<PAGE> 1
FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended November 30, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 1-9610
CARNIVAL CORPORATION
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(Exact name of registrant as specified in its charter)
Republic of Panama 59-1562976
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3655 N.W. 87th Avenue, Miami, Florida 33178-2428
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (305) 599-2600
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Securities registered pursuant to Section 12(b) of the Act:
NAME OF EXCHANGE ON
TITLE OF EACH CLASS WHICH REGISTERED
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Class A Common Stock New York Stock
($.01 par value) Exchange, Inc.
4-1/2% Convertible New York Stock
Subordinated Notes due July 1, 1997 Exchange, Inc.
Securities registered pursuant to Section 12(g) of the Act: None.
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
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Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in any definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ].
The aggregate market value of the voting stock held by non-affiliates of the
Registrant is approximately $2,172,000,000 based upon the closing market price
on February 8, 1995 of a share of Class A Common Stock on the New York Stock
Exchange as reported by the Wall Street Journal.
<PAGE> 2
At February 8, 1995, the Registrant had outstanding 227,657,557 shares
of its Class A Common Stock, $.01 par value and 54,957,142 shares of its Class
B Common Stock, $.01 par value.
DOCUMENTS INCORPORATED BY REFERENCE
The information described below and contained in the Registrant's 1994
annual report to shareholders on pages 20 through 36 furnished to the
Commission pursuant to Rule 14a-3(b) of the Exchange Act, is incorporated by
reference into this Form 10-K.
PART AND ITEM OF THE FORM 10-K
PART II
ITEM 5(a) AND (b). Market for the Registrant's Common Equity and Related
Stockholder Matters - Market Information and Holders.
ITEM 6. Selected Financial Data
ITEM 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
ITEM 8. Financial Statements and Supplementary Data
The information described below and contained in the Registrant's 1995
definitive Proxy Statement, to be filed with the Commission is incorporated by
reference into this Form 10-K.
PART AND ITEM OF THE FORM 10-K
PART III
ITEM 10 . Directors and Executive Officers of the Registrant.
ITEM 11. Executive Compensation.
ITEM 12. Security Ownership of Certain Beneficial Owners and
Management.
ITEM 13. Certain Relationships and Related Transactions.
<PAGE> 3
PART I
ITEM 1. BUSINESS
A. GENERAL
Carnival Corporation was incorporated under the laws of the Republic of
Panama in November 1974. In April of 1994 the shareholders approved a name
change of the company from Carnival Cruise Lines, Inc. to Carnival Corporation.
Carnival Corporation and subsidiaries (the "Company") is the world's largest
multiple-night cruise company based on the number of passengers carried and
revenues generated. The Company offers a broad range of cruise products,
serving the contemporary cruise market through Carnival Cruise Lines
("Carnival" - a division of Carnival Corporation), the premium market through
Holland America Line and the luxury market through Windstar Cruises and the
Company's joint venture, Seabourn Cruise Line. The nine Carnival ships have an
aggregate capacity of 14,756 passengers with itineraries in the Caribbean and
Mexican Riviera. The seven Holland America Line ships have an aggregate
capacity of 8,795 passengers with itineraries in the Caribbean and Alaska and
through the Panama Canal, as well as other worldwide itineraries. The three
Windstar ships have an aggregate capacity of 444 passengers with itineraries in
the Caribbean, the South Pacific, and the Mediterranean. Seabourn Cruise Line
operates two 204 passenger cruise ships in the luxury market with itineraries
in the Caribbean, the Baltic, the Mediterranean and the Far East. Epirotiki
Line, a 49% owned joint venture (See Item 1. Business - Other Cruise
Activities), operates eight passenger cruise ships with itineraries in the
Aegean and Eastern Mediterranean.
The Company has signed agreements with a Finnish shipyard providing for the
construction of four additional 2,040-berth SuperLiners for Carnival with
delivery expected in June 1995, March 1996, February 1998 and November 1998.Two
additional 2,640-berth cruise vessels are under contract for construction for
Carnival from an Italian shipyard scheduled for delivery in September 1996 and
December 1998. The Company also has agreements with the same Italian shipyard
for one 1,266-berth cruise ship and one 1,320- berth cruise ship for Holland
America Line with delivery expected in June 1996 and September 1997,
respectively.
The Company also operates a tour business: Holland America Westours.
Holland America Westours markets sight-seeing tours both separately and as part
of Holland America Line cruise/tour packages. Holland America Westours
operates 16 hotels in Alaska and the Canadian Yukon, four luxury day-boats
offering tours to the glaciers of Alaska and the Yukon River, over 290 motor
coaches used for sight-seeing and charters in the states of Washington and
Alaska and in the Canadian Rockies and ten private domed rail cars which are
run on the Alaskan railroad between Anchorage and Fairbanks.
Previously, the Company adopted a plan to dispose of the Crystal Palace,
which comprised the entire resort and casino segment of the Company's
operations. In August 1994, the Company sold 100% of the shares of Carnival's
Crystal Palace Hotel Corporation, Ltd. for $80 million. See Note 5 in
Carnival Corporation's 1994 Annual Report to Shareholders incorporated by
reference into this document for more information.
B. CRUISE SHIP SEGMENT
INDUSTRY
The passenger cruise industry has experienced substantial growth over the
past 25 years. The industry has evolved from a trans-ocean carrier service
into a vacation alternative to land-based resorts and sight-seeing
destinations. According to Cruise Lines International Association ("CLIA"), an
industry trade group, in 1970 approximately 500,000 North American passengers
took cruises for three consecutive nights or more. CLIA estimates that this
number reached 4.5 million passengers in 1994 and is expected to grow 4% to
approximately 4.7 million passengers in 1995.
Despite the growth of the cruise industry to date, the Company believes
that the estimated 4.7 million passengers who will take cruises in 1995 will
represent only approximately 2% of the overall North American vacation market,
defined as persons who travel for leisure purposes on trips of three nights or
longer involving at least one night's stay in a hotel.
<PAGE> 4
According to CLIA, in 1982 there were approximately 84 cruise ships serving
the North American market offering voyages of three or more days, having an
aggregate capacity of approximately 46,000 passengers. By the end of 1994, the
market included 138 vessels with an aggregate capacity of approximately 107,000
passengers. CLIA estimates that by the end of 1995 the North American market
will be served by 136 vessels having an aggregate capacity of approximately
107,000 passengers. The following table sets forth the industry and Company
growth over the past five years based on passengers carried for at least three
consecutive nights:
<TABLE>
<CAPTION>
COMPANY CRUISE
PASSENGERS AS
NORTH AMERICAN COMPANY CRUISE A PERCENTAGE OF
CRUISE PASSENGERS NORTH AMERICAN
YEAR PASSENGERS* CARRIED CRUISE PASSENGERS
- ---- ---------- ------- -----------------
(Calendar) (Fiscal)
<S> <C> <C> <C>
1994 4,535,000(est) 1,354,000 29.9%
1993 4,480,000 1,154,000 25.8
1992 4,136,000 1,153,000 27.9
1991 3,979,000 1,100,000 27.6
1990 3,640,000 953,000 26.2
</TABLE>
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* Source: CLIA.
- -----------------
From 1990 through 1994, the Company's average compound annual growth rate
in number of passengers carried was 9.2% versus the industry average of 5.7%.
During this period, the Company's percentage share of passengers carried
increased from 26.2% to 29.9%.
The Company's passenger capacity has grown from 13,399 at November 30, 1989
to 23,995 at November 30, 1994. In early 1990, the completion of the Fantasy
brought 2,044 berths into service. The lengthening of the Westerdam increased
capacity by another 490 berths beginning in March 1990. In June 1991, the
Ecstasy added an additional 2,040 berths. The delivery of the Statendam,
Sensation and Maasdam in 1993 increased capacity an additional 4,572 berths
more than offsetting a decrease of 906 berths related to the sale of the Mardi
Gras. During 1994, net capacity increased by 2,369 berths due to the delivery
of the Fascination and Ryndam, net of the 937 berth FiestaMarina which was
returned to Epirotiki Lines (See Item 1. Business - Other Cruise Activities).
CRUISE SHIPS AND ITINERARIES
Under the Carnival Cruise Lines name, the Company serves the contemporary
market with nine ships (collectively, the "Carnival Ships"). Eight of the
Carnival Ships were designed by and built for Carnival, including seven
SuperLiners which are among the largest in the cruise industry. Eight of the
Carnival Ships operate in the Caribbean and one Carnival Ship calls on ports in
the Mexican Riviera.
Through its subsidiary, HAL Antillen N.V. ("HAL"), the Company operates ten
cruise ships offering premium or luxury specialty vacations. Seven of these
ships, the Rotterdam, the Nieuw Amsterdam, the Noordam, the Westerdam, the
Statendam, the Maasdam and the Ryndam are operated under the Holland America
Line name (the "HAL Ships"). The remaining three ships, the Wind Star, the
Wind Song and the Wind Spirit, are operated under the Windstar Cruises name
(the "Windstar Ships"). Six of the HAL Ships were designed by and built for
HAL. The three Windstar Ships were built for Windstar Sail Cruises, Ltd. (
"WSCL") between 1986 and 1988.
HAL offers premium cruises of various lengths, primarily in the Caribbean,
Alaska, Panama Canal, Europe, the Mediterranean, Hawaii, Mexico, South
Pacific, South America and the Orient. Cruise lengths vary from 3 to 98 days,
with a large proportion being seven or ten days in length. Periodically, the
HAL Ships make longer grand cruises or operate on short-term special
itineraries. For example, in 1994, the Statendam made a 98-day world cruise, a
36-day Grand Mediterranean and Black Sea voyage and the Maasdam made a 62-day
Grand Australian and New Zealand voyage. HAL will continue to offer these
special and longer itineraries in order to increase travel opportunities for
its customers and strengthen its cruise offerings in view of the fleet
expansion. The three Windstar Ships currently operate in the Caribbean, the
Mediterranean and the South Pacific.
2
<PAGE> 5
The following table presents summary information concerning the Company's
ships. Areas of operation are based on current itineraries and are subject to
change.
<TABLE>
<CAPTION>
YEAR
FIRST IN GROSS LENGTH PRIMARY
COMPANY PAX REGISTERED AND AREAS OF
NAME REGISTRY BUILT SERVICE CAP* TONS WIDTH OPERATION
- ---- -------- ----- -------- ---- ---- ----- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
CARNIVAL CRUISE LINES
- ---------------------
Fascination Panama 1994 1994 2,040 70,367 855/104 Caribbean
Sensation Panama 1993 1993 2,040 70,367 855/104 Caribbean
Ecstasy Liberia 1991 1991 2,040 70,367 855/104 Caribbean
Fantasy Liberia 1990 1990 2,044 70,367 855/104 Bahamas
Celebration Liberia 1987 1987 1,486 47,262 738/92 Caribbean
Jubilee Liberia 1986 1986 1,486 47,262 738/92 Mexican Riviera
Holiday Bahamas 1985 1985 1,452 46,052 727/92 Mexican Riviera
Tropicale Liberia 1982 1982 1,022 36,674 660/85 Caribbean
Festivale Bahamas 1961 1978 1,146 38,175 760/90 Caribbean
-------
Total Carnival Ships Capacity................... 14,756
-------
HOLLAND AMERICA LINE
- --------------------
Ryndam Bahamas 1994 1994 1,266 55,451 720/101 Alaska, Caribbean
Maasdam Bahamas 1993 1993 1,266 55,451 720/101 Europe, Caribbean
Statendam Bahamas 1993 1993 1,266 55,451 720/101 Alaska, Caribbean
Westerdam Bahamas 1986 1988 1,494 53,872 798/95 Canada, Caribbean
Noordam Netherlands 1984 1984 1,214 33,930 704/89 Alaska, Caribbean
Antilles("N.A.")
Nieuw Amsterdam N.A. 1983 1983 1,214 33,930 704/89 Alaska, Caribbean
Rotterdam N.A. 1959 1959 1,075 37,783 749/94 Alaska, Hawaii
-------
Total HAL Ships Capacity........................ 8,795
-------
WINDSTAR CRUISES
- ----------------
Wind Spirit Bahamas 1988 1988 148 5,736 440/52 Caribbean,
Mediterranean
Wind Song Bahamas 1987 1987 148 5,703 440/52 South Pacific
Wind Star Bahamas 1986 1986 148 5,703 440/52 Caribbean,
------- Mediterranean
Total Windstar Ships Capacity.................. 444
-------
TOTAL CAPACITY.................................... 23,995
=======
</TABLE>
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* In accordance with industry practice passenger capacity is calculated based
on two passengers per cabin even though some cabins can accommodate three or
four passengers.
3
<PAGE> 6
CRUISE SHIP CONSTRUCTIONS
The Company is currently constructing six cruise ships to be operated under
the Carnival name and two cruise ships to be operated under the Holland America
Line name. The following table presents summary information concerning ships
under construction:
<TABLE>
<CAPTION>
LENGTH
EXPECTED PAX AND APPROXIMATE
VESSEL DELIVERY SHIPYARD CAP TONS WIDTH COST
- ------ -------- -------- --- ---- ----- ----
(000's)
CARNIVAL CRUISE LINES
- ---------------------
<S> <C> <C> <C> <C> <C> <C>
Imagination June 1995 Masa-Yards 2,040 70,367 855/104 $ 330,000
Inspiration March 1996 Masa-Yards 2,040 70,367 855/104 270,000
To Be Named September 1996 Fincantieri 2,640 101,000 886/116 400,000
To Be Named February 1998 Masa-Yards 2,040 70,367 855/104 300,000
To Be Named November 1998 Masa-Yards 2,040 70,367 855/104 300,000
To Be Named December 1998 Fincantieri 2,640 101,000 886/116 415,000
------- -----------
Total Carnival Ships Capacity 13,440 2,015,000
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HOLLAND AMERICA LINE
- --------------------
Veendam June 1996 Fincantieri 1,266 55,451 720/101 225,000
To Be Named September 1997 Fincantieri 1,320 62,000 776/106 235,000
------- ------------
Total HAL Ships Capacity 2,586 460,000
------- ------------
TOTAL 16,026 $2,475,000
====== ==========
</TABLE>
OTHER CRUISE ACTIVITIES
In April 1992, the Company finalized an agreement to acquire up to 50% of a
joint venture company ("Seabourn") which had been set up to acquire the cruise
operations of K/S Seabourn Cruise Line. The Company's investment in Seabourn
is in the form of two subordinated secured ten-year loans of $15 million and
$10 million, respectively. In return for providing Seabourn with sales and
marketing support, the Company received a 25% equity interest. The $10 million
note is convertible at any time prior to maturity into an additional 25%
interest, and in certain instances will automatically convert into an
additional 25% interest, in Seabourn. Seabourn operates two ultra-luxury
ships, which have an aggregate capacity of 408 passengers and have itineraries
in the Caribbean, the Baltic, the Mediterranean and the Far East.
In September 1993 the Company acquired a 16.6% equity interest in Epirotiki
Lines , a Greece based operator of eight cruise ships with an aggregate
capacity of approximately 5,200 passengers, in exchange for the cruise ship
Mardi Gras. In March 1994 the Company acquired an additional 26.4% equity
interest, bringing its total ownership interest to 43%, in exchange for the
cruise ship FiestaMarina. In February 1995, the Epirotiki venture reorganized
which resulted in the Company obtaining an additional 6% interest for a total
ownership of 49%. The Greece-based company operates its eight cruise ships
primarily on itineraries in the Aegean and Eastern Mediterranean Seas.
In October 1993, Carnival Cruise Lines' Carnivale was renamed the
FiestaMarina and began service with FiestaMarina Cruises, a division of
Carnival catering to the Latin America and Spanish speaking U.S. markets,
departing from San Juan, Puerto Rico and LaGuaira/Caracas, Venezuela for 3-, 4-
and 7-day cruises. In September 1994, this product was discontinued as the
depth of the market could not support the size of the vessel. The vessel,
which was under charter, was returned to Epirotiki Lines.
4
<PAGE> 7
CRUISE TARIFFS
Unless otherwise noted, brochure prices include round trip airfare from
over 175 cities in the United States and Canada. If a passenger chooses not
to have the Company provide air transportation, the ticket price is reduced.
Brochure prices vary depending on size and location of cabin, the time of year
that the voyage takes place, and when the booking is made. The cruise brochure
price includes a wide variety of activities and facilities, such as a fully
equipped casino, nightclubs, theatrical shows, movies, parties, a discotheque,
a health club and swimming pools on each ship. The brochure price also
includes numerous dining opportunities daily.
Brochure pricing information below is per person based on double occupancy:
<TABLE>
<CAPTION>
AREA OF OPERATION CRUISE LENGTH PRICE RANGE
----------------- ------------- -----------
<S> <C> <C>
CARNIVAL CRUISE LINES
Caribbean 3-day $549--$1,169
4-day 649--1,329
7-day 1,399--2,429
Mexico 3-day 549--1,169
4-day 649--1,329
7-day 1,399--2,429
HOLLAND AMERICA LINE (1)
Alaska 3-day $ 504--3,094
4-day 728-- 4,468
7-day 1,120--6,875
Caribbean 7-day 1,495--5,200
10-day 2,135--7,240
Europe 10- to 12-day 3,240--13,345
Panama Canal 10- to 22-day 2,185--14,840
WINDSTAR CRUISES (1)
Caribbean 7-day $2,995--$3,195
Mediterranean 7- to 16-day 3,895--6,695
South Pacific 7-day 2,995--3,195
</TABLE>
- -----------------------------------------------------
(1) Prices represent cruise only
- -----------------------------------------------------
Brochure prices are regularly discounted through the Company's early
booking discount program and other promotions.
ON-BOARD AND OTHER REVENUES
The Company derives revenues from certain on-board activities and services
including casino gaming, liquor sales, gift shop sales, shore tours,
photography and promotional advertising by merchants located in ports of call.
The casinos, which contain slot machines and gaming tables including
blackjack, craps, roulette and stud poker are open when the ships are at sea
in international waters. The Company also earns revenue from the sale of
alcoholic beverages. Certain onboard activities are managed by independent
concessionaires from which the Company collects a percentage of revenues, while
certain others are managed by the Company.
The Company receives additional revenue from the sale to its passengers of
shore excursions at each ship's ports of call. On the Carnival Ships, such
shore excursions are operated by independent tour operators and include bus and
taxi sight-seeing excursions, local boat and beach parties, and nightclub and
casino visits. On the HAL Ships, shore excursions are operated by Holland
America Westours and independent parties.
5
<PAGE> 8
In conjunction with its cruise vacations on the Carnival Ships, the Company
sells pre- and post-cruise land packages. Such packages generally include one,
two or three-night vacations at locations such as Walt Disney World in Orlando,
Florida or resorts in the South Florida and the San Juan Puerto Rico areas.
In conjunction with its cruise vacations on the HAL Ships, HAL sells
pre-cruise and post-cruise land packages which are more fully described below.
(See "Item 1. Business - Tour Segment")
PASSENGERS
The following table sets forth the aggregate number of passengers carried
and percentage occupancy for the Company's ships for the periods indicated:
<TABLE>
<CAPTION>
FISCAL YEAR ENDED NOVEMBER 30,
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Number of Passengers 1,354,000 1,154,000 1,153,000
Occupancy Percentage* 104.0% 105.3% 105.3%
</TABLE>
- -----------------------------------------
* In accordance with industry practice, total capacity is calculated based
on two passengers per cabin even though some cabins can accommodate three or
four passengers. Occupancy percentages in excess of 100% indicate that more
than two passengers occupied some cabins.
- -----------------------------------------
The following table sets forth the actual occupancy percentage for all
cruises on the Company's ships during each quarter for the fiscal years ended
November 30, 1993 and November 30, 1994:
<TABLE>
<CAPTION>
OCCUPANCY
QUARTER ENDING PERCENTAGE
-------------- ----------
<S> <C>
February 28, 1993 100.9%
May 31, 1993 104.2
August 31, 1993 114.3
November 30, 1993 100.9
February 28, 1994 100.2
May 31, 1994 101.2
August 31, 1994 113.4
November 30, 1994 100.9
</TABLE>
SALES AND MARKETING
The Company markets the Carnival Ships as the "Fun Ships(R)" and uses the
themes "Carnival's Got the Fun(R)" and "The Most Popular Cruise Line in the
World(R)", among others.
Carnival advertises nationally directly to consumers on network television
and through extensive print media featuring its spokesperson, Kathie Lee
Gifford. Carnival believes its advertising generates interest in cruise
vacations generally and results in a higher degree of consumer awareness of the
"Fun Ships(R)" concept and the "Carnival(R)" name. Substantially all of
Carnival's cruise bookings are made through travel agents, which arrangement is
encouraged as a matter of policy. In fiscal 1994, Carnival took reservations
from about 28,000 of approximately 45,000 travel agencies in the United States
and Canada. Travel agents receive a standard commission of 10% (15% in the
State of Florida), plus the potential of an additional commission based on
sales volume. Moreover, because cruise vacations are substantially
all-inclusive, sales of Carnival cruise vacations yield a significantly higher
commission to travel agents than selling air tickets and hotel rooms. During
fiscal 1994, no one travel agency accounted for more than 2% of Carnival's
revenues.
6
<PAGE> 9
Carnival engages in substantial promotional efforts designed to motivate
and educate retail travel agents about its "Fun Ships(R)" cruise vacations.
Carnival employs approximately 90 field sales representatives and 40 in-house
service representatives to motivate independent travel agents and promote its
cruises. Carnival believes it has the largest sales force in the industry.
To facilitate access and to simplify the reservation process, Carnival
employs approximately 290 reservation agents to take bookings from independent
travel agents. Carnival's fully-automated reservation system allows its
reservation agents to respond quickly to book cabins on its ships. Carnival
has a policy of pricing comparable cabins (based on size, location and length
of voyage) on its various ships at the same rate ("common rating"). Such
common rate includes round-trip airfare, which means that any passenger can fly
from any one of over 175 cities in the United States and Canada to ports of
embarkation for the same price. By common rating, Carnival is able to offer
customers a wider variety of voyages for the same price, which the Company
believes improves occupancy on all its cruises.
Carnival's cruises generally are substantially booked several months in
advance of the sailing date. This lead time allows Carnival to adjust its
prices, if necessary, in relation to demand for available cabins, as indicated
by the level of advance bookings. During late fiscal 1992, Carnival decided to
introduce its SuperSaver fares at an earlier stage of the booking process to
promote effective yield management and to encourage potential passengers to
book cruise reservations earlier. Carnival's payment terms require that a
passenger pay approximately 15% of the cruise price within 7 days of the
reservation date and the balance not later than 45 days before the sailing date
for 3- and 4-day cruises and 60 days before the sailing date for 7-day cruises.
Carnival believes that its success is due in large part to its unique
product positioning within the industry. Carnival markets the Carnival Ship
cruises not only as alternatives to competitors' cruises, but as vacation
alternatives to land-based resorts and sight-seeing destinations. Carnival
seeks to attract passengers from the broad vacation market, including those who
have never been on a cruise ship before and who might not otherwise consider a
cruise as a vacation alternative. Carnival's strategy has been to emphasize the
cruise experience itself rather than particular destinations, as well as the
advantages of a prepaid, all-inclusive vacation package. Carnival markets the
Carnival Ship cruises as the "Fun Ships(R)" experience, which includes a wide
variety of shipboard activities and entertainment, such as full-scale casinos
and nightclubs, an atmosphere of pampered service and unlimited food.
The Company's product positioning stems from its belief that the cruise
market is actually comprised of three primary segments with different passenger
demographics and, therefore, different passenger requirements and growth
characteristics. These three segments are the contemporary, premium and luxury
specialty segments. The luxury specialty segment, which is not as large as the
other segments, is served by cruises with per diems of $300 or higher. The
premium segment typically is served by cruises that last for 7 to 14 days or
more at per diem rates of $250 or higher, and appeal principally to more
affluent customers. Passengers that travel on cruises serving the luxury
specialty and premium segments typically have previously been on a cruise ship,
and marketing efforts in these segments are geared toward reaching these
experienced cruise passengers. The contemporary segment, on the other hand, is
served typically by cruises that are 7 days or shorter in length, are priced at
per diem rates of $200 or less, and feature a casual ambience. Because cruises
serving the contemporary segment are more affordable, require less time and are
more casual in nature, they appeal to passengers of all ages and income
categories. The primary market for the contemporary segment is the first time
cruise passenger (only an estimated 7% of the North American population has
ever cruised). The Company believes that the success and growth of the
Carnival cruises are attributable in large part to its early recognition of
this market segmentation and its efforts to reach and promote the expansion of
the contemporary segment.
The HAL and Windstar Ships cater to the premium and luxury specialty
markets, respectively. The Company believes that the hallmarks of the HAL
experience are beautiful ships and gracious attentive service. HAL
communicates this difference as "A Tradition of Excellence(R)", a reference to
its long standing reputation as a first class and grand cruise line.
7
<PAGE> 10
Substantially all of HAL's bookings are made through travel agents, which
arrangement HAL encourages as a matter of policy. In fiscal 1994, HAL took
reservations from about 20,000 of approximately 45,000 travel agencies in the
U.S. and Canada. Travel agents receive a standard commission of between 10%
and 15%, depending on the specific cruise product sold, with the potential for
override commissions based upon sales volume. During 1994, no one travel
agency accounted for more than 1% of HAL's total revenue.
HAL has focused much of its recent sales effort at creating an excellent
relationship with the travel agency community. This is related to the HAL
marketing philosophy that travel agents have a large impact on the consumer
cruise selection process, and will recommend HAL more often because of its
excellent reputation for service to both consumers and independent travel
agents. HAL solicits continuous feedback from consumers and the independent
travel agents making bookings with HAL to insure they are receiving excellent
service.
HAL's marketing communication strategy is primarily composed of newspaper
and magazine advertising, large scale brochure distribution and direct mail
solicitations to past passengers (referred to as "alumni") and cable
television. HAL engages in substantial promotional efforts designed to
motivate and educate retail travel agents about its products. HAL employs
approximately 50 field sales representatives and 30 in-house sales
representatives to support the field sales force. Carnival's approximate 90
field sales representatives also promote HAL products. To facilitate access to
HAL and to simplify the reservation process for the HAL ships, HAL employs
approximately 220 reservation agents to take bookings from travel agents.
HAL's cruises generally are booked several months in advance of the sailing
date. The Company solicits current and former passengers of the Carnival Ships
to take future cruises on the HAL and Windstar Ships.
Windstar Cruises has its own marketing and reservations staff. Field sales
representatives for both HAL and Carnival act as field sales representatives
for Windstar. Marketing efforts are primarily devoted to a) travel agent
support and awareness, b) direct mail solicitation of past passengers, and c)
distribution of brochures.
The marketing features the distinctive nature of the graceful, modern sail
ships and the distinctive "casually elegant" experience on "intimate
itineraries" (apart from the normal cruise experience). Windstar's cruise
market positioning is embodied in the phrase "180 degrees from ordinary".
SEASONALITY
The Company's revenue from the sale of passenger tickets for the Carnival
Ships is moderately seasonal. Historically, demand for Carnival cruises has
been greater during the periods from late December through April and late June
through August. Demand traditionally is lower during the period from September
through mid-December and during May. To allow for full availability during
peak periods, drydocking maintenance is usually performed in September, October
and early December. HAL cruise revenues are more seasonal than Carnival's
cruise revenues. Demand for HAL cruises is strongest during the summer months
when HAL ships operate in Alaska and Europe. Demand for HAL cruises is lower
during the winter months when HAL ships sail in more competitive markets.
COMPETITION
Cruise lines compete for consumer disposable leisure time dollars with
other vacation alternatives such as land-based resort hotels and sight-seeing
destinations, and public demand for such activities is influenced by general
economic conditions.
The Carnival Ships compete with cruise ships operated by seven different
cruise lines which operate year round from Florida and California with similar
itineraries and with seven other cruise lines operating seasonally from other
Florida and California ports, including cruise ships operated by HAL.
Competition for cruise passengers in South Florida is substantial. Ships
operated by Royal Caribbean Cruise Lines and Norwegian Cruise Lines sail
regularly from Miami on itineraries similar to those of the Carnival Ships.
Carnival competes year round with ships operated by Royal Caribbean Cruise
Lines and Princess Cruises embarking from Los Angeles to the west coast of
Mexico. Cruise lines such as Norwegian Cruise Lines, Royal Caribbean Cruise
Lines, Costa Cruises, Cunard and Princess Cruise Lines offer voyages competing
with Carnival from San Juan to the Caribbean.
8
<PAGE> 11
In the Alaska market, HAL competes directly with cruise ships operated by
seven different cruise lines with the largest competitors being Princess Cruise
Lines and Regency Cruises, Inc. Over the past several years, there has been a
steady increase in the available capacity among all cruise lines in the Alaska
market.
The Alaska market is divided into two areas: southeast Alaska and the Gulf
of Alaska. In the southeast Alaska market, HAL's primary competitor is
Princess Cruise Lines. In the Gulf of Alaska market, HAL's primary competitors
are Princess Cruise Lines and Regency Cruises, Inc.
In the Caribbean market, HAL competes with cruise ships operated by 14
different cruise lines, its primary competitors being Princess Cruise Lines,
Royal Caribbean Cruise Lines and Norwegian Cruise Line, as well as the Carnival
Ships. In 1989, the Company began introducing a number of new itineraries
which reduces the extent to which HAL competes directly with the Carnival
Ships.
GOVERNMENTAL REGULATION
The Ecstasy, Fantasy, Jubilee, Celebration and Tropicale are Liberian
flagged ships, the Sensation and Fascination are Panamanian flagged ships, and
the balance of the Carnival Ships are registered in the Bahamas. The Ryndam,
Maasdam, Statendam and Westerdam are registered in the Bahamas, while the
balance of the HAL Ships are flagged in the Netherlands Antilles. The Windstar
Ships are registered in the Bahamas. The ships are subject to inspection by
the United States Coast Guard for compliance with the Convention for the Safety
of Life at Sea and by the United States Public Health Service for sanitary
standards. The Company is also regulated by the Federal Maritime Commission,
which, among other things, certifies ships on the basis of the ability of the
Company to meet obligations to passengers for refunds in case of
non-performance. The Company believes it is in compliance with all material
regulations applicable to its ships and has all licenses necessary to the
conduct of its business. In connection with a significant portion of its
Alaska cruise operations, HAL relies on a concession permit from the National
Park Service to operate its cruise ships in Glacier Bay National Park, which is
periodically renewed. There can be no assurance that the permits will continue
to be renewed or that regulations relating to the renewal of such permits,
including preference rights, will remain unchanged in the future.
