AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 29, 2001
REGISTRATION STATEMENT NO. 333-
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- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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CARNIVAL CORPORATION
(Exact name of registrant as specified in its charter)
REPUBLIC OF PANAMA 4400 59-1562976
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification Number)
3655 N.W. 87TH AVENUE
MIAMI, FLORIDA 33178-2428
(305) 599-2600
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive office)
------------------------------
ARNALDO PEREZ, ESQ.
GENERAL COUNSEL
CARNIVAL CORPORATION
3655 N.W. 87TH AVENUE
MIAMI, FLORIDA 33178-2428
(305) 599-2600
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
------------------------------
WITH COPIES TO:
JOHN C. KENNEDY, ESQ.
PAUL, WEISS, RIFKIND, WHARTON & GARRISON
1285 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10019-6064
(212) 373-3000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after the effective date of this Registration Statement.
If the only securities being registered on this form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. / /
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 of the Securities Act of 1933,
other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
------------------------------
CALCULATION OF THE REGISTRATION FEE
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
SECURITIES REGISTERED REGISTERED(1) PER SECURITY PRICE REGISTRATION FEE
Liquid Yield Option-TM- Notes due 2021......... 1,051,175,000 47.566% 500,001,900 119,501
Common Stock................................... 17,446,000(2) (3) -0-(3) -0-(3)
(-TM-) Trademark of Merrill Lynch & Co., Inc.
(1) The LYONs were issued at an original price of $475.66 per $1,000 principal
amount at maturity, which represents an aggregate initial issue price of
$500,001,900 and an aggregate principal amount at maturity of
$1,051,175,000.
(2) Includes the shares of common stock initially issuable upon conversion of
the LYONs at the rate of 16.5964 shares of common stock per $1,000 principal
amount at maturity of LYONs. Pursuant to Rule 416 under the Securities Act,
such number of shares of common stock registered hereby shall also include
an indeterminate number of additional shares of common stock that may be
issued from time to time upon conversion of the LYONs by reason of
adjustment of the conversion price or upon repurchase or redemption, in each
case in certain circumstances outlined in the prospectus. See "Description
of LYONs--Conversion Rights."
(3) Pursuant to Rule 457(i) under the Securities Act, there is no filing fee
with respect to the shares of common stock issuable upon the conversion of
the LYONs because no additional consideration will be received in connection
with the exercise of the conversion privilege.
------------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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- --------------------------------------------------------------------------------
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THE
SELLING SECURITYHOLDERS IDENTIFIED IN THIS PROSPECTUS MAY NOT SELL THESE
SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE
SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY
STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED NOVEMBER 29, 2001
CARNIVAL CORPORATION
---------------
$1,051,175,000 LIQUID YIELD OPTION-TM- NOTES DUE 2021
(ZERO COUPON--SENIOR)
17,446,000 SHARES OF COMMON STOCK
------------------
This prospectus relates to $1,051,175,000 aggregate principal amount at maturity
of our Liquid Yield Option-TM- Notes due 2021 (the "LYONs") held by certain
selling securityholders. The LYONs may be sold from time to time by or on behalf
of the selling securityholders named in this prospectus or in supplements to
this prospectus.
This prospectus also relates to 17,446,000 shares of our common stock issuable
upon conversion of the LYONs held by certain selling securityholders, plus such
additional indeterminate number of shares as may become issuable upon conversion
of the LYONs by reason of adjustment to the conversion price in certain
circumstances.
The selling securityholders may sell all or a portion of the LYONs in market
transactions, negotiated transactions or otherwise and at prices which will be
determined by the prevailing market price for the LYONs or in negotiated
transactions. The selling securityholders may also sell all or a portion of the
shares of common stock from time to time on the New York Stock Exchange, in
negotiated transactions or otherwise, and at prices which will be determined by
the prevailing market price for the shares or in negotiated transactions. The
selling securityholders will receive all of the proceeds from the sale of the
LYONs and the common stock. We will not receive any proceeds from the sale of
LYONs or common stock by the selling securityholders.
Our common stock is traded on the New York Stock Exchange under the symbol CCL.
On November 28, 2001, the last reported sales price of our common stock was
$25.47 per share. There is no public market for the LYONs, and we do not intend
to apply for listing of them or any securities exchange or to seek approval for
quotation of them through any automated quotation system.
WE URGE YOU TO CAREFULLY READ THE "RISK FACTORS" SECTION BEGINNING ON PAGE 11,
WHERE WE DESCRIBE SPECIFIC RISKS ASSOCIATED WITH THESE SECURITIES, BEFORE YOU
MAKE YOUR INVESTMENT DECISION.
Neither the Securities and Exchange Commission, nor any state securities
commission, has approved or disapproved of these LYONs or common stock or passed
upon the adequacy or accuracy of this prospectus. Any representation to the
contrary is a criminal offense.
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(-TM-) Trademark of Merrill Lynch & Co., Inc.
The date of this prospectus is November , 2001.
TABLE OF CONTENTS
PAGE
--------
Where You Can Find More Information......................... 2
Incorporation of Documents by Reference..................... 3
Summary..................................................... 4
Securities Being Offered.................................. 6
Risk Factors................................................ 10
Risks Related to our Business............................. 10
Risks Relating to our Corporate Structure................. 12
Risks Relating to the LYONs and our Common Stock.......... 14
Special Note Regarding Forward-Looking Statements........... 14
Ratio of Earnings to Fixed Charges.......................... 16
Price Range of Common Stock and Dividends................... 16
Selected Consolidated Financial Data........................ 18
Capitalization.............................................. 19
Use of Proceeds............................................. 20
Selling Securityholders..................................... 20
Plan of Distribution........................................ 21
Description of LYONs........................................ 23
Description of Capital Stock................................ 41
Certain Panamanian and United States Federal Income Tax
Considerations............................................ 44
Experts..................................................... 47
Legal Matters............................................... 47
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WHERE YOU CAN FIND MORE INFORMATION
We are subject to the informational requirements of the Securities Exchange
Act of 1934, and file reports, proxy statements and other information with the
SEC. We have also filed with the SEC a registration statement on Form S-3 to
register the LYONs and the underlying common stock. This prospectus, which forms
part of the registration statement, does not contain all of the information
included in that registration statement. For further information about Carnival
Corporation and the securities offered in this prospectus, you should refer to
the registration statement and its exhibits. You may read and copy any document
we file with the SEC at the SEC's Public Reference Room, 450 Fifth Street, N.W.,
Washington, D.C. 20549. Copies of these reports, proxy statements and
information may be obtained at prescribed rates from the Public Reference
Section of the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549. Please
call the SEC at 1-800-SEC-0330 for further information on the operation of the
Public Reference Room. In addition, the SEC maintains a web site that contains
reports, proxy statements and other information regarding registrants, such as
us, that file electronically with the SEC. The address of this web site is
http://www.sec.gov.
You should only rely on the information contained in this prospectus and
incorporated by reference therein.
2
INCORPORATION OF DOCUMENTS BY REFERENCE
We are incorporating by reference into this prospectus the documents listed
below and any other filings made by us with the SEC under Section 13(a), 13(c),
14 or 15(d) of the Exchange Act prior to the termination of the offering:
- Our Annual Report on Form 10-K for the fiscal year ended November 30,
2000.
- Our Quarterly Reports on Form 10-Q for the fiscal quarters ended February
28, 2001, May 31, 2001 and August 31, 2001.
- Our Current Reports on Form 8-K filed on December 21, 2000, February 26,
2001, April 27, 2001, June 29, 2001, September 21, 2001, October 19, 2001,
October 23, 2001, October 25, 2001 and October 29, 2001 with the SEC.
Any statement contained in this prospectus or in a document incorporated or
deemed to be incorporated by reference in this prospectus shall be deemed to be
modified or superseded for purposes of this prospectus to the extent that a
statement contained in this prospectus or in any other document subsequently
filed with the SEC which is or is deemed to be incorporated by reference in this
prospectus 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.
We will provide without charge to you, upon your written or oral request a
copy of any or all of the documents incorporated by reference in this
prospectus, not including the exhibits to these documents, unless such exhibits
are specifically incorporated by reference in these documents. Requests for such
copies should be directed to Investor Relations, Carnival Corporation, 3655 N.W.
87th Avenue, Miami, Florida 33178-2428. Except as provided above, no other
information, including information on our web site, is incorporated by reference
into this prospectus.
3
SUMMARY
THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED
INFORMATION INCLUDED ELSEWHERE OR INCORPORATED BY REFERENCE INTO THIS
PROSPECTUS. BECAUSE THIS IS A SUMMARY, IT MAY NOT CONTAIN ALL THE INFORMATION
THAT MAY BE IMPORTANT TO YOU. YOU SHOULD READ THE ENTIRE PROSPECTUS, AS WELL AS
THE INFORMATION INCORPORATED BY REFERENCE, BEFORE MAKING AN INVESTMENT DECISION.
SOME OF THE STATEMENTS IN THIS "SUMMARY" ARE FORWARD-LOOKING STATEMENTS. PLEASE
SEE "SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS" FOR MORE INFORMATION
REGARDING THESE STATEMENTS. IN THIS PROSPECTUS, UNLESS OTHERWISE STATED OR THE
CONTEXT OTHERWISE REQUIRES, THE TERMS "WE," "US" AND "OUR" REFER TO CARNIVAL
CORPORATION, A PANAMANIAN CORPORATION, AND ITS CONSOLIDATED SUBSIDIARIES.
CARNIVAL CORPORATION
We are the world's largest multiple-night cruise company based on the number
of passengers carried, revenues generated and available capacity. We offer a
broad range of cruise products, serving the contemporary cruise market through
Carnival Cruise Lines and Costa Cruises, the premium market through Holland
America Line and the luxury market through Cunard Line, Seabourn Cruise Line and
Windstar Cruises. In total, we own and operate 42 cruise ships with an aggregate
capacity of 58,342 passengers based on two passengers per cabin. The fifteen
Carnival Cruise Lines ships have an aggregate capacity of 31,122 passengers with
itineraries primarily in the Caribbean and the Mexican Riviera. The seven Costa
ships have an aggregate capacity of 9,276 passengers with itineraries primarily
in Europe, the Caribbean and South America. The ten Holland America ships have
an aggregate capacity of 13,348 passengers, with itineraries primarily in the
Caribbean, Europe and Alaska. Windstar operates four luxury, sail-powered ships
with an aggregate capacity of 756 passengers, primarily in the Caribbean, Europe
and Central America. The four Seabourn ships have an aggregate capacity of 1,382
passengers and the two Cunard ships have an aggregate capacity of 2,458
passengers, each with worldwide itineraries.
We have signed agreements with three shipyards providing for the
construction of additional cruise ships as set forth in the following table:
EXPECTED ESTIMATED TOTAL
SERVICE PASSENGER COST ($ IN
SHIP DATE (1) SHIPYARD CAPACITY (2) MILLIONS) (3)
- ---- --------- ------------------- ------------- ---------------
CARNIVAL CRUISE LINES
Carnival Pride................ 1/02 Masa-Yards (4) 2,124 $ 375
Carnival Legend............... 8/02 Masa-Yards (4) 2,124 375
Carnival Conquest............. 12/02 Fincantieri 2,974 500
Carnival Glory................ 8/03 Fincantieri 2,974 500
Carnival Miracle.............. 4/04 Masa-Yards (4) 2,124 375
Carnival Valor................ 11/04 Fincantieri (4) 2,974 500
------ ------
TOTAL CARNIVAL CRUISE LINES... 15,294 2,625
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HOLLAND AMERICA LINE
Zuiderdam..................... 11/02 Fincantieri (4) 1,848 410
Oosterdam..................... 7/03 Fincantieri (4) 1,848 410
Newbuild...................... 2/04 Fincantieri (4) 1,848 410
Newbuild...................... 10/04 Fincantieri (4) 1,848 410
Newbuild...................... 6/05 Fincantieri (4) 1,848 410
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TOTAL HOLLAND AMERICA LINE.... 9,240 2,050
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4
EXPECTED ESTIMATED TOTAL
SERVICE PASSENGER COST ($ IN
SHIP DATE (1) SHIPYARD CAPACITY (2) MILLIONS) (3)
- ---- --------- ------------------- ------------- ---------------
COSTA CRUISES
Costa Mediterranea............ 7/03 Masa-Yards (5) 2,114 340
Costa Fortuna................. 1/04 Fincantieri (6) 2,720 395
Costa Magica.................. 12/04 Fincantieri (6) 2,720 395
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TOTAL COSTA CRUISES........... 7,554 1,130
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CUNARD LINE
Queen Mary 2.................. 12/03 Chantiers de 2,620 780
l'Atlantique (4)
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TOTAL CUNARD LINE............. 2,620 780
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TOTAL......................... 34,708 $6,585
====== ======
- --------------------------
(1) The expected service date is the date the ship is currently expected to
begin revenue generating activities.
(2) In accordance with cruise industry practice, passenger capacity is
calculated based on two passengers per cabin even though some cabins can
accommodate three or four passengers.
(3) Estimated total cost of the completed ship includes the contract price with
the shipyard, design and engineering fees, capitalized interest, various
owner supplied items and construction oversight costs.
(4) These construction contracts are denominated in either German marks, Italian
lira or euros and have been fixed into U.S. dollars through the utilization
of forward foreign currency contracts.
(5) This construction contract is denominated in German marks which has a fixed
exchange rate with Costa's functional currency, which is the Italian lira.
The estimated total cost has been translated into U.S. dollars using the
August 31, 2001 exchange rate.
(6) These construction contracts are denominated in Italian lira, and the
estimated total costs have been translated into U.S. dollars using the
August 31, 2001 exchange rate.
In connection with the ships under contract for construction, we have paid
approximately $547 million through August 31, 2001, and we anticipate paying
approximately $940 million during the twelve months ending August 31, 2002 and
approximately $5.1 billion thereafter.
We also operate a tour business through Holland America Tours, which markets
sightseeing tours both separately and as part of its cruise/tour packages.
Holland America Tours operates 12 hotels in Alaska and the Canadian Yukon, two
luxury dayboats offering tours to the glaciers of Alaska and the Yukon River,
over 300 motor coaches used for sightseeing and charters in the states of
Washington and Alaska and 13 private domed rail cars which are run on the Alaska
railroad between Anchorage and Fairbanks.
We were incorporated under the laws of the Republic of Panama in November
1974. Our executive offices are located at 3655 N.W. 87th Avenue, Miami, Florida
33178-2428, telephone number (305) 599-2600.
5
SECURITIES BEING OFFERED
This prospectus covers the sale of $1,051,175,000 aggregate principal amount
at maturity of LYONs and 17,446,000 shares of our common stock, plus an
indeterminate number of additional shares of common stock that may be issued
form time to time upon conversion of the LYONs by reason of adjustment to the
conversion price or upon repurchase or redemption, in each case in certain
circumstances described in this prospectus.
We issued and sold $840,940,000 aggregate principal amount at maturity of
LYONs, on October 24, 2001, in a private offering to Merrill Lynch & Co., as the
initial purchaser. On October 26, 2001, upon exercise of its overallotment
option by Merrill Lynch & Co., we issued and sold to Merrill Lynch & Co., as the
initial purchaser, an additional $210,235,000 aggregate principal amount at
maturity of LYONs. These LYONs were simultaneously resold by the initial
purchaser in transactions exempt from registration requirements of the
Securities Act to persons reasonably believed by the initial purchaser to be
"qualified institutional buyers" (as defined in Rule 144A under the Securities
Act).
The shares of common stock may be offered by the selling securityholders
following the conversion of the LYONs.
TERMS OF THE LYONS
LYONs.......................... $1,051,175,000 aggregate principal amount at maturity of
LYONs due 2021. We do not pay interest on the LYONs prior to
maturity. Each LYON was issued at a price of $475.66 per
LYON (plus accrued original issue discount, if any) and has
a principal amount at maturity of $1,000.
Maturity of LYONs.............. October 24, 2021.
Yield to Maturity of LYONs..... 3.75% per year (computed on a semi-annual bond equivalent
basis) calculated from October 24, 2001.
Original Issue Discount........ The LYONs were issued at an issue price significantly below
the principal amount at maturity of the LYONs. The
difference between the issue price and the principal amount
at maturity of a LYON is referred to as original issue
discount. This original issue discount accrues daily at a
rate of 3.75% per year beginning on October 24, 2001,
calculated on a semi-annual bond equivalent basis, using a
360-day year comprised of twelve 30-day months. You should
be aware that although we do not pay interest on the LYONs,
United States holders must include original issue discount,
as it accrues, in their gross income for United States
federal income tax purposes. See "Certain Panamanian and
United States Federal Income Tax Considerations--United
States--United States Holders--Original Issue Discount."
6
Conversion Rights.............. For each LYON surrendered for conversion, if specified
conditions are satisfied, a holder will receive 16.5964
shares of our common stock. Upon conversion, we will have
the right to deliver, in lieu of our common stock, cash or a
combination of cash and common stock. If we elect to pay
holders cash for their LYONs, the payment will be based on
the average sale price of our common stock for the five
consecutive trading days immediately following either:
- the date of our notice of our election to deliver
cash, which we must give within two business days
after receiving a conversion notice, unless we have
earlier given notice of redemption as described in
this prospectus; or
- the conversion date, if we have given notice of
redemption specifying that we intend to deliver cash
upon conversion thereafter.
The conversion rate may be adjusted for certain reasons
specified in the indenture but will not be adjusted for
accrued original issue discount. Upon conversion, a holder
will not receive any cash payment representing accrued
original issue discount. Instead, accrued original issue
discount will be deemed paid by the shares of common stock
received by the holder on conversion. See "Description of
LYONs--Conversion Rights."
Commencing after February 28, 2002, holders may surrender
LYONs for conversion into shares of common stock in any
fiscal quarter (and only during such fiscal quarter), if the
closing sale price of our common stock for at least 20
trading days in a period of 30 consecutive trading days
ending on the last trading day of the preceding fiscal
quarter is more than 110% of the accreted conversion price
per share of common stock on the last day of such preceding
fiscal quarter. Our fiscal quarters end on the last day of
February, May, August and November. The "accreted conversion
price" per share as of any day will equal the issue price of
a LYON plus the accrued original discount to that day, with
that sum divided by the number of shares of common stock
issuable upon conversion of a LYON.
LYONs or portions of LYONs in integral multiples of $1,000
principal amount at maturity called for redemption may be
surrendered for conversion until the close of business on
the redemption date, even if the LYONs are not otherwise
convertible. In addition, if we make a significant
distribution to our shareholders or if we are a party to
certain consolidations, mergers or binding share exchanges,
LYONs may be surrendered for conversion as provided in
"Description of LYONs--Conversion Rights." The ability to
surrender LYONs for conversion will expire at the close of
business on the business day immediately preceding
October 24, 2021, unless they have previously been redeemed
or repurchased. See "Description of LYONs--Conversion
Rights--Conversion Rights Upon Notice of Redemption."
7
Ranking........................ The LYONs are unsecured and unsubordinated obligations and
rank equal in right of payment to all our existing and
future unsecured and unsubordinated indebtedness. However,
the LYONs are effectively subordinated to all existing and
future obligations of our subsidiaries. As of August 31,
2001, we had approximately $2.66 billion of total
indebtedness outstanding, which included approximately
$1.21 billion of indebtedness of our consolidated
subsidiaries. See "Capitalization."
Sinking Fund................... None.
Redemption of LYONs at Our
Option....................... We may redeem all or a portion of the LYONs at any time on
or after October 24, 2008 at the redemption prices set forth
in this prospectus under the caption, "Description of
LYONs--Redemption of LYONs at our Option." Holders may
convert their LYONs after they are called for redemption at
any time prior to the close of business on the redemption
date. Our notice of redemption will inform the holders of
our election to deliver shares of our common stock or to pay
cash or a combination of cash and common stock. See
"Description of LYONs--Redemption of LYONs at Our Option."
Purchase of LYONs by Us at the
Option
of Holder.................... Holders may require us to purchase all or a portion of their
LYONs on the following dates at the following prices:
- On October 24, 2006 for a price equal to $572.76 per LYON,
- On October 24, 2008 for a price equal to $616.94 per LYON,
- On October 24, 2011 for a price equal to $689.68 per LYON,
and
- On October 24, 2016 for a price equal to $830.47 per LYON.
We may choose to pay the purchase price in cash, shares of
common stock or a combination of cash and shares of common
stock. After receiving notice of such choice, you may
withdraw your election. We may also add additional purchase
dates on which holders may require us to purchase all or a
portion of their LYONs. See "Description of the
LYONs--Purchase of LYONs by Us at the Option of the Holder."
Change in Control.............. Upon a change in control (as defined in the indenture
governing the LYONs) of our company occurring at any time on
or before October 24, 2008, each holder may require us to
purchase all or a portion of such holder's LYONs for cash at
a price equal to 100% of the issue price of the LYONs to be
purchased plus accrued original issue discount to, but
excluding, the date of purchase. See "Description of
LYONs--Change in Control Permits Purchase of LYONs by Us at
the Option of the Holder."
Ownership Limitation on
LYONs........................ In order to permit us to retain our status as a publicly
traded corporation under the proposed Treasury regulations
to Section 883 of the Code, LYONs generally may not be
transferred if the transfer would result in ownership,
including LYONs and other convertible securities on an
as-converted basis, by one person or group of related
persons by virtue of the attribution provisions of the Code,
of more than 4.9% of our common stock. See "Description of
LYONs--Ownership Limitation on LYONs."
8
Use of Proceeds................ The selling securityholders will receive all of the proceeds
from the sale of the securities sold under this prospectus.
We will not receive any of the proceeds from sales by the
selling securityholders of the offered securities.
DTC Eligibility................ The LYONs were issued in book-entry form and are represented
by one or more permanent global certificates deposited with
a custodian for and registered in the name of a nominee of
DTC in New York, New York. Beneficial interests in any such
securities are shown on, and transfers are effected only
through, records maintained by DTC and its direct and
indirect participants, and any such interest may not be
exchanged for certificated securities, except in limited
circumstances. See "Description of LYONs--Book-Entry
System."
Shelf Registration Statement... Under the registration rights agreement, dated October 24,
2001, between Merrill Lynch & Co. and us, we have agreed to
use commercially reasonable efforts to cause a shelf
registration statement to become effective within 180 days
after the date of original issuance of the LYONs. We are
required to keep such shelf registration statement effective
until the earlier of (i) the sale pursuant to the shelf
registration statement of all of the LYONs and the shares of
common stock issuable upon conversion of the LYONs, which
together we refer to as "registrable securities," and (ii)
the expiration of the holding period applicable to such
securities held by non-affiliates of ours under Rule 144(k)
under the Securities Act, or any successor provision and
(iii) the second anniversary of the effective date of the
shelf registration statement, subject to certain permitted
exceptions. See "Description of LYONs--Registration Rights."
We are permitted to suspend the use of this prospectus under
certain circumstances. We agreed to pay predetermined
liquidated damages to selling securityholders if this
prospectus is unavailable for periods in excess to those
described elsewhere in this prospectus. Purchasers of the
registrable securities offered by means of this prospectus
will not have any rights under the registration rights
agreement, although once sold under this registration
statement the registrable securities should be freely
tradable except by purchasers who are our "affiliates" or
are "underwriters" of the registrable securities for
purposes of the Securities Act.
Trading Symbol for our Common
Stock........................ Our common stock is traded on the New York Stock Exchange
under the symbol "CCL."
9
RISK FACTORS
YOU SHOULD CAREFULLY CONSIDER THE FOLLOWING SPECIFIC RISK FACTORS AS WELL AS
THE OTHER INFORMATION CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS
BEFORE DECIDING TO INVEST IN THE LYONS AND OUR COMMON STOCK. SOME STATEMENTS IN
THIS SECTION ARE "FORWARD-LOOKING STATEMENTS." FOR A DISCUSSION OF THOSE
STATEMENTS AND OF OTHER FACTORS FOR INVESTORS TO CONSIDER, SEE "SPECIAL NOTE
REGARDING FORWARD-LOOKING STATEMENTS."
RISKS RELATED TO OUR BUSINESS
DEMAND FOR CRUISES CAN BE AND HAS BEEN AFFECTED BY MANY FACTORS THAT ARE OUTSIDE
OUR CONTROL, INCLUDING THE ONGOING EFFECTS OF THE SEPTEMBER 11, 2001 TERRORIST
INCIDENTS; AND OUR OPERATING RESULTS AND REVENUES DEPEND IN LARGE PART ON DEMAND
FOR CRUISES.
Demand for cruises may be affected by a number of factors. For example, our
sales are dependent on the underlying economic strength of the countries in
which we operate. Adverse economic conditions can reduce the level of disposable
income of consumers available for vacations. In addition, armed conflicts or
political instability in areas where our ships cruise can adversely affect
demand for our cruises to those areas. Also, acts of terrorism can have an
adverse effect on tourism, travel and the availability of air service and other
forms of transportation. In particular, the recent terrorist attacks and
subsequent actions have impacted negatively our revenues and operating results
since September 11, 2001. Given the uncertainty regarding the future impact of
these events on tourism and travel, we are unable to quantify their long-term
impact on our future operations at this time.
Finally, adverse incidents involving cruise ships and adverse media
publicity concerning the cruise industry in general can impact demand. The
operation of cruise ships involves the risk of accidents and other incidents
which may bring into question passenger safety and adversely affect future
industry performance. While we make passenger safety a high priority in the
design and operation of our ships, accidents and other incidents involving
cruise ships could adversely affect our future sales and profitability. Any
reduction in demand may have a negative impact on our net revenue yields, which
would also have a negative impact on our net income.
OVERCAPACITY WITHIN THE CRUISE BUSINESS COULD HAVE A NEGATIVE IMPACT ON OUR NET
REVENUE YIELDS.
Cruising capacity has grown in recent years, and we expect it to continue to
increase over the next five years as all of the major cruise companies,
including our own, are expected to introduce new ships into service. In order to
utilize new capacity, the cruise industry must increase its share of the overall
vacation market. Any imbalances between cruise industry supply and demand could
have a negative impact on our net revenue yields, which would also have a
negative impact on our net income.
ENVIRONMENTAL AND HEALTH AND SAFETY LEGISLATION COULD INCREASE OPERATING COSTS.
Some environmental groups have lobbied for more stringent regulation of
cruise ships. Some groups also have generated negative publicity about the
cruise industry and its environmental impact. As a result, governmental
authorities around the world may enact new environmental and health and safety
legislation. For instance, the United States Environmental Protection Agency is
considering new laws and rules to manage cruise ship waste. Stricter
environmental and health and safety regulations could increase the cost of
compliance and adversely affect the cruise industry.
WE FACE SIGNIFICANT COMPETITION FROM BOTH CRUISE LINES AND OTHER VACATION
OPERATORS.
We operate in the vacation market. We compete for consumer disposable
leisure-time dollars with both other cruise operators and a wide array of
vacation operators, including numerous land destinations and timeshare vacation
operators located throughout the world. These operators attempt to obtain a
competitive advantage by lowering prices and by improving their products by
offering
10
different vacation experiences, itineraries and locations. Since September 11,
2001, the major cruise lines, including our own, have announced the movement of
some of their vessels from European to North American ports. The redeployment of
such vessels may result in increased competition among the cruise lines with
respect to Caribbean, Mexican Riviera and Alaska cruises. Our principal
competitors include Royal Caribbean Cruise Ltd., which owns Royal Caribbean
International and Celebrity Cruises, P&O Princess Cruises plc, which owns
Princess Cruises, P&O Cruises and Aida Cruises, and Norwegian Cruise Line and
Orient Lines, which are both owned by Star Cruises plc. On November 20, 2001,
Royal Caribbean Cruise Ltd. and P&O Princess Cruises plc announced their
intention to combine their businesses, subject to shareholder and regulatory
approvals. In the event that we do not compete effectively with other cruise
companies and other vacation operators, our market share could decrease and our
net revenue yields could be adversely affected.
OUR OPERATING COSTS ARE SUBJECT TO MANY ECONOMIC AND POLITICAL FACTORS THAT ARE
BEYOND OUR CONTROL.
Some of our operating costs, including fuel costs, insurance premiums and
security costs, are subject to increases because of economic or political
instability. Since September 11, 2001, our insurance costs have increased, and
we have also incurred additional expense due to heightened security for our
operations. Additional political instability or terrorist incidents could result
in further increases to operating costs. Increases in operating costs could
adversely affect our operating results because we may not be able to increase
the prices on our cruise vacations to recover these increased costs.
CONDUCTING BUSINESS INTERNATIONALLY MAY RESULT IN INCREASED COSTS.
We operate our business internationally, and we plan to continue to develop
our international presence, especially in Europe. Operating internationally
exposes us to a number of risks. Examples include currency fluctuations,
interest rate movements, increases in duties and taxes, political uncertainty,
and changes in laws and policies affecting cruising, vacation or maritime
businesses or the governing operations of foreign-based companies. If we are
unable to address these risks adequately, our financial results could be
adversely affected.
DELAYS OR FAULTS IN SHIP CONSTRUCTION COULD REDUCE OUR PROFITABILITY.
Cruise ships are large and complicated vessels, and building them involves
risks similar to those encountered in similar sophisticated construction
projects, including delays in delivery and faulty construction. Delays or faults
in ship construction may result in delays or cancellations of scheduled cruises,
necessitate unscheduled repairs and drydocking of the ship and increase our
shipbuilding costs and/or expenses. Industrial action, insolvency of shipyards
or other events could also delay or indefinitely postpone the delivery of new
ships. These events, in turn, could, to the extent they are not covered by
contractual provisions or insurance, adversely affect our financial results.
THE INABILITY OF QUALIFIED SHIPYARDS TO BUILD OUR SHIPS COULD REDUCE OUR FUTURE
PROFITABILITY.
We believe that there are a limited number of shipyards in the world capable
of the quality construction of large passenger cruise ships. We currently have
contracts with three of these shipyards for the construction of 15 ships to
enter service over the next four years. Our primary competitors also have
contracts to construct new cruise ships. If we elect to build additional ships
in the future, which we expect to do, there is no assurance that any of these
shipyards will have the available capacity to build additional new ships for us
at the times desired by us or that the shipyards will agree to build additional
ships at a cost acceptable to us. Additionally, there is no assurance that ships
under contract for construction will be delivered. These events, in turn, could
adversely affect our financial results.
11
RISKS RELATING TO OUR CORPORATE STRUCTURE
ANY CHANGE OF OUR TAX STATUS UNDER THE UNITED STATES INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE"), COULD HAVE AN ADVERSE EFFECT ON OUR NET INCOME
AND SHAREHOLDERS.
We are a foreign corporation engaged in a trade or business in the United
States, and our ship-owning subsidiaries are foreign corporations that, in many
cases, depending upon the itineraries of their ships, receive income from
sources within the United States. To the best of our knowledge, we believe that,
under Section 883 of the Code and applicable income tax treaties, our income and
the income of our ship-owning subsidiaries, in each case derived from or
incidental to the international operation of a ship or ships, is currently
exempt from United States federal income tax. We believe that substantially all
of our income, and the income of our ship-owning subsidiaries, with the
exception of the United States source income from the transportation, hotel and
tour business of Holland America Tours, is derived from or incidental to the
international operation of a ship or ships within the meaning of Section 883 and
applicable income tax treaties.
We believe that we and many of our ship-owning subsidiaries currently
qualify for the Section 883 exemption since each of us is incorporated in
qualifying jurisdictions and our common stock is primarily and regularly traded
on an established securities market in the United States. To date, however, no
final Treasury regulations or other definitive interpretations of the relevant
portions of Section 883 have been promulgated, although regulations have been
proposed. See the risk factor immediately below for a discussion of the proposed
regulations under Section 883. Those regulations or official interpretations
could differ materially from our interpretation of this Code provision and, even
in the absence of differing regulations or official interpretations, the
Internal Revenue Service might successfully challenge our interpretation. In
addition, the provisions of Section 883 are subject to change at any time by
legislation. Moreover, changes could occur in the future with respect to the
identity, residence, or holdings of our direct or indirect shareholders that
could affect our and our subsidiaries' eligibility for the Section 883
exemption. Accordingly, it is possible that we and our subsidiaries will not be
exempt from United States federal income tax on United States-source shipping
income. If we and our ship-owning subsidiaries were not entitled to the benefit
of Section 883, we would be subject to United States federal income taxation on
a portion of our income, which would reduce our net income.
We believe that the income of some of our ship-owning subsidiaries currently
qualifies for exemption from United States federal income tax under bilateral
income tax treaties. These treaties may be cancelled by either country or
replaced with a new agreement that treats shipping income differently than under
the agreements currently in force. If these subsidiaries do not qualify for
benefits under the existing treaties or the existing treaties are cancelled or
materially modified in a manner adverse to our interests and the subsidiaries do
not qualify for the Section 883 exemption, the ship-owning subsidiaries would be
subject to United States federal income taxation on a portion of their income,
which would reduce our net income.
FAILURE TO COMPLY WITH THE PROPOSED TREASURY REGULATIONS COULD HAVE A NEGATIVE
IMPACT ON OUR NET INCOME AND STOCK PRICE. ALSO, IN ORDER TO COMPLY WITH PROPOSED
TREASURY REGULATIONS, YOUR ABILITY TO ACQUIRE OR TRANSFER OUR COMMON STOCK AND
THE LYONS IS RESTRICTED.
On February 8, 2000, the United States Treasury Department issued proposed
Treasury regulations to Section 883 of the Code, relating to income derived by
foreign corporations from the international operation of ships and aircraft. The
proposed regulations provide, in general, that a corporation organized in a
qualified foreign country and engaged in the international operation of ships or
aircraft shall exclude qualified income from gross income for purposes of United
States federal income taxation provided that the corporation can satisfy certain
ownership requirements, including, among other things, that its stock is
publicly traded. A publicly traded corporation will satisfy this requirement if
more than 50% of its stock is owned by persons who each own less than 5% of the
value of the
12
outstanding shares of the corporation's capital stock. To the best of our
knowledge, after due investigation, we believe that we currently qualify as a
publicly traded corporation under these proposed regulations. However, because
various members of the Arison family and certain trusts established for their
benefit currently own approximately 47% of our common stock, there is the
potential that another shareholder could acquire 5% or more of our common stock,
which could jeopardize our qualification as a publicly traded corporation. If,
in the future, we were to fail to qualify as a publicly traded corporation, we
would be subject to United States federal income tax on our income associated
with our cruise operations in the United States. In such event, our net income
and stock price would be negatively impacted.
As a precautionary matter, we amended our second amended and restated
articles of incorporation to ensure that we will continue to qualify as a
publicly traded corporation under the proposed regulations. This amendment
provides that no one person or group of related persons, other than certain
members of the Arison family and certain trusts established for their benefit,
may own or be deemed to own by virtue of the attribution provisions of the Code
more than 4.9% of our common stock, whether measured by vote, value or number of
shares. Any shares of our common stock acquired in violation of this provision
will be transferred to a trust and, at the direction of our board of directors,
sold to a person whose shareholding does not violate that provision. No profit
for the purported transferee may be realized from any such sale. In addition,
under specified circumstances, the trust may transfer the common stock at a loss
to the purported transferee. Because the LYONs are convertible into common
stock, the transfer of the LYONs will be subject to similar restrictions. See
"Description of LYONs--Ownership Limitation on LYONs." These transfer
restrictions may also have the effect of delaying or preventing a change in our
control or other transactions in which the shareholders might receive a premium
for their shares of our common stock over the then prevailing market price or
which the shareholders might believe to be otherwise in their best interest.
A GROUP OF PRINCIPAL SHAREHOLDERS EFFECTIVELY CONTROLS US AND HAS THE POWER TO
CAUSE OR PREVENT A CHANGE OF CONTROL.
A group of shareholders comprising certain members of the Arison family,
including Micky Arison, our chairman and chief executive officer, and trusts
established for their benefit, beneficially own, as of the date of this
prospectus, a total of approximately 47% of our outstanding common stock. As a
result, this group of shareholders has the power to substantially influence the
election of directors and our affairs and policies without the consent of our
other shareholders. In addition, this group has the power to prevent or cause a
change in control.
WE ARE NOT A UNITED STATES CORPORATION, AND OUR SHAREHOLDERS MAY BE SUBJECT TO
THE UNCERTAINTIES OF A FOREIGN LEGAL SYSTEM IN PROTECTING THEIR INTERESTS.
Our corporate affairs are governed by our second amended and restated
articles of incorporation and by-laws and by the corporate laws of Panama. Thus,
our public shareholders may have more difficulty in protecting their interests
in the face of actions by the management, directors or controlling shareholders
than would shareholders of a corporation incorporated in a United States
jurisdiction.
13
RISKS RELATING TO THE LYONS AND OUR COMMON STOCK
AN ACTIVE TRADING MARKET FOR THE LYONS MAY NOT DEVELOP.
The LYONs are a new issue of securities for which there is currently no
public market and no active trading market might ever develop. If the LYONs are
traded, they may trade at a discount from their initial offering price,
depending on prevailing interest rates, the market for similar securities, the
price of our shares of common stock, our performance and other factors. In
addition, we do not know whether an active trading market will develop for the
LYONs. To the extent that an active trading market does not develop, the
liquidity and trading prices for the LYONs may be harmed.
WE MAY NOT HAVE THE ABILITY TO RAISE THE FUNDS NECESSARY TO FINANCE THE CHANGE
IN CONTROL REPURCHASE OPTION OR THE REPURCHASE AT THE OPTION OF THE HOLDER
PROVISION IN THE LYONS.
Upon the occurrence of specific kinds of change in control events occurring
on or before October 24, 2008, and on the 2006, 2008, 2011 and 2016 purchase
dates, we may be required to repurchase all outstanding LYONs. However, it is
possible that we will not have sufficient funds at such time to make the
required repurchase of LYONs in cash or that restrictions in our debt
instruments will not allow such repurchases. See "Description of LYONs--Purchase
of LYONs by Us at the Option of the Holder" and "--Change in Control Permits
Purchase of LYONs by Us at the Option of the Holder."
THE HOLDERS OF OUR COMMON STOCK MAY EXPERIENCE A DILUTION IN THE VALUE OF THEIR
EQUITY INTEREST AS A RESULT OF THE ISSUANCE AND SALE OF ADDITIONAL SHARES OF OUR
COMMON STOCK.
A substantial number of shares of our common stock were issued by us in
private transactions not involving a public offering and are therefore treated
as "restricted securities" for purposes of Rule 144 under the Securities Act or
are held by our affiliates and, therefore, treated as "restricted securities" or
"control securities." Some members of the Arison family and related entities
beneficially own approximately 47% of our outstanding common stock. No
predictions can be made as to the effect, if any, that the issuance and
availability for future market sales of shares of our common stock will have on
the market price of our common stock prevailing from time to time. Sales of
substantial amounts of our common stock (including shares issued upon the
exercise of stock options), or the perception that such sales could occur, could
materially adversely affect the prevailing market price for our common stock and
could impair our future ability to raise capital through an offering of equity
securities.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in this prospectus constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. We have tried, wherever possible, to identify such statements by using
words such as "anticipate," "assume," "believe," "expect," "intend," "plan" and
words and terms of similar substance in connection with any discussion of future
operating or financial performance. These forward-looking statements, including
those which may impact the forecasting of our net revenue yields, involve known
and unknown risks, uncertainties and other factors, which may cause our actual
results, performances or achievements to be materially different from any future
results, performances 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 the net revenue yields for our cruise
products;
- consumer demand for cruises;
- effects on consumer demand of armed conflicts, political instability,
terrorism, the availability of air service and adverse media publicity;
14
- increases in cruise industry capacity;
- cruise and other vacation industry competition;
- continued availability of attractive port destinations;
- changes in tax laws and regulations;
- our ability to implement our shipbuilding program and to continue to
expand our business outside the North American market;
- our ability to attract and retain shipboard crew;
- changes in foreign currency rates, security expenses, food, fuel,
insurance and commodity prices and interest rates;
- delivery of new ships on schedule and at the contracted prices;
- weather patterns;
- unscheduled ship repairs and drydocking;
- incidents involving cruise ships;
- impact of pending or threatened litigation; and
- changes in laws and regulations applicable to us.
We caution the reader that these risks may not be exhaustive. We operate in
a continually changing business environment, and new risks emerge from time to
time. We cannot predict such risks nor can we assess the impact, if any, of such
risks on our business or the extent to which any risk, or combination of risks
may cause actual results to differ from those projected in any forward-looking
statements. Accordingly, forward-looking statements should not be relied upon as
a prediction of actual results. We undertake no obligation to publicly update or
revise any forward-looking statements, whether as a result of new information,
future events or otherwise.
15
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth our ratio of earnings to fixed charges on a
historical basis for the periods indicated and on an unaudited pro forma basis
for the nine months ended August 31, 2001 and the fiscal year ended November 30,
2000. The pro forma data give effect to the application of the proceeds of the
LYONs and the amortization of deferred financing expenses. Earnings include net
income, adjusted for income taxes, minority interest and income from affiliated
operations net of dividends received, plus fixed charges and exclude capitalized
interest. Fixed charges include gross interest expense, amortization of deferred
financing expenses and an amount equivalent to interest included in rental
charges. We have assumed that one-third of rental expense is representative of
the interest factor.
HISTORICAL PRO FORMA
-------------------------------------------------------------------------- -------------------------------
NINE MONTHS
ENDED
AUGUST 31, YEARS ENDED NOVEMBER 30, NINE MONTHS YEAR ENDED
------------------- ---------------------------------------------------- ENDED AUGUST 31, NOVEMBER 30,
2001 2000 2000 1999 1998 1997 1996 2001 2000
-------- -------- -------- -------- -------- -------- -------- ---------------- ------------
Ratio of earnings to
fixed charges...... 8.3x 13.6x 11.5x 11.3x 8.8x 9.0x 6.4x 7.7x 9.5x
PRICE RANGE OF COMMON STOCK AND DIVIDENDS
Our common stock is traded on the New York Stock Exchange under the symbol
"CCL". The intra-day high and low of our common stock sales prices for the
periods indicated were as follows:
HIGH LOW
-------- --------
FISCAL 1999
First Quarter............................................. $49.125 $34.875
Second Quarter............................................ $53.500 $38.500
Third Quarter............................................. $50.500 $39.750
Fourth Quarter............................................ $51.875 $38.125
FISCAL 2000
First Quarter............................................. $51.250 $27.250
Second Quarter............................................ $29.063 $21.188
Third Quarter............................................. $27.500 $18.313
Fourth Quarter............................................ $25.875 $19.563
FISCAL 2001
First Quarter............................................. $34.938 $21.938
Second Quarter............................................ $33.400 $23.600
Third Quarter............................................. $33.740 $25.890
Fourth Quarter (through November 28, 2001)................ $31.450 $16.950
As of November 28, 2001, there were approximately 4,594 holders of record of
our common stock.
We declared cash dividends on all of our common stock in the amount of $.09
per share in each of the first three quarters of fiscal 1999 and $.105 for each
subsequent quarter through and including the fourth quarter of fiscal 2001.
Payment of future dividends on the common stock will depend upon, among other
factors, our earnings, financial condition and capital requirements. We may also
declare special dividends to all shareholders in the event that members of the
Arison family and certain related entities, as a result of any future income tax
audit, are required to pay additional income taxes by reason of their ownership
of our common stock.
16
The Republic of Panama does not currently have tax treaties with any other
country. Under current law, we believe that distributions to our shareholders,
other than residents of Panama or other business entities conducting business in
Panama, are not subject to taxation under the laws of the Republic of Panama.
Dividends that we pay to United States citizens, residents, corporations and to
foreign corporations doing business in the United States, to the extent treated
as "effectively connected" income, will be taxable as ordinary income for United
States federal income tax purposes to the extent of our current or accumulated
earnings and profits, but generally will not qualify for any dividends-received
deduction.
The payment and amount of any dividend is within the discretion of our board
of directors, and it is possible that the amount of any dividend may vary from
the levels discussed above.
17
SELECTED CONSOLIDATED FINANCIAL DATA
The selected consolidated financial data presented below for the fiscal
years ended November 30, 2000, 1999, 1998, 1997 and 1996, and as of the end of
each such fiscal year, are derived from our audited financial statements and
should be read in conjunction with those financial statements and the related
notes. The selected financial data presented below for the nine month periods
ended August 31, 2001 and 2000, are derived from our unaudited financial
statements and should be read in conjunction with those financial statements and
related notes.
NINE MONTHS ENDED
AUGUST 31, YEARS ENDED NOVEMBER 30,
----------------------- --------------------------------------------------------------
2001 2000 2000 1999 1998 1997 1996
---------- ---------- ---------- ---------- ---------- ---------- ----------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
INCOME STATEMENT AND OTHER
DATA (3):
Revenues...................... $3,576,649 $2,928,216 $3,778,542 $3,497,470 $3,009,306 $2,447,468 $2,212,572
Operating income before income
from affiliated
operations.................. 816,218 778,756 945,130 943,941 819,792 660,979 551,461
Operating income.............. 772,194 774,395 982,958 1,019,699 896,524 714,070 597,428
Net income.................... 809,888 (4) 771,663 965,458 1,027,240 835,885 666,050 566,302
Earnings per share (1):
Basic....................... $ 1.39 $ 1.28 $ 1.61 $ 1.68 $ 1.40 $ 1.12 $ 0.98
Diluted..................... 1.38 1.27 1.60 1.66 1.40 1.12 0.96
Dividends declared per share
(1)......................... 0.315 0.315 0.420 0.375 0.315 0.240 0.190
Capital expenditures.......... 713,328 882,460 1,003,348 872,984 1,150,413 497,657 901,905
Available lower berth days.... 15,500 11,808 15,888 14,336 12,237 10,992 9,838
Occupancy percentage (2)...... 107.0% 106.1% 105.4% 104.3% 106.3% 108.3% 107.6%
AS OF AUGUST 31, AS OF NOVEMBER 30,
------------------------ --------------------------------------------------------------
2001 (3) 2000 2000 (3) 1999 1998 1997 1996
----------- ---------- ---------- ---------- ---------- ---------- ----------
(IN THOUSANDS)
BALANCE SHEET DATA:
Total assets................. $11,275,806 $8,592,170 $9,831,320 $8,286,355 $7,179,323 $5,426,775 $5,101,888
Long-term debt
(excluding portion due
within one year).......... 2,478,482 1,475,831 2,099,077 867,515 1,563,014 1,015,294 1,316,632
Total shareholders' equity... 6,546,416 5,769,186 5,870,617 5,931,247 4,285,476 3,605,098 3,030,884
- ------------------------------
(1) All per share amounts have been adjusted as of such date to reflect a
two-for-one stock split effective June 12, 1998.
(2) In accordance with cruise industry practice, occupancy percentage is
calculated based upon 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.
(3) Since June 1997, we owned 50% of Costa. On September 29, 2000, we completed
the acquisition of the remaining 50% interest in Costa. We accounted for
this transaction using the purchase accounting method. Prior to the fiscal
2000 acquisition, we accounted for our 50% interest in Costa using the
equity method. Commencing in fiscal 2001, Costa's results of operations have
been consolidated on a current month basis in the same manner as our other
wholly-owned subsidiaries. Our November 30, 2000 and August 31, 2001
consolidated balance sheets include Costa's balance sheet. See Note 3 to our
financial statements for the year ended November 30, 2000, which are
incorporated by reference in this prospectus.
