PROXY STATEMENT PURSUANT TO
SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to section 240.14a-11(c) or section 240.14a-12
COMMODORE HOLDINGS LIMITED
--------------------------
(Name of Registrant as Specified In Its Charter)
Not Applicable
----------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
........................................................................
2) Aggregate number of securities to which transaction applies:
........................................................................
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on
which the filing fee is calculated and state how it was
determined):.....................................................
4) Proposed maximum aggregate value of transaction:
........................................................................
5) Total fee paid:
........................................................................
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing. 1) Amount
Previously Paid:
..................................................
2) Form, Schedule or Registration Statement No.:
..................................................
3) Filing Party:
..................................................
4) Date Filed:
..................................................
<PAGE>
[COMMODORE LOGO]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
February 5, 1997
Notice is hereby given that the Annual Meeting of Stockholders of
Commodore Holdings Limited (the "Company") will be held on Wednesday, February
5, 1997, at 10:00 a.m., Eastern Standard Time, at the offices of New Commodore
Cruise Lines Limited, 4000 Hollywood Boulevard, Suite 385, South Tower,
Hollywood, Florida 33021, for the following purposes, as described in the
attached proxy statement:
A. To elect two directors to serve on the Company's Board of
Directors until the annual meeting of stockholders to be held in
2000, and until their successors are elected and qualified;
B. To ratify the appointment of Grant Thornton LLP, as the Company'
independent auditors for the Company's 1997 fiscal year; and
C. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on December 23,
1996, as the record date for the determination of stockholders entitled to
notice of and to vote at the meeting and at any adjournment thereof.
Accordingly, only stockholders of record at the close of business on that date
will be entitled to vote at the meeting.
Under applicable Bermuda law and the Company's Bye-Laws, if a quorum is
present, the favorable vote of a simple majority of the votes cast by holders of
the Company's common stock, voting together as a single class in person or by
proxy at the Annual Meeting of Stockholders, will be required in order to
approve the matters referred to in the proposals above.
The independent auditors' report and financial statements for the
Company's 1996 fiscal year will also be presented at the Annual Meeting of
Stockholders.
By order of the Board of Directors.
BLANCA SANTOS
January 14, 1997 Secretary
YOU ARE URGED TO COMPLETE, DATE, SIGN AND PROMPTLY MAIL THE ENCLOSED PROXY IN
THE ACCOMPANYING POSTAGE-FREE ENVELOPE.
<PAGE>
COMMODORE HOLDINGS LIMITED
4000 Hollywood Boulevard
Suite 385, South Tower
Hollywood, Florida 33021
(954) 967-2100
---------------
PROXY STATEMENT
---------------
ANNUAL MEETING OF STOCKHOLDERS
February 5, 1997
This Proxy Statement has been prepared and is furnished by the Board of
Directors of Commodore Holdings Limited (the "Company") in connection with the
solicitation of proxies for the Annual Meeting of Stockholders of the Company to
be held on February 5, 1997, and at any adjournment thereof, for the purposes
set forth in the accompanying notice of meeting (the "Annual Meeting").
It is anticipated that this Proxy Statement and the accompanying form of
proxy will be mailed to stockholders on or about January 14, 1997. The Company's
Annual Report, including audited financial statements for the fiscal year ended
September 30, 1996, is being mailed or delivered concurrently with this Proxy
Statement. The Annual Report is not to be regarded as proxy soliciting material.
Only holders of record of the Company's common stock, $.01 par value
(the "Common Stock"), on the books of the Company at the close of business on
December 23, 1996 are entitled to vote at the meeting. On that date, there were
5,581,933 issued and outstanding shares of Common Stock. The holder of each
share of Common Stock is entitled to one vote on each matter to be presented at
the meeting.
Shares represented by a properly executed proxy received in time to
permit its use at the meeting or any adjournment thereof will be voted in
accordance with the instructions indicated therein. If no instructions are
indicated, the shares represented by the proxy will be voted for the election of
all nominees for director, for the ratification of the appointment of Grant
Thornton LLP as the Company's independent auditors, and, in the discretion of
the proxy holders, as to any other matter which may properly come before the
meeting. A stockholder who has given a proxy may revoke it at any time before it
is voted at the meeting by giving written notice of revocation to the Secretary,
by submitting a proxy bearing a later date, or by attending the meeting and
voting in person.
<PAGE>
The expense of soliciting proxies will be borne by the Company. Proxies
will be solicited principally by mail, but directors, officers and regular
employees of the Company may solicit proxies personally, by telephone or by
facsimile transmissions. The Company will reimburse custodians, nominees or
other persons for their out-of-pocket expenses in sending proxy material to
beneficial owners.