The International Maritime Organization has adopted safety standards as
part of the "Safety of Life at Sea" ("SOLAS") Convention, applicable generally
to all passenger ships carrying 36 or more passengers. Generally, SOLAS
imposes enhanced vessel structural requirements designed to improve passenger
safety. The SOLAS requirements are phased in through the year 2010. However,
certain stringent SOLAS fire safety requirements must be implemented by 1997.
Only two of the Company's vessels, Carnival's Festivale, and HAL's Rotterdam
are expected to be affected by the SOLAS 1997 requirements which will not
result in material costs to the Company.
From time to time various other regulatory and legislative changes have
been or may in the future be proposed that could have an effect on the cruise
industry in general.
FINANCIAL INFORMATION
For financial information about the Company's cruise ship segment with
respect to the three fiscal years ended November 30, 1994, see Note 11 "Segment
Information" to the Company's Consolidated Financial Statements as of November
30, 1994 in the Company's 1994 annual report on page 29 incorporated by
reference into this document.
C. TOUR SEGMENT
In addition to its cruise business, HAL markets sight-seeing tours
separately and as a part of cruise/tour packages under the Holland America
Westours name. Tour operations are based in Alaska, Washington State and
western Canada. Since a substantial portion of Holland America Westours'
business is derived from the sale of tour packages in Alaska during the summer
tour season, tour operations are highly seasonal.
9
<PAGE> 12
HOLLAND AMERICA WESTOURS
Holland America Line-Westours Inc. ("Holland America Westours") is a
wholly-owned subsidiary of HAL. The group of subsidiaries which together
comprise the tour operations perform three independent yet interrelated
functions. During 1994, as part of an integrated travel program to
destinations in Alaska and the Canadian Rockies, the tour service group offered
62 different tour programs varying in length from 6 to 23 days. The
transportation group and hotel group support the tour service group by
supplying facilities needed to conduct tours. Facilities include dayboats,
motor coaches, rail cars and hotels.
Four luxury dayboats perform an important role in the integrated Alaska
travel program offering tours to the glaciers and fjords of Alaska and the
Yukon River. The Fairweather cruises the Lynn Canal in Southeast Alaska and
the Glacier Queen II cruises to the Columbia Glacier near Valdez, Alaska. The
third dayboat, the Yukon Queen, cruises the Yukon River between Dawson City,
Yukon Territory and Eagle, Alaska. A fourth dayboat, the Ptarmigan, operates
on Portage Lake in Alaska. The four dayboats have a combined capacity of 696
passengers.
A fleet of over 290 motor coaches using the trade name Gray Line operate in
Alaska, Washington and western Canada. These motor coaches are used for
extended trips, city sight-seeing tours and charter hire. HAL conducts its
tours both as part of a cruise/tour package and as individual sight-seeing
products sold under the Gray Line name. In addition, HAL operates express Gray
Line motor coach service between downtown Seattle and the Seattle-Tacoma
International Airport.
Ten private domed rail cars, which are called "McKinley Explorers", run on
the Alaska railroad between Anchorage and Fairbanks, stopping at Denali
National Park.
In connection with its tour operations, HAL owns or leases motor coach
maintenance shops in Seattle, and at Juneau, Fairbanks, Anchorage, Skagway and
Ketchikan in Alaska. HAL also owns or leases service offices at Anchorage,
Fairbanks, Juneau, Ketchikan and Skagway in Alaska, at Whitehorse in the Yukon
Territory, in Seattle and at Vancouver in British Columbia. Certain real
property facilities on federal land are used in HAL's tour operations pursuant
to permits from the applicable federal agencies.
WESTMARK HOTELS
HAL owns and/or operates 16 hotels in Alaska and the Canadian Yukon under
the name Westmark Hotels. Four of the hotels are located in Canada's Yukon
Territory and offer a combined total of 585 rooms. The remaining 12 hotels,
all located throughout Alaska, provide a total of 1,650 rooms, bringing the
total number of hotel rooms to 2,235.
The hotels play an important role in HAL's tour program during the summer
months when they provide accommodations to the tour passengers. The hotels
located in the larger metropolitan areas remain open during the entire year,
acting during the winter season as centers for local community activities while
continuing to accommodate the travelling public. HAL hotels include dining,
lounge and conference or meeting room facilities. Certain hotels have gift
shops and other tourist services on the premises.
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<PAGE> 13
The hotels are summarized in the following table:
<TABLE>
<CAPTION>
OPEN DURING
HOTEL NAME LOCATION ROOMS 1994 SEASON
- ---------- -------- ----- ------------
<S> <C> <C> <C>
Alaska Hotels:
Westmark Anchorage Anchorage 198 year-round
Westmark Inn Anchorage 90 seasonal
Westmark Inn Fairbanks 173 seasonal
Westmark Fairbanks Fairbanks 238 year-round
Westmark Juneau Juneau 105 year-round
The Baranof Juneau 194 year-round
Westmark Cape Fox Ketchikan 72 year-round
Westmark Kodiak Kodiak 81 year-round
Westmark Shee Atika Sitka 101 year-round
Westmark Inn Skagway Skagway 209 seasonal
Westmark Tok Tok 92 seasonal
Westmark Valdez Valdez 97 year-round
Canadian Hotels (Yukon Territory):
Westmark Inn Beaver Creek 174 seasonal
Westmark Klondike Inn Whitehorse 99 seasonal
Westmark Whitehorse Whitehorse 181 year-round
Westmark Inn Dawson 131 seasonal
</TABLE>
Thirteen of the hotels are owned by a HAL subsidiary. The remaining three
hotels, Westmark Anchorage, Westmark Cape Fox and Westmark Shee Atika are
operated under arrangements involving third parties such as management
agreements and leases.
For the hotels that operate year-round, the occupancy percentage for 1994
was 61.1%, and for the hotels that operate only during the summer months, the
occupancy percentage for 1994 was 76.9%.
SEASONALITY
The Company's tour revenues are extremely seasonal with a large majority
generated during the late spring and summer months in connection with the
Alaska cruise season. Holland America Westours' tours are conducted in
Washington, Alaska and the Canadian Rockies. The Alaska and Canadian Rockies
tours coincide to a great extent with the Alaska cruise season, May through
September. Washington tours are conducted year-round although demand is
greatest during the summer months. During periods in which tour demand is low,
HAL seeks to maximize its motor coach charter activity such as operating
charter tours to ski resorts in Washington and Canada.
SALES AND MARKETING
HAL tours are marketed both separately and as part of cruise-tour packages.
Although most HAL cruise-tours include a HAL cruise as the cruise segment,
other cruise lines also market HAL tours as a part of their cruise tour
packages and sight-seeing excursions. Tours sold separately are marketed
through independent travel agents and also directly by HAL, utilizing sales
desks in major hotels. General marketing for the hotels is done through
various media in Alaska, Canada and the continental United States. Travel
agents, particularly in Alaska, are solicited, and displays are used in
airports in Seattle, Washington, Portland, Oregon and various Alaskan cities.
Rates at Westmark Hotels are on the upper end of the scale for hotels in Alaska
and the Canadian Yukon.
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<PAGE> 14
CONCESSIONS
Certain tours in Alaska are conducted on federal property requiring
concession permits from the applicable federal agencies such as the National
Park Service or the United States Forest Service.
COMPETITION
Holland America Westours competes with independent tour operators and motor
coach charter operators in Washington, Alaska and the Canadian Rockies. The
primary competitors in Alaska are Princess Tours (which owns approximately 120
motor coaches and three hotels) and Alaska Sightseeing/Trav-Alaska (which owns
approximately 40 motor coaches). The primary competitor in Washington is
Gazelle (with approximately 15 motor coaches). The primary competitors in the
Canadian Rockies are Tauck Tours, Princess Tours and Brewster Transportation.
Westmark Hotels compete with various hotels throughout Alaska, including
the Super 8 national motel chain, many of which charge prices below those
charged by HAL. Dining facilities in the hotels also compete with the many
restaurants in the same geographic areas.
GOVERNMENT REGULATION
HAL's motor coach operations are subject to regulation both at the federal
and state levels, including primarily the Interstate Commerce Commission, the
U.S. Department of Transportation, the Washington Utilities and Transportation
Commission, the British Columbia Motor Carrier Commission and the Alaska
Transportation Commission. Certain of HAL's tours involve federal properties
and are subject to regulation by various federal agencies such as the National
Park Service, the Federal Maritime Administration and the U.S. Forest Service.
In connection with the operation of its beverage facilities in the Westmark
Hotels, HAL is required to comply with state, county and/or city ordinances
regulating the sale and consumption of alcoholic beverages. Violations of
these ordinances could result in fines, suspensions or revocation of such
licenses and preclude the sale of any alcoholic beverages by the hotel
involved.
In the operation of its hotels, HAL is required to comply with applicable
building and fire codes. Changes in these codes have in the past and may in
the future, require substantial capital expenditures to insure continuing
compliance such as the installation of sprinkler systems.
FINANCIAL INFORMATION
For financial information about the Company's tour segment with respect to
the three fiscal years ended November 30, 1994, see Note 11 "Segment
Information" to the Company's Consolidated Financial Statements as of November
30, 1994 in the Company's 1994 annual report incorporated by reference into
this document.
12
<PAGE> 15
D. EMPLOYEES
The Company's Carnival operations have approximately 1,300 full-time and
100 part-time employees engaged in shoreside operations. Carnival also employs
approximately 330 officers and approximately 6,300 crew and staff on the
Carnival Ships.
The Company's HAL operations have approximately 3,600 employees engaged in
shoreside, tour and hotel operations, of which approximately 2,100 employees
hold part-time/seasonal positions. HAL also employs approximately 220 officers
and approximately 3,300 crew and staff on the HAL Ships and Windstar Ships.
Due to the seasonality of its Alaska and Canadian operations, HAL tends to
increase its work force during the summer months, employing significant
additional full-time and part-time personnel. HAL has entered into agreements
with unions covering employees in certain of its hotels and certain of its tour
and ship employees.
The Company considers its employee relations generally to be good.
E. SUPPLIERS
The Company's largest purchases are for airfare, advertising, fuel, food
and related items, hotel supplies and products related to passenger
accommodation. Although the Company chooses to use a limited number of
suppliers for most of its food and fuel purchases, most of the necessary
supplies are available from numerous sources at competitive prices. The use of
a limited number of suppliers enables the Company to obtain volume discounts.
F. INSURANCE
The Company maintains insurance covering legal liabilities related to crew,
passengers and other third parties on the Carnival Ships and the HAL Ships in
operation through The Standard Steamship Owners Protection & Indemnity
Association (Bermuda) Limited (the "SSOPIA") and the Steamship Mutual
Underwriting Association Ltd. (the "SMUAL"). The amount and terms of these
insurances are governed by the rules of the foregoing associations.
The Company currently maintains insurance on the hull and machinery of each
vessel in amounts equal to the approximate market value of each vessel. The
Company maintains war risk insurance on each vessel. This coverage includes
legal liability to crew and passengers including terrorist risks for which
coverage would be excluded from SSOPIA or SMUAL. The coverage for hull and
machinery and war risks is effected with international markets, including
underwriters at Lloyds. The Company, as required by the Federal Maritime
Commission, maintains at all times two $15 million performance bonds for the
Carnival Ships, and the HAL and Windstar Ships, respectively, to cover
passenger ticket liabilities in the event of a cancelled or interrupted cruise.
The Company maintains certain levels of self insurance for liabilities and
hull and machinery through the use of substantial deductibles. Such
deductibles may be increased in the future.
The Company also maintains various insurance policies to protect the
assets, earnings and liabilities arising from the operation of HAL Westours, as
well as land based insurance for the Company.
13
<PAGE> 16
ITEM 2. PROPERTIES
The Company's cruise ships are described in Section B of Item 1 under the
heading "Cruise Ship Segment". The properties associated with HAL's tour
operations are described in Section C of Item 1 under the heading "Tour
Segment".
Carnival's shoreside operations and corporate headquarters are located at
3655 N.W. 87th Avenue, Miami, Florida, and consists of approximately 231,000
square feet of office space which the Company leased until it purchased it in
December 1994. In order to provide space for the future growth of Carnival and
to consolidate existing personnel, approximately 225,000 square feet of office
space is being constructed next to the existing facility with an estimated
completion date of September 1996. Carnival is also leasing approximately
60,000 square feet of office space at 5225 N.W. 87th Avenue, Miami, Florida
until the new facility is completed.
HAL headquarters are at 300 Elliott Avenue West in Seattle, Washington in
leased space in an office building. The lease is for approximately 119,000
square feet.
ITEM 3. LEGAL PROCEEDINGS
In 1986, a lawsuit was filed by the American Association of Cruise
Passengers ("AACP") against Carnival Corporation, Holland America
Line-Westours, Inc. and ten other cruise lines and an association of travel
agents seeking treble and punitive damages, alleging violation of federal and
state antitrust laws and interference with business expectancies under state
common law. The amount of damages sought is not specified in the complaint and
has not been revealed in discovery to date. AACP has asserted that the
defendants have agreed with each other to boycott AACP because of AACP's
practice of rebating travel agency commissions to passengers and advertising
discounts on such cruise lines' advertised fares. The Company is contesting
the case vigorously and is seeking dismissal as to Carnival Corporation on
jurisdictional grounds, pursuant to prior Court of Appeals rulings. In
addition, these rulings have significantly limited the total amount of damages
recoverable even if liability of one or more of the cruise lines is found.
Based on the current status of the proceedings, the Company does not believe
that the outcome of this lawsuit will have a material adverse affect on the
Company's financial condition or results of operations.
The Company is routinely involved in liability and other claims typical of
the cruise ship, hotel and tour businesses. After the application of
deductibles, a substantial portion of these claims are fully covered by
insurance. The Company is also involved from time to time in commercial,
regulatory and employment related disputes and claims. In the opinion of
management, such claims, if decided adversely, individually or in the
aggregate, would not have a material adverse effect upon the Company's
financial condition or results of operations..
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OR SECURITY HOLDERS
None.
14
<PAGE> 17
EXECUTIVE OFFICERS OF THE REGISTRANT
Pursuant to General Instruction G(3), the information regarding executive
officers of the Company called for by Item 401(b) of Regulation S-K is hereby
included in Part 1 of this report.
The following table sets forth the name, age and title of each executive
officer. Titles listed relate to positions within Carnival Corporation unless
otherwise noted.
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Micky Arison 45 Chairman of the Board and Chief Executive Officer
Gerald R. Cahill 43 Vice President--Finance
Robert H. Dickinson 52 President and Chief Operating Officer
of Carnival and Director
Howard S. Frank 53 Vice-Chairman, Chief Financial Officer and Director
A. Kirk Lanterman 63 President and Chief Executive Officer of Holland
America Line-Westours Inc. and Director
Lowell Zemnick 51 Vice President and Treasurer
Meshulam Zonis 61 Senior Vice President--Operations of Carnival and
Director
</TABLE>
BUSINESS EXPERIENCE OF OFFICERS
Micky Arison, age 45, has been Chief Executive Officer since 1979 and
Chairman of the Board since 1990. He was President from 1979 to May 1993 and
has also been a director since June 1987. Prior to 1979, he served Carnival
for successive two-year periods as sales agent, reservations manager and as
Vice President in charge of passenger traffic. He is the son of Ted Arison,
Carnival Corporations's founder. He served on the Board of Directors of Ensign
Bank, FSB until August 30, 1990. On that date, the Office of Thrift
Supervision appointed the Resolution Trust Corporation receiver of Ensign Bank.
.
Gerald Cahill, age 43, is a Certified Public Accountant and has been Vice
President-Finance since September 1994. Mr. Cahill was the chief financial
officer from 1988 to 1992 and the chief operating officer from 1992 to 1994 of
Safecard Services, Inc. From 1979 to 1988 he held financial positions at
Resorts International Inc. and, prior to that, spent six years with Price
Waterhouse LLP.
Robert H. Dickinson, age 52, has been President and Chief Operating Officer
of Carnival since May 1993. From 1979 to May 1993, he was Senior Vice
President--Sales and Marketing of Carnival. He has also been a director since
June 1987.
Howard S. Frank, age 53, has been Vice-Chairman of the Board since October
1993 and has been Chief Financial Officer and Chief Accounting Officer since
July 1, 1989 and a Director since 1992. From July 1989 to October 1993 he was
Senior Vice President- Finance. From July 1975 through June 1989, he was a
partner with Price Waterhouse LLP.
A. Kirk Lanterman, age 63, is a Certified Public Accountant and has been
President and Chief Executive Officer of Holland America Line-Westours Inc.
since January 1989 and a Director since 1992. From 1983 to January 1989, he
was President and Chief Operating Officer of Holland America Line-Westours Inc.
From 1979 to 1983, he was President of Westours which merged in 1983 with
Holland America Line.
Lowell Zemnick, age 51, is a Certified Public Accountant and has been Vice
President since 1980 and Treasurer since September 1990. Mr. Zemnick was the
chief financial officer of Carnival from 1980 to September 1990 and was the
Chief Financial Officer of Carnival Corporation from May 1987 through June
1989.
Meshulam Zonis, age 61, has been Senior Vice President--Operations of
Carnival since 1979. He has also been a director since June 1987. From 1974
through 1979, Mr. Zonis was Vice President--Operations of Carnival.
15
<PAGE> 18
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDERS MATTERS
A. MARKET INFORMATION
The information required by Item 5(a), market information, which appears on
page 36 of the Carnival Corporation 1994 Annual Report to Shareholders, is
incorporated by reference into this Form 10-K Annual Report.
B. HOLDERS
The information required by Item 5(b), holders of common stock, which
appears on page 36 of the Carnival Corporation 1994 Annual Report to
Shareholders, is incorporated by reference into this Form 10-K Annual Report.
C. DIVIDENDS
The Company declared cash dividends, restated to reflect the stock
split effective November 30, 1994, of $.07 per share in each quarter of fiscal
1993, $.07 per share in each of the first three fiscal quarters of 1994, $.075
in the fourth quarter of fiscal 1994 and $.075 per share in the first quarter
of 1995. Payment of future quarterly dividends will depend, among other
factors, upon the Company's earnings, financial condition and capital
requirements and certain tax considerations of certain members of the Arison
family and trusts for the benefit of Mr. Ted Arison's children (the "Principal
Shareholders"), some of whom are required to include a portion of the Company's
earnings in their taxable income, whether or not the earnings are distributed
(see "D. Taxation of the Company"). The Company may also declare special
dividends to all shareholders in the event that the Principal Shareholders are
required to pay additional income taxes by reason of their ownership of the
Common Stock, either because of an income tax audit of the Company or the
Principal Shareholders or because of certain actions by the Company (such as a
failure by the Company to maintain its investment in shipping assets at a
certain level) that would trigger adverse tax consequences to the Principal
Shareholders under the special tax rules applicable to them.
Any dividend declared by the Board of Directors on the Company's Common
Stock will be paid concurrently at the same rate on the Class A Common Stock
and the Class B Common Stock.
While no tax treaty currently exists between the Republic of Panama and the
United States, under current law the Company believes that distributions to its
shareholders are not subject to taxation under the laws of the Republic of
Panama. Dividends paid by the Company will be taxable as ordinary income for
United States Federal income tax purposes to the extent of the Company's
current or accumulated earnings and profits, but generally will not qualify for
any dividends-received deduction.
Certain loan documents entered into by certain of HAL's subsidiaries
restrict the level of dividend payments by HAL's subsidiaries to HAL.
The payment and amount of any dividend is within the discretion of the
Board of Directors, and it is possible that the amount of any dividend may vary
from the levels discussed above. If the law regarding the taxation of the
Company's income to the Principal Shareholders were to change so that the
amount of tax payable by the Principal Shareholders were increased or reduced,
the amount of dividends paid by the Company might be more or less than is
currently contemplated.
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<PAGE> 19
D. TAXATION OF THE COMPANY
The following discussion summarizes the expected United States Federal
income taxation of the Company's current operations. State and local taxes are
not discussed. The discussion is based upon currently existing provisions of
the Internal Revenue Code of 1986, as amended (the "Code"), existing and
proposed regulations thereunder and current administrative rulings and court
decisions. All of the foregoing are subject to change and any such change
could affect the continuing validity of this discussion. In connection with
the foregoing, investors should be aware that the Tax Reform Act of 1986
(hereinafter, the "1986 Tax Act") changed significantly the United States
Federal income tax rules applicable to the Company and certain holders of its
stock (including the Principal U.S. Shareholders). Although the relevant
provisions of the 1986 Tax Act are discussed herein, they have not yet been the
subject of extensive administrative or judicial interpretation.
UNITED STATES
Carnival Corporation is a Panamanian corporation, and its material
subsidiaries (other than subsidiaries engaged in the bus, hotel and tour
business of Holland America Line) are Liberian, Netherlands Antilles, British
Virgin Islands, and Bahamian corporations. Accordingly, the Company's income
from sources outside of the United States ("foreign source income") generally
is not subject to United States tax. Moreover, the Company anticipates that,
under current law, all or virtually all of its income from sources within the
United States ("United States Source Income") that constitutes Shipping Income
(as defined below) will be exempt from United States corporate income taxation
for as long as Carnival Corporation and its subsidiaries meet the requirements
of Section 883 of the Code. Section 883 of the Code provides that income of a
foreign corporation derived from the international operation, or from the
rental on a full or bareboat basis, of ships ("Shipping Income") is exempt from
United States taxation if (1) the foreign country in which the foreign
corporation is organized grants an equivalent exemption to citizens of the
United States and to corporations organized in the United States (an
"equivalent exemption jurisdiction") and (2) the foreign corporation is a
controlled foreign corporation ("CFC") as defined in Section 957(a) of the Code
(the "CFC Test"). The Company believes that substantially all of its United
States Source Income other than Holland America Line's income from its bus,
hotel and tour operations, currently qualifies as Shipping Income, and that
Panama, the Netherlands Antilles, the British Virgin Islands, the Bahamas, and
Liberia are equivalent exemption jurisdictions. (Holland America Line's income
from its hotel and tour operations, is not Shipping Income, and, accordingly,
is subject to United States corporate income tax). If, however, Panamanian,
Netherlands Antilles, British Virgin Islands, Bahamian or Liberian law were to
change adversely, the Company would consider taking appropriate steps
(including reincorporating in another jurisdiction) so as to remain eligible
for the exemption from United States Federal income tax provided by Section 883
of the Code.
A foreign corporation is a CFC when stock representing more than 50% of
such corporation's voting power or equity value is owned (or considered as
owned) on any day of its fiscal year by United States persons who each own (or
are considered as owning) stock representing 10% or more of the corporation's
voting power ("Ten Percent Shareholders"). Stock of the Company representing
more than 50% of the total combined voting power of all classes of stock is
owned by the Micky Arison 1994 "B" Trust (the "B Trust"),which is a "United
States Person", and thus the Company meets the definition of a CFC. The B
Trust is a U.S. trust whose primary beneficiary is Micky Arison, the Company's
Chairman of the Board. Accordingly, at the corporate level, the Company
expects that virtually all of its income (with the exception of its United
States source income from the operation of transportation, hotel and tour
business of HAL) to remain exempt from United States Income taxes. The B Trust
has entered into an agreement with the Company that is designed to ensure,
except under certain limited circumstances, that stock possessing more than 50%
of the Company's voting power will be held by Ten Percent Shareholders until at
least July 1, 1997. Because the Company is a CFC, a pro rata share of the
shipping earnings of the Company, as well as certain other amounts, is
includable in the taxable income of any "Ten Percent Shareholder", as defined
above.
17
<PAGE> 20
A substantial portion of the Company's income will, as discussed below, be
treated as United States Source Income. If the Company were to fail to meet
the requirements of Section 883 of the Code with respect to any of its United
States Source Income (or if Section 883 of the Code were repealed), some or all
of the Company's Shipping Income that is United States Source Income would
become subject to a significant United States tax burden. Any such United
States Source Income that is considered to be "effectively connected" with the
conduct of a United States trade or business would be subject not only to
general United States Federal corporate income tax, but also to a 30% "branch
level" tax on effectively connected earnings and profits (generally, adjusted
taxable income reduced by taxes and adjusted for the amount of the Company's
earnings treated as reinvested in the Company's United States business). Any
such United States Source Income that is not considered to be effectively
connected with a United States trade or business will instead be subject to a
4% tax on United States source gross transportation income (or, possibly, to a
30% tax if any such income were considered to be 100% United States Source
Income under the rules described below, which, as discussed below, the Company
does not believe to be the case with respect to any significant portion of its
Shipping Income). The Company believes that at least a significant portion of
its United States Source Income would probably be considered to be effectively
connected with a United States trade or business for this purpose.
Under amendments to the Code enacted as part of the 1986 Tax Act, the
Company's United States Source Income will include 50% of all transportation
income (including income derived from, or in connection with, the use or
hiring, or leasing for use of a cruise ship, or the performance of services
directly related to such use) attributable to transportation that begins or
ends in the United States, and 100% of such transportation income with respect
to transportation which begins and ends in the United States. The legislative
history of these rules suggests that a cruise which begins and ends in United
States ports, but which calls on one or more foreign ports (including ports in
possessions of the United States), will be treated as transportation that
begins or ends in the United States, rather than as transportation that begins
and ends in the United States, thus resulting in no more (and, with respect to
a cruise that calls on more than one foreign port, possibly less) than 50%
United States Source Income. There are, however, no regulations or other
authoritative interpretations of these new rules, and, accordingly, the matter
is not entirely free from doubt.
Under a provision of the Technical and Miscellaneous Revenue Act of 1988,
Section 883 of the Code applies only to income derived from the international
operation of ships. The legislative history of that provision indicates that
Section 883 of the Code does not apply to Shipping Income that is treated as
100% United States Source Income under the source of income rules discussed in
the preceding paragraph since it does not constitute income from the
international operation of a ship because it results from transportation that
is considered to begin and end in the United States; accordingly, any such
income may well be subject to United States corporate tax unless another
exception were applicable. As discussed in the preceding paragraph, although
the matter is not entirely free from doubt, the Company does not believe that
any significant portion of its Shipping Income from its current operations is
100% United States Source Income under the applicable provisions of the Code.
Accordingly, the Company does not believe that the 1988 legislation
significantly increases its United States corporate tax with respect to its
current operations.
OTHER JURISDICTIONS
The Company anticipates that its income will not be subject to significant
taxation under the laws of the Republic of Panama, Liberia, the Netherlands
Antilles, the British Virgin Islands or the Bahamas.
ITEM 6. SELECTED FINANCIAL DATA
The information required by Item 6, selected financial data for the five
years ended November 30, 1994, which appears on page 35 of the Carnival
Corporation 1994 Annual Report to Shareholders, is incorporated by reference
into this Form 10-K Annual Report.
18
<PAGE> 21
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The information required by Item 7, Management's Discussion and Analysis of
Financial Condition and Results of Operation, which appears on pages 32 through
34 of the Carnival Corporation 1994 Annual Report to Shareholders, is
incorporated by reference into this Form 10-K Annual Report.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements, together with the report thereon of Price
Waterhouse LLP dated January 23, 1995, appearing on pages 20 through 31 and
supplemental data on page 36 of the Carnival Corporation 1994 Annual Report to
Shareholders are incorporated by reference into this Form 10-K Annual Report.
ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
ITEMS 10, 11, 12 AND 13. DIRECTORS AND EXECUTIVE OFFICERS OF THE
REGISTRANT, EXECUTIVE COMPENSATION, SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT, AND CERTAIN RELATIONSHIPS AND
RELATED TRANSACTIONS
The information required by Items 10, 11, 12 and 13 is incorporated by
reference to the Registrant's definitive Proxy Statement to be filed with the
Commission not later than 120 days after the close of the fiscal year except
that the information concerning the Registrant's executive officers called for
by Item 401(b) of Regulation S-K has been included in Part I of this report.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) (1)-(2) FINANCIAL STATEMENTS AND SCHEDULES:
The list of financial statements set forth in the index on page 19 of
Registrant's 1994 Annual Report filed with the commission with this filing is
hereby incorporated herein by this reference. No financial statement schedules
are required, pursuant to SEC Release #33-7118, for filings made after December
20, 1994.
(3) EXHIBITS:
The exhibits listed on the accompanying Exhibit Index are filed or
incorporated by reference as part of this report and such Exhibit Index is
hereby incorporated herein by reference.
(b) No reports on Form 8-K were filed during the three months ended
November 30, 1994.
19
<PAGE> 22
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
Miami, and the State of Florida on this 23rd day of February 1995.
CARNIVAL CORPORATION.
By /s/ Micky Arison
-------------------------------------
Micky Arison
Chairman of the Board and
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
<TABLE>
<S> <C> <C>
/s/ Micky Arison Chairman of the Board, Chief February 23, 1995
-------------------------------- Executive Officer and Director
Micky Arison
/s/ Howard S. Frank Vice-Chairman, Chief Financial February 23, 1995
-------------------------------- and Accounting Officer and Director
Howard S. Frank
/s/ Maks L. Birnbach Director February 23, 1995
--------------------------------
Maks L. Birnbach
/s/ Richard G. Capen, Jr. Director February 23, 1995
--------------------------------
Richard G. Capen, Jr.