(4) Our net income for the nine months ended August 31, 2001 includes an
impairment loss of approximately $101 million and a nonoperating net gain of
approximately $100 million from the sale of our investment in Airtours plc.
See Notes 8 and 9 to our financial statements for the nine months ended
August 31, 2001, which are incorporated by reference in this prospectus.
18
CAPITALIZATION
The following table sets forth our capitalization as of August 31, 2001 and
as adjusted as of such date to give effect to the LYONs and the application of
the gross proceeds of that offering. See "Use of Proceeds."
AS OF AUGUST 31, 2001
-------------------------------------
ACTUAL AS ADJUSTED
----------------- -----------------
(in thousands, except per share data)
Long-term debt (1):
LYONs net of discount....................................... $ -- $ 500,000
2% convertible senior debentures due 2021................... 600,000 600,000
Unsecured debentures and notes, bearing interest at rates
ranging from 6.15% to 7.7%, due through 2028.............. 848,749 848,749
Euro note, secured by one ship, bearing interest at euribor
plus 0.5% (4.8% at August 31, 2001), due through 2008..... 128,554 128,554
Unsecured euro notes, bearing interest at rates ranging from
euribor plus 0.19% to euribor plus 1.0% (4.7% to 5.4% at
August 31, 2001), due 2001, 2005 and 2006 (2)............. 780,743 621,039
Unsecured euro notes, bearing interest at 5.57%, due in
2006...................................................... 272,074 272,074
Other....................................................... 30,210 30,210
----------- -----------
Total long-term debt...................................... 2,660,330 3,000,626
Less portion due within one year.......................... (181,848) (22,144)
----------- -----------
Total long-term debt (excluding portion due within one
year)................................................... 2,478,482 2,978,482
----------- -----------
Shareholders' equity:
Common stock; $.01 par value; 960,000 shares authorized;
620,006 shares issued..................................... 6,200 6,200
Additional paid-in capital.................................. 1,805,050 1,805,050
Retained earnings........................................... 5,501,532 5,501,532
Unearned stock compensation................................. (13,590) (13,590)
Accumulated other comprehensive loss........................ (25,139) (25,139)
Treasury stock; 33,848 shares at cost....................... (727,637) (727,637)
----------- -----------
Total shareholders' equity................................ 6,546,416 6,546,416
----------- -----------
Total capitalization (excluding portion of long-term debt
due within one year).................................... $ 9,024,898 $ 9,524,898
=========== ===========
- ------------------------
(1) All borrowings are in U.S. dollars unless otherwise noted. Euro denominated
notes have been translated to U.S. dollars at August 31, 2001 exchange rate.
(2) In May 2001, we entered into a five-year $235 million unsecured euro
denominated revolving credit facility, of which $207 million was available
at August 31, 2001. We intend to refinance a $70 million unsecured euro
note, due in 2001, with proceeds from this revolver and, accordingly, have
classified this $70 million of outstanding debt as long-term at August 31,
2001.
19
USE OF PROCEEDS
The selling securityholders will receive all of the proceeds from the sale
of the securities sold under this prospectus. We will not receive any of the
proceeds from sales by the selling securityholders of the offered securities.
SELLING SECURITYHOLDERS
The following table provides, as of November 28, 2001, the name of each
selling securityholder, the principal amount at maturity of the LYONs held by
such selling securityholder, the number of shares of common stock owned by such
securityholder prior to its purchase of the LYONs and the common stock issuable
upon conversion of the LYONs (based upon the initial conversion price). This
information has been obtained from the selling securityholders. Selling
securityholders representing an amount of up to an additional $817,138,000
aggregate principal amount at maturity of the LYONs will be added to the table
prior to or after the effectiveness of the registration statement of which this
prospectus is a part.
(2)
PRINCIPAL
AMOUNT AT
MATURITY OF (3) (4) (5)
LYONS PERCENT OF COMMON STOCK COMMON STOCK
(1) BENEFICIALLY TOTAL ISSUABLE UPON OWNED PRIOR TO
SELLING OWNED AND OUTSTANDING CONVERSION OF CONVERSION OF
SECURITYHOLDER OFFERED LYONS THE LYONS LYONS*
- --------------------------------- ------------- -------------- ----------------- -----------------
BNP Paribas Equity Strategies
SNC............................ $ 5,500,000 0.52% 91,281 241,406
First Union Securities, Inc...... 39,400,000 3.75% 653,908 0
Global Bermuda Limited
Partnership.................... 3,300,000 0.31% 54,769 --
HBK Master Fund L.P.............. 9,000,000 0.86% 149,370 7,200
Highbridge International LLC..... 26,500,000 2.52% 439,811 --
J.P. Morgan Securities Inc....... 2,050,000 0.20% 34,023 187,218
Lakeshore International, Ltd..... 13,200,000 1.26% 219,076 --
MLQA Convertible Securities
Arbitrage Ltd.................. 52,500,000 4.99% 871,325 --
Shepherd Investments
International, Ltd............. 58,087,000 5.53% 964,050 --
St. Albans Partners Ltd.......... 10,000,000 1.00% 165,966 --
Triborough Partners QP, LLC...... 2,500,000 0.24% 41,491 --
Yield Strategies Fund I, LP...... 12,000,000 1.14% 199,160 --
- --------------------------
* Assuming the sale of all LYONs and common stock issuable upon conversion of
the LYONs, selling securityholders will not hold any LYONs and will hold the
number of our common stock set forth in column (5) "Common Stock Owned Prior
to Conversion of LYONs". At that time, no selling securityholder will hold
more than 1% of our outstanding common stock.
Except as described below, none of the selling securityholders listed above
has, or within the past three years had, any position, office or any material
relationship with us or any of our affiliates. Because the selling
securityholders may offer all or some portion of the above-referenced securities
under this prospectus or otherwise, no estimate can be given as to the amount of
percentage that will be held by the selling securityholders upon termination of
any sale. In addition, the selling securityholders identified above may have
sold, transferred or otherwise disposed of all or a portion of such securities
since October 24, 2001, in transactions exempt from the registration
requirements of the Securities Act.
Generally, only selling securityholders identified in the foregoing table
who beneficially own the securities set forth opposite their respective names in
columns (2) and (5) may sell offered securities under the registration statement
of which this prospectus forms a part. We may from time to time include
additional selling securityholders in supplements to this prospectus.
20
PLAN OF DISTRIBUTION
The LYONs and underlying common stock, which we will refer to as offered
securities, are being registered to permit the resale of such securities by the
holders of them from time to time after the date of this prospectus. We will not
receive any of the proceeds from the sale by the selling securityholders of the
LYONs and common stock. We will bear the fees and expenses incurred in
connection with our obligation to register the LYONs and underlying common
stock. These fees and expenses include registration and filing fees, printing
and duplication expenses, fee and disbursement of our counsel. However, the
selling securityholders will pay all underwriting discounts and selling
commissions, if any, and their own legal expenses.
The selling securityholders may sell the LYONs and common stock from time to
time, at market prices prevailing at the time of sale, at prices related to
market prices, at fixed prices, prices subject to change or at negotiated
prices, by a variety of methods including the following:
- in market transactions;
- in privately negotiated transactions;
- through broker-dealers, which may act as agents or principals;
- in a block trade in which a broker-dealer will attempt to sell a block of
securities as agent but may position and resell a portion of the block as
principal to facilitate the transaction;
- if we agree to it prior to the distribution, through one or more
underwriters on a firm commitment or best-efforts basis;
- directly to one or more purchasers;
- through agents;
- in any combination of the above; or
- by any other legally available means.
In effecting sales, brokers or dealers engaged by the selling
securityholders may arrange for other brokers or dealers to participate.
Broker-dealer transactions may include:
- purchases of the LYONs and common stock by a broker-dealer as principal
and resales of them by the broker-dealer for its account pursuant to this
prospectus;
- ordinary brokerage transactions; or
- transactions in which the broker-dealer solicits purchasers.
- If a material arrangement with any underwriter, broker, dealer or other
agent is entered into for the sale of any LYONs and common stock through a
secondary distribution or a purchase by a broker or dealer, or if other
material changes are made in the plan of distribution of the LYONs and
common stock, a prospectus supplement will be filed, if necessary, under
the Securities Act disclosing the material terms and conditions of such
arrangement. The underwriter or underwriters with respect to an
underwritten offering of LYONs and common stock and the other material
terms and conditions of the underwriting will be set forth in a prospectus
supplement relating to such offering and, if an underwriting syndicate is
used, the managing underwriter or underwriters will be set forth on the
cover of the prospectus supplement. In connection with the sale of LYONs
and common stock, underwriters will receive compensation in the form of
underwriting discounts or commissions and may also receive commissions
from purchasers of LYONs and underlying common stock for whom they may act
as agent. Underwriters may sell to or through dealers, and such dealers
may receive compensation in the form of discounts, concessions or
commissions from the underwriters and/or commissions from the purchasers
for whom they may act as agent.
21
In addition, any securities covered by this prospectus which can be sold
under Rule 144 under the Securities Act may be sold under Rule 144 rather than
in a registered offering contemplated by this prospectus.
The selling securityholders and any underwriters, broker-dealers or agents
participating in the distribution of the securities may be deemed to be
"underwriters" within the meaning of the Securities Act, and any profit on the
sale of the LYONs and/or common stock by the selling securityholders and any
commissions received by any such underwriters, broker-dealers or agents may be
deemed to be underwriting commissions under the Securities Act.
The selling securityholders and any other person participating in the
distribution will be subject to applicable provisions of the Exchange Act and
the rules and regulations under the Exchange Act, including without limitation,
Regulation M, which may limit the timing of purchases and sales of any of the
LYONs and common stock by the selling securityholders and any other relevant
person. Furthermore, Regulation M may restrict the ability of any person engaged
in the distribution of the LYONs and common stock to engage in market-making
activities with respect to the particular LYONs and common stock being
distributed. All of the above may affect the marketability of the LYONs and
common stock and the ability of any person or entity to engage in market-making
activities with respect to the LYONs and common stock.
Under the securities laws of certain states, the LYONs and underlying common
stock may be sold in those states only through registered or licensed brokers or
dealers. In addition, in certain states the LYONs and common stock may not be
sold unless the LYONs and common stock have been registered or qualified for
sale in the state or an exemption from registration or qualification is
available and is complied with.
We have agreed to indemnify the selling securityholders against certain
civil liabilities, including certain liabilities arising under the Securities
Act, and the selling securityholders will be entitled to contribution from us in
connection with those liabilities. The selling securityholders will indemnify us
against certain civil liabilities, including liabilities arising under the
Securities Act, and will be entitled to contribution from the selling
securityholders in connection with those liabilities.
We are permitted to suspend the use of this prospectus under certain
circumstances relating to pending corporate developments, public filings with
the SEC and similar events for a period not to exceed 60 days in any three-month
period and not to exceed an aggregate of 90 days in any 12-month period.
However, if the duration of such suspension exceeds any of the periods
above-mentioned, we have agreed to pay liquidated damages. Please refer to the
section entitled "Description of LYONs--Registration Rights."
The outstanding common stock is listed for trading on the New York Stock
Exchange under the symbol "CCL." We do not intend to apply for listing of the
LYONs on any securities exchange or for quotation through the National
Association of Securities Dealers Automated Quotation System. Accordingly, we
cannot assure you about the development of liquidity or any trading market for
the LYONs. Please refer to the section entitled "Risk Factors."
22
DESCRIPTION OF LYONS
We have issued the LYONs pursuant to the indenture dated as of April 25,
2001, between us and US Bank Trust National Association, as trustee, as
supplemented by a second supplemental indenture dated October 24, 2001,
governing the LYONs. We refer to the indenture, as so supplemented, as the
"indenture."
The following summary does not purport to be complete, and is subject to,
and is qualified in its entirety by reference to, all of the provisions of the
LYONs and the indenture. We urge you to read the indenture and the form of the
LYONs, which you may obtain from us upon request. As used in this description,
all references to "our company," "we," "us" or "our" mean Carnival Corporation,
excluding, unless otherwise expressly stated or the context otherwise requires,
its subsidiaries.
GENERAL
The LYONs were limited to $1,051,175,000 aggregate principal amount at
maturity. The LYONs mature on October 24, 2021. The principal amount at maturity
of each LYON is $1,000. The LYONs will be payable at the office of the paying
agent, which initially will be an office or agency of the trustee, or an office
or agency maintained by us for such purpose, in the Borough of Manhattan, The
City of New York.
The LYONs were offered at a substantial discount from their principal amount
at maturity. We do not make periodic payments of interest on the LYONs. Each
LYON was issued at an issue price of $475.66 per LYON. However, the LYONs accrue
original issue discount while they remain outstanding. Original issue discount
is the difference between the issue price and the principal amount at maturity
of a LYON. Original issue discount is calculated on a semi-annual bond
equivalent basis at the yield to maturity of the LYONs, using a 360-day year
comprised of twelve 30-day months. The issue date for the LYONs and the
commencement date for the accrual of original issue discount is October 24,
2001.
Maturity, conversion, purchase by us at the option of a holder or redemption
of a LYON at our option will cause original issue discount to cease to accrue on
such LYON. We may not reissue a LYON that has matured or been converted,
purchased by us at your option, redeemed or otherwise cancelled, except for
registration of transfer, exchange or replacement of such LYON.
LYONs may be presented for conversion at the office of the conversion agent,
and for exchange or registration of transfer at the office of the registrar,
each such agent initially being the trustee. We do not charge a service fee for
any registration of transfer or exchange of the LYONs.
RANKING OF LYONS
The LYONs are unsecured and unsubordinated obligations. The LYONs rank equal
in right of payment to all of our existing and future unsecured and
unsubordinated indebtedness. However, the LYONs are effectively subordinated to
all existing and future obligations of our subsidiaries.
As of August 31, 2001, we had approximately $2.66 billion of total
indebtedness outstanding, which included approximately $1.21 billion of
indebtedness of our consolidated subsidiaries. See "Capitalization."
CONVERSION RIGHTS
Holders may surrender LYONs for conversion into shares of our common stock
only if at least one of the conditions described below is satisfied. The initial
conversion rate is 16.5964 shares of common stock per $1,000 principal amount at
maturity of LYONs, subject to adjustment upon the occurrence of certain events
described below. A holder of a LYON otherwise entitled to a fractional share
will receive cash in an amount equal to the value of such fractional share based
on the sale price, as defined below,
23
on the trading day immediately preceding the conversion date. Upon a conversion,
we will have the right to deliver cash or a combination of cash and common
stock, as described below.
CONVERSION RIGHTS BASED ON COMMON STOCK PRICE. Commencing after
February 28, 2002, holders may surrender LYONs for conversion into shares of our
common stock in any fiscal quarter (and only during such fiscal quarter), if the
closing sale price of our common stock for at least 20 trading days in a period
of 30 consecutive trading days ending on the last trading day of the preceding
fiscal quarter is more than 110% of the accreted conversion price per share of
common stock on the last day of such preceding fiscal quarter (the "conversion
trigger price"). Our fiscal quarters end on the last day of February, May,
August and November. The "accreted conversion price" per share as of any day
will equal the sum of the issue price of a LYON plus the accrued original issue
discount to that day, with that sum divided by the number of shares of common
stock issuable upon a conversion of a LYON.
"Trading Day" means a day during which trading in securities generally
occurs on the New York Stock Exchange or, if the common stock is not listed on
the New York Stock Exchange, on the principal other national or regional
securities exchange on which the common stock is then listed or, if the common
stock is not listed on a national or regional securities exchange, on the
National Association of Securities Dealers Automated Quotation System or, if the
common stock is not quoted on the National Association of Securities Dealers
Automated Quotation System, on the principal other market on which the common
stock is then traded.
The table below shows the conversion trigger price per share of our common
stock for each of the first 20 fiscal quarters. These prices reflect the
accreted conversion price per share of common stock multiplied by 110%. The
conversion trigger price for the fourth fiscal quarter of 2021 beginning
September 1 is $65.92, assuming no adjustment to the conversion rate.
(2)
(1) CONVERSION
ACCRETED TRIGGER
CONVERSION PRICE
FISCAL QUARTER* PRICE (1) X 110%
--------------- ---------- -------------
2002
Second Quarter............................................ $29.04 $31.94
Third Quarter............................................. 29.31 32.24
Fourth Quarter............................................ 29.58 32.54
2003
First Quarter............................................. 29.86 32.85
Second Quarter............................................ 30.14 33.15
Third Quarter............................................. 30.42 33.46
Fourth Quarter............................................ 30.70 33.77
2004
First Quarter............................................. 30.99 34.09
Second Quarter............................................ 31.28 34.41
Third Quarter............................................. 31.57 34.73
Fourth Quarter............................................ 31.87 35.05
2005
First Quarter............................................. 32.16 35.38
Second Quarter............................................ 32.46 35.71
Third Quarter............................................. 32.77 36.04
Fourth Quarter............................................ 33.07 36.38
24
(2)
(1) CONVERSION
ACCRETED TRIGGER
CONVERSION PRICE
FISCAL QUARTER* PRICE (1) X 110%
--------------- ---------- -------------
2006
First Quarter............................................. 33.38 36.72
Second Quarter............................................ 33.69 37.06
Third Quarter............................................. 34.01 37.41
Fourth Quarter............................................ 34.32 37.76
2007
First Quarter............................................. 34.64 38.11
- ------------------------
* This table assumes no events have occurred that would require an adjustment
to the conversion rate. Our fiscal quarters end on the last days of
February, May, August and November.
CONVERSION RIGHTS UPON NOTICE OF REDEMPTION. A holder may surrender for
conversion a LYON called for redemption at any time prior to the close of
business on the redemption date, even if it is not otherwise convertible at such
time. A LYON for which a holder has delivered a purchase notice or a change in
control purchase notice as described below requiring us to purchase the LYON may
be surrendered for conversion only if such notice is withdrawn in accordance
with the indenture.
CONVERSION RIGHTS UPON OCCURRENCE OF CERTAIN CORPORATE TRANSACTIONS. If we
are party to a consolidation, merger or binding share exchange pursuant to which
our shares of common stock would be converted into cash, securities or other
property, the LYONs may be surrendered for conversion at any time from and after
the date which is 15 days prior to the anticipated effective date of the
transaction until 15 days after the actual date of such transaction and, at the
effective time, the right to convert LYONs into shares of common stock will be
changed into a right to convert it into the kind and amount of cash, securities
or other property of our company or another person which the holder would have
received if the holder had converted the holder's LYONs immediately prior to the
transaction. If such transaction also constitutes a change in control, the
holder will be able to require us to purchase all or a portion of such holder's
LYONs as described under "--Change in Control Permits Purchase of LYONs by Us at
the Option of the Holder."
In the event we elect to make a distribution described in the third or
fourth bullet of the paragraph under the caption, "--Conversion
Rights--Conversion Rate Adjustment" below describing adjustments to the
conversion rate which, in the case of the fourth bullet, has a per share value
equal to more than 7.5% of the sale price of our shares of common stock on the
day preceding the declaration date for such distribution, we will be required to
give notice to the holders of the LYONs at least 20 days prior to the
ex-dividend date for such distribution and, upon the giving of such notice, the
LYONs may be surrendered for conversion at any time until the close of business
on the business day prior to the ex-dividend date or until we announce that such
distribution will not take place.
Notwithstanding anything to the contrary, no LYONs may be surrendered for
conversion pursuant to the first paragraph under this caption, and no corporate
transaction requiring an adjustment to the conversion price will be deemed to
have occurred by reason of the completion of a merger, consolidation or other
transaction effected with one of our affiliates for the purpose of:
- changing our jurisdiction of organization; or
- effecting a corporate reorganization, including, without limitation, the
implementation of a holding company structure.
DELIVERY OF COMMON STOCK. On conversion of a LYON, a holder will not
receive any cash payment of interest representing accrued original issue
discount. Our delivery to the holder of the full number
25
of shares of common stock into which the LYON is convertible, together with any
cash payment for such holder's fractional shares, will be deemed:
- to satisfy our obligation to pay the principal amount at maturity of the
LYON; and
- to satisfy our obligation to pay accrued original issue discount
attributable to the period from the issue date through the conversion
date.
As a result, accrued original issue discount is deemed to be paid in full
rather than cancelled, extinguished or forfeited.
A certificate for the number of full shares of common stock into which any
LYONs are converted, together with any cash payment for fractional shares, will
be delivered through the conversion agent as soon as practicable following the
conversion date. For a discussion of the tax treatment of a holder receiving
shares of common stock upon conversion, see "Certain Panamanian and United
States Federal Income Tax Considerations."
In lieu of delivery of shares of our common stock upon notice of conversion
of any LYONs (for all or any portion of the LYONs), we may elect to pay holders
surrendering LYONs an amount in cash per LYON (or a portion of a LYON) equal to
the average sale price of our common stock for the five consecutive trading days
immediately following either (a) the date of our notice of our election to
deliver cash as described below if we have not given notice of redemption, or
(b) the conversion date, in the case of conversion following our notice of
redemption specifying that we intend to deliver cash upon conversion, in either
case multiplied by the conversion rate in effect on that date. We will inform
the holders through the trustee no later than two business days following the
conversion date of our election to deliver shares of our common stock or to pay
cash in lieu of delivery of the shares, unless we have already informed holders
of our election in connection with our optional redemption of the LYONs as
described under "--Redemption of LYONs at Our Option." If we elect to deliver
all of such payment in shares of our common stock, the shares will be delivered
through the conversion agent no later than the fifth business day following the
conversion date. If we elect to pay all or a portion of such payment in cash,
the payment, including any delivery of our common stock, will be made to holders
surrendering LYONs no later than the tenth business day following the applicable
conversion date. If an event of default, as described under "--Events of
Default; Waiver and Notice" below (other than a default in a cash payment upon
conversion of the LYONs), has occurred and is continuing, we may not pay cash
upon conversion of any LYONs or portion of a LYON (other than cash for
fractional shares).
To convert a LYON into shares of common stock, a holder must:
- complete and manually sign the conversion notice on the back of the
LYON or complete and manually sign a facsimile of the conversion notice
and deliver the conversion notice to the conversion agent;
- surrender the LYON to the conversion agent;
- if required by the conversion agent, furnish appropriate endorsements
and transfer documents; and
- if required, pay all transfer or similar taxes.
Pursuant to the indenture, the date on which all of the foregoing
requirements have been satisfied is the conversion date.
CONVERSION RATE ADJUSTMENT. The conversion rate will be adjusted for:
- dividends or distributions on our shares of common stock payable in
shares of common stock or other capital stock of our company;
- subdivisions, combinations or certain reclassifications of shares of
our common stock;
26
- distributions to all holders of shares of common stock of certain
rights to purchase shares of common stock for a period expiring within
60 days at less than the sale price at the time; and
- distributions to all holders of our shares of common stock of our
assets (including shares of capital stock, of or similar equity
interests in, a subsidiary or other business unit of ours) or debt
securities or certain rights to purchase our securities (excluding cash
dividends or other cash distributions from current or retained earnings
other than, with respect to any consecutive 12-month period, the
amount, if any, by which the aggregate amount of all cash dividends on
the common stock occurring during such 12-month period exceeds on a per
share basis 7.5% of the sale price of the shares of common stock on the
day preceding the date of declaration of such dividend or other
distribution).
In the event that we pay a dividend or make a distribution on shares of our
common stock consisting of capital stock of, or similar equity interests in, a
subsidiary or other business unit of ours, the conversion rate will be adjusted
based on the market value of the securities so distributed relative to the
market value of our common stock, in each case based on the average sale prices
of those securities for the 10 trading days commencing on and including the
fifth trading day after the date on which "ex-dividend trading" commences for
such dividend or distribution on the New York Stock Exchange or such other
national or regional exchange or market on which the securities are then listed
or quoted.
No adjustment to the conversion rate or the ability of a holder of a LYON to
convert will be made if we provide that holders of LYONs will participate in the
transaction without conversion or in certain other cases.
The indenture permits us to increase the conversion rate from time to time.
In the event of:
- a taxable distribution to holders of shares of common stock which
results in an adjustment of the conversion rate; or
- an increase in the conversion rate at our discretion,
the holders of the LYONs may, in certain circumstances, be deemed to have
received a distribution subject to federal income tax as a dividend. See
"Certain Panamanian and United States Federal Income Tax Considerations."
Upon determination that LYON holders are or will be entitled to convert
their LYONs into shares of common stock in accordance with the foregoing
provisions, we will issue a press release and publish such information on our
website on the World Wide Web.
REDEMPTION OF LYONS AT OUR OPTION
Prior to October 24, 2008, the LYONs will not be redeemable at our option.
Beginning on October 24, 2008, we may redeem the LYONs at any time as a whole,
or from time to time in part. We will give not less than 30 days nor more than
60 days notice of redemption by mail to holders of the LYONs. The notice of
redemption will inform the holders of our election to deliver shares of our
common stock or to pay cash or a combination of cash and common stock.
27
The table below shows the redemption prices of a LYON on October 24, 2008,
at each October 24 thereafter prior to maturity and at stated maturity on
October 24, 2021. The redemption price equals the original issue price plus
accrued original issue discount to the redemption date. The redemption price of
a LYON redeemed between such dates would include an additional amount reflecting
the additional original issue discount accrued since the immediately preceding
date in the table.
(1) (2) (3)
ACCRUED ORIGINAL REDEMPTION PRICE
REDEMPTION DATE LYON ISSUE PRICE ISSUE DISCOUNT (1) + (2)
--------------- ---------------- ---------------- ----------------
October 24, 2008............................... $475.66 $141.28 $ 616.94
October 24, 2009............................... 475.66 164.63 640.29
October 24, 2010............................... 475.66 188.87 664.53
October 24, 2011............................... 475.66 214.02 689.68
October 24, 2012............................... 475.66 240.13 715.79
October 24, 2013............................... 475.66 267.22 742.88
October 24, 2014............................... 475.66 295.34 771.00
October 24, 2015............................... 475.66 324.52 800.18
October 24, 2016............................... 475.66 354.81 830.47
October 24, 2017............................... 475.66 386.24 861.90
October 24, 2018............................... 475.66 418.87 894.53
October 24, 2019............................... 475.66 452.73 928.39
October 24, 2020............................... 475.66 487.87 963.53
At stated maturity............................. 475.66 524.34 1,000.00
If we decide to redeem fewer than all of the outstanding LYONs, the trustee
will select the LYONs to be redeemed in principal amounts at maturity of $1,000
or integral multiples of $1,000. In this case, the trustee may select the LYONs
by lot, pro rata, or by another method the trustee considers fair and
appropriate.
If the trustee selects a portion of your LYONs for partial redemption and
you convert a portion of your LYONs, the converted portion will be deemed to be
the portion selected for redemption.
PURCHASE OF LYONS BY US AT THE OPTION OF THE HOLDER
You have the right to require us to purchase your LYONs on any October 24
occurring in the years 2006, 2008, 2011 and 2016. We will be required to
purchase any outstanding LYON for which a written purchase notice has been
properly delivered by the holder to the paying agent and not withdrawn, subject
to certain additional conditions. We may also add additional dates on which you
may require us to purchase all or a portion of your LYONs. However, we cannot
assure you that we will add any purchase dates. You may submit your LYONs for
purchase to the paying agent at any time from the opening of business on the
date that is 20 business days prior to the purchase date until the close of
business on the purchase date. Also, our ability to satisfy our purchase
obligations may be affected by the factors described in "Risk Factors" under the
heading "We may not have the ability to raise the funds necessary to finance the
change in control repurchase option or the repurchase at the option of the
holder provision in the LYONs."
The purchase price of a LYON will be:
- $572.76 per LYON on October 24, 2006;
- $616.94 per LYON on October 24, 2008;
- $689.68 per LYON on October 24, 2011; and
- $830.47 per LYON on October 24, 2016.
28
The purchase prices shown above are equal to the issue price plus accrued
original discount to the purchase date. We may, at our option, elect to pay the
purchase price in cash or shares of common stock, or any combination thereof.
For a discussion of the tax treatment of a holder receiving cash, shares of
common stock or any combination thereof, see "Certain Panamanian and United
States Federal Income Tax Considerations."
We will be required to give notice on a date not less than 20 business days
prior to the purchase date to all holders at their addresses shown in the
register of the registrar, and to beneficial owners as required by applicable
law, stating among other things:
- whether we will pay the purchase price of the LYONs in cash or shares of
common stock or any combination thereof, and specifying the percentages of
each;
- if we elect to pay in shares of common stock, the method of calculating
the market price of the common stock; and
- the procedures that holders must follow to require us to purchase their
LYONs.
Your purchase notice electing to require us to purchase your LYONs must
state:
- if certificated LYONs have been issued, the LYONs certificate numbers, or
if not, such information as may be required under appropriate DTC
procedures;
- the portion of the principal amount of LYONs to be purchased, in integral
multiples of $1,000 principal amount at maturity;
- that we are to purchase the LYONs pursuant to the applicable provisions of
the LYONs and the indenture; and
- in the event we elect, pursuant to the notice that we are required to
give, to pay the purchase price in shares of common stock, in whole or in
part, but the purchase price is ultimately to be paid to you entirely in
cash because any of the conditions to payment of the purchase price or
portion of the purchase price in shares of common stock is not satisfied
prior to the close of business on the purchase date, as described below,
whether you elect:
1. to withdraw the purchase notice as to some or all of the LYONs to
which it relates; or
2. to receive cash in respect of the entire purchase price for all LYONs
or portions of the LYONs subject to such purchase notice.
If you fail to indicate your choice with respect to the election described
in the final bullet point above, you will be deemed to have elected to receive
cash in respect of the entire purchase price for all LYONs subject to the
purchase notice in these circumstances. For a discussion of the tax treatment of
a holder receiving cash instead of shares of common stock, see "Certain
Panamanian and United States Federal Income Tax Considerations."
You may withdraw any purchase notice by a written notice of withdrawal
delivered to the paying agent prior to the close of business on the purchase
date. The notice of withdrawal must state:
- the principal amount at maturity of the withdrawn LYONs;
- if certificated LYONs have been issued, the certificate numbers of the
withdrawn LYONs, or if not, such information as may be required under
appropriate DTC procedures; and
- the principal amount at maturity, if any, of LYONs that remain subject to
your purchase notice.
If we elect to pay the purchase price, in whole or in part, in shares of
common stock, the number of shares to be delivered by us will be equal to the
portion of the purchase price to be paid in shares of common stock divided by
the market price of one share of common stock. We will pay cash based
29
on the market price for all fractional shares in the event we elect to deliver
shares of common stock in payment, in whole or in part, of the purchase price.
The "market price" means the average of the sale prices of the common stock
for the five trading day period ending on the third business day (if the third
business day prior to the purchase date is a trading day or, if not, then on the
last trading day prior to the third business day) prior to the purchase date,
appropriately adjusted to take into account the occurrence, during the period
commencing on the first of such trading days during such five trading day period
and ending on such purchase date, of certain events with respect to the common
stock that would result in an adjustment of the conversion rate.
The "sale price" of the common stock on any date means the closing sale
price per share (or if no closing sale price is reported, the average of the bid
and ask prices or, if more than one in either case, the average of the average
bid and the average ask prices) on such date as reported in composite
transactions for the principal United States securities exchange on which the
common stock is traded or, if the common stock is not listed on a United States
national or regional securities exchange, as reported by the National
Association of Securities Dealers Automated Quotation System or by the National
Quotation Bureau Incorporated.
Because the market price of the common stock is determined prior to the
purchase date, holders of LYONs exercising the purchase right bear the market
risk with respect to the value of the common stock to be received from the date
such market price is determined to the purchase date. We may pay the purchase
price or any portion of the purchase price in shares of common stock only if the
information necessary to calculate the market price is published in a daily
newspaper of national circulation or is otherwise readily publicly available.
Upon determination of the actual number of shares of common stock to be
issued for each $1,000 principal amount at maturity of LYONs in accordance with
the foregoing provisions, we will publish such information on our Web site on
the World Wide Web or through such other public medium as we may use at that
time.
Our right to purchase LYONs, in whole or in part, with shares of common
stock is subject to our satisfying various conditions, including:
- the listing of such shares of common stock on the principal United States
securities exchange on which the common stock is then listed or, if not so
listed, on Nasdaq;
- the registration of the shares of common stock under the Securities Act
and the Exchange Act, if required; and
- any necessary qualification or registration under applicable state
securities law or the availability of an exemption from such qualification
and registration.
If such conditions are not satisfied with respect to a holder prior to the
close of business on the purchase date, we will pay the purchase price of the
LYONs of the holder entirely in cash. See "Certain Panamanian and United States
Federal Income Tax Considerations." We may not change the form or components or
percentages of components of consideration to be paid for the LYONs once we have
given the notice that we are required to give to holders of LYONs, except as
described in the first sentence of this paragraph.
Our ability to purchase LYONs with cash may be limited by the terms of our
then existing borrowing agreements. The indenture prohibits us from purchasing
LYONs for cash in connection with your purchase right if any event of default
under the indenture has occurred and is continuing, except a default in the
payment of the purchase price with respect to the LYONs.
You must either effect book-entry transfer or deliver the LYONs to be
purchased, together with necessary endorsements, to the office of the paying
agent after delivery of the purchase notice to
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receive payment of the purchase price. You will receive payment in cash on the
later of the purchase date or the time of book-entry transfer or the delivery of
your LYONs. If the paying agent holds money or securities sufficient to pay the
purchase price of the LYON on the business day following the purchase date,
then, immediately after the purchase date:
- your LYONs will cease to be outstanding;
- original issue discount will cease to accrue; and
- all other rights of the holder will terminate.
This will be the case whether or not book-entry transfer of your LYONs is
made and whether or not your LYONs are delivered to the paying agent.
We will comply with the provisions of Rule 13e-4, Rule 14e-1 and any other
tender offer rules under the Exchange Act that may be applicable at the time. We
will file Schedule TO or any other schedule under the Exchange Act required in
connection with any offer by us to purchase the LYONs at your option.
CHANGE IN CONTROL PERMITS PURCHASE OF LYONS BY US AT THE OPTION OF THE HOLDER
In the event of a change in control, which occurs on or before October 24,
2008, you will have the right, at your option, subject to the terms and
conditions of the indenture, to require us to purchase for cash any or all of
your LYONs in integral multiples of $1,000 principal amount at maturity. We will
purchase the LYONs at a price equal to 100% of the issue price of the LYONs to
be purchased plus accrued original issue discount to, but excluding, the change
in control purchase date.
We will be required to purchase the LYONs as of the date that is 35 business
days after the occurrence of such change in control (a "change in control
purchase date").
A change of control occurs in the following situations:
- any person or group, other than our subsidiaries, any of our or their
employee benefit plans or permitted holders, after the first issuance of
LYONs files a Schedule TO or a Schedule 13D (or any successors to those
Schedules) stating that it has become and actually is the beneficial owner
of our voting stock representing more than 50% of the total voting power
of all of our classes of voting stock entitled to vote generally in the
election of the members of our board of directors; or
- permitted holders file a Schedule TO or a Schedule 13D (or any successors
to those Schedules) stating that they have become and actually are
beneficial owners of our voting stock representing more than 80%, in the
aggregate, of the voting power of all of our classes of voting stock
entitled to vote generally in the election of the members of our board of
directors; or
- we consolidate with or merge with or into another person (other than a
subsidiary), we sell, convey, transfer or lease our properties and assets
substantially as an entirety to any person (other than a subsidiary), or
any person (other than a subsidiary) consolidates with or merges with or
into our company, and our outstanding common stock is reclassified into,
exchanged for or converted into the right to receive any other property or
security, provided that none of these circumstances will be a change in
control if the persons that beneficially own our voting stock immediately
prior to a transaction beneficially own, in substantially the same
proportion, shares with a majority of the total voting power of all
outstanding voting securities of the surviving or transferee person that
are entitled to vote generally in the election of that person's board of
directors.
For purposes of this provision, a "permitted holder" means each of Marilyn
B. Arison, Micky Arison, Shari Arison, Michael Arison or their spouses, children
or lineal descendants of Marilyn B. Arison, Micky Arison, Shari Arison, Michael
Arison or their spouses, any trust established for the
31
benefit of any Arison family member mentioned in this paragraph, or any "person"
(as such term is used in Section 13(d) or 14(d) of the Exchange Act), directly
or indirectly, controlling, controlled by or under common control with any
Arison family member mentioned in this paragraph or any trust established for
the benefit of any such Arison family member or any charitable trust or
non-profit entity established by a permitted holder.
Notwithstanding anything to the contrary, the completion of a merger,
consolidation or other transaction effected with one of our affiliates for the
purpose of:
- changing our jurisdiction of organization; or
- effecting a corporate reorganization, including, without limitation, the
implementation of a holding company structure
shall not be deemed to be a "change of control."
Within 15 business days after the occurrence of a change in control, we are
obligated to mail to the trustee and to all holders of LYONs at their addresses
shown in the register of the registrar and to beneficial owners as required by
applicable law a notice regarding the change in control, stating, among other
things:
- the events causing a change in control;
- the date of such change in control;
- the last date on which the purchase right may be exercised;
- the change in control purchase price;
- the change in control purchase date;
- the name and address of the paying agent and the conversion agent;
- the conversion rate and any adjustments to the conversion rate;
- that LYONs with respect to which a change in control purchase notice is
given by the holder may be converted only if the change in control
purchase notice has been withdrawn in accordance with the terms of the
LYONs and the indenture; and
- the procedures that holders must follow to exercise these rights.
To exercise this right, you must deliver a written notice to the paying
agent prior to the close of business on the business day immediately before the
change in control purchase date. The required purchase notice upon a change in
control must state:
- if certificated LYONs have been issued, the LYON certificate numbers, or
if not, must comply with appropriate DTC procedures;
- the portion of the principal amount of LYONs to be purchased, in integral
multiples of $1,000 principal amount at maturity; and
- that we are to purchase such LYONs pursuant to the applicable provisions
of the LYONs and the indenture.
You may withdraw any change in control purchase notice by a written notice
of withdrawal delivered to the paying agent prior to the close of business on
the business day before the change in control purchase date. The notice of
withdrawal must state:
- the principal amount at maturity of the withdrawn LYONs, in integral
multiples of $1,000 principal amount at maturity;
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- if certificated LYONs have been issued, the certificate numbers of the
withdrawn LYONs, or if not, must comply with appropriate DTC procedures;
and
- the principal amount at maturity, if any, of LYONs that remain subject to
your change in control purchase notice.
A holder must either effect book-entry transfer or deliver the LYONs to be
purchased, together with necessary endorsements, to the office of the paying
agent after delivery of the change in control purchase notice to receive payment
of the change in control purchase price. You will receive payment in cash on the
change in control purchase date or the time of book-entry transfer or the
delivery of your LYONs. If the paying agent holds money or securities sufficient
to pay the change in control purchase price of your LYONs on the business day
following the change in control purchase date, then, immediately after the
change in control purchase date:
- your LYONs will cease to be outstanding;
- original issue discount will cease to accrue; and
- all other rights of the holder will terminate.
This will be the case whether or not book-entry transfer of your LYONs is
made or whether or not your LYONs is delivered to the paying agent.
We will comply with the provisions of Rule 13e-4, Rule 14e-1 and any other
tender offer rules under the Exchange Act that may be applicable at the time. We
will file Schedule TO or any other schedule under the Exchange Act required in
connection with any offer by us to purchase the LYONs at your option.
The change in control purchase feature of the LYONs may in certain
circumstances make more difficult or discourage a takeover of us. The change in
control purchase feature, however, is not the result of our knowledge of any
specific effort:
- to accumulate shares of common stock;
- to obtain control of us by means of a merger, tender offer, solicitation
or otherwise; or
- by management to adopt a series of anti-takeover provisions.
Instead, the terms of the change in control purchase feature resulted from
negotiations between Merrill Lynch and us.
We could, in the future, enter into certain transactions, including certain
recapitalizations, that would not constitute a change in control with respect to
the change in control purchase feature of the LYONs but that would increase the
amount of our (or our subsidiaries') outstanding indebtedness.
No LYONs may be purchased by us at the option of holders upon a change in
control if there has occurred and is continuing an event of default with respect
to the LYONs, other than a default in the payment of the change in control
purchase price with respect to the LYONs.
For purposes of defining a change of control:
- the term "person" and the term "group" have the meanings given by Sections
13(d) and 14(d) of the Exchange Act or any successor provisions;
- the term "group" includes any group acting for the purpose of acquiring,
holding or disposing of securities within the meaning of Rule 13d-5(b)(1)
under the Exchange Act or any successor provision; and
- the term "beneficial owner" is determined in accordance with Rules 13d-3
and 13d-5 under the Exchange Act or any successor provision, except that a
person will be deemed to have beneficial
33
ownership of all shares that person has the right to acquire irrespective
of whether that right is exercisable immediately or only after the passage
of time.
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
The indenture provides that we may not consolidate with or merge into any
other entity or convey or transfer our properties and assets substantially as an
entirety to any entity, unless:
- the successor or transferee entity is a corporation, limited liability
company trust or partnership organized under the laws of the United States
or any State of the United States or the District of Columbia or the
Republic of Panama or any other country recognized by the United States
and all political subdivisions of such countries;
- the successor or transferee entity, if other than us, expressly assumes by
a supplemental indenture executed and delivered to the trustee, in form
reasonably satisfactory to the trustee, the due and punctual payment of
the principal of, any premium on and any interest or accrued original
issue discount on, all the outstanding LYONs and the performance of every
covenant in the indenture to be performed or observed by us and provides
for conversion rights in accordance with applicable provisions of the
indenture;
- immediately after giving effect to the transaction, no Event of Default,
as defined in the indenture, and no event which, after notice or lapse of
time or both, would become an Event of Default, has happened and is
continuing; and
- we have delivered to the trustee an officers' certificate and an opinion
of counsel, each in the form required by the indenture and stating that
such consolidation, merger, conveyance or transfer and such supplemental
indenture comply with the foregoing provisions relating to such
transaction.
In case of any such consolidation, merger, conveyance or transfer, the
successor entity will succeed to and be substituted for us as obligor on the
LYONs, with the same effect as if it had been named in the indenture as our
company.
EVENTS OF DEFAULT; WAIVER AND NOTICE
An event of default is defined in the indenture as:
(a) default for 30 days in payment of any Liquidated Damages under the
registration rights agreement described below;
(b) default in payment of principal of or any premium on the LYONs at
maturity, redemption price, purchase price or change in control purchase price,
when the same becomes due and payable;
(c) default in the payment (after any applicable grace period) of any
indebtedness for money borrowed by our company or a Subsidiary in excess of
$50 million in aggregate principal amount (excluding such indebtedness of any
Subsidiary other than a Significant Subsidiary, all the indebtedness of which
Subsidiary is nonrecourse to our company or any other Subsidiary) or default on
such indebtedness that results in the acceleration of such indebtedness prior to
its express maturity, if such indebtedness is not discharged, or such
acceleration is not annulled, by the end of a period of 30 days after written
notice to us by the trustee or to us and the trustee by the holders of at least
25% in principal amount at maturity of the outstanding LYONs;
(d) default by us in the performance of any other covenant contained in the
indenture for the benefit of the LYONs that has not been remedied by the end of
a period of 60 days after notice is given as specified in the indenture; and
(e) certain events of bankruptcy, insolvency and reorganization of our
company or a Significant Subsidiary.
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When we refer to a "Significant Subsidiary," we mean any Subsidiary, the Net
Worth of which represents more than 10% of the Consolidated Net Worth of our
company and our Subsidiaries. The terms "Subsidiary," "Net Worth" and
"Consolidated Net Worth" are defined in the indenture.
The indenture provides that:
- if an event of default described in clause (a), (b), (c) or (d) above has
occurred and is continuing, either the trustee or the holders of not less
than 25% in aggregate principal amount at maturity of the LYONs may
declare the accreted principal amount (the original issue price of the
LYONs plus accrued original issue discount thereon through the date of
such declaration) of the LYONs then outstanding to be due and payable
immediately;
- upon certain conditions such declarations may be annulled and past
defaults (except for defaults in the payment of principal of, any premium
on or interest on, the LYONs and in compliance with certain covenants) may
be waived by the holders of a majority in aggregate principal amount at
maturity of the LYONs then outstanding.
- if an event of default described in clause (e) occurs and is continuing,
then the accreted principal amount of all LYONs issued under the indenture
and then outstanding shall become and be due and payable immediately,
without any declaration or other act by the trustee or any other holder.
In case of default in payment of the accreted principal amount of the LYONs,
whether at the stated maturity or upon acceleration or redemption, from and
after the maturity date, the LYONs will bear interest, payable upon demand of
their beneficial owners, at the rate of 3.75% per year, to the extent that
payment of any interest is legally enforceable, on the unpaid amount due and
payable on that date in accordance with the terms of the LYONs to the date
payment of that amount has been made or duly provided for.
Under the indenture, the trustee must give to the holders of LYONs notice of
all uncured defaults known to it with respect to the LYONs within 90 days after
such a default occurs (the term default to include the events specified above
without notice or grace periods); provided that, except in the case of default
in the payment of principal of, any premium on, any of the LYONs, the trustee
will 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 the LYONs.
No holder of any LYONs may institute any action under the indenture unless:
- such holder has given the trustee written notice of a continuing event of
default with respect to the LYONs;
- the holders of not less than 25% in aggregate principal amount at maturity
of the LYONs then outstanding have requested the trustee to institute
proceedings in respect of such event of default;
- such holder or holders have offered the trustee such reasonable indemnity
as the trustee may require;
- the trustee has failed to institute an action for 60 days thereafter; and
- no inconsistent direction has been given to the trustee during such 60-day
period by the holders of a majority in aggregate principal amount at
maturity of LYONs.
The holders of a majority in aggregate principal amount at maturity of the
LYONs affected and then outstanding will have the right, subject to certain
limitations, to direct the time, method and place of conducting any proceeding
for any remedy available to the trustee or exercising any trust or power
conferred on the trustee with respect to the LYONs. The indenture provides that,
if an event of default occurs and is continuing, the trustee, in exercising its
rights and powers under the indenture, will be
35
required to use the degree of care of a prudent man in the conduct of his own
affairs. The indenture further provides that the trustee shall not be required
to expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties under the indenture unless it has
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is reasonably assured to it.
We must furnish to the trustee within 120 days after the end of each fiscal
year a statement of our company signed by one of the officers of our company to
the effect that a review of our activities during such year and of our
performance under the indenture and the terms of the LYONs has been made, and,
to the knowledge of the signatories based on such review, we have complied with
all conditions and covenants of the indenture or, if we are in default,
specifying such default.
For the purposes of determining whether the holders of the requisite
principal amount at maturity of LYONs have taken any action herein described,
the principal amount of LYONs will be deemed to be the portion of such principal
amount that would be due and payable at the time of the taking of such action
upon a declaration of acceleration of maturity thereof.
MODIFICATION OF THE INDENTURE
We and the trustee may, without the consent of the holders of the debt
securities issued under the indenture, enter into supplemental indentures for,
among others, one or more of the following purposes:
- to evidence the succession of another corporation to our company, and the
assumption by such successor of our obligations under the indenture and
the LYONs;
- to add covenants of our company, or surrender any rights of our company,
or add any rights for the benefit of the holders of LYONs;
- to cure any ambiguity, omission, defect or inconsistency in such
indenture;
- to establish the form or terms of any other series of debt securities,
including any subordinated securities;
- to evidence and provide for the acceptance of any successor trustee with
respect to the LYONs or one or more other series of debt securities or to
facilitate the administration of the trusts thereunder by one or more
trustees in accordance with such indenture; and
- to provide any additional events of default.