In determining the presence of a quorum at the Annual Meeting,
abstentions are counted and broker non-votes are not. The Company's Bye-Laws
provide that the affirmative vote of a majority of the shares cast shall be the
act of the stockholders, except as otherwise provided, among other things, by
the Bermuda Companies Act 1981, as amended (the "Act"). The Act, together with
the Company's Bye-Laws, provide that directors are elected by a majority of the
votes cast. Under the Act, abstentions do not count as votes cast. Therefore,
under the Act and the Company's Bye-Laws, as to all matters to be voted on by
stockholders at the Annual Meeting, abstentions and broker non-votes will have
no legal effect on whether a matter is approved.
In order to assure that your interests will be represented, you are
requested, regardless of the number of shares you hold, to sign the proxy and
return it promptly in the enclosed envelope.
-2-
<PAGE>
PRINCIPAL STOCKHOLDERS AND
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth certain information regarding the
beneficial ownership of the Company's Common Stock, as of January 1, 1997, by
each person known by the Company to be the beneficial owner of more than 5% of
the Company's outstanding Common Stock, by each director, by each named
executive officer, and by all directors and officers of the Company as a group.
Except as indicated below, (i) the address for each 5% stockholder is c/o
Commodore Holdings Limited, 4000 Hollywood Boulevard, Suite 385, South Tower,
Hollywood, Florida 33021; and (ii) all shares are owned directly with sole
voting and dispositive power.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF PERCENT
NAME OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
- ------------------------ -------------------- ---------
<S> <C> <C>
a) Directors and Officers
Jeffrey I. Binder, Rosalie Binder, and
JeMJ Financial Services, Inc.(1)
9350 South Dixie Highway, Suite 1220
Miami, FL 33156.................................. 1,000,000 17.9%
Ralph V. De Martino ............................. 0 0%
Arnold Adolphus Francis, Q.C.(2)................. 0 0%
Mark J. Maged.................................... 0 0%
Frederick A. Mayer(3)............................ 500,000 8.6%
A. Robert Miller(4) ............................. 0 0%
Alan Pritzker(5)................................. 6,250 *
James Sullivan................................... 0 0%
All directors and officers as a group(6)
(8 persons including those
named above)................................ 1,506,250 26.0%
b) Other Beneficial Owner
Eff-Shipping, Ltd.(7)
c/o EffJohn North America
Suite 108, The Atrium Center
1515 N. Federal Highway
Boca Raton, Florida 33432........................ 1,006,979 15.3%
</TABLE>
-3-
<PAGE>
- --------------------
* Represents beneficial ownership of less than 1%.
(1) Mr. Binder owns 500,000 shares of Common Stock together with his wife, as
tenants-by- the-entireties. JeMJ Financial Services, Inc., a company
controlled by Mr. Binder, owns 500,000 shares of Common Stock. This amount
excludes 500,000 shares of Common Stock which Mr. Binder, his wife and
JeMJ have a right to purchase at $6.00 per share pursuant to warrants,
which warrants are presently exercisable.
(2) The Honorable Wayne L. Furbert, C.P.A., J.P., M.P., serves as Alternate
Director for Mr. Francis. Mr. Furbert does not beneficially own any shares
of Common Stock.
(3) This amount includes a warrant to purchase 200,000 shares of Common Stock,
which is presently exercisable.
(4) Helen Patricia Forrest serves as an Alternate Director for Mr. Miller. Ms.
Forrest does not beneficially own any shares of Common Stock.
(5) This amount includes a warrant to purchase 6,250 shares of Common Stock,
which is presently exercisable.
(6) Excludes 500,000 shares of Common Stock, which such persons may acquire
pursuant to warrants which are presently exercisable at $6.00 per share.
Includes warrants to purchase 206,250 shares of Common Stock, which
warrants are presently exercisable.
(7) Represents Series A Preference Shares, which Eff-Shipping may presently
convert into 1,006,979 shares of Common Stock.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
To the Company's knowledge, based solely on a review of the copies of
the reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended September 30, 1996, the
Company's directors and executive officers complied with all applicable filing
requirements of Section 16(a) of the Securities Exchange Act of 1934.
-4-
<PAGE>
ELECTION OF DIRECTORS
The persons named in the accompanying form of proxy intend to vote all
valid proxies received in favor of the election of each of the persons named
below as nominees for director unless authority is withheld. Directors elected
at the meeting will serve until the Annual Meeting of Stockholders to be held in
the year 2000, and until their successors are elected and qualified. In the
event that any nominee is unable or unwilling to serve, discretionary authority
is reserved to the persons named in the accompanying form of proxy to vote for
substitute nominees. Management does not anticipate that such an event will
occur. Each director shall be elected by a majority of the votes cast.