/s/ Robert H. Dickinson Director February 23, 1995
--------------------------------
Robert H. Dickinson
/s/ A. Kirk Lanterman Director February 23, 1995
--------------------------------
A. Kirk Lanterman
/s/ Harvey Levinson Director February 23, 1995
--------------------------------
Harvey Levinson
/s/ Modesto Maidique Director February 23, 1995
--------------------------------
Modesto Maidique
/s/ William S. Ruben Director February 23, 1995
--------------------------------
Willaim S. Ruben
/s/ Stuart Subotnick Director February 23, 1995
--------------------------------
Stuart Subotnick
/s/ Sherwood M. Weiser Director February 23, 1995
--------------------------------
Sherwood M. Weiser
/s/ Meshulam Zonis Director February 23, 1995
--------------------------------
Meshulam Zonis
/s/ Uzi Zucker Director February 23, 1995
--------------------------------
Uzi Zucker
</TABLE>
20
<PAGE> 23
INDEX TO EXHIBITS
<TABLE>
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3.1 - Form of Amended and Restated Articles of Incorporation of the Company.(1)
3.2 - Form of By-laws of the Company.(2)
4.1 - Letter Agreement dated July 11, 1989 between the Company and the Ted Arison Irrevocable Trust.(3)
4.2 - Revolving Credit Agreement dated July 1, 1993 between the Company and Citibank N.A. and certain banks named
therein.(4)
4.3 - Indenture entered into by the Registrant and First Trust National Association, as Trustee, relating to the
4-1/2% Convertible Subordinated Notes Due July 1, 1997 and the Form of Notes.(5)
4.4 - Amendment No. 1 to Revolving Credit Agreement dated June 15, 1994 between the Company and Citibank N.A.(6)
4.5 - Form of Indenture dated as of March 1, 1993 between Carnival Cruise Lines, Inc. and First Trust National
Association, as Trustee, relating to the Debt Securities, including form of Debt Security.(7)
4.6 - Second Amended and Restated Shareholder Agreement dated September 26, 1994 by and among Carnival Corporation,
Ted Arison, TAMMS Investment Company, The Ted Arison Family Holding Trust No. 4, The Micky Arison "B" Trust,
and T.A. Limited. (8)
4.7 - Assignment and Assumption Agreement dated September 26, 1994 by and among Ted Arison, Baring Brothers Ltd.,
Keinnort Benson Trustees Ltd., Cititrust Ltd., W.A.M. Trustees Jersey Ltd., and Carnival Corporation. (9)
10.1 - Carnival Cruise Lines, Inc. Stock Option Plan.(10)
10.2 - Carnival Cruise Lines, Inc. Restricted Stock Plan.(11)
10.3 - Carnival Cruise Lines, Inc. Retirement Plan.(12)
10.4 - Carnival Cruise Lines, Inc. Non-Qualified Retirement Plan.(13)
10.5 - Carnival Cruise Lines, Inc. Key Management Incentive Plan.(14)
10.6 - 1993 Outside Directors' Stock Option Plan.(15)
10.7 - Consulting Agreement/Registration Rights Agreement dated June 14, 1991, between the Company and Ted
Arison.(16)
10.8 - Form of Deferred Compensation Agreement between the Company and each of Harvey Levinson, Meshulam Zonis and
Robert H. Dickinson.(17)
10.9 - Indemnity Agreement between the Company and Ted Arison.(18)
10.10 - Stock Compensation Agreement dated February 1, 1991, between the Company and Robert H. Dickinson.(19)
10.11 - Employment Agreement dated July 1, 1989, between the Company and Howard Frank.(20)
10.12 - Carnival Cruise Lines, Inc. 1992 Stock Option Plan.(21)
10.13 - Holland America Line-Westours Inc. 1991-1993 Key Management Incentive Plan.(22)
10.14 - Amendment to the Carnival Cruise Lines, Inc. Stock Option Plan.(23)
10.15 - Holland America Line-Westours Inc. 1989 and 1990 Key Management Incentive Plan.(24)
10.16 - Consulting Agreement dated July 31, 1992, between the Company and Arison Investments Ltd.(25)
10.17 - First Amendment to Consulting Agreement/Registration Rights Agreement.(26)
10.18 - 1993 Carnival Cruise Lines, Inc. Restricted Stock Plan.(27)
10.19 - Shipbuilding Agreement dated January 12, 1993 between Futura Cruises, Inc. and Fincantieri - Cantieri Navali
Italiani S.p.A.*(28)
10.20 - Shipbuilding Agreement dated December 23, 1993 between Kvaerner Masa-Yards, Inc. and the Company.(29)
10.21 - Shipbuilding Agreement dated December 10, 1993 between Wind Surf Limited and Fincantieri-Cantieri Navali
Italiani S.p.A.**(30)
10.22 - Organization agreement dated February 25, 1994 between the Company and the principals of The Continental
Companies.(31)
10.23 - Shipbuilding Agreement dated January 14, 1995 between Utopia Cruises, Inc. and Fincantieri-Cantieri Navali
Italiani S.p.A.**
10.24 - Shipbuilding Agreement dated January 14, 1995 between Wind Surf Limited and Fincantieri-Cantieri Navali
Italiani S.p.A.**
10.25 - Shipbuilding Agreement dated December 7, 1994 between Carnival Corporation and Kvaerner Masa-Yards, Inc.**
10.26 - Shipbuilding Agreement dated January 12, 1995 between Carnival Corporation and Kvaerner Masa-Yards, Inc.**
</TABLE>
<PAGE> 24
<TABLE>
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10.27 - Shipbuilding Agreement dated March 25, 1992 between Carnival Corporation and Kvaerner Masa-Yards, Inc.**
10.28 - Consulting and Retirement Agreement between A. Kirk Lanterman and Holland America Line-Westours, Inc.
10.29 - Amended and Restated Carnival Corporation 1992 Stock Option Plan
10.30 - 1994 Carnival Cruise Line Key Management Incentive Plan
10.31 - Stock Purchase Agreement between Carnival Corporation and CHC International.
10.32 - Stock Purchase Agreement between Carnival Corporation, Sherwood Weiser and others.
11.0 - Statement regarding computation of per share earnings.
12.0 - Ratio of Earnings to Fixed Charges
13.0 - Portions of 1994 Annual Report incorporated by reference into 1994 Annual Report on Form 10-K
21 - Subsidiaries of the Company.
23.0 - Price Waterhouse LLP Consent
27.0 - Financial Data Schedule (for SEC use only)
28.1 - Maks L. Birnbach Director's Agreement.(32)
28.2 - William S. Ruben Director's Agreement.(33)
28.3 - Stuart Subotnick Director's Agreement.(34)
28.4 - Sherwood M. Weiser Director's Agreement.(35)
28.5 - Uzi Zucker Director's Agreement.(36)
</TABLE>
* Portions of documents omitted pursuant to an order for confidential
treatment pursuant to Rule 24b-2 under the Securities Act of 1934, as amended.
** Portions of documents omitted pursuant to an application for an order
for confidential treatment pursuant to Rule 24b-2 under the Securities Act of
1934, as ammended.
<PAGE> 25
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(1) Incorporated by reference to Exhibit No. 3.1 to the registrant's registration statement on Form S-1 (File No.
33-14844), filed with the Securities and Exchange Commission.
(2) Incorporated by reference to Exhibit No. 3.2 to the registrant's registration statement on Form S-1 (File No.
33-14844), filed with the Securities and Exchange Commission.
(3) Incorporated by reference to Exhibit No. 4.10 to the registrant's registration statement on Form S-1 (File No.
33-31795), filed with the Securities and Exchange Commission.
(4) Incorporated by reference to Exhibit 4.1 to the registrant's Quarterly Report on Form 10-Q for the quarter
ended May 31, 1993 (Commission File No. 1-9610), filed with the Securities and Exchange Commission.
(5) Incorporated by reference to Exhibit No. 4(a) and Exhibit No. 4(b) to the registrant's Report on Form 8-K as
filed with the Securities and Exchange Commission on July 6, 1992.
(6) Incorporated by reference to Exhibit 4.1 to the registrant's Quarterly Report on Form 10-Q for the quarter
ended May 31, 1994 (Commission File No. 1-9610), filed with the Securities and Exchange Commission.
(7) Incorporated by reference to Exhibit No. 4 on Form S-3 to the registrant's registration statement on Form S-3
(File No. 33-53136), filed with the Securities and Exchange Commission.
(8) Incorporated by reference to Exhibit 4.1 to the registrant's Quarterly Report on Form 10-Q for the quarter
ended August 31, 1994 (Commission File No. 1-9610), filed with the Securities and Exchange Commission.
(9) Incorporated by reference to Exhibit 4.2 to the registrant's Quarterly Report on Form 10-Q for the quarter
ended August 31, 1994 (Commission File No. 1-9610), filed with the Securities and Exchange Commission.
(10) Incorporated by reference to Exhibit No. 10.1 to the registrant's registration statement on Form S-1 (File No.
33-14844), filed with the Securities and Exchange Commission.
(11) Incorporated by reference to Exhibit No. 10.2 to the registrant's registration statement on Form S-1 (File No.
33-14844), filed with the Securities and Exchange Commission.
(12) Incorporated by reference to Exhibit No. 10.3 to the registrant's Annual Report on Form 10-K for the fiscal
year ended November 30, 1990 (Commission File No. 1-9610), filed with the Securities and Exchange Commission.
(13) Incorporated by reference to Exhibit No. 10.4 to the registrant's Annual Report on Form 10-K for the fiscal
year ended November 30, 1990 (Commission File No. 1-9610), filed with the Securities and Exchange Commission.
(14) Incorporated by reference to Exhibit No. 10.5 to the registrant's Annual Report on Form 10-K for the fiscal
year ended November 30, 1993 (Commission File No. 1-9610), filed with the Securities and Exchange Commission.
(15) Incorporated by reference to Exhibit No. 10.6 to the registrant's Annual Report on Form 10-K for the fiscal
year ended November 30, 1993 (Commission File No. 1-9610), filed with the Securities and Exchange Commission.
(16) Incorporated by reference to Exhibit No. 4.3 to post-effective amendment no. 1 on Form S-3 to the registrant's
registration statement on Form S-1 (File No. 33-24747), filed with the Securities and Exchange Commission.
(17) Incorporated by reference to Exhibit No. 10.17 to the registrant's registration statement on Form S-1 (File No.
33-14844), filed with the Securities and Exchange Commission.
(18) Incorporated by reference to Exhibit No. 10.18 to the registrant's registration statement on Form S-1 (File No.
33-14844), filed with the Securities and Exchange Commission.
</TABLE>
<PAGE> 26
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(19) Incorporated by reference to Exhibit No. 10.43 to the registrant's Annual Report on Form 10-K for the fiscal
year ended November 30, 1991 (Commission File No. 1-9610), filed with the Securities and Exchange Commission.
(20) Incorporated by reference to Exhibit No. 10.44 to the registrant's Annual Report on Form 10-K for the fiscal
year ended November 30, 1991 (Commission File No. 1-9610), filed with the Securities and Exchange Commission.
(21) Incorporated by reference to Exhibit No. 10.45 to the registrant's Annual Report on Form 10-K for the fiscal
year ended November 30, 1991 (Commission File No. 1-9610), filed with the Securities and Exchange Commission.
(22) Incorporated by reference to Exhibit No. 10.46 to the registrant's Annual Report on Form 10-K for the fiscal
year ended November 30, 1991 (Commission File No. 1-9610), filed with the Securities and Exchange Commission.
(23) Incorporated by reference to Exhibit No. 10.47 to the registrant's Annual Report on Form 10-K for the fiscal
year ended November 30, 1991 (Commission File No. 1-9610), filed with the Securities and Exchange Commission.
(24) Incorporated by reference to Exhibit No. 10.48 to the registrant's Annual Report on Form 10-K for the fiscal
year ended November 30, 1991 (Commission File No. 1-9610), filed with the Securities and Exchange Commission.
(25) Incorporated by reference to Exhibit No. 10.39 to the registrant's Annual Report on Form 10-K for the fiscal
year ended November 30, 1992 (Commission File No. 1-9610), filed with the Securities and Exchange Commission.
(26) Incorporated by reference to Exhibit No. 10.40 to the registrant's Annual Report on Form 10-K for the fiscal
year ended November 30, 1992 (Commission File No. 1-9610), filed with the Securities and Exchange Commission.
(27) Incorporated by reference to Exhibit No. 10.41 to the registrant's Annual Report on Form 10-K for the fiscal
year ended November 30, 1992 (Commission File No. 1-9610), filed with the Securities and Exchange Commission.
(28) Incorporated by reference to Exhibit No. 10.42 to the registrant's Annual Report on Form 10-K for the fiscal
year ended November 30, 1992 (Commission File No. 1-9610), filed with the Securities and Exchange Commission.
(29) Incorporated by reference to Exhibit No. 10.39 to the registrant's Annual Report on Form 10-K for the fiscal
year ended November 30, 1993 (Commission File No. 1-9610), filed with the Securities and Exchange Commission.
(30) Incorporated by reference to Exhibit No. 10.40 to the registrant's Annual Report on Form 10-K for the fiscal
year ended November 30, 1993 (Commission File No. 1-9610), filed with the Securities and Exchange Commission.
(31) Incorporated by reference to Exhibit 10.1 to the registrant's Quarterly Report on Form 10-Q for the quarter
ended February 28, 1994 (Commission File No. 1-9610), filed with the Securities and Exchange Commission.
(32) Incorporated by reference to Exhibit No. 28.1 to the registrant's Annual Report on Form 10-K for the fiscal
year ended November 30, 1990 (Commission File No. 1-9610), filed with the Securities and Exchange Commission.
(33) Incorporated by reference to Exhibit No. 28.2 to the registrant's registration statement on Form S-1 (File No.
33-14844), filed with the Securities and Exchange Commission.
(34) Incorporated by reference to Exhibit No. 28.3 to the registrant's registration statement on Form S-1 (File No.
33-14844), filed with the Securities and Exchange Commission.
</TABLE>
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(35) Incorporated by reference to Exhibit No. 28.4 to the registrant's registration statement on Form S-1 (File No.
33-14844), filed with the Securities and Exchange Commission.
(36) Incorporated by reference to Exhibit No. 28.5 to the registrant's registration statement on Form S-1 (File No.
33-14844), filed with the Securities and Exchange Commission.
</TABLE>
<PAGE> 1
EXHIBIT 10.28
RETIREMENT AND CONSULTING AGREEMENT
AGREEMENT made this 30th day of November, 1994, between CARNIVAL
CORPORATION, having its principal place of business at 3655 N.W. 87th Avenue,
Miami, Florida (the "COMPANY") and A. Kirk Lanterman, ("LANTERMAN"), residing at
714 W. Galer, Seattle, Washington, 98119.
RECITALS
A. Lanterman has served as President and Chief Executive Officer
of the Company's wholly-owned subsidiary, Holland America Line-Westours, Inc.
("HAL") since January 1989, and has performed exemplary service during said
years.
B. The Company desires to compensate Lanterman for such exemplary
service by way of retirement pay.
C. The Company desires to retain Lanterman's consulting services
following such retirement on the terms set forth in this Agreement.
IN CONSIDERATION of past services as related above and the consulting
services related below, it is agreed as follows:
1. Compensation For Past Services and Consulting Services
1.1 For a period of ten (10) years following the date of
retirement by Lanterman from active service with the Company or its
subsidiaries (the "RETIREMENT DATE"), the Company shall pay to Lanterman in
monthly installments an annual compensation of $300,000.00.
<PAGE> 2
1.2 In the event of Lanterman's death prior to the tenth
anniversary of the Retirement Date, the unpaid balance of this total
compensation ($3,000,000.00) shall be paid in full to Lanterman's estate within
30 days of the date of his death. The unpaid balance shall be its then present
value calculated by utilization of an interest rate of 7.5% per year.
2. Consulting Services
Commencing on the Retirement Date and for a period of ten (10)
years, Lanterman agrees to perform consulting services for the Company in
regard to the business operations of HAL upon the specific written request of
the Company. Such services shall be provided during normal business hours, on
such dates, for such time and at such locations as shall be agreeable to
Lanterman. Such services shall not require more than five (5) hours in any
calendar month, unless expressly consented to by Lanterman, which consent may
be withheld for any reason whatsoever. The Company will reimburse Lanterman
for any out-of-pocket expenses incurred by him in the performance of said
consulting services.
3. Independent Contractor
Commencing on the Retirement Date, after retirement, Lanterman
acknowledges that he will be solely an independent contractor and consultant.
He further acknowledges that he will not consider himself to be an employee of
the Company, and will not be entitled to any Company employment rights or
benefits.
4. Confidentiality
Lanterman will keep in strictest confidence, both during
-2-
<PAGE> 3
the term of this Agreement and subsequent to termination of this Agreement, and
will not during the term of this agreement or thereafter disclose or divulge to
any person, firm or corporation, or use directly or indirectly, for his own
benefit or the benefit of others, any confidential Company information
including, without limitation, to any trade secrets respecting the business or
affairs of the Company which he may acquire or develop in connection with or as
a result of the performance of his service hereunder. In the event of an
actual or threatened breach by Lanterman of the provisions of this paragraph,
the Company shall be entitled to injunctive relief restraining Lanterman from
the breach or threatened breach as it sole remedy. The Company hereby waives
the rights for damages, whether consequential or otherwise.
5. Enforceable
The provisions of this Agreement shall be enforceable
notwithstanding the existence of any claim or cause of action of Lanterman
against the Company, or the Company against Lanterman, whether predicated on
this Agreement or otherwise.
6. Applicable Law
This Agreement shall be construed in accordance with the laws
of the State of Washington, and venue for any litigation concerning an alleged
breach of this Agreement shall be in King County, Washington, and the
prevailing party shall be entitled to reasonable attorney's fees and costs
incurred.
7. Entire Agreement
This Agreement contains the entire agreement of the
-3-
<PAGE> 4
parties relating to the subject matter hereof. Any notice to be given under
this Agreement shall be sufficient if it is in writing an is sent by certified
or registered mail to Lanterman or to the Company to the attention of the
President, or otherwise as directed by the Company, from time to time, at the
addresses as they appear in the opening paragraph of this Agreement.
8. Waiver
The waiver by either party of a breach of any provision of
this Agreement shall not operate or be construed as a waiver of any subsequent
breach.
IN WITNESS WHEREOF, the Company and Lanterman have duly executed this
Agreement as of the day and year first above written.
CARNIVAL CORPORATION
By: HOWARD FRANK
-----------------------------------
Vice Chairman
A. KIRK LANTERMAN
A. KIRK LANTERMAN
--------------------------------------
-4-
<PAGE> 1
EXHIBIT 10.29
AMENDED AND RESTATED
CARNIVAL CORPORATION
1992 STOCK OPTION PLAN
(adopted by the Board of Directors on January 20, 1992
and amended on February 23, 1995)
Carnival Corporation, a Panamanian corporation (the "Company"), hereby
formulates and adopts the following 1992 Stock Option Plan (the "Plan") for key
employees of the Company and its Subsidiaries (as defined in Paragraph 5).
1. Purpose. The purpose of the Plan is to secure for the Company
the benefits of the additional incentive inherent in the ownership of Class A
Voting Common Stock, par value $.01 per share, of the Company ("Common Stock")
by selected key employees of the Company and its Subsidiaries who, in the
judgment of the Committee (as defined in Paragraph 2), are important to the
success and the growth of the business of the Company and its Subsidiaries and
to help the Company and its Subsidiaries secure and retain the services of such
employees.
2. Administration. The Plan shall be administered in a manner
consistent with the requirements for exemptive relief under Rule 16b-3 or its
successor provision under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). The Plan shall be administered by a committee (the
"Committee") consisting solely of two or more members of the Board of Directors
of the Company (the Board of Directors"), each of whom, to the extent necessary
to comply with the requirements of Rule 16b-3 under the Exchange Act and
Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code")
and the regulations issued thereunder ("162(m)"), is intended to be a
"disinterested person", within the meaning of Rule 16b-3 under the Exchange Act
and an "outside director" within the meaning of Section 162(m); provided that
the failure of any member of the Committee to qualify as a "disinterested
person" or an "outside director" shall not affect the validity, terms or
conditions of any award made hereunder which otherwise complies with the
provisions of this Plan. The Committee shall select one of its members as
Chairman and shall make such rules and regulations as it shall deem appropriate
concerning the holding of its meetings and transaction of its business. A
majority of the whole Committee shall constitute a quorum, and the act of a
Page 1 of 8
<PAGE> 2
majority of the members of the Committee present at a meeting at which a quorum
is present shall be the act of the Committee. Any member of the Committee may
be removed at any time either with or without cause by resolution adopted by
the Board of Directors, and any vacancy on the Committee may at any time be
filled by resolution adopted by the Board of Directors.
Subject to the express provisions of the Plan, the Committee shall
have plenary authority to interpret the Plan, to prescribe, amend and rescind
the rules and regulations relating to it and to make all other determinations
deemed necessary and advisable for the administration of the Plan. The
determinations of the Committee shall be conclusive.
3. Common Stock Subject to Options. Subject to the adjustment
provisions of Paragraph 13 below, a maximum of 4,000,000 shares of Common Stock
may be made subject to options granted under the Plan. If, and to the extent
that, options granted under the Plan shall terminate, expire or be canceled for
any reason without having been exercised, new options may be granted in respect
of the shares covered by such terminated, expired or canceled options. The
granting and such terms of such new options shall comply in all respects with
the provisions of the Plan.
Shares sold upon the exercise of any option granted under the Plan may
be shares of authorized and unissued Common Stock, shares of issued Common
Stock held in the Company's treasury, or both.
There shall be reserved at all times for sale under the Plan a number
of shares, of either authorized and unissued shares of Common Stock, shares of
Common Stock held in the Company's treasury, or both, equal to the maximum
number of shares which may be purchased pursuant to options granted or that may
be granted under the Plan.
4. Grant of Options. The Committee shall have the authority and
responsibility, within the limitations of the Plan, to determine the employees
to whom options are to be granted, whether the options granted shall be
"incentive stock options" ("Incentive Options"), within the meaning of section
422(b) of the Code, or options which are not Incentive Options ("Nonqualified
Options"), the number of shares that may be purchased under each option and the
option price; provided that the maximum number of shares in respect of which
Incentive Options and/or Nonqualified Options may be granted to any individual
employee in any calendar year during the term of the Plan shall be 1,000,000.
In determining the employees to whom options shall be granted and the
number of shares to be covered by each such option, the Committee shall take
into consideration the employee's present and potential contribution to the
success of the Company and its
Page 2 of 8
<PAGE> 3
Subsidiaries and such other factors as the Committee may deem proper and
relevant.
5. Employees Eligible. Options may be granted to any key
employee of the Company or any of its Subsidiaries. Options may be granted to
employees who hold or have held options under this Plan or any similar or other
awards under any other plan of the Company or any of its Subsidiaries.
Employees who are also officers or directors of the Company or any of its
Subsidiaries shall not by reason of such offices be ineligible as recipients of
options.
For purpose of the Plan, a "Subsidiary" of the Company shall mean any
"subsidiary corporation", as such term is defined in section 424(f) of the
Code. Any entity shall be deemed a Subsidiary of the Company only for such
periods as the requisite ownership relationship is maintained.
No person who would own, directly or indirectly, immediately after the
granting of an option to such person, more than 10% of the total combined
voting power of all classes of stock of the Company or any of its Subsidiaries,
except as permitted by section 422(c) of the Code, shall be eligible to receive
an Incentive Option under the Plan.
An employee receiving an option pursuant to the Plan is hereinafter
referred to as an "Optionee".
6. Price. The option price of each share of Common Stock
purchasable under any Incentive Option granted pursuant to the Plan shall not
be less than the Fair Market Value (as defined below) thereof at the time the
option is granted. The Committee is hereby given the authority to determine
the price at which any Nonqualified Option may be granted.
For purposes of the Plan, "Fair Market Value" of a share of Common
Stock means the average of the high and low sales prices of a share of Common
Stock on the New York Stock Exchange Composite Tape on the date in question.
If shares of Common Stock are not traded on the New York Stock Exchange on such
date, "Fair Market Value" of a share of Common Stock shall be determined by the
Committee in its sole discretion.
7. Duration of Options. Each option granted hereunder shall
become exercisable, in whole or in part, at the time or times provided by the
Committee; provided, however, that if an optionee's employment with the Company
or any Subsidiary shall terminate by reason of death or "permanent and total
disability", within the meaning of section 22(e)(3) of the Code ("Disability"),
each outstanding option granted to such optionee shall become exercisable in
full in respect of the aggregate number of share covered thereby.
Page 3 of 8
<PAGE> 4
Notwithstanding any provision of the Plan to the contrary, the
unexercised portion of any option granted under the Plan shall automatically
and without notice terminate and become null and void at the time of the
earliest to occur of the following:
(a) The expiration of 10 years from the date on which such option
was granted;
(b) The expiration of one year from the date the Optionee's
employment with the Company or any of its Subsidiaries shall terminate by
reason of Disability; provided, however, that if the Optionee shall die during
such one-year period, the provisions of subparagraph C9) below shall apply;
(c) The expiration of one year from the date of the Optionee's
death, if such death occurs either during employment by the Company or any of
its Subsidiaries or during the one-year period described in subparagraph (b)
above.
(d) The date the Optionee's employment with the Company or any of
its Subsidiaries shall terminate by reason of "cause" (as hereafter defined).
Termination by reason of "cause" shall mean termination by reason of
participation and conduct during employment consisting of fraud, felony,
willful misconduct or commission of any act which causes or may reasonably be
expected to cause substantial damage to the Company or any of its Subsidiaries;
(e) The expiration of three months from the date the Optionee's
employment with the Company or any of its Subsidiaries shall terminate other
than by reason of death, Disability or termination for cause; and
(f) In whole or in part, at such earlier time or upon the
occurrence of such earlier event as the Committee in its discretion may provide
upon the granting of such option.
The Committee may determine whether any given leave of absence
constitutes a termination of employment. The options granted under the Plan
shall not be affected by any change of employment so long as the Optionee
continues to be an employee of the Company or any of its Subsidiaries.
8. Exercise of Options. An option granted under this Plan shall
be deemed exercised when the person entitled to exercise the option (a)
delivers written notice to the Company at its principal business office,
directed to the attention of its Secretary, of the decision to exercise, (b)
concurrently tenders to the Company full payment for the shares to be purchased
pursuant to such exercise,, and (c) complies with such other reasonable
requirements as the Committee establishes pursuant to Paragraph 2 of the Plan.
Page 4 of 8
<PAGE> 5
Payment for shares with respect to which an option is exercised may be made in
cash, check or money order and, subject to the Committee's consent, by Common
Stock. No person will have the rights of a shareholder with respect to shares
subject to an option granted under this Plan until a certificate or
certificates for the shares have been delivered to him.
9. Nontransferability of Options. No option or any right
evidenced thereby shall be transferable in any manner other than by will or the
laws of descent and distribution, and, during the lifetime of an Optionee, only
the Optionee (or the Optionee's court-appointed legal representative) may
exercise an option. In the Committee's discretion, an option may be
transferred pursuant to a "qualified domestic relations order", as defined in
section 414(p) of the Code.
10. Rights of Optionee. Neither the Optionee nor the Optionee's
executor or administrator shall have any of the rights of a stockholder of the
Company with respect to the shares subject to an option until certificates for
such shares shall actually have been issued upon the due exercise of such
option. No adjustment shall be made for any regular cash dividend for which the
record date is prior to the date of such due exercise and full payment for such
shares has been made therefor.
11. Right To Terminate Employment. Nothing in the Plan or in any
option shall confer upon any Optionee the right to continue in the employment
of the Company or any of its Subsidiaries or affect the right of the Company or
any of its Subsidiaries to terminate the Optionee's employment at any time,
subject, however, to the provisions of any agreement of employment between the
Company or any of its Subsidiaries and the Optionee.
12. Nonalienation of Benefits. No right or benefit under the Plan
shall be subject to anticipation, alienation, sale, assignment, hypothecation,
pledge, exchange, transfer, encumbrance or charge, and any attempt to
anticipate, alienate, sell, assign, hypothecate, pledge, exchange, transfer,
encumber or charge the same shall be void. To the extent permitted by
applicable law, no right or benefit hereunder shall in any manner be liable for
or subject to the debts, contracts, liabilities or torts of the person entitled
to such benefits.
13. Adjustment Upon Changes in Capitalization, etc. In the event
of any stock split, stock dividend, stock change, reclassification,
recapitalization or combination of shares which changes the character or amount
of Common Stock prior to exercise of any portion of an option theretofore
granted under the Plan, such option, to the extent that it shall not have been
exercised, shall entitle the Optionee (or the Optionee's executor or
administrator) upon its exercise to receive in substitution
Page 5 of 8
<PAGE> 6
therefor such number and kind of shares as the Optionee would have been
entitled to receive if the Optionee had actually owned the stock subject to
such option at the time of the occurrence of such change; provided, however,
that if the change is of such a nature that the Optionee, upon exercise of the
option, would receive property other than shares of stock the Committee shall
make an appropriate adjustment in the option to provide that the Optionee (or
the Optionee's executor or administrator) shall acquire upon exercise only
shares of stock of such number and kind as the Committee, in its sole judgment,
shall deem equitable; and, provided further, that any such adjustment shall be
made so as to conform to the requirements of section 424(a) of the Code.
In the event that any transaction (other than a change specified in
the preceding paragraph) described in section 424(a) of the Code affects the
Common Stock subject to any unexercised option, the Board of Directors of the
surviving or acquiring corporation shall make such similar adjustment as is
permissible and appropriate.
If any such change or transaction shall occur, the number and kind of
shares for which options may thereafter be granted under the Plan shall be
adjusted to give effect thereto.
14. Purchase for Investment. Whether or not the options and
shares covered by the Plan have been registered under the Securities Act of
1933, as amended, each person exercising an option under the Plan may be
required by the Company to give a representation in writing that such person is
acquiring such shares for investment and not with a view to, or for sale in
connection with, the distribution of any part thereof. The Company will
endorse any necessary legend referring to the foregoing restriction upon the
certificate or certificates representing any shares issued or transferred to
the Optionee upon the exercise of any option granted under the Plan.
15. Form of Agreements with Optionees. Each option granted
pursuant to the Plan shall be in writing and shall have such form, terms and
provisions, not inconsistent with the provisions of the Plan, as the Committee
shall provide for such option. The effective date of the granting of an option
shall be the date on which the Committee approves such grant. Each Optionee
shall be notified promptly of such grant, and a written agreement shall be
promptly executed and delivered by the Company and the Optionee.
16. Termination and Amendment of Plan and Options. Unless the
Plan shall theretofore have been terminated as hereinafter provided, options
may be granted under the Plan at any time, and from time to time, prior to the
tenth anniversary of the Effective Date (as defined below), on which date the
Plan will expire, except as to options then outstanding under the Plan. Such
options shall
Page 6 of 8
<PAGE> 7
remain in effect until they have been exercised, have expired or have been
canceled.
The Plan may be terminated or amended at any time by the Board of
Directors; provided, however, that any such amendment shall comply with all
applicable laws (including Code section 422), applicable stock exchange listing
requirements, and applicable requirements for exemption (to the extent
necessary) under Rule 16b-3 under the Exchange Act.
No termination, modification or amendment of the Plan, without the
consent of the Optionee, may adversely affect the rights of such person with
respect to such option. With the consent of the Optionee and subject to the
terms and conditions of the Plan, the Committee may amend outstanding option
agreements with any Optionee.
17. Effective Date of Plan. The Plan shall become effective upon
its adoption by the Board of Directors (the "Effective Date"), subject,
however, to its approval by the Company's shareholders within 12 months after
the date of such adoption.