With certain exceptions, the indenture or the rights of the holders of the
LYONs may be modified by us and the trustee with the consent of the holders of a
majority in aggregate principal amount at maturity of the LYONs then
outstanding, but no such modification may be made without the consent of the
holder of each outstanding LYON affected thereby that would:
- change the maturity of any payment of principal of, or any premium on, any
LYONs, or reduce the principal amount at maturity or the rate of accrual
of original issue discount of any LYON, or change any place of payment
where, or the coin or currency in which, any LYON or any premium is
payable, or impair the right to institute suit for the enforcement of any
such payment on or after the maturity thereof (or, in the case of
redemption or repayment, on or after the redemption date or the repayment
date, as the case may be) or adversely affect the conversion or repurchase
provisions in the indenture;
- reduce the percentage in principal amount at maturity of the outstanding
LYONs, the consent of whose holders is required for any such modification,
or the consent of whose holders is required for any waiver of compliance
with certain provisions of the indenture or certain defaults thereunder
and their consequences provided for in the indenture; or
36
- modify any of the provisions of certain sections of the indenture,
including the provisions summarized in this paragraph, except to increase
any such percentage or to provide that certain other provisions of the
indenture cannot be modified or waived without the consent of the holder
of each outstanding LYON affected thereby.
DISCHARGE OF THE INDENTURE
We may satisfy and discharge our obligations under the indenture by
delivering to the trustee for cancellation all outstanding LYONs or by
depositing with the trustee, the paying agent or the conversion agent, if
applicable, after the LYONs have become due and payable, whether at stated
maturity, or any redemption date, or any purchase date, or a change in control
purchase date, or upon conversion or otherwise, cash or common stock (as
applicable under the terms of the indenture) sufficient to pay all of the
outstanding LYONs and paying all other sums payable under the indenture by our
company.
OWNERSHIP LIMITATION ON LYONS
In order to permit us to retain our status as a publicly traded corporation
under the proposed Treasury regulations to Section 883 of the Code, LYONs may
not be transferred if the transfer would result in ownership by one person or
group of related persons by virtue of the attribution provisions of the Code,
other than certain members of the Arison family and certain trusts established
for their benefit, of more than 4.9% of our common stock, whether measured by
vote, value or number of shares. The calculation of a holder's stockholdings
assumes the conversion of the LYONs and other convertible securities issued by
us held by that person or group. See "Description of Capital Stock--Common
Stock--Transfer Restrictions" for a discussion of the attribution provisions. If
a person attempts to acquire LYONs in violation of the 4.9% ownership
limitation, the putative transfer to that person would be void, and the intended
transferee would acquire no rights to the LYONs. For purposes of this 4.9%
limitation, a "transfer" will include any sale, transfer, gift, assignment,
devise or other disposition, whether voluntary or involuntary, whether of
record, constructively or beneficially, and whether by operation of law or
otherwise.
If a prohibited transfer of LYONs results in the ownership of LYONs and
shares of common stock by any shareholder in violation of the 4.9% limit or
would cause us to be subject to United States federal shipping or aircraft
income tax, those LYONs the ownership of which is in excess of the 4.9% limit or
would cause us to be subject to United States federal shipping or aircraft
income tax will automatically be designated as "excess LYONs."
Our board of directors may waive the 4.9% limit or transfer restrictions in
any specific instance if evidence satisfactory to our board of directors and our
tax counsel is presented that such ownership will not jeopardize our status as
exempt from United States income taxation on gross income from the international
operation of a ship or ships, within the meaning of Section 883 of the Code. The
board of directors may also terminate the limit and transfer restrictions
generally at any time for any reason.
Excess LYONs will be transferred to a trust. The trustee of the trust will
be appointed by us and will be independent of us and the purported holder of the
excess LYONs. The beneficiary of such trust will be one or more charitable
organizations selected by the trustee of such trust. The trust will be deemed to
own the LYONs for the beneficiary of such trust on the day prior to the date of
the putative violative transfer.
At the direction of our board of the directors, the trustee of such trust
will transfer the excess LYONs held in trust to a person or persons (including
us) whose ownership of such excess LYONs will not violate the 4.9% limit or
otherwise cause us to become subject to United States shipping income tax within
180 days after the later of the transfer or other event that resulted in such
excess LYONs or we become aware of such transfer or event. If such a transfer is
made, the interest of the charitable beneficiary will terminate, the designation
of such shares as excess LYONs will cease and the prohibited holder of the
excess LYONs will receive the payment that reflects a price per LYON for such
excess
37
LYONs equal to the lesser of (i) the price received by the trustee of such trust
for the sale or other disposition of the LYONs held in trust, and (ii) the price
paid by the prohibited transferee for the LYONs, or, if the prohibited
transferee did not give value for such LYONs, the market price of the LYONs on
the date of the event that resulted in the excess LYONs. A prohibited transferee
or holder of the excess LYONs will not be permitted to receive an amount that
reflects any appreciation in the excess LYONs during the period that such excess
LYONs were outstanding. Any amount received in excess of the amount permitted to
be received by the prohibited transferee or holder of the excess LYONs must be
turned over to the charitable beneficiary of the trust.
If the foregoing restrictions are determined to be void or invalid by virtue
of any legal decision, statute, rule or regulation, then the intended transferee
or holder of any excess LYONs may be deemed, at our option, to have acted as an
agent on our behalf in acquiring or holding such excess LYONs and to hold such
excess LYONs on our behalf.
We have the right to purchase any excess LYONs held by the trust for a
period of 90 days from the later of (i) the date the transfer or other event
resulting in excess LYONs has occurred and (ii) the date the board of directors
determines in good faith that a transfer or other event resulting in excess
LYONs has occurred. The price per excess LYON to be paid by us will be equal to
the lesser of (i) the price per LYON paid in the transaction that created such
excess LYONs (or, in the case of certain other events, the market price per LYON
for the excess LYONs on the date of such event), or (ii) the lowest market price
for the excess LYONs at any time after their designation as excess LYONs and
prior to the date we accept such offer.
GOVERNING LAW
The indenture and the LYONs are governed by and construed in accordance with
the laws of the State of New York.
BOOK-ENTRY SYSTEM
The LYONs that were sold to qualified institutional buyers are evidenced by
global securities, which were deposited with, or on behalf of, DTC and
registered in the name of Cede & Co. as DTC's nominee. Except as set forth
below, the global securities may be transferred, in whole or in part, only to
another DTC nominee or to a successor of DTC or its nominee.
After a sale of LYONs under this shelf registration statement, LYONs that
were held as beneficial interests in the global securities with DTC will remain
as beneficial interests in the global securities.
Persons may hold their interests in the global securities directly through
DTC if they are participants in DTC, or indirectly through organizations that
are participants in DTC. Transfers between participants will be effected in
accordance with DTC rules and will be settled in clearing house funds.
Persons who are not DTC participants may own interests in the global
securities only through DTC participants or certain banks, brokers, dealers,
trust companies and other parties that clear through or maintain a custodial
relationship with a DTC participant. So long as Cede & Co., as the nominee of
DTC, is the registered owner of the global securities, we will consider Cede &
Co. for all purposes to be the sole holder of the global securities. Except as
provided in this section or as described in "Exchange of Beneficial Interests in
the Global Securities for Certificated LYONs," owners of beneficial interests in
the global securities will not have certificates registered in their names, will
not receive physical delivery of certificates in definitive registered form, and
will not be considered the holders of the LYONs.
We will pay interest on and the redemption price or repurchase price of the
global securities to Cede & Co., as the registered owner, by wire transfer of
immediately available funds on each interest payment, redemption or repurchase
date. We and the trustee have no responsibility or liability for any
38
aspect of the records relating to or payments made on account of beneficial
ownership interests in the global securities.
DTC has informed us that its practice is to credit participants' accounts on
the payment date with payments in amounts proportionate to their beneficial
interests in the global securities, unless it has reason to believe that it will
not receive payment. Only the DTC participants are responsible for payments to
owners of beneficial interests held through them.
Because DTC can only act on behalf of participants, who in turn act on
behalf of indirect participants and certain banks, a person having a beneficial
interest in the principal amount at maturity represented by the global
securities may be unable to pledge its interest to persons or entities that do
not participate in the DTC system, due to the lack of a physical certificate
evidencing its interest.
We are not responsible for the performance by DTC or its participants or
indirect participants of their obligations. The trustee is also not responsible
for such performance. DTC has advised us that it will take any action permitted
to be taken by a holder of LYONs, only at the direction of one or more
participants with an interest in a global security, and only with respect to the
principal amount at maturity as to which the participants have given it a
direction.
DTC has advised us that it is a limited purpose trust company organized
under the laws of New York, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the Uniform Commercial Code and a "clearing
agency" registered under the provisions of Section 17A of the Exchange Act. DTC
was created to hold securities for its participants and to facilitate the
clearance and settlement of securities transactions between participants through
electronic book-entry changes to the accounts of its participants, thereby
eliminating the need for physical movement of certificates. Participants include
securities brokers and dealers, banks, trust companies and clearing corporations
and may include certain other organizations such as the initial purchasers of
the debentures. Certain participants (or their representatives), together with
other entities, own DTC. Indirect access to the DTC system is available to
others such as banks, brokers, dealers and trust companies that clear through,
or maintain a custodial relationship with, a participant, either directly or
indirectly.
Although DTC has agreed to the foregoing procedures to facilitate transfers
of interests in global securities among participants, it has no obligation to
perform or continue to perform these procedures. These procedures may be
discontinued at any time.
EXCHANGE OF BENEFICIAL INTERESTS IN THE GLOBAL SECURITY FOR CERTIFICATED LYONS
A global security is exchangeable for definitive convertible LYONs in
registered certificated form if DTC notifies us that it is unwilling or unable
to continue as depositary for the global security and we fail to appoint a
successor depositary within 90 days or if we, at any time and in our sole
discretion, decide not to have the LYONs represented by global securities.
REGISTRATION RIGHTS
The summary herein of certain provisions of the registration rights
agreement is subject to, and is qualified in its entirety by reference to, all
the provisions of the registration rights agreement, which is incorporated by
reference into the registration statement of which this prospectus forms a part.
We entered into a registration rights agreement with Merrill Lynch pursuant to
which we agreed to file with the SEC, at our expense and for the benefit of the
holders, a shelf registration statement covering resale of the LYONs and the
shares of common stock issuable upon conversion of the LYONs, as soon as
practicable, but in any event within 90 days after the date of original issuance
of the LYONs. We will use reasonable best efforts to cause the shelf
registration statement to become effective as promptly as practicable but in any
event within 180 days of such date of original issuance, and to keep the shelf
registration statement effective until the earlier of (i) the transfer pursuant
to Rule 144 under the Securities Act or the sale pursuant to the shelf
registration statement of all the securities registered thereunder, (ii) the
expiration of the holding period applicable to such securities held by persons
that
39
are not affiliates of ours under Rule 144(k) under the Securities Act or any
successor provision and (iii) the second anniversary of the effective date of
the registration statement, subject to certain permitted exceptions. We are
permitted to suspend the use of this prospectus under certain circumstances
relating to pending corporate developments, public filings with the SEC and
similar events for a period not to exceed 60 days in any three-month period and
not to exceed an aggregate of 90 days in any 12-month period. We agreed to pay
predetermined liquidated damages as described herein ("Liquidated Damages") to
holders of transfer restricted LYONs and holders of transfer restricted common
stock issued upon conversion of the LYONs, if a shelf registration statement is
not timely filed or made effective or if the prospectus is unavailable for the
periods in excess of those permitted above. Such Liquidated Damages shall accrue
until such failure to file or become effective or unavailability is cured, (i)
in respect of any LYONs at a rate per year equal to 0.25% for the first 90 day
period after the occurrence of such event and 0.50% thereafter of the applicable
principal amount (as defined below) thereof and, (ii) in respect of any shares
of common stock issued upon conversion, at a rate per year equal to 0.25% for
the first 90 day period and 0.50% thereafter of the then applicable conversion
price (as defined below). So long as the failure to file or become effective or
unavailability continues, we will pay Liquidated Damages in cash on April 24 and
October 24 of each year to the holder of record of the transfer restricted LYONs
or shares of common stock on the immediately preceding April 10 or October 10.
When such registration default is cured, accrued and unpaid Liquidated Damages
will be paid in cash to the record holder as of the date of such cure.
A holder who sells LYONs or shares of common stock issued upon conversion of
the LYONs pursuant to the shelf registration statement must complete and deliver
to us a notice and questionnaire, at least 10 business days prior to any
distribution of the securities so offered. A holder generally is required to be
named as a selling securityholder in the prospectus or in any supplements to
such prospectus, at the time of effectiveness, deliver a prospectus to
purchasers and be bound by the provisions of the registration rights agreement
that are applicable to such holder, including the indemnification provisions,
and will be subject to certain civil liability provisions under the Securities
Act. If the holder of offered securities is not a named selling securityholder
in this prospectus at the time of effectiveness of the shelf registration
statement, we will prepare and file, if required, as promptly as practicable
after the receipt of such holder's questionnaire, amendments to the shelf
registration statement and/or supplements to the prospectus as are necessary to
permit such holder to deliver this prospectus, including any supplements, to
purchasers of the offered securities, subject to our right to suspend the use of
this prospectus as described above. We will pay all of our expenses relating to
the shelf registration statement, provide copies of such prospectus to each
holder that has notified us of its acquisition of LYONs or shares of common
stock issued upon conversion of the LYONs, notify each such holder when the
shelf registration statement has become effective and take certain other actions
as are required to permit, subject to the foregoing, unrestricted resales of the
LYONs and the shares of common stock issued upon conversion of the LYONs.
The term "applicable principal amount" means, as of any date of
determination, with respect to each $1,000 principal amount at maturity of
LYONs, the sum of the initial issue price of such LYONs, $475.66 per $1,000
principal amount at maturity, plus accrued original issue discount with respect
to such LYONs through such date of determination.
The term "applicable conversion price" means, as of any date of
determination, the applicable principal amount of each LYON as of such date of
determination divided by the conversion rate in effect as of such date of
determination or, if no LYONs are then outstanding, the conversion rate that
would be in effect were LYONs then outstanding.
40
DESCRIPTION OF CAPITAL STOCK
GENERAL
Our authorized capital stock consists of 960,000,000 shares of common stock
and 40,000,000 shares of preferred stock. On November 28, 2001, there were
586,171,547 shares of common stock and no shares of preferred stock outstanding.
The following description is qualified in all respects by reference to our
second amended and restated articles of incorporation.
COMMON STOCK
VOTING. Holders of common stock vote as a single class on all matters
submitted to a vote of the shareholders, with each share of common stock
entitled to one vote. In the annual election of directors, the holders of common
stock are not entitled to vote cumulatively.
DIVIDENDS. The holders of the common stock are entitled to receive such
dividends, if any, as may be declared by our board of directors in its
discretion out of funds legally available to be paid as dividends. Panamanian
law permits the payment of dividends to the extent of our retained earnings.
TRANSFER RESTRICTIONS. On February 8, 2000, the United States Treasury
Department issued proposed Treasury regulations to Section 883 of the Code
relating to income derived by foreign corporations from the international
operation of a ship or ships (which includes certain cruise ship and aircraft
income). The proposed regulations provide, in general, that a foreign
corporation organized in a qualified foreign country and engaged in the
international operation of ships and aircraft shall exclude such income from
gross income for purposes of federal income taxation provided that the
corporation can satisfy certain ownership requirements, including, among other
things, that its stock be publicly traded. A corporation's stock that is
otherwise publicly traded will fail to satisfy this requirement if it is closely
held, i.e., that 50% or more of its stock is owned by persons who each own 5% or
more of the value of the outstanding shares of the corporation's stock.
To the best of our knowledge, after due investigation, we currently qualify
as a publicly traded corporation under the proposed regulations. However,
because certain members of the Arison family and certain trusts established for
their benefit own approximately 47% of our common stock, there is the potential
that another shareholder could acquire 5% or more of our common stock which
could jeopardize our qualification as a publicly traded corporation. If we in
the future were to fail to qualify as a publicly traded corporation, we would be
subject to United States income tax on income associated with our cruise
operations in the United States. As a precautionary matter, in 2000, we amended
our articles of incorporation to ensure that we will continue to qualify as a
publicly traded corporation under the proposed regulations.
Our articles have been amended to provide that no one person or group of
related persons, other than certain members of the Arison family and certain
trusts established for their benefit, may own, or be deemed to own by virtue of
the attribution provisions of the Code, more than 4.9% of our common stock,
whether measured by vote, value or number. In addition, the articles generally
restrict the transfer of any shares of our common stock if such transfer would
cause us to be subject to United States shipping income tax. In general, the
attribution rules under the Code applicable in determining whether a person is a
5% shareholder under the proposed regulations attribute stock:
- among specified members of the same family,
- to shareholders owning 50% or more of a corporation from that corporation,
- among corporations that are members of the same controlled group,
- among grantors, beneficiaries and fiduciaries of trusts, and
- to partners of a partnership from that partnership.
For purposes of this 4.9% limit, a "transfer" will include any sale,
transfer, gift, assignment, devise or other disposition, whether voluntary or
involuntary, whether of record, constructively or beneficially, and whether by
operation of law or otherwise. The 4.9% limit will not apply to certain members
of the
41
Arison family and certain trusts established for their benefit. These
shareholders will be permitted to transfer their shares of our common stock
without complying with the limit so long as transfer does not cause us to be
subject to United States income tax on shipping operations.
Our second amended and restated articles of incorporation provide that the
board of directors may waive the 4.9% limit or transfer restrictions (in any
specific instance) if evidence satisfactory to our board of directors and our
tax counsel is presented that such ownership will not jeopardize our status as
exempt from United States income taxation on gross income from the international
operation of a ship or ships, within the meaning of Section 883 of the Code. The
board of directors may also terminate the limit and transfer restrictions
generally at any time for any reason.
If a purported transfer or other event (including owning shares of common
stock in excess of the 4.9% limit on the effective date of the proposed
amendment) results in the ownership of common stock by any shareholder in
violation of the 4.9% limit (or causes us to be subject to United States income
tax on shipping operations), such shares of common stock in excess of the 4.9%
limit or which would cause us to be subject to United States shipping income tax
will automatically be designated as "excess shares" to the extent necessary to
ensure that the purported transfer or other event does not result in ownership
of common stock in violation of the 4.9% limit (or causes us to become subject
to United States income tax on shipping operations) and any proposed transfer
that would result in such an event would be void. Any purported transferee or
other purported holder of excess shares will be required to give us written
notice of a purported transfer or other event that would result in excess
shares. The purported transferee or holders of such excess shares shall have no
rights in such excess shares, other than a right to the payments described
below.
Excess shares will not be treasury stock but rather will continue to be
issued and outstanding shares of our common stock. While outstanding, excess
shares will be transferred to a trust. The trustee of such trust will be
appointed by us and will be independent of us and the purported holder of the
excess shares. The beneficiary of such trust will be one or more charitable
organizations selected by the trustee. The trustee will be entitled to vote the
excess shares on behalf of the beneficiary. If, after the purported transfer or
other event resulting in excess shares and prior to the discovery by us of such
transfer or other event, dividends or distributions are paid with respect to
such excess shares, such dividends or distributions will be repaid to the
trustee upon demand for payment to the charitable beneficiary. All dividends
received or other income declared by the trust will be paid to the charitable
beneficiary. Upon our liquidation, dissolution or winding up, the purported
transferee or other purported holder will receive a payment that reflects a
price per share for such excess shares generally equal to the lesser of (i) in
the case of excess shares resulting from a purported transfer, the price per
share paid in the transaction that created such excess shares (or, in the case
of certain other events, the market price per share for the excess shares on the
date of such event), or (ii) in the case of excess shares resulting from an
event other than a purported transfer, the market price for the excess shares on
the date of such event.
At the direction of the board of the directors, the trustee will transfer
the excess shares held in trust to a person or persons (including us) whose
ownership of such excess shares will not violate the 4.9% limit or otherwise
cause us to become subject to United States shipping income tax within 180 days
after the later of the transfer or other event that resulted in such excess
shares or we become aware of such transfer or event. If such a transfer is made,
the interest of the charitable beneficiary will terminate, the designation of
such shares as excess shares will cease and the purported holder of the excess
shares will receive the payment described below. The purported transferee or
holder of the excess shares will receive a payment that reflects a price per
share for such excess shares equal to the lesser of (i) the price per share
received by the trustee and (ii) the price per share such purported transferee
or holder paid in the purported transfer that resulted in the excess shares (or,
if the purported transferee or holder did not give value for such excess shares
(through a gift, devise or other event) a price per share equal to the market
price on the date of the purported transfer or other event that resulted in the
excess shares). A purported transferee or holder of the excess shares will not
be
42
permitted to receive an amount that reflects any appreciation in the excess
shares during the period that such excess shares were outstanding. Any amount
received in excess of the amount permitted to be received by the purported
transferee or holder of the excess shares must be turned over to the charitable
beneficiary of the trust.
If the foregoing restrictions are determined to be void or invalid by virtue
of any legal decision, statute, rule or regulation, then the intended transferee
or holder of any excess shares may be deemed, at our option, to have acted as an
agent on our behalf in acquiring or holding such excess shares and to hold such
excess shares on our behalf.
We will have the right to purchase any excess shares held by the trust for a
period of 90 days from the later of (i) the date the transfer or other event
resulting in excess shares has occurred and (ii) the date the board of directors
determines in good faith that a transfer or other event resulting in excess
shares has occurred. The price per excess share to be paid by us will be equal
to the lesser of (i) the price per share paid in the transaction that created
such excess shares (or, in the case of certain other events, the market price
per share for the excess shares on the date of such event), or (ii) the lowest
market price for the excess shares at any time after their designation as excess
shares and prior to the date we accept such offer.
These provisions in our second amended and restated articles of
incorporation could have the effect of delaying, deferring or preventing a
change in our control or other transaction in which our shareholders might
receive a premium for their shares of common stock over the then-prevailing
market price or which such holders might believe to be otherwise in their best
interests. To the extent that the proposed regulations are either not adopted or
are adopted in form which, in the opinion of our board of directors, does not
require the proposed amendment to ensure that we will maintain its income tax
exemption for its shipping income, our board of directors may determine, in its
sole discretion, to terminate the 4.9% limit and the transfer restrictions in
the amendment.
TRANSFER AGENT AND REGISTRAR. The transfer agent and registrar for our
common stock is First Union National Bank.
OTHER PROVISIONS. Upon liquidation or dissolution, the holders of shares of
common stock are entitled to receive on a proportionate basis all of our 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 the shares. All shares
of common stock that are currently outstanding are fully paid for and may not be
assessed.
Neither Panamanian law nor our by-laws limit 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 we believe that distributions to our shareholders other than
residents of Panama or other business entities conducting business in Panama,
are not subject to taxation under the laws of the Republic of Panama.
Under Panamanian law, our directors may vote by proxy.
PREFERRED STOCK
Our board of directors may issue, without further authorization from our
stockholders, up to 40,000,000 shares of preferred stock in one or more series.
Our board of directors may determine, at the time of creating each series, the
distinctive designation of, and the number of shares in, the series, its
dividend rate, the number of votes, if any, allocated to each share of the
series, the price and terms on which the shares may be redeemed, the terms of
any applicable sinking fund, the amount payable upon liquidation, dissolution or
winding up, the conversion rights, if any, and any other rights, preferences and
priorities of the shares as our board of directors may be permitted to fix under
the laws of the Republic of Panama in effect at the time the series is created.
The issuance of preferred stock could adversely affect the voting power of
holders of common stock and could delay, defer or prevent a change in control.
43
CERTAIN PANAMANIAN AND UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
PANAMA
Under current Panamanian law, because we conduct all of our operations
outside of Panama, no Panamanian taxes or withholding will be imposed on
payments to holders of our securities.
UNITED STATES
GENERAL. This is a summary of certain United States federal income tax
considerations relevant to holders of LYONs. This summary is based upon the
Internal Revenue Code of 1986, as amended, Treasury regulations, IRS rulings and
judicial decisions now in effect, all of which are subject to change (possibly
with retroactive effect) or different interpretations. There can be no assurance
that the IRS will not challenge one or more of the conclusions described herein,
and we have not obtained, nor do we intend to obtain, a ruling from the IRS with
respect to the United States federal income tax consequences of acquiring or
holding LYONs.
This summary does not purport to deal with all aspects of United States
federal income taxation that may be relevant to a holder, such as persons
subject to the alternative minimum tax provisions of the Code. Also, it does not
purport to deal with persons in special tax situations, such as insurance
companies, tax-exempt organizations, mutual funds, retirement plans, financial
institutions, dealers in securities or foreign currency, United States
expatriates, persons that hold the LYONs as part of a "straddle" or as a "hedge"
against currency risk or in connection with a conversion or another integrated
transaction for tax purposes, and persons that have functional currency other
than the United States dollar.
This summary also does not discuss the tax consequences arising under the
laws of any state, local or foreign jurisdiction. In addition, this summary is
limited to original purchasers of LYONs who acquire LYONs at their issue price
within the meaning of Section 1273 of the Code and who will hold the LYONs and
common stock into which the LYONs may be converted as "capital assets" within
the meaning of Section 1221 of the Code. The "issue price" of the LYONs will
equal the first price at which a substantial amount of the LYONs are sold for
cash to the public, not including sales to bond houses, brokers or similar
persons or organizations acting in the capacity of underwriters, placement
agents or wholesalers.
Persons considering the purchase, ownership, conversion or other disposition
of LYONs should consult their own tax advisors regarding the United States
federal income tax consequences and the consequences arising under the laws of
any state, local or foreign taxing jurisdiction.
While the following does not purport to discuss all tax matters relating to
the LYONs, and assuming the LYONs will be treated as indebtedness, the following
are the material federal income tax consequences of the LYONs, subject to the
qualifications described above.
The term "United States holder" means a beneficial owner of LYONs or common
stock into which LYONs have been converted that is, for United States federal
income tax purposes:
- a citizen or resident of the United States;
- a corporation or other entity that has elected to be treated as a
corporation, created or organized in or under the laws of the United
States or any political subdivision thereof;
- an estate, the income of which is subject to United States federal income
tax regardless of its source; or
- a trust if a court within the United States is able to exercise primary
jurisdiction over its administration and one or more United States persons
have authority to control all of its substantial decisions or if the trust
has otherwise elected to be a United States person in accordance with
applicable Treasury regulations.
44
The term "non-United States holder" means a beneficial owner, other than a
partnership, of LYONs or common stock into which LYONs have been converted that
is not a United States holder for United States federal income tax purposes.
If a partnership, including for this purpose any entity treated as a
partnership for United States tax purposes, is a beneficial owner of LYONs or
common stock into which LYONs have been converted, the treatment of a partner in
the partnership will generally depend upon the status of the partner and upon
the activities of the partnership. A holder of LYONs that is a partnership, and
partners in such a partnership, should consult their tax advisors about the
United States federal income tax consequences of holding and disposing of LYONs
and common stock into which LYONs have been converted.
UNITED STATES HOLDERS
ORIGINAL ISSUE DISCOUNT. The LYONs are being issued at a substantial
discount from their principal amount at maturity. For United States federal
income tax purposes, the difference between the issue price and the stated
principal amount at maturity of each LYON constitutes original issue discount.
United States holders of the LYONs will be required to include original issue
discount in income periodically over the term of the LYONs before receipt of the
cash or other payment attributable to such income.
A United States holder of a LYON must include in gross income for United
States federal income tax purposes the sum of the daily portions of original
issue discount with respect to the LYON for each day during the taxable year or
portion of a taxable year on which such holder holds the LYON. The daily portion
is determined by allocating to each day of an accrual period a pro rata portion
of an amount equal to the adjusted issue price of the LYON at the beginning of
the accrual period multiplied by the yield to maturity of the LYON. The accrual
period of a LYON may be of any length and may vary in length over the term of
the LYON, provided that each accrual period is no longer than one year. The
adjusted issue price of the LYON at the start of any accrual period is the issue
price of the LYON increased by the accrued original issue discount for each
prior accrual period. Under these rules, United States holders will have to
include in gross income increasingly greater amounts of original issue discount
in each successive accrual period. Any amount included in income as original
issue discount will increase a United States holder's tax basis in the LYON.
We will be required to furnish annually to the IRS and to certain
noncorporate United States holders information regarding the amount of the
original issue discount attributable to that year. For this purpose, we will use
a six-month accrual period which ends on the day in each calendar year
corresponding to the maturity day of the LYON or the date six months before such
maturity date.
DISPOSITION OR CONVERSION. Except as described below, gain or loss upon a
sale or other disposition of a LYON will generally be capital gain or loss,
which will be long-term if the LYON is held for more than one year. Net capital
gains of a non-corporate United States holder are, under certain circumstances,
taxed at lower rates than items of ordinary income. In the case of a
non-corporate United States holder, long-term capital gains are generally taxed
at a maximum 20% federal tax rate. Net capital gains of a corporate United
States holder are taxed at the same rates as ordinary income, with a maximum
federal rate of 35%. The deductibility of capital losses is subject to
limitations.
A conversion of a LYON into common stock, and the use of common stock to
repurchase a LYON, whether at the option of the holder or us, will not be a
taxable event except with respect to cash received in lieu of a fractional
share. The United States holder's obligation to include in gross income the
daily portions of original issue discount with respect to a LYON will terminate
prospectively on the date of conversion. The United States holder's basis in the
common stock received for a LYON will be the same as the United States holder's
basis in the LYON at the time of conversion or exchange, exclusive of any tax
basis allocable to a fractional share.
If a United States holder elects to exercise its option to tender a LYON to
us and the purchase price is paid in a combination of shares of common stock and
cash (other than cash received in lieu of
45
a fractional share), gain (but not loss) realized by the United States holder
will be recognized, but only to the extent such gain does not exceed that cash.
Generally, that gain will be capital gain and will be long-term if the holding
period for that LYON is more than one year. A United States holder's tax basis
in the common stock received in the exchange will equal the United States
holder's tax basis in the LYON tendered to us, exclusive of any tax basis
allocable to a fractional share interest as described below, decreased by the
amount of cash (other than cash received in lieu of a fractional share), if any,
received in exchange and increased by the amount of any gain recognized by the
United States holder on the exchange (other than gain with respect to a
fractional share).
If a United States holder elects to exercise its option to tender a LYON to
us and we deliver cash in satisfaction of the purchase price, the United States
holder will recognize gain or loss, measured by the difference between the
amount of the cash and the United States holder's basis in the tendered LYON.
Gain or loss recognized by the United States holder will generally be capital
gain or loss, which gain or loss will be long-term if the holding period for
such LYON is more than one year.
Cash received in lieu of a fractional share of common stock upon conversion
of a LYON or upon a put of a LYON to us on a purchase date should be treated as
a payment in exchange for the fractional share. Accordingly, the receipt of cash
in lieu of a fractional share of common stock should generally result in capital
gain or loss, if any, measured by the difference between the cash received for
the fractional share and the holder's basis in the fractional share.
Gain or loss upon a sale or other disposition of the common stock received
upon conversion of a LYON or in satisfaction of the purchase price of a LYON put
to us generally will be capital gain or loss (which gain or loss will be
long-term if the holding period for such common stock is more than one year).
The holding period for common stock received in exchange will include the
holding period for the LYON tendered to us in exchange for the common stock.
However, the holding period for common stock attributable to accrued original
issue discount may commence on the day following the conversion or purchase
date.
DIVIDENDS. If a United States holder receives common stock, in general,
distributions on the common stock that are paid out of our current or
accumulated earnings and profits (as defined for United States federal income
tax purposes) will constitute taxable dividends and will be includible in income
by a holder in accordance with that holder's method of accounting for United
States federal income tax purposes.
CONSTRUCTIVE DIVIDEND. If at any time we make a distribution of property to
our stockholders that would be taxable to the stockholders as a dividend for
United States federal income tax purposes and, in accordance with the
anti-dilution provisions of the LYONs, the conversion rate of the LYONs is
increased (or if the conversion rate is increased at our discretion), the
increase may be deemed to be the payment of a taxable dividend to holders of the
LYONs.
For example, an increase in the conversion rate in the event of
distributions of evidences of indebtedness or our assets or an increase in the
event of an extraordinary cash dividend will generally result in deemed dividend
treatment to holders of the LYONs, but generally an increase in the event of
stock dividends or the distribution of rights to subscribe for common stock will
not. See "Description of LYONs--Conversion Rights."
BACKUP WITHHOLDING AND INFORMATION REPORTING. Information reporting will
apply to payments of interest (including accruals of original issue discount) or
dividends, if any, made by us on, or the proceeds of the sale or other
disposition of, the LYONs or shares of common stock with respect to certain
non-corporate United States holders, and backup withholding may apply unless the
recipient United States holder of such payment supplies a taxpayer
identification number, certified under penalties of perjury, as well as certain
other information or otherwise establishes an exemption from backup withholding.
Any amount withheld under the backup withholding rules will be allowable as a
credit against the United States holder's United States federal income tax,
provided that the required information is provided to the IRS.
46
NON-UNITED STATES HOLDERS
ORIGINAL ISSUE DISCOUNT AND DISPOSITION. In general and subject to the
discussion below under "--Backup Withholding and Information Reporting," a
non-United States holder will not be subject to United States federal income or
withholding tax with respect to original issue discount with respect to LYONs or
gain upon the disposition of LYONs or shares of common stock, unless:
- the income or gain is "United States trade or business income," which
means income or gain that is effectively connected with the conduct by the
non-United States holder of a trade or business, or, in the case of a
treaty resident, attributable to a permanent establishment or a fixed
base, in the United States, or
- such non-United States holder is an individual who is present in the
United States for 183 days or more in the taxable year of disposition and
certain other conditions are met.
United States trade or business income of a non-United States holder will
generally be subject to regular United States income tax in the same manner as
if it were realized by a United States holder. Non-United States holders that
realize United States trade or business income with respect to the LYONs or
shares of common stock should consult their tax advisers as to the treatment of
such income or gain. In addition, United States trade or business income of a
non-United States holder that is a non-United States corporation may be subject
to a branch profits tax at a rate of 30%, or such lower rate provided by an
applicable income tax treaty.
BACKUP WITHHOLDING AND INFORMATION REPORTING. If the LYONs, or shares of
common stock into which LYONs have been converted, are held by a non-United
States holder through a non-United States, and non-United States related, broker
or financial institution, information reporting and backup withholding generally
would not be required. Information reporting, and possibly backup withholding,
may apply if the LYONs or shares of common stock are held by a non-United States
holder through a United States, or United States related, broker or financial
institution and the non-United States holder fails to provide appropriate
information. Non-United States holders should consult their tax advisers.
EXPERTS
The financial statements incorporated in this prospectus by reference to the
Annual Report on Form 10-K for the year ended November 30, 2000 have been so
incorporated in reliance on the report of PricewaterhouseCoopers LLP,
independent certified public accountants, given on the authority of said firm as
experts in auditing and accounting.
LEGAL MATTERS
The validity of the offered LYONs has been passed upon by Paul, Weiss,
Rifkind, Wharton & Garrison, New York, New York. The validity of the shares of
the offered common stock has been passed upon by Tapia Linares y Alfaro, Panama
City, Republic of Panama.
James M. Dubin, a partner of Paul, Weiss, Rifkind, Wharton & Garrison and
one of our directors, is the sole stockholder of three corporations which act as
trustees or protectors of various trusts established for the benefit of members
of the Arison family. In this capacity, Mr. Dubin has shared voting or
dispositive rights for approximately 24.9% of our outstanding common stock.
Paul, Weiss, Rifkind, Wharton & Garrison also serves as counsel to Micky Arison,
our chairman and chief executive officer, Shari Arison, one of our directors,
and other Arison family members and trusts.
47
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the various expenses payable in connection
with the issuance and distribution of the debentures and underlying common stock
being registered hereby, other than underwriting discounts and commissions
(which will be described in the applicable prospectus supplement). All the
amounts shown are estimates, except the SEC registration fee. All of such
expenses are being borne by us.
SEC Registration Fee........................................ $119,501
New York Stock Exchange Listing Fee......................... $
Accounting Fees and Expenses................................ $
Legal Fees and Expenses..................................... $
Printing and Engraving Expenses............................. $
--------
Total....................................................... $
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Our second amended and restated articles of incorporation and by-laws
provide, subject to the requirements set forth therein, that with respect to any
person who was or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative, we shall indemnify such person by reason of the fact that he is
or was one of our director or an officer, and may indemnify such person by
reason of the fact that he is or was one of our employees or agents or is or was
serving at our request as a director, officer, employee or agent in another
corporation, partnership, joint venture, trust or other enterprise, in either
case against expenses (including attorney's fees), judgments, fines and amounts
paid in settlement actually and reasonably incurred by him in connection with
such action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to our best interests and, with
respect to any criminal action or proceeding, had no reasonable cause to believe
his conduct was unlawful. We have entered into indemnity agreements with Shari
Arison, Maks L. Birnbach, Richard G. Capen, Jr., Arnold W. Donald, James M.
Dubin, Modesto Maidique, Stuart Subotnick, Sherwood M. Weiser, Meshulam Zonis
and Uzi Zucker providing essentially the same indemnities as are described in
the our second amended and restated articles of incorporation.
Under a registration rights agreement among us and certain irrevocable
trusts (the "Trusts"), the Trusts have agreed to indemnify us, our directors and
officers and each person who controls us within the meaning of the Exchange Act,
against certain liabilities. Under a registration agreement between us and
selling holders of our 2% convertible senior debentures due 2021, these selling
holders have agreed to indemnify us, our directors and officers and each person
who controls us within the meaning of the Exchange Act against certain
liabilities. Finally, under a registration agreement between us and the selling
securityholders, the selling securityholders have agreed to indemnify us, our
directors and officers and each person who controls us within the meaning of the
Exchange Act against certain liabilities.
II-1
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
4.1 Second Amended and Restated Articles of Incorporation of the
Registrant (incorporated by reference to Exhibit No. 3 to
the Registrant's registration statement on Form S-3,
File No. 333-68999, filed with the Securities and Exchange
Commission).
4.2 Amendment to Second Amended and Restated Articles of
Incorporation of the Registrant (incorporated by reference
to Exhibit 3.1 to the Registrant's quarterly report on Form
10-Q for the quarter ended May 31, 1999, filed with the
Securities and Exchange Commission).
4.3 Certificate of Amendment of Articles of Incorporation of the
Registrant (incorporated by reference to Exhibit 3.1 to the
Registrant's quarterly report on Form 10-Q for the quarter
ended May 31, 2000, filed with the Securities and Exchange
Commission).
4.4 Form of By-laws of the Registrant (incorporated by reference
to Exhibit 3.2 to the Registrant's registration statement on
Form S-1, File No. 33-14844, filed with the Securities and
Exchange Commission).
4.5 Indenture, dated as of April 25, 2001, between Carnival
Corporation and U.S. Bank Trust National Association, as
trustee, relating to unsecured and unsubordinated debt
securities (incorporated by reference to Exhibit No. 4.5 to
the Registrant's registration statement on
Form S-3, File No. 333-62950, filed with the Securities
Exchange Commission).
4.6 Second Supplemental Indenture, dated as of October 24, 2001,
between Carnival Corporation and U.S. Bank Trust National
Association, as trustee, creating a series of securities
designated Liquid Yield Option-TM-Notes due 2021 (Zero
Coupon--Senior).
4.7 Registration Rights Agreement, dated as of October 24, 2001,
between Carnival Corporation and Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated.
5.1 Opinion of Paul, Weiss, Rifkind, Wharton & Garrison.
5.2 Opinion of Tapia Linares y Alfaro.
12.1 Ratios of Earnings to Fixed Charges (incorporated by
reference to Exhibit 12 to the Registrant's quarterly report
on Form 10-Q for the quarter ended August 31, 2001, filed
with the Securities and Exchange Commission).
12.2 Ratios of Earnings to Fixed Charges (incorporated by
reference to Exhibit 12 to the Registrant's annual report on
Form 10-K for the fiscal year ended November 30, 2000, filed
with the Securities and Exchange Commission).
23.1 Consent of PricewaterhouseCoopers LLP.
23.2 Consent of Paul, Weiss, Rifkind, Wharton & Garrison
(included in Exhibit 5.1).
23.3 Consent of Tapia Linares y Alfaro (included in Exhibit 5.2).
24 Power of Attorney.
25.1 Statement of Eligibility under the Trust Indenture Act of
1939 on Form T-1 of U.S Bank Trust National Association to
act as Trustee under the Indenture, dated as of April 25,
2001, as supplemented by the Second Supplemental Indenture,
dated as of October 24, 2001 (incorporated by reference to
Exhibit No. 25.1 to the Registrant's registration statement
on Form S-3 File No. 333-62950, filed with the Securities
Exchange Commission).
II-2
ITEM 17. UNDERTAKINGS
The Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the Registration Statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form
of a prospectus filed with the Commission pursuant to Rule 424(b)
if, in the aggregate, the changes in volume and price represent no
more than a 20% change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in the
effective registration statement; and
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in this Registration
Statement or any material change to such information in this
Registration Statement; provided, however, that paragraphs (1)(i)
and (1)(ii) do not apply if the information required to be included
in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to Section 13 or
Section 15(d) of the Exchange Act that are incorporated by
reference in this Registration Statement;
(2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof;
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination
of the offering;
(4) That, for purposes of determining any liability under the Securities Act
of 1933, each filing of the Registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934
that is incorporated by reference in this Registration Statement shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof; and
(5) To file an application for the purpose of determining the eligibility of
the trustee to act under subsection (a) of Section 310 of the Trust
Indenture Act of 1939 in accordance with the rules and regulations
prescribed by the Commission under Section 305(b)(2) of the Trust
Indenture Act of 1939.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers, and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer, or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer, or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be filed on its behalf by the undersigned, thereunto duly
authorized, in the City of Miami, State of Florida, on the 29th day of November,
2001.
CARNIVAL CORPORATION
By: /s/ Micky Arison
---------------------------------------------
Name: Micky Arison
Title: Chairman of the Board, Chief Executive
Officer and Director
KNOW TO ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Micky Arison, Howard S. Frank and Gerald R.
Cahill, such person's true and lawful attorney-in-fact and agents, with full
power of substitution and revocation for such person and in such person's name,
place and stead, in any and all capacities to sign any and all amendments
(including post-effective amendments) to this Registration Statement or any
registration statement filed pursuant to Rule 462 under the Securities Act of
1933, and to file the same with all exhibits thereto, and the other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorney-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and things requisite and necessary to be done,
as fully to all intents and purposes as such person might or could do in person,
hereby ratifying and confirming all said attorney-in-fact and agents, or any of
them, or their and his substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ MICKY ARISON Chairman of the Board, Chief November 29, 2001
------------------------------------ Executive Officer and Director
Micky Arison (Principal Executive Officer)
/s/ HOWARD S. FRANK Vice Chairman of the Board, Chief November 29, 2001
------------------------------------ Operating Officer and Director
Howard S. Frank
/s/ GERALD R. CAHILL Senior Vice President--Finance and November 29, 2001
------------------------------------ Chief Financial and Accounting
Gerald R. Cahill Officer
/s/ SHARI ARISON Director November 29, 2001
------------------------------------
Shari Arison
/s/ MAKS L. BIRNBACH Director November 29, 2001
------------------------------------
Maks L. Birnbach
Director November 29, 2001
------------------------------------
Richard G. Capen, Jr.
II-4
SIGNATURE TITLE DATE
--------- ----- ----
/s/ ROBERT H. DICKINSON Director November 29, 2001
------------------------------------
Robert H. Dickinson
/s/ ARNOLD W. DONALD Director November 29, 2001
------------------------------------
Arnold W. Donald
/s/ JAMES M. DUBIN Director November 29, 2001
------------------------------------
James M. Dubin
/s/ A. KIRK LANTERMAN Director November 29, 2001
------------------------------------
A. Kirk Lanterman
Director November 29, 2001
------------------------------------
Modesto A. Maidique
/s/ STUART SUBOTNICK Director November 29, 2001
------------------------------------
Stuart Subotnick
/s/ SHERWOOD M. WEISER Director November 29, 2001
------------------------------------
Sherwood M. Weiser
Director November 29, 2001
------------------------------------
Meshulam Zonis
Director November 29, 2001
------------------------------------
Uzi Zucker
II-5
EXHIBIT INDEX
4.1 Second Amended and Restated Articles of Incorporation of the
Registrant (incorporated by reference to Exhibit No. 3 to
the Registrant's registration statement on Form S-3,
File No. 333-68999, filed with the Securities and Exchange
Commission).
4.2 Amendment to Second Amended and Restated Articles of
Incorporation of the Registrant (incorporated by reference
to Exhibit 3.1 to the Registrant's quarterly report on Form
10-Q for the quarter ended May 31, 1999, filed with the
Securities and Exchange Commission).
4.3 Certificate of Amendment of Articles of Incorporation of the
Registrant (incorporated by reference to Exhibit 3.1 to the
Registrant's quarterly report on Form 10-Q for the quarter
ended May 31, 2000, filed with the Securities and Exchange
Commission).
4.4 Form of By-laws of the Registrant (incorporated by reference
to Exhibit 3.2 to the Registrant's registration statement on
Form S-1, File No. 33-14844, filed with the Securities and
Exchange Commission).
4.5 Indenture, dated as of April 25, 2001, between Carnival
Corporation and U.S. Bank Trust National Association, as
trustee, relating to unsecured and unsubordinated debt
securities (incorporated by reference to Exhibit No. 4.5 to
the Registrant's registration statement on
Form S-3, File No. 333-62950, filed with the Securities
Exchange Commission).
4.6 Second Supplemental Indenture, dated as of October 24, 2001,
between Carnival Corporation and U.S. Bank Trust National
Association, as trustee, creating a series of securities
designated Liquid Yield Option-TM-Notes due 2021 (Zero
Coupon--Senior).
4.7 Registration Rights Agreement, dated as of October 24, 2001,
between Carnival Corporation and Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated.
5.1 Opinion of Paul, Weiss, Rifkind, Wharton & Garrison.
5.2 Opinion of Tapia Linares y Alfaro.
12.1 Ratios of Earnings to Fixed Charges (incorporated by
reference to Exhibit 12 to the Registrant's quarterly report
on Form 10-Q for the quarter ended August 31, 2001, filed
with the Securities and Exchange Commission).
12.2 Ratios of Earnings to Fixed Charges (incorporated by
reference to Exhibit 12 to the Registrant's annual report on
Form 10-K for the fiscal year ended November 30, 2000, filed
with the Securities and Exchange Commission).
23.1 Consent of PricewaterhouseCoopers LLP.
23.2 Consent of Paul, Weiss, Rifkind, Wharton & Garrison
(included in Exhibit 5.1).
23.3 Consent of Tapia Linares y Alfaro (included in Exhibit 5.2).
24 Power of Attorney.
25.1 Statement of Eligibility under the Trust Indenture Act of
1939 on Form T-1 of U.S Bank Trust National Association to
act as Trustee under the Indenture, dated as of April 25,
2001, as supplemented by the Second Supplemental Indenture,
dated as of October 24, 2001 (incorporated by reference to
Exhibit No. 25.1 to the Registrant's registration statement
on Form S-3 File No. 333-62950, filed with the Securities
Exchange Commission).