18. Government and Other Regulations. The obligation of the
Company with respect to options granted under the Plan shall be subject to all
applicable laws, rules and regulations and such approvals by any governmental
agency as may be required, including, without limitation, the effectiveness of
any registration statement required under the Securities Act of 1933, as
amended, the rules and regulations of any securities exchange on which the
Common Stock may be listed.
19. Withholding. The Company's obligation to deliver shares of
Common Stock in respect of any option granted under the Plan shall be subject
to all applicable federal, state and local tax withholding requirements.
Federal, state and local tax withholding tax due upon the exercise of any
option (or upon any disqualifying disposition of shares of Common Stock subject
to an Incentive Option) in the Committee's sole discretion, may be paid in
shares of Common Stock (including the withholding of shares subject to an
option) upon such terms and conditions as the Committee may determine.
20. Separability. If any of the terms or provision of the Plan
conflict with the requirements of Rule 16b-3 under the Exchange Act and/or
section 422 of the Code, then such terms or provisions shall be deemed
inoperative to the extent they so conflict with the requirements of Rule 16b-3
and/or section 422 of the Code. With respect to Incentive Options, if the Plan
does not contain any provision required to be included herein under section 422
of the Code, such provision shall be deemed to be incorporated herein with the
same force and effect as if such provision had been
Page 7 of 8
<PAGE> 8
set out at length herein; provided, further, that to the extent any option
which is intended to qualify as an Incentive Option cannot so qualify, such
option, to that extent, shall be deemed to be a Nonqualified Option for all
purposes of the Plan.
21. Non-Exclusivity of the Plan. Neither the adoption of the Plan
by the Board of Directors nor the submission of the Plan to the shareholders of
the Company for approval shall be construed as creating any limitation on the
power of the Board of Directors to adopt such other incentive arrangements as
it may deem desirable, including, without limitation, the granting of stock
options and the awarding of stock and cash otherwise than under the Plan, and
such arrangements may be either generally applicable or applicable only in
specific cases.
22. Exclusion from Pension and Profit-Sharing Computation. By
acceptance of an option, each Optionee shall be deemed to have agreed that such
grant is special incentive compensation that will not be taken into account, in
any manner, as salary, compensation or bonus in determining the amount of any
payment under any pension, retirement or other employee benefit plan of the
Company or any of its Subsidiaries. In addition, such option will not affect
the amount of any life insurance coverage, if any, provided by the Company on
the life of the Optionee which is payable to such beneficiary under any life
insurance plan covering employees of the Company or any of its Subsidiaries.
23. Governing Law. The Plan shall be governed by, and construed
in accordance with, the laws of the State of Florida.
Page 8 of 8
<PAGE> 1
EXHIBIT 10.30
1994 CARNIVAL CRUISE LINES
KEY MANAGEMENT INCENTIVE PLAN
OBJECTIVE
The Carnival Cruise Lines 1994 Key Management Incentive Plan (the "Plan") is
designed to focus managerial attention on the objective of maximizing the
profitability of the Carnival Cruise Lines division ("CCL") of Carnival
Corporation. The Plan provides a framework within which the participants share
in the incremental earnings of CCL achieved from applicable business operations
on a fiscal year-to-year basis.
PLAN ADMINISTRATION
The administrator of the Plan is the Compensation Committee of Carnival
Corporation (the "Committee"). The Committee shall have sole discretion in
resolving any questions regarding the administration or terms of the Plan not
addressed in this document as well as in resolving any ambiguities that may
exist in this document.
PLAN YEAR
The "Plan Year" shall be the 12-month period ending November 30 of each year.
PARTICIPATION
The President, Senior Vice President and Vice-Presidents of CCL shall be
eligible to participate in the Plan. The Committee may expand Plan
eligibility to include directors, managers and/or supervisors for any Plan
year. Participation in the Plan shall be determined on an annual basis by the
Committee. No employee will have the automatic right to be selected as a
participant for any year or, having been selected as a participant for one
year, be considered a participant for any other year.
Only persons who are employed by CCL or one of its divisions on the first day
of the Plan Year are eligible to participate in the Plan except that persons
who commence employment following the beginning of the Plan Year may, with the
approval of the Committee, be allowed to participate in the Plan. Such
late-entry participants will be awarded Points (as defined below) pro-rated to
the time of their entry into the Plan, subject to the approval of the
Committee.
<PAGE> 2
In order to actually receive an Incentive Award (as defined below) under the
Plan, a participant must be employed by CCL or one of its divisions on the last
day of the Plan year. The only exception to this requirement is for
participants whose employment is terminated prior to the last day of the Plan
Year as the result of death, disability or retirement ("Early Termination
Employees").
BONUS POOL
The total amount payable under the Plan for each Plan year (the "Bonus Pool")
shall be equal to two percent (2%) (the "Bonus Percentage") of (x) the net
income generated within each Plan Year by CCL and its divisions calculated in
accordance with generally accepted accounting principals consistently applied
(the "Net Income") minus (y) CCL's Net Income for the fiscal year ending
November 30, 1993. The Bonus Percentage for the fiscal years ending November
30, 1996 and thereafter, if applicable, will be determined by the Board of
Directors within 90 days of the commencement of each such fiscal year.
METHOD OF CALCULATING INCENTIVE AWARDS
The Committee shall, in its discretion and after consideration of the
recommendations of the President of CCL, assign a specific number of points
(the "Points") to each participant. The Points awarded to each participant
will be communicated to the participant during the first ninety (90) days of
each Plan Year. Such decisions may be revised during a Plan Year by the
Committee due to major changes in position responsibilities occurring during
the Plan Year.
The Committee, in its sole discretion and after consideration of the
recommendations of the President of CCL, shall adjust the Points assigned to
each participant by multiplying such particpant's Points by a percentage within
the range set forth below corresponding to such participant's evaluated
performance for such year (the "Weighted Points"):
- EXCELLENT PERFORMANCE 90-100%
- GOOD PERFORMANCE 75-89%
- FAIR PERFORMANCE 60-74%
- LESS THAN FAIR 0-59%
PERFORMANCE
Each particpant shall receive an Incentive Award equal to the product of his or
her Weighted Points multiplied by the "Point Value". The Point Value shall be
equal to (i) the amount of the Bonus Pool, divided by (ii) the aggregate Points
(before adjustments) awarded to participants for each Plan year.
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<PAGE> 3
Any amounts remaining in the Bonus Pool following the calculation of the
Incentive Awards pursuant to the preceding paragraph shall be available for
discretionary distribution by the Committee to participants.
PAYMENT OF INCENTIVE AWARDS
Incentive Awards are paid on a date determined by the Committee which is within
seventy-five (75) days following the conclusion of each Plan Year. At the
discretion of the Committee, advance partial payment of Incentive Awards may be
made based on anticipated Net Income. At the discretion of the Committee,
special arrangements may be made for earlier payment to Early Termination
Employees.
Incentive Awards shall be payable eighty percent (80%) in cash and twenty
percent (20%) in shares of Class A Common Stock of Carnival Corporation;
provided, however, that the Incentive Award to the President of CCL shall be
payable sixty-five percent (65%) in cash and thirty-five (35%) in Class A
Common Stock. The number of shares issuable to each participant shall be
determined by dividing the dollar amount of the stock portion of the
participant's Incentive Award by the average closing price for the Class A
Common Stock for the last ten (10) trading days of the Plan year, as quoted on
the national stock exchange on which the Class A Common Stock is traded.
Fractional shares of the Class A Common Stock will not be issued. The value of
the Class A Common Stock received by Plan participants will be reported to
governmental taxing authorities, and taxes shall be withheld in respect of such
Class A Common Stock, in accordance with the requirements of applicable law.
DURATION OF PLAN
The Plan will be effective for the fiscal years 1994, 1995, and 1996. It is
the intent of Carnival Corporation to make a decision on whether or not to
renew the Plan for an additional year in August of each year in order to effect
a 2-year planning horizon (e.g., decision by August 1995 as to whether or not
to extend the Plan to 1997).
RESERVATION OF SHARES
Subject to adjustment as provided in the last sentence of this paragraph, the
maximum number of shares of Class A Common Stock that shall be authorized and
reserved for issuance under the Plan shall be 100,000 shares of Class A Common
Stock. The maximum number of shares authorized and reserved may be increased
from time to time by approval of the Board, and, if required pursuant to Rule
16b-3 under the Exchange Act, the stockholders of Carnival Corporation. The
shares to be issued to participants pursuant to the Plan may be, at the
election of Carnival Corporation, either
3
<PAGE> 4
treasury shares or shares authorized but unissued, and, if treasury shares are
used, all references in the Plan to the issuance of shares shall, for corporate
law purposes, be deemed to mean the transfer of shares from treasury. Any
shares of Class A Common Stock that are subject to an Incentive Award that
lapses or expires shall automatically again become available for use under the
Plan. In the event of any reorganization, merger, consolidation,
recapitalization, liquidation, reclassification, stock dividend, stock split,
combination of shares or any other change in the corporate structure or shares
of Carnival Corporation, the Committee shall make appropriate adjustment as to
the number and kind of securities subject to and reserved under the Plan and,
in order to prevent the dilution or enlargement of the rights of participants,
the number and kind of securities subject to outstanding stock awards.
PURCHASE FOR INVESTMENT
Class A Common Stock issued will be subject to a restriction on sale commencing
from date of issuance and continuing until, but not including, the first
trading day in the second January following the end of the Plan year in respect
of which the Class A Common Stock was issued (e.g., Class A Common Stock issued
in respect of the Plan year ending November 30, 1994 would be subject to a
restriction on a sale that would not end until the first trading day in
January, 1996). Holders will be eligible to receive dividends during the
restriction period.
Whether or not the shares of Class A Common Stock covered by the Plan have been
registered under the Securities Act of 1933, as amended, each person acquiring
shares of Class A Common Stock under the Plan may be required by Class A Common
Stock to give a representation in writing that such person is acquiring such
shares for investment and not with a view to, or for sale in connection with,
the distribution of any part thereof. Carnival Corporation will endorse any
necessary legend referring to the foregoing restriction upon the certificate or
certificates representing any shares of Class A Common Stock issued or
transferred to the Plan participants upon the grant of any shares of Class A
Common Stock under the Plan.
AMENDMENT OF PLAN
The Board of Directors of Carnival Corporation may amend the Plan from time to
time in such respects as the Board may deem advisable; provided, however, that
no such amendment shall be effective without approval of the stockholders of
Carnival Corporation if stockholder approval of the amendment is required
pursuant to Rule 16b-3 under the Exchange Act.
4
<PAGE> 5
GOVERNMENTAL AND OTHER REGULATIONS
The Plan and the Class A Common Stock awards under the Plan shall be subject to
all applicable federal and state laws, rules and regulations and such approvals
by any governmental or regulatory agency or national securities exchange, as
may be required. Carnival Corporation shall not be required to issue or
deliver any certificates or shares of stock prior to the completion of any
registration or qualification of such shares under any federal or state law, or
any ruling or regulations of any governmental body or national securities
exchange which Carnival Corporation shall, in its sole discretion, determine
to be necessary or advisable.
5
<PAGE> 1
EXHIBIT 10.31
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (the "Agreement") is made and entered
into as of the 30th day of November, 1994, by and among (i) CHC International,
Inc., a Florida corporation doing business as "Carnival Hotels and Casinos"
("CHC"), and (ii) Carnival Corporation, a Panamanian corporation ("CCL").
RECITALS
A. CHC has authorized capital of 10,000,000 shares of common
stock, $.01 par value per share (the "Common Stock"), and 1,000,000 shares of
preferred stock, $.01 par value per share.
B. CHC filed Amendment No. 1 to Registration Statement on Form
S-1 ("Amendment No. 1") with the Securities and Exchange Commission (the "SEC")
(File No. 33-79436) on November 2, 1994, which relates to the proposed dividend
by CCL of approximately 1,412,425 shares of Common Stock to its shareholders
(the "Distribution").
C. CHC has 3,177,500 shares of Common Stock issued and
outstanding.
D. CCL desires to make an equity investment of $12,500,000 in
CHC, subject to the terms and conditions of this Agreement, and CHC believes
such investment, together with the Other Investments (as defined and described
in paragraph E below), is in the best interest of CHC and its shareholders.
E. Concurrently with the investment to be made by CCL pursuant to
this Agreement, Sherwood M. Weiser, Donald E. Lefton, Thomas F. Hewitt, Peter
L. Sibley, W. Peter Temling and Robert B. Sturges are making as investment of
an aggregate of $10,500,000 in CHC, and Irving Zeldman is making an investment
of $2,000,000 in CHC (such other investors are hereinafter referred to as the
"Other Investors", and such other investments are hereinafter referred to as
the "Other Investments").
F. Concurrently with the Other Investments, CHC is granting to
the Other Investors options to purchase an aggregate of 453,026 shares of
Common Stock at an exercise price of $12.50 per share.
G. CCL and CHC are parties to that certain Loan Agreement, dated
as of March 9, 1994, providing for CCL's loan to CHC of up to $10 million (the
"CCL Loan"), the entire principal amount of which is currently outstanding.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants contained herein, the parties agree as follows:
ARTICLE I - SALE AND PURCHASE OF SHARES; GRANT OF OPTIONS
1.1 Sale and Purchase of Shares.
(a) On the terms and subject to the conditions of this
Agreement, at the Closing (as defined in Section 2.1), CHC shall sell, convey,
assign, transfer and deliver 1,000,000 shares of Common Stock to CCL (the
"Purchased Shares").
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<PAGE> 2
(b) To effect the transfers contemplated by Section
1.1(a), at the Closing, CHC shall deliver or cause to be delivered to CCL,
against payment therefor in accordance with Section 1.2 hereof, stock
certificates (bearing the appropriate "restricted transfer" legend to the
effect that such shares have not been registered under the Securities Act of
1933, as amended (the "Securities Act")), representing the Common Stock being
sold to CCL by CHC.
1.2 Purchase Price; Payment for Shares.
(a) The purchase price (the "Purchase Price") for the
shares of Common Stock being purchased by CCL is $12,500,000.
(b) The Purchase Price shall be payable to CHC on the
Closing Date by the delivery date by CCL to CHC of (a) $12,075,000 by wire
transfer in same day funds or by a cashiers check, provided that such amount
shall be offset by the outstanding principal balance owed by CHC to CCL under
the CCL Loan (currently $10,000,000), and as a result of such offset and upon
payment by CHC to CCL at the Closing of all accrued interest under the CCL
Loan, the promissory note evidencing the indebtedness of CHC under the CCL Loan
shall be cancelled and returned to CHC, (b) a promissory note in the aggregate
principal amount of $425,000 and (c) a security and pledge agreement. The
promissory note to be executed by CCL (the "Promissory Note") shall provide for
four equal annual installments of principal and annual payments of interest,
and shall be in substantially the form attached hereto as Exhibit A. The
security and pledge agreement to be executed by the CCL (the "Pledge
Agreement") shall provide for the pledge of 40,000 shares of the] Common Stock
purchased hereunder by CCL as collateral for the Promissory Note, and shall be
in substantially the form attached hereto as Exhibit B.
1.3 Registration Rights. CHC shall grant registration rights with
respect to the Purchased Shares, substantially in accordance with the terms set
forth in the Registration Rights Agreement attached hereto as Exhibit C (the
"Registration Rights Agreement").
ARTICLE II - CLOSING
2.1 Closing. The closing of transactions contemplated hereby (the
"Closing") shall be held at 9:00 a.m., Miami time, on November 30, 1994 (the
"Closing Date"), at the offices of Greenberg, Traurig, Hoffman, Lipoff, Rosen &
Quentel, P.A., 1221 Brickell Avenue, Miami, Florida 33131, or at such other
place and at such other time as the parties may mutually agree.
2.2 Deliveries by CHC. At or prior to the Closing, CHC shall (i)
deliver to CCL one or more certificates representing all of the shares of
Common Stock purchased by CCL, provided that, the certificates representing
40,000 of the shares of Common Stock issued to CCL and pledged to CHC pursuant
to the Pledge Agreement shall be immediately returned to and retained by CHC
pursuant to the Pledge Agreement, (ii) execute and deliver the Registration
Rights Agreement and (iii) pay and deliver to CCL all accrued and unpaid
interest under the CCL Loan.
2.3 Deliveries by CCL. At or prior to the Closing, the following
deliveries shall be made to CHC: (i) CCL shall pay and deliver the Purchase
Price required to be delivered pursuant to Section 1.2, (ii) CCL shall execute
and deliver the Registration Rights Agreement, (iii) CCL shall execute and
deliver the Promissory Note and the Pledge Agreement and (iv) CCL shall deliver
the cancelled promissory note under the CCL Loan.
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<PAGE> 3
ARTICLE III - REPRESENTATIONS AND WARRANTIES
OF CHC
CHC hereby represents and warrants to CCL that:
3.1 Corporate Existence and Qualification. CHC is a corporation
duly organized, validly existing and in good standing under the laws of the
state of Florida; has the corporate power to own, manage, lease and hold its
properties and to carry on its business as and where such properties are
presently located and such business is presently conducted; and is duly
qualified to do business as a foreign corporation in each jurisdiction where
the failure to be so qualified would have a material adverse effect on its
business, financial condition or results of operations.
3.2 Authority, Approval and Enforceability. This Agreement has
been duly executed and delivered by CHC, and CHC has all requisite corporate
power and authority to execute and deliver this Agreement, to consummate the
transactions contemplated hereby, and to perform its obligations hereunder.
This Agreement constitutes the legal, valid and binding obligation of CHC,
enforceable in accordance with its terms, except as such enforcement may be
limited by general equitable principles or by applicable bankruptcy,
insolvency, moratorium, or similar laws and judicial decisions from time to
time in effect which affect creditors' rights generally.
3.3 Capitalization and Ownership. CHC's authorized capital stock
consists of (i) 10,000,000 shares of Common Stock, of which 3,177,500 shares
are issued and outstanding, and (ii) 1,000,000 shares of preferred stock, none
of which are outstanding. All of the outstanding shares of Common Stock are
duly authorized, validly issued, fully paid and nonassessable.
3.4 Information in Amendment No. 1. Except with respect to the
transactions contemplated under this Agreement, Amendment No. 1 does not
contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.
ARTICLE IV - REPRESENTATIONS AND WARRANTIES OF CCL
CCL represents and warrants to CHC, that:
4.1 Authority, Approval and Enforceability. This Agreement has
been duly executed and delivered by CCL. CCL has all requisite power and
authority to execute and deliver this Agreement, to consummate the transactions
contemplated hereby, and to perform its obligations hereunder. This Agreement
constitutes the legal, valid and binding obligation of CCL, enforceable in
accordance with its terms, except as such enforcement may be limited by general
equitable principles or by applicable bankruptcy, insolvency, moratorium, or
similar laws and judicial decisions from time to time in effect which affect
creditors' rights generally.
4.2 Investment Representations.
(a) CCL is acquiring the Common Stock issuable pursuant
to this Agreement for its own account and not with a view to, or for sale in
connection with, a "distribution," as such term is used in Section 2(11) of the
Securities Act.
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<PAGE> 4
(b) CCL is an "accredited investor," as that term is
defined in Rule 501(a) of Regulation D promulgated under the Securities Act.
(c) CCL understands that the sale of shares of Common
Stock under this Agreement has not been registered under the Securities Act or
applicable state securities laws.
(d) CCL understands that the certificates representing
shares of Common Stock issued to CCL pursuant to this Agreement shall bear a
"restricted transfer" legend substantially as follows:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933 or any applicable
state law. They may not be offered for sale, sold,
transferred or pledged without (1) registration under the
Securities Act of 1933 and any applicable state law, or (2) at
holder's expense, an opinion (satisfactory to the Company) of
counsel (satisfactory to the Company) the registration is not
required."
(e) CCL acknowledges that all matters relating to CHC,
the Agreement and CCL's investment in the Common Stock have been explained to
the satisfaction of CCL and that CCL understands the speculative nature and
risks involved in its investment.
(f) CCL can bear the economic risks inherent in its
investments in the Common Stock.
(g) CCL has been afforded the opportunity to ask
questions of, and receive answers from CHC and to obtain any additional
information, to the extent that CHC possesses such information or could have
acquired it without unreasonable effort or expense, necessary to verify the
accuracy of the information contained in Amendment No. 1 delivered to CCL (the
receipt of which is acknowledged by CCL) and has in general had access to all
information deemed material to an investment decision with respect to the
acquisition of the Common Stock.
(h) CCL acknowledges that it has been advised that:
THE FLORIDA SECURITIES ACT PROVIDES, WHERE SALES ARE MADE TO
FIVE OR MORE PERSONS IN FLORIDA, THAT ANY SALE MADE PURSUANT
TO SUBSECTION 517.061(11) OF THE FLORIDA SECURITIES ACT SHALL
BE VOIDABLE BY SUCH FLORIDA PURCHASER EITHER WITHIN THREE DAYS
AFTER THE FIRST TENDER OF CONSIDERATION IS MADE BY SUCH
PURCHASER TO THE ISSUER, AN AGENT OF THE ISSUER, OR AN ESCROW
AGENT OR WITHIN THREE DAYS AFTER THE AVAILABILITY OF THAT
PRIVILEGE IS COMMUNICATED TO SUCH PURCHASER, WHICHEVER OCCURS
LATER.
(i) CCL acknowledges that the holding period requirements
under Rule 144 promulgated under the Securities Act will not begin to run until
the Promissory Note delivered by CCL has been satisfied in full.
4.3 Representations Relied Upon by CCL. CCL acknowledges receipt
of Amendment No. 1, which describes, among other things, the Distribution and
certain risk factors relating to an investment in Common Stock of CHC. CCL is
acquiring the Common Stock without having been furnished any representations or
warranties of any kind whatsoever with respect to CHC's business and financial
condition, other than the representations contained herein. Without limiting
the generality of the foregoing, CCL
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<PAGE> 5
acknowledges that neither CHC nor any other person has provided, and CCL is not
relying in any way upon, any representations regarding projections or future
performance of CHC.
ARTICLE V - CONDITIONS TO CLOSING
The Closing shall be subject to the satisfaction on or before the
Closing Date of the following conditions:
5.1 Other Investments. The Other Investments shall have been
consummated.
5.2 Representations and Warranties. All representations and
warranties made in this Agreement by the parties hereto shall be true and
complete on the Closing Date as if such representations and warranties had been
made on such date.
ARTICLE VI - MISCELLANEOUS
6.1 Confidentiality. The parties hereto shall hold in strict
confidence all, and not divulge or disclose any, information of any kind
concerning the transactions contemplated by this Agreement; provided, however,
that the foregoing obligation of confidence shall not apply to (i) information
that is or becomes generally available to the public other than as a result of
a disclosure by the parties hereto and (ii) information that is required by
federal securities laws or otherwise to be disclosed by the parties hereto.
6.2 Further Assurances. Following the Closing, the parties shall
execute and deliver such documents, and take such other action, as shall be
reasonably requested by any other party hereto to carry out the transactions
contemplated by this Agreement.
6.3 Publicity. Neither of the parties hereto shall issue or make,
or cause to have issued or made, any public release or announcement concerning
this Agreement or the transactions contemplated hereby, without the advance
approval in writing of the form and substance thereof by the other party
hereto, which approval shall not be unreasonably withheld, except as required
by law or by the rules of the National Association of Securities Dealers or the
United States Securities Exchange Commission (in which case, so far as
possible, there shall be consultation between the parties prior to such
announcement), and the parties shall endeavor jointly to agree on the text of
any announcement or circular so approved or required.
6.4 Costs and Expenses. Each of the parties to this Agreement
shall bear its own expenses incurred in connection with the negotiation,
preparation, execution and closing of this Agreement and the transactions
contemplated hereby.
6.5 Notices. Any notice, request, instruction, correspondence or
other document to be given hereunder by any party hereto to another (herein
collectively called "Notice") shall be in writing and delivered personally or
mailed by registered or certified mail, postage prepaid and return receipt
requested, or by telecopier, or by a reputable overnight courier, as follows:
CHC: CHC International, Inc.
3250 Mary Street, 5th Floor
Miami, Florida 33133
Attention: President
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<PAGE> 6
CCL: Carnival Corporation
3655 N.W. 87th Avenue
Miami, Florida 33178
Attention: President
6.6 Governing Law. The provisions of this agreement and the
documents delivered pursuant hereto shall be governed by and construed in
accordance with the laws of the State of Florida.
6.7 Entire Agreement; Amendments and Waivers. This Agreement,
together with all exhibits and schedules attached hereto, constitutes the
entire agreement between and among the parties hereto pertaining to the subject
matter hereof and supersedes all prior agreements, understandings, negotiations
and discussions, whether oral or written, of the parties, and there are no
warranties, representations or other agreements between the parties in
connection with the subject matter hereof except as set forth specifically
herein or contemplated hereby. No supplement, modification or waiver of this
Agreement shall be binding unless executed in writing by the party to be bound
thereby. No waiver of any of the provisions of this Agreement shall be deemed
or shall constitute a waiver of any other provision hereof (regardless of
whether similar), nor shall any such waiver constitute a continuing waiver
unless otherwise expressly provided.
6.8 Binding Effect and Assignment. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective permitted successors and assigns; but neither this Agreement nor any
of the rights, benefits or obligations hereunder shall be assigned, by
operation of law or otherwise, by any party hereto without the prior written
consent of the other party. Nothing in this Agreement, express or implied, is
intended to confer upon any person or entity other than the parties hereto and
their respective permitted successors and assigns, any rights, benefits or
obligations hereunder.
6.9 Multiple Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but both of which
together shall constitute one and the same instrument.
EXECUTED as of the date first written above.
CHC INTERNATIONAL, INC.
By:
----------------------------------
CARNIVAL CORPORATION
By:
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<PAGE> 7
EXHIBIT C
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT ("Agreement") is made and entered
into this 30th day of November, 1994, among (i) CHC INTERNATIONAL, INC., a
Florida corporation doing business as "Carnival Hotels and Casinos" (the
"Company"), and (ii) CARNIVAL CORPORATION, a Panamanian corporation (the
"Holder").
RECITALS
A. The Company is contemporaneously issuing and delivering to the
Holder shares of the Company's common stock, par value $.01 per share (the
"Common Stock"), in the amounts set forth opposite the Holder's name on
Schedule I attached hereto.
B. Pursuant to that certain Stock Purchase Agreement, dated as of
November 30, 1994 (the "Purchase Agreement"), between the Company and the
Holder, the Company has agreed to provide to the Holder certain registration
rights with respect to the shares of Common Stock issued to the Holder pursuant
to the Purchase Agreement (such shares of Common Stock being referred to herein
as the "Restricted Shares").
AGREEMENT
NOW, THEREFORE, in consideration of the premises and covenants set
forth in the Purchase Agreement, the parties agree as follows:
1. Registration Rights.
(a) Incidental (Piggyback) Registration. Subject to the
limitations set forth in this Agreement, if the Company at any time within two
(2) years of the date hereof proposes to file on its behalf and/or on behalf of
any of its security holders ("the demanding security holders") a Registration
Statement under the Securities Act of 1933, as amended (the "Securities Act")
on any form (other than a Registration Statement on Form S-4 or S-8 or any
successor form for securities to be offered in a transaction of the type
referred to in Rule 145 under the Securities Act or to employees of the Company
pursuant to any employee benefit plan, respectively) for the general
registration of securities to be sold for cash with respect to its Common Stock
or any other class of equity security (as defined in Section 3(a) (11) of the
Securities Exchange Act of 1934) of the Company, it will give written notice to
the Holder at least 15 days before the initial filing with the Securities and
Exchange Commission (the "Commission") of such Registration Statement, which
notice shall set forth the intended method of disposition of the securities
proposed to be registered by the Company. The notice shall offer to include in
such filing the aggregate number of shares of Restricted Shares as the Holder
may request.
If the Holder desires to have Restricted Shares registered under this
Section 1, it shall advise the Company in writing within 10 days after the date
of receipt of such offer from the Company, setting forth the amount of such
Restricted Shares for which registration is requested. The Company shall
thereupon include in such filing the number of shares of Restricted Shares for
which registration is so requested, subject to the following. In the event
that the proposed registration by the Company is, in whole or in part,
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<PAGE> 8
an underwritten public offering of securities of the Company, the Company shall
not be required to include any of the Restricted Shares in such underwriting
unless the Holder agrees to accept the offering on the same terms and
conditions as the shares of Common Stock, if any, otherwise being sold through
underwriters under such registration; provided, however, that: (i) if the
managing underwriter determines and advises the Company that the inclusion of
all Restricted Shares proposed to be included by the Holder in the underwritten
public offering and other issued and outstanding shares of Common Stock
proposed to be included therein by the persons other than the Holder, the
Company and any demanding security holder (the "Other Shares") would jeopardize
the success of the Company's offering, then the Company shall be required to
include in the offering (in addition to the number of shares to be sold by the
Company and any demanding security holder) only that number of Restricted
Shares that the managing underwriter believes will not jeopardize the success
of the Company's offering and the number of Restricted Shares and Other Shares
not included in such underwritten public offering shall be reduced pro rata
based upon the number of shares of Restricted Shares and Other Shares requested
by the holders thereof to be registered in such underwritten public offering;
and (ii) in each case all shares of Common Stock owned by the Holder which are
not included in the underwritten public offering shall be withheld from the
market by the Holder for a period, not to exceed one hundred eighty (180)
calendar days, which the managing underwriter reasonably determines as
necessary in order to effect the underwritten public offering. In the event
the Company chooses a registration form which limits the size of the offering
either in terms of the number of shares or dollar amount, the Company shall not
be required to include in the offering (in addition to the number of shares to
be sold by the Company) Restricted Shares which would exceed such limits, and
the number of Restricted Shares and Other Shares not included in such offering
shall be reduced pro rata based upon the number of Restricted Shares and Other
Shares requested by the holders thereof to be registered in such offering.