EXHIBIT 4.6
CARNIVAL CORPORATION
and
U.S. BANK TRUST NATIONAL ASSOCIATION,
As Trustee
--------------------------
SECOND SUPPLEMENTAL INDENTURE
Dated as of October 24, 2001
---------------------------
Supplemental to Indenture
Dated as of April 25, 2001
--------------
Creating a series of Securities
designated
Liquid Yield OptionTM Notes due 2021
TABLE OF CONTENTS
ARTICLE One DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION 2
Section 101 Definitions. 2
ARTICLE Two THE LYONs 6
Section 201 Designation of LYONs; Establishment of Form. 6
Section 202 Transfer and Exchange. 8
Section 203 Amount. 14
Section 204 Original Issue Discount. 14
Section 205 Liquidated Damages. 14
Section 206 Denominations. 14
Section 207 Place of Payment. 14
Section 208 Redemption. 15
Section 209 Conversion. 15
Section 210 Stated Maturity. 15
Section 211 Repurchase. 15
Section 212 Discharge of Liability on LYONs. 15
Section 213 Other Terms of LYONs. 16
Section 214 Ownership Limitation on LYONs 16
Section 215 Payments of Additional Amounts. 22
ARTICLE Three AMENDMENTS TO THE INDENTURE 22
Section 301 Provisions Applicable Only to LYONs. 22
Section 302 Registration, Registration of Transfer and Exchange. 23
Section 303 Reserved. 23
Section 304 Payment of Original Issue Discount. 23
Section 305 Discharge of Liability on Securities. 23
Section 306 Repayment to the Company. 24
Section 307 Events of Default. 24
Section 308 Acceleration of Maturity; Rescission and Annulment. 26
Section 309 Unconditional Right of Holders to Receive Principal, Premium and
Interest. 27
Section 310 Reports by Company. 27
Section 311 Consolidation, Merger and Sale. 28
Section 312 Supplemental Indentures Without Consent of Holders. 29
Section 313 Supplemental Indenture with Consent of Holder. 29
Section 314 Maintenance of Office or Agency. 30
Section 315 Redemption. 30
Section 316 Conversion Arrangement on Call for Redemption. 30
Section 317 Optional Redemption or Assumption of Securities under Certain
Circumstances. 31
ARTICLE Four CONVERSION 31
Section 401 Conversion Rights. 31
Section 402 Conversion Rights Based on Common Stock Price. 32
Section 403 Conversion Rights Upon Notice of Redemption. 32
Section 404 Conversion Rights Upon Occurrence of Certain Corporate
Transactions. 33
Section 405 Conversion Procedures. 33
Section 406 Fractional Shares. 35
Section 407 Taxes on Conversion. 35
Section 408 Company to Provide Common Stock. 35
Section 409 Adjustment of Conversion Rate. 35
Section 410 No Adjustment. 40
Section 411 Adjustment for Tax Purposes. 41
Section 412 Notice of Adjustment. 41
Section 413 Notice of Certain Transactions. 41
Section 414 Effect of Reclassification, Consolidation, Merger or Sale on
Conversion Privilege. 42
Section 415 Trustee's Disclaimer. 42
Section 416 Voluntary Increase. 43
ARTICLE Five REDEMPTION OF LYONS AT THE OPTION OF THE COMPANY 43
Section 501 General. 43
ARTICLE Six REPURCHASE OF LYONs AT OPTION OF THE HOLDER 43
Section 601 General. 43
Section 602 The Company's Right to Elect Manner of Payment of Repurchase Price. 45
Section 603 Purchase with Cash. 46
Section 604 Payment by Issuance of Common Stock. 46
Section 605 Notice of Election. 48
Section 606 Common Stock Delivered Upon Purchase. 49
Section 607 Procedure upon Repurchase. 49
Section 608 Taxes. 50
Section 609 Effect of Repurchase Notice. 50
Section 610 Deposit of Repurchase Price. 51
Section 611 Securities Repurchased in Part. 51
Section 612 Compliance with Securities Laws Upon Purchase of Securities. 52
Section 613 Repayment to the Company. 52
Section 614 Conversion Arrangement on Repurchase. 52
ARTICLE Seven PURCHASE OF LYONs AT OPTION OF THE HOLDER UPON CHANGE IN CONTROL 52
Section 701 Right to Require Repurchase. 52
Section 702 Effect of Change in Control Purchase Notice. 55
Section 703 Deposit of Change in Control Purchase Price. 56
Section 704 Securities Purchased In Part. 57
Section 705 Compliance With Securities Laws Upon Purchase of Securities. 57
Section 706 Repayment to the Company. 57
ARTICLE Eight MISCELLANEOUS PROVISIONS 57
Section 801 Integral Part. 57
Section 802 General Definitions. 58
Section 803 Adoption, Ratification and Confirmation. 58
Section 804 Counterparts. 58
Section 805 Governing Law. 58
Section 806 Conflict of Any Provision of Indenture with Trust Indenture Act
of 1939. 58
Section 807 Effect of Headings. 58
Section 808 Severability of Provisions. 58
Section 809 Successors and Assigns. 59
Section 810 Benefit of Supplemental Indenture. 59
Section 811 Acceptance by Trustee. 59
Section 812 Amendment to Indenture. 59
ANNEX A A-1
Exhibit B-1 B-1-1
Exhibit B-2 B-2-1
CARNIVAL CORPORATION
SECOND SUPPLEMENTAL INDENTURE
THIS SECOND SUPPLEMENTAL INDENTURE, dated as of October 24,
2001, between Carnival Corporation, a corporation organized and existing under
the laws of the Republic of Panama (the "Company"), and U.S. Bank Trust National
Association, a national banking association organized and existing under the
laws of the United States of America (the "Trustee").
WITNESSETH
WHEREAS, the Company has heretofore executed and delivered to
the Trustee an Indenture, dated as of April 25, 2001 (the "Indenture"),
providing for the issuance from time to time of its debentures, notes, bonds or
other evidences of indebtedness (hereinafter called "Securities") in one or more
fully registered series;
WHEREAS, Section 9.1(7) of the Indenture provides that the
Company and the Trustee may from time to time enter into one or more indentures
supplemental thereto to establish the form or terms of Securities of a new
series;
WHEREAS, Section 3.1 of the Indenture provides that the
Company may enter into supplemental indentures to establish the terms and
provisions of a series of Securities issued pursuant to the Indenture;
WHEREAS, on April 25, 2001, the Company issued its 2%
Convertible Senior Debentures due 2021 under a First Supplemental Indenture
dated as of April 25, 2001;
WHEREAS, the Company desires to issue Liquid Yield OptionTM
Notes due 2021 (the "LYONs"), a new series of Security, the issuance of which
was authorized by resolution of the Board of Directors of the Company, dated
October (, 2001;
WHEREAS, the Company, pursuant to the foregoing authority,
proposes in and by this Second Supplemental Indenture (the "Second Supplemental
Indenture") to supplement and amend in certain respects the Indenture insofar as
it will apply only to the LYONs (and not to any other series); and
WHEREAS, all things necessary have been done to make the
LYONs, when executed by the Company and authenticated and delivered hereunder
and duly issued by the Company, the valid obligations of the Company, and to
make this Second Supplemental Indenture a valid agreement of the Company, in
accordance with their and its terms.
NOW THEREFORE:
In consideration of the premises provided for herein, the
Company and the Trustee mutually covenant and agree for the equal and
proportionate benefit of all Holders of the LYONs as follows:
__DEFINITIONS AND OTHER_PROVISIONS OF GENERAL APPLICATION
Definitions.
For all purposes of the Indenture and this Second Supplemental
Indenture relating to the series of Securities created hereby, except as
otherwise expressly provided or unless the context otherwise requires, the terms
defined in this Article have the meanings assigned to them in this Article. Each
capitalized term that is used in this Second Supplemental Indenture but not
defined herein shall have the meaning specified in the Indenture.
"Accreted Conversion Price" has the meaning specified in
Section 402.
"Accreted Principal Amount" with respect to any given date,
means the Issue Price of the LYONs plus accrued Original Issue Discount thereon
through such date.
"Agent Members" has the meaning specified in Section 201.
"Applicable Procedures" means, with respect to any transfer or
exchange of beneficial ownership interests in a Global Security, the rules and
procedures of the Depositary that are applicable to such transfer or exchange.
"Beneficial Owner" has the meaning specified in Section
701(a).
"Capital Stock" or "capital stock" of any Person means any and
all shares, interests, partnership interests, participations, rights or other
equivalents (however designated) of equity interests (however designated) issued
by that Person.
"Certificated Security" means a Security that is in
substantially the form attached hereto as Annex A.
"Change in Control" has the meaning specified in Section 701.
"Change in Control Purchase Date" has the meaning specified in
Section 701.
"Change in Control Purchase Notice" has the meaning specified
in Section 701.
"Change in Control Purchase Price" has the meaning specified
in Section 701.
"Code" means the U.S. Internal Revenue Code of 1986, as
amended.
"Common Stock" means the common stock, par value $0.01 per
share, of the Company as it exists on the date of this Second Supplemental
Indenture or any other shares of Capital Stock of the Company into which such
common stock is reclassified or changed.
"Company Notice Date" has the meaning specified in Section
603.
"Consolidated Net Worth" means, at any time, the Net Worth of
the Company and its Subsidiaries on a consolidated basis determined in
accordance with GAAP.
"Conversion Agent" shall be the agent specified in Section
201.
"Conversion Date" has the meaning specified in Section 405.
"Conversion Rate" has the meaning specified in Section 401.
"Depositary" has the meaning specified in Section 201(a).
"Determination Date" has the meaning specified in Section
409(d)(1).
"DTC" has the meaning specified in Section 201(a).
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any successor statute.
"Expiration Date" has the meaning specified in Section
409(d)(2).
"Expiration Time" has the meaning specified in Section
409(d)(2).
"Excess LYONs" has the meaning specified in Section 214.
"GAAP" means generally accepted accounting principles as in
effect on the date of this Second Supplemental Indenture in the United States.
"Global Security" means a permanent Global Security that is in
substantially the form attached hereto as Annex A and that includes the
information and schedule called for by footnotes 1, 3 and 4 thereof and which is
deposited with the Depositary or the Securities Custodian and registered in the
name of the Depositary or its nominee.
"Indenture" has the meaning specified in the recitals.
"Institutional Accredited Investors" has the meaning specified
in Section 201(b).
"Issue Date" of any LYON means the date on which the LYON was
originally issued or deemed issued as set forth on the face of the LYON.
"Issue Price" means $476.66 per $1,000 principal amount at
Stated Maturity of LYONs.
"Liquidated Damages" shall have the meaning set forth in the
Registration Rights Agreement.
"LYONs" has the meaning specified in the recitals.
"Market Price" has the meaning specified in Section 604.
"Net Worth" means, at any time with respect to the Company or
a Subsidiary thereof, the net worth of the Company or such Subsidiary, as the
case may be, determined in accordance with GAAP.
"NYSE" has the meaning specified in Section 409(e).
"Original Issue Discount" with respect to any Outstanding
LYON, means the difference between the Issue Price and the Principal Amount at
Maturity of such LYON.
"Outstanding", when used with respect to Securities or
Securities of any series, means, as of the date of determination, all such
Securities theretofore authenticated and delivered under this Indenture, except:
Securities theretofore cancelled by the Trustee or delivered
to the Trustee for cancellation;
Securities for whose payment, repurchase or redemption money
or Common Stock in the necessary amount has been theretofore deposited with the
Trustee or any Paying Agent (other than the Company) in trust or set aside and
segregated in trust by the Company (if the Company shall act as its own Paying
Agent) for the Holders of such Securities; provided that, if such Securities are
to be redeemed, notice of such redemption has been duly given pursuant to this
Indenture or provision therefor satisfactory to the Trustee has been made;
Securities which have been cancelled pursuant to Section 3.9
of the Indenture or in exchange for or in lieu of which other Securities have
been authenticated and delivered pursuant to this Indenture, other than any such
Securities in respect of which there shall have been presented to the Trustee
proof satisfactory to it that such Securities are held by a bona fide purchaser
in whose hands such Securities are valid obligations of the Company; and
Securities converted into Common Stock pursuant to the terms
of the Indenture or such Securities;
provided, however, that in determining whether the Holders of
the requisite Principal Amount at Maturity of the Outstanding Securities have
given any request, demand, authorization, direction, notice, consent or waiver
hereunder, Securities owned by the Company or any other obligor upon the
Securities or any Affiliate of the Company or of such other obligor shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Securities which the
Trustee knows to be so owned shall be so disregarded. Securities so owned which
have been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Securities and that the pledgee is not the Company or any
other obligor upon the Securities or any Affiliate of the Company or of such
other obligor.
"Permitted Holders" has the meaning specified in Section
701(a).
"Principal Amount at Maturity" of any LYON means the principal
amount at maturity as set forth on the face of the LYON.
"Purchased Shares" has the meaning specified in Section
409(d)(2).
"purchases" has the meaning specified in Section 409(d)(3).
"QIB" has the meaning specified in Section 201(a).
"Redemption Price" has the meaning specified in Section 501.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of October 24, 2001, between the Company and Merrill Lynch &
Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated.
"Repurchase Date" has the meaning specified in Section 601.
"Repurchase Notice" has the meaning specified in Section 601.
"Repurchase Price" has the meaning specified in Section 601.
"Restricted Certificated Security" means a Certificated
Security which is a Transfer Restricted Security.
"Restricted Global Security" means a Global Security that is a
Transfer Restricted Security.
"Rule 144" means Rule 144 under the Securities Act or any
successor to such Rule.
"Rule 144A" means Rule 144A under the Securities Act or any
successor to such Rule.
"Sale Price" has the meaning specified in Section 604.
"Securities" has the meaning specified in the preamble of this
Second Supplemental Indenture.
"Securities Act" means the Securities Act of 1933, as amended,
or any successor statute.
"Securities Custodian" means the Trustee, as custodian with
respect to the Securities in global form, or any successor thereto.
"Significant Subsidiary" means any Subsidiary, the Net Worth
of which represents more than 10% of the Consolidated Net Worth of the Company
and its Subsidiaries.
"Second Supplemental Indenture" has the meanings specified in
the recitals.
"tender offer" has the meaning specified in Section 409(d)(3).
"tendered shares" has the meaning specified in Section
409(d)(3).
"Trading Day" means a day during which trading in securities
generally occurs on the New York Stock Exchange or, if the Common Stock is not
listed on the New York Stock Exchange, on the principal other national or
regional securities exchange on which the Common Stock is then listed or, if the
Common Stock is not listed on a national or regional securities exchange, on the
National Association of Securities Dealers Automated Quotation System or, if the
Common Stock is not quoted on the National Association of Securities Dealers
Automated Quotation System, on the other principal market on which the Common
Stock is then traded.
"Transfer Certificate" has the meaning specified in Section
202(b)(1).
"Transfer Restricted Securities" has the meaning specified in
Section 202(f)(1).
"Trigger Event" has the meaning specified in Section 409(c).
"Triggering Distribution" has the meaning specified in Section
409(d)(1).
"Unrestricted Certificated Security" means a Certificated
Security which is not a Transfer Restricted Security.
"Unrestricted Global Security" means a Global Security which
is not a Transfer Restricted Security.
"Voting Stock" means any class or classes of Capital Stock
pursuant to which the holders thereof under ordinary circumstances have the
power to vote in the
election of the board of directors, managers or trustees of any Person (or other
Persons performing similar functions), irrespective of whether or not, at the
time, Capital Stock of any other class or classes shall have, or might have,
voting power by reason of the happening of any contingency.
__THE LYONs
Designation of LYONs; Establishment of Form.
There shall be a series of Securities designated _ Liquid
Yield Option"! Notes due 2021_ of the Company, and the form thereof shall be
substantially as set forth in Annex A hereto, which is incorporated into and
shall be deemed a part of this Second Supplemental Indenture, with such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by the Indenture, and may have such letters, numbers or
other marks of identification and such legends or endorsements placed thereon as
may be required to comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the officers of the Company executing
such LYONs, as evidenced by their execution of the LYONs.
Restricted Global Securities. All of the LYONs are initially
being offered and sold to qualified institutional buyers as defined in Rule 144A
(collectively, "QIBs" or individually a "QIB") in reliance on Rule 144A under
the Securities Act and shall be issued initially in the form of one or more
Restricted Global Securities, which shall be deposited on behalf of the
purchasers of the LYONs represented thereby with the Trustee, at its Corporate
Trust Office, as Securities Custodian for the depositary, The Depository Trust
Company ("DTC") (such depositary, or any successor thereto, being hereinafter
referred to as the "Depositary'), and registered in the name of its nominee,
Cede & Co., duly executed by the Company and authenticated by the Trustee as
hereinafter provided. The aggregate Principal Amount at Maturity of a Restricted
Global Security may from time to time be increased or decreased by adjustments
made on the records of the Securities Custodian as hereinafter provided, subject
in each case to compliance with the Applicable Procedures.
Institutional Accredited Investor Securities. Except as
provided in this Section 201 or Section 202, owners of beneficial interests in
Global Securities will not be entitled to receive physical delivery of
Certificated Securities. Securities offered and sold within the United States to
institutional accredited investors as defined in Rule 501(a)(1), (2), (3) and
(7) under the Securities Act ("Institutional Accredited Investors") shall be
issued, initially in the form of Certificated Securities, duly executed by the
Company and authenticated by the Trustee as hereinafter provided.
Global Securities in General. Each Global Security shall
represent such of the Outstanding LYONs as shall be specified therein and each
shall provide that it shall represent the aggregate Principal Amount at Maturity
of Outstanding LYONs from time to time endorsed thereon and that the aggregate
Principal Amount at Maturity of Outstanding LYONs represented thereby may from
time to time be reduced or increased, as appropriate, to reflect exchanges,
redemptions, purchases or conversions of such
LYONs. Any endorsement of a Global Security to reflect the amount of any
increase or decrease in the Principal Amount at Maturity of Outstanding LYONs
represented thereby shall be made by the Securities Custodian in accordance with
the standing instructions and procedures existing between the Depositary and the
Securities Custodian.
Neither any members of, or participants in, the Depositary
("Agent Members") nor any other Persons on whose behalf Agent Members may act
shall have rights under this Indenture with respect to any Global Security held
in the name of the Depositary or any nominee thereof, or under the Global
Security, and the Depositary (including, for this purpose, its nominee) may be
treated by the Company, the Trustee and any agent of the Company or the Trustee
as the absolute owner and Holder of such Global Security for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall (A) prevent the
Company, the Trustee or any agent of the Company or the Trustee from giving
effect to any written certification, proxy or other authorization furnished by
the Depositary or (B) impair, as between the Depositary, its Agent Members and
any other Person on whose behalf an Agent Member may act, the operation of
customary practices governing the exercise of the rights of a Holder of any
LYON.
Certificated Securities. Certificated Securities shall be
issued only under the limited circumstances provided in Sections 201(b),
202(a)(1) and 202(b) hereof.
Paying Agent and Conversion Agent. The Company shall maintain
an office or agency where LYONs may be presented for purchase or payment
("Paying Agent") and an office or agency where LYONs may be presented for
conversion ("Conversion Agent"). The Company may have one or more additional
paying agents and one or more additional conversion agents.
The Company shall enter into an appropriate agency agreement
with any Paying Agent or Conversion Agent (other than the Trustee). The
agreement shall implement the provisions of this Indenture that relate to such
agent. The Company shall notify the Trustee of the name and address of any such
agent. If the Company fails to maintain a Paying Agent or Conversion Agent, the
Trustee shall act as such and shall be entitled to appropriate compensation
therefor pursuant to Section 6.7 of the Indenture. The Company or any Subsidiary
or an Affiliate of either of them may act as Paying Agent or Conversion Agent.
The Company initially appoints the Trustee as Conversion Agent
and Paying Agent in connection with the LYONs.
Transfer and Exchange.
Transfer and Exchange of Global Securities.
Except as provided in Section 202(b), Certificated Securities
shall be issued in exchange for interests in the Global Securities only if (x)
the Depositary notifies the Company that it is unwilling or unable to continue
as depositary for the Global Securities or if it at any time ceases to be a
"clearing agency" registered under the
Exchange Act if so required by applicable law or regulation and a successor
depositary is not appointed by the Company within 90 days, or (y) at any time,
the Company so determines, in its sole discretion. In either case, the Company
shall execute, and the Trustee shall, upon receipt of a Company Order (which the
Company agrees to deliver promptly), authenticate and deliver Certificated
Securities in an aggregate Principal Amount at Maturity equal to the Principal
Amount at Maturity of such Global Securities in exchange therefor. Only
Restricted Certificated Securities shall be issued in exchange for beneficial
interests in Restricted Global Securities, and only Unrestricted Certificated
Securities shall be issued in exchange for beneficial interests in Unrestricted
Global Securities. Certificated Securities issued in exchange for beneficial
interests in Global Securities shall be registered in such names and shall be in
such authorized denominations as the Depositary, pursuant to instructions from
its direct or indirect participants or otherwise, shall instruct the Trustee.
The Trustee shall deliver or cause to be delivered such Certificated Securities
to the persons in whose names such Securities are so registered. Such exchange
shall be effected in accordance with the Applicable Procedures. Nothing herein
shall require the Trustee to communicate directly with beneficial owners, and
the Trustee shall in connection with any transfers hereunder be entitled to rely
on instructions received through the registered Holder.
In the event that Certificated Securities are issued in
exchange for beneficial interests in Global Securities in accordance with the
foregoing paragraph and, thereafter, the events or conditions specified in this
Section 202(a)(1) which required such exchange shall have ceased to exist, the
Company shall mail notice to the Trustee and to the Holders stating that Holders
may exchange Certificated Securities for interests in Global Securities by
complying with the procedures set forth in this Indenture and briefly describing
such procedures and the events or circumstances requiring that such notice be
given.
Notwithstanding any other provisions of this Second
Supplemental Indenture other than the provisions set forth in Section 202(a)(1)
hereof, a Global Security may not be transferred, except as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary. Nothing in this Section 202(a)(2) shall prohibit or render
ineffective any transfer of a beneficial interest in a Global Security effected
in accordance with the other provisions of this Section 202.
Restrictions on Transfer of a Beneficial Interest in a Global
Security for a Certificated Security. A beneficial interest in a Global Security
may not be exchanged for a Certificated Security except upon satisfaction of the
requirements set forth below. Upon receipt by the Trustee of a request in the
form satisfactory to the Trustee from the Depositary or its nominee on behalf of
a person having a beneficial interest in a Global Security to register the
transfer of all or a portion of such beneficial interest in accordance with
Applicable Procedures for a Certificated Security, together with:
in the case of a request to register the transfer of a
beneficial interest in a Restricted Global Security, a certificate (a "Transfer
Certificate"), in substantially the form set forth in Exhibit B_1, and a
certification in substantially the form set forth in Exhibit B_2, that such
beneficial interest in the Restricted Global Security is being transferred to an
Institutional Accredited Investor;
written instructions to the Trustee to make, or direct the
Security Registrar to make, an adjustment on its books and records with respect
to such Global Security to reflect a decrease in the aggregate Principal Amount
at Maturity of the LYONs represented by the Global Security, such instructions
to contain information regarding the Depositary account to be credited with such
decrease; and
if the Company or the Trustee so requests, a customary opinion
of counsel, certificates and other information reasonably acceptable to them as
to the compliance with the restrictions set forth in the legend described in
Section 202(f)(1),
then the Trustee shall cause, or direct the Security Registrar
to cause, in accordance with the standing instructions and procedures existing
between the Depositary and the Security Registrar, the aggregate Principal
Amount at Maturity of LYONs represented by the Global Security to be decreased
by the aggregate Principal Amount at Maturity of the Certificated Security to be
issued, shall authenticate and deliver such Certificated Security and shall
debit or cause to be debited to the account of the Person specified in such
instructions a beneficial interest in the Global Security equal to the Principal
Amount at Maturity of the Certificated Security so issued.
Transfer and Exchange of Certificated Securities. When
Certificated Securities are presented by a Holder to a Security Registrar with a
request:
to register the transfer of the Certificated Securities to a
person who will take delivery thereof in the form of Certificated Securities
only; or
to exchange such Certificated Securities for an equal
Principal Amount at Maturity of Certificated Securities of other authorized
denominations,
such Security Registrar shall register the transfer or make
the exchange as requested; provided, however, that the Certificated Securities
presented or surrendered for register of transfer or exchange:
shall be duly endorsed or accompanied by a written instrument
of transfer in accordance with the fifth paragraph of Section 3.5 of the
Indenture; and
in the case of a Restricted Certificated Security, such
request shall be accompanied by the following additional information and
documents, as applicable:
if such Restricted Certificated Security is being delivered to
the Security Registrar by a Holder for registration in the name of such Holder,
without transfer, or such Restricted Certificated Security is being transferred
to the Company or a Subsidiary
of the Company, a certification to that effect from such Holder (in
substantially the form set forth in the Transfer Certificate);
if such Restricted Certificated Security is being transferred
to a person the Holder reasonably believes is a QIB in accordance with Rule 144A
or pursuant to an effective registration statement under the Securities Act, a
certification to that effect from such Holder (in substantially the form set
forth in the Transfer Certificate);
if such Restricted Certificated Security is being transferred
to an Institutional Accredited Investor, a certification to that effect from
such Holder (in substantially the form set forth in the Transfer Certificate), a
certification from the Institutional Accredited Investor to whom such Restricted
Certificated Security is being transferred in substantially the form set forth
in Exhibit B_2, and, if the Company or such Security Registrar so requests, a
customary opinion of counsel, certificates and other information reasonably
acceptable to them as to the compliance with the restrictions set forth in the
legend described in Section 202(f)(1); or
if such Restricted Certificated Security is being transferred
(i) pursuant to an exemption from the registration requirements of the
Securities Act in accordance with Rule 144 or (ii) pursuant to an exemption from
the registration requirements of the Securities Act (other than pursuant to Rule
144A or Rule 144) and as a result of which, in the case of a Security
transferred pursuant to this clause (ii), such Security shall cease to be a
"restricted security" within the meaning of Rule 144, a certification to that
effect from the Holder (in substantially the form set forth in the Transfer
Certificate) and, if the Company or such Security Registrar so requests, a
customary opinion of counsel, certificates and other information reasonably
acceptable to the Company and such Security Registrar to the effect that such
transfer is in compliance with the Securities Act.
Transfer of a Beneficial Interest in a Restricted Global
Security for a Beneficial Interest in an Unrestricted Global Security. Any
person having a beneficial interest in a Restricted Global Security may upon
request, subject to the Applicable Procedures, transfer such beneficial interest
to a person who is required or permitted to take delivery thereof in the form of
an Unrestricted Global Security. Upon receipt by the Trustee of written
instructions or such other form of instructions as is customary for the
Depositary, from the Depositary or its nominee on behalf of any person having a
beneficial interest in a Restricted Global Security and the following additional
information and documents in such form as is customary for the Depositary from
the Depositary or its nominee on behalf of the person having such beneficial
interest in the Restricted Global Security (all of which may be submitted by
facsimile or electronically):
if such beneficial interest is being transferred pursuant to
an effective registration statement under the Securities Act, a certification to
that effect from the transferor (in substantially the form set forth in the
Transfer Certificate); or
if such beneficial interest is being transferred (i) pursuant
to an exemption from the registration requirements of the Securities Act in
accordance with Rule 144 or (ii) pursuant to an exemption from the registration
requirements of the Securities Act
(other than pursuant to Rule 144A or Rule 144) and as a result of which, in the
case of a Security transferred pursuant to this clause (ii), such Security shall
cease to be a "restricted security" within the meaning of Rule 144, a
certification to that effect from the transferor (in substantially the form set
forth in the Transfer Certificate) and, if the Company or the Trustee so
requests, a customary opinion of counsel, certificates and other information
reasonably acceptable to the Company and the Trustee to the effect that such
transfer is in compliance with the Securities Act,
the Trustee, as a Security Registrar and Securities Custodian,
shall reduce or cause to be reduced the aggregate Principal Amount at Maturity
of the Restricted Global Security by the appropriate Principal Amount at
Maturity and shall increase or cause to be increased the aggregate Principal
Amount at Maturity of the Unrestricted Global Security by a like Principal
Amount at Maturity. Such transfer shall otherwise be effected in accordance with
the Applicable Procedures. If no Unrestricted Global Security is then
outstanding, the Company shall execute and the Trustee shall, upon receipt of a
Company Order (which the Company agrees to deliver promptly), authenticate and
deliver an Unrestricted Global Security.
Transfers of Certificated Securities for Beneficial Interest
in Global Securities. If Certificated Securities are presented by a Holder to a
Security Registrar with a request:
to register the transfer of such Certificated Securities to a
person who will take delivery thereof in the form of a beneficial interest in a
Global Security, which request shall specify whether such Global Security will
be a Restricted Global Security or an Unrestricted Global Security; or
to exchange such Certificated Securities for an equal
Principal Amount at Maturity of beneficial interests in a Global Security, which
beneficial interests will be owned by the Holder transferring such Certificated
Securities (provided that in the case of such an exchange, Restricted
Certificated Securities may be exchanged only for Restricted Global Securities
and Unrestricted Certificated Securities may be exchanged only for Unrestricted
Global Securities),
the Security Registrar shall register the transfer or make the
exchange as requested by canceling such Certificated Security and causing, or
directing the Securities Custodian to cause, the aggregate Principal Amount at
Maturity of the applicable Global Security to be increased accordingly and, if
no such Global Security is then outstanding, the Company shall issue and the
Trustee shall authenticate and deliver a new Global Security; provided, however,
that the Certificated Securities presented or surrendered for registration of
transfer or exchange:
shall be duly endorsed or accompanied by a written instrument
of transfer in accordance with the fifth paragraph of Section 3.5 of the
Indenture;
in the case of a Restricted Certificated Security to be
transferred for a beneficial interest in an Unrestricted Global Security, such
request shall be accompanied by the following additional information and
documents, as applicable:
if such Restricted Certificated Security is being transferred
pursuant to an effective registration statement under the Securities Act, a
certification to that effect from such Holder (in substantially the form set
forth in the Transfer Certificate); or
if such Restricted Certificated Security is being transferred
pursuant to (i) an exemption from the registration requirements of the
Securities Act in accordance with Rule 144 or (ii) pursuant to an exemption from
the registration requirements of the Securities Act (other than pursuant to Rule
144A or Rule 144) and as a result of which, in the case of a Security
transferred pursuant to this clause (ii), such Security shall cease to be a
"restricted security" within the meaning of Rule 144, a certification to that
effect from such Holder (in substantially the form set forth in the Transfer
Certificate), and, if the Company or the Security Registrar so requests, a
customary opinion of counsel, certificates and other information reasonably
acceptable to the Company and the Trustee to the effect that such transfer is in
compliance with the Securities Act;
in the case of a Restricted Certificated Security to be
transferred or exchanged for a beneficial interest in a Restricted Global
Security, such request shall be accompanied by a certification from such Holder
(in substantially the form set forth in the Transfer Certificate) to the effect
that such Restricted Certificated Security is being transferred to a person the
Holder reasonably believes is a QIB (which, in the case of an exchange, shall be
such Holder) in accordance with Rule 144A; and
in the case of an Unrestricted Certificated Security to be
transferred or exchanged for a beneficial interest in an Unrestricted Global
Security, such request need not be accompanied by any additional information or
documents.
Legends.
Except as permitted by the following paragraphs (2) and (3),
each Global Security and Certificated Security (and all Securities issued in
exchange therefor or upon registration of transfer or replacement thereof and
any Common Stock issuable upon conversion thereof) shall bear a legend in
substantially the form called for by footnote 2 to Annex A hereto (each, a
"Transfer Restricted Security") for so long as such Security or Common Stock
issuable upon conversion thereof is required by this Indenture to bear such
legend. Each Transfer Restricted Security shall have attached thereto a Transfer
Certificate in substantially the form set forth in Exhibit B_1 hereto.
Upon any sale or transfer of a Transfer Restricted Security
(x) pursuant to Rule 144, (y) pursuant to an effective registration statement
under the Securities Act or (z) pursuant to any other available exemption (other
than Rule 144A) from the registration requirements of the Securities Act and as
a result of which, in the case of a Security transferred pursuant to this clause
(z), such Security shall cease to be a "restricted security" within the meaning
of Rule 144:
in the case of any Restricted Certificated Security, any
Security Registrar shall permit the Holder thereof to exchange such Restricted
Certificated Security for an Unrestricted Certificated Security, or (under the
circumstances described in Section 202(e) hereof) to transfer such Restricted
Certificated Security to a transferee who shall take such Security in the form
of a beneficial interest in an Unrestricted Global Security, and in each case
shall rescind any restriction on the transfer of such Security; provided,
however, that the Holder of such Restricted Certificated Security shall, in
connection with such exchange or transfer, comply with the other applicable
provisions of this Section 202; and
in the case of any beneficial interest in a Restricted Global
Security, the Trustee shall permit the beneficial owner thereof to transfer such
beneficial interest to a transferee who shall take such interest in the form of
a beneficial interest in an Unrestricted Global Security and shall rescind any
restriction on transfer of such beneficial interest; provided, however, that
such Unrestricted Global Security shall continue to be subject to the provisions
of Section 202(a)(2) hereof, and provided further, however, that the owner of
such beneficial interest shall, in connection with such transfer, comply with
the other applicable provisions of this Section 202.
Upon the exchange, registration of transfer or replacement of
Securities not bearing the legend described in paragraph (1) above, the Company
shall execute, and the Trustee shall authenticate and deliver, Securities that
do not bear such legend and which do not have a Transfer Certificate attached
thereto.
Transfers to the Company. Nothing in this Second Supplemental
Indenture or in tr transfer of any Securities (including beneficial interests in
Global Securities) to the Company or any of its Subsidiaries, which Securities
shall thereupon be canceled in accordance Section 3.9 of the Indenture.
Additional OID Legend. Any Restricted Certificated Security
shall bear the legend required by Treas. Reg. Section 1.1275-3(b).
Amount.
The Trustee shall authenticate and deliver LYONs for original
issue in an aggregate Principal Amount at Maturity of up to $1,051,175,000 upon
a Company Order for the authentication and delivery of LYONs, without any
further action by the Company. The aggregate Principal Amount at Maturity of
LYONs that may be authenticated and delivered under the Indenture may not exceed
the amount set forth in the foregoing sentence, except for LYONs authenticated
and delivered upon registration of transfer of, or in exchange for, or in lieu
of, other LYONs pursuant to Section 202 of this Second Supplemental Indenture or
Sections 2.5, 3.4, 3.5, 3.6 or 11.7 of the Indenture.
The Company may not issue new LYONs to replace LYONs that it
has paid or delivered to the Trustee for cancellation or that any Holder has
converted pursuant to Article Four hereof.
Original Issue Discount.
The LYONs shall be issued at a discount from their Principal
Amount at Maturity and will not bear interest. Outstanding LYONs shall accrue
Original Issue Discount, calculated on a semi-annual bond equivalent basis at
3.75% per annum from October 24, 2001, using a 360-day year comprised of twelve
30-day months. Original Issue Discount shall cease to accrue at the Stated
Maturity, or such earlier date as determined pursuant to Section 208, 209 or 211
of this Second Supplemental Indenture. Upon any such earlier date specified in
the previous sentence, the Holders of any LYONs shall be entitled to payment of
Original Issue Discount and other amounts hereunder, as provided in Section 309
of this Second Supplemental Indenture.
Liquidated Damages.
Liquidated Damages with respect to the LYONs shall be payable
in accordance with the provisions and in the amounts set forth in the
Registration Rights Agreement.
Denominations.
Each LYON shall be in fully registered form without coupons in
the denominations of $1,000 of Principal Amount at Maturity or any integral
multiple thereof.
Place of Payment.
The Place of Payment for the LYONs and the place or places
where the LYONs may be surrendered for registration of transfer, exchange,
repurchase, redemption or conversion and where notices may be given to the
Company in respect of the LYONs is at the office of the Trustee in New York, New
York and at the agency of the Trustee maintained for that purpose at the office
of the Trustee; provided, however, that payment of interest may be made at the
option of the Company by check mailed to the address of the Person entitled
thereto as such address shall appear in the Security Register (as defined in the
Indenture).
Redemption.
There shall be no sinking fund for the retirement of the
LYONs.
The Company, at its option, may redeem the LYONs on or after
October 24, 2008 in accordance with the provisions and at the Redemption Price
set forth under the captions "Optional Redemption" and "Notice of Redemption" in
the LYONs and in accordance with the provisions of the Indenture and this Second
Supplemental Indenture, including, without limitation, Article Five hereof.
Conversion.
The LYONs shall be convertible in accordance with the
provisions and at the Conversion Rate set forth under the caption "Conversion"
in the LYONs and in accordance with the provisions of the Indenture and this
Second Supplemental Indenture, including, without limitation, Article Four
hereof.
Stated Maturity.
The date on which the principal of the LYONs is due and
payable, unless earlier converted, accelerated, redeemed or repurchased pursuant
to the Indenture or this Second Supplemental Indenture, shall be October 24,
2021.
Repurchase.
The LYONs shall be repurchased by the Company, at the option
of the Holder in accordance with the provisions and at the Repurchase Price set
forth under the caption "Repurchase by the Company at the Option of the Holder"
in the LYONs and in accordance with the provisions of the Indenture and this
Second Supplemental Indenture, including, without limitation, Article Six
hereof.
The LYONs shall be purchased by the Company in accordance with
the provisions and at the Change in Control Purchase Price set forth under the
caption "Purchase of Securities at Option of Holder Upon a Change in Control" in
the LYONs and in accordance with the provisions of this Second Supplemental
Indenture, including, without limitation, Article Seven hereof.
Discharge of Liability on LYONs.
The LYONs may be discharged by the Company in accordance with
the provisions of Article IV of the Indenture, as amended by Section 305 hereof.
Other Terms of LYONs.
Without limiting the foregoing provisions of this Article, the
terms of the LYONs shall be as set forth in the form of the LYONs set forth in
Annex A hereto and as provided in the Indenture.
Ownership Limitation on LYONs
For purposes of this Section 214, the following terms shall
have the following meanings:
"Beneficial Ownership" shall mean ownership of Shares
(including Shares deemed to be held as a result of ownership of the LYONs) by a
Person who would be treated as an owner of such Shares directly, indirectly or
constructively through the application of Section 267(b) of the Code, as
modified in any way by Section 883 of the Code and the regulations promulgated
thereunder. The terms "Beneficial Owner", "Beneficially Owns" and "Beneficially
Owned" shall have correlative meanings.
"Charitable Beneficiary" shall mean the organization or
organizations described in Section 170(c)(2) and 501(c)(3) of the Code selected
by the Excess LYONs Trustee.
"Code" shall mean the United States Internal Revenue Code of
1986, as amended from time to time.
"Excess LYONs" shall mean LYONs resulting from an event
described in Section 214(c) hereof.
"Excess LYONs Trust" shall mean the trust created pursuant to
this Section 214.
"Excess LYONs Trustee" shall mean a Person, who shall be
unaffiliated with the Company, any Purported Beneficial Transferee and any
Purported Record Transferee, appointed by the Company as the trustee of the
Excess LYONs Trust.
"Existing Holders" shall mean (i) any member of the group of
Persons that jointly filed Amendment No. 2 to the Third Amended and Restated
Schedule 13D with the United States Securities and Exchange Commission on
January 19, 2001 with respect to the beneficial ownership of shares of Common
Stock; and (ii) any Permitted Transferee.
"Market Price" of the LYONs on any date shall mean the average
of the Closing Price for the five (5) consecutive trading days ending on such
date, or if such date is not a trading date, the five consecutive trading days
preceding such date. The "Closing Price" on any date shall mean (i) the last
sale price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system if the LYONs
are listed or admitted to trading on the New York Stock Exchange, or (ii) if the
LYONs are not listed or admitted to trading on the New York Stock Exchange, the
last sale price, regular way, or in case no such sale takes place on such day,
the average of the closing bid and asked prices, as reported in the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which the LYONs are listed or
admitted to trading, or (iii) if the LYONs are not listed or admitted to trading
on any national securities exchange, the last quoted price, or if not so quoted,
the average of the high bid and low asked prices in the over-the-counter market,
as reported by the National Association of Securities Dealers, Inc. Automated
Quotation System or, if such system is no longer in use, the principal other
automated quotations system that may then be in use, or (iv) if the LYONs are
not quoted by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in the LYONs
selected by the Company. Such Market Price shall be expressed as a percentage
price per $1,000 of Principal Amount at Maturity of the LYONs.
"Ownership Limit" shall mean, in the case of a Person other
than an Existing Holder, Beneficial Ownership of more than four and nine-tenths
percent (4.9%),
by value, vote or number, of the Shares. The Ownership Limit shall not apply to
any Existing Holder.
"Permitted Transfer" shall mean a Transfer by an Existing
Holder to any Person which does not result in the Company losing its exemption
from taxation on gross income derived from the international operation of a ship
or ships within the meaning of Section 883 of the Code. Any such transferee is
herein referred to as a "Permitted Transferee."
"Person" shall mean a person as defined by Section 7701(a) of
the Code.
"Purported Beneficial Holder" shall mean, with respect to any
event (other than a purported Transfer, but including holding Shares or LYONs in
excess of the Ownership Limitation) which results in Excess LYONs, the Person
for whom the Purported Record Holder held LYONs that, pursuant to Section 214(c)
hereof, became Excess LYONs upon the occurrence of such event.
"Purported Beneficial Transferee" shall mean, with respect to
any purported Transfer which results in Excess LYONs, the purported beneficial
transferee for whom the Purported Record Transferee would have acquired LYONs if
such Transfer had been valid under Section 214(b) hereof.
"Purported Record Holder" shall mean, with respect to any
event (other than a purported Transfer, but including holding Shares or LYONs in
excess of the Ownership Limitation) which results in Excess LYONs, the record
holder of the LYONs that, pursuant to Section 214(c) hereof, became Excess LYONs
upon the occurrence of such event.
"Purported Record Transferee" shall mean, with respect to any
purported Transfer which results in Excess LYONs, the record holder of the LYONs
if such Transfer had been valid under Section 214(b) hereof.
"Restriction Termination Date" shall mean such date as may be
determined by the Company in its sole discretion (and for any reason) as the
date on which the ownership and transfer restrictions set forth in this Section
214 should cease to apply.
"Shares" shall means shares of the Company as may be
authorized and issued from time to time pursuant to its Articles of
Incorporation. For purposes of determining a Person's Beneficial Ownership of
any Shares, the conversion of the LYONs and any other convertible securities
held by such Person shall be deemed effected and any option, warrant or similar
instrument held by such Person shall be deemed exercised.
"Transfer" shall mean any sale, transfer, gift, hypothecation,
pledge, assignment, devise or other disposition of the Shares or the LYONs
(including (i) the granting of any option or interest similar to an option
(including an option to acquire an
option or any series of such options) or entering into any agreement for the
sale, transfer or other disposition of the LYONs or (ii) the sale, transfer,
assignment or other disposition of any securities or rights convertible into or
exchangeable for the LYONs or Shares, whether voluntary or involuntary, whether
of record, constructively or beneficially and whether by operation of law or
otherwise. For purposes of this definition, whether securities or rights are
convertible or exchangeable for the LYONs or Shares shall be determined in
accordance with Sections 267(b) and 883 of the Code.
Except as provided in Section 214(i) hereof, until the
Restriction Termination Date: (1) no Person (other than an Existing Holder)
shall Beneficially Own Shares and/or LYONs representing Shares in excess of the
Ownership Limit; (2) any Transfer that, if effective, would result in any Person
(other than an Existing Holder) Beneficially Owning Shares and/or LYONs
representing Shares in excess of the Ownership Limit shall be void ab initio as
to the Transfer of that amount of the LYONs representing Shares which would be
otherwise Beneficially Owned by such Person in excess of the Ownership Limit,
and the intended transferee shall acquire no rights in such LYONs in excess of
the Ownership Limit; and (3) any Transfer of the LYONs that, if effective, would
result in the Company being "closely held" within the meaning of Section 883 of
the Code and the regulations promulgated thereunder shall be void ab initio as
to the Transfer of that amount of such LYONs which would cause the Company to be
"closely held" within the meaning of Section 883 of the Code and the regulations
promulgated thereunder and the intended transferee shall acquire no rights in
such LYONs.
(1) If, notwithstanding the other provisions contained in this
Second Supplemental Indenture, at any time until the Restriction Termination
Date, there is a purported Transfer or other event such that any Person (other
than an Existing Holder) would Beneficially Own Shares and/or LYONs representing
Shares in excess of the Ownership Limit, then, except as otherwise provided in
Section 214(i) hereof, such LYONs representing Shares which would be in excess
of the Ownership Limit, shall automatically be designated as Excess LYONs, as
further described below. The designation of such LYONs as Excess LYONs shall be
effective as of the close of business on the business day prior to the date of
the Transfer or other event. If, after designation of such LYONs owned directly
by a Person as Excess LYONs, such Person still owns LYONs representing Shares in
excess of the applicable Ownership Limit, LYONs representing Shares Beneficially
Owned by such Person constructively in excess of the Ownership Limit shall be
designated as Excess LYONs until such Person does not Beneficially Own Shares
and/or LYONs representing Shares in excess of the applicable Ownership Limit.
Where such Person owns LYONs constructively through one or more Persons and the
LYONs as held by such other Persons must be designated as Excess LYONs, the
designation of LYONs held by such other Persons as Excess LYONs shall be pro
rata.
(2) If, notwithstanding the other provisions contained in this
Second Supplemental Indenture, at any time until the Restriction Termination
Date, there is a purported Transfer or other event which, if effective, would
cause the Company to
become "closely held" within the meaning of Section 883 of the Code and
regulations promulgated thereunder, then, except as otherwise provided in
Section 214(i) hereof, the LYONs being Transferred or which are otherwise
affected by such event and which, in either case, would cause, when taken
together with all LYONs and Shares, the Company to be "closely held" within the
meaning of Section 883 of the Code and the regulations promulgated thereunder
shall automatically be designated as Excess LYONs. The designation of such LYONs
as Excess LYONs shall be effective as of the close of business on the business
day prior to the date of the Transfer or other event. If, after designation of
such LYONs owned directly by a Person as Excess LYONs, such Person still owns
LYONs representing Shares in excess of the applicable Ownership Limit, LYONs
representing Shares Beneficially Owned by such Person constructively in excess
of the Ownership Limit shall be designated as Excess LYONs until such Person
does not own Shares and/or LYONs or in excess of the applicable Ownership Limit.
Where such Person owns LYONs constructively through one or more Persons and the
LYONs held by such other Persons must be designated as Excess LYONs, the
designation of LYONs held by such other Persons as Excess LYONs shall be pro
rata.
If the Company shall at any time determine in good faith that
a purported Transfer or other event has taken place in violation of Section
214(b) hereof or that a Person intends to acquire or has attempted to acquire
LYONs representing Beneficial Ownership of Shares in violation of Section 214(b)
hereof, the Company may take such action as it deems advisable to refuse to give
effect to or to prevent such Transfer or other event, including, but not limited
to, refusing to give effect to such Transfer or other event on the books of the
Company and the Trustee, instituting proceedings to enjoin such Transfer or
other event or transaction, provided, however, that any Transfers or attempted
Transfers (or, in the case of events other than a Transfer, Beneficial
Ownership) in violation of Section 214(b) hereof shall be void ab initio and
automatically result in the designation and treatment described in Section
214(c) hereof, irrespective of any action (or non-action) by the Company.