2. Registration Procedures. If the Company is required by the
provisions of Section 1 to use its best efforts to effect the registration of
any of its securities under the Securities Act, the Company will, as
expeditiously as possible:
(a) prepare and file with the Commission a Registration
Statement with respect to such securities and use its best efforts to cause
such Registration Statement to become effective and prepare and file with the
Commission such amendments and supplements to such Registration Statement and
the prospectus used in connection therewith as may be necessary to keep such
Registration Statement effective and to comply with the provisions of the
Securities Act with respect to the sale or other disposition of all securities
covered by such Registration Statement until the earlier of such time as all of
such securities have been disposed of in a public offering or the expiration of
90 days;
(b) furnish to such selling security holders such number
of copies of a summary prospectus or other prospectus, including a preliminary
prospectus, in conformity with the requirements of the Securities Act, and such
other documents, as such selling security holders may reasonably request;
(c) use its best efforts to register or qualify the
securities covered by such Registration Statement under such other securities
or blue sky laws of such jurisdictions within the United States and Puerto Rico
as each holder of such securities shall reasonably request (provided, however,
the Company shall not be obligated to qualify as a foreign corporation to do
business under the laws of any jurisdiction in which it is not then qualified
or to file any general consent to service or process), and do such other
reasonable acts and things as may be required of it to enable such holder to
consummate the disposition in such jurisdiction of the securities covered by
such Registration Statement;
(d) enter into customary agreements (including an
underwriting agreement in customary form) and take such other actions as are
reasonably required in order to expedite or facilitate the disposition of such
Common Stock; and as shall be required in connection with the action taken by
the Company; and
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<PAGE> 9
(e) promptly notify in writing the Holder and each
underwriter of the happening of any event, during the period of distribution,
as a result of which the Registration Statement includes an untrue statement of
a material fact or omits to state any material fact required to be stated
therein or necessary to make the statements therein not misleading in light of
the circumstances then existing (in which case, the Company shall promptly
provide the Holder with revised or supplemental prospectuses and if so
requested by the Company in writing, the Holder shall promptly take action to
cease making any offers of the Restricted Shares until receipt and distribution
of such revised or supplemental prospectuses).
3. Expenses. All expenses incurred in complying with this
Agreement, including, without limitation, all registration and filing fees
(including all expenses incident to filing with the NASD), printing expenses,
fees and disbursements of counsel for the Company, expenses of any special
audits incident to or required by any such registration and expenses (including
attorneys' fees) of complying with the securities or blue sky laws of any
jurisdictions pursuant to Section 2(d), except to the extent required to be
paid by participating selling securityholders by state securities or blue sky
laws, shall be paid by the Company, except that the Company shall not be liable
for any fees, discounts or commissions to any underwriter or any fees or
disbursements of counsel for the Holder in respect of the securities sold by
the Holder.
4. Indemnification. In the event of any registration of any
Restricted Shares under the Securities Act pursuant to this Agreement, the
Company shall indemnify and hold harmless the seller of such shares, each
underwriter of such shares, if any, each such broker or any other person, if
any, who controls any of the foregoing persons, within the meaning of the
Securities Act, against any losses, claims, damages or liabilities, joint or
several, to which any of the foregoing persons may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement of a material fact contained in any registration statement
under which such Restricted Shares were registered under the Securities Act,
any final prospectus contained therein, or any amendment or supplement thereto,
or any document prepared and/or furnished by the Company incident to the
registration or qualification of any Restricted Shares, or arise out of or are
based upon the omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading or, with
respect to any final prospectus, necessary to make the statements therein in
light of the circumstances under which they were made, not misleading, or any
violations by the Company of the Securities Act or state securities or "blue
sky" laws applicable to the Company relating to action or inaction required of
the Company in connection with such registration or qualification under such
state securities or blue sky laws; and shall reimburse such seller, such
underwriter, broker or other person acting on behalf of such seller and each
such controlling person for any legal or any other expenses reasonably incurred
by any of them in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement
or alleged untrue statement or omission or alleged omission made in said
registration statement, said final prospectus or said amendment or supplement
or any document incident to the registration or qualification of any Restricted
Shares in reliance upon and in conformity with information furnished to the
Company for use in preparation thereof. Before Restricted Shares held by the
Holder shall be included in any registration pursuant to this Agreement, the
Holder shall have agreed to indemnify and hold harmless (in the same manner and
to the same extent as set forth in this Section 4 for the indemnification of
such prospective seller and underwriter by the Company) the Company, each
director of the Company, each officer of the Company who shall sign such
registration statement and any person who controls the Company within the
meaning of the Securities Act, with respect to any untrue statement or omission
from such registration statement or final prospectus contained therein or any
amendment or supplement thereto, if such untrue statement or omission was (i)
made in reliance upon and in conformity with information furnished to the
Company by the Holder for use in the preparation of such registration
statement, final prospectus or amendment or supplement or (ii) contained in any
Registration Statement which was utilized by the Holder or any controlling
person or affiliate of the Holder either (A) on any date which is in excess of
90 days after the date of the Prospectus included therein, or (B) after the
Holder was notified, in accordance with Section 2(f) hereof, that such
Registration Statement contained an untrue
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<PAGE> 10
statement of a material fact or omitted to state any material fact. Promptly
after receipt by an indemnified party of notice of the commencement of any
action involving a claim referred to in this Section 4, such indemnified party
will, if a claim in respect thereof is made against any indemnifying party,
give written notice to the latter of such claim and/or the commencement of such
action. In case any such action is brought against an indemnified party, the
indemnifying party will be entitled to participate in and assume the defense
thereof, jointly with any other indemnifying party similarly notified to the
extent that it may wish, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election to assume the defense thereof, the
indemnifying party shall be responsible for any legal or other expenses
subsequently incurred by the latter in connection with the defense thereof,
provided that if any indemnified party shall have reasonably concluded that
there may be one or more legal defenses available to such indemnified party
which conflict in any material respect with those available to the indemnifying
party, or that such claim or litigation involves or could have an effect upon
matters beyond the scope of the indemnity agreement provided in this Section 4,
such indemnifying party shall reimburse such indemnified party and shall not
have the right to assume the defense of such action on behalf of such
indemnified party and such indemnifying party shall reimburse such indemnified
party and any person controlling such indemnified party for that portion of the
fees and expenses of any counsel retained by the indemnified party which are
reasonably related to the matters covered by the indemnity agreement provided
in this Section 4. The indemnifying party shall not make any settlement of any
claims indemnified against thereunder without the written consent of the
indemnified party or parties, which consent shall not be unreasonably withheld.
Notwithstanding the foregoing provisions of this Section 4, if pursuant to an
underwritten public offering of the Common Stock, the Company, the selling
shareholders and the underwriters enter into an underwriting or purchase
agreement relating to such offering which contains provisions covering
indemnification among the parties thereto in connection with such offering, the
indemnification provisions of this Section 4 shall be deemed inoperative for
purposes of such offering.
5. Certain Limitations on Registration Rights. Notwithstanding
the other provisions of this Agreement, the Company shall not be obligated to
register the Restricted Shares of the Holder if, in the opinion of counsel to
the Company, the sale or other disposition of the Holder's Restricted Shares
may be effected without registering such Restricted Shares under the Securities
Act. The Company's obligations under Section 1 are also expressly conditioned
upon the Holder furnishing to the Company in writing such information
concerning the Holder and its controlling persons and the terms of the Holder's
proposed offering of Restricted Shares as the Company shall reasonably request
for inclusion in the Registration Statement.
6. Miscellaneous.
(a) Notice Generally. Any notice, demand, request,
consent, approval, declaration, delivery or other communication hereunder to be
made pursuant to the provisions of this Agreement shall be sufficiently given
or made if in writing and either delivered in person with receipt acknowledged,
delivered by reputable overnight courier, telecopied and confirmed separately
in writing by a copy mailed as follows or sent by registered or certified mail,
return receipt requested, postage prepaid, addressed as set forth in the
Purchase Agreement.
(b) Successors and Assigns. This Agreement shall inure
to the benefit of and be binding upon the successors and assigns of each of the
parties hereto; provided, however, that the Holder's rights hereunder may not
be transferred without the written consent of the Company.
(c) Governing Law. This Agreement shall be governed by
the laws of the State of Florida, without regard to the provisions thereof
relating to conflict of laws.
(d) Severability. Wherever possible, each provision of
this Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this
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<PAGE> 11
Agreement shall be prohibited by or invalid under applicable law, such
provisions shall be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement.
(e) Entire Agreement. This Agreement, together with the
Purchase Agreement, is intended by the parties as a final expression of their
agreement and intended to be a complete exclusive statement of the Agreement
and understanding of the parties hereto in respect of the subject matter
contained herein and therein. There are no restrictions, promises, warranties
or undertakings, other than those set forth or referred to herein and therein.
This Agreement supersedes all prior agreements and understandings between the
parties with respect to the subject matter hereof.
(f) Counterparts. This Agreement may be executed in
separate counterparts, each of which shall collectively and separately,
constitute one agreement.
IN WITNESS WHEREOF, the Company and Holder have executed this
Agreement as of the date first above written.
CHC INTERNATIONAL, INC.
By:
----------------------------------
CARNIVAL CORPORATION
By:
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PROMISSORY NOTE
New York, New York
$425,000.000 November 30, 1994
FOR VALUE RECEIVED, the undersigned does hereby promise to pay to CHC
International, Inc., a Florida corporation (the "Company"), or order, the
principal sum of Four Hundred Twenty-Five Thousand Dollars ($425,000.00),
together with interest from and after date hereof until paid at the rate
specified below on the balance of principal thereof remaining from time to time
unpaid. The outstanding balance shall bear interest at a rate equal to 7.1%
per annum, calculated on the basis of a 360-day year. All sums payable
hereunder shall be payable at the offices of the Company, 3250 Mary Street, 5th
Floor, Miami, Florida 33133, or at such other place or places as the holder
hereof may from time to time otherwise direct, in such coin and currency as
shall be at the time of payment legal tender for the payment of public and
private debts in the United States of America.
The principal of this Note shall be payable in four (4) equal annual
installments, commencing on the 30th day of November, 1995 and continuing on
the 30th day of November 1996, the 30th day of November, 1997 and ending on the
30th day of November, 1998 (each such date being hereinafter referred to as a
"Payment Date"). All accrued interest on the unpaid principal balance of this
Note shall be paid together with each payment of principal on each Payment
Date.
This Note is subject to prepayment at any time or from time to time at
the option of the undersigned, either in whole or in part, without premium or
penalty, each such partial prepayment to be applied first in payment of the
interest accrued upon the principal balance hereof at the time outstanding and
then in reduction of the principal balance hereof.
Payment of this Note is secured by a grant of a security interest in,
pledge of, the following described collateral:
(a) 40,000 shares (the "Shares") of common stock, par
value $.01 per share, of the Company which have been issued to the
undersigned pursuant to that certain Stock Purchase Agreement dated of
even date herewith (the "Purchase Agreement"); and
(b) All rights, powers, privileges and preferences
pertaining to the Shares and any stock rights, rights to subscribe,
cash distributions, dividends, stock dividends, liquidating dividends,
new securities (whether certificated or uncertificated) and other
property to which the Obligor may become entitled by reason of the
ownership of any securities pledged and assigned hereunder from time
to time; and
(c) All Proceeds of any of the foregoing Collateral.
The parties to this Note may agree at any time to a substitution of
other property as collateral to secure this Note.
All past due and delinquent sums hereunder, both principal and
interest, shall bear interest at the rate determined above until such sums have
been paid.
<PAGE> 13
The entire unpaid principal balance of, and all accrued interest on,
this Note shall immediately become due and payable upon default by the
undersigned maker hereof in the payment of any installment of principal and
accrued interest thereon as and when same becomes due and payable in accordance
with the terms hereof, or the occurrence of an event of default as defined in
any agreement entered into to provide security for the payment of this Note,
and in either case such default shall continue for a period of ten (10) days
after receipt by the undersigned maker of written notice of such default from
the holder hereof.
The undersigned maker and all sureties, endorsers, and guarantors of
this Note hereby waive demand, presentment for payment, protest, notice of
protest, filing of suit and diligence in collecting this Note or enforcing any
security herefor.
This Note shall be construed in accordance with and governed by the
laws of the State of Florida.
In the event default is made in the payment of this Note and this Note
is placed in the hands of an attorney for collection, or in the event this Note
is collected in whole or in part by suit or through bankruptcy proceedings, or
other legal proceedings of any kind, the undersigned agrees to pay, in addition
to all the sums payable hereunder, all collection costs, including reasonable
attorneys' fees.
Executed this 30th day of November, 1994.
CARNIVAL CORPORATION
By:_____________________________________
Name:
Title:
STATE OF NEW YORK:
SS:
COUNTY OF NEW YORK:
On this ___ day of ___________________, 1994, the foregoing promissory
note was executed and acknowledged before me, the undersigned authority, in the
sate and county aforesaid, by ______________, as the holder of a Special Power
of Attorney, on behalf of the maker of the foregoing promissory note. He
personally appeared before me and is personally known to me or produced
______________________ as identification.
[NOTARIAL SEAL] Notary:
Print Name:
Notary Public, State of
My commission expires:
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<PAGE> 14
SECURITY AND PLEDGE AGREEMENT
THIS SECURITY AGREEMENT (the "Agreement"), dated this 30th day of
November by and between Carnival Corporation (hereinafter called "Debtor"), and
CHC International, Inc., a Florida corporation (the "Secured Party"), as the
holder of the Note (as defined below).
1. Security Interest. For value received, Debtor hereby sells,
transfers, conveys, sets over, delivers, bargains, pledges, assigns and grants
to Secured Party, upon the terms and conditions of this Agreement, a security
interest in and to any and all present or future rights of Debtor in and to all
of the following rights, interests and property (all of the following being
herein sometimes called the "Collateral"):
(a) 40,000 shares (the "Shares") of the common stock, par
value $.01 per share, of the Secured Party which have been issued to
Debtor pursuant to the Purchase Agreement (as defined below);
(b) All rights, powers, privileges and preferences
pertaining to the Shares described in Section 1(a) above and any stock
rights, rights to subscribe, cash distributions, dividends, stock
dividends, liquidating dividends, new securities (whether certificated
or uncertificated) and other property to which the Obligor may become
entitled by reason of the ownership of any Securities pledged and
assigned hereunder from time to time; and
(c) All Proceeds of any of the foregoing Collateral
described above in this Section 1.
All capitalized terms used but not otherwise defined in this Agreement shall
have the respective meanings given them in the Florida Uniform Commercial Code.
As used in this Agreement, the term "Securities" means any notes, stocks,
treasury stocks, bonds, debentures, evidences of indebtedness, warrants,
partnership interests, stock options, beneficial interests in trusts, or equity
interests of any nature whatsoever in any legal entity or, in general, any
interest or instrument commonly known as a "security," or any warrant or right
to subscribe to or purchase any of the foregoing; and the term "issuer" means,
with respect to any Securities, the legal entity in which such Securities
evidence an ownership or beneficial interest.
2. Stock Purchase Agreement. This Agreement is being executed and
delivered pursuant to the terms, conditions and requirements of the Stock
Purchase Agreement (the "Purchase Agreement"), dated as of November 30, 1994,
pursuant to which Secured Party has sold the Shares to Debtor. The security
interests herein granted ("Security Interests") shall secure full payment and
performance of: (a) that certain Promissory Note of even date herewith in the
principal amount of $425,000, made by Debtor and payable to the order of
Secured Party (such note and any notes given in modification, renewal,
extension or substitution thereof being herein sometimes collectively referred
to as the "Notes" and individually as the "Note"); and (b) the due and punctual
observance and performance of each and every agreement, covenant and condition
on Debtor's part to be observed or performed under this Agreement and the Note
(all of which debts, duties, liabilities and obligations hereinbefore described
and covered by this Agreement and the Note are hereinafter referred to as the
"Obligation").
3. Priority. Debtor represents and warrants that the Security
Interests are first and prior security interests in and to all of the
Collateral.
4. Representations, Warranties and Covenants. The Debtor hereby
represents and warrants to Secured Party and covenants for the benefit of
Secured Party as follows:
<PAGE> 15
(a) Debtor is the sole legal and equitable owner of the
Shares free from any adverse claim, lien, security interest, encumbrance or
other right, title or interest of any person, except for the security interest
created hereby. Debtor has the right and power to grant a security interest in
the Collateral to Secured Party without the consent of any other person, and
Debtor shall at his expense defend the Collateral against all claims and
demands of all persons at any time claiming the Collateral or any interest
therein adverse to Secured Party. So long as any Obligation to the Secured
Party pursuant to the Note is outstanding, Debtor will not without the prior
written consent of Secured Party grant to any person a security interest in any
of the Collateral or permit any lien or encumbrance to attach to any of the
Collateral, or suffer or permit any levy or garnishment, or attachment to be
made on any part of the Collateral, or permit any financing statement to
reflect an interest in any part of the Collateral, except that of Secured
Party, to be on file with respect thereto.
(b) Debtor has delivered to Secured Party all stock
certificates evidencing the Shares pledged and assigned under this Agreement
(and the Debtor shall promptly deliver the same with respect to all
certificated Securities pledged and assigned to Secured Party hereafter,
including the Additional Shares), together with duly executed stock powers in
blank and all other assignments or endorsements reasonably requested by Secured
Party.
(c) If new or additional Securities are issued to Debtor
(as a stock dividend, stock split, or pursuant to any reclassification or
recapitalization of the capital of any issuer of Securities pledged and
assigned hereunder, or the reorganization or, merger, acquisition or
consolidation of any such issuer or otherwise) with respect to the Collateral,
then the same shall be deemed an increment to the Collateral and under pledge
and assignment to Secured Party hereunder. If evidenced by a stock
certificate, bond, warrant, debenture, certificate, or other Instrument or
writing, then such Securities shall (to the extent acquired or received by or
placed under Debtor's control) be held in trust for and promptly delivered to
Secured Party, together with duly executed stock powers in blank and any other
assignments or endorsements as Secured Party may request. If any such
Securities are uncertificated, then Debtor shall immediately upon acquisition
of such Securities cause Secured Party to be registered as the transferee
thereof on the books of the depository, custodian bank, clearing corporation,
brokerage house, issuer or otherwise, as may be requested by Secured Party.
(d) Without the prior consent of Secured Party, Debtor
shall not sell, transfer, assign, convey, lease or otherwise dispose of any
part of the Collateral, nor enter into any contract or agreement to do so.
Debtor will not compromise, release, surrender or waive any rights of any
nature whatsoever in respect of any of the Collateral without Secured Party's
prior written consent.
5. Debtor's Obligations. So long as the Note is outstanding,
Debtor covenants and agrees with Secured Party (a) not to permit any material
part of the Collateral to be levied upon under any legal process; (b) not to
dispose of or pledge any of the Collateral without the prior written consent of
Secured Party; (c) to comply with all applicable federal, state and local
statutes, laws, rules and regulations, the noncompliance with which could have
a material and adverse effect on the value of the Collateral; and (d) to pay
all taxes accruing after the Closing Date which constitute, or may constitute,
a lien against the Collateral, prior to the date when penalties or interest
would attach to such taxes; provided, that Debtor may contest any such tax
claim if done diligently and in good faith.
6. Event of Default. As used herein, the term "Event of Default"
shall include any or all of the following if same exist on the 10th day after
written notice by Secured Party to Debtor which certifies such default:
(a) The assignment, voluntary or involuntary conveyance
of legal or beneficial interest, mortgage, pledge or grant of a security
interest in any of the Collateral; or
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<PAGE> 16
(b) The filing or issuance of a notice of any lien,
warrant for distraint or notice of levy for taxes or assessment against the
Collateral (except for those which are being contested in good faith and for
which adequate reserves have been created); or
(c) Nonpayment of any installment of principal or
interest upon the date same shall be due and payable under the terms of the
Note; or
(d) The adjudication of Debtor as bankrupt, or the taking
of any voluntary action by Debtor or any involuntary action against Debtor
seeking an adjudication of Debtor as bankrupt, or seeking relief by or against
Debtor under any provision of the Bankruptcy Code.
7. Remedies. Upon the occurrence and during the continuation of
an Event of Default as defined herein, in addition to any and all other rights
and remedies which Secured Party may then have hereunder or under the Note,
under the Uniform Commercial Code of the State of Florida or of any other
pertinent jurisdiction (the "Code"), or otherwise, Secured Party may, at its
Option: (a) reduce its claim to judgment or foreclosure or otherwise enforce
the Security Interests, in whole or in part, by any available judicial
procedure; (b) sell, or otherwise dispose of, at the office of Secured Party,
or elsewhere, all or any part of the Collateral, and any such sale or other
disposition may be as a unit or in parcels, by public or private proceedings,
and by way of one or more contracts (it being agreed that the sale of any part
of the Collateral shall not exhaust the Secured Party's power of sale, but
sales may be made from time to time, and at any time, until all of the
Collateral has been sold or until the Obligation has been paid and performed in
full); (c) at his discretion, retain the Collateral in satisfaction of he
Obligation whenever the circumstances are such that Secured Party is entitled
to do so under the Code or otherwise; (d) exercise all voting or consensual
rights of the Collateral upon notice to Debtor of such election and otherwise
act with respect to the Collateral as though it were the outright owner thereof
(Debtor hereby irrevocably constitutes and appoints Secured Party as the proxy
and attorney-in-fact of Debtor, with full power of substitution, to do so); and
(e) exercise any and all other rights, remedies and privileges he may have
under the Note and the other documents defining the Obligation.
8. Application of Proceeds by Secured Party. Any and all
proceeds ever received by Secured Party from any sale or other disposition of
the Collateral, or any part thereof, or the exercise of any other remedy
pursuant hereto shall be applied by Secured Party to the Obligation in such
order and manner as Secured Party, in its sole discretion, may deem
appropriate, notwithstanding any directions or instructions to the contrary by
Debtor; provided that (a) the proceeds and/or accounts shall be applied toward
satisfaction of the Obligation; and (b) if such proceeds and/or accounts are
not sufficient to pay the Obligation in full, Debtor shall remain liable to
Secured Party for the deficiency. Any proceeds received by Secured Party under
this Agreement in excess of those necessary to fully and completely satisfy the
Obligation shall be distributed to Debtor.
9. Notice of Sale. Reasonable notification of the time and place
of any public sale of the Collateral, or reasonable notification of the time
after which any private sale or other intended disposition of the Collateral is
to be made, shall be sent to Debtor and to any other persons entitled under the
Code to notice; provided, that if any of the Collateral threatens to decline
speedily in value or is of a type customarily sold on a recognized market,
Secured Party may sell, pledge, assign or otherwise dispose of the Collateral
without notification, advertisement or other notice of any kind. It is agreed
that notice sent or given not less than ten (10) calendar days prior to the
taking of the action to which the notice relates is reasonable notification and
notice for the purpose of this paragraph.
10. Delivery of Notices. Any notice or demand required to be
given hereunder shall be in writing and shall be deemed to have been duly given
and received, if given by hand, when a writing containing such notice is
received by the entity or person to whom addressed or, is given by mail, two
(2) business days after a certified or registered letter containing such
notice, with postage prepaid, is deposited in the United
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<PAGE> 17
States mails, addressed to:
If to Secured Party:
CHC International, Inc.
3250 Mary Street, 5th Floor
Miami, Florida 33133
Attention: President
If to Debtor:
Carnival Corporation
3655 N.W. 87th Avenue
Miami, Florida 33178
Attention: President
Any such address may be changed from time to time by serving notice to the
other party as above provided. A business day shall mean a day of the week
which is not a Saturday or Sunday or a holiday recognized by national banking
associations.
11. Binding Effect. This Agreement shall be binding upon Debtor,
his heirs, successors, assigns, executors, administrators, and personal or
legal representatives, and shall inure to the benefit of Secured Party, its
successors and assigns.
12. Governing Law. This Agreement shall be construed in
accordance with and governed by the laws of the State of Florida.
13. Severability. In the event that any one or more of the
provisions contained in this Agreement are held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Agreement.
EXECUTED as of the day and year first herein set forth.
CHC INTERNATIONAL, INC.
By:
------------------------------------
CARNIVAL CORPORATION
By:
------------------------------------
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<PAGE> 1
EXHIBIT 10.32
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (the "Agreement") is made and entered
into as of the 30th day of November, 1994, by and among, (i) Carnival
Corporation, a Panamanian corporation ("CCL"), and (ii) Sherwood M. Weiser
("Weiser"), Donald E. Lefton ("Lefton"), Thomas F. Hewitt ("Hewitt"), Peter
Sibley ("Sibley"), W. Peter Temling ("Temling") and Robert B. Sturges
("Sturges") (Weiser, Lefton, Hewitt, Sibley, Temling and Sturges are sometimes
collectively referred to herein as the "Buyers" and individually as a "Buyer").
RECITALS
A. CHC International, Inc., a Florida corporation doing business
as "Carnival Hotels and Casinos" ("CHC"), has authorized capital of 10,000,000
shares of common stock, $.01 par value per share (the "Common Stock"), and
1,000,000 shares of preferred stock, $.01 par value per share.
B. CHC filed Amendment No. 1 to Registration Statement on Form
S-1 ("Amendment No. 1") with the Securities and Exchange Commission (the "SEC")
(File No. 33-79436) on November 2, 1994, which Registration Statement (the
"Registration Statement") relates to the proposed dividend by CCL of shares of
Common Stock to its shareholders (the "Distribution").
C. CHC has 5,177,500 shares of Common Stock issued and
outstanding, 2,550,000 of which are currently owned of record and beneficially
by CCL.
D. CCL desires to sell to Buyers, and Buyers desire to purchase
from CCL, an aggregate of 1,305,000 shares of CHC Common Stock.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants contained herein, the parties agree as follows:
ARTICLE I - SALE AND PURCHASE OF SHARES; GRANT OF OPTIONS
1.1 Sale and Purchase of Shares.
(a) On the terms and subject to the conditions of this
Agreement, CCL hereby sells, conveys, assigns, transfers and delivers to
Buyers, and Buyers hereby purchase from CCL, an aggregate of 1,305,000 shares
of Common Stock (the "Purchased Shares") for an aggregate purchase price of
$16,312,500, as follows:
<TABLE>
<CAPTION>
NUMBER OF
BUYER PURCHASED SHARES PURCHASE PRICE
----- ---------------- --------------
<S> <C> <C>
Weiser 429,624 $ 5,370,300
Lefton 429,624 5,370,300
Hewitt 159,197 1,989,963
Sibley 159,197 1,989,962
Sturges 63,679 795,988
Temling 63,679 795,987
--------- ----------
1,305,000 $16,312,500
========= ==========
</TABLE>
<PAGE> 2
(b) To effect the transfers contemplated by Section
1.1(a), CCL is hereby causing to be delivered to each Buyer, against payment
therefor in accordance with Section 1.2 hereof, stock certificates representing
the number of Purchased Shares set forth opposite such Buyer's name under the
column "Number of Purchased Shares" in Section 1.1(a).
1.2 Purchase Price; Payment for Shares.
(a) The aggregate purchase price of $16,312,500 (the
"Purchase Price") for the shares of Common Stock being purchased by Buyers
hereunder is hereby being paid by each Buyer's delivery to CCL of (a) such
Buyer's promissory note in the aggregate principal amount equal to the amount
set forth opposite such Buyer's name under the column "Purchase Price" in
Section 1.1(a), such note in the form attached hereto as Exhibit A (each a
"Note") and (b) a security and pledge agreement in the form attached hereto as
Exhibit B (each a "Security Agreement").
ARTICLE II - REPRESENTATIONS AND WARRANTIES
OF CCL
CCL hereby represents and warrants to Buyers that:
2.1 Corporate Existence and Qualification. CCL is a corporation
duly organized, validly existing and in good standing under the laws of Panama;
has the corporate power to own, manage, lease and hold its properties and to
carry on its business as and where such properties are presently located and
such business is presently conducted; and is duly qualified to do business as a
foreign corporation in each jurisdiction where the failure to be so qualified
would have a material adverse effect on its business, financial condition or
results of operations.
2.2 Authority, Approval and Enforceability. This Agreement has
been duly executed and delivered by CCL, and CCL has all requisite corporate
power and authority to execute and deliver this Agreement, to consummate the
transactions contemplated hereby, and to perform its obligations hereunder.
This Agreement constitutes the legal, valid and binding obligation of CCL,
enforceable in accordance with its terms, except as such enforcement may be
limited by general equitable principles or by applicable bankruptcy,
insolvency, moratorium, or similar laws and judicial decisions from time to
time in effect which affect creditors' rights generally.
2.3 Ownership and Delivery of Shares. Except for the restrictions
set forth in that certain Shareholders' Agreement, dated as of March 9, 1994,
among all of CHC's shareholders except Sturges, CCL owns all of the Purchased
Shares free and clear of any and all pledges, security interests, liens,
charges, proxies, calls or other encumbrances of any nature whatsoever. CCL's
delivery of a certificate or certificates representing the Purchased Shares to
Buyers pursuant to this Agreement, against payment therefor pursuant to Section
1.2 hereof, transfers valid title to such Purchased Shares to Buyers, free and
clear of any and all pledges, security interests, liens, charges, proxies,
calls or other encumbrances of any nature whatsoever. There are no outstanding
options, warrants, calls, subscriptions, agreements or commitments of any
character, except this Agreement, to which CCL is a party obligating it to sell
any Purchased Shares or which restrict the transfer of any such shares held by
it.
ARTICLE III - REPRESENTATIONS AND WARRANTIES OF BUYERS
Each of the Buyers hereby severally represents and warrants to CCL
that:
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<PAGE> 3
3.1 Authority, Approval and Enforceability. This Agreement has
been duly executed and delivered by such Buyer. Such Buyer has all requisite
power and authority to execute and deliver this Agreement, to consummate the
transactions contemplated hereby, and to perform his obligations hereunder.
This Agreement and such Buyer's Note and Security Agreement constitute the
legal, valid and binding obligation of such Buyer, enforceable in accordance
with their respective terms, except as such enforcement may be limited by
general equitable principles or by applicable bankruptcy, insolvency,
moratorium, or similar laws and judicial decisions from time to time in effect
which affect creditors' rights generally.
3.2 Investment Representations.
(a) Such Buyer is acquiring the Purchased Shares to be
acquired by him pursuant to this Agreement for his own account and not with a
view to, or for sale in connection with, a "distribution," as such term is used
in Section 2(11) of the Securities Act of 1933, as amended (the "Securities
Act").
(b) Such Buyer is an "accredited investor," as that term
is defined in Rule 501(a) of Regulation D promulgated under the Securities Act.
(c) Such Buyer understands that the sale of shares of
Common Stock under this Agreement has not been registered under the Securities
Act or applicable state securities laws.
(d) Such Buyer understands that the certificates
representing shares of Common Stock being sold by CCL pursuant to this
Agreement bear a "restricted transfer" legend substantially as follows:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933 or any applicable
state law. They may not be offered for sale, sold,
transferred or pledged without (1) registration under the
Securities Act of 1933 and any applicable state law, or (2) at
holder's expense, an opinion (satisfactory to the Company) of
counsel (satisfactory to the Company) that registration is not
required."
(e) Such Buyer acknowledges that all matters relating to
CHC, the Agreement and such Buyer's investment in the Common Stock have been
explained to the satisfaction of such Buyer and that such Buyer understands the
speculative nature and risks involved in its investment.
(f) Such Buyer can bear the economic risks inherent in
its investments in the Common Stock.
(g) Such Buyer has been afforded the opportunity to ask
questions of, and receive answers from CHC and to obtain any additional
information, to the extent that CHC possesses such information or could have
acquired it without unreasonable effort or expense, necessary to verify the
accuracy of the information contained in Amendment No. 1 delivered to such
Buyer (the receipt of which is acknowledged by such Buyer) and has in general
had access to all information deemed material to an investment decision with
respect to his acquisition of the Common Stock.
(h) Such Buyer acknowledges that the holding period
requirements under Rule 144 promulgated under the Securities Act will not begin
to run until the Promissory Note being delivered by him hereunder has been
satisfied in full.
3.3 Representations. Such Buyer acknowledges receipt of Amendment
No. 1, which describes, among other things, certain risk factors relating to an
investment in Common Stock of CHC. Such Buyer
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<PAGE> 4
is acquiring the Common Stock without having been furnished any representations
or warranties of any kind whatsoever with respect to CHC's business and
financial condition, other than the representations contained herein. Without
limiting the generality of the foregoing, such Buyer acknowledges that neither
CCL, CHC nor any other person has provided, and such Buyer is not relying in
any way upon, any representations regarding projections or future performance
of CHC.
ARTICLE IV - BUYERS' PUT
4.1 Sale and Purchase. Subject to Article V, at any time between
May 30, 1996 and the second (subject to extension to the fourth to the extent
CCL exercises its extension rights under the last sentence of Section 5.1
hereof) anniversary of the date of CCL's sale of the Purchased Shares hereunder
(the "Closing Date"), upon written notice from Weiser (the "Put Notice"), CCL
shall repurchase from Buyers, on the date and in the manner set forth in this
Article IV, all (but not less than all) of the Purchased Shares then held by
Buyers, at the Purchase Price per share of Common Stock paid by Buyers
hereunder, together with an amount necessary so that the aggregate purchase
price to be paid by CCL pursuant to this Article IV returns to each Buyer his
original investment of $12.50 per share and also provides such Buyer with a
rate of return thereon of 6.10% per annum, in each case from the Closing Date
until the date the Purchased Shares are acquired by CCL pursuant to this
Article IV. Each of the Buyers agrees that Weiser shall have the sole right to
deliver the Put Notice.
4.2 Terms of Payment of Purchase Price. CCL shall pay to Buyers
the purchase price for all Purchased Shares acquired pursuant to this Article
IV in cash; provided, however, that CCL shall have the right to reduce, deduct
or otherwise offset against each payment otherwise due to a Buyer hereunder any
and all amounts owed to CCL by such Buyer, including principal and accrued
interest owed to CCL pursuant to the Note delivered by such Buyer pursuant to
this Agreement.
4.3 Closing. The consummation of any transfer under this Article
IV shall take place on the 10th business day after the Put Notice is received
by CCL, subject, however, to the provisions of Article V. The closing shall
occur at the principal office of CHC, and the closing procedures shall be
consistent with the provisions of this Article IV.
4.4 Tender Requirements at Closing. At the closing, the Buyers
shall present to CCL share certificates for all Purchased Shares to be acquired
by CCL pursuant to this Article IV, such share certificates to be in proper
form for transfer. Such Common Stock shall be transferred free of all liens
and encumbrances or adverse claims of any kind of character. CCL, upon receipt
of proper tenders from Buyers, shall tender payment in accordance with the
terms provided in this Article IV.
ARTICLE V - TRANSFERS BY CCL
5.1 Distribution Obligation. Not later than the second
anniversary of the Closing (subject to extension pursuant to the last sentence
of this Section 5.1), CCL shall distribute to its shareholders a sufficient
number of shares of CHC Common Stock and take such other actions so that,
assuming exercise of the "put" contemplated by Article IV hereof and following
such distribution, CCL and the shareholders of CCL who are not citizens of the
United States within the meaning of applicable "Maritime Laws" (as defined in
the Registration Statement) do not collectively own more than 25% (or such
other percentage as may be applicable under Maritime Laws from time to time) of
CHC's outstanding Common Stock; provided, however, that (i) CCL's obligation to
effect the Distribution contemplated hereby shall be subject in all respects to
the declaration of the Registration Statement (or similar registration
statement) effective under the Securities Act of 1933, as amended, and (ii) in
lieu of any such Distribution, CCL shall have the right (subject to applicable
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<PAGE> 5
law) to (A) sell to one or more affiliated or unaffiliated parties (in a single
transaction) a sufficient number of shares of CHC Common Stock so that,
assuming exercise of such "put" and following such sale(s), CCL and any of such
third party purchasers who are not such United States citizens do not
collectively own more than 25% (or such other percentage as may be applicable
under Maritime Laws from time to time) of CHC's outstanding Common Stock, or
(B) engage in such other transaction (including, but not limited to,
establishing one or more trust relationships) with respect to the shares of CHC
Common Stock then held by CCL, assuming exercise of such "put," so that the
ownership of all such shares will not result in more than 25% (or such other
percentage as may be applicable under Maritime Laws from time to time) of CHC's
outstanding Common Stock being held by persons who are not U.S. citizens within
the meaning of applicable Maritime Laws, (any sale(s) or other transactions
pursuant to this clause (ii) being referred to as an "Alternate Transaction").
CCL shall have the right to extend the date by which it must comply with its
obligations under this Section 5.1 from the second anniversary of the Closing
to the fourth anniversary of the Closing by delivering to Weiser a written
notice to such effect not later than September 30, 1996; provided, however,
that notwithstanding anything in this Agreement or any Note to the contrary,
upon delivery of such CCL notice (i) Weiser's right to deliver a Put Notice
shall automatically be extended until such fourth anniversary, and (ii) the due
date of all principal and interest payments under each Note shall automatically
be extended until such fourth anniversary.
5.2 Notice of Distribution. CCL shall provide Buyers with at
least 120 days prior written notice (a "CCL Disposition Notice") of any
proposed Distribution or Alternative Transaction. CCL shall have the right to
deliver a CCL Disposition Notice at any time, including prior to May 30, 1996.
Notwithstanding Article IV, (i) upon receipt of the CCL Disposition Notice,
Weiser shall have the right to deliver a Put Notice, subject to automatic
expiration of such right if (a) Weiser does not deliver to CCL a Put Notice
within 20 business days of Buyers' receipt of a CCL Disposition Notice, and (b)
CCL thereafter consummates the transaction that was the subject of such CCL
Disposition Notice (unless any failure to consummate is due to any actions or
omissions by CHC and/or the Buyers), and (ii) the consummation of any "put"
transfer under Article IV shall be deferred until the effective date of the
proposed Distribution or Alternative Transaction, as the case may be (provided,
however, that such effective date shall at all times be prior to the maturity
date of the Note).
5.3 Jones Act Limit on "Put". Provided that CCL has not
theretofore delivered a CCL Disposition Notice, Weiser shall not deliver a Put
Notice prior to July 31, 1998 if (i) the consummation of the "put" would cause
more than 25% (or such other percentage as may be applicable under Maritime
Laws from time to time) of CHC's outstanding Common Stock to be owned by
persons who are not United States citizens within the meaning of applicable
Maritime Laws, and (ii) a significant portion of CHC's business is then subject
to such Maritime Laws. The limitation on delivering a Put Notice contemplated
by this Section 5.3 shall automatically terminate on July 31, 1998.
ARTICLE VI - MISCELLANEOUS
6.1 Confidentiality. The parties hereto shall hold in strict
confidence all, and not divulge or disclose any, information of any kind
concerning the transactions contemplated by this Agreement; provided, however,
that the foregoing obligation of confidence shall not apply to (i) information
that is or becomes generally available to the public other than as a result of
a disclosure by the parties hereto and (ii) information that is required by
federal securities laws or otherwise to be disclosed by the parties hereto.
6.2 Further Assurances. Following the Closing, the parties shall
execute and deliver such documents, and take such other action, as shall be
reasonably requested by any other party hereto to carry out the transactions
contemplated by this Agreement.
- 5 -
<PAGE> 6
6.3 Publicity. Neither of the parties hereto shall issue or make,
or cause to have issued or made, any public release or announcement concerning
this Agreement or the transactions contemplated hereby, without the advance
approval in writing of the form and substance thereof by the other party
hereto, which approval shall not be unreasonably withheld, except as required
by law or by the rules of the National Association of Securities Dealers or the
United States Securities Exchange Commission (in which case, so far as
possible, there shall be consultation between the parties prior to such
announcement), and the parties shall endeavor jointly to agree on the text of
any announcement or circular so approved or required.
6.4 Costs and Expenses. Each of the parties to this Agreement
shall bear its own expenses incurred in connection with the negotiation,
preparation, execution and closing of this Agreement and the transactions
contemplated hereby.
6.5 Notices. Any notice, request, instruction, correspondence or
other document to be given hereunder by any party hereto to another (herein
collectively called "Notice") shall be in writing and delivered personally or
mailed by registered or certified mail, postage prepaid and return receipt
requested, or by telecopier, or by a reputable overnight courier, as follows:
If to CCL: Carnival Corporation
3655 N.W. 87th Avenue
Miami, Florida 33178
Attention: President
If to any Buyer: c/o CHC International, Inc.
3250 Mary Street, 5th Floor
Miami, Florida 33133
6.6 Governing Law. The provisions of this agreement and the
documents delivered pursuant hereto shall be governed by and construed in
accordance with the laws of the State of Florida.
6.7 Entire Agreement; Amendments and Waivers. This Agreement,
together with all exhibits and schedules attached hereto, constitutes the
entire agreement between and among the parties hereto pertaining to the subject
matter hereof and supersedes all prior agreements, understandings, negotiations
and discussions, whether oral or written, of the parties, and there are no
warranties, representations or other agreements between the parties in
connection with the subject matter hereof except as set forth specifically
herein or contemplated hereby. No supplement, modification or waiver of this
Agreement shall be binding unless executed in writing by the party to be bound
thereby. No waiver of any of the provisions of this Agreement shall be deemed
or shall constitute a waiver of any other provision hereof (regardless of
whether similar), nor shall any such waiver constitute a continuing waiver
unless otherwise expressly provided.
6.8 Binding Effect and Assignment. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective permitted successors and assigns; but neither this Agreement nor any
of the rights, benefits or obligations hereunder shall be assigned, by
operation of law or otherwise, by any party hereto without the prior written
consent of the other party. Nothing in this Agreement, express or implied, is
intended to confer upon any person or entity other than the parties hereto and
their respective permitted successors and assigns, any rights, benefits or
obligations hereunder.
- 6 -
<PAGE> 7
6.9 Multiple Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but both of which
together shall constitute one and the same instrument.
EXECUTED as of the date first written above.
CARNIVAL CORPORATION
By: ___________________________________
________________________________________
SHERWOOD M. WEISER
________________________________________
DONALD E. LEFTON
________________________________________
THOMAS F. HEWITT
________________________________________
PETER SIBLEY
________________________________________
W. PETER TEMLING
________________________________________
ROBERT B. STURGES
- 7 -
<PAGE> 8
PROMISSORY NOTE
New York, New York
$A- November 30, 1994
FOR VALUE RECEIVED, the undersigned does hereby promise to pay to
Carnival Corporation, a Panama corporation (the "Payee"), the principal sum of
B- Dollars ($A-), together with interest from and after date hereof until paid
at the rate specified below on the balance of principal thereof remaining from
time to time unpaid. The outstanding balance shall bear interest at a rate
equal to six percent (6.0%) per annum. All sums payable hereunder shall be
payable at the offices of the Payee, 3655 N. W. 87th Avenue, Miami, Florida
33178, or at such other place or places as the holder hereof may from time to
time otherwise direct, in such coin and currency as shall be at the time of
payment legal tender for the payment of public and private debts in the United
States of America.
The principal of, and all accrued interest on, this Note shall be due
and payable in full on November 30, 1996, which date shall automatically be
extended as provided in Sections 5.1 and 5.2 of that certain Stock Purchase
Agreement being executed by Payee and the undersigned maker contemporaneously
with the execution of this Note (i.e., extended to November 30, 1998, subject
to earlier payment to coordinate with the closing of any purchase by Payee of
the below-described "Shares").
This Note is subject to prepayment at any time or from time to time at
the option of the undersigned, either in whole or in part, without premium or
penalty, each such partial prepayment to be applied first in payment of the
interest accrued upon the principal balance hereof at the time outstanding and
then in reduction of the principal balance hereof.
Payment of this Note is secured by a grant of a security interest in,
pledge of, the following described collateral:
(a) C- shares (the "Shares") of common stock, par value
$.01 per share, of CHC International, Inc. which have been
contemporaneously sold by the Payee to the undersigned maker.
(b) All rights, powers, privileges and preferences
pertaining to the shares described in the preceding paragraph (a) and
any stock rights, rights to subscribe, cash distributions, dividends,
stock dividends, liquidating dividends, new securities (whether
certificated or uncertificated) and other property to which the
obligor may become entitled by reason of the ownership of any
securities pledged and assigned hereunder from time to time; and
(c) All proceeds of any of the foregoing Collateral.
The parties to this Note may agree at any time to a substitution of
other property as collateral to secure this Note.
All past due and delinquent sums hereunder, both principal and
interest, shall bear interest at the rate determined above until such sums have
been paid.
1
<PAGE> 9
The entire unpaid principal balance of, and all accrued interest on,
this Note shall immediately become due and payable upon default by the
undersigned maker hereof in the payment of any installment of principal and
accrued interest thereon as and when same becomes due and payable in accordance
with the terms hereof, or the occurrence of an event of default as defined in
any agreement entered into to provide security for the payment of this Note,
and in either case such default shall continue for a period of ten (10) days
after receipt by the undersigned maker of written notice of such default from
the holder hereof.
The undersigned maker and all sureties, endorsers, and guarantors of
this Note hereby waive demand, presentment for payment, protest, notice of
protest, filing of suit and diligence in collecting this Note or enforcing any
security herefor.
This Note shall be construed in accordance with and governed by the
laws of the State of Florida.
In the event default is made in the payment of this Note and this Note
is placed in the hands of an attorney for collection, or in the event this Note
is collected in whole or in part by suit or through bankruptcy proceedings, or
other legal proceedings of any kind, the undersigned agrees to pay, in addition
to all the sums payable hereunder, reasonable attorneys' fees, provided,
however, such attorneys' fees shall in no case be greater than ten percent
(10%) of the principal and interest then due hereon.
Executed as of the 30th day of November, 1994.
D-
By:
-------------------------------------
Thomas J. Bezold, as Attorney-in-fact
2
<PAGE> 10
SECURITY AND PLEDGE AGREEMENT
THIS SECURITY AGREEMENT (the "Agreement"), dated as of the 30th day of
November, 1994 by and between D- (hereinafter called "Debtor"), and Carnival
Corporation, a Panamanian corporation (the "Secured Party"), as the holder of
the Note (as defined below).
1. Security Interest. For value received, Debtor hereby sells,
transfers, conveys, sets over, delivers, bargains, pledges, assigns and grants
to Secured Party, upon the terms and conditions of this Agreement, a security
interest in and to any and all present or future rights of Debtor in and to all
of the following rights, interests and property (all of the following being
herein sometimes called the "Collateral"):
(a) C- shares (the "Shares") of the common stock, par
value $.01 per share, of CHC International, Inc. which have been
contemporaneously sold by Secured Party to Debtor pursuant to the
Purchase Agreement (as defined below);
(b) All rights, powers, privileges and preferences
pertaining to the Shares and any stock rights, rights to subscribe,
cash distributions, dividends, stock dividends, liquidating dividends,
new securities (whether certificated or uncertificated) and other
property to which the Debtor may become entitled by reason of the
ownership of any Securities (as defined below) pledged and assigned
hereunder from time to time; and
(c) All Proceeds of any of the foregoing Collateral described
above in this Section 1.
All capitalized terms used but not otherwise defined in this Agreement shall
have the respective meanings given them in the Florida Uniform Commercial Code.
As used in this Agreement, the term "Securities" means any notes, stocks,
treasury stocks, bonds, debentures, evidences of indebtedness, warrants,
partnership interests, stock options, beneficial interests in trusts, or equity
interests of any nature whatsoever in any legal entity or, in general, any
interest or instrument commonly known as a "security," or any warrant or right
to subscribe to or purchase any of the foregoing; and the term "issuer" means,
with respect to any Securities, the legal entity in which such Securities
evidence an ownership or beneficial interest.
2. Stock Purchase Agreement. This Agreement is being executed and
delivered pursuant to the terms, conditions and requirements of the Stock
Purchase Agreement (the "Purchase Agreement"), dated of even date herewith,
pursuant to which Secured Party has sold the Shares to Debtor. The security
interests herein granted ("Security Interests") shall secure full payment and
performance of: (a) that certain Promissory Note of even date herewith in the
principal amount of $A-, made by Debtor and payable to the order of Secured
Party (such note and any notes given in modification, renewal, extension or
substitution thereof being herein sometimes collectively referred to as the
"Notes" and individually as the "Note"); and (b) the due and punctual
observance and performance of each and every agreement, covenant and condition
on Debtor's part to be observed or performed under this Agreement and the Note
(all of which debts, duties, liabilities and obligations hereinbefore described
and covered by this Agreement and the Note are hereinafter referred to as the
"Obligation").
3. Priority. Debtor represents and warrants that the Security Interests
are first and prior security interests in and to all of the Collateral.
4. Representations, Warranties and Covenants. The Debtor hereby
represents and warrants to Secured Party and covenants for the benefit of
Secured Party as follows:
1
<PAGE> 11
(a) Debtor is the sole legal and equitable owner of the Shares
free from any adverse claim, lien, security interest, encumbrance or
other right, title or interest of any person, except for the security
interest created hereby. Debtor has the right and power to grant a
security interest in the Collateral to Secured Party without the consent
of any other person, and Debtor shall at his expense defend the Collateral
against all claims and demands of all persons at any time claiming the
Collateral or any interest therein adverse to Secured Party. So long as
any Obligation to the Secured Party pursuant to the Note is outstanding,
Debtor will not without the prior written consent of Secured Party grant
to any person a security interest in any of the Collateral or permit any
lien or encumbrance to attach to any of the Collateral, or suffer or
permit any levy or garnishment, or attachment to be made on any part of
the Collateral, or permit any financing statement to reflect an interest
in any part of the Collateral, except that of Secured Party, to be on file
with respect thereto.
(b) Debtor has delivered to Secured Party all stock certificates
evidencing the Shares pledged and assigned under this Agreement, together
with duly executed stock powers in blank and all other assignments or
endorsements reasonably requested by Secured Party.
(c) If new or additional Securities are issued to Debtor (as a
stock dividend, stock split, or pursuant to any reclassification or
recapitalization of the capital of any issuer of Securities pledged and
assigned hereunder, or the reorganization or, merger, acquisition or
consolidation of any such issuer or otherwise) with respect to the
Collateral, then the same shall be deemed an increment to the Collateral
and under pledge and assignment to Secured Party hereunder. If evidenced
by a stock certificate, bond, warrant, debenture, certificate, or other
Instrument or writing, then such Securities shall (to the extent acquired
or received by or placed under Debtor's control) be held in trust for and
promptly delivered to Secured Party, together with duly executed stock
powers in blank and any other assignments or endorsements as Secured Party
may request. If any such Securities are uncertificated, then Debtor shall
immediately upon acquisition of such Securities cause Secured Party to be
registered as the transferee thereof on the books of the depository,
custodian bank, clearing corporation, brokerage house, issuer or
otherwise, as may be requested by Secured Party.
(d) Without the prior consent of Secured Party, Debtor shall not
sell, transfer, assign, convey, lease or otherwise dispose of any part of
the Collateral, nor enter into any contract or agreement to do so.
Debtor will not compromise, release, surrender or waive any rights of any
nature whatsoever in respect of any of the Collateral without Secured
Party's prior written consent.
5. Debtor's Obligations. So long as the Note is outstanding, Debtor
covenants and agrees with Secured Party (a) not to permit any material part of
the Collateral to be levied upon under any legal process; (b) not to dispose of
any of the Collateral without the prior written consent of Secured Party; (c)
to comply with all applicable federal, state and local statutes, laws, rules
and regulations, the noncompliance with which would have a material and adverse
effect on the value of the Collateral; and (d) to pay all taxes accruing after
the Closing Date which constitute, or may constitute, a lien against the
Collateral, prior to the date when penalties or interest would attach to such
taxes; provided, that Debtor may contest any such tax claim if done diligently
and in good faith.
6. Event of Default. As used herein, the term "Event of Default"
shall include any or all of the following if same exist on the 10th day after
written notice by Secured Party to Debtor which certifies such default:
(a) The assignment, voluntary or involuntary conveyance of legal
or beneficial interest, mortgage, pledge or grant of a security interest
in any of the Collateral; or
2
<PAGE> 12
(b) The filing or issuance of a notice of any lien, warrant for
distraint or notice of levy for taxes or assessment against the Collateral
(except for those which are being contested in good faith and for which
adequate reserves have been created); or
(c) Nonpayment of any installment of principal or interest upon
the date same shall be due and payable under the terms of the Note; or
(d) The adjudication of Debtor as bankrupt, or the taking of any
voluntary action by Debtor or any involuntary action against Debtor
seeking an adjudication of Debtor as bankrupt, or seeking relief by or
against Debtor under any provision of the Bankruptcy Code.
7. Remedies. Upon the occurrence and during the continuation of an
Event of Default as defined herein, in addition to any and all other rights and
remedies which Secured Party may then have hereunder or under the Note, under
the Uniform Commercial Code of the State of Florida or of any other pertinent
jurisdiction (the "Code"), or otherwise, Secured Party may, at its Option: (a)
reduce its claim to judgment or foreclosure or otherwise enforce the Security
Interests, in whole or in part, by any available judicial procedure; (b) sell,
or otherwise dispose of, at the office of Secured Party, or elsewhere, all or
any part of the Collateral, and any such sale or other disposition may be as a
unit or in parcels, by public or private proceedings, and by way of one or more
contracts (it being agreed that the sale of any part of the Collateral shall
not exhaust the Secured Party's power of sale, but sales may be made from time
to time, and at any time, until all of the Collateral has been sold or until
the Obligation has been paid and performed in full); (c) at its discretion,
retain the Collateral in satisfaction of the Obligation whenever the
circumstances are such that Secured Party is entitled to do so under the Code
or otherwise; and (d) exercise any and all other rights, remedies and
privileges it may have under the Note and the other documents defining the
Obligation. Provided that an Event of Default has not occurred, Debtor shall
retain all voting rights with respect to the Shares and all cash dividends
declared with respect to such Shares.
8. Application of Proceeds by Secured Party. Any and all proceeds
ever received by Secured Party from any sale or other disposition of the
Collateral, or any part thereof, or the exercise of any other remedy pursuant
hereto shall be applied by Secured Party to the Obligation in such order and
manner as Secured Party, in its sole discretion, may deem appropriate,
notwithstanding any directions or instructions to the contrary by Debtor;
provided that (a) the proceeds and/or accounts shall be applied toward
satisfaction of the Obligation; and (b) if such proceeds and/or accounts are
not sufficient to pay the Obligation in full, Debtor shall remain liable to
Secured Party for the deficiency. Any proceeds received by Secured Party under
this Agreement in excess of those necessary to fully and completely satisfy the
Obligation (as well as Secured Party's costs and expenses incurred in
connection with its exercise of remedies hereunder) shall be distributed to
Debtor.
9. Notice of Sale. Reasonable notification of the time and
place of any public sale of the Collateral, or reasonable notification of the
time after which any private sale or other intended disposition of the
Collateral is to be made, shall be sent to Debtor and to any other persons
entitled under the Code to notice; provided, that if any of the Collateral
threatens to decline speedily in value or is of a type customarily sold on a
recognized market, Secured Party may sell, pledge, assign or otherwise dispose
of the Collateral without notification, advertisement or other notice of any
kind. It is agreed that notice sent or given not less than ten (10) calendar
days prior to the taking of the action to which the notice relates is
reasonable notification and notice for the purpose of this paragraph.
10. Delivery of Notices. Any notice or demand required to be given
hereunder shall be in writing and shall be deemed to have been duly given and
received, if given by hand, when a writing containing such notice is received
by the entity or person to whom addressed or, is given by mail, two (2)
business days after a certified or registered letter containing such notice,
with postage prepaid, is deposited in the United States mails, addressed to:
3
<PAGE> 13
If to Secured Party:
Carnival Corporation
3655 N.W. 87th Avenue
Miami, Florida 33133
Attention: President
If to Debtor:
c/o CHC International, Inc.
3250 Mary Street
Miami, Florida 33133
Any such address may be changed from time to time by serving notice to the
other party as above provided. A business day shall mean a day of the week
which is not a Saturday or Sunday or a holiday recognized by national banking
associations.
11. Binding Effect. This Agreement shall be binding upon Debtor, his
heirs, successors, assigns, executors, administrators, and personal or legal
representatives, and shall inure to the benefit of Secured Party, its
successors and assigns.
12. Governing Law. This Agreement shall be construed in accordance with
and governed by the laws of the State of Florida.
13. Severability. In the event that any one or more of the provisions
contained in this Agreement are held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality or unenforceability shall not
affect any other provision of this Agreement.
EXECUTED as of the day and year first herein set forth.
SECURED PARTY:
CARNIVAL CORPORATION
By:________________________________________
DEBTOR:
___________________________________________
D-
4
<PAGE> 1
EXHIBIT 11
CARNIVAL CORPORATION
STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS
(In thousands, except per share data)
<TABLE>
<CAPTION>
FOR THE YEARS ENDED NOVEMBER 30,
--------------------------------
1994 1993
---- ----
<S> <C> <C>
Net income $381,765 $318,170
Adjustments to net income for the purpose of computing
fully diluted earnings per share:
Interest reduction from assumed conversion of
4.5% Convertible Debentures 5,418 5,538
-------- --------
Adjusted net income $387,183 $323,708
======== ========
Weighted average shares outstanding 282,744 282,474
Adjustments to weighted average shares outstanding for the
purpose of computing fully diluted earnings per share:
Additional shares issuable upon
conversion of 4.5% Convertible Debentures 6,618 6,618
-------- --------
Adjusted weighted average shares outstanding 289,362 289,092
======== ========
Earnings per share:
Primary $1.35 $1.13
Fully Diluted* $1.34 $1.12
</TABLE>
* This exhibit is provided to comply with SEC regulations. In accordance with
Accounting Principles Board Opinion No. 15, the Company does not present fully
diluted EPS in its financial statements because the convertible debentures are
anti-dilutive or result in a less than 3% dilution for the periods presented.
<PAGE> 1
EXHIBIT 12
CARNIVAL CORPORATION
RATIO OF EARNINGS TO FIXED CHARGES
(In thousands, except ratios)
<TABLE>
<CAPTION>
FOR THE YEARS ENDED NOVEMBER 30,
---------------------------------
1994 1993 1992 1991 1990
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Income from continuing operations $381,765 $318,170 $281,773 $253,824 $234,431
Income tax expense 10,053 5,497 9,008 8,995 4,546
-------- -------- -------- -------- --------
Income from continuing operations
before income taxes $391,818 $323,667 $290,781 $262,819 $238,977
======== ======== ======== ======== ========
Fixed Charges:
Interest expense $ 51,378 $ 34,325 $ 53,792 $ 65,428 $ 61,848
Interest portion of rental expense (1) 2,575 2,894 3,567 3,300 2,883
Fixed charges associated with
discontinued operations 928 1,451 1,265 7,349 7,299
Capitalized interest 21,888 24,609 21,682 28,215 40,312
-------- -------- -------- -------- --------
Total fixed charges $ 76,769 $ 63,279 $ 80,306 $104,292 $112,342
======== ======== ======== ======== ========
Earnings before fixed charges $446,699 $362,337 $349,405 $338,896 $311,007
======== ======== ======== ======== ========
Ratio of earnings to fixed charges 5.8 x 5.7 x 4.4 x 3.2 x 2.8 x
</TABLE>
___________________
(1) Represents one-third of rental expense, which Company management believes
to be representative of the interest portion of rental expense.