Any Person who acquires or attempts to acquire LYONs in
violation of Section 214(b) hereof, or any Person who is a purported transferee
such that Excess LYONs result under Section 214(c) hereof, shall immediately
give written notice to the Company of such Transfer, attempted Transfer or other
event and shall provide to the Company such other information as the Company may
request in order to determine the effect, if any, of such Transfer or attempted
Transfer or other event on the Company's status as qualifying for exemption from
taxation on gross income from the international operation of a ship or ships
within the meaning of Section 883 of the Code.
Prior to the Restriction Termination Date: (1) every Person
who holds LYONs and/or Shares representing Beneficial Ownership of three percent
(3%) or more, by vote, value or number, or such lower percentages as required
pursuant to regulations under the Code, of the outstanding Shares (including any
LYONs deemed to be converted into Shares) shall promptly after becoming such a
three percent (3%) Beneficial Owner, give written notice to the Company stating
the name and address of such Beneficial Owner, the general ownership structure
of such Beneficial Owner, the number of shares
of each class of Shares and/or the amount of LYONs Beneficially Owned, and a
description of how such Shares or LYONs are held and (2) each Person who is a
Beneficial Owner of Shares (including LYONs deemed to be converted into Shares)
or LYONs and each Person (including the holder of record) who is holding Shares
or LYONs for a Beneficial Owner shall provide on demand to the Company such
information as the Company may request from time to time in order to determine
the Company's status as exempt from taxation on gross income from the
international operation of a ship or ships within the meaning of Section 883 of
the Code and to ensure compliance with the Ownership Limit.
Nothing contained in this Second Supplemental Indenture shall
limit the ability of the Company to take such other action as it deems necessary
or advisable to protect the interests of the Company by preservation of the
Company's status as exempt from taxation on gross income from the international
operation of a ship or ships within the meaning of Section 883 of the Code and
to ensure compliance with the Ownership Limit.
Reserved.
The Company upon receipt of a ruling from the Internal Revenue
Service or an opinion of tax counsel, satisfactory to it in its sole and
absolute discretion, in each case to the effect that the Company's status as
exempt from taxation on gross income from the international operation of a ship
or ships within the meaning of Section 883 of the Code will not be jeopardized,
may exempt a Person (or may generally exempt any class of Persons) from the
Ownership Limit if the Company, in its sole discretion, ascertains that such
Person's (or Persons') Beneficial Ownership of Shares and/or LYONs will not
jeopardize the Company's status as exempt from taxation on gross income from the
international operation of a ship or ships within the meaning of Section 883 of
the Code. The Company may require representations and undertakings from such
Person or Persons as are necessary to make such determination.
Prior to the Restriction Termination Date, each certificate
for the LYONs shall bear the following legend:
THIS SECURITY IS SUBJECT TO LIMITATIONS ON OWNERSHIP CONTAINED
IN THE INDENTURE, IN ORDER TO PERMIT THE COMPANY TO RETAIN ITS STATUS AS A
PUBLICLY TRADED CORPORATION UNDER PROPOSED TREASURY REGULATIONS UNDER SECTION
883 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED.
Upon any purported Transfer or other event that results in
Excess LYONs pursuant to Section 214(b) or (c) hereof, such Excess LYONs shall
be deemed to have been transferred to the Excess LYONs Trustee, as trustee of
the Excess LYONs Trust, for the benefit of the Charitable Beneficiary effective
as of the close of business on the business day prior to the date of the
Transfer or other event. The Purported Record Transferee or Purported Record
Holder shall have no rights in
such Excess LYONs. The Purported Beneficial Transferee or Purported Beneficial
Holder shall have no rights in such Excess LYONs except as provided in
subsection (m). The Excess LYONs Trustee may resign at any time so long as the
Company shall have appointed a successor trustee. The Excess LYONs Trustee
shall, from time to time, designate one or more charitable organization or
organizations as the Charitable Beneficiary.
Excess LYONs shall be entitled to the same interest or
distributions as determined as if the designation of Excess LYONs had not
occurred. Any interest or distributions paid prior to the discovery by the
Company that the LYONs have been designated as Excess LYONs shall be repaid to
the Excess LYONs Trust upon demand. Otherwise, any interest or distributions on
the Excess LYONs shall be paid to the Excess LYONs Trust. All interest or
distributions received or other income earned by the Excess LYONs Trust shall be
paid over to the Charitable Beneficiary.
Excess LYONs shall be transferable only as provided in this
subsection (m). At the direction of the Company, the Excess LYONs Trustee shall
transfer the Excess LYONs held in the Excess LYONs Trust to a Person or Persons
(including, without limitation, the Company under subsection (n) below) whose
ownership of such LYONs shall not violate the Ownership Limit or otherwise cause
the Company to become "closely held" within the meaning of Section 883 of the
Code within 180 days after the later of (i) the date of the Transfer or other
event which resulted in Excess LYONs and (ii) the date the Company determines in
good faith that a Transfer or other event resulting in Excess LYONs has
occurred, if the Company does not receive a notice of such Transfer or other
event pursuant to Section 214(e) hereof. If such a transfer is made, the
interest of the Charitable Beneficiary shall terminate, the designation of such
LYONs as Excess LYONs shall thereupon cease and a payment shall be made to the
Purported Beneficial Transferee, Purported Beneficial Holder and/or the
Charitable Beneficiary as described below. If the Excess LYONs resulted from a
purported Transfer, the Purported Beneficial Transferee shall receive a payment
from the Excess LYONs Trustee that reflects a price for such Excess LYONs equal
to the lesser of (A) the price received by the Excess LYONs Trustee and (B)(x)
the price such Purported Beneficial Transferee paid for the LYONs in the
purported Transfer that resulted in the Excess LYONs, or (y) if the Purported
Beneficial Transferee did not give value for such Excess LYONs (through a gift,
devise or other similar event) a price equal to the product of (1) the Market
Price of such LYONs on the date of the purported Transfer that resulted in the
Excess LYONs and (2) the aggregate Principal Amount at Maturity of such Excess
LYONs. If the Excess LYONs resulted from an event other than a purported
Transfer, the Purported Beneficial Holder shall receive a payment from the
Excess LYONs Trustee that reflects a price for Excess LYONs equal to the lesser
of (A) the price received by the Excess LYONs Trustee and (B) the product of (1)
the Market Price of such LYONs on the date of the event that resulted in Excess
LYONs and (2) the aggregate Principal Amount at Maturity of such Excess LYONs.
Prior to any transfer of any interest in the Excess LYON Trust, the Company must
have waived in writing its purchase rights, if any, under Section 214(n) hereof.
Any funds received by the Excess LYONs Trustee in excess of the funds payable to
the Purported Beneficial Holder or the Purported Beneficial Transferor shall be
paid to the Charitable Beneficiary. The Company shall pay the costs and expenses
of the Excess LYONs Trustee.
Notwithstanding the foregoing, if the provisions of this
subsection (m) are determined to be void or invalid by virtue of any legal
decision, statute, rule or regulation, then the Purported Beneficial Transferee
or Purported Beneficial Holder of Excess LYONs may be deemed, at the option of
the Company, to have acted as an agent on behalf of the Company, in acquiring or
holding such Excess LYONs and to hold such Excess LYONs on behalf of the
Company.
Excess LYONs shall be deemed to have been offered for sale by
the Excess LYONs Trustee to the Company, or its designee, at a price equal to
(i) in the case of Excess LYONs resulting from a purported Transfer, the lesser
of (A) the price of the LYONs in the transaction that created such Excess LYONs
(or, in the case of devise, gift or other similar event, the Market Price of the
LYONs on the date of such devise, gift or other similar event), or (B) the
product of (1) the lowest Market Price of the LYONs which resulted in the Excess
LYONs at any time after the date such LYONs were designated as Excess LYONs and
prior to the date the Company, or its designee, accepts such offer and (2) the
aggregate Principal Amount at Maturity of such Excess LYONs or (ii) in the case
of Excess LYONs resulting from an event other than a purported Transfer, the
lesser of (A) the product of (1) the Market Price of the LYONs on the date of
such event and (2) the aggregate Principal Amount at Maturity of such Excess
LYONs or (B) the product of (1) the lowest Market Price for LYONs at any time
from the date of the event resulting in such Excess LYONs and prior to the date
the Company, or its designee, accepts such offer and (2) the aggregate Principal
Amount at Maturity of such Excess LYONs. The Company shall have the right to
accept such offer for a period of ninety (90) days after the later of (i) the
date of the Transfer or other event which resulted in such Excess LYONs and (ii)
the date the Company determines in good faith that a Transfer or other event
resulting in Excess LYONs has occurred, if the Company does not receive a notice
of such Transfer or other event pursuant to Section 214(e) hereof.
The Company is authorized specifically to seek equitable
relief, including injunctive relief, to enforce the provisions of this Section
214. No delay or failure on the part of the Company in exercising any right
hereunder shall operate as a waiver of any right of the Company, except to the
extent specifically waived in writing.
The Trustee of the LYONs shall have no responsibility to
monitor the ownership of the LYONs.
The Trustee shall have no responsibility to monitor the
ownership of the LYONs.
Payments of Additional Amounts.
Sections 10.5 and 11.8 of the Indenture shall apply to the
LYONs.
__AMENDMENTS TO THE INDENTURE
Provisions Applicable Only to LYONs.
The Provisions contained herein shall apply to the LYONs only
and not to any other series of Security issued under the Indenture and any
covenants provided herein are expressly being included solely for the benefit of
the LYONs and not for the benefit of any other series of Security issued under
the Indenture. These amendments shall be effective for so long as there remain
any LYONs Outstanding.
Registration, Registration of Transfer and Exchange.
The Indenture is hereby amended, subject to Section 301 hereof
and with respect to the LYONs only, by replacing the seventh paragraph of
Section 3.5 with the following paragraph:
The Company shall not be required (i) to issue, register the
transfer of or exchange the Securities of any series during a period beginning
at the opening of business 15 days before the day of the mailing of a notice of
redemption of Securities of that series selected for redemption and ending at
the close of business on the day of such mailing, (ii) to register the transfer
of or exchange any LYON so selected for redemption in whole or in part, except
the unredeemed portion of any LYON being redeemed in part, or (iii) to exchange
or register a transfer of any LYON or portions thereof in respect of which a
Change in Control Purchase Notice or Repurchase Notice has been delivered and
not withdrawn by the Holder thereof (except, in the case of the purchase or
repurchase of a LYON in part, the portion not to be purchased).
Reserved.
Payment of Original Issue Discount.
The Indenture is hereby amended, subject to Section 301 hereof
and with respect to the LYONs only, by inserting the following paragraph before
the final paragraph in Section 3.7 of the Indenture:
On conversion of a Holder's LYONs, such Holder shall not
receive any cash payment of accrued Original Issue Discount. The Company's
delivery to a Holder of the full number of shares of Common Stock into which a
LYON is convertible, together with any cash payment for such Holder's fractional
shares, or cash or a combination of cash and Common Stock in lieu thereof, shall
be deemed to satisfy the Company's obligation to pay all accrued Original Issue
Discount.
Discharge of Liability on Securities.
When (i) the Company delivers to the Trustee or any Paying
Agent all Outstanding LYONs (other than LYONs replaced pursuant to Section 3.6
of the Indenture) for cancellation or (ii) all Outstanding LYONs have become due
and payable and the Company deposits with the Trustee or any Paying Agent cash
or, if expressly permitted by the terms of the LYONs, Common Stock sufficient to
pay all amounts due and owing on all Outstanding LYONs (other than LYONs
replaced pursuant to Section 3.6), and if in either case the Company pays all
other sums payable hereunder by
the Company, then this Second Supplemental Indenture shall, subject to Section
6.7 of the Indenture, cease to be of further effect, except for the
indemnification of the Trustee, which shall survive. The Trustee shall join in
the execution of a document prepared by the Company acknowledging satisfaction
and discharge of this Second Supplemental Indenture on demand of the Company
accompanied by an Officers' Certificate and Opinion of Counsel and at the
reasonable cost and expense of the Company.
Repayment to the Company.
The Trustee and the Paying Agent shall return to the Company
upon written request any money or securities held by them for the payment of any
amount with respect to the LYONs that remains unclaimed for two years, subject
to applicable unclaimed property law. After return to the Company, Holders
entitled to the money or securities must look to the Company for payment as
general creditors unless an applicable abandoned property law designates another
person and the Trustee and the Paying Agent shall have no further liability to
the Holders of LYONs with respect to such money or securities for that period
commencing after the return thereof.
Events of Default.
The Indenture is hereby amended, subject to Section 301 hereof
and with respect to the LYONs only, by replacing Section 5.1 with the following
paragraph:
"Event of Default", wherever used herein, means with respect
to the LYONs any one of the following events (whatever the reason for such Event
of Default and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
default in the payment of any Liquidated Damages pursuant to
the Registration Rights Agreement, and continuance of such default for a period
of 30 days; or
default in the payment of the principal amount at Maturity,
the Redemption Price, the Repurchase Price, or the Change in Control Purchase
Price, as the case may be, in respect of the LYONs when the same become due and
payable; or
a default under any bonds, debentures, notes or other
evidences of indebtedness for money borrowed by the Company or a Subsidiary or
under any mortgages, indentures or instruments under which there may be issued
or by which there may be secured or evidenced any indebtedness for money
borrowed by the Company or a Subsidiary, whether such indebtedness now exists or
shall hereafter be created, which indebtedness, individually or in the
aggregate, is in excess of $50,000,000 principal amount (excluding any such
indebtedness of any Subsidiary other than a Significant Subsidiary, all the
indebtedness of which Subsidiary is nonrecourse to the Company or any other
Subsidiary), which default shall constitute a failure to pay any portion of the
principal of or interest on such indebtedness when due and payable after the
expiration of
any applicable grace or cure period with respect thereto or shall have resulted
in such indebtedness becoming or being declared due and payable prior to the
date on which it would otherwise have become due and payable, without such
indebtedness having been discharged, or such acceleration having been rescinded
or annulled, within a period of 30 days after there shall have been given, by
registered or certified mail, to the Company by the Trustee or to the Company
and the Trustee by the Holders of at least 25% in Principal Amount at Maturity
of the Outstanding LYONs a written notice specifying such default and requiring
the Company to cause such indebtedness to be discharged or cause such
acceleration to be rescinded or annulled and stating that such notice is a
"Notice of Default" hereunder; or
default by the Company in the performance, or breach, of any
covenant or warranty of the Company in the Indenture or this Second Supplemental
Indenture for the benefit of the LYONs (other than a covenant or warranty a
default in whose performance or whose breach is elsewhere in this Section 501
specifically dealt with), and continuance of such default or breach for a period
of 60 days after there has been given, by registered or certified mail, to the
Company by the Trustee or to the Company and the Trustee by the Holders of at
least 25% in Principal Amount at Maturity of the Outstanding LYONs a written
notice specifying such default or breach and requiring it to be remedied and
stating that such notice is a "Notice of Default" hereunder; or
the entry by a court having jurisdiction in the premises of
(A) a decree or order for relief in respect of the Company or a Significant
Subsidiary in an involuntary case or proceeding under any applicable Federal,
State or foreign bankruptcy, insolvency, reorganization or other similar law
(each, a "Bankruptcy Law") or (B) a decree or order adjudging the Company or a
Significant Subsidiary a bankrupt or insolvent, or approving as properly filed a
petition seeking reorganization, arrangement, adjustment or composition of or in
respect of the Company or a Significant Subsidiary under any applicable Federal,
State or foreign law, or appointing a custodian, receiver, liquidator, assignee,
trustee, sequestrator or other similar official of the Company or a Significant
Subsidiary or of any substantial part of their respective properties, or
ordering the winding up or liquidation of the affairs of the Company or a
Significant Subsidiary, and the continuance of any such decree or order for
relief or any such other decree or order unstayed and in effect for a period of
60 consecutive days; or
the commencement by the Company or a Significant Subsidiary of
a voluntary case or proceeding under any applicable Bankruptcy Law or of any
other case or proceeding to be adjudicated a bankrupt or insolvent, or the
consent by either the Company or a Significant Subsidiary to the entry of a
decree or order for relief in respect of the Company or a Significant Subsidiary
in an involuntary case or proceeding under any applicable Bankruptcy Law or to
the commencement of any bankruptcy or insolvency case or proceeding against
either the Company or a Significant Subsidiary, or the filing by either the
Company or a Significant Subsidiary of a petition or answer or consent seeking
reorganization or relief under any applicable Federal, State or foreign law, or
the consent by either the Company or a Significant Subsidiary to the filing of
such petition or to the appointment of or taking possession by a custodian,
receiver, liquidator,
assignee, trustee, sequestrator or other similar official of the Company or a
Significant Subsidiary or of any substantial part of their respective
properties, or the making by either the Company or a Significant Subsidiary of
an assignment for the benefit of creditors, or the admission by either the
Company or a Significant Subsidiary in writing of an inability to pay the debts
of either the Company or a Significant Subsidiary generally as they become due,
or the taking of corporate action by the Company or a Significant Subsidiary in
furtherance of any such action.
Upon the occurrence of a default in payment of the Accreted
Principal Amount, (whether upon acceleration pursuant to Section 5.2 of the
Indenture, upon the date set for payment of the Redemption Price, the Change in
Control Purchase Price, the Repurchase Price or upon the Stated Maturity of the
LYON), from and after such date the LYONs shall bear interest at the rate of
3.75% per annum on the unpaid amount due and payable on such date, compounded on
a semi-annual basis (based on a 360-day year of 12 30-day months) to the extent
that payment of any interest is legally enforceable, payable upon demand of the
Holder or beneficial Holder of any such LYON, in accordance with the terms of
the LYONs, to the date that payment of such amount has been made or provided for
upon the terms set forth herein.
Acceleration of Maturity; Rescission and Annulment.
The Indenture is hereby amended, subject to Section 301 hereof
and with respect to the LYONs only, by replacing Section 5.2 with the following
paragraphs:
If an Event of Default under clauses (1), (2), (3) or (4) of
the definition of Event of Default in Section 307 above, with respect to LYONs
at the time Outstanding, occurs and is continuing, then in every such case the
Trustee or the Holders of not less than 25% in Principal Amount at Maturity of
the Outstanding LYONs may declare the Accreted Principal Amount of all of the
LYONs to be due and payable immediately, by a notice in writing to the Company
(and to the Trustee if given by Holders), and upon any such declaration, such
Accreted Principal Amount shall become immediately due and payable.
At any time after such a declaration of acceleration with
respect to LYONs has been made and before a judgment or decree for payment of
the money due has been obtained by the Trustee as hereinafter in this Article
provided, the Holders of a majority in Principal Amount at Maturity of the
Outstanding LYONs, by written notice to the Company and the Trustee, may rescind
and annul such declaration and its consequences if:
the Company has paid or deposited with the Trustee a sum
sufficient to pay:
the Accreted Principal Amount to the date of such payment or
deposit;
to the extent that payment of such interest is enforceable
under applicable law, interest on the Accreted Principal Amount to the date of
such payment or deposit, at
the rate borne by the LYONs during the period of such default in accordance with
the last paragraph of Section 307 of this Second Supplemental Indenture; and
all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel;
and
all Events of Default with respect to the LYONs, other than
the non-payment of the Accreted Principal Amount of the LYONs which have become
due solely by such declaration of acceleration, have been cured or waived as
provided in Section 5.13 of the Indenture.
No such waiver or rescission and annulment shall affect any
subsequent default or impair any right consequent thereon.
If an Event of Default described in clauses (5) and (6) of the
definition of Event of Default in Section 307 above, with respect to LYONs at
the time Outstanding, occurs and is continuing, then the Accreted Principal
Amount of the Outstanding LYONs shall become due and payable immediately,
without any declaration or other act by the Trustee or any Holder.
Unconditional Right of Holders to Receive Principal, Premium
and Interest.
Notwithstanding any other provision in this Second
Supplemental Indenture, the Holder of any Security shall have the right, which
is absolute and unconditional, to receive payment of the principal of (and
premium, if any) and (subject to Section 3.7 of the Indenture) interest on such
Security on the Stated Maturity or Maturities expressed in such Security (or in
the case of redemption, to receive the Redemption Price on the Redemption Date,
in the case of a repurchase, to receive the Repurchase Price on the Repurchase
Date, or in the case of a Change in Control, to receive the Change in Control
Purchase Price on the Change in Control Purchase Date) and to institute suit for
the enforcement of any such payment on or after such respective dates, and such
rights shall not be impaired without the consent of such Holder.
Reports by Company.
The Company shall: (1) provide to the Trustee, within 15 days
after the Company is required to file the same with the Commission, copies of
the annual reports and of the information, documents and other reports (or
copies of such portions of any of the foregoing as the Commission may from time
to time by rules and regulations prescribe) which the Company may be required to
file with the Commission pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934; or, if the Company is not required to file
information, documents or reports pursuant to either of said Sections, then it
shall provide to the Trustee and file with the Commission, in accordance with
rules and regulations prescribed from time to time by the Commission, such of
the supplementary and periodic information, documents and reports which may be
required pursuant to Section 13 of the Securities Exchange Act of 1934 in
respect of a security listed and registered on a national securities exchange as
may be prescribed from time to time in such rules and regulations;
file with the Trustee and the Commission, in accordance with
rules and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance by the
Company with the conditions and covenants of this Indenture as may be required
from time to time by such rules and regulations; and
transmit by mail to all Securityholders, as their names and
addresses appear in the Security Register, within 30 days after the filing
thereof with the Trustee, such summaries of any information, documents and
reports required to be filed by the Company pursuant to paragraphs (1) and (2)
of this Section as may be required by rules and regulations prescribed from time
to time by the Commission.
If at any time while any of the Securities are "restricted
securities" within the meaning of Rule 144, the Company is no longer subject to
the reporting requirements of Section 13 or 15(d) of the Exchange Act, the
Company shall prepare and shall furnish to any Holder, any beneficial owner of
Securities and any prospective purchaser of Securities designated by a Holder or
a beneficial owner of Securities, promptly upon request, the information
required pursuant to Rule 144A(d)(4) (or any successor thereto) under the
Securities Act in connection with the offer, sale or transfer of Securities.
Consolidation, Merger and Sale.
Section 8.1 of the Indenture is, with respect to the LYONs
only, hereby amended and restated in its entirety to read as follows:
The Company shall not consolidate with or merge into any other
entity or convey or transfer its properties and assets substantially as an
entirety to any entity, unless:
the successor or transferee entity is a corporation, limited
liability company, trust or partnership organized under the laws of the United
States or any State of the United States or the District of Columbia or the
Republic of Panama or any other country recognized by the United States and all
political subdivisions of such countries;
the successor or transferee entity, if other than the Company,
expressly assumes by a supplemental indenture executed and delivered to the
Trustee, in form reasonably satisfactory to the Trustee, the due and punctual
payment of the principal of, any premium on and any interest or accrued Original
Issue Discount on, all the Outstanding LYONs and the performance of every
covenant in the Indenture (as supplemented by this Second Supplemental
Indenture) to be performed or observed by
the Company and provides for conversion rights in accordance with applicable
provisions of the Indenture and this Second Supplemental Indenture;
immediately after giving the effect to the transaction, no
Event of Default and no event which, after notice or lapse of time or both,
would become an Event of Default, has occurred and is continuing; and
the Company has delivered to the Trustee an officers'
certificate and an opinion of counsel, each in the form required by the
Indenture and this Second Supplemental Indenture, stating that such
consolidation, merger, conveyance or tr with the foregoing provisions relating
to such transaction.
In case of any such consolidation, merger, conveyance or
transfer, the successor entity shall succeed to and be substituted for the
Company as obligor under the Indenture (as supplemented hereby), with the same
effect as if it had been named in the Indenture (as supplemented hereby) as the
Company.
Supplemental Indentures Without Consent of Holders.
Section 9.1 of the Indenture is hereby amended, subject to
Section 301 hereof and with respect to the LYONs only, by inserting the
following paragraph:
to add any rights for the benefit of Holders of LYONs; and
to provide any additional events of default.
Supplemental Indenture with Consent of Holder.
Section 9.2 of the Indenture is, with respect to the LYONs
only, hereby amended and restated in its entirety to read as follows:
With the consent of the Holders of not less than a majority in
Principal Amount at Maturity of the Outstanding LYONs, by Act of said Holders
delivered to the Company and the Trustee, the Company, when authorized by a
Board Resolution, and the Trustee may from time to time and at any time enter
into an indenture or indentures supplemental hereto (which shall conform to the
provisions of the Trust Indenture Act of 1939 as in force at the date of
execution thereof) for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of any
supplemental indenture or of modifying in any manner the rights of the Holders
of LYONs; provided, however, that no such supplemental indenture shall (i)
change the Maturity of any payment of principal of, or any premium on, or
Original Issue Discount on, any LYON, or reduce the Principal Amount at Maturity
thereof or the rate of accrual of Original Issue Discount or any premium
thereon, or change the place of payment where, or the coin or currency in which
any LYON or any premium or Original Issue Discount thereon is payable, or impair
the right to institute suit for the enforcement of any such payment on or after
the Maturity thereof (or, in the case of redemption or repayment, on or after
the redemption date or the repayment date, as the case may be),
(ii) adversely affect the conversion rights of the Holders under Article Four of
the Second Supplemental Indenture or the right of Holders to require the Company
to repurchase the LYONs under Articles Six and Seven of the Second Supplemental
Indenture, (iii) reduce the percentage in aggregate Principal Amount at Maturity
of the Outstanding LYONs, the consent of whose holders is required for any such
modification, or the consent of whose holders is required for any waiver of
compliance with the provisions of the Indenture or the Second Supplemental
Indenture or for any waiver of an Event of Default; or (iv) modify this Section
9.2, except to increase any percentages required for approval or to provide that
certain other provisions of the Indenture or the Second Supplemental Indenture
cannot be modified or waived without the consent of the Holder of each
Outstanding LYON affected thereby.
A supplemental indenture which changes or eliminates any
covenant or other provision of this Indenture which has expressly been included
solely for the benefit of one or more particular series of Securities, or which
modifies the rights of the Holders of Securities or such series with respect to
such covenant or other provision, shall be deemed not to affect the rights under
this Indenture of the Holders of Securities of any other series.
Upon the request of the Company accompanied by a copy of a
Board Resolution authorizing the execution of any such supplemental indenture,
and upon the filing with the Trustee of evidence of the consent of Holders as
aforesaid, the Trustee shall join with the Company in the execution of such
supplemental indenture. It shall not be necessary for any Act of Holders under
this Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the substance
thereof.
Maintenance of Office or Agency.
The first paragraph of Section 10.2 of the Indenture is hereby
amended, subject to Section 301 hereof and with respect to the LYONs only, by
changing the first sentence thereof to read in its entirety as follows:
The Company shall maintain in each Place of Payment for the
LYONs an office or agency where the LYONs may be presented or surrendered for
payment, where the LYONs may be surrendered for registration of transfer or
exchange, where the LYONs may be surrendered for conversion and where notices
and demands to or upon the Company in respect of the LYONs and this Indenture
may be served. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee, and the Company hereby appoints the Trustee as its agent
to receive all such presentations, surrenders, notices and demands.
Redemption.
Section 11.4 of the Indenture is hereby amended, subject to
Section 301 hereof and with respect to the LYONs only, by deleting the word
"and" at the end of paragraph (5) thereof, replacing the period at the end of
paragraph (6) thereof with ", and" and by inserting the following paragraph:
the election of the Company (which, subject to the provisions
of Article Four of the Second Supplemental Indenture, shall be irrevocable) to
deliver shares of Common Stock or to pay cash or a combination of cash and
Common Stock in lieu of delivery of such shares with respect to any LYONs.
Section 11.2 of the Indenture shall be modified by deleting
the number "45" in the second sentence thereof and replacing it with the number
"30".
Conversion Arrangement on Call for Redemption.
In connection with LYONs, the Company may arrange for the
purchase and conversion of any LYONs called for redemption by an agreement with
one or more investment bankers or other purchasers to purchase such LYONs by
paying to a Paying Agent (other than the Company or any of its Affiliates) in
trust for the Holders, on or before 11:00 A.M. New York City time on the
Redemption Date, an amount that, together with any amounts deposited with such
Paying Agent by the Company for the redemption of such LYONs, is not less than
the Redemption Price of such LYONs. Notwithstanding anything to the contrary
contained in this Article, the obligation of the Company to pay the Redemption
Price of such LYONs shall be deemed to be satisfied and discharged to the extent
such amount is so paid by such purchasers; provided, however, that nothing in
this Section 316 shall relieve the Company of its obligation to pay the
Redemption Price of LYONs called for redemption. If such an agreement is entered
into, any LYONs called for redemption and not surrendered for conversion by the
Holders thereof prior to the relevant Redemption Date may, at the option of the
Company upon written notice to the Trustee, be deemed, to the fullest extent
permitted by law, acquired by such purchasers from such Holders and
(notwithstanding anything to the contrary contained in Article Four hereof)
surrendered by such purchasers for conversion, all as of immediately prior to
the close of business on the Business Day immediately prior to the Redemption
Date, subject to payment of the above amount as aforesaid. The Paying Agent
shall hold and pay to the Holders whose LYONs are selected for redemption any
such amount paid to it for purchase in the same manner as it would money
deposited with it by the Company for the redemption of LYONs. Without the Paying
Agent's prior written consent, no arrangement between the Company and such
purchasers for the purchase and conversion of any LYONs shall increase or
otherwise affect any of the powers, duties, responsibilities or obligations of
the Paying Agent as set forth in this Indenture, and the Company agrees to
indemnify the Paying Agent from, and hold it harmless against, any loss,
liability or expense arising out of or in connection with any such arrangement
for the purchase and conversion of any LYONs between the Company and such
purchasers, including the costs and expenses incurred by the Paying Agent in the
defense of any claim or liability reasonably incurred without negligence or bad
faith on its part arising out of or in connection with the exercise or
performance of
any of its powers, duties, responsibilities or obligations under this Indenture,
in accordance with the indemnity provisions applicable to the Trustee set forth
herein.
Optional Redemption or Assumption of Securities under Certain
Circumstances.
The LYONs may be redeemed in accordance with Section 11.8 of
the Indenture which is hereby amended, subject to Section 301 hereof and with
respect to the LYONs only, by adding the following subsection:
In the event that the LYONs are called for redemption pursuant
to the terms of this Section, the Holders of LYONs shall have all rights,
including rights to conversion and to the receipt of Original Issue Discount
upon conversion, which such Holders would have had if the LYONs had been called
for redemption by the Company pursuant to Article Five hereof.
__CONVERSION
Conversion Rights.
LYONs shall be convertible in accordance with their terms and
in accordance with this Article.
The initial conversion rate (the "Conversion Rate") is 16.5964
shares of Common Stock per $1,000 Principal Amount at Maturity of LYONs, subject
to adjustment upon the occurrence of certain events described in this Article. A
Holder of a LYON otherwise entitled to a fractional share shall receive cash in
an amount equal to the value of such fractional share based on the Sale Price on
the trading day immediately preceding the Conversion Date. Upon a conversion,
the Company may deliver cash or a combination of cash and Common Stock in lieu
of Common Stock, as described in Section 405.
A Holder of LYONs is not entitled to any rights of a holder of
Common Stock until such Holder has converted its LYONs to Common Stock, and only
to the extent such LYONs are deemed to have been converted into Common Stock
pursuant to this Article.
Upon determination that Holders are or will be entitled to
convert their LYONs pursuant to this Article Four, the Company shall publish
such determination at the Company's Web site on the World Wide Web or through
such other public medium as the Company may use at that time.
Conversion Rights Based on Common Stock Price.
Commencing after February 28, 2002, a Holder of a LYON may
convert the such LYON into shares of Common Stock in any fiscal quarter (and
only during such fiscal quarter), if the closing sale price of the Common Stock
for at least 20 Trading Days
in a period of 30 consecutive Trading Days ending on the last Trading Day of the
immediately preceding fiscal quarter is more than 110% of the Accreted
Conversion Price (as defined below) that is in effect on such last day of such
preceding fiscal quarter.
The "Accreted Conversion Price", as of any date of
determination, shall equal (x) the sum of the Issue Price per $1,000 Principal
Amount at Maturity of a LYON plus accrued Original Issue Discount thereon
computed to, but not including, such date divided by (y) the Conversion Rate as
of such date.
Conversion Rights Upon Notice of Redemption.
A Holder of a LYON may surrender for conversion a LYON called
for redemption under Article Five hereof at any time prior to the close of
business on the Redemption Date, even if it is not otherwise convertible at such
time. A LYON for which a Holder has delivered a Repurchase Notice as described
in Section 601 or a Change in Control Purchase Notice as described in Section
701 requiring the Company to purchase such LYONs may be surrendered for
conversion only if such Repurchase Notice or Change of Control Purchase Notice
is withdrawn in accordance with this Second Supplemental Indenture.
In case a LYON or portion thereof is called for redemption
pursuant to Article Eleven of the Indenture and/or Article Five hereof, such
conversion right shall terminate at the close of business on the Business Day
immediately preceding the Redemption Date for such LYON or such earlier date as
the Holder presents such LYON for redemption (unless the Company defaults in
making the payment of the Redemption Price when due, in which case the
conversion right shall terminate at the close of business on the date such
default is cured and such Redemption Price is paid).
Conversion Rights Upon Occurrence of Certain Corporate
Transactions.
If the Corporation is a party to a consolidation, merger or
binding share exchange pursuant to which the shares of Common Stock would be
converted into cash, securities or other property, any LYON may be surrendered
for conversion at any time from and after the date which is 15 days prior to the
anticipated effective date of the transaction until 15 days after the actual
date of such transaction and, at the effective time of the transaction, the
right to convert a LYON into shares of Common Stock shall be changed into a
right to convert such LYON into the kind and amount of cash, securities or other
property of the Company or another person which the Holder would have received
if the Holder had converted such LYON immediately prior to the transaction.
Notwithstanding anything to the contrary, no LYONs may be surrendered for
conversion pursuant to this Section 404 by reason of the completion of a merger,
consolidation or other transaction effected with one of the Company's Affiliates
for the purpose of (i) changing the Company's jurisdiction of organization or
(ii) effecting a corporate reorganization, including, without limitation, the
implementation of a holding company structure.
Conversion Procedures.
To convert a LYON, a Holder must (a) complete and manually
sign the conversion notice or a facsimile of the Conversion Notice on the back
of the LYON and deliver such notice to a Conversion Agent, (b) surrender the
LYON to a Conversion Agent, (c) furnish appropriate endorsements and transfer
documents if required by the Security Registrar or a Conversion Agent, and (d)
pay any transfer or similar tax, if required. The date on which the Holder
satisfies all of those requirements is the "Conversion Date." Within two
Business Days following the Conversion Date, the Company shall deliver to the
Holder, through the Conversion Agent, written notice of whether such LYONs shall
be converted into Common Stock or paid in cash or a combination of cash and
Common Stock, unless the Company shall have delivered to such Holder notice of
redemption pursuant to Section 11.4 of the Indenture and the Conversion Date
occurs before the Redemption Date set forth in such notice. If the Company shall
have notified the Holder that all of such LYONs shall be converted into Common
Stock, the Company shall deliver to the Holder through the Conversion Agent, as
soon as practicable but in any event no later than the fifth Business Day
following the Conversion Date, a certificate for the number of whole shares of
Common Stock issuable upon the conversion and cash in lieu of any fractional
shares pursuant to Section 406. Except as otherwise provided in this Article
Four, if the Company shall have notified the Holder that all or a portion of
such LYON shall be paid in cash, the Company shall deliver to the Holder
surrendering such LYON the amount of cash payable with respect to such LYON no
later than the tenth Business Day following such Conversion Date, together with
a certificate for the number of full shares of Common Stock deliverable upon the
conversion and cash in lieu of any fractional share determined pursuant to
Section 406 hereof. Except as otherwise provided in this Article Four, the
Company may not change its election with respect to the consideration to be
delivered upon conversion of a LYON once the Company has notified the Holder in
accordance with this paragraph. Anything herein to the contrary notwithstanding,
in the case of Global Securities, conversion notices may be delivered and such
LYONs may be surrendered for conversion in accordance with the Applicable
Procedures of the Depositary as in effect from time to time. The Person in whose
name the Common Stock certificate is registered shall be deemed to be a
shareholder of record on the Conversion Date; provided, however, that no
surrender of a LYON on any date when the stock transfer books of the Company are
closed shall be effective to constitute the Person or Persons entitled to
receive the shares of Common Stock upon such conversion as the record holder or
holders of such shares of Common Stock on such date, but such surrender shall be
effective to constitute the Person or Persons entitled to receive such shares of
Common Stock as the record holder or holders thereof for all purposes at the
close of business on the next succeeding day on which such stock transfer books
are open; provided further, however, that such conversion shall be at the
Conversion Rate in effect on the date that such LYON shall have been surrendered
for conversion, as if the stock transfer books of the Company had not been
closed. Upon conversion of a LYON, such Person shall no longer be a Holder of
such LYON.
No payment or adjustment shall be made for dividends on, or
other distributions with respect to, any Common Stock except as provided in this
Article. On conversion of a LYON, except as provided below in the case of
certain LYONs or
portions thereof called for redemption described in Section 304 hereof, that
portion of accrued Original Issue Discount attritutable to the period from the
Issue Date through the Conversion Date of such LYON shall not be cancelled,
extinguished or forfeited, but rather shall be deemed to be paid in full to the
Holder thereof through delivery of the Common Stock (together with the cash
payment, if any, in lieu of fractional shares), or cash or a combination of cash
and Common Stock in lieu thereof, in exchange for the LYON being converted
pursuant to the provisions hereof, and the fair market value of such shares of
Common Stock (together with any such cash payment in lieu of fractional shares),
or cash or a combination of cash and Common Stock in lieu thereof, shall be
treated as issued, to the extent thereof, first in exchange for accrued Original
Issue Discount through the Conversion Date and the balance, if any, of such fair
market value of such Common Stock (and any such cash payment), or cash in lieu
thereof, shall be treated as issued in exchange for the Issue Price of the LYON
being converted pursuant to the provisions hereof.
If a Holder converts more than one LYON at the same time, the
number of shares of Common Stock issuable upon the conversion shall be based on
the aggregate Principal Amount at Maturity of LYONs converted.
Upon surrender of LYON that is converted in part, the Company
shall execute, and the Trustee shall authenticate and deliver to the Holder a
new LYON equal in Principal Amount at Maturity to the Principal Amount at
Maturity of the unconverted portion of the LYON surrendered.
The Holders' rights to convert LYONs into Common Stock are
subject to the Company's right to elect instead to pay each such Holder the
amount of cash set forth in the next succeeding sentence (or an equivalent
amount in a combination of cash and shares of Common Stock), in lieu of
delivering such Common Stock; provided, however, that if an Event of Default
(other than a default in a cash payment upon conversion of the LYONs) shall have
occurred and be continuing, the Company shall deliver Common Stock in accordance
with this Article, whether or not the Company has delivered a notice pursuant to
Section 11.4 of the Indenture or Section 405 hereof to the effect that the
Debentures would be paid in cash or a combination of cash and Common Stock. The
amount of cash to be paid pursuant to Section 405 hereof for each $1,000 of
Principal Amount at Maturity of a LYON (or portion thereof) upon conversion
shall be equal to the average Sale Price of the Common Stock for the five
consecutive trading days immediately following (i) the date of the Company's
notice of its election to deliver cash upon conversion, if the Company has not
given a notice of redemption pursuant to Section 11.4 of the Indenture, or (ii)
the Conversion Date, in the case of a conversion following such a notice of
redemption specifying an intent to deliver cash upon conversion, in either case
multiplied by the Conversion Rate (or appropriate fraction of such Conversion
Rate) in effect on such Conversion Date.
Fractional Shares.
The Company shall not issue a fractional share of Common Stock
upon conversion of a LYON. Instead, the Company shall deliver cash for the
current market
value of the fractional share. The current market value of a fractional share of
Common Stock shall be determined, to the nearest 1/1,000th of a share, by
multiplying the Sale Price on the Trading Day immediately prior to the
Conversion Date, of a full share of Common Stock by the fractional amount and
rounding the product to the nearest whole cent.
Taxes on Conversion.
If a Holder converts a LYON, the Company shall pay any
documentary, stamp or similar issue or transfer tax due on the issue of shares
of Common Stock upon such conversion. However, the Holder shall pay any such tax
which is due because the Holder requests the shares to be issued in a name other
than the Holder's name. The Conversion Agent may refuse to deliver the
certificate representing the Common Stock being issued in a name other than the
Holder's name until the Conversion Agent receives a sum sufficient to pay any
tax which will be due because the shares are to be issued in a name other than
the Holder's name. Nothing herein shall preclude any tax withholding required by
law or regulation.
Company to Provide Common Stock.
The Company shall, prior to issuance of any LYONs under this
Article, and from time to time as may be necessary, reserve, out of its
authorized but unissued Common Stock, a sufficient number of shares of Common
Stock to permit the conversion of all LYONs Outstanding into shares of Common
Stock. All shares of Common Stock delivered upon conversion of the LYONs shall
be newly issued shares, shall be duly authorized, validly issued, fully paid and
nonassessable and shall be free from preemptive rights and free of any lien or
adverse claim.
The Company will endeavor promptly to comply with all federal
and state securities laws regulating the registration of the offer and delivery
of shares of Common Stock to a converting Holder upon conversion of LYONs, if
any, and will list or cause to have quoted such shares of Common Stock on each
national securities exchange or on the Nasdaq National Market or other
over-the-counter market or such other market on which the Common Stock are then
listed or quoted.
Adjustment of Conversion Rate.
The Conversion Rate shall be adjusted from time to time by the
Company as follows:
In case the Company (i) pays a dividend on its Common Stock in
shares of Common Stock, (ii) makes a distribution on its Common Stock in shares
of Common Stock, (iii) subdivides its outstanding Common Stock into a greater
number of shares, or (iv) combines its outstanding Common Stock into a smaller
number of shares, the Conversion Rate in effect immediately prior thereto shall
be adjusted so that the Holder of any LYON thereafter surrendered for conversion
shall be entitled to receive that number of shares of Common Stock which it
would have owned had such LYON been
converted immediately prior to the happening of such event. An adjustment made
pursuant to this subsection (a) shall become effective immediately after the
record date in the case of a dividend or distribution and shall become effective
immediately after the effective date in the case of subdivision or combination.
In case the Company issues rights or warrants to all or
substantially all holders of its Common Stock entitling them (for a period
commencing no earlier than the record date described below and expiring not more
than 60 days after such record date) to subscribe for or purchase shares of
Common Stock (or securities convertible into Common Stock) at a price per share
(or having a conversion price per share) less than the current market price per
share of Common Stock (as determined in accordance with subsection (e) of this
Section 409) on the record date for the determination of shareholders entitled
to receive such rights or warrants, the Conversion Rate in effect immediately
prior thereto shall be adjusted so that the same shall equal the rate determined
by multiplying the Conversion Rate in effect immediately prior to such record
date by a fraction of which the numerator shall be the number of shares of
Common Stock outstanding on such record date plus the number of additional
shares of Common Stock offered (or into which the convertible securities so
offered are convertible), and of which the denominator shall be the number of
shares of Common Stock outstanding on such record date plus the number of shares
which the aggregate offering price of the total number of shares of Common Stock
so offered (or the aggregate conversion price of the convertible securities so
offered, which shall be determined by multiplying the number of shares of Common
Stock issuable upon conversion of such convertible securities by the conversion
price per share of Common Stock pursuant to the terms of such convertible
securities) would purchase at the current market price per share (as determined
in accordance with subsection (e) of this Section 409) of Common Stock on such
record date. Such adjustment shall be made successively whenever any such rights
or warrants are issued, and shall become effective immediately after such record
date. If at the end of the period during which such rights or warrants are
exercisable not all rights or warrants shall have been exercised, the adjusted
Conversion Rate shall be immediately readjusted to what it would have been based
upon the number of additional shares of Common Stock actually issued (or the
number of shares of Common Stock issuable upon conversion of convertible
securities actually issued).
In case the Company distributes to all or substantially all
holders of its Common Stock any shares of capital stock (other than dividends or
distributions of Common Stock on Common Stock to which Section 409(a) applies)
of the Company, evidences of indebtedness or other assets (including securities
of any Person other than the Company, but excluding all-cash distributions or
any rights or warrants referred to in Section 409(b)), then in each such case
the Conversion Rate shall be adjusted so that the same shall equal the rate
determined by multiplying the current Conversion Rate by a fraction of which the
numerator shall be the current market price per share (as
determined in accordance with subsection (e) of this Section 409) of the Common
Stock on the record date mentioned below, and of which the denominator shall be
the current market price per share (as determined in accordance with subsection
(e) of this Section 409) of the Common Stock on such record date less the fair
market value on such record date (as determined by the Board of Directors, whose
determination shall be conclusive evidence of such fair market value and which
shall be evidenced by an Officers' Certificate delivered to the Trustee) of the
portion of the capital stock, evidences of indebtedness or other non-cash assets
so distributed applicable to one share of Common Stock (determined on the basis
of the number of shares of Common Stock outstanding on the record date). Such
adjustment shall be made successively whenever any such distribution is made and
shall become effective immediately after the record date for the determination
of shareholders entitled to receive such distribution.
In the event that the Company implements a shareholder rights
plan, such rights plan shall provide, subject to customary exceptions and
limitations, that upon conversion of the LYONs the Holders will receive, in
addition to the Common Stock issuable upon such conversion, the rights issued
under such rights plan (notwithstanding the occurrence of an event causing such
rights to separate from the Common Stock at or prior to the time of conversion).
Any distribution of rights or warrants pursuant to a shareholder rights plan
complying with the requirements set forth in the immediately preceding sentence
of this paragraph shall not constitute a distribution of rights or warrants for
the purposes of this Section 409(c) or any other provision of this Section 409.
Rights or warrants distributed by the Company to all holders
of Common Stock entitling the holders thereof to subscribe for or purchase
shares of the Company's capital stock (either initially or under certain
circumstances), which rights or warrants, until the occurrence of a specified
event or events ("Trigger Event"): (i) are deemed to be transferred with such
shares of Common Stock; (ii) are not exercisable; and (iii) are also issued in
respect of future issuances of Common Stock, shall be deemed not to have been
distributed for purposes of this Section 409(c) or any other provision of this
Section 409(c) (and no adjustment to the Conversion Rate under this Section
409(c) or any other provision of this Section 409 will be required) until the
occurrence of the earliest Trigger Event. If such right or warrant is subject to
subsequent events, upon the occurrence of which such right or warrant shall
become exercisable to purchase different securities, evidences of indebtedness
or other assets or entitle the holder to purchase a different number or amount
of the foregoing or to purchase any of the foregoing at a different purchase
price, then the occurrence of each such event shall be deemed to be the date of
issuance and record date with respect to a new right or warrant (and a
termination or expiration of the existing right or warrant without exercise by
the holder thereof). In addition, in the event of any distribution (or deemed
distribution) of rights or warrants, or any Trigger Event or other event (of the
type described in the preceding sentence) with respect thereto, that resulted in
an adjustment to the Conversion Rate under this Section 409(c), (1) in the case
of any such rights or warrants which shall all have been redeemed or repurchased
without exercise by any holders thereof, the Conversion Rate shall be readjusted
upon such final redemption or repurchase to give effect to such distribution or
Trigger Event, as the case may be, as though it were a cash distribution, equal
to the per share redemption or repurchase price received by a holder of Common
Stock with respect to such rights or warrants (assuming such holder had retained
such rights or warrants), made to all holders of Common Stock as of the date of
such
redemption or repurchase, and (2) in the case of such rights or warrants all of
which shall have expired or been terminated without exercise, the Conversion
Rate shall be readjusted as if such rights and warrants had never been issued.
(1) In case the Company, by dividend or otherwise, at any time
distributes (a "Triggering Distribution") to all or substantially all holders of
its Common Stock all-cash distributions in an aggregate amount that, together
with the aggregate amount of (A) any cash and the fair market value (as
determined by the Board of Directors, whose determination shall be conclusive
evidence thereof and which shall be evidenced by an Officers' Certificate
delivered to the Trustee) of any other consideration payable in respect of any
tender offer by the Company or a Subsidiary of the Company for Common Stock
consummated within the 12 months preceding the date of payment of the Triggering
Distribution and in respect of which no Conversion Rate adjustment pursuant to
this Section 409 has been made and (B) all other cash distributions to all or
substantially all holders of its Common Stock made within the 12 months
preceding the date of payment of the Triggering Distribution and in respect of
which no Conversion Rate adjustment pursuant to this Section 409 has been made,
exceeds an amount equal to 7.5% of the product of the current market price per
share of Common Stock (as determined in accordance with subsection (e) of this
Section 409) on the Business Day (the "Determination Date") immediately
preceding the day on which such Triggering Distribution is declared by the
Company multiplied by the number of shares of Common Stock outstanding on the
Determination Date (excluding shares held in the treasury of the Company), the
Conversion Rate shall be increased so that the same shall equal the rate
determined by multiplying such Conversion Rate in effect immediately prior to
the Determination Date by a fraction of which the numerator shall be such
current market price per share of Common Stock (as determined in accordance with
subsection (e) of this Section 409) on the Determination Date, and the
denominator shall be the current market price per share of Common Stock (as
determined in accordance with subsection (e) of this Section 409) on the
Determination Date less the sum of the aggregate amount of cash and the
aggregate fair market value (determined as aforesaid) of any such other
consideration so distributed, paid or payable within such 12 months (including,
without limitation, the Triggering Distribution) applicable to one share of
Common Stock (determined on the basis of the number of shares of Common Stock
outstanding on the Determination Date), such increase to become effective
immediately prior to the opening of business on the day following the date on
which the Triggering Distribution is paid.
(2) In case any tender offer made by the Company or any of its
Subsidiaries for Common Stock expires and such tender offer (as amended upon the
expiration thereof) involves the payment of aggregate consideration in an amount
(determined as the sum of the aggregate amount of cash consideration and the
aggregate fair market value (as determined by the Board of Directors, whose
determination shall be conclusive evidence thereof and which shall
be evidenced by an Officers' Certificate delivered to the Trustee thereof ) of
any other consideration) that, together with the aggregate amount of (A) any
cash and the fair market value (as determined by the Board of Directors, whose
determination shall be conclusive evidence thereof and which shall be evidenced
by an Officers' Certificate delivered to the Trustee) of any other consideration
payable in respect of any other tender offers by the Company or any Subsidiary
of the Company for Common Stock consummated within the 12 months preceding the
date of the Expiration Date (as defined below) and in respect of which no
Conversion Rate adjustment pursuant to this Section 409 has been made and (B)
all cash distributions to all or substantially all holders of its Common Stock
made within the 12 months preceding the Expiration Date and in respect of which
no Conversion Rate adjustment pursuant to this Section 409 has been made,
exceeds an amount equal to 7.5% of the product of the current market price per
share of Common Stock (as determined in accordance with subsection (e) of this
Section 409) as of the last date (the "Expiration Date") tenders could have been
made pursuant to such tender offer (as it may be amended) (the last time at
which such tenders could have been made on the Expiration Date is hereinafter
sometimes called the "Expiration Time") multiplied by the number of shares of
Common Stock outstanding (including tendered shares but excluding any shares
held in the treasury of the Company) at the Expiration Time, then, immediately
prior to the opening of business on the day after the Expiration Date, the
Conversion Rate shall be increased so that the same shall equal the rate
determined by multiplying the Conversion Rate in effect immediately prior to
close of business on the Expiration Date by a fraction of which the numerator
shall be the sum of (x) the aggregate consideration (determined as aforesaid)
payable to stockholders based on the acceptance (up to any maximum specified in
the terms of the tender offer) of all shares validly tendered and not withdrawn
as of the Expiration Time (the shares deemed so accepted, up to any such
maximum, being referred to as the "Purchased Shares") and (y) the product of the
number of shares of Common Stock outstanding (less any Purchased Shares and
excluding any shares held in the treasury of the Company) at the Expiration Time
and the current market price per share of Common Stock (as determined in
accordance with subsection (e) of this Section 409) on the Trading Day next
succeeding the Expiration Date, and the denominator shall be the product of the
number of shares of Common Stock outstanding (including tendered shares but
excluding any shares held in the treasury of the Company) at the Expiration Time
multiplied by the current market price per share of Common Stock (as determined
in accordance with subsection (e) of this Section 409) on the Trading Day next
succeeding the Expiration Date, such increase to become effective immediately
prior to the opening of business on the day following the Expiration Date. In
the event that the Company is obligated to purchase shares pursuant to any such
tender offer, but the Company is permanently prevented by applicable law from
effecting any or all such purchases or any or all such purchases are rescinded,
the Conversion Rate shall again be adjusted to be the Conversion Rate which
would have been in effect based upon the number of shares actually purchased. If
the application of this Section 409(d)(2) to any tender offer would result in a
decrease in the Conversion Rate, no adjustment shall be made for such tender
offer under this Section 409(d)(2).
(3) For purposes of this Section 409(d), the term "tender
offer" shall mean and include both tender offers and exchange offers, all
references to "purchases" of shares in tender offers (and all similar
references) shall mean and include both the purchase of shares in tender offers
and the acquisition of shares pursuant to exchange
offers, and all references to "tendered shares" (and all similar references)
shall mean and include shares tendered in both tender offers and exchange
offers.
For the purpose of any computation under subsections (b), (c)
and (d) of this Section 409 the current market price per share of Common Stock
on any date shall be deemed to be the average of the daily closing prices for
the 10 consecutive Trading Days commencing five Trading Days before (i) the
Determination Date or the Expiration Date, as the case may be, with respect to
distributions or tender offers under subsection (d) of this Section 409 or (ii)
the record date with respect to distributions, issuances or other events
requiring such computation under subsection (b) or (c) of this Section 409. The
closing price for each day shall be the last reported sales price or, in case no
such reported sale takes place on such date, the average of the reported closing
bid and asked prices in either case on the New York Stock Exchange (the "NYSE")
or, if the Common Stock is not listed or admitted to trading on the NYSE, on the
principal national securities exchange on which the Common Stock are listed or
admitted to trading or, if not listed or admitted to trading on any national
securities exchange, the last reported sales price of the Common Stock as quoted
on Nasdaq (the term "Nasdaq" shall include, without limitation, the Nasdaq
National Market) or, in case no reported sales takes place, the average of the
closing bid and asked prices as quoted on Nasdaq or any comparable system or, if
the Common Stock is not quoted on Nasdaq or any comparable system, the closing
sales price or, in case no reported sale takes place, the average of the closing
bid and asked prices, as furnished by any two members of the National
Association of Securities Dealers, Inc. selected from time to time by the
Company for that purpose. If no such prices are available, the current market
price per share shall be the fair value of a share of Common Stock as determined
by the Board of Directors (which shall be evidenced by an Officers' Certificate
delivered to the Trustee).
In any case in which this Section 409 requires that an
adjustment be made following a record date or a Determination Date or Expiration
Date, as the case may be, established for purposes of this Section 409, the
Company may elect to defer (but only until five Business Days following the
filing by the Company with the Trustee of the certificate described in Section
412) issuing to the Holder of any LYON converted after such record date or
Determination Date or Expiration Date the shares of Common Stock and other
capital stock of the Company issuable upon such conversion over and above the
shares of Common Stock and other capital stock of the Company issuable upon such
conversion only on the basis of the Conversion Rate prior to adjustment; and, in
lieu of the shares the issuance of which is so deferred, the Company shall issue
or cause its transfer agents to issue due bills or other appropriate evidence
prepared by the Company of the right to receive such shares. If any distribution
in respect of which an adjustment to the Conversion Rate is required to be made
as of the record date or Determination Date or Expiration Date therefor is not
thereafter made or paid by the Company for any reason, the Conversion Rate shall
be readjusted to the Conversion Rate which would then be in effect if such
record date had not been fixed or such effective date or Determination Date or
Expiration Date had not occurred.
Upon the election by the Company to make a distribution as
described in paragraphs (b), (c) and (d) of this Section 409, which in the case
of paragraph (d) has a per share value equal to more than 15% of the Sale Price
of shares of Common Stock on the Trading Day preceding the declaration date for
such distribution, the Company shall give notice to Holders of the LYONs not
less than 20 days prior to the ex-dividend date for such distribution. Upon
giving such notice, Holders may surrender the LYONs for conversion pursuant to
this Article Four at any time until the close of business on the Business Day
prior to the ex-dividend date or until the Company publicly announces that such
distribution will not be given effect.
No Adjustment.
No adjustment in the Conversion Rate shall be required unless
the adjustment would require an increase or decrease of at least 1% in the
Conversion Rate as last adjusted; provided, however, that any adjustments which
by reason of this Section 410 are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Article shall be made to the nearest cent or to the nearest 1/1000th
of a share, as the case may be.
Except pursuant to Section 414, no adjustment in the
Conversion Rate will be made by reason of the completion of a merger,
consolidation or other transaction effected with one of the Company's Affiliates
for the purpose of (1) changing the jurisdiction of organization of the Company
or (2) effecting a corporate reorganization including, without limitation, the
implementation of a holding company structure.
No adjustment need be made for issuances of Common Stock
pursuant to a Company plan for reinvestment of dividends or interest or for a
change in the par value or a change to no par value of the Common Stock.
To the extent that the LYONs become convertible into the right
to receive cash, no adjustment need be made thereafter as to the cash. Interest
shall not accrue on the cash.
Adjustment for Tax Purposes.
The Company shall be entitled to make such adjustments in the
Conversion Rate, in addition to those required by Section 409, as in its
discretion shall determine to be advisable in order that any stock dividends,
subdivisions of shares, distributions of rights to purchase stock or securities
or distributions of securities convertible into or exchangeable for stock
hereafter made by the Company to its stockholders shall not be taxable.
Notice of Adjustment.
Whenever the Conversion Rate is adjusted, the Company shall
promptly mail to Holders a notice of the adjustment and file with the Trustee an
Officers'
Certificate specifying the adjusted Conversion Rate, and briefly stating the
facts requiring the adjustment and the manner of computing it.
Notice of Certain Transactions.
In the event that:
the Company takes any action which would require an adjustment
in the Conversion Rate,
the Company takes any action that requires a supplemental
indenture pursuant to Section 414, or
there is a dissolution or liquidation of the Company,
the Company shall mail to Holders and file with the Trustee a
notice stating the proposed record or effective date, as the case may be. The
Company shall mail the notice at least fifteen days before such date. Failure to
mail such notice or any defect therein shall not affect the validity of any
transaction referred to in clause (1), (2) or (3) of this Section 413.
Effect of Reclassification, Consolidation, Merger _or Sale on
Conversion Privilege.
If any of the following shall occur, namely: (a) any
reclassification or change of shares of Common Stock issuable upon conversion of
the LYONs (other than a change in par value, or from par value to no par value,
or from no par value to par value, or as a result of a subdivision or
combination); (b) any cons party consolidating with another entity or merging
with or into another entity other than a merger in which the Company is the
continuing corporation and which does not result in any reclassification of, or
change (other than a change in par value, or from par value to no par value, or
from no par value to par value, or as a result of a subdivision or combination)
in, Outstanding shares of Common Stock; or (c) any sale or conveyance of all or
substantially all of the property and assets of the Company to any Person, then
the Company, or such successor, purchasing or transferee corporation, as the
case may be, shall, as a condition precedent to such reclassification, change,
consolidation, merger, sale or conveyance, execute and deliver to the Trustee a
supplemental indenture providing that the Holder of each LYON then Outstanding
shall have the right to convert such LYON into the kind and amount of shares of
stock and other securities and property (including cash) receivable upon such
reclassification, change, consolidation, merger, sale or conveyance by a holder
of the number of shares of Common Stock deliverable upon conversion of such LYON
immediately prior to such reclassification, change, consolidation, merger, sale
or conveyance. Such supplemental indenture shall provide for adjustments of the
Conversion Rate which shall be as nearly equivalent as may be practicable to the
adjustments of the Conversion Rate provided for in this Article. If, in the case
of any such consolidation, merger, sale or conveyance, the stock or other
securities and property (including cash) receivable thereupon by a holder of
Common Stock include shares of
stock or other securities and property of a Person other than the successor,
purchasing or transferee corporation, as the case may be, in such consolidation,
merger, sale or conveyance, then such supplemental indenture shall also be
executed by such other Person and shall contain such additional provisions to
protect the interests of the Holders of the LYONs as the Board of Directors
shall reasonably consider necessary by reason of the foregoing. The provisions
of this Section 414 shall similarly apply to successive reclassifications,
changes, consolidations, mergers, sales or conveyances.
In the event the Company shall execute a supplemental
indenture pursuant to this Section 414, the Company shall promptly file with the
Trustee (x) an Officers' Certificate briefly stating the reasons therefor, the
kind or amount of shares of stock or other securities or property (including
cash) receivable by Holders of the LYONs upon the conversion of their LYONs
after any such reclassification, change, consolidation, merger, sale or
conveyance, any adjustment to be made with respect thereto and that all
conditions precedent have been complied with and (y) an Opinion of Counsel that
all conditions precedent have been complied with, and shall promptly mail notice
thereof to all Holders.
Trustee's Disclaimer.
The Trustee shall have no duty to determine when an adjustment
under this Article should be made, how it should be made or what such adjustment
should be, but may accept as conclusive evidence of that fact or the correctness
of any such adjustment, and shall be protected in relying upon, an Officers'
Certificate including the Officers' Certificate with respect thereto which the
Company is obligated to file with the Trustee pursuant to Section 412. The
Trustee makes no representation as to the validity or value of any securities or
assets issued upon conversion of LYONs, and the Trustee shall not be responsible
for the Company's failure to comply with any provisions of this Article.
The Trustee shall not be under any responsibility to determine
the correctness of any provisions contained in any supplemental indenture
executed pursuant to Section 414, but may accept as conclusive evidence of the
correctness thereof, and shall be fully protected in relying upon, the Officers'
Certificate with respect thereto which the Company is obligated to file with the
Trustee pursuant to Section 414.
Voluntary Increase.
The Company from time to time may increase the Conversion Rate
by any amount for any period of time if the period is at least 20 days or such
longer period as may be required by law and if the increase is irrevocable
during the period.
__REDEMPTION OF LYONS AT THE OPTION OF THE COMPANY
General.
Beginning on October 24, 2008, the Company may redeem the
LYONs at any time as a whole, or from time to time in part, pursuant to the
terms and conditions under the caption "Redemption at the Option of the Holder"
in the LYONs, at the redemption price specified therein (the "Redemption Price")
and otherwise in accordance with Article 11 of the Indenture and Section 315 of
this Second Supplemental Indenture.
__REPURCHASE OF LYONs AT OPTION OF THE HOLDER
General.
The Company shall be required to repurchase LYONs in
accordance with this Article Six.
LYONs shall be purchased by the Company pursuant to the terms
and conditions under the caption "Repurchase by the Company at the Option of the
Holder" in the LYONs on any October 24 occurring in the years 2006, 2008, 2011
and 2016 (each, a "Repurchase Date"), at the repurchase price specified therein
(each, a "Repurchase Price"), at the option of the Holder thereof, upon:
delivery to the Paying Agent, by the Holder of a written
notice of purchase (a "Repurchase Notice") at any time from the opening of
business on the date that is at least 20 Business Days prior to a Repurchase
Date until the close of business on such Repurchase Date stating:
if Certificated Security has been issued, the certificate
number of the LYON which the Holder will deliver to be repurchased or if not,
such information as may be required under appropriate DTC Procedures,
the portion of the Principal Amount at Maturity of the LYON
which the Holder will deliver to be repurchased, which portion must be $1,000 or
an integral multiple thereof,
that such LYON shall be purchased as of the Repurchase Date
pursuant to the terms and conditions specified under the paragraph "Repurchase
by the Company at the Option of the Holder" of the LYONs and in the Indenture,
as supplemented by this Second Supplemental Indenture,
in the event that the Company elects, pursuant to Section 602
hereof, to pay the Repurchase Price to be paid as of such Repurchase Date, in
whole or in part, in Common Stock but such portion of the Repurchase Price shall
ultimately be payable to such Holder entirely in cash because any of the
conditions to payment of the Repurchase Price in Common Stock is not satisfied
prior to the close of business on such Repurchase Date, as set forth in Section
603 hereof, whether such Holder elects (i) to withdraw such Repurchase Notice as
to some or all of the LYONs to which such Repurchase Notice relates (stating the
Principal Amount at Maturity and certificate numbers of the LYONs as to which
such withdrawal shall relate), or (ii) to receive cash in respect of the entire
Repurchase Price for all LYONs (or portions thereof) to which such Repurchase
Price relates, and
delivery of such LYONs to the Paying Agent prior to, on or
after the Repurchase Date (together with all necessary endorsements) at the
offices of the Paying Agent, such delivery being a condition to receipt by the
Holder of the Repurchase Price therefor; provided, however, that such Repurchase
Price shall be so paid pursuant to this Article only if the LYONs so delivered
to the Paying Agent conform in all respects to the description thereof in the
related Repurchase Notice.
If a Holder, in such Holder's Repurchase Notice and in any
written notice of withdrawal delivered by such Holder pursuant to the terms of
Section 609 hereof, fails to indicate such Holder's choice with respect to the
election set forth in clause (D) of Section 601(1), such Holder shall be deemed
to have elected to receive cash in respect of the Repurchase Price for all LYONs
subject to the Repurchase Notice in the circumstances set forth in such clause
(D).
The Company shall purchase from the Holder thereof, pursuant
to this Article, a portion of a LYON if the Principal Amount at Maturity of such
portion is $1,000 or an integral multiple of $1,000. Provisions of this
Indenture that apply to the purchase of all of a LYON also apply to the purchase
of such portion of such LYON.
Any purchase by the Company contemplated pursuant to the
provisions of this Article shall be consummated by the delivery of the
consideration to be received by the Holder (if any) promptly following the later
of the Repurchase Date and the time of delivery of the LYON.
Notwithstanding anything herein to the contrary, any Holder
delivering to the Paying Agent the Repurchase Notice contemplated by this
Section 601 shall have the right to withdraw such Repurchase Notice at any time
prior to the close of business on the Repurchase Date by delivery of a written
notice of withdrawal to the Paying Agent in accordance with Section 609.
The Paying Agent shall promptly notify the Company of the
receipt by it of any Repurchase Notice or written notice of withdrawal thereof.
The Company may, at its option, specify additional dates on
which Holders will have the right to require it to repurchase LYONs upon written
notice to the Trustee and the Holders. Such notice shall specify the additional
dates upon which the Company shall be required to repurchase the LYONs at the
option of the Holders and shall be delivered to the Trustee and the Holders no
less than 25 Business Days prior to the earliest repurchase date specified in
such notice.
The Company's Right to Elect Manner of Payment of _Repurchase
Price.
The Repurchase Price of LYONs in respect of which a Repurchase
Notice pursuant to Section 601 hereof has been given, or a specified percentage
thereof, will be
paid by the Company, at the election of the Company, in cash or Common Stock or
in any combination of cash and Common Stock, subject to the conditions set forth
in Section 602 and 603 hereof. The Company shall designate, in the Company
Notice delivered pursuant to Section 605 hereof, whether the Company will
purchase the LYONs for cash or Common Stock, or, if a combination thereof, the
percentages of the Repurchase Price of LYONs in respect of which it will pay in
cash and Common Stock; provided, however, that the Company will pay cash for
fractional interests in Common Stock. For purposes of determining the existence
of potential fractional interests, all LYONs subject to purchase by the Company
held by a Holder shall be considered together (no matter how many separate
certificates are to be presented). Each Holder whose LYONs are purchased
pursuant to this Article shall receive the same percentage of cash or Common
Stock in payment of the Repurchase Price for such LYONs, except (i) as provided
in Section 604 hereof with regard to the payment of cash in lieu of fractional
Common Stock and (ii) in the event that the Company is unable to purchase the
LYONs of a Holder or Holders for Common Stock because any necessary
qualifications or registrations of the Common Stock under applicable state
securities laws cannot be obtained, the Company may purchase the LYONs of such
Holder or Holders for cash. The Company may not change its election with respect
to the consideration (or components or percentages of components thereof) to be
paid once the Company has given its Company Notice to Holders except pursuant to
this Section 602 hereof or pursuant to Section 604 hereof in the event of a
failure to satisfy, prior to the close of business on the Repurchase Date, any
condition to the payment of the Repurchase Price, in whole or in part, in Common
Stock.
At least three Business Days before the Company Notice Date
(as defined in Section 603 of this Second Supplemental Indenture), the Company
shall deliver an Officers' Certificate to the Trustee specifying:
(i) the manner of payment selected by the Company,
(ii) the information required by Section 605,
(iii) if the Company elects to pay the Repurchase Price, or a
specified percentage thereof, in Common Stock, that the conditions to such
manner of payment set forth in Section 604 hereof have been or will be complied
with, and
(iv) whether the Company desires the Trustee to give the
Company Notice required by Section 605 hereof.
Purchase with Cash.
On each Repurchase Date, at the option of the Company, the
Repurchase Price of LYONs in respect of which a Repurchase Notice pursuant to
Section 601 has been given, or a specified percentage thereof, may be paid by
the Company with cash equal to the aggregate Repurchase Price of such LYONs. If
the Company elects to purchase LYONs with cash, the Company Notice, as provided
in Section 605, shall be
sent to Holders (and to beneficial owners as required by applicable law) not
less than 20 Business Days prior to such Purchase Date (the "Company Notice
Date").
Payment by Issuance of Common Stock.
On each Repurchase Date, at the option of the Company, the
Repurchase Price of LYONs in respect of which a Repurchase Notice pursuant to
Section 601 has been given, or a specified percentage thereof, may be paid by
the Company by the issuance of a number of shares of Common Stock equal to the
quotient obtained by dividing (i) the amount of cash to which the Holders would
have been entitled had the Company elected to pay all or such specified
percentage, as the case may be, of the Repurchase Price of such LYONs in cash by
(ii) the Market Price of a share of Common Stock, subject to the next succeeding
paragraph.
The Company shall not issue a fractional share of Common Stock
in payment of the Repurchase Price. Instead the Company shall pay cash for the
current market value of the fractional share. The current market value of a
fraction of a share of Common Stock shall be determined by multiplying the
Market Price by such fraction and rounding the product to the nearest whole cent
with one half cent being rounded upwards. It is understood that if a Holder
elects to have more than one LYON repurchased, the number of shares of Common
Stock shall be based on the aggregate amount of LYONs to be repurchased.
If the Company elects to purchase the LYONs by the issuance of
Common Stock, the Company Notice, as provided in Section 605, shall be sent to
the Holders (and to beneficial owners as required by applicable law) not later
than the Company Notice Date.
The Company's right to exercise its election to purchase the
LYONs pursuant to this Article through the issuance of Common Stock shall be
conditioned upon:
(i) the Company's not having given its Company Notice of an
election to pay entirely in cash and its giving of timely Company Notice of
election to purchase all or a specified percentage of the LYONs with Common
Stock as provided herein;
(ii) the listing of shares of Common Stock to be issued in
respect of the payment of the Repurchase Price on the principal United States
securities exchange on which the Common Stock is then listed;
(iii) the registration of the shares of Common Stock to be
issued in respect of the payment of the Repurchase Price under the Securities
Act or the Exchange Act, in each case, if required for the initial issuance
thereof;
(iv) any necessary qualification or registration under
applicable state securities laws or the availability of an exemption from such
qualification and registration; and
(v) the receipt by the Trustee of an Officers' Certificate and
an Opinion of Counsel each stating that (A) the terms of the issuance of the
Common Stock are in conformity in all material respects with this Second
Supplemental Indenture and (B) the Common Stock to be issued by the Company in
payment of the Repurchase Price in respect of LYONs has been duly authorized
and, when issued and delivered pursuant to the terms of this Second Supplemental
Indenture in payment of the Repurchase Price in respect of the LYONs, will be
validly issued, fully paid and non-assessable and, to the best of such counsel's
knowledge, free from preemptive rights, and, in the case of such Officer's
Certificate, stating that conditions (i), (ii) (iii) and (iv) above and the
condition set forth in the second succeeding sentence have been satisfied and,
in the case of such Opinion of Counsel, stating that conditions (ii) and (iii)
above have been satisfied.
Such Officers' Certificate shall also set forth the number of
shares of Common Stock to be issued for each $1,000 Principal Amount at Maturity
of LYONs and the Sale Price of a share of Common Stock on each trading day
during the period commencing on the first trading day of the period during which
the Market Price is calculated and ending three Business Days prior to the
applicable Repurchase Date. The Company shall pay the Repurchase Price (or any
portion thereof) in Common Stock only if the information necessary to calculate
the Market Price is published in The Wall Street Journal or another daily
newspaper of national circulation or is otherwise readily publicly available. If
the foregoing conditions are not satisfied with respect to a Holder or Holders
prior to the close of business on the Repurchase Date and the Company has
elected to repurchase the LYONs pursuant to this Article through the issuance of
Common Stock, the Company shall pay, without further notice, the entire
Repurchase Price of the LYONs of such Holder or Holders in cash.
The "Market Price" means the average of the Sale Prices of the
Common Stock for the five Trading Day period ending on the third Business Day
(if the third Business Day prior to the applicable Repurchase Date is a Trading
Day, or if not, then on the last Trading Day prior to the third Business Day),
prior to the applicable Repurchase Date appropriately adjusted to take into
account the occurrence, during the period commencing on the first of such
Trading Days during such five Trading Day period and ending on such Repurchase
Date, of any event described in Section 409; subject, however, to the conditions
set forth in Sections 409(f) and 410.
The "Sale Price" of the Common Stock on any date means the
closing per share sale price (or, if no closing sale price is reported, the
average of the bid and ask prices or, if more than one in either case, the
average of the average bid and average ask prices) on such date as reported in
the composite transactions for the principal United States securities exchange
on which the Common Stock is traded or, if the Common Stock is not listed on a
United States national or regional securities exchange, as reported by the
National Association of Securities Dealers Automated Quotation System or by the
National Quotation Bureau Incorporated.
Notice of Election.
The Company's notice (the "Company Notice") of election to
repurchase with cash or Common Stock or any combination thereof shall be sent to
the Holders in the manner provided in Section 206 of the Indenture at the
Company Notice Date. Such Company Notice shall state the manner of payment
elected and shall contain the following information:
In the event the Company has elected to pay the Repurchase
Price (or a specified percentage thereof) with Common Stock, the Company Notice
shall:
state that each Holder will receive Common Stock with a Market
Price equal to such specified percentage of the Repurchase Price of the LYONs
held by such Holder (except any cash amount to be paid in lieu of fractional
shares);
set forth the method of calculating the Market Price of the
Common Stock; and
state that because the Market Price of Common Stock will be
determined prior to the Repurchase Date, Holders will bear the market risk with
respect to the value of the Common Stock to be received from the date such
Market Price is determined to the Repurchase Date.
In any case, each Company Notice shall include a form of
Repurchase Notice to be completed by a Holder and shall state:
the Repurchase Price and the Conversion Rate;
the name and address of the Paying Agent and the Conversion
Agent;
that LYONs as to which a Repurchase Notice has been given may
be converted pursuant to Article Four hereof only if the applicable Repurchase
Notice has been withdrawn in accordance with the terms of this Indenture;
that LYONs must be surrendered to the Paying Agent to collect
payment of the Purchase Price;
that the Repurchase Price for any LYON as to which a
Repurchase Notice has been given and not withdrawn will be paid promptly
following the later of the Repurchase Date and the time of surrender of such
LYON as described in (D);
the procedures the Holder must follow to exercise repurchase
rights under this Article and a brief description of those rights;
briefly, the conversion rights of the LYONs; and
the procedures for withdrawing a Repurchase Notice (including,
without limitation, for a conditional withdrawal pursuant to the terms of
Section 601 or 609).
If any of the LYONs is in the form of a Global Security, then
the Company shall modify the Company Notice to the extent necessary to accord
with the procedures of the Depositary applicable to the repurchase of Global
Securities.
At the Company's request, the Trustee shall give such Company
Notice in the Company's name and at the Company's expense; provided, however,
that, in all cases, the text of such Company Notice shall be prepared by the
Company.
Upon determination of the actual number of shares of Common
Stock to be issued for each $1,000 Principal Amount at Maturity of LYONs, the
Company will publish such determination at the Company's Web site on the World
Wide Web or through such other public medium as the Company may use at that
time.
Common Stock Delivered Upon Purchase.
All Common Stock delivered upon purchase of the LYONs shall be
newly issued shares or treasury shares, shall be duly authorized, validly
issued, fully paid and nonassessable and shall be free from preemptive rights
and free of any lien or adverse claim.
Procedure upon Repurchase.
As soon as practicable after the Repurchase Date, the Company
shall deliver to each Holder entitled to receive Common Stock through the Paying
Agent, a certificate for the number of full shares of Common Stock issuable in
payment of the Repurchase Price and cash in lieu of any fractional shares of
Common Stock. The Person in whose name the certificate for Common Stock is
registered shall be treated as a holder of record of Common Stock on the
Business Day following the Repurchase Date. Subject to Section 604, no payment
or adjustment will be made for dividends on the Common Stock the record date for
which occurred on or prior to the Repurchase Date.
Taxes.
If a Holder of a LYON is paid in Common Stock, the Company
shall pay any documentary, stamp or similar issue or transfer tax due on such
issue of Common Stock. However, the Holder shall pay any such tax which is due
because the Holder requests the Common Stock to be issued in a name other than
the Holder's name. The Paying Agent may refuse to deliver the certificates
representing the shares of Common Stock being issued in a name other than the
Holder's name until the Paying Agent receives a sum sufficient to pay any tax
which will be due because the shares of Common Stock are to be issued in a name
other than the Holder's name.
Effect of Repurchase Notice.
Upon receipt by the Paying Agent of the Repurchase Notice
specified in Section 605, the Holder of the LYON in respect of which such
Repurchase Notice was given shall (unless such Repurchase Notice is withdrawn as
specified in the following
two paragraphs) thereafter be entitled to receive solely the Repurchase Price
with respect to such LYON. Such Repurchase Price shall be paid to such Holder,
subject to receipt of funds and/or Common Stock by the Paying Agent, promptly
following the later of (x) the Repurchase Date with respect to such LYON
(provided the conditions in Section 601 have been satisfied) and (y) the time of
delivery of such LYON to the Paying Agent by the Holder thereof in the manner
required by Section 601. LYONs in respect of which a Repurchase Notice has been
given by the Holder thereof may not be converted pursuant to Article Four hereof
on or after the date of the delivery of such Repurchase Notice unless such
Repurchase Notice has first been validly withdrawn as specified in the following
two paragraphs.
A Repurchase Notice may be withdrawn by means of a written
notice of withdrawal delivered to the office of the Paying Agent in accordance
with the Repurchase Notice at any time prior to the close of business on the
applicable Repurchase Date specifying:
if Certificated Securities have been issued, the certificate
number of the LYON in respect of which such notice of withdrawal is being
submitted, or if not, such information as may be required under appropriate
procedures of the Depositary;
the Principal Amount at Maturity of the LYON with respect to
which such notice of withdrawal is being submitted; and
the Principal Amount at Maturity, if any, of such LYON which
remains subject to the original Repurchase Notice and which has been or will be
delivered for purchase by the Company.
A written notice of withdrawal of a Repurchase Notice may be
in the form set forth in the preceding paragraph or may be in the form of (i) a
conditional withdrawal contained in a Repurchase Notice pursuant to the terms of
Section 601(1)(D) or (ii) a conditional withdrawal containing the information
set forth in Section 601(l)(D) and the preceding paragraph and contained in a
written notice of withdrawal delivered to the Paying Agent as set forth in the
preceding paragraph.
There shall be no purchase of any LYONs pursuant to this
Article (other than through the issuance of Common Stock in payment of the
Repurchase Price, including cash in lieu of fractional shares) if there has
occurred (prior to, on or after, as the case may be, the giving, by the Holders
of such LYONs, of the required Repurchase Notice) and is continuing an Event of
Default (other than a default in the payment of the Repurchase Price with
respect to such LYONs). The Paying Agent will promptly return to the respective
Holders thereof any LYONs (x) with respect to which a Repurchase Notice has been
withdrawn in compliance with this Indenture, or (y) held by it during the
continuance of an Event of Default (other than a default in the payment of the
Repurchase Price with respect to such LYONs) in which case, upon such return,
the Repurchase Notice with respect thereto shall be deemed to have been
withdrawn.
Deposit of Repurchase Price.
Prior to 11:00 a.m. (New York City time) on the Business Day
following the Repurchase Date, the Company shall deposit with the Trustee or
with the Paying Agent an amount of money (in immediately available funds if
deposited on such Business Day) and/or Common Stock, if permitted hereunder,
sufficient to pay the aggregate Repurchase Price of all of the LYONs or portions
thereof which are to be purchased as of the Repurchase Date. The manner in which
the deposit required by this Section 610 is made by the Company shall be at the
option of the Company, provided, however, that such deposit shall be made in a
manner such that the Trustee or a Paying Agent shall have immediately available
funds on the Repurchase Date.
If a Paying Agent holds, in accordance with the terms hereof,
money and/or Common Stock sufficient to pay the Repurchase Price of any LYON for
which a Repurchase Notice has been tendered and not withdrawn in accordance with
this Indenture then, immediately after Repurchase Date, such LYON will cease to
be Outstanding, Original Issue Discount shall cease to accrue thereon, and the
rights of the Holder in respect thereof shall terminate (other than the right to
receive the Repurchase Price as aforesaid).
Securities Repurchased in Part.
Any LYON which is to be purchased only in part shall be
surrendered at the office of the Paying Agent (with, if the Company or the
Trustee so requires, due endorsement by, or a written instrument of transfer in
form satisfactory to the Company or the Trustee duly executed by, the Holder
thereof or such Holder's attorney duly authorized in writing) and the Company
shall execute and the Trustee shall authenticate and deliver to the Holder of
such LYON, without service charge except for any taxes to be paid by the Holder
in the event a LYON is registered under a new name, a new LYON, of any
authorized denomination as requested by such Holder in aggregate Principal
Amount at Maturity equal to, and in exchange for, the portion of the Principal
Amount at Maturity of the LYON so surrendered which is not purchased.
Compliance with Securities Laws Upon Purchase of _Securities.
In connection with any offer to purchase or purchase of LYONs
under this Article (provided that such offer or purchase constitutes an "issuer
tender offer" for purposes of Rule 13e_4 (which term, as used herein, includes
any successor provision thereto) under the Exchange Act at the time of such
offer or purchase), the Company shall (i) comply with Rule 13e_4 under the
Exchange Act, (ii) file the related Schedule TO (or any successor schedule, form
or report), if required, under the Exchange Act, and (iii) otherwise comply with
all applicable Federal and state securities laws so as to permit the rights and
obligations under Article Six to be exercised in the time and in the manner
specified in this Article.
Repayment to the Company.
The Trustee and the Paying Agent shall return to the Company
any cash or Common Stock that remain unclaimed
for two years, subject to applicable unclaimed property law, together with
interest or dividends, if any, thereon held by them for the payment of the
Repurchase Price, provided, however, that to the extent that the aggregate
amount of cash or Common Stock deposited by the Company pursuant to Section 610
exceeds the aggregate Repurchase Price of the LYONs or portions thereof which
the Company is obligated to purchase as of the Repurchase Date, then promptly
after the Business Day following the Repurchase Date, the Trustee shall return
any such excess to the Company together with interest or dividends, if any,
thereon. Thereafter, any Holder entitled to payment must look to the Company for
payment as general creditors, unless an applicable abandoned property law
designates another Person.
Conversion Arrangement on Repurchase.
Any LYONs required to be repurchased under this Article,
unless surrendered for conversion before the close of business on the Repurchase
Date, may be deemed to be purchased from the Holders of such LYONs for an amount
in cash not less than the Repurchase Price, by one or more investment bankers or
other purchasers who may agree with the Company to purchase such LYONs from the
Holders, to convert them into Common Stock of the Company and to make payment
for such LYONs to the Trustee in trust for such Holders.
__PURCHASE OF LYONs AT OPTION OF_THE HOLDER UPON CHANGE IN
CONTROL
Right to Require Repurchase.
If at any time on or before October 24, 2008, while LYONs
remain Outstanding, a Change in Control occurs, LYONs shall be purchased by the
Company in integral multiples of $1,000 Principal Amount at Maturity at the
option of the Holders thereof as of the date that is 35 Business Days after the
occurrence of the Change in Control (the "Change in Control Purchase Date")
subject to satisfaction by or on behalf of any Holder of the requirements set
forth in subsection (c) of this Section 701. The purchase price of such LYONs
(the "Change in Control Purchase Price") shall be equal to 100% of the Issue
Price of the LYONs to be purchased plus accrued Original Issue Discount, to but
excluding, the Change in Control Purchase Date.
A "Change in Control" shall be deemed to have occurred at such
time after the date hereof as (a) any Person or any Persons acting together in a
manner which would constitute a "group" for purposes of Section 13(d) of the
Exchange Act, or any successor provision thereto, together with any Affiliates
thereof (but in each case excluding Subsidiaries, any employee benefit plans of
the Company or its Subsidiaries or any Permitted Holders), after the first
issuance of LYONs files a Schedule TO or a Schedule
13D (or any successors to those forms) stating that it or they has or have
become and actually is or are Beneficial Owners, directly or indirectly, of
Capital Stock of the Company, entitling such Person or Persons and its or their
Affiliates to exercise more than 50% of the total voting power of all classes of
the Company's Capital Stock entitled to vote generally in the election of the
Company's directors or (b) any of the Permitted Holders, after the first
issuance of LYONs, file a Schedule TO or a Schedule 13D (or any successors to
those forms) stating that they have become and actually are Beneficial Owners of
the Company's Capital Stock representing more than 80%, in the aggregate, of the
voting power entitled to vote generally in the election of the Company's
directors or (c) the Company consolidates with or merges into any other Person
(other than a Subsidiary), or any other Person (other than a Subsidiary)
consolidates with or merges into the Company, or the Company sells, conveys,
transfers or leases its properties and assets substantially as an entirety to
any Person other than a Subsidiary, and, in the case of any such transaction the
outstanding Common Stock is reclassified into, exchanged for or converted into
the right to receive any other property or security, unless the stockholders of
the Company immediately before such transaction, own, directly or indirectly,
immediately following such transaction, at least a majority of the combined
voting power of the outstanding voting securities of the Person resulting from
such transaction or the Person acquiring such properties and assets, entitled to
vote generally on the election of such resulting or acquiring Person's
directors, in substantially the same proportion as their ownership of the Common
Stock immediately before such transaction, provided, however, that a Change in
Control shall not be deemed to have occurred upon the completion of a merger,
consolidation or other transaction effected with any Affiliates of the Company
for the purpose of (x) changing the Company's jurisdiction of organization, or
(y) effecting a corporate reorganization of the Company, including, without
limitation, the implementation of a holding company structure.
The term "Beneficial Owner" shall be determined in accordance
with Rules 13d_3 and 13d_5 promulgated by the Securities and Exchange Commission
under the Exchange Act or any successor provision thereto, except that a Person
shall be deemed to have "beneficial ownership" of all shares that such Person
has the right to acquire, whether such right is exercisable immediately or only
after the passage of time.
The term "Permitted Holder" shall mean each of Marilyn B.
Arison, Micky Arison, Shari Arison, Michael Arison or their spouses, children or
lineal descendants of Marilyn B. Arison, Micky Arison, Shari Arison, Michael
Arison or their spouses, any trust established for the benefit of any Arison
family member mentioned in this paragraph, or any "person" (as such term is used
in Section 13(d) or 14(d) of the Exchange Act), directly or indirectly,
controlling, controlled by or under common control with any Arison family member
mentioned in this paragraph or any trust established for the benefit of any such
Arison family member or any charitable trust or non-profit entity established by
a Permitted Holder.
Within 15 Business Days after the occurrence of a Change in
Control, the Company shall mail a written notice of the Change in Control to the
Trustee and to each Holder. The notice shall include the form of a Change in
Control Purchase Notice to be completed by the Holder and shall state:
(1) the date of such Change in Control and, briefly, the
events causing such Change in Control;
(2) the date by which the Change in Control Purchase Notice
pursuant to this Section 701 must be given;
(3) the Change in Control Purchase Date;
(4) the Change in Control Purchase Price that will be accrued
and payable with respect to the LYONs as of the Change in Control Purchase Date;
(5) briefly, the conversion rights of the LYONs;
(6) the name and address of each Paying Agent and Conversion
Agent;
(7) the Conversion Rate and any adjustments thereto;
(8) that LYONs as to which a Change in Control Purchase Notice
has been given may be converted into Common Stock pursuant to Article Four only
to the extent that the Change in Control Purchase Notice has been withdrawn in
accordance with the terms of this Indenture;
(9) the procedures that the Holder must follow to exercise
rights under this Section 701;
(10) the procedures for withdrawing a Change in Control
Purchase Notice, including a form of notice of withdrawal; and
(11) that the Holder must satisfy the requirements set forth
in the LYONs in order to convert the LYONs.
If any of the LYONs is in the form of a Global Security, then
the Company shall modify such notice to the extent necessary to accord with the
procedures of the Depositary applicable to the repurchase of Global Securities.
A Holder may exercise its rights specified in subsection (a)
of this Section 701 upon delivery of a written notice (which shall be in
substantially the form included as an attachment to the LYONs and which may be
delivered by letter, overnight courier, hand delivery, facsimile transmission or
in any other written form and, in the case of Global Securities, may be
delivered electronically or by other means in accordance with the Depositary's
customary procedures) of the exercise of such rights (a "Change in Control
Purchase Notice") to any Paying Agent at any time prior to the close of business
on the Business Day next preceding the Change in Control Purchase Date.
The delivery of such LYON to any Paying Agent (together with
all necessary endorsements) at the office of such Paying Agent shall be a
condition to the receipt by the Holder of the Change in Control Purchase Price.
The Company shall purchase from the Holder thereof, pursuant
to this Section 701, a portion of a LYON if the Principal Amount at Maturity of
such portion is $1,000 or an integral multiple of $1,000. Provisions of this
Indenture that apply to the purchase of all of a LYON pursuant to Sections 701
through 706 also apply to the purchase of such portion of such LYON.
Any purchase by the Company contemplated pursuant to the
provisions of this Section 701 shall be consummated by the delivery of the
consideration to be received by the Holder promptly following the later of the
Change in Control Purchase Date and the time of delivery of the LYON to the
Paying Agent in accordance with this Section 701.
Notwithstanding anything herein to the contrary, any Holder
delivering to a Paying Agent the Change in Control Purchase Notice contemplated
by this subsection (c) shall have the right to withdraw such Change in Control
Purchase Notice in whole or as to a portion thereof that is with respect to a
Principal Amount at Maturity of LYONs of $1,000 or an integral multiple thereof
at any time prior to the close of business on the Business Day next preceding
the Change in Control Purchase Date by delivery of a written notice of
withdrawal to the Paying Agent in accordance with Section 702.
A Paying Agent shall promptly notify the Company of the
receipt by it of any Change in Control Purchase Notice or written withdrawal
thereof.
Anything herein to the contrary notwithstanding, in the case
of Global Securities, any Change in Control Purchase Notice may be delivered or
withdrawn and such LYONs may be surrendered or delivered for purchase in
accordance with the applicable procedures of the Depositary as in effect from
time to time.
Effect of Change in Control Purchase Notice.
Upon receipt by any Paying Agent of the Change in Control
Purchase Notice specified in Section 701(c), the Holder of the LYON in respect
of which such Change in Control Purchase Notice was given shall (unless such
Change in Control Purchase Notice is withdrawn as specified below) thereafter be
entitled to receive the Change in Control Purchase Price with respect to such
LYON. Such Change in Control Purchase Price shall be paid to such Holder
promptly following the later of (a) the Change in Control Purchase Date with
respect to such LYON (provided the conditions in Section 701(c) have been
satisfied) and (b) the time of delivery of such LYON to a Paying Agent by the
Holder thereof in the manner required by Section 701(c). LYONs in respect of
which a Change in Control Purchase Notice has been given by the Holder thereof
may not be converted into Common Stock on or after the date of the delivery of
such Change in Control Purchase Notice unless such Change in Control Purchase
Notice has first been validly withdrawn as specified in the following paragraph.
A Change in Control Purchase Notice may be withdrawn by means
of a written notice of withdrawal delivered to the office of the Paying Agent in
accordance with the Change in Control Purchase Notice at any time prior to the
close of business on the applicable Change in Control Purchase Date specifying:
(1) if a Certificated Security has been issued, the
certificate number of the LYONs in respect of which such notice of withdrawal is
being submitted, or if not, such information as required by the Depositary;
(2) the Principal Amount at Maturity, in integral multiples of
$1,000, of the LYONs with respect to which such notice of withdrawal is being
submitted; and
(3) the Principal Amount at Maturity, if any, of such LYONs
which remain subject to the original Change in Control Purchase Notice and which
has been or will be delivered for purchase by the Company.
There shall be no purchase of any LYONs pursuant to this
Article if there has occurred (prior to, on or after, as the case may be, the
giving, by the Holders of such LYONs, of the required Change in Control Purchase
Notice) and is continuing an Event of Default (other than a default in the
payment of the Change in Control Purchase Price with respect to such LYONs). The
Paying Agent will promptly return to the respective Holders thereof any LYONs
(x) with respect to which a Change in Control Purchase Notice has been withdrawn
in compliance with this Indenture, or (y) held by it during the continuance of
an Event of Default (other than a default in the payment of the Change in
Control Purchase Price with respect to such LYONs) in which case, upon such
return, the Change in Control Purchase Notice with respect thereto shall be
deemed to have been withdrawn.
Deposit of Change in Control Purchase Price.
On or before 11:00 a.m. New York City time on the Change in
Control Purchase Date, the Company shall deposit with the Trustee or with a
Paying Agent (other than the Company or an Affiliate of the Company) an amount
of money (in immediately available funds if deposited on such Business Day)
sufficient to pay the aggregate Change in Control Purchase Price of all the
LYONs or portions thereof that are to be purchased as of such Change in Control
Purchase Date. The manner in which the deposit required by this Section 703 is
made by the Company shall be at the option of the Company, provided, however,
that such deposit shall be made in a manner such that the Trustee or a Paying
Agent shall have immediately available funds on the Change in Control Purchase
Date.