<PAGE> 1
EXHIBIT 13
Carnival Corporation
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
(in thousands)
- ----------------------------------------------------------------------------------------------------------
November 30, 1994 1993
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS:
CURRENT ASSETS:
Cash and cash equivalents $ 54,105 $ 60,243
Short-term investments 70,115 88,677
Accounts receivable 20,789 19,310
Consumable inventories, at average cost 45,122 37,245
Prepaid expenses and other 50,318 48,323
- ----------------------------------------------------------------------------------------------------------
Total current assets 240,449 253,798
- ----------------------------------------------------------------------------------------------------------
PROPERTY AND EQUIPMENT --
at cost, less accumulated depreciation and amortization 3,071,431 2,588,009
- ----------------------------------------------------------------------------------------------------------
OTHER ASSETS:
Goodwill, less accumulated amortization of $41,310 and $34,328 233,553 237,327
Long-term notes receivable 76,876 29,136
Investments in affiliates and other assets 47,514 21,097
Net assets of discontinued operation 89,553
- ----------------------------------------------------------------------------------------------------------
$3,669,823 $3,218,920
==========================================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY:
CURRENT LIABILITIES:
Current portion of long-term debt $ 84,644 $ 91,621
Accounts payable 86,750 81,374
Accrued liabilities 114,868 94,830
Customer deposits 257,505 228,153
Dividends payable 21,190 19,763
Reserve for discontinued operation 34,253
- ----------------------------------------------------------------------------------------------------------
Total current liabilities 564,957 549,994
- ----------------------------------------------------------------------------------------------------------
LONG-TERM DEBT 1,046,904 916,221
- ----------------------------------------------------------------------------------------------------------
CONVERTIBLE NOTES 115,000 115,000
- ----------------------------------------------------------------------------------------------------------
OTHER LONG-TERM LIABILITIES 14,028 10,499
- ----------------------------------------------------------------------------------------------------------
COMMITMENTS AND CONTINGENCIES (Note 10)
- ----------------------------------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY:
Class A Common Stock; $.01 par value; one vote per share;
799,000 shares authorized; 227,575 and 227,376 shares
issued and outstanding 2,276 2,274
Class B Common Stock; $.01 par value; five votes per share;
201,000 shares authorized; 54,957 shares issued and outstanding 550 550
Paid-in-capital 544,947 541,194
Retained earnings 1,390,589 1,089,323
Less -- other (9,428) (6,135)
- ----------------------------------------------------------------------------------------------------------
Total shareholders' equity 1,928,934 1,627,206
- ----------------------------------------------------------------------------------------------------------
$3,669,823 $3,218,920
==========================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 2
Carnival Corporation
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
(in thousands, except per share data)
- --------------------------------------------------------------------------------------------------------
Years Ended November 30, 1994 1993 1992
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
REVENUES $1,806,016 $1,556,919 $1,473,614
- --------------------------------------------------------------------------------------------------------
COSTS AND EXPENSES:
Operating expenses 1,028,475 907,925 865,587
Selling and administrative 223,272 207,995 194,298
Depreciation and amortization 110,595 93,333 88,833
- --------------------------------------------------------------------------------------------------------
1,362,342 1,209,253 1,148,718
- --------------------------------------------------------------------------------------------------------
OPERATING INCOME 443,674 347,666 324,896
- --------------------------------------------------------------------------------------------------------
OTHER INCOME (EXPENSE):
Interest income 8,668 11,527 16,946
Interest expense, net of capitalized interest (51,378) (34,325) (53,792)
Other income (expense) (9,146) (1,201) 2,731
Income tax expense (10,053) (5,497) (9,008)
- --------------------------------------------------------------------------------------------------------
(61,909) (29,496) (43,123)
- --------------------------------------------------------------------------------------------------------
INCOME BEFORE EXTRAORDINARY ITEM 381,765 318,170 281,773
EXTRAORDINARY ITEM
Loss on early extinguishment of debt (5,189)
- --------------------------------------------------------------------------------------------------------
NET INCOME $ 381,765 $ 318,170 $ 276,584
========================================================================================================
EARNINGS PER SHARE:
Income before extraordinary item $ 1.35 $ 1.13 $ 1.00
Net income $ 1.35 $ 1.13 $ .98
========================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 3
Carnival Corporation
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
(in thousands)
- -------------------------------------------------------------------------------------------------------
Years Ended November 30, 1994 1993 1992
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net income $ 381,765 $ 318,170 $ 276,584
ADJUSTMENTS:
Depreciation and amortization 110,595 93,333 88,833
Non-cash interest 8,782
Other 2,754 7,608 11,473
CHANGES IN OPERATING ASSETS AND LIABILITIES:
Increase in receivables (2,872) (1,548) (3,903)
(Increase) decrease in inventory (7,877) (5,627) 2,518
(Increase) decrease in prepaid and other (1,995) (16,203) 4,546
Increase (decrease) in accounts payable 5,376 9,901 (5,417)
Increase (decrease) in accrued liabilities 20,038 24,911 (341)
Increase in customer deposits 29,352 49,208 11,222
- -------------------------------------------------------------------------------------------------------
Net cash provided from operations 537,136 479,753 394,297
- -------------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES:
Decrease (increase) in short-term investments 15,249 22,371 (54,620)
Additions to property and equipment, net (594,789) (712,826) (120,812)
Increase in other non-current assets (5,649) (14,713) (28,217)
Proceeds from sale of discontinued operation 20,000
- -------------------------------------------------------------------------------------------------------
Net cash used for investing activities (565,189) (705,168) (203,649)
- -------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES:
Proceeds from issuance of common stock 2,297 1,360 715
Principal payments of long-term debt (414,381) (483,174) (798,657)
Repayment of debt of discontinued operation (25,000)
Dividends paid (79,072) (79,027) (77,400)
Proceeds from long-term debt 538,071 731,485 588,000
Payments of short-term borrowings (10,000)
- -------------------------------------------------------------------------------------------------------
Net cash provided from (used for)
financing activities 21,915 170,644 (297,342)
- -------------------------------------------------------------------------------------------------------
Net decrease in cash and cash equivalents (6,138) (54,771) (106,694)
Cash and cash equivalents at beginning of year 60,243 115,014 221,708
- -------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of year $ 54,105 $ 60,243 $ 115,014
=======================================================================================================
SUPPLEMENTAL DISCLOSURES:
Cash paid during the year for:
Interest (net of amount capitalized) $ 48,501 $ 33,419 $ 74,655
=======================================================================================================
Income taxes $ 6,871 $ 4,889 $ 4,699
=======================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 4
Carnival Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 -- DESCRIPTION OF BUSINESS
Carnival Corporation and subsidiaries (the "Company") operate three separate
cruise lines under the names Carnival Cruise Lines, Holland America Line and
Windstar Cruises and a tour business, Holland America Westours. Additionally,
the Company has investments in other cruise operations, discussed below.
Under the Carnival Cruise Lines name, the Company operates nine cruise ships
serving the Caribbean and the Mexican Riviera. Holland America Line operates
seven cruise ships serving primarily the Caribbean and Alaska, and Windstar
Cruises operates three luxury, sail-powered vessels which call on more exotic
locations inaccessible to larger ships. The Company has a 25% interest in K/S
Seabourn Cruise Line ("Seabourn") and a note receivable which is convertible
into an additional 25% interest. Seabourn operates two luxury vessels. The
Company also has a 43% interest in Epirotiki Lines which operates nine vessels
in the Aegean and Eastern Mediterranean. Holland America Westours markets
sight-seeing tours both separately and as a part of Holland America Line
cruise/tour packages. Holland America Westours also operates sixteen hotels in
Alaska and the Canadian Yukon, four luxury day boats offering tours to the
glaciers of Alaska and the Yukon River, over 290 motor coaches used for
sight-seeing and charters in the states of Washington and Alaska and in the
Canadian Rockies and eight private domed rail cars which are run on the Alaska
Railroad between Anchorage and Fairbanks.
NOTE 2 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PREPARATION OF FINANCIAL STATEMENTS
The accompanying financial statements present the consolidated balance sheets,
statements of operations and cash flows of the Company. All material
intercompany transactions and accounts have been eliminated in consolidation.
Certain amounts in prior years have been reclassified to conform with the
current year's presentation.
CASH AND CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS
Cash and cash equivalents includes investments with original maturities of
three months or less and are stated at cost which approximates market.
The Company adopted Statement of Financial Accounting Standards No. 115 ("SFAS
115"), "Accounting for Certain Investments in Debt and Equity Securities",
effective November 30, 1994.
At November 30, 1994, short-term investments are primarily comprised of
marketable debt securities, including U.S. Government and corporate debt
securities. These investments are categorized as available for sale and, in
accordance with SFAS 115, are stated at fair value. Unrealized holding gains
and losses are included as a component of shareholders' equity until realized.
At November 30, 1993, short-term investments were carried at cost which
approximated market.
PROPERTY AND EQUIPMENT
Property and equipment is stated at cost. Depreciation and amortization is
computed using the straight-line method over the following estimated useful
lives:
<TABLE>
<CAPTION>
YEARS
--------------------------------------
<S> <C>
Vessels 15-30
Buildings 10-35
Equipment 2-20
Leasehold improvements shorter of the term
of lease or related
asset life
</TABLE>
During 1994, the depreciable lives of four ships built in the 1980's were
extended from 20 or 25 years to 30 years to conform to industry standards.
This resulted in a reduction of depreciation expense of approximately $4
million, or $.01 per share, during the year ended November 30, 1994.
Assets and related obligations for equipment under capital leases are
initially recorded at an amount equal to the present value of the future
minimum lease payments using interest rates implicit within the leases.
Equipment under capital leases is amortized over the life of the lease or the
estimated useful life of the asset, whichever is shorter.
The Company capitalizes interest on vessels and other capital projects during
the construction period. Interest is capitalized using rates equivalent to the
average borrowing rate of the Company's long-term debt.
Costs associated with drydocking are capitalized and charged to expense over
the lesser of 12 months or the period to the next scheduled drydocking.
GOODWILL
Goodwill of $275 million resulting from the acquisition of HAL Antillen, N.V.
("HAL"), the parent company of Holland America Line, Windstar Cruises and
Holland America Westours, is being amortized using the straight-line method
over 40 years.
INVESTMENTS IN AFFILIATES
The Company accounts for investments based on its ability to exercise
significant influence over financial and operating policies of the investee
and/or its relative ownership interest. The Company consolidates affiliates in
which it has control or an ownership interest of at least 50%. For affiliates
where significant influence exists and/or where the level of ownership is
between 20% and 50%, the investment is accounted for using the equity method.
When the Company does not have significant influence, the level of ownership
interest is less than 20%, or for new investments where the ability to exercise
control or significant influence is temporary, the cost method of accounting is
followed.
REVENUE RECOGNITION
Customer cruise deposits, which represent unearned revenue, are included in
the balance sheet when received and are recognized as cruise revenue upon
completion of voyages with durations of 10 days or less and on a pro rata
basis, computed using the number of days completed during the reporting period,
for voyages in excess of 10 days. Revenues from tour and related services
are recognized at the time the service is performed.
<PAGE> 5
FINANCIAL INSTRUMENTS
The Company's financial instruments include forward foreign currency contracts
and interest rate swap agreements held for purposes other than trading. These
contracts are entered into to hedge the impact of foreign currency and interest
rate fluctuations. Changes in the market value of forward foreign currency
contracts which hedge exposures of firm commitments related to the construction
of cruise ships are recorded when the related foreign currency payments are
made with any resulting gain or loss included in the cost of the vessel.
Discounts and premiums related to forward agreements entered into to hedge
estimated foreign currency transactions are amortized to income over the life
of the agreement and changes in market value of the foreign currency are
recognized into income currently. Gains and losses on interest rate swap
transactions designated as hedges are recorded as reductions or increases in
interest expense over the life of the swap agreement.
INCOME TAXES
The Company and its subsidiaries are exempt from U.S. corporate income tax on
U.S. source income from international passenger cruise operations if (i) their
countries of incorporation exempt shipping operations of U.S. persons from
income tax (the "Incorporation Test"), and (ii) they meet the "CFC Test".The
Company and its subsidiaries involved in the cruise ship operations meet the
Incorporation Test because they are incorporated in countries which provide the
required exemption to U.S. persons involved in shipping operations. A company
meets the CFC Test if it is a controlled foreign corporation ("CFC"). A CFC is
defined by the Internal Revenue Code as a foreign corporation more than 50% of
whose stock by voting power or value is owned or considered as owned by U.S.
persons, each of whom owns or is considered to own 10% or more of the
corporation's voting power ("10% U.S. Shareholders"). During 1994, all of the
outstanding shares of Class B Common Stock of the Company were transferred to
The Micky Arison 1994 "B" Trust (the "B Trust"), a U.S. trust whose primary
beneficiary is Micky Arison, the Company's Chairman of the Board. Stock of the
Company representing more than 50% of the total combined voting power of all
classes of stock is owned by the B Trust, which is a "United States Person",
and thus, the Company meets the definition of a CFC. Accordingly, the Company
believes that virtually all of its income (with the exception of its United
States source income from the operation of transportation, hotel and tour
businesses of HAL) is exempt from United States Federal Income taxes. The B
Trust has entered into an agreement with the Company that is designed to
ensure, except under certain limited circumstances, that stock possessing more
than 50% of the Company's voting power will be held by ten percent shareholders
until at least July 1, 1997. If the Company or the subsidiaries involved in
the cruise ship operations were to cease to meet the CFC Test, and no other
basis for exemption were available, much of their income would become subject
to taxation by the United States at higher than normal corporate tax rates.
Because the Company is a CFC, a pro rata share of the passenger cruise
operation earnings of the Company is includable in the taxable income of any
"10% U.S. Shareholder", as defined above.
EARNINGS PER SHARE AND STOCK SPLIT
On December 14, 1994, a two-for-one stock split was effected whereby one
additional Common Share, par value $.01, was issued for each share outstanding
to shareholders of record on November 30, 1994. All share and per share data
appearing in the consolidated financial statements and notes thereto have been
retroactively adjusted for this stock split.
Earnings per share computations are based on the weighted average number of
shares of Class A and B Common Stock and common equivalent shares (related to
stock options), outstanding during each of the years. Total shares used in
the computation were 282.7 million, 282.5 million and 281.7 million for fiscal
years 1994, 1993 and 1992, respectively.
NOTE 3 -- SHORT-TERM INVESTMENTS
Short-term investments, classified as available for sale at November 30,
1994, consisted of the following debt securities (in thousands):
<TABLE>
<CAPTION>
Fair Value Cost
- ----------------------------------------------------------------
<S> <C> <C>
U. S. Government securities $57,819 $60,726
Mortgage backed securities 1,600 1,837
Corporate securities 10,696 10,865
- ----------------------------------------------------------------
$70,115 $73,428
================================================================
</TABLE>
The contractual maturities of debt securities at November 30, 1994 were as
follows (in thousands):
<TABLE>
<CAPTION>
Fair Value Cost
- ----------------------------------------------------------------
<S> <C> <C>
Due within one year $ 8,461 $ 8,553
Due after one year through five years 36,755 38,059
Due after five years through 10 years 3,144 4,000
Not due at a single maturity date 21,755 22,816
- ----------------------------------------------------------------
$70,115 $73,428
================================================================
</TABLE>
Gross unrealized holding losses at November 30, 1994 were $3.3 million and are
included with other shareholders' equity in the accompanying balance sheet.
Proceeds and gross realized losses from the sale of short-term investments for
the year ended November 30, 1994 were $124 million and $1.1 million,
respectively. For the purpose of determining gross realized gains and losses,
the cost of short-term investments sold is based upon specific identification.
<PAGE> 6
NOTE 4 -- PROPERTY AND EQUIPMENT
<TABLE>
<CAPTION>
Property and equipment consists of the following: (in thousands)
- -------------------------------------------------------------------------------------
November 30, 1994 1993
- -------------------------------------------------------------------------------------
<S> <C> <C>
Vessels $3,147,026 $2,342,781
Vessels under construction 207,128 465,896
- -------------------------------------------------------------------------------------
3,354,154 2,808,677
Land, buildings and improvements 95,294 92,775
Transportation and other equipment 152,649 121,963
- -------------------------------------------------------------------------------------
Total property and equipment 3,602,097 3,023,415
Less -- accumulated depreciation and amortization (530,666) (435,406)
- -------------------------------------------------------------------------------------
$3,071,431 $2,588,009
=====================================================================================
</TABLE>
Interest costs associated with the construction of vessels and buildings were
capitalized during the construction period and amounted to $21.9 million in
1994, $24.6 million in 1993 and $21.7 million in 1992.
NOTE 5 -- NOTES RECEIVABLE AND INVESTMENTS IN AFFILIATES
NOTES RECEIVABLE -- DISPOSAL OF RESORT AND CASINO SEGMENT
Previously, the Company adopted a plan to dispose of the Crystal Palace, which
comprised the entire resort and casino segment of the Company's operations. In
conjunction with that plan, the Company recorded a provision for the estimated
loss on the disposition of the Crystal Palace and began accounting for this
segment as a discontinued operation. In August 1994, the Company sold 100% of
the shares of Carnival's Crystal Palace Hotel Corporation, Ltd. for $80
million, consisting of $20 million in cash and $60 million of notes (the "CCP
Notes") secured by a leasehold interest in the Crystal Palace Hotel, the
hotel's furniture, fixtures, equipment, inventory, shares in subsidiary
companies of the Crystal Palace, including the casino management company, and
the casino equipment, furniture and fixtures. The CCP Notes are due in monthly
installments over a twenty year period and bear interest at 6% through year ten
and 8% thereafter. The Company exchanged $12.5 million of the CCP Notes as
consideration for a portion of its investment in CHC International, Inc.
("CHC"), discussed below. In accordance with the sale agreement, the Company
used the $20 million of cash proceeds from the transaction, along with an
additional $5 million contributed by the Company, to pay off existing Crystal
Palace indebtedness which was guaranteed by the Company. No material gain or
loss was recorded in 1994 upon the final disposition of the property.
INVESTMENT IN AFFILIATES
During 1994, the Company acquired a 50% interest in CHC, a newly created hotel
and casino management company. Principals of The Continental Companies (the
"TCC Principals") own the remainder of CHC and are responsible for day-to-day
operations. One of the TCC Principals is a member of the Company's board of
directors. CHC began operating a casino riverboat in U.S. waters in December
1994. This CHC operation required the Company to divest itself of slightly more
than half of its 50% interest in order to comply with The Jones Act. The
Jones Act prohibits the operation of vessels exclusively in U.S. waters by any
company that is 25% or more owned by non-U.S. entities. Accordingly, the
Company sold a 25.1% interest in CHC to the TCC Principals in exchange for $16
million of 6% notes receivable (the "TCC Notes") . The TCC Notes contain a put
option which the TCC Principals can exercise, requiring the Company to purchase
25.1% of CHC in exchange for the full principal and interest due under the TCC
Notes. If not exercised, the option expires in November 1996. As of November
30, 1994, the carrying value of the Company's CHC investment, including the TCC
Notes, is approximately $24 million. Since inception, the Company's intention
has been to spin-off 90% of its CHC investment to shareholders. At November
30, 1994, there were no significant amounts owed to or from CHC. Further, CHC
pays a license fee to the Company amounting to 1% of CHC's gross revenues, as
adjusted, not to be less than $100,000 per year, for the use of the "Carnival"
name.
NOTE 6 -- LONG-TERM DEBT AND CONVERTIBLE NOTES
Long-term debt consists of the following:
<TABLE>
<CAPTION>
(in thousands)
- ----------------------------------------------------------------------------------------------------
November 30, 1994 1993
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
Mortgages and other loans payable bearing interest at rates ranging
from 8% to 9.9%, secured by vessels, maturing through 1999 $ 287,642 $ 377,543
Unsecured Revolving Credit Facility Due 1999 238,000 150,000
Unsecured 5.75% Notes Due March 15, 1998 200,000 200,000
Unsecured 6.15% Notes Due October 1, 2003 124,939 124,932
Unsecured 7.20% Debentures Due October 1, 2023 124,862 124,857
Unsecured 7.7% Notes Due July 15, 2004 99,890
Unsecured Medium Term Notes bearing interest at rates ranging
from 5.95% to 7.0%, due from 1999 to 2004 30,000
Other loans payable 26,215 30,510
- ----------------------------------------------------------------------------------------------------
1,131,548 1,007,842
Less portion due within one year (84,644) (91,621)
- ----------------------------------------------------------------------------------------------------
$1,046,904 $ 916,221
====================================================================================================
</TABLE>
<PAGE> 7
Property and equipment with a net book value of $981 million at November 30,
1994 is pledged as collateral against the mortgage indebtedness.
In June 1994, the Company increased the line of credit available under its
five-year unsecured revolving credit agreement with a syndicate of banks from
$500 million to $750 million (the "$750 Million Revolving Credit Facility") and
extended the due date to 1999. The $750 Million Revolving Credit Facility
currently bears interest at LIBOR plus .20% and provides for a commitment fee
of .02% on the unused balance and a facility fee of .08% on the total facility.
The Company has an interest rate swap agreement which converts the fixed rate
on its unsecured 5.75% Notes due March 15, 1998 (the "$200 Million Notes") to a
LIBOR based floating rate loan. By entering into a second interest rate swap
agreement, the Company fixed the rate on these notes from March 1995 to
September 1995 at a rate of 6.94% (see Note 8).
A subsidiary of the Company has a $25 million revolving line of credit for
short-term working capital purposes. The loan bears interest at LIBOR plus 50
basis points or prime. As of November 30, 1994, there was no balance
outstanding under this line of credit.
Certain loan agreements entered into by some of HAL's subsidiaries restrict
the level of dividend payments by HAL's subsidiaries to HAL.
As of November 30, 1994, the scheduled annual maturities of the Company's
long-term debt is summarized as follows (in thousands):
<TABLE>
<S> <C>
1995 $ 84,644
1996 72,693
1997 64,806
1998 257,894
1999 285,397
Thereafter 366,114
------------------------------
$1,131,548
==============================
</TABLE>
In July 1992, the Company issued $115 million of 4-1/2% Convertible
Subordinated Notes Due July 1, 1997 (the "Convertible Notes"). The notes are
convertible into 57.55 shares of the Company's Class A Common Stock per $1,000
of notes. As of November 30, 1994 the notes are convertible into a total of
approximately 6.6 million shares of Class A Common Stock.
NOTE 7 -- SHAREHOLDERS' EQUITY
The following represents an analysis of the changes in shareholders' equity
for the three years ended November 30, 1994 (common stock and paid-in capital
have been restated to reflect a two-for-one stock split effective November 30,
1994):
<TABLE>
<CAPTION>
(in thousands)
- ---------------------------------------------------------------------------------------------------------------------------------
COMMON STOCK
$.01 PAR VALUE PAID-IN RETAINED
CLASS A CLASS B CAPITAL EARNINGS OTHER TOTAL
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
BALANCE, NOVEMBER 30, 1991 $2,262 $550 $524,086 $652,482 $(8,251) $1,171,129
- ---------------------------------------------------------------------------------------------------------------------------------
Net income for the year 276,584 276,584
Cash dividends (78,873) (78,873)
Issuance of stock upon conversion
of zero coupon notes 10 13,410 13,420
Issuance of stock to employees
under stock plans 715 715
Vested portion of common stock
under restricted stock plan 1,870 1,870
- ---------------------------------------------------------------------------------------------------------------------------------
BALANCE, NOVEMBER 30, 1992 $2,272 $550 $538,211 $850,193 $(6,381) $1,384,845
- ---------------------------------------------------------------------------------------------------------------------------------
Net income for the year 318,170 318,170
Cash dividends (79,040) (79,040)
Issuance of stock to employees
under stock plans 2 2,983 (1,625) 1,360
Vested portion of common stock
under restricted stock plan 1,871 1,871
- ---------------------------------------------------------------------------------------------------------------------------------
BALANCE, NOVEMBER 30, 1993 $2,274 $550 $541,194 $1,089,323 $(6,135) $1,627,206
- ---------------------------------------------------------------------------------------------------------------------------------
Net income for the year 381,765 381,765
Cash dividends (80,499) (80,499)
Unrealized loss on investments
available for sale (3,313) (3,313)
Issuance of stock to employees
under stock plans 2 3,753 (1,458) 2,297
Vested portion of common stock
under restricted stock plan 1,478 1,478
- ---------------------------------------------------------------------------------------------------------------------------------
BALANCE, NOVEMBER 30, 1994 $2,276 $550 $544,947 $1,390,589 $(9,428) $1,928,934
=================================================================================================================================
</TABLE>
<PAGE> 8
Each share of Class A Common Stock is entitled to one vote and each share of
Class B Common Stock is entitled to five votes, except (i) for the election of
directors, and (ii) as otherwise provided by law. Annually, the holders of
Class A Common Stock, voting as a separate class, are entitled to elect 25% of
the directors to be elected. The holders of Class B Common Stock, voting as a
separate class, are entitled to elect 75% of the directors to be elected, so
long as the number of shares of Class B Common Stock is at least 12-1/2% of the
number of outstanding shares of both classes of Common Stock. If the number of
outstanding shares of Class B Common Stock falls below 12-1/2%, directors that
would have been elected by a separate vote of that class will instead be
elected by the holders of both classes of Common Stock, with holders of Class A
Common Stock having one vote per share and holders of Class B Common Stock
having five votes per share. At the option of the holder of record, each share
of Class B Common Stock is convertible at any time into one share of Class A
Common Stock.
At November 30, 1994 there were approximately 12.9 million shares of Class A
Common Stock reserved for conversion of convertible debt, exercise of stock
options, and for issuance of shares under the employee stock purchase plan and
restricted stock plans.
During 1994, the Company declared quarterly cash dividends aggregating $.285
per share. In October 1994, the Board of Directors increased the quarterly
dividends from $.07 per share to $.075 per share.
NOTE 8 -- FINANCIAL INSTRUMENTS
The Company estimates the fair market value of financial instruments through
the use of public market prices, quotes from financial institutions, and other
available information. Considerable judgement is required in interpreting data
to develop estimates of market value and, accordingly, amounts are not
necessarily indicative of the amounts that the Company could realize in a
current market exchange.
LONG-TERM NOTES RECEIVABLE
The Company's long-term notes receivable are comprised primarily of $47.5
million of CCP Notes, a $15 million 9% note from Seabourn, and a $10 million
7.5% convertible note from Seabourn. The fair value of the $47.5 million and
$15 million notes is estimated to be $51 million at November 30, 1994 based on
current market interest rates for securities with similar risks and terms. The
Company believes it is not practicable to estimate the fair value of the $10
million convertible note from Seabourn due to the lack of information related
to the value of Seabourn's common stock.
LONG-TERM DEBT AND CONVERTIBLE NOTES
The fair value at November 30, 1994 of the Company's long-term debt was
approximately $1.074 billion which is approximately $58 million less than the
carrying value of $1.132 billion. The fair value of the long-term debt is less
than the carrying amount due to the Company's issuance of fixed rate debt
obligations which were issued at interest rates below market rates at November
30, 1994. The fair value of the Company's long-term debt is estimated based on
the quoted market price for the same or similar issues or on the current rates
offered to the Company for debt of similar terms and maturity. At November 30,
1994, the carrying amount of the Convertible Notes was approximately $33
million less than the current value primarily due to increases in the price of
the Company's Class A Common Stock.
FOREIGN CURRENCY AND INTEREST RATE SWAP AGREEMENTS
The Company enters into forward foreign currency contracts to reduce its
exposures relating to changes in foreign currency rates. These instruments are
subject to gain or loss from changes in foreign currency rates; however, any
realized gain or loss would generally be offset by gains or losses on the
actual foreign currency transaction. The Company also enters into interest rate
swap agreements to adjust the relationship between the amount of the Company's
fixed and floating rate debt. Certain exposures to credit losses related to
counterparty nonperformance exist; however, the Company does not anticipate
nonperformance by the counterparties as they are primarily large, well
established financial institutions. The fair values of the Company's forward
and swap hedging instruments discussed below are based on prices quoted by
financial institutions for these or similar instruments, adjusted for maturity
differences.
Several of the Company's contracts for the construction of cruise vessels are
stated in foreign currencies. The Company entered into forward foreign currency
contracts to fix the price of the vessels into U.S. dollars (see Note 10). As
of November 30, 1994, these forward contracts were in a gain position of
approximately $32 million. At the expiration of the forwards, which coincides
with the payments related to vessels under construction, any gains or losses
will be included in the cost of the vessel. In addition, the Company prices
some products in Canadian dollars and had entered into foreign currency
contracts totalling approximately U.S. $77 million to reduce the impact of
changes in exchange rates. As of November 30, 1994 there were no significant
gains or losses related to the Canadian currency transactions.
The Company has hedged the interest rate on the $200 Million Notes through the
utilization of interest rate swap agreements (see Note 6). As of November 30,
1994, the interest rate swaps were in an unrealized loss position of
approximately $13.3 million. These swap agreements effectively convert the $200
Million Notes into a floating rate facility after September 1995.
NOTE 9--RELATED PARTY TRANSACTIONS
A deceased relative of Ted Arison ( the "Company's Founder" and father of
Micky Arison) assisted the Company in the negotiation of agreements related to
the operation of Carnival's Crystal Palace Hotel and Casino. In consideration
for these services, the Company agreed to pay a fee over a 10-year period
beginning in January 1989. These fees were terminated in 1994 in connection
with the sale of the property, (see Note 5). Fees paid under this agreement
amounted to $0 in 1994, $567,000 in 1993 and $655,000 in 1992.
The Company utilizes Carnival Air Lines, an airline indirectly owned by the
Company's Chairman of the Board, to transport passengers. The Company also
<PAGE> 9
receives a license fee for the use of the "Carnival" name. During the fiscal
years ended November 30, 1994, 1993 and 1992 approximately $4 million, $8
million, and $12 million , respectively, has been paid to the airline for
transportation services. Approximately $.5 million has been received by the
Company for license fees during fiscal year ended November 30, 1994.
A director of the Company is employed by an investment banking firm. The
investment banking firm assisted the Company in connection with all issuances
of notes and Class A Common Stock to the public during the fiscal years ended
November 30, 1994, 1993 and 1992. In addition, the investment banking firm has
provided other services for the Company during those years. The Company paid
the investment banking firm $300,000, $300,000 and $200,000 in fiscal years
ended November 30, 1994, 1993 and 1992, respectively.
The Company has a six-year consulting agreement with a corporation affiliated
with the Company's Founder to provide services related to the construction of
cruise ships. The consulting agreement expires in November 1996. Under the
consulting agreement, the Company's Founder is paid a fee of $500,000 per year
plus travel expenses. The Company's Founder also has certain demand and piggy
back registration rights with respect to shares of Class A Common Stock
beneficially owned by him.
Pursuant to an agreement between the Company and certain irrevocable trusts,
the beneficiaries of which are the children of the Company's Founder and
certain others, the Company has granted to the trusts certain registration
rights with respect to 14,277,028 shares of Class A Common Stock held for
investment by the trusts. The Company has agreed to prepare and file with the
SEC a registration statement and pay all expenses relating to such
registration, except for fees and disbursements of counsel for the trusts,
selling costs, underwriting discounts and applicable filing fees.
NOTE 10 -- COMMITMENTS AND CONTINGENCIES
CAPITAL EXPENDITURES
The following table provides a description of ships currently under contract
for construction ( in millions, except berth data):
<TABLE>
<CAPTION>
Expected Number Estimated
Delivery Contract of Lower Total
Ship Name Operating Unit Date Denomination Berths Cost
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Imagination Carnival Cruise Lines 6/95 Finnish Markka 2,040 $ 330
Inspiration Carnival Cruise Lines 3/96 U. S. Dollar 2,040 270
Veendam Holland America Line 6/96 Italian Lira 1,266 225
To Be Named Carnival Cruise Lines 9/96 Italian Lira 2,640 400
To Be Named Holland America Line 9/97 Italian Lira 1,320 235
To Be Named Carnival Cruise Lines 2/98 U. S. Dollar 2,040 300
To Be Named Carnival Cruise Lines 11/98 U. S. Dollar 2,040 300
To Be Named Carnival Cruise Lines 12/98 Italian Lira 2,640 415
- ----------------------------------------------------------------------------------
16,026 $2,475
==================================================================================
</TABLE>
Contracts denominated in foreign currencies have been fixed into U.S. Dollars
through the utilization of forward currency contracts (see Note 8). In
connection with the vessels under contract for construction described above,
the Company has paid $207 million through November 30, 1994, anticipates paying
$385 million in fiscal 1995 and $1.9 billion beyond fiscal 1995.