If a Paying Agent holds, in accordance with the terms hereof,
money sufficient to pay the Change in Control Purchase Price of any LYON for
which a Change in Control Purchase Notice has been tendered and not withdrawn in
accordance with this Indenture then, on the Change in Control Purchase Date,
such LYON will cease to be Outstanding, Original Issue Discount will cease to
accrue, and the rights of the Holder in respect thereof shall terminate. The
Company shall publicly announce the Principal Amount at Maturity of LYONs
purchased as a result of such Change in Control on or as soon as practicable
after the Change in Control Purchase Date.
Securities Purchased In Part.
Any LYON that is to be purchased only in part shall be
surrendered at the office of a Paying Agent and promptly after the Change in
Control Purchase Date the Company shall execute and the Trustee shall
authenticate and deliver to the Holder of such LYON, without service charge
(other than amounts to be paid in respect of
applicable transfer taxes), a new LYON or LYONs, of such authorized denomination
or denominations in integral multiples of $1,000 as may be requested by such
Holder, in aggregate Principal Amount at Maturity equal to, and in exchange for,
the portion of the Principal Amount at Maturity of the LYON so surrendered that
is not purchased.
Compliance With Securities Laws Upon Purchase of _Securities.
In connection with any offer to purchase or purchase of LYONs
under this Article (provided that such offer or purchase constitutes an "issuer
tender offer" for purposes of Rule 13e_4 (which term, as used herein, includes
any successor provision thereto) under the Exchange Act at the time of such
offer or purchase), the Company shall (i) comply with Rule 13e_4 under the
Exchange Act, (ii) file the related Schedule TO (or any successor schedule, form
or report), if required, under the Exchange Act, and (iii) otherwise comply with
all applicable Federal and state securities laws so as to permit the rights and
obligations under this Article to be exercised in the time and in the manner
specified in this Article.
Repayment to the Company.
The Trustee and the Paying Agent shall return to the Company
any cash or Common Stock that remains unclaimed for two years, subject to
applicable unclaimed property law, together with interest or dividends, if any,
thereon held by them for the payment of the Change in Control Purchase Price;
provided, however, that to the exten Stock deposited by the Company pursuant to
Section 703 exceeds the aggregate Change in Control Purchase Price of the LYONs
or portions thereof which the Company is obligated to purchase as of the Change
in Control Purchase Date, then on the Business Day following the Repurchase
Date, the Trustee shall return any such excess to the Company together with
interest or dividends, if any, thereon. Thereafter, any Holder entitled to
payment must look to the Company for payment as general creditors, unless an
applicable abandoned property law designates another Person.
__MISCELLANEOUS PROVISIONS
Integral Part.
This Second Supplemental Indenture constitutes an integral
part of the Indenture with respect to the LYONs only.
General Definitions.
For all purposes of this Second Supplemental Indenture:
capitalized terms used herein without definition shall have
the meanings specified in the Indenture; and
the terms "herein", "hereof", "hereunder" and other words of
similar import refer to this Second Supplemental Indenture.
Adoption, Ratification and Confirmation.
The Indenture, as supplemented and amended by this Second
Supplemental Indenture, is in all respects hereby adopted, ratified and
confirmed, and this Second Supplemental Indenture shall be deemed part of the
Indenture in the manner and to the extent herein and therein provided. The
provisions of this Second Supplemental Indenture shall, subject to the terms
hereof, supersede the provisions of the Indenture to the extent the Indenture is
inconsistent herewith.
Counterparts.
This Second Supplemental Indenture may be executed in any
number of counterparts, each of which when so executed shall be deemed an
original; and all such counterparts shall together constitute but one and the
same instrument.
Governing Law.
THIS SECOND SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
THE CONFLICTS OF LAW RULES OF SAID STATE.
Conflict of Any Provision of Indenture with Trust Indenture
Act of 1939.
If and to the extent that any provision of this Second
Supplemental Indenture limits, qualifies or conflicts with a provision required
under the terms of the Trust Indenture Act of 1939, as amended, such Trust
Indenture Act provision shall control.
Effect of Headings.
The Article and Section headings herein are for convenience
only and shall not affect the construction hereof.
Severability of Provisions.
In case any provision in this Second Supplemental Indenture or
in the LYONs shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
Successors and Assigns.
All covenants and agreements in this Second Supplemental
Indenture by the parties hereto shall bind their respective successors and
assigns and inure to the benefit of their respective successors and assigns,
whether so expressed or not.
Benefit of Supplemental Indenture.
Nothing in this Second Supplemental Indenture, express or
implied, shall give to any Person, other than the parties hereto, any Security
Registrar, any Paying Agent, any Conversion Agent and their successors
hereunder, and the Holders of the LYONs, any benefit or any legal or equitable
right, remedy or claim under this Second Supplemental Indenture.
Acceptance by Trustee.
The Trustee accepts the amendments to the Indenture effected
by this Second Supplemental Indenture and agrees to execute the trusts created
by the Indenture as hereby amended, but only upon the terms and conditions set
forth in this Second Supplemental Indenture and the Indenture. Without limiting
the generality of the foregoing, the Trustee assumes no responsibility for the
correctness of the recitals contained herein, which shall be taken as the
statements of the Company and except as provided in the Indenture the Trustee
shall not be responsible or accountable in any way whatsoever for or with
respect to the validity or execution or sufficiency of this Second Supplemental
Indenture and the Trustee makes no representation with respect thereto.
Amendment to Indenture.
Section 3.3 of the Indenture is hereby amended with respect to
all series of Securities issued under the Indenture by replacing the first and
second sentences thereof with the following: "The Securities shall be signed on
behalf of the Company by any one of the following: Its Chairman of the Board,
its President, its Chief Executive Officer, any Senior Vice President, any Vice
President or any Secretary. Such signature upon the Securities may be the manual
or facsimile signature of the present or any future such authorized officer and
may be imprinted or otherwise reproduced on the Securities."
Section 1.1 of the Indenture is hereby amended with respect to
all series of Securities issued under the Indenture by replacing the paragraph
below the heading "Company Request; Company Order" with the following: "The term
"Company Request" or "Company Order" shall mean a written request or order
signed in the name of the Company by its Chairman of the Board, its President,
its Chief Executive Officer, any Senior Vice President, any Vice President or
any Secretary, and delivered to the Trustee.
IN WITNESS WHEREOF, the parties hereto have caused this Second
Supplemental Indenture to be duly executed and attested as of the day and year
first written above.
CARNIVAL CORPORATION
By:
U.S. BANK TRUST NATIONAL ASSOCIATION
By:
ANNEX A
GLOBAL SECURITY
[FORM OF FACE OF SECURITY]
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY
OR A NOMINEE THEREOF. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN
THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND, UNLESS AND UNTIL IT IS
EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE FORM, THIS SECURITY
MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE
DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER
NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.]_
THIS SECURITY AND THE SHARES OF COMMON STOCK ISSUABLE UPON
CONVERSION OF THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER
THIS SECURITY, THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE REOFFERED,
SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION. EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED
THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS
OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A ("RULE 144A")
THEREUNDER.
THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES
TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY PRIOR TO THE DATE (THE
"RESALE RESTRICTION TERMINATION DATE") ON WHICH THIS SECURITY IS SALEABLE
PURSUANT TO RULE 144(K) UNDER THE SECURITIES ACT ONLY (A) TO CARNIVAL
CORPORATION (THE "COMPANY", OR THE "ISSUER") OR ANY SUBSIDIARY THEREOF, (B) FOR
SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A
PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHICH NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) TO AN INSTITUTIONAL
"ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (A)(1), (2), (3) OR (7)
OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN
ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL "ACCREDITED INVESTOR," FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION
WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, (D) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT, OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S
RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (C) OR (E) TO
REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER
INFORMATION SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE FOREGOING CASES, A
CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY
IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE AND IN EACH CASE IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES, AND THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY
ANY PURCHASER OF THIS SECURITY FROM IT OF THE RESALE RESTRICTIONS REFERRED TO
ABOVE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE
RESALE RESTRICTION TERMINATION DATE._
THIS SECURITY IS SUBJECT TO LIMITATIONS ON OWNERSHIP CONTAINED
IN THE INDENTURE, IN ORDER TO PERMIT THE COMPANY TO RETAIN ITS STATUS AS A
PUBLICLY TRADED CORPORATION UNDER PROPOSED TREASURY REGULATIONS UNDER SECTION
883 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED.
[FORM OF FACE OF SECURITY]
CARNIVAL CORPORATION
Liquid Yield Option"! Notes due 2021_(Zero Coupon _ Senior)
Issue Date: October 24, 2001 Principal Amount at Maturity:
$______________ CUSIP: ________________Registered: No. R_
Carnival Corporation, a corporation organized and existing
under the laws of the Republic of Panama (herein called the "Company", which
term includes any successor corporation under the Indenture hereinafter referred
to), for value received, hereby promises to pay to Cede & Co., or registered
assigns, the principal sum of ___________________________ DOLLARS ($___________)
on October 24, 2021, [or such greater or lesser amount as is indicated in the
Schedule of Exchanges of Securities on the other side of this LYON]._
This Security shall not bear interest. Original Issue Discount
shall accrue as specified on the reverse side of this Security. This LYON is
convertible as specified on the reverse side of this LYON.
Payment of any amounts in respect of this LYON will be made at
the office or agency of the Company maintained for that purpose in The City of
New York, in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts;
provided, however, that at the option of the Company, payment of interest, if
any, may be made by check mailed to the address of the Person entitled thereto
as such address shall appear in the Security Register.
Reference is hereby made to the further provisions of this
LYON set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse hereof by manual signature,
this LYON shall not be entitled to any benefit under the Indenture or be valid
or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed.
Dated: October 24, 2001
CARNIVAL CORPORATION
By: Name: _ Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
U.S. Bank Trust National Association, as Trustee
_Authorized Signature
Date of Authentication: October 24, 2001
[FORM OF REVERSE SIDE OF SECURITY]
CARNIVAL CORPORATION
Liquid Yield Option"! Notes due 2021_(Zero Coupon _ Senior)
This Security is one of a duly authorized issue of senior
securities of the Company (herein called the _ Securities_ ), issued and to be
issued in one or more series under an Indenture, dated as of April 25, 2001, as
amended by the Second Supplemental Indenture thereto, dated as of October 24,
2001 (as so amended, herein called the "Indenture"), between the Company and
U.S. Bank Trust National Association, as Trustee (herein called the "Trustee",
which term includes any successor trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights, limitations of rights, duties and immunities
thereunder of the Company, the Trustee and the Holders of the Securities and of
the terms upon which the Securities are, and are to be, authenticated and
delivered. This Security is one of the series designated on the face hereof
(herein called the "LYONs"), limited in aggregate principal amount at Stated
Maturity (the "Principal Amount at Maturity") to $1,051,175,000 created pursuant
to the Indenture as supplemented by the Second Supplemental Indenture.
Capitalized terms used and not otherwise defined in this LYON are used as
defined in the Indenture.
The LYONs are general unsecured and unsubordinated obligations
of the Company. The Indenture does not limit other indebtedness of the Company,
secured or unsecured.
Interest on Overdue Amounts
Except as provided in this paragraph, this LYON shall not bear
interest. If the principal amount at Maturity hereof or any portion of such
principal amount at Maturity is not paid when due (whether upon acceleration
pursuant to Section 5.2 of the Indenture, upon the date set for payment of the
Redemption Price as described under "Optional Redemption", upon the date set for
payment of the Change in Control Purchase Price pursuant to "Purchase of LYONs
at Option of Holder Upon a Change in Control", upon the date set for payment of
the Repurchase Price under "Repurchase by the Company at the Option of the
Holder" or upon the Stated Maturity of this LYON), then in each such case the
overdue amount shall, to the extent permitted by law, bear interest at the rate
of 3.75% per annum (computed on a semi-annual bond equivalent basis based
on a 360-day year of twelve 30-day months), which interest shall accrue from the
date such overdue amount was originally due to the date payment of such amount
has been made or duly provided for. All such interest shall be payable as set
forth in the Indenture.
Method of Payment
Payments in respect of the Accreted Principal Amount of the
LYONs shall be made by the Company in immediately available funds.
Paying Agent, Conversion Agent and Security Registrar.
Initially, the Trustee shall act as Paying Agent, Conversion
Agent and Security Registrar. The Company may appoint and change any Paying
Agent, Conversion Agent, Security Registrar or co-registrar without notice,
other than notice to the Trustee, except that the Company shall maintain at
least one Paying Agent in the State of New York, City of New York, Borough of
Manhattan, which shall initially be an office or agency of the Trustee. The
Company or any of its Subsidiaries or any of their Affiliates may act as Paying
Agent, Conversion Agent, Security Registrar or co-registrar.
Optional Redemption
No sinking fund is provided for the LYONs. At any time on or
after October 24, 2008, the LYONs are redeemable at any time as a whole, or from
time to time in part, at the option of the Company in accordance with the
Indenture at a redemption price (the "Redemption Price") equal to the Issue
Price of such LYONs plus any accrued Original Issue Discount to, but excluding,
the Redemption Date.
If the Company redeems less than all of the outstanding LYONs,
the Trustee will select the LYONs to be redeemed (i) by lot; (ii) pro rata; or
(iii) by another method the Trustee considers fair and appropriate. If the
Trustee selects a portion of a Holder's LYONs for partial redemption and the
Holder converts a portion of the same LYONs, the converted portion shall be
deemed to be from the portion selected for redemption.
Notice of Redemption
Notice of optional redemption by the Company will be mailed by
first-class mail at least 30 days but not more than 60 days before the
Redemption Date to each Holder of LYONs to be redeemed at its registered
address. LYONs in denominations larger than $1,000 Principal Amount at Maturity
may be redeemed in part, but only in whole multiples of $1,000. On and after the
Redemption Date, subject to the deposit with the Paying Agent of funds
sufficient to pay the Redemption Price for such LYONs, all Original Issue
Discount shall cease to accrue on such LYONs or portions thereof called for
redemption in such notice.
Purchase of LYONs at Option of Holder Upon a Change in Control
At the option of the Holder and subject to the terms and
conditions of the Indenture, the Company shall purchase all or any part
specified by the Holder in such Holder's Change in Control Purchase Notice (so
long as the principal amount at Stated Maturity of such part is $1,000 or an
integral multiple of $1,000 in excess thereof) of the LYONs held by such Holder
on the date that is 35 Business Days after the occurrence of a Change in
Control, at a purchase price (the "Change in Control Purchase Price") equal to
the Issue Price of the LYONs to be purchased plus Original Issue Discount
accrued thereon to, but excluding, the Change in Control Purchase Date.
The Holder shall have the right to withdraw any Change in
Control Purchase Notice (in whole or in a portion thereof that is $1,000
Principal Amount at Maturity or an integral multiple of $1,000 in excess
thereof) at any time prior to the close of business on the Business Day prior to
the Change in Control Purchase Date by delivering a written notice of withdrawal
to the Paying Agent in accordance with the terms of the Indenture.
If cash sufficient to pay the Change in Control Purchase Price
of all LYONs or portions thereof to be purchased as of the Change in Control
Purchase Date, is deposited with the Paying Agent on the Business Day following
the Change in Control Purchase Date, all Original Issue Discount shall cease to
accrue on such LYONs (or portions thereof) immediately after such Change in
Control Purchase Date, and the Holder thereof shall have no other rights as such
(other than the right to receive the Change in Control Purchase Price upon
surrender of such LYON).
Conversion
Subject to the provisions of the Indenture, the Holder of a
LYON may convert the LYON into Common Stock on a Conversion Date in any fiscal
quarter (and only during such fiscal quarter) if the closing sale price of the
Common Stock for at least 20 trading days in a period of 30 consecutive trading
days ending on the last trading day of the immediately preceding fiscal quarter
is more than 110% of the Accreted Conversion Price per share of Common Stock on
the last trading day of such preceding fiscal quarter87aq.
The "Accreted Conversion Price", as of any date of
determination, shall equal (x) the sum of the Issue Price per $1,000 Principal
Amount at Maturity of a LYON plus accrued Original Issue Discount thereon
computed to, but not including, such date divided by (y) the Conversion Rate as
of such date.
Subject to the provisions of the Indenture, a Holder may
convert into Common Stock a LYON or portion of a LYON which has been called for
redemption by the Company, even if the LYON , or any portion thereof is not
subject to conversion by the Holder, but such LYONs may be surrendered for
conversion until the close of business on the second Business Day immediately
preceding the Redemption Date.
Subject to the provisions of the Indenture, in the event the
Company is a party to a consolidation, merger or binding share exchange pursuant
to which the
Common Stock would be converted into cash, securities or other property as set
forth in Section 404 of the Second Supplemental Indenture, the LYONs may be
surrendered for conversion at any time from and after the date which is 15 days
prior to the date of the anticipated effective time of such transaction
announced by the Company until 15 days after the actual effective date of such
transaction, and at the effective time of such transaction the right to convert
a LYON into Common Stock will be deemed to have changed into a right to convert
it into the kind and amount of cash, securities or other property which the
holder would have received if the holder had converted its LYON immediately
prior to the transaction.
Subject to the provisions of the Indenture, upon the election
by the Company to make a distribution as described in paragraphs (b), (c) and
(d) of Section 409 of the Indenture, which in the case of paragraph (d) of such
Section has a per share value equal to more than 15% of the Sale Price of shares
of Common Stock on the Trading Day preceding the declaration date for such
distribution, the Company shall give notice to Holders of the LYONs not less
than 20 days prior to the ex-dividend date for such distribution. Upon giving
such notice, Holders may surrender the LYONs for conversion at any time until
the close of business of the Business Day prior to the ex-dividend date or until
the Company publicly announces that such distribution will not be given effect.
A LYON in respect of which a Holder has delivered a Purchase
Notice or Change in Control Purchase Notice exercising the option of such Holder
to require the Company to purchase such LYON may be converted only if such
notice of exercise is withdrawn in accordance with the terms of the Indenture.
The initial Conversion Rate is 16.5964 shares of Common Stock per $1,000
Principal Amount at Maturity of LYONs, subject to adjustment upon the occurrence
of certain events described in the Indenture.
A Holder's right to convert the LYONs into Common Stock of the
Company is also subject to the Company's right to elect to pay such Holder the
amount of cash set forth in the next succeeding sentence (or an equivalent
amount in a combination of cash and shares of Common Stock), in lieu of
delivering all or part of such Common Stock; provided, however, that if such
payment of cash is not permitted pursuant to the provisions of the Indenture,
the Company shall deliver Common Stock (and cash in lieu of fractional shares of
Common Stock) in accordance with the Indenture, whether or not the Company has
delivered a notice pursuant to the Indenture to the effect that the LYONs will
be paid in cash. The amount of cash to be paid for each $1,000 Principal Amount
at Maturity of a LYON shall be equal to the average Sale Price of a share of
Common Stock of the Company for the five consecutive Trading Days immediately
following (i) the date of the Company's notice of its election to deliver cash
upon conversion, if the Company has not given a notice of redemption pursuant to
the Indenture, or (ii) the Conversion Date, in the case of a conversion
following such a notice of redemption specifying an intent to deliver cash or a
combination of cash and Common Stock upon conversion, in either case multiplied
by the Conversion Rate in effect on such Conversion Date. If the Company shall
elect to make such payment wholly in shares of Common Stock, then such shares
shall be delivered through the Conversion Agent to Holders surrendering LYONs as
promptly as practicable but in any event no later than the
fifth Business Day following the Conversion Date. If, however, the Company
elects to make any portion of such payment in cash, then the payment, including
any delivery of shares of Common Stock, shall be made to Holders surrendering
LYONs no later than the tenth Business Day following the Conversion Date.
The Company may not pay cash in lieu of delivering all or part
of such shares of Common Stock upon the conversion of any LYON pursuant to the
terms of the Indenture (other than cash in lieu of fractional shares) if there
has occurred (prior to, on or after, as the case may be, the Conversion Date or
the date on which the Company delivers its notice specifying whether each
Conversion shall be converted into shares of Common Stock or cash) and is
continuing an Event of Default (other than a default in such payment on such
LYONs).
A Holder may convert a portion of a LYON if the Principal
Amount at Maturity of such portion is $1,000 or an integral multiple of $1,000.
No payment or adjustment shall be made for dividends on the Common Stock except
as provided in the Indenture. On conversion of a LYON, except as otherwise
provided in the Second Supplemental Indenture, accrued Original Issue Discount
attributable to the period from the Issue Date through the Conversion Date with
respect to the converted LYON shall not be cancelled, extinguished or forfeited,
but rather shall be deemed to be paid in full to the Holder thereof through
delivery of the Common Stock (together with the cash payment, if any, in lieu of
fractional shares), or cash in lieu thereof, in exchange for the LYON being
converted pursuant to the provisions hereof, and the fair market value of such
shares of Common Stock (together with any such cash payment in lieu of
fractional shares), or cash in lieu thereof, shall be treated as issued in
exchange for the Issue Price of the LYON being converted pursuant to the
provisions hereof.
No fractional shares will be issued upon conversion; in lieu
thereof, an amount will be paid in cash based upon the Sale Price of the Common
Stock on the Trading Day immediately prior to the Conversion Date.
To convert a LYON, a Holder must (a) complete and manually
sign the conversion notice set forth below and deliver such notice to a
Conversion Agent, (b) surrender the LYON to the Conversion Agent, (c) furnish
appropriate endorsements and transfer documents (including any certification
that may be required under applicable law) if required by the Conversion Agent,
and (d) pay any transfer or similar tax, if required.
Repurchase by the Company at the Option of the Holder
Subject to the terms and conditions of the Indenture, the
Company shall become obligated to purchase, at the option of the Holder, the
LYONs held by such Holder on the following Repurchase Dates and at the following
Repurchase Prices per $1,000 Principal Amount at Maturity of such LYONs, upon
delivery of a Repurchase Notice containing the information set forth in the
Indenture, at any time from the opening of business on the date that is at least
20 Business Days prior to such Repurchase Date
until the close of business on such Repurchase Date and upon delivery of the
LYONs to the Paying Agent by the Holder as set forth in the Indenture.
Repurchase Date Repurchase Price
October 24, 2006 $572.76
October 24, 2008 $616.94
October 24, 2011 $689.68
October 24, 2016 $830.47
The Repurchase Price may be paid, at the option of the
Company, in cash or by the issuance of Common Stock (as provided in the
Indenture), or in any combination thereof.
Holders have the right to withdraw any Repurchase Notice by
delivering to the Paying Agent a written notice of withdrawal prior to the close
of business on the Repurchase Date in accordance with the provisions of the
Indenture.
If cash (and/or securities if permitted under the Indenture)
sufficient to pay the Repurchase Price of all LYONs or portions thereof to be
purchased as of the Repurchase Date, is deposited with the Paying Agent on the
Business Day following the Repurchase Date, immediately after such Repurchase
Date, such LYON shall cease to be Outstanding, Original Issue Discount shall
cease to accrue thereon, and the Holder thereof shall have no other rights as
such (other than the right to receive the Repurchase Price upon surrender of
such LYON).
Conversion Arrangement on Call for Redemption
Any LYONs called for redemption, unless surrendered for
conversion before the close of business on the Redemption Date, may be deemed to
be purchased from the Holders of such LYONs at an amount not less than the
Redemption Price by one or more investment bankers or other purchasers who may
agree with the Company to purchase such LYONs from the Holders, to convert them
into Common Stock of the Company and to make payment for such LYONs to the
Paying Agent in trust for such Holders.
Transfer
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this LYON is registrable in the
Security Register, upon surrender of this LYON for registration or transfer at
the office or agency in a Place of Payment for the LYONs, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new LYONs, of any
authorized denominations and for the same aggregate Principal Amount
at Maturity, executed by the Company and authenticated and delivered by the
Trustee, will be issued to the designated transferee or transferees.
The LYONs are issuable only in registered form without coupons
in denominations of $1,000 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations set forth therein and on the face
of this LYON, LYONs are exchangeable for a like aggregate Principal Amount at
Maturity of LYONs of a different authorized denomination as requested by the
Holder surrendering the same.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this LYON for registration of
transfer, the Company, the Trustee or any agent of the Company or the Trustee
may treat the Person in whose name this LYON is registered as the owner hereof
for all purposes, whether or not this LYON be overdue, and neither the Company,
the Trustee nor any such agent shall be affected by notice to the contrary.
Ownership Limitation on LYONs
In order to permit the Company to retain its status as a
publicly traded corporation under the proposed Treasury regulations to Section
883 of the Internal Revenue Code of 1986, as amended (the "Code"), LYONs
generally may not be transferred if the transfer would result in the ownership,
including LYONs and other convertible securities of the Company on an
as-converted basis, by one Person or a group of related Persons by virtue of the
attribution provisions of the Code, of more than 4.9% of the outstanding Common
Stock of the Company.
Amendment, Supplement and Waiver
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the LYONs under the
Indenture at any time by the Company and the Trustee with the consent of the
Holders of a majority in Principal Amount at Maturity of the LYONs at the time
Outstanding. The Indenture also contains provisions permitting the Holders of
specified percentages in Principal Amount at Maturity of the LYONs at the time
Outstanding, on behalf of the Holders of all LYONs, to waive compliance by the
Company with certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this LYON shall be conclusive and
binding upon such Holder and upon all future Holders of this LYON and of any
LYON issued upon the registration of transfer hereof or in exchange hereof or in
lieu hereof, whether or not notation of such consent or waiver is made upon this
LYON.
Successor Corporation
When a successor corporation assumes all the obligations of
its predecessor under the LYONs and the Indenture in accordance with the terms
and conditions of the Indenture, the predecessor corporation will (except in
certain circumstances specified in the Indenture) be released from those
obligations.
Defaults and Remedies
Under the Indenture, Events of Default include (i) default in
the payment of any Liquidated Damages and continuance of such default for a
period of 30 days; (ii) default in payment of the Principal Amount at Maturity,
Redemption Price, Repurchase Price or Change in Control Purchase Price, as the
case may be, in respect of the LYONs when the same becomes due and payable;
(iii) failure by the Company to comply with other agreements in the Indenture
for the benefit of the LYONs, subject to notice and lapse of time; (iv) default
under any bond, debenture, note or other evidence of indebtedness for money
borrowed of the Company or any Subsidiary having an aggregate outstanding
principal amount in excess of $50,000,000 (excluding such indebtedness of any
Subsidiary other than a Significant Subsidiary, all the indebtedness of which is
nonrecourse to the Company or any other Subsidiary), which default shall be with
respect to payment or shall have resulted in such indebtedness being
accelerated, without such indebtedness being discharged or such acceleration
having been rescinded or annulled, subject to notice and passage of time; and
(v) certain events of bankruptcy, insolvency or reorganization of the Company or
any Significant Subsidiary. If an Event of Default with respect to LYONs shall
occur and be continuing, the Accreted Principal Amount through the acceleration
date may be declared due and payable in the manner and with the effect provided
in the Indenture. If an Event of Default occurs as a result of certain events of
bankruptcy, insolvency or reorganization of the Company, the Accreted Principal
Amount on the LYONs Outstanding shall become due and payable immediately without
any declaration or other act on the part of the Trustee or any Holder, all as
and to the extent provided in the Indenture.
Indenture
The Company issued the LYONs under an Indenture dated as of
April 25, 2001, as supplemented and amended by a Second Supplemental Indenture
dated as of October 24, 2001 (as amended, the "Indenture"), among the Company
and the Trustee. The terms of the Securities include those stated in the
Indenture and those made part of the Indenture by reference to the Securities
themselves and the Trust Indenture Act of 1939, as in effect from time to time
(the "TIA"). Capitalized terms used herein and not defined herein have the
meanings ascribed thereto in the Indenture. The Securities are subject to all
such terms, and Holders are referred to the Indenture and the TIA for a
statement of those terms.
No Recourse Against Others
No recourse shall be had for the payment of the principal of
or the interest, if any, on this LYON, for any claim based hereon, or otherwise
in respect hereof, or based on or in respect of the Indenture or any indenture
supplemental thereto, against any
incorporator, shareholder, officer or director, as such, past, present or
future, of the Company or of any successor corporation, whether by virtue of any
constitution, statute or rule of law or by the enforcement of any assessment of
penalty or otherwise, all such liability being, by acceptance hereof and as part
of the consideration for the issue hereof, expressly waived and released.
Authentication
This LYON shall not be valid until the Trustee or an
authenticating agent manually signs the certificate of authentication on the
other side of this LYON.
Indenture to Control; Governing Law
In the case of any conflict between the provisions of this
LYON and the Indenture, the provisions of the Indenture shall control.
THE INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
THE CONFLICTS OF LAW RULES OF SAID STATE.
Abbreviations and Definitions
Customary abbreviations may be used in the name of the Holder
or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by
the entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common),
CUST (= Custodian) and U/G/M/A (= Uniform Gifts to Minors
Act).
All terms defined in the Indenture and used in this LYON but
not specifically defined herein are defined in the Indenture and are used herein
as so defined.
CONVERSION NOTICE
To convert this LYON into Common Stock of the Company, check
the box: (
To convert only part of this LYON, state the Principal Amount
at Maturity to be converted (must be $1,000 or a multiple of $1,000):
$__________.
If you want the stock certificate made out in another person's
name, fill in the form below:
_ (Insert other person's soc. sec. or tax I.D. no.)
_ (Print or type other person's name, address and zip code)
Your Signature:___________________________________ Date:
(Sign exactly as your name appears on the other side of this
LYON)
Signature guaranteed by:_
By:
OPTION OF HOLDER TO ELECT PURCHASE ON CHANGE IN_CONTROL
If you want to elect to have this LYON purchased, in whole or
in part, by the Company pursuant to Section 701 of the Indenture, check the
following box: (
If you want to have only part of this LYON purchased by the
Company pursuant to Section 701 of the Indenture, state the Principal Amount at
Maturity you want to be purchased (must be $1,000 or a multiple of $1,000):
$___________.
Signature guaranteed by:_
By:
SCHEDULE OF EXCHANGES OF SECURITIES_
The following exchanges, redemptions, repurchases or
conversions of a part of this Global Security have been made:
Date of Transaction_Amount of Decrease in_Principal Amount at
Maturity of this_Global Security_Amount of Increase in_Principal Amount at
Maturity of the_Global
Security__________________________________________________________
Exhibit B-1
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR_REGISTRATION OF TRANSFER OF RESTRICTED SECURITIES_
Re: Liquid Yield Option Notes"! due 2021 (the _ LYONs_ ) of
Carnival Corporation
This certificate relates to $___________ Principal Amount at
Maturity of Securities owned in (check applicable box)
( book-entry or
( definitive form
by _______________________________________ (the "Transferor").
The Transferor has requested a Security Registrar or the
Trustee to exchange or register the transfer of such LYONs.
In connection with such request and in respect of each such
Security, the Transferor does hereby certify that the Transferor is familiar
with transfer restrictions relating to the LYONs as provided in Section 202 of
the Second Supplemental Indenture dated as of October 24, 2001 (the
"Indenture"), between Carnival Corporation and US Bank Trust National
Association, as trustee.
In connection with any transfer of any of the LYONs evidenced
by this certificate occurring prior to the expiration of the period referred to
in Rule 144(k) under the Securities Act after the later of the date of original
issuance of the Securities and the last date, if any, on which such LYONs were
owned by the Company or any Affiliate of the Company, the undersigned confirms
that such LYONs are being transferred in accordance with its terms:
CHECK ONE BOX BELOW
(1) _(_to the Company or a subsidiary of the Company; or__(2)
_(_pursuant to an effective registration statement under the Securities Act of
1933; or__(3) _(_to a "qualified institutional buyer" (as defined in Rule 144A
under the Securities Act of 1933) that purchases for its own account or for the
account of a qualified institutional buyer to whom notice is given that such
transfer is being made in reliance on Rule 144A, in each case pursuant to and in
compliance with Rule 144A under the Securities Act of 1933; or__(4)_(_to an
institutional accredited investor, defined in Rule 501(a)(1), (2), (3) or (7) of
Regulation D under the Securities Act; or__(5)_(_pursuant to another available
exemption from registration under the Securities Act of 1933.__Unless one of the
boxes is checked, the Trustee will refuse to register any of the LYONs evidenced
by this certificate in the name of any person other than the registered holder
thereof, provided, however, that if box (4) or (5) is checked, the Trustee may
require, prior to registering any such transfer of the LYONs, such legal
opinions, certifications and other information as the Company has reasonably
requested to confirm that such transfer is being made pursuant to an exemption
from, or in a transaction not subject to, the registration requirements of the
LYONs Act of 1933, such as the exemption provided by Rule 144 under such Act.
_Signature
Signature Guarantee:
_Signature must be guaranteed Signature
TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing
this LYON for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, and is aware that the sale to it is being made in reliance on Rule 144A
and acknowledges that it has received such information regarding the Company as
the undersigned has requested pursuant to Rule 144A or has determined not to
request such information and that it is aware that the transferor is relying
upon the undersigned's foregoing representations in order to claim the exemption
from registration provided by Rule 144A.
Dated: _ NOTICE: To be executed by an
executive officer
EXHIBIT B-2
Form of Letter to be Delivered by Accredited Investors
Carnival Corporation_3655 N.W. 87th Avenue,_Miami, Florida
33178-2428 _Attention: Corporate Secretary
US Bank Trust National Association, as Security Registrar_100
Wall Street, 16th floor_New York, NY 10005_Attention: Corporate Trust
Administration
__Dear Sirs:
We are delivering this letter in connection with the proposed
transfer of $_____________ Principal Amount at Maturity of the Liquid Yield
Option "! Notes due 2021 (the _ LYONs_ ) of Carnival Corporation (the _ Company_
), which are convertible into shares of Common Stock of the Company.
We hereby confirm that:
(i) we are an _ accredited investor_ within the meaning of
Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act of
1933, as amended (the "Securities Act"), or an entity in which all of the equity
owners are "accredited investors" within the meaning of Rule 501(a)(1), (2), (3)
or (7) of Regulation D under the Securities Act (an "Institutional Accredited
Investor");
(ii) the purchase of LYONs by us is for our own account or for
the account of one or more other Institutional Accredited Investors or as
fiduciary for the account of one or more trusts, each of which is an "accredited
investor" within the meaning of Rule 501(a)(7) under the Securities Act and for
each of which we exercise sole investment discretion or (B) we are a "bank,"
within the meaning of Section 3(a)(2) of the Securities Act, or a "savings and
loan association" or other institution described in Section 3(a)(5)(A) of the
Securities Act that is acquiring Debentures as fiduciary for the account of one
or more institutions for which we exercise sole investment discretion;
(iii) we will acquire LYONs having a minimum aggregate
Principal Amount at Maturity of not less than $100,000 for our own account or
for any separate account for which we are acting;
(iv) we have such knowledge and experience in financial and
business matters that we are capable of evaluating the merits and risks of
purchasing LYONs; and
(v) we are not acquiring LYONs with a view to distribution
thereof or with any present intention of offering or selling LYONs or the Common
Stock deliverable upon conversion thereof, except as permitted below; provided
that the disposition of our property and property of any accounts for which we
are acting as fiduciary shall remain at all times within our control.
We understand that the LYONs were originally offered and sold
in a transaction not ed States within the meaning of the Securities Act and that
the LYONs and the shares of Common Stock (the "Securities") issuable upon
conversion thereof have not been registered under the Securities Act, and we
agree, on our own behalf and on behalf of each account for which we acquire any
LYONs, that if in the future we decide to resell or otherwise transfer such
LYONs prior to the date on which the LYONs are transferable pursuant to Rule
144(k) under the Securities Act, such LYONs may be resold or otherwise
transferred only (i) to the Company or any subsidiary thereof, or (ii) for as
long as the Debentures are eligible for resale pursuant to Rule 144A, to a
person we reasonably believe to be a "qualified institutional buyer" (as defined
in Rule 144A under the Securities Act) that purchases for its own account or for
the account of such a qualified institutional buyer to which notice is given
that the transfer is being made in reliance on Rule 144A, or (iii) to an
Institutional Accredited Investor that is acquiring the LYONs for its own
account, or for the account of such an Institutional Accredited Investor for
investment purposes and not with a view to, or for offer or sale in connection
with, any distribution in violation of the Securities Act, or (iv) pursuant to
another available exemption from registration under the Securities Act (if
applicable), or (v) pursuant to a registration statement which has been declared
effective under the Securities Act and, in each case, in accordance with any
applicable securities laws of any State of the United States or any other
applicable jurisdiction and in accordance with the legends set forth on the
Securities. We further agree to provide any person purchasing any of the LYONs
other than pursuant to clause (v) above from us a notice advising such purchaser
that resales of such securities are restricted as stated herein. We understand
that the trustee or the transfer agent, as the case may be, for the Securities
will not be required to accept for registration of transfer any LYONs pursuant
to (iii) or (iv) above except upon presentation of evidence satisfactory to the
Company and the trustee that the foregoing restrictions on transfer have been
complied with. We further understand that any LYONs will be in the form of
definitive physical certificates and that such certificates will bear a legend
reflecting the substance of this paragraph other than certificates representing
LYONs transferred pursuant to clause (v) above.
We acknowledge that the Company, others, the Trustee, the
Security Registrar and you will rely upon our confirmations, acknowledgments and
agreements set
forth herein, and we agree to notify you promptly in writing if any of our
representations or warranties herein ceases to be accurate and complete.
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK.
_(Name of Purchaser)
By: _ Name: _ Title:_
Address:
TM Trademark of Merrill Lynch & Co., Inc.
_ These paragraphs should be included only if the Security is
a Global Security.
_ [These paragraphs to be included only if the Security is a
Transfer Restricted Security.]
_ [To be included only if the Security is a Global Security.]
_ The Signature must be guaranteed by an institution which is
a member of one of the following recognized signature guaranty programs: (i) the
Securities Transfer Agent Medallion Program (STAMP); (ii) the New York Stock
Exchange Medallion Program (MSP); (iii) the Stock Exchange Medallion Program
(SEMP); or (iv) such other guaranty program acceptable to the Trustee.
_ The Signature must be guaranteed by an institution which is
a member of one of the following recognized signature guaranty programs: (i) the
Securities Transfer Agent Medallion Program (STAMP); (ii) the New York Stock
Exchange Medallion Program (MSP); (iii) the Stock Exchange Medallion Program
(SEMP); or (iv) such other guaranty program acceptable to the Trustee.
_ This schedule should be included only if the Security is a
Global Security.
_ This certificate should only be included if this Security is
a Transfer Restricted Security.
EXHIBIT 4.7
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made
and entered into as of October 24, 2001, by and between CARNIVAL CORPORATION, a
corporation organized and existing pursuant to the laws of the Republic of
Panama (the "Company") and MERRILL LYNCH & CO., MERRILL LYNCH, PIERCE, FENNER &
SMITH INCORPORATED (the "Initial Purchaser").
This Agreement is made pursuant to the Purchase Agreement,
dated October 19, 2001 (the "Purchase Agreement"), between the Company, as
issuer of the Liquid Yield OptionTM Notes due 2021 (the "LYONs"), and the
Initial Purchaser, which provides for, among other things, the sale by the
Company to the Initial Purchaser of the aggregate principal amount at maturity
of LYONs specified therein. In order to induce the Initial Purchaser to enter
into the Purchase Agreement, the Company has agreed to provide the registration
rights set forth in this Agreement. The execution of this Agreement is a
condition to the closing under the Purchase Agreement.
The Company agrees with the Initial Purchaser, (i) for its
benefit as Initial Purchaser and (ii) for the benefit of the beneficial owners
(including the Initial Purchaser) from time to time of the LYONs, and the
beneficial owners from time to time of the Underlying Common Stock (as defined
herein) issued upon conversion of, if any, (each of the foregoing a "Holder" and
together the "Holders"), as follows:
SECTION 1. DEFINITIONS. Capitalized terms used herein without
definition shall have their respective meanings set forth in the Purchase
Agreement. As used in this Agreement, the following terms shall have the
following meanings:
"Affiliate" With respect to any specified person, an
"affiliate," as defined in Rule 144, of such person.
"Applicable Conversion Price" The Applicable Conversion Price,
as of any date of determination, means the Applicable Principal Amount per
$1,000 principal amount at maturity of LYONs as of such date of determination
divided by the Conversion Rate in effect as of such date of determination or, if
no LYONs are then outstanding, the Conversion Rate that would be in effect were
LYONs then outstanding.
"Applicable Principal Amount" The Applicable Principal Amount,
as of any date of determination, means with respect to each $1,000 principal
amount at maturity of LYONs, the sum of the Issue Price (as defined in the
Indenture) of such LYONs plus accrued Original Issue Discount (as defined in the
Indenture) with respect to such LYONs through such date of determination.
"Business Day" Each Monday, Tuesday, Wednesday, Thursday and
Friday that is not a day on which banking institutions in The City of New York
are authorized or obligated by law or executive order to close.
"Common Stock" The Common Stock, $0.01 par value, of the
Company and any other shares of common stock as may constitute "Common Stock"
for purposes of the Indenture, including the Underlying Common Stock.
"Company" See the first paragraph hereof.
"Conversion Rate" Conversion Rate shall have the meaning
assigned to such term in the Indenture.
"Damages Accrual Period" See Section 2(e) hereof.
"Damages Payment Date" Each April 24 and October 24.
"Deferral Notice" See Section 3(h) hereof.
"Deferral Period" See Section 3(h) hereof.
"Effectiveness Deadline Date" See Section 2(a) hereof.
"Effectiveness Period" The period of two years from the Issue
Date or such shorter period ending on the date that all Registrable Securities
have ceased to be Registrable Securities.
"Event" See Section 2(e) hereof.
"Event Date" See Section 2(e) hereof.
"Event Termination Date" See Section 2(e) hereof.
"Exchange Act" The Securities Exchange Act of 1934, as
amended, and the rules and regulations of the SEC promulgated thereunder.
"Filing Deadline Date" See Section 2(a) hereof.
"Holder" See the third paragraph hereof.
"Indenture" The Indenture, dated as of April 25, 2001, between
the Company and U.S. Bank Trust National Association, as trustee, as amended and
supplemented by the Second Supplemental Indenture, dated as of October 24, 2001,
pursuant to which the LYONs are being issued.
"Initial Purchaser" See the first paragraph of this Agreement.
"Initial Shelf Registration Statement" See Section 2(a)
hereof.
"Issue Date" means October 24, 2001.
"Liquidated Damages Amount" See Section 2(e) hereof.
2
"LYONs" See the second paragraph hereof.
"Material Event" See Section 3(h) hereof.
"Notice and Questionnaire" A written notice delivered to the
Company containing substantially the information called for by the Selling
Securityholder Notice and Questionnaire attached as Annex A to the Offering
Memorandum of the Company, dated October 19, 2001, relating to the LYONs.
"Notice Holder" On any date, any Holder that has delivered a
Notice and Questionnaire to the Company on or prior to such date.
"Prospectus" The prospectus included in any Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 415 promulgated under the
Securities Act), as amended or supplemented by any amendment or prospectus
supplement, including post-effective amendments, and all materials incorporated
by reference in such Prospectus.
"Purchase Agreement" See the second paragraph hereof.
"Record Date" With respect to any Damages Payment Date
relating to any LYON or Underlying Common Stock as to which any Liquidated
Damages Amount has accrued, (i) the 14th day immediately preceding such Damages
Payment Date if the Damages Accrual Period has not ended, or (ii) the date of
the end Damages Accrual Period.
"Record Holder" With respect to any Damages Payment Date
relating to any LYON or Underlying Common Stock as to which any Liquidated
Damages Amount has accrued, the registered holder of such LYON or Underlying
Common Stock, as the case may be, on the Record Date.
"Registrable Securities" The Securities, until such securities
have been converted or exchanged and, at all times subsequent to any such
conversion or exchange, any securities into or for which such securities have
been converted or exchanged, and any security issued with respect thereto upon
any stock dividend, split, merger or similar event until, in the case of any
such security, the earliest of (i) its effective registration under the
Securities Act and resale in accordance with the Registration Statement covering
it, (ii) expiration of the holding period that would be applicable thereto under
Rule 144(k) were it not held by an Affiliate of the Company or (iii) its sale to
the public pursuant to Rule 144.
"Registration Expenses" See Section 5 hereof.
"Registration Statement" Any registration statement of the
Company that covers any of the Registrable Securities pursuant to the provisions
of this Agreement, including the Prospectus, amendments and supplements to such
registration statement, including post-effective amendments, all exhibits, and
all materials incorporated by reference in such registration statement.
3
"Restricted Securities" As this term is defined in Rule 144.
"Rule 144" Rule 144 under the Securities Act, as such Rule may
be amended from time to time, or any similar rule or regulation hereafter
adopted by the SEC.
"Rule 144A" Rule 144A under the Securities Act, as such Rule
may be amended from time to time, or any similar rule or regulation hereafter
adopted by the SEC.
"SEC" The Securities and Exchange Commission.
"Securities" Collectively means the LYONs and the Underlying
Common Stock.
"Securities Act" The Securities Act of 1933, as amended, and
the rules and regulations promulgated by the SEC thereunder.
"Shelf Registration Statement" See Section 2(a) hereof.
"Subsequent Shelf Registration Statement" See Section 2(b)
hereof.
"TIA" The Trust Indenture Act of 1939, as amended.
"Trustee" U.S. Bank Trust Company (or any successor entity),
the Trustee under the Indenture.
"Underlying Common Stock" The Common Stock into which the
LYONs are convertible or issued upon any such conversion.
SECTION 2. SHELF REGISTRATION.
(a) The Company shall prepare and file or cause to be prepared
and filed with the SEC no later than a date which is ninety (90) days after the
Issue Date (the "Filing Deadline Date") a Registration Statement for an offering
to be made on a delayed or continuous basis pursuant to Rule 415 of the
Securities Act (a "Shelf Registration Statement") registering the resale from
time to time by Holders thereof of all of the Registrable Securities (the
"Initial Shelf Registration Statement"). The Initial Shelf Registration
Statement shall be on Form S-3 or another appropriate form permitting
registration of such Registrable Securities for resale by such Holders in
accordance with the methods of distribution reasonably elected by the Holders
and set forth in the Initial Shelf Registration Statement; provided, that in no
event will such method(s) of distribution take the form of an underwritten
offering of the Registrable Securities without the prior agreement of the
Company. The Company shall use reasonable best efforts to cause the Initial
Shelf Registration Statement to be declared effective under the Securities Act
by the date (the "Effectiveness Deadline Date") that is one hundred and eighty
(180) days after the Issue Date, and to keep the Initial Shelf Registration
Statement (or any Subsequent Shelf Registration Statement) continuously
effective under the Securities Act until the expiration of the Effectiveness
Period subject to the rights of the Company under Section 3(h) to create a
Deferral Period. At the time the Initial Shelf Registration Statement is
declared effective, each Holder that became a Notice Holder on or prior to the
date 10 Business Days prior to such time of effectiveness shall be named as a
selling securityholder in the Initial Shelf Registration
4
Statement and the related Prospectus in such a manner as to permit such Holder
to deliver such Prospectus to purchasers of Registrable Securities in accordance
with applicable law under ordinary circumstances, subject to compliance with
blue sky laws. The Company shall not permit any of its securityholders (other
than the Holders of Registrable Securities) to include any of the Company's
securities in the Shelf Registration Statement.
(b) If the Initial Shelf Registration Statement or any
Subsequent Shelf Registration Statement ceases to be effective other than during
a Deferral Period for any reason at any time during the Effectiveness Period,
the Company shall use reasonable efforts to obtain the prompt withdrawal of any
order suspending the effectiveness thereof, and in any event shall within thirty
(30) days of such cessation of effectiveness amend the Shelf Registration
Statement in a manner reasonably expected by the Company to obtain the
withdrawal of the order suspending the effectiveness thereof, or file an
additional Shelf Registration Statement covering all of the Securities that as
of the date of such filing are Registrable Securities (a "Subsequent Shelf
Registration Statement"). If a Subsequent Shelf Registration Statement is filed,
the Company shall use reasonable efforts to cause the Subsequent Shelf
Registration Statement to become effective as promptly as reasonably practicable
after such filing, unless during a Deferral Period, or, if filed during a
Deferral Period, after the expiration of a Deferral Period, and to keep such
Registration Statement (or subsequent Shelf Registration Statement) continuously
effective until the end of the Effectiveness Period.
(c) The Company shall supplement and amend the Shelf
Registration Statement if required by the rules, regulations or instructions
applicable to the registration form used by the Company for such Shelf
Registration Statement if required by the Securities Act.
(d) Each Holder of Registrable Securities agrees that if such
Holder wishes to sell Registrable Securities pursuant to a Shelf Registration
Statement and related Prospectus, it will do so only in accordance with this
Section 2(d) and Section 3(h). Each Holder of Registrable Securities wishing to
sell Registrable Securities pursuant to a Shelf Registration Statement and
related Prospectus agrees to deliver a Notice and Questionnaire to the Company
at least ten (10) Business Days prior to any intended distribution of
Registrable Securities under the Shelf Registration Statement. From and after
the date the Initial Shelf Registration Statement is declared effective, the
Company shall, as promptly as reasonably practicable after the date a Notice and
Questionnaire is delivered, (i) if required by applicable law, file with the SEC
a post-effective amendment to the Shelf Registration Statement or prepare and,
if required by applicable law, file a supplement to the related Prospectus or a
supplement or amendment to any document incorporated therein by reference or
file any other document required by the SEC so that the Holder delivering such
Notice and Questionnaire is named as a selling securityholder in the Shelf
Registration Statement and the related Prospectus in such a manner as to permit
such Holder to deliver such Prospectus to purchasers of the Registrable
Securities in accordance with applicable law and, if the Company shall file a
post-effective amendment to the Shelf Registration Statement, use reasonable
efforts to cause such post-effective amendment to be declared effective under
the Securities Act as promptly as reasonably practicable; (ii) provide such
Holder copies of any documents filed pursuant to Section 2(d)(i); and (iii)
notify such Holder as promptly as reasonably practicable after the effectiveness
under the Securities Act of any post-effective amendment filed pursuant to
Section 2(d)(i); provided, that if such Notice and Questionnaire is delivered
during a Deferral Period, the Company shall so inform the Holder
5
delivering such Notice and Questionnaire and shall take the actions set forth in
clauses (i), (ii) and (iii) above upon expiration of the Deferral Period in
accordance with Section 3(h). Notwithstanding anything contained herein to the
contrary, the Company shall be under no obligation to name any Holder that is
not a Notice Holder as a selling securityholder in any Registration Statement or
related Prospectus; provided, however, that any Holder that becomes a Notice
Holder pursuant to the provisions of Section 2(d) of this Agreement (whether or
not such Holder was a Notice Holder at the time the Registration Statement was
initially declared effective) shall be named as a selling securityholder in the
Registration Statement or related Prospectus subject to and in accordance with
the requirements of this Section 2(d).
(e) The parties hereto agree that the Holders of Registrable
Securities will suffer damages, and that it would not be feasible to ascertain
the extent of such damages with precision, if (i) the Initial Shelf Registration
Statement has not been filed on or prior to the Filing Deadline Date, (ii) the
Initial Shelf Registration Statement has not been declared effective under the
Securities Act on or prior to the Effectiveness Deadline Date, or (iii) the
aggregate duration of Deferral Periods in any period exceeds the number of days
permitted in respect of such period pursuant to Section 3(h) hereof (each of the
events of a type described in any of the foregoing clauses (i) through (iii) are
individually referred to herein as an "Event," and the Filing Deadline Date in
the case of clause (i), the Effectiveness Deadline Date in the case of clause
(ii), and the date on which the aggregate duration of Deferral Periods in any
period exceeds the number of days permitted by Section 3(h) hereof in the case
of clause (iii), being referred to herein as an "Event Date"). Events shall be
deemed to continue until the "Event Termination Date," which shall be the
following dates with respect to the respective types of Events: the date the
Initial Shelf Registration Statement is filed in the case of an Event of the
type described in clause (i), the date the Initial Shelf Registration Statement
is declared effective under the Securities Act in the case of an Event of the
type described in clause (ii), termination of the Deferral Period that caused
the limit on the aggregate duration of Deferral Periods in a period set forth in
Section 3(h) to be exceeded in the case of the commencement of an Event of the
type described in clause (iii).
Accordingly, commencing on (and including) any Event Date and
ending on (but excluding) the next date on which there are no Events that have
occurred and are continuing (a "Damages Accrual Period"), the Company agrees to
pay, as liquidated damages and not as a penalty, an amount (the "Liquidated
Damages Amount"), payable on the Damages Payment Dates to Record Holders of then
outstanding LYONs that are Registrable Securities, of then outstanding shares of
Underlying Common Stock issued upon conversion of LYONs that are Registrable
Securities, if any, as the case may be, accruing, for each portion of such
Damages Accrual Period beginning on and including a Damages Payment Date (or, in
respect of the first time that the Liquidation Damages Amount is to be paid to
Record Holders on a Damages Payment Date as a result of the occurrence of any
particular Event, beginning on and including the Event Date) and ending on but
excluding the first to occur of (A) the date of the end of the Damages Accrual
Period or (B) the next Damages Payment Date, at a rate per annum equal to (i) in
respect of any LYONs, at a rate per year equal to 0.25% for the first 90-day
period from the Event Date and 0.50% for each 90-day period thereafter of the
Applicable Principal Amount thereof as of such Event Date and, (ii) in respect
of any shares of Underlying Common Stock, at a rate per year equal to 0.25% for
the first 90-day period from the Event Date and 0.50% for each 90-day period
thereafter of the Applicable Conversion Price as of such Event Date, in each
case determined as of the Record Date; provided, that any Liquidated Damages
Amount accrued with
6
respect to any LYON or portion thereof called for redemption on a redemption
date or converted into Underlying Common Stock on a conversion date prior to the
Damages Payment Date, shall, in any such event, be paid instead to the Holder
who submitted such LYON or portion thereof for redemption or conversion on the
applicable redemption date or conversion date, as the case may be, on such date
(or promptly following the conversion date, in the case of conversion).
Notwithstanding the foregoing, no Liquidated Damages Amounts shall accrue as to
any Registrable Security from and after the earlier of (x) the date such
security is no longer a Registrable Security and (y) expiration of the
Effectiveness Period. The rate of accrual of the Liquidated Damages Amount with
respect to any period shall not exceed the rate provided for in this paragraph
notwithstanding the occurrence of multiple concurrent Events. Following the cure
of all Events requiring the payment by the Company of Liquidated Damages Amounts
to the Holders of Registrable Securities pursuant to this Section, the accrual
of Liquidated Damages Amounts will cease (without in any way limiting the effect
of any subsequent Event requiring the payment of the Liquidated Damages Amount
by the Company).
The Trustee shall be entitled, on behalf of Holders of LYONs
or Underlying Common Stock, to seek any available remedy for the enforcement of
this Agreement, including for the payment of any Liquidated Damages Amount.
Notwithstanding the foregoing, the parties agree that the sole remedy for a
violation of the terms of this Agreement with respect to which liquidated
damages are expressly provided shall be such liquidated damages.
All of the Company's obligations set forth in this Section
2(e) that are outstanding with respect to any Registrable Security at the time
such Security ceases to be a Registrable Security shall survive until such time
as all such obligations with respect to such security have been satisfied in
full (notwithstanding termination of this Agreement pursuant to Section 8(j)).
The parties hereto agree that the liquidated damages provided
for in this Section 2(e) constitute a reasonable estimate of the damages that
may be incurred by Holders of Registrable Securities by reason of the failure of
the Shelf Registration Statement to be filed or declared effective or available
for effecting resales of Registrable Securities in accordance with the
provisions hereof.
SECTION 3. REGISTRATION PROCEDURES. In connection with the registration
obligations of the Company under Section 2 hereof, the Company shall:
(a) Subject to section 3(h), prepare and file with the SEC
such amendments and post-effective amendments to each Registration Statement as
may be necessary to keep such Registration Statement continuously effective for
the applicable period specified in Section 2(a); cause the related Prospectus to
be supplemented by any required Prospectus supplement, and as so supplemented to
be filed pursuant to Rule 424 (or any similar provisions then in force) under
the Securities Act; and use reasonable efforts to comply with the provisions of
the Securities Act applicable to it with respect to the disposition of all
securities covered by such Registration Statement during the Effectiveness
Period in accordance with the intended methods of disposition by the sellers
thereof set forth in such Registration Statement as so amended or such
Prospectus as so supplemented.
7
(b) As promptly as reasonably practicable give notice to the
Notice Holders and the Initial Purchaser (i) when any Prospectus, Prospectus
supplement, Registration Statement or post-effective amendment to a Registration
Statement has been filed with the SEC and, with respect to a Registration
Statement or any post-effective amendment, when the same has been declared
effective, (ii) of any request, following the effectiveness of the Initial Shelf
Registration Statement under the Securities Act, by the SEC or any other federal
or state governmental authority for amendments or supplements to any
Registration Statement or related Prospectus or for additional information,
(iii) of the issuance by the SEC or any other federal or state governmental
authority of any stop order suspending the effectiveness of any Registration
Statement or the initiation or threatening of any proceedings for that purpose,
(iv) of the receipt by the Company of any notification with respect to the
suspension of the qualification or exemption from qualification of any of the
Registrable Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose, (v) of the occurrence of (but
not the nature of or details concerning) a Material Event (provided, however,
that no notice by the Company shall be required pursuant to this clause (v) in
the event that the Company either promptly files a Prospectus supplement to
update the Prospectus or a Form 8-K or other appropriate Exchange Act report
that is incorporated by reference into the Registration Statement, which, in
either case, contains the requisite information with respect to such Material
Event that results in such Registration Statement no longer containing any
untrue statement of material fact or omitting to state a material fact necessary
to make the statements contained therein not misleading) and (vi) of the
determination by the Company that a post-effective amendment to a Registration
Statement will be filed with the SEC, which notice may, at the discretion of the
Company (or as required pursuant to Section 3(h)), state that it constitutes a
Deferral Notice, in which event the provisions of Section 3(h) shall apply.
(c) Use reasonable efforts to obtain the withdrawal of any
order suspending the effectiveness of a Registration Statement or the lifting of
any suspension of the qualification (or exemption from qualification) of any of
the Registrable Securities for sale in any jurisdiction in which they have been
qualified for sale, in either case at the earliest possible moment or, if a
Deferral Period is in effect, at the earliest possible moment after the Deferral
Period.
(d) If reasonably requested by the Initial Purchaser or any
Notice Holder, as promptly as reasonably practicable incorporate in a Prospectus
supplement or post-effective amendment to a Registration Statement such
information as the Initial Purchaser or such Notice Holder shall, on the basis
of an opinion of nationally-recognized counsel experienced in such matters,
determine to be required to be included therein by applicable law and make any
required filings of such Prospectus supplement or such post-effective amendment;
provided, that the Company shall not be required to take any actions under this
Section 3(d) that are not, in the reasonable opinion of counsel for the Company,
in compliance with applicable law or to include the disclosure which at the time
would have an adverse effect on the business or operation of the Company and/or
its Subsidiaries, as determined in good faith by the Company.
(e) As promptly as reasonably practicable furnish to each
Notice Holder and the Initial Purchaser, upon their request and without charge,
at least one (1) conformed copy of the Registration Statement and any amendment
thereto, including financial statements, but excluding schedules, all documents
incorporated or deemed to be incorporated therein by
8
reference and all exhibits (unless requested in writing to the Company by such
Notice Holder or the Initial Purchaser, as the case may be).
(f) During the Effectiveness Period, deliver to each Notice
Holder in connection with any sale of Registrable Securities pursuant to a
Registration Statement, without charge, as many copies of the Prospectus or
Prospectuses relating to such Registrable Securities (including each preliminary
prospectus) and any amendment or supplement thereto as such Notice Holder may
reasonably request; and the Company hereby consents (except during such periods
that a Deferral Notice is outstanding and has not been revoked) to the use of
such Prospectus or each amendment or supplement thereto by each Notice Holder in
connection with any offering and sale of the Registrable Securities covered by
such Prospectus or any amendment or supplement thereto in the manner set forth
therein.
(g) Subject to Section 3(h), prior to any public offering of
the Registrable Securities pursuant to the Shelf Registration Statement, use
commercially reasonable efforts to register or qualify or cooperate with the
Notice Holders in connection with the registration or qualification (or
exemption from such registration or qualification) of such Registrable
Securities for offer and sale under the securities or Blue Sky laws of such
jurisdictions within the United States as any Notice Holder reasonably requests
in writing (which request may be included in the Notice and Questionnaire) it
being agreed that no such registration or qualification will be made unless so
requested; prior to any public offering of the Registrable Securities pursuant
to the Shelf Registration Statement, use reasonable efforts to keep each such
registration or qualification (or exemption therefrom) effective during the
Effectiveness Period in connection with such Notice Holder's offer and sale of
Registrable Securities pursuant to such registration or qualification (or
exemption therefrom) and do any and all other acts or things necessary to enable
the disposition in such jurisdictions of such Registrable Securities in the
manner set forth in the relevant Registration Statement and the related
Prospectus; provided, that the Company will not be required to (i) qualify as a
foreign corporation or as a dealer in securities in any jurisdiction where it is
not otherwise qualified but for this Agreement or (ii) take any action that
would subject it to general service of process in suits or to taxation in any
such jurisdiction where it is not then so subject.
(h) Upon (A) the issuance by the SEC of a stop order
suspending the effectiveness of the Shelf Registration Statement or the
initiation of proceedings with respect to the Shelf Registration Statement under
Section 8(d) or 8(e) of the Securities Act, (B) the occurrence of any event or
the existence of any fact (a "Material Event") as a result of which any
Registration Statement shall contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading, or any Prospectus shall contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading, or (C) the
occurrence or existence of any corporate development that, in the discretion of
the Company, makes it appropriate to suspend the availability of the Shelf
Registration Statement and the related Prospectus, (i) in the case of clause (B)
above, subject to the next sentence, as promptly as reasonably practicable
prepare and file a post-effective amendment to such Registration Statement or a
supplement to the related Prospectus or any document incorporated therein by
reference or file any other required document that would be incorporated by
reference into such
9
Registration Statement and Prospectus so that such Registration Statement does
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, and such Prospectus does not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, as thereafter
delivered to the purchasers of the Registrable Securities being sold thereunder,
and, in the case of a post-effective amendment to a Registration Statement,
subject to the next sentence, use reasonable efforts to cause it to be declared
effective as promptly as is reasonably practicable, and (ii) give notice to the
Notice Holders that the availability of the Shelf Registration Statement is
suspended (a "Deferral Notice") and, upon receipt of any Deferral Notice, each
Notice Holder agrees to suspend the use of the Prospectus and not to sell any
Registrable Securities pursuant to the Registration Statement until such Notice
Holder's receipt of copies of the supplemented or amended Prospectus provided
for in clause (i) above, or until it is advised in writing by the Company that
the Prospectus may be used, and has received copies of any additional or
supplemental filings that are incorporated or deemed incorporated by reference
in such Prospectus. The Company will use all reasonable efforts to ensure that
the use of the Prospectus may be resumed (x) in the case of clause (A) above, as
promptly as reasonably practicable, (y) in the case of clause (B) above, as soon
as, in the sole judgment of the Company, public disclosure of such Material
Event would not be prejudicial to or contrary to the interests of the Company
or, if necessary to avoid unreasonable burden or expense, as soon as reasonably
practicable thereafter and (z) in the case of clause (C) above, as soon as, in
the discretion of the Company, such suspension is no longer appropriate. The
period during which the availability of the Registration Statement and any
Prospectus is suspended (the "Deferral Period") shall, without the Company
incurring any obligation to pay liquidated damages pursuant to Section 2(e), not
exceed sixty (60) days in any three (3) month period or one hundred and twenty
(120) days in any twelve (12) month period.
(i) If reasonably requested in writing in connection with a
disposition of Registrable Securities pursuant to a Registration Statement, make
reasonably available for inspection during normal business hours by a
representative for the Notice Holders of such Registrable Securities and any
broker-dealers, attorneys and accountants retained by such Notice Holders, all
relevant financial and other records, pertinent corporate documents and
properties of the Company and its subsidiaries, and cause the appropriate
executive officers, directors and designated employees of the Company and its
subsidiaries to make reasonably available for inspection during normal business
hours all relevant information reasonably requested by such representative for
the Notice Holders or any such broker-dealers, attorneys or accountants in
connection with such disposition, in each case as is customary for similar "due
diligence" examinations; provided, however, that such persons shall first agree
in writing with the Company that any information that is reasonably designated
by the Company in writing as confidential at the time of delivery of such
information shall be kept confidential by such persons and shall be used solely
for the purposes of exercising rights under this Agreement and such person shall
comply with applicable securities laws, unless (i) disclosure of such
information is required by court or administrative order or is necessary to
respond to inquiries of regulatory authorities, (ii) disclosure of such
information is required by law (including any disclosure requirements pursuant
to federal securities laws in connection with the filing of any Registration
Statement or the use of any Prospectus referred to in this Agreement), (iii)
such information becomes generally available to the public other than as a
result of a disclosure or failure to safeguard by
10
any such person or (iv) such information becomes available to any such person
from a source other than the Company and such source is not bound by a
confidentiality agreement or fiduciary obligations; and provided further, that
the foregoing inspection and information gathering shall, to the greatest extent
possible, be coordinated on behalf of all the Notice Holders and the other
parties entitled thereto by the counsel referred to in Section 5.
(j) Comply with all applicable rules and regulations of the
SEC and make generally available to its securityholders earning statements
(which need not be audited) satisfying the provisions of Section 11(a) of the
Securities Act and Rule 158 thereunder (or any similar rule promulgated under
the Securities Act) no later than 90 days after the end of the first 12-month
period constituting a fiscal year commencing on the first day of the first
fiscal quarter of the first fiscal year of the Company commencing after the
effective date of a Registration Statement, which statements shall cover said
12-month periods.
(k) Cooperate with each Notice Holder to facilitate the timely
preparation and delivery of certificates representing Registrable Securities
sold pursuant to a Registration Statement, and cause such Registrable Securities
to be in such denominations as are permitted by the Indenture and registered in
such names as such Notice Holder may request in writing at least two Business
Days prior to any sale of such Registrable Securities.
(l) Provide a CUSIP number for all Registrable Securities
covered by each Registration Statement not later than the effective date of such
Registration Statement and provide the Trustee for the LYONs and the transfer
agent for the Common Stock with certificates for the Registrable Securities that
are in a form eligible for deposit with The Depository Trust Company.
(m) Make reasonable effort to provide such information as is
required for any filings required to be made with the National Association of
Securities Dealers, Inc.
(n) Enter into such customary agreements and take all such
other reasonable necessary actions in connection therewith (including those
reasonably requested by the holders of a majority of the Registrable Securities
being sold) in order to expedite or facilitate the registration or the
disposition of such Registrable Securities; provided that the Company shall not
be required to take any action in connection with an underwritten offering
without its consent; and
(o) Cause the Indenture to be qualified under the TIA not
later than the effective date of any Registration Statement; and in connection
therewith, cooperate with the Trustee to effect such changes to the Indenture as
may be required for the Indenture to be so qualified in accordance with the
terms of the TIA and execute, and use reasonable efforts to cause the Trustee to
execute, all documents as may be required to effect such changes, and all other
forms and documents required to be filed with the SEC to enable the Indenture to
be so qualified in a timely manner.
SECTION 4. HOLDER'S OBLIGATIONS. Each Holder agrees, by acquisition of
the Registrable Securities, that no Holder of Registrable Securities shall be
entitled to sell any of such Registrable Securities pursuant to a Registration
Statement or to receive a Prospectus
11
relating thereto, unless such Holder has furnished the Company with a Notice and
Questionnaire as required pursuant to Section 2(d) hereof (including the
information required to be included in such Notice and Questionnaire) and the
information set forth in the next sentence. Each Notice Holder agrees promptly
to furnish to the Company all information required to be disclosed in order to
make the information previously furnished to the Company by such Notice Holder
not misleading and any other information regarding such Notice Holder and the
distribution of such Registrable Securities as may be required to be disclosed
in the Registration Statement under applicable law or pursuant to SEC comments.
Each Holder further agrees to notify the Company within 10 business days of
request, of the amount of Registrable Securities sold pursuant to the
Registration Statement and, in the absence of a response, the Company may assume
that all of the Holder's Registrable Securities were so sold.
In addition, each Holder agrees that:
(a) upon receipt of a Deferral Notice, it will keep the fact
of such notice confidential, forthwith discontinue disposition of its
Registrable Securities pursuant to the Registration Statement, and will not
deliver any Prospectus forming part thereof until receipt of the amended or
supplemented Registration Statement or Prospectus, as applicable, or until it is
advised in writing by the Company that the Prospectus may be used and has
received copies of any additional or supplemental filings that are incorporated
or deemed incorporated by reference in such Prospectus;
(b) if so directed by the Company in the Deferral Notice, it
will deliver to the Company (at the Company's expense) all copies, other than
permanent file copies then in its possession, of the Prospectus; and
(c) the sale of the Registrable Securities pursuant to a
Registration Statement shall only be made in the manner set forth in such
currently effective Registration Statement.
SECTION 5. REGISTRATION EXPENSES. The Company shall bear all fees and
expenses incurred in connection with the performance by the Company of its
obligations under Sections 2 and 3 of this Agreement whether or not any of the
Registration Statements are declared effective. Such fees and expenses shall
include, without limitation, (i) all registration and filing fees (including,
without limitation, fees and expenses (x) with respect to filings required to be
made with the National Association of Securities Dealers, Inc. and (y) of
compliance with federal and state securities or Blue Sky laws to the extent such
filings or compliance are required pursuant to this Agreement (including fees
and expenses of the Company's counsel)), (ii) printing expenses (including,
without limitation, expenses of printing certificates for Registrable Securities
in a form eligible for deposit with The Depository Trust Company), (iii)
duplication expenses relating to copies of any Registration Statement or
Prospectus delivered to any Holders hereunder, (iv) fees and disbursements of
counsel for the Company in connection with the Shelf Registration Statement, and
(v) reasonable fees and disbursements of the Trustee and its counsel and of the
registrar and transfer agent for the Common Stock. In addition, the Company
shall pay the internal expenses of the Company (including, without limitation,
all salaries and expenses of officers and employees performing legal or
accounting duties), the expense of any annual audit, the fees and expenses
incurred in connection with the listing of the Registrable Securities on any
securities exchange on which the same securities of the Company are then
12
listed and the fees and expenses of any person, including special experts,
retained by the Company.
SECTION 6. INDEMNIFICATION; CONTRIBUTION.
(a) The Company agrees to indemnify and hold harmless the
Initial Purchaser and each holder of Registrable Securities and each person, if
any, who controls the Initial Purchaser or any holder of Registrable Securities
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act, as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue
statement or alleged untrue statement of a material fact
contained in the Registration Statement (or any amendment
thereto), or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to
make the statements therein not misleading or arising out of
any untrue statement or alleged untrue statement of a material
fact included in any preliminary prospectus or the Prospectus
(or any amendment or supplement thereto), or the omission or
alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, to the extent of the
aggregate amount paid in settlement of any litigation, or any
investigation or proceeding by any governmental agency or
body, commenced or threatened, or of any claim whatsoever
based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, provided that (subject
to Section 6(d) below) any such settlement is effected with
the prior written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by the
Initial Purchaser), reasonably incurred in investigating,
preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based
upon any such untrue statement or omission, or any such
alleged untrue statement or omission, to the extent that any
such expense is not paid under (i) or (ii) above;
PROVIDED, HOWEVER, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by the
Initial Purchaser, such holder of Registrable Securities (which also
acknowledges the indemnity provisions herein) or any person, if any, who
controls the Initial Purchaser or any such holder of Registrable Securities
expressly for use in the Registration Statement (or any amendment thereto) or
any preliminary prospectus or the Prospectus (or any amendment or supplement
thereto); provided, further, that this indemnity agreement shall not apply to
any loss, liability, claim, damage or expense (1) arising from an offer or sale
of Registrable Securities occurring during a Deferral Period, if a Deferral
Notice was given to such
13
Notice Holder in accordance with Section 8(b), or (2) if the Holder fails to
deliver at or prior to the written confirmation of sale, the most recent
Prospectus, as amended or supplemented, and such Prospectus, as amended or
supplemented, would have corrected such untrue statement or omission or alleged
untrue statement or omission of a material fact.
(b) In connection with any Shelf Registration in which a
holder, including, without limitation, the Initial Purchaser, of Registrable
Securities is participating, in furnishing information relating to such holder
of Registrable Securities to the Company in writing expressly for use in such
Registration Statement, any preliminary prospectus, the Prospectus or any
amendments or supplements thereto, the holders of such Registrable Securities
agree, severally and not jointly, to indemnify and hold harmless the Initial
Purchaser and each person, if any, who controls the Initial Purchaser within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange
Act and the Company, and each person, if any, who controls the Company within
the meaning of either such Section, against any and all loss, liability, claim,
damage and expense described in the indemnity contained in subsection (a) of
this Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto), or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
such holder of Registrable Securities (which also acknowledges the indemnity
provisions herein) or any person, if any, who controls any such holder of
Registrable Securities expressly for use in the Registration Statement (or any
amendment thereto) or such preliminary prospectus or the Prospectus (or any
amendment or supplement thereto).
The Initial Purchaser agrees to indemnify and hold harmless
the Company, the holders of Registrable Securities, and each person, if any, who
controls the Company or any holder of Registrable Securities within the meaning
of either Section 15 of the Securities Act or Section 20 of the Exchange Act
against any and all loss, liability, claim, damage and expense described in the
indemnity contained in subsection (a) of this Section, as incurred, but only
with respect to untrue statements or omissions, or alleged untrue statements or
omissions, made in the Registration Statement (or any amendment thereto), or any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Company by the Initial Purchaser expressly for use in the Registration
Statement (or any amendment thereto) or such preliminary prospectus or the
Prospectus (or any amendment or supplement thereto).
(c) Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action commenced
against it in respect of which indemnity may be sought hereunder, but failure to
so notify an indemnifying party shall not relieve such indemnifying party from
any liability hereunder to the extent it is not materially prejudiced as a
result thereof and in any event shall not relieve it from any liability which it
may have otherwise than on account of this indemnity agreement. The indemnifying
party, upon request of the indemnified party, shall retain counsel reasonably
satisfactory to the indemnified party to represent the indemnified party and any
others the indemnifying party may designate in such proceeding and shall pay the
fees and disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified
14
party unless (i) the indemnifying party and the indemnified party shall have
mutually agreed to the retention of such counsel or (ii) the named parties to
any such proceeding (including any impleaded parties) include both the
indemnifying party and the indemnified party and representation of both parties
by the same counsel would be inappropriate due to actual or potential differing
interests between them. It is understood that the indemnifying party shall not,
in respect of the legal expenses of any indemnified party in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for (a)
the fees and expenses of more than one separate firm (in addition to any local
counsel), whose fees must be reasonable, for the Initial Purchaser, Holders of
Registrable Securities, and all persons, if any, who control the Initial
Purchaser or Holders of Registrable Securities within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act, collectively
(b) the fees and expenses of more than one separate firm (in addition to any
local counsel), whose fees must be reasonable, for the Company, and each person,
if any, who controls the Company within the meaning of either such Section, and
that all fees and expenses payable under (a) and (b) above shall be reimbursed
as they are incurred. In the case of any such separate firm for the Initial
Purchaser, Holders of Registrable Securities, and control persons of the Initial
Purchaser and Holders of Registrable Securities, such firm shall be designated
in writing by the Initial Purchaser. In the case of any such separate firm for
the Company, and control persons of the Company, such firm shall be designated
in writing by the Company. The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final non-appealable judgment for the
plaintiff, the indemnifying party agrees to indemnify the indemnified party from
and against any loss or liability by reason of such settlement or judgment. No
indemnifying party shall, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of any judgment with
respect to any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever in
respect of which indemnification or contribution could be sought under this
Section 6 (whether or not the indemnified parties are actual or potential
parties thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
(d) If at any time an indemnified party shall have requested
an indemnifying party to reimburse the indemnified party for fees and expenses
of counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 6(a)(ii) effected without its
written consent if (i) such settlement is entered into more than 45 days after
receipt by such indemnifying party of aforesaid request, (ii) such indemnifying
party shall have received notice of the terms of such settlement at least 30
days prior to such settlement being entered into and (iii) such indemnifying
party shall not have reimbursed such indemnified party in accordance with such
request prior to the date of such settlement. Notwithstanding the immediately
preceding sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel, an indemnifying party shall not be liable for any settlement of the
nature contemplated by Section 6(a)(ii) effected without its consent if such
indemnifying party (1) reimburses such indemnified party in accordance with such
request to the extent it considers such request to be reasonable and (2)
provides written notice to the indemnified party substantiating the unpaid
balance as unreasonable, in each case prior to the date of such settlement.
15
(e) If the indemnification to which an indemnified party is
entitled under this Section 6 is for any reason unavailable to or insufficient
although applicable in accordance with its terms to hold harmless an indemnified
party in respect of any losses, liabilities, claims, damages or expenses
referred to therein, then each indemnifying party shall contribute to the
aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred (i) in such proportion as is
appropriate to reflect the relative benefits received by the indemnifying party
on the one hand and the indemnified party on the other hand from the offering of
the Registrable Securities or (ii) if the allocation provided by clause (i) is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the indemnifying party on the one hand and of the indemnified
party on the other hand in connection with the statements or omissions which
resulted in such losses, liabilities, claims, damages or expenses, as well as
any other relevant equitable considerations.
The relative fault of the Company on the one hand and the
holders of the Registrable Securities or the Initial Purchaser on the other hand
shall be determined by reference to, among other things, whether any such untrue
or alleged untrue statement of a material fact or omission or alleged omission
to state a material fact relates to information supplied by the Company or by
the holder of the Registrable Securities or the Initial Purchaser and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 6(e) were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to above in this Section 6(e). The
aggregate amount of losses, liabilities, claims, damages, and expenses incurred
by an indemnified party and referred to above in this Section 6(e) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 6, neither the
holder of any Registrable Securities nor the Initial Purchaser, shall be
required to indemnify or contribute any amount in excess of the amount by which
the total price at which the Registrable Securities sold by such holder of
Registrable Securities or by the Initial Purchaser, as the case may be, and
distributed to the public were offered to the public exceeds the amount of any
damages that such holder of Registrable Securities or the Initial Purchaser has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
For purposes of this Section 6(e), each person, if any, who
controls the Initial Purchaser or any holder of Registrable Securities within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act shall have the same rights to contribution as the
16
Initial Purchaser or such holder, and each person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act shall have the same rights to contribution as the Company.
SECTION 7. INFORMATION REQUIREMENTS. The Company covenants that, if at
any time before the end of the Effectiveness Period the Company is not subject
to the reporting requirements of the Exchange Act, the Company will cooperate
with any Holder of Registrable Securities and take such further reasonable
action as any Holder of Registrable Securities may reasonably request in writing
(including, without limitation, making such reasonable representations as any
such Holder may reasonably request), all to the extent required from time to
time to enable such Holder to sell Registrable Securities without registration
under the Securities Act within the limitation of the exemptions provided by
Rule 144 and Rule 144A under the Securities Act and customarily taken in
connection with sales pursuant to such exemptions.
SECTION 8. MISCELLANEOUS; NO CONFLICTING AGREEMENTS. Except for such
agreements that will be waived or amended prior to the filing of the
Registration Statement, the Company is not, as of the date hereof, a party to,
nor shall the Company, on or after the date of this Agreement, enter into any
agreement with respect to its securities that conflicts with the rights granted
to the Holders of Registrable Securities in this Agreement. Except for such
agreements that will be waived or amended prior to the filing of the
Registration Statement, the Company represents and warrants that the rights
granted to the Holders of Registrable Securities hereunder do not in any way
conflict with the rights granted to the holders of the Company's other issued
and outstanding securities under any other agreements.
(a) AMENDMENTS AND WAIVERS. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the Company has obtained the written consent of Holders
of a majority of the then outstanding Underlying Common Stock constituting
Registrable Securities (with Holders of LYONs deemed to be the Holders, for
purposes of this Section, of the number of outstanding shares of Underlying
Common Stock into which such LYONs are or would be convertible or exchangeable
as of the date on which such consent is requested). Notwithstanding the
foregoing, a waiver or consent to depart from the provisions hereof with respect
to a matter that relates exclusively to the rights of Holders of Registrable
Securities whose securities are being sold pursuant to a Registration Statement
and that does not directly or indirectly affect the rights of other Holders of
Registrable Securities may be given by Holders of at least a majority of the
Registrable Securities being sold by such Holders pursuant to such Registration
Statement; provided, that the provisions of this sentence may not be amended,
modified, or supplemented except in accordance with the provisions of the
immediately preceding sentence. Each Holder of Registrable Securities
outstanding at the time of any such amendment, modification, supplement, waiver
or consent or thereafter shall be bound by any such amendment, modification,
supplement, waiver or consent effected pursuant to this Section 8(a), whether or
not any notice, writing or marking indicating such amendment, modification,
supplement, waiver or consent appears on the Registrable Securities or is
delivered to such Holder.
17
(b) NOTICES. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand delivery, by telecopier,
by courier guaranteeing overnight delivery or by first-class mail, return
receipt requested, and shall be deemed given (i) when made, if made by hand
delivery, (ii) upon confirmation, if made by telecopier, (iii) one (1) Business
Day after being deposited with such courier, if made by overnight courier or
(iv) on the date indicated on the notice of receipt, if made by first-class
mail, to the parties as follows:
(w) if to a Holder of Registrable Securities that is not a
Notice Holder, at the address for such Holder then appearing in the Registrar
(as defined in the Indenture);
(x) if to a Notice Holder, at the most current address given
by such Holder to the Company in a Notice and Questionnaire or any amendment
thereto;
(y) if to the Company, to:
Carnival Corporation
3655 N.W. 87th Avenue
Miami, FL 33178-2428
Attention: Arnaldo Perez, Esq., General Counsel
Telecopier No.:
with a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, N.Y. 10019
Attention: John C. Kennedy, Esq.
Telecopier No.: (212) 373-2042
and
(z) if to the Initial Purchaser, to:
Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10080
Attention: Mark Hagan
Telecopy No.: (212) 449-9143
or to such other address as such person may have furnished to the other persons
identified in this Section 8(c) in writing in accordance herewith.
(c) APPROVAL OF HOLDERS. Whenever the consent or approval of
Holders of a specified percentage of Registrable Securities is required
hereunder, Registrable Securities held by the Company or its affiliates (as such
term is defined in Rule 405 under the Securities Act)
18
(other than the Initial Purchaser or subsequent Holders of Registrable
Securities if such subsequent Holders are deemed to be such affiliates solely by
reason of their holdings of such Registrable Securities) shall not be counted in
determining whether such consent or approval was given by the Holders of such
required percentage.
(d) SUCCESSORS AND ASSIGNS. Any person who purchases any
Registrable Securities from the Initial Purchaser shall be deemed, for purposes
of this Agreement, to be an assignee of the Initial Purchaser. This Agreement
shall inure to the benefit of and be binding upon the successors and assigns of
each of the parties and shall inure to the benefit of and be binding upon each
Holder of any Registrable Securities.
(e) COUNTERPARTS. This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be original and all of which taken
together shall constitute one and the same agreement.
(f) HEADINGS. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(g) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
(h) SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held to be invalid, illegal, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated thereby, and the parties hereto
shall use their best efforts to find and employ an alternative means to achieve
the same or substantially the same result as that contemplated by such term,
provision, covenant or restriction, it being intended that all of the rights and
privileges of the parties shall be enforceable to the fullest extent permitted
by law.
(i) ENTIRE AGREEMENT. This Agreement is intended by the
parties as a final expression of their agreement and is intended to be a
complete and exclusive statement of the agreement and understanding of the
parties hereto in respect of the subject matter contained herein and the
registration rights granted by the Company with respect to the Registrable
Securities. Except as provided in the Purchase Agreement, there are no
restrictions, promises, warranties or undertakings, other than those set forth
or referred to herein, with respect to the registration rights granted by the
Company with respect to the Registrable Securities. This Agreement supersedes
all prior agreements and undertakings among the parties solely with respect to
such registration rights.
(j) TERMINATION. This Agreement and the obligations of the
parties hereunder shall terminate upon the end of the Effectiveness Period,
except for any liabilities or obligations under Sections 4, 5 or 6 hereof and
the obligations to make payments of and provide for Liquidated Damages under
Section 2(e) hereof to the extent such damages accrue prior to the
19
end of the Effectiveness Period, each of which shall remain in effect in
accordance with its terms.
20
IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.
CARNIVAL CORPORATION
By: /s/ Arnaldo Perez
-----------------------------------
Name: Arnaldo Perez
Title: Vice President and Secretary
Accepted as of the date
first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: /s/ Marc Hagen
-----------------------------------------
Authorized Signatory
EXHIBIT 5.1
[PAUL, WEISS, RIFKIND, WHARTON & GARRISON LETTERHEAD]
November 29, 2001
Carnival Corporation
3655 N.W. 87th Avenue
Miami, FL 33178-2428
REGISTRATION STATEMENT ON FORM S-3
Ladies and Gentlemen:
In connection with the Registration Statement on Form S-3 (the
"Registration Statement") filed by Carnival Corporation (the "Issuer"), a Panama
corporation, with the Securities and Exchange Commission (the "SEC") under the
Securities Act of 1933, as amended (the "Act"), and the rules and regulations
under the Act (the "Rules"), we have been requested to render our opinion as to
the legality of the securities being registered. The Registration Statement
relates to the registration under the Act of the sale of (i) $1,051,175,000
aggregate principal amount at maturity of the Issuer's Liquid Yield Option Notes
due 2021 (the "LYONs") and held by certain securityholders, and (ii) 17,446,000
shares (the "Shares") of the Company's Common Stock issuable upon conversion of
the LYONs held by these selling securityholders, plus such additional
indeterminate number of shares as may become issuable upon conversion of the
LYONs by reason of adjustment to the conversion price in certain circumstances.
The LYONs were issued under a Second Supplemental Indenture (the "Second
Supplemental Indenture"), dated as of October 24, 2001, between the Issuer and
the U.S. Bank Trust National Association, as trustee (the "Trustee") and an
Indenture (the "Indenture"), dated as of April 25, 2001, between the Issuer and
the Trustee. Capitalized terms used and not otherwise defined in this letter
have the respective meanings given those terms in the Registration Statement.
Carnival Corporation 2
In connection with this opinion, we have examined originals, conformed
copies or photocopies, certified or otherwise identified to our satisfaction, of
the following documents (collectively, the "Documents"):
(i) the Registration Statement;
(ii) the Second Supplemental Indenture;
(iii) the Indenture;
(iv) the LYONs; and
(v) the Registration Rights Agreement, dated as of October 24,
2001, among the Issuer and Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated, as the initial purchaser
(the "Initial Purchaser") (the "Registration Rights
Agreement").
In addition, we have examined such other certificates, agreements and documents
that we deemed relevant and necessary as a basis for our opinion.
In our examination of the documents referred to above, and in rendering
our opinion, we have assumed, without independent investigation, (i) the
genuineness of all signatures, (ii) the authenticity of all documents submitted
to us as originals, (iii) the conformity to the original documents of all
documents submitted to us as certified, photostatic, reproduced or conformed
copies of validly existing agreements or other documents and the authenticity of
all the latter documents, (iv) that the statements regarding matters of fact in
the certificates, records, agreements, instruments and documents that we have
examined are accurate and complete and (v) the legal capacity of all individuals
who have executed any of the documents which we examined. We have relied as to
matters of fact upon certificates of officers of the Issuer.
We have also assumed that (i) the Issuer is validly existing and in
good standing under the laws of the Republic of Panama, (ii) that the Issuer has
all necessary corporate power and authority to enter into and perform its
obligations under the Registration Rights Agreement, the Indenture and the
Second Supplemental Indenture and the LYONs, (iii) that the Indenture and the
Second Supplemental Indenture, the Registration Rights Agreement and the LYONs
have been duly executed and delivered by the parties thereto, (iv) that the
execution, delivery and performance by the Issuer of the Indenture and the
Second Supplemental Indenture, the Registration Rights Agreement and the LYONs
have been duly authorized by all necessary corporate action and do not violate
the Issuer's organizational documents or the laws of Panama, (v) that the
Indenture and the Second Supplemental Indenture are valid and binding
obligations of the Trustee under the laws of its jurisdiction of incorporation
and the State of New York, and of the Issuer under the laws of the Republic of
Panama, and (vi) that the Registration Rights Agreement is a valid and binding
agreement of the Initial Purchaser under the
Carnival Corporation 3
laws of its jurisdiction of incorporation and the State of New York, and of the
Issuer under the laws of the Republic of Panama.
Based on the foregoing, and subject to the assumptions, exceptions and
qualifications set forth herein, we are of the opinion that the LYONs are valid
and binding obligations of the Issuer under the laws of the State of New York,
enforceable against the Issuer in accordance with their terms.
Our opinion is subject to the qualification that the enforceability of
the Indenture and the Second Supplemental Indenture, the Registration Rights
Agreement and the LYONs may be (i) subject to bankruptcy, insolvency, fraudulent
conveyance or transfer, reorganization, moratorium and other similar laws
affecting creditors' rights generally and (ii) general principles of equity
(regardless of whether enforcement is considered in a proceeding at law or in
equity).
The opinion expressed above is limited to the laws of the State of New
York. Our opinion is rendered only with respect to the laws, and the rules,
regulations and orders under them, which are currently in effect.
We hereby consent to the use of this opinion as an exhibit to the
Registration Statement and to the reference to us under the heading "Legal
Matters" in the prospectus included in the Registration Statement. In giving
this consent, we do not admit that we come within the category of persons whose
consent is required by the Act or the Rules.
Very truly yours,
/s/ PAUL, WEISS, RIFKIND, WHARTON & GARRISON
PAUL, WEISS, RIFKIND, WHARTON & GARRISON
EXHIBIT 5.2
[LETTERHEAD OF TAPIA, LINARES Y ALFARO]
November 29, 2001.
Carnival Corporation
3655 N.W. 87th Avenue
Miami, Florida 33178-2428
U.S.A.
REGISTRATION STATEMENT ON FORM S-3
Dear Sirs:
In connection with the Registration Statement on Form S-3 (the "Registration
Statement") relating to the registration with the Securities and Exchange
Commission pursuant to the Securities Act of 1933, as amended (the "Act"), and
the rules and regulations promulgated thereunder, by Carnival Corporation, a
Panamanian corporation (the "Company") of the sale of (i) $1,051,175,000
aggregate principal amount at maturity of Liquid Yield Option Notes due 2021
(the "LYONs") issued by the Company, held by certain securityholders, and (ii)
17,446,000 shares (the "Shares") of the Company's Common Stock issuable upon
conversion of the LYONs held by these selling securityholders, plus such
additional indeterminate number of shares as may become issuable upon conversion
of the LYONs by reason of adjustment to the conversion price in certain
circumstances, we have been requested to render our opinion as to the legality
of the securities being registered thereunder.
The LYONs were issued under a Second Supplemental Indenture (the "Second
Supplemental Indenture"), dated as of October 24, 2001, between the Company and
U.S. Bank Trust National Association, as trustee (the "Trustee"), and an
Indenture (the "Indenture"), dated as of April 25, 2001, between the Company and
the Trustee. The LYONs and the Shares are hereinafter called, collectively, the
"Securities."
In this connection we have examined (i) originals, photocopies or conformed
copies of the Registration Statement, including the exhibits and amendments
thereto, (ii) the Indenture and the Second Supplemental Indenture filed as
exhibits to the Registration Statement, and (iii) records of certain of the
Company's corporate proceedings relating to, among other things, the issuance
and sale of the Securities. In addition, we have made such other examinations of
law and fact as we considered necessary in order to form a basis for the opinion
hereinafter expressed. In connection with such investigation, we have assumed
the genuineness of all
Carnival Corporation
Page 2
signatures, the authenticity of all documents submitted to us as originals, the
conformity to originals of all documents submitted to us as photocopies or
conformed copies. We have relied as to matters of fact upon certificates of
officers of the Company.
In rendering the opinion set forth below, we have assumed that (i) the Indenture
and the Second Supplemental Indenture have been duly authorized by the parties
thereto other than the Company, and has been executed and delivered by the
Trustee, and (ii) the Indenture and the Second Supplemental Indenture do
represent a valid and binding obligation of the Trustee under the laws of its
jurisdiction of incorporation and the State of New York.
Based on the foregoing, we are of the opinion that:
1. The execution and delivery of the Indenture and the Second Supplemental
Indenture, the performance of the Company's obligations hereunder, the
execution, issuance and delivery of the Securities, as applicable, and the
performance of the Company's obligations thereunder have been duly
authorized by the Company.
2. The LYONs represent valid and binding obligations of the Company,
enforceable against the Company in accordance with the terms of their
terms, the provisions of the Indenture and the Second Supplemental
Indenture, except that such enforceability may be subject to (a)
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
or other similar laws affecting creditors' rights generally, and (b)
general principles of equity (regardless of whether such enforcement is
considered in a proceeding in equity or at law).
3. The Shares issuable upon conversion of the LYONs have been duly authorized
and reserved for issuance and will be validly issued, fully paid and
nonassessable, when issued upon conversion of the LYONs in accordance with
the terms of the LYONs, the Indenture and the Second Supplemental
Indenture.
4. Neither distributions to the holders of the Shares nor the interest paid on
the LYONs will be subject to taxation under the laws of Panama. Also, the
Company's income will not be subject to significant taxation under the laws
of Panama, as long as the Company's income is produced outside the
territory of the Republic of Panama.
We are members of the Bar of the Republic of Panama. We express no opinion as to
matters of law other than the laws of the Republic of Panama.
We hereby consent to the use of our name in the Registration Statement and in
the prospectus therein, and to the use of this opinion as an exhibit to the
Registration Statement. In giving this consent, we do not thereby admit that we
come within the category of persons whose consent is required by the Act or by
the rules and regulations promulgated thereunder.
Carnival Corporation
Page 3
Yours very truly,
/s/ Mario E. Correa
Mario E. Correa
EXHIBIT 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our report dated January 26, 2001 relating to the
financial statements, which appears in the 2000 Annual Report to Shareholders,
which is incorporated by reference in Carnival Corporation's Annual Report on
Form 10-K for the year ended November 30, 2000. We also consent to the reference
to us under the heading "Experts" in such Registration Statement.
/s/ PricewaterhouseCoopers LLP
Miami, Florida
November 29, 2001