LITIGATION
In 1986, a lawsuit was filed by the American Association of Cruise Passengers
("AACP") against Carnival Corporation, Holland America Line-Westours, Inc. and
ten other cruise lines and an association of travel agents seeking treble and
punitive damages, alleging violation of federal and state antitrust laws and
interference with business expectancies under state common law. The amount of
damages sought is not specified in the complaint and has not been revealed in
discovery to date. AACP has asserted that the defendants have agreed with each
other to boycott AACP because of AACP's practice of rebating travel agency
commissions to passengers and advertising discounts on such cruise lines'
advertised fares. The Company is contesting the case vigorously and is seeking
dismissal as to Carnival Corporation on jurisdictional grounds, pursuant to
prior Court of Appeals rulings. In addition, these rulings have significantly
limited the total amount of damages recoverable even if liability of one or
more of the cruise lines is found. Based on the current status of the
proceedings, the Company does not believe that the outcome of this lawsuit will
have a material adverse affect on the Company's financial condition or results
of operations.
In the normal course of business, various other claims and lawsuits have been
filed or are pending against the Company. The majority of these claims and
lawsuits are covered by insurance. Management believes the outcome of any such
suits which are not covered by insurance would not have a material adverse
effect on the Company's financial condition or results of operations.
<PAGE> 10
OPERATING LEASES
On March 27, 1989, the Company entered into a ten-year lease for 230,000
square feet of office space located in Miami, Florida. The Company moved its
operation to this location in October 1989. In December 1994, the Company
purchased the building and an adjacent parcel of land for approximately $23
million. In order to provide space for the Company's expanding operations, the
Company has commenced construction of a second building on the parcel of land
at an estimated cost of $35 million. The Company also leases other facilities,
transportation and other equipment under operating leases. Rental expense for
all operating leases for the years ended November 30, 1994, 1993 and 1992 was
approximately $7.7 million, $8.7 million and $10.7 million, respectively. As
of November 30, 1994, minimum annual rentals for all operating leases,
excluding the lease related to the building purchase discussed above, with
initial or remaining terms in excess of one year, are as follows (in
thousands):
1995 $ 5,792
1996 5,789
1997 5,681
1998 4,666
1999 2,908
Thereafter 9,676
----------------------------
$34,512
============================
NOTE 11 -- SEGMENT INFORMATION
The Company's cruise segment currently operates sixteen passenger cruise
ships and three luxury sailing vessels. Cruise revenues are comprised of sales
of tickets and other revenues from on-board activities. A tour business
operated by HAL, consisting of sixteen hotels, four luxury day-boats, over 290
motor coaches and eight private domed rail cars comprise the assets that
generate revenue for the tour segment. Intersegment revenues represent tour
revenues generated when tour services are rendered in conjunction with a
cruise.
Segment information for the three years ended November 30, 1994 is as follows:
<TABLE>
<CAPTION>
(in thousands)
- -----------------------------------------------------------------------------------------
Year Ended November 30, 1994 1993 1992
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C>
REVENUES
Cruise $1,623,069 $1,381,473 $1,292,587
Tour 227,613 214,382 215,194
Intersegment revenues (44,666) (38,936) (34,167)
- -----------------------------------------------------------------------------------------
$1,806,016 $1,556,919 $1,473,614
=========================================================================================
GROSS OPERATING
PROFIT
Cruise $ 726,808 $ 598,642 $ 552,669
Tour 50,733 50,352 55,358
- -----------------------------------------------------------------------------------------
$ 777,541 $ 648,994 $ 608,027
=========================================================================================
DEPRECIATION AND AMORTIZATION
Cruise $ 101,146 $ 84,228 $ 79,743
Tour 9,449 9,105 9,090
- -----------------------------------------------------------------------------------------
$ 110,595 $ 93,333 $ 88,833
=========================================================================================
OPERATING INCOME
Cruise $ 425,590 $ 333,392 $ 301,845
Tour 18,084 14,274 23,051
- -----------------------------------------------------------------------------------------
$ 443,674 $ 347,666 $ 324,896
=========================================================================================
IDENTIFIABLE ASSETS
Cruise $3,531,727 $2,995,221 $2,415,547
Tour 138,096 134,146 140,507
Discontinued resort and casino 89,553 89,553
- -----------------------------------------------------------------------------------------
$3,669,823 $3,218,920 $2,645,607
=========================================================================================
CAPITAL EXPENDITURES
Cruise $ 587,249 $ 705,196 $ 111,766
Tour 9,963 10,281 11,400
- -----------------------------------------------------------------------------------------
$ 597,212 $ 715,477 $ 123,166
=========================================================================================
</TABLE>
<PAGE> 11
NOTE 12 -- EMPLOYEE BENEFIT PLANS
STOCK OPTION PLANS
The Company has stock option plans, applicable to Class A Common Stock, for
certain key employees. The plans are administered by a committee of two
directors of the Company (the "Committee") who determine the employees and
directors eligible to participate, the number of shares for which options are
to be granted and the amounts that any employee or director may exercise within
a specified year or years. The maximum number of shares available to be
granted as of November 30, 1994 was 3,128,836. Under the terms of the plans,
the option price per share is established by the Committee as an amount between
50% and 100% of the fair market value of the shares of Class A Common Stock on
the date the option is granted. Since 1991, all options granted have been for
100% of the fair market value of the shares on the date of grant. Options may
extend for such periods as may be determined by the Committee but only for so
long as the optionee remains an employee of the Company.
The status of options issued by the Company was as follows (restated to
reflect a two-for-one stock split):
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Years Ended November 30, 1994 1994 1993 1992
- -------------------------------------------------------------------------------------------------------------------
PRICE
PER SHARE NUMBER OF SHARES
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Unexercised Options -- Beginning of Year $ 3.88 - $20.25 730,526 730,598 101,718
Options Granted $19.82 - $23.88 1,764,000 72,000 674,000
Options Exercised $ 4.50 - $16.00 (61,290) (56,472) (45,120)
Options Cancelled (15,600)
- -------------------------------------------------------------------------------------------------------------------
Unexercised Options -- End of Year $ 3.88 - $23.88 2,433,236 730,526 730,598
===================================================================================================================
</TABLE>
RESTRICTED STOCK PLANS
The Company has restricted stock plans under which certain key employees are
granted restricted shares of the Company's Class A Common Stock. Shares are
awarded in the name of each of the participants, who have all the rights of
other Class A shareholders, subject to certain restriction and forfeiture
provisions. Unearned compensation is recorded at the date of award based on
the market value of the shares on the date of grant. Unearned compensation is
amortized to expense over the vesting period. As of November 30, 1994 there
have been 1,896,032 shares issued under the plans of which 661,850 remain to be
vested.
DEFINED CONTRIBUTION PLANS
HAL has two defined contribution plans available to substantially all U.S. and
Canadian employees. HAL contributes to these plans based on employee
contributions and salary levels. Total expense relating to these plans in each
fiscal year ended November 30, 1994, 1993 and 1992 was approximately $2 million.
DEFINED BENEFIT PENSION PLANS
The Company adopted two pension plans (qualified and non-qualified) effective
January 1, 1989 which together cover all full-time employees of Carnival
Corporation working in the United States, excluding HAL employees. Employees
will vest in the pension plans 100% after five years of service and will be
eligible to receive benefits at age 55. The benefits are based on years of
service and the employee's highest average compensation over five consecutive
years during the last ten years of employment. Carnival Corporation's funding
policy for the qualified plan is to annually contribute at least the minimum
amount required under the applicable labor regulations. The weighted average
discount rate, 8.5% in 1994, 7.5% in 1993 and 8.0% in 1992, and a 5.0% rate of
increase in future compensation levels were used in determining the projected
benefit obligation. The expected long-term rate of return on assets was 8.5%.
Pension costs for the qualified and non-qualified defined benefit plans were
approximately $2.0 million, $1.5 million and $1.4 million in 1994, 1993 and
1992, respectively.
The funded status of the plans at November 30, 1994 and 1993 is:
<TABLE>
<CAPTION>
Qualified Non-Qualified
(in thousands) (in thousands)
- -------------------------------------------------------------------------------------------------------------------
1994 1993 1994 1993
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Accumulated benefit obligation:
Vested $ 2,796 $ 2,673 $ 3,089 $ 3,464
Non-vested 285 461 102 149
- -------------------------------------------------------------------------------------------------------------------
$ 3,081 $ 3,134 $ 3,191 $ 3,613
===================================================================================================================
Projected benefit obligation $ 4,606 $ 4,842 $ 4,801 $ 5,532
Plan assets (3,745) (3,307)
- -------------------------------------------------------------------------------------------------------------------
Unfunded accumulated benefits 861 1,535 4,801 5,532
Unrecognized prior service cost (491) (576) (460) (1,553)
Unrecognized gains and (losses) (493) (1,067) 309 (265)
- -------------------------------------------------------------------------------------------------------------------
Accrued (prepaid) pension obligation $ (123) $ (108) $ 4,650 $ 3,714
===================================================================================================================
</TABLE>
<PAGE> 12
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
PRICE WATERHOUSE LLP [LOGO]
To the Board of Directors and Shareholders of
Carnival Corporation
In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of operations and cash flows present fairly, in all
material respects, the financial position of Carnival Corporation and its
subsidiaries at November 30, 1994 and 1993, and the results of their operations
and their cash flows for each of the three years in the period ended November
30, 1994, in conformity with generally accepted accounting principles. These
financial statements are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these statements in accordance with
generally accepted auditing standards which require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for the
opinion expressed above.
PRICE WATERHOUSE LLP
Miami, Florida
January 23, 1995
<PAGE> 13
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Carnival Corporation and its subsidiaries (the "Company") earn revenues
primarily from (i) the sale of passenger tickets, which include accommodations,
meals, airfare and substantially all shipboard activities, and (ii) the sale of
goods and services on board its cruise ships, such as casino gaming, liquor
sales, gift shop sales and other related services. The Company also derives
revenues from the tour operations of HAL Antillen N.V. ("HAL").
For selected segment information related to the Company's revenues, gross
operating profit, operating income and other financial information, see Note 11
in the accompanying financial statements.
The following table presents operations data expressed as a percentage of
total revenues and selected statistical information for the periods indicated:
<TABLE>
<CAPTION>
Years Ended November 30, 1994 1993 1992
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
REVENUES 100% 100% 100%
COSTS AND EXPENSES:
Operating expenses 57 58 59
Selling and administrative 12 14 13
Depreciation and amortization 6 6 6
- ----------------------------------------------------------------------------------------------
OPERATING INCOME 25 22 22
OTHER INCOME (EXPENSE) (4) (2) (3)
- ----------------------------------------------------------------------------------------------
INCOME FROM CONTINUING OPERATIONS 21% 20% 19%
==============================================================================================
SELECTED STATISTICAL INFORMATION:
Passengers carried 1,354,000 1,154,000 1,153,000
Passenger cruise days 8,102,000 7,003,000 6,766,000
Occupancy percentage 104.0% 105.3% 105.3%
</TABLE>
GENERAL
The growth in the Company's revenues during the last three fiscal years has
primarily been a function of the expansion of its fleet capacity.
Fixed costs, including depreciation, fuel, insurance, port charges and crew
costs represent more than one-third of the Company's operating expenses and do
not significantly change in relation to changes in passenger loads and aggregate
passenger ticket revenue.
The Company's different businesses experience varying degrees of seasonality.
The Company's revenue from the sale of passenger tickets for Carnival Cruise
Lines ("Carnival") ships is moderately seasonal. Historically, demand for
Carnival cruises has been greater during the periods from late December through
April and late June through August. HAL cruise revenues are more seasonal than
Carnival's cruise revenues. Demand for HAL cruises is strongest during the
summer months when HAL ships operate in Alaska and Europe. Demand for HAL
cruises is lower during the winter months when HAL ships sail in more
competitive markets. The Company's tour revenues are extremely seasonal with
a large majority of tour revenues generated during the late spring and summer
months in conjunction with the Alaska cruise season.
FISCAL YEAR ENDED NOVEMBER 30, 1994 COMPARED TO FISCAL YEAR ENDED NOVEMBER 30,
1993
REVENUES
The increase in total revenues of $249.1 million from 1993 to 1994 was
comprised of a $241.6 million, or 17.5%, increase in cruise revenues and an
increase of $7.5 million, or 4.3%, in tour revenues for the period. The
increase in cruise revenues was primarily the result of a 17.2% increase in
capacity for the period. This capacity increase resulted from additional
capacity provided by Carnival's SuperLiners Sensation and Fascination which
entered service in November 1993 and July 1994, respectively, and Holland
America Line's Maasdam and Ryndam which entered service in December 1993 and
October 1994, respectively. Also affecting cruise revenues were slightly higher
yields, slightly lower occupancies and lost revenues related to the grounding of
the Nieuw Amsterdam which resulted in the cancellation of three one-week cruises
in August 1994. See Other Income (Expense) below.
Average capacity is expected to increase approximately 13% during the next
fiscal year as a result of the delivery of the Fascination in July 1994, the
Ryndam in October 1994 and the Imagination in June 1995, net of a reduction in
capacity due to the discontinuance of the Company's FiestaMarina cruise division
in September 1994.
Revenues from the Company's tour operations increased to $182.9 million in
1994 from $175.4 million in 1993 primarily due to an increase in the number of
tour passengers.
COSTS AND EXPENSES
Operating expenses increased $120.6 million, or 13.3% , from 1993 to 1994.
Cruise operating costs increased by $113.4 million, or 14.5%, to $896.3 million
in 1994 from $782.8 million in 1993. Cruise operating costs increased primarily
due to costs associated with the increased capacity in 1994.
Selling and administrative expenses increased $15.3 million, or 7.3%, from
1993 to 1994. These increases were
<PAGE> 14
attributable to additional advertising and other costs associated primarily with
the increase in capacity. Depreciation and amortization increased by $17.3
million, or 18.5%, to $110.6 million in 1994 from $93.3 million in 1993.
Depreciation and amortization increased primarily due to the additional
capacity discussed above. Also, the depreciable lives of four of the Carnival
ships built in the 1980's were extended from 20 or 25 years to 30 years to
conform to industry standards. This resulted in a reduction of depreciation of
approximately $4 million during 1994.
OTHER INCOME (EXPENSE)
Total other expense (net of other income) in 1994 of $61.9 million increased
from $29.5 million in 1993. Interest income decreased to $8.7 million in 1994
from $11.5 million in 1993 due to a lower level of investments in 1994. Interest
expense increased to $73.3 million in 1994 from $58.9 million in 1993 as a
result of increased debt levels. Both the lower investment levels and higher
debt levels were the result of expenditures made in connection with the ongoing
construction and delivery of cruise ships. Capitalized interest decreased to
$21.9 million in 1994 from $24.6 million in 1993.
Other expenses increased to $9.1 million in 1994 because of two events
which occurred during 1994. In August 1994, HAL's Nieuw Amsterdam ran aground
in Alaska which resulted in the cancellation of three one-week cruises. Costs
associated with repairs to the ship, passenger handling and various other
expenses amounted to $6.4 million and were included in other expenses. In
September 1994, the Company discontinued its FiestaMarina division because of
lower than expected passenger occupancy levels. This resulted in a charge of
$3.2 million to other expense. The cruise ship operated by FiestaMarina was
under charter from Epirotiki Lines, 43% owned by the Company, and was returned
to Epirotiki.
Income tax expense increased to $10.1 million in 1994 primarily as a result
of taxes, approximately $3 million, on a dividend paid by the tour company, a
U.S. company, to its parent company, a foreign shipping company.
FISCAL YEAR ENDED NOVEMBER 30, 1993 COMPARED TO FISCAL YEAR ENDED NOVEMBER 30,
1992
REVENUES
The increase in total revenues of $83.3 million from 1992 to 1993 was
comprised of an $88.9 million, or 6.9%, increase in cruise revenues for the
period and a $5.6 million decrease in tour revenues. The increase in cruise
revenues was primarily the result of a 3.5% increase in capacity for the period
resulting from the addition of Holland America Line's cruise ship Statendam in
late January 1993 and a 3.3% increase in passenger yields resulting from an
increase in ticket pricing and passenger spending.
Revenues from the Company's tour operation decreased $5.6 million, or 3.1%,
from $181.0 million in 1992 as compared to $175.4 million in 1993. The decrease
was due to a reduction in pricing resulting from increased discounting by
competitors.
COSTS AND EXPENSES
Operating expenses increased $42.3 million, or 4.9%, from 1992 to 1993.
Cruise operating costs increased by $42.9 million, or 5.8%, to $782.8 million in
1993 from $739.9 million in 1992, primarily due to additional costs associated
with the increased capacity in 1993.
Selling and administrative costs increased $13.7 million, or 7.0%, primarily
due to increases in advertising expenses associated with increased capacity and
an increase in television advertising in 1993.
Depreciation and amortization increased by $4.5 million, or 5.1%, to $93.3
million in 1993 from $88.8 million in 1992 primarily due to the addition of the
Statendam.
OTHER INCOME (EXPENSE)
Other expense (net of other income) of $29.5 million decreased in 1993 from
$43.1 million in 1992. Interest income decreased to $11.5 million in 1993 from
$16.9 million in 1992 due to lower interest rates on short-term investments in
1993. Interest expense, net of capitalized interest, decreased to $34.3 million
in 1993 from $53.8 million in 1992. Total interest expense decreased to $58.9
million in 1993 from $75.5 million in 1992 as a result of decreased debt levels
and lower interest rates on floating rate debt. Capitalized interest increased
to $24.6 million in 1993 from $21.7 million in 1992 due to higher investments in
vessels under construction. Income tax expense decreased $3.5 million to $5.5
million in 1993 from $9.0 million in 1992 due primarily to a reduction in
earnings for the tour operation.
LIQUIDITY AND CAPITAL RESOURCES
SOURCES AND USES OF CASH
The Company's business provided $537 million of net cash from operations
during the year ended November 30, 1994, an increase of 12% over the comparable
period in 1993. The increase was primarily the result of higher earnings for
the period.
During the year ended November 30, 1994, the Company spent approximately $595
million on capital projects of which $549 million was spent in connection with
its ongoing shipbuilding program. The Fascination and the Ryndam were
completed and delivered in 1994. The remainder was spent on vessel
refurbishments, tour assets and other equipment.
These capital expenditures were funded by cash from operations, borrowings
under the $750 Million Revolving Credit Facility and the issuance by the
Company of $100 million of 7.7% Notes Due July 15, 2004 (the 7.7% Notes) and
$30 million of medium term notes due from 1999 to 2004.
The Company also made scheduled principal payments during 1994 totalling
approximately $90 million under various individual vessel mortgage loans and
paid $79 million in cash dividends.
FUTURE COMMITMENTS
The Company is scheduled to take delivery of eight new vessels over the next
five years. The Imagination is scheduled for delivery in fiscal 1995. The
Company will pay approximately $385 million in fiscal 1995 related to the
construction of cruise ships and $1.9 billion beyond fiscal 1995. See Note 10
in the accompany-
<PAGE> 15
ing financial statements for more information related to commitments for the
construction of cruise ships. In addition, the Company has $1,132 million of
long-term debt of which $85 million is due in fiscal 1995. See Note 6 for more
information regarding the Company's debt. The Company also enters into forward
foreign currency contracts and interest rate swap agreements to hedge the
impact of foreign currency and interest rate fluctuations. See Notes 2 and 8
for more information regarding forward contracts and swap agreements.
FUNDING SOURCES
Cash from operations is expected to be the Company's principal source of
capital to fund its debt service requirements and ship construction costs. In
addition, the Company may fund a portion of the construction cost of new ships
from borrowings under the $750 Million Revolving Credit Facility and/or through
the issuance of long-term debt in the public or private markets. One of the
Company's subsidiaries also has a $25 million line of credit. At November 30,
1994, approximately $512 million was available for borrowing by the Company
under the $750 Million Revolving Credit Facility.
To the extent that the Company should require or choose to fund future capital
commitments from sources other than operating cash or from borrowings under the
$750 Million Revolving Credit Facility, the Company believes that it will be
able to secure such financing from banks or through the offering of debt and/or
equity securities in the public or private markets. In this regard, the Company
has filed two Registration Statements on Form S-3 (the "Shelf Registration")
relating to a shelf offering of up to $500 million aggregate principal amount of
debt or equity securities. In July 1994, the Company issued the 7.7% Notes
under the Shelf Registration. The Company has also commenced an ongoing $100
million medium term note program under the Shelf Registration pursuant to which
the Company may from time to time issue notes with maturities from nine months
to 50 years from the date of issue. Under the medium term note program, the
Company has issued $30 million of five to ten-year notes bearing interest at
rates ranging from 5.95% to 7% per annum. A balance of $370 million aggregate
principal amount of debt or equity securities remains available for issuance
under the Shelf Registration.
<PAGE> 16
SUPPLEMENTAL INFORMATION
SELECTED FINANCIAL DATA
The selected financial data presented below for the fiscal years ended
November 30, 1990 through 1994 and as of the end of each such fiscal year are
derived from the financial statements of the Company and should be read in
conjunction with such financial statements and the related notes. Certain
amounts in prior years have been reclassified to conform with the current year's
presentation.
<TABLE>
<CAPTION> (In thousands, except per share data)
- -----------------------------------------------------------------------------------------------------------------------------------
Years Ended November 30, 1994 1993 1992 1991 1990
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Total revenues $1,806,016 $1,556,919 $1,473,614 $1,404,704 $1,253,756
Operating income $ 443,674 $ 347,666 $ 324,896 $ 315,905 $ 291,313
Income from continuing operations $ 381,765 $ 318,170 $ 281,773 $ 253,824 $ 234,431
Net income $ 381,765 $ 318,170 $ 276,584 $ 84,988 $ 206,202
Earnings per share (1):
Income from continuing operations $ 1.35 $ 1.13 $ 1.00 $ .93 $ .87
Net income $ 1.35 $ 1.13 $ .98 $ .31 $ .77
Dividends declared per share $ .285 $ .280 $ .280 $ .245 $ .240
Passenger cruise days 8,102 7,003 6,766 6,365 5,565
Percent of total capacity (2) 104.0% 105.3% 105.3% 105.7% 106.6%
(in thousands)
- -----------------------------------------------------------------------------------------------------------------------------------
November 30, 1994 1993 1992 1991 1990
- -----------------------------------------------------------------------------------------------------------------------------------
BALANCE SHEET DATA:
Total assets $3,669,823 $3,218,920 $2,645,607 $2,650,252 $2,583,424
Long-term debt and convertible
notes $1,161,904 $1,031,221 $ 776,600 $ 921,689 $ 999,772
Total shareholders' equity $1,928,934 $1,627,206 $1,384,845 $1,171,129 $1,036,071
</TABLE>
(1) All earnings per share amounts have been adjusted to reflect a two-for-one
stock split effective November 30, 1994.
(2) In accordance with cruise industry practice, total capacity 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.
<PAGE> 17
MARKET PRICE FOR CAPITAL STOCK
The following table sets forth for the periods indicated the high and low
market prices for the Class A Common Stock on the New York Stock Exchange
restated to reflect the two-for-one stock split effective November 30, 1994:
<TABLE>
<CAPTION>
SALES PRICE SALES PRICE
- ------------------------------------------------------------- -------------------------------------------------------------
HIGH LOW HIGH LOW
- ------------------------------------------------------------- -------------------------------------------------------------
Fiscal Year ended November 30, 1994: Fiscal Year ended November 30, 1993:
- ------------------------------------------------------------- -------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
FIRST QUARTER $26.125 $23.000 FIRST QUARTER $19.688 $15.688
- ------------------------------------------------------------- -------------------------------------------------------------
SECOND QUARTER $25.438 $21.000 SECOND QUARTER $19.563 $15.125
- ------------------------------------------------------------- -------------------------------------------------------------
THIRD QUARTER $24.063 $21.750 THIRD QUARTER $22.125 $16.500
- ------------------------------------------------------------- -------------------------------------------------------------
FOURTH QUARTER $23.125 $20.563 FOURTH QUARTER $24.125 $19.875
- ------------------------------------------------------------- -------------------------------------------------------------
</TABLE>
As of February 14, 1995, there were approximately 3,488 holders of record of
the Company's Class A Common Stock. All of the issued and outstanding shares
of Class B Common Stock are held by The Micky Arison 1994 "B" Trust, a United
States Trust, whose primary beneficiary is Micky Arison. While no tax treaty
currently exists between the Republic of Panama and the United States, under
current law, the Company believes that distributions to its shareholders are not
subject to taxation under the laws of the Republic of Panama.
SELECTED QUARTERLY FINANCIAL DATA (unaudited)
Quarterly financial results for the year ended November 30, 1994 are as
follows:
<TABLE>
<CAPTION>
(in thousands, except per share data)
- ------------------------------------------------------------------------------------------------------------------------------------
FOR THE QUARTER FIRST SECOND THIRD FOURTH
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
TOTAL REVENUES $385,256 $409,400 $600,796 $410,564
- ------------------------------------------------------------------------------------------------------------------------------------
OPERATING INCOME $ 72,013 $ 85,780 $204,927 $ 80,954
- ------------------------------------------------------------------------------------------------------------------------------------
NET INCOME $ 65,051 $ 77,886 $168,776 $ 70,052
- ------------------------------------------------------------------------------------------------------------------------------------
EARNINGS PER SHARE $ .23 $ .28 $ .60 $ .25
- ------------------------------------------------------------------------------------------------------------------------------------
Quarterly financial results for the year ended November 30, 1993 are as
follows:
(in thousands, except per share data)
- ------------------------------------------------------------------------------------------------------------------------------------
FOR THE QUARTER FIRST SECOND THIRD FOURTH
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL REVENUES $323,635 $378,237 $529,328 $325,719
- ------------------------------------------------------------------------------------------------------------------------------------
OPERATING INCOME $ 51,732 $ 70,236 $172,008 $ 53,690
- ------------------------------------------------------------------------------------------------------------------------------------
NET INCOME $ 50,677 $ 65,140 $152,214 $ 50,139
- ------------------------------------------------------------------------------------------------------------------------------------
EARNINGS PER SHARE $ .18 $ .23 $ .54 $ .18
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 1
EXHIBIT 21
LIST OF SUBSIDIARIES OF CARNIVAL CORPORATION
<TABLE>
<CAPTION>
JURISDICTION OF INCORPORATION
NAME OF SUBSIDARY OR ORGANIZATION
- ----------------- -----------------------------
<S> <C>
(9) Alaska Overland, Inc. Alaska
(5) Alaska Travel Center, Inc. Washington
(8) Anchorage Hotel Associates, Inc. Alaska
Celebration Cruises Inc. Liberia
(5) Evergreen Trails, Inc. Washington
Festivale Maritime Limited Bahamas
Futura Cruises Inc. Panama
HAL Antillen N.V. Netherlands Antilles
(1) HAL Beheer B.V. Netherlands
(1) HAL Buitenland B.V. Netherlands
(1) HAL Cruises LImited Bahamas
(1) HAL Maritime Ltd. British Virgin Islands
(1) HAL Overseas Ltd. British Virgin Islands
(1) HAL Services B.V. Holland
(1) HAL Shipping Ltd. British Virgin Islands
(3) Holland America Line Inc. Delaware
(3) Holland America Line - Westours Washington
Jubilee Cruises Inc. Liberia
(5) Leisure Corporation Alaska
Sunbury Assets Inc. Panama
Sunbury Assets Limited Bahamas
(6) Trailways Tours, Inc. Washington
Trident Insurance Company Limited Bermuda
Tropicale Cruises Inc. Liberia
Utopia Cruises Inc. Panama
(1) West Coast Cruise Ltd. British Virgin Islands
(5) Westmark Hotels of Canada Ltd. Canada(7)
(5) Westmark Hotels, Inc. Alaska
(8) Westmark Kodiak Inc. Alaska
(8) Westmark Third Avenue Inc. Alaska
(5) Westours Motor Coaches, Inc. Alaska
(5) White Pass & Yukon Motorcoaches, Inc. Alaska
(2) Wind Spirit Limited Bahamas
(1) Windstar Sail Cruises Limited Bahamas
(2) Wind Star Limited Bahamas
(1) Wind Surf Limited Bahamas
- -----------------------------------------------
(1) Subsidiary of HAL Antillen N.V.
(2) Subsidiary of Windstar Sail Cruises Limited
(3) Subsidiary of HAL Buitenland B.V.
(4) Subsidiary of Holland America Line Inc.
(5) Subsidiary of Holland America Line-Westours Inc.
(6) Subsidiary of Evergreen Trails, Inc.
(7) Holland America Line-Westours Inc. owns all of the common stock and
noncumulative redeemable preferred stock, while Westmark Hotels, Inc.
owns all of the redeemable preferred Class B stock and the redeemable
preferred Class C stock.
(8) Subsidiary of Westmark Hotels, Inc.
(9) Subsidiary of Westours Motor Coaches, Inc.
</TABLE>
<PAGE> 1
EXHIBIT 23
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectuses
constituting part of the Registration Statements on Forms S-3 (No. 33-50947,
No. 33-53136 and No.33-48756) and the Registration Statements on Forms S-8
(No. 33-53099, 33-51195, 33-45288, 33-45287 and 33-26898) of Carnival
Corporation of our report dated January 23, 1995 appearing on page 31 of the
Annual Report to Shareholders for the year ended November 30, 1994 which is
incorporated in this Annual Report on Form 10-K.
PRICE WATERHOUSE LLP
January 23, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF CARNIVAL CORPORATION FOR THE YEAR ENDED NOVEMBER 30,
1994, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> NOV-30-1994
<PERIOD-END> NOV-30-1994
<CASH> 54,105
<SECURITIES> 70,115
<RECEIVABLES> 20,789
<ALLOWANCES> 0
<INVENTORY> 45,122
<CURRENT-ASSETS> 240,449
<PP&E> 3,602,097
<DEPRECIATION> 530,666
<TOTAL-ASSETS> 3,669,823
<CURRENT-LIABILITIES> 564,957
<BONDS> 1,161,904
<COMMON> 2,826
0
0
<OTHER-SE> 1,926,108
<TOTAL-LIABILITY-AND-EQUITY> 3,669,823
<SALES> 0
<TOTAL-REVENUES> 1,806,016
<CGS> 0
<TOTAL-COSTS> 1,028,475
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 73,266
<INCOME-PRETAX> 391,818
<INCOME-TAX> 10,053
<INCOME-CONTINUING> 381,765
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 381,765
<EPS-PRIMARY> 1.35
<EPS-DILUTED> 1.34
</TABLE>