The Board of Directors is divided into three classes. There are two
directors in each class, and each class is elected every third year. Directors
who are voted into a class during the term of the class may serve less than a
three-year term. Each Director will hold office for the term to which he is
elected and until his successor is duly elected and qualified. Mr. Ralph De
Martino and Mr. Mark Maged have terms expiring at this Annual Meeting and are
nominees for re-election. The Board of Directors elects officers annually and
such officers serve at the discretion of the Board of Directors.
(a) Nominees For Director
<TABLE>
<CAPTION>
BUSINESS EXPERIENCE CURRENT
AGE AS OF DURING PAST FIVE YEARS DIRECTOR TERM
NAME NOVEMBER 1, 1996 AND DIRECTORSHIPS SINCE EXPIRES
- ---- ---------------- ------------------- ------- -------
<S> <C> <C> <C> <C>
Ralph V. De Martino........ 42 Principal of De Martino Finkelstein 1996 1997
Rosen & Virga since 1983 and
managing partner since 1987; member
of the Committee on Corporate,
Banking and Business Law of the
Bar Association of the District of
Columbia and the American Bar
Association.
Mark Maged................. 65 Chairman of MJM Associates, LLC 1996 1997
since 1995; Chairman of Internet
Tradeline Inc. since 1995; interna-
tional investment and financial
advisor to a number of private and
public institutions and corporations
since 1984; President and Chief
Executive Officer of Schroeders, Inc
and Chairman and Chief Executive
Officer of its subsidiary, J. Henry
Schroder Bank and Trust, THE U.S. arm
of the Britishmer- chant bank,
Schroders PLC, between 1974 and 1984.
-5-
<PAGE>
BUSINESS EXPERIENCE CURRENT
AGE AS OF DURING PAST FIVE YEARS DIRECTOR TERM
NAME NOVEMBER 1, 1996 AND DIRECTORSHIPS SINCE EXPIRES
- ---- ---------------- ------------------- ------- -------
(b) Continuing Directors
Jeffrey I. Binder.......... 50 Chairman of the Board since 1995; 1995 1998
Chairman of the Board and a director
of Tel-Med, a publicly traded
company which develops medical
products and provides medical related
services, since 1991; Chairman of the
Board and a director of H.P. America,
Inc., a privately traded holding company
which owns health maintenance organi-
zations and medical practices companies,
since 1995; Chairman of the Board and a
director of JeMJ Financial Services,
Inc., a private holding company since
1989; President and a director of
Sector Associates, Ltd., a public
company engaged in the furniture retail
business, from 1989 until 1993.
Frederick A. Mayer......... 62 Vice Chairman of the Board and 1995 1998
Chief Executive Officer since 1995;
Co-founder and Vice Chairman of
Regency Cruises Inc. ("Regency")
between 1985 and 1995; President of
Exprinter International USA, a
travel organization, between 1955
and 1995; Chairman of the Board
and President of Marmara Marine,
Inc. which owns the S/S United
States, since 1992. In November,
1995 Regency filed for Chapter 11
bankruptcy protection.
Arnold Adolphus 74 Director of the Company since 1995; 1995 1999
Francis, CBE, Q.C., partner in Richards, Francis &
J.P...................... Francis, a law firm based on
Bermuda, since 1980. Richards,
Francis & Francis acts as Bermuda
counsel to the Company.
-6-
<PAGE>
BUSINESS EXPERIENCE CURRENT
AGE AS OF DURING PAST FIVE YEARS DIRECTOR TERM
NAME NOVEMBER 1, 1996 AND DIRECTORSHIPS SINCE EXPIRES
- ---- ---------------- ------------------- ------- -------
A. Robert Miller........... 56 Director of the Company since 1995; 1995 1999
associate in Richards, Francis &
Francis since 1992; self-employed
as an attorney prior to 1992.
Helen Patricia Forrest..... 38 Alternate Director for Mr. Miller 1995 1999
since June 1996; associate in
Richards, Francis & Francis
since 1991.
Honorable Wayne L. 40 Alternate Director for Mr. Francis 1995 1999
Furbert, C.P.A., J.P., since 1995; financial controller of
M.P...................... Richards, Francis & Francis since
1983; Chairman of the Finance
Committee of the Bermuda Hosp tals
Board since 1982; Minister of
Community and Cultural Affairs in
Bermuda.
</TABLE>
BOARD OF DIRECTORS
GENERAL
The Board of Directors of the Company held two meetings during fiscal
1996 and acted by unanimous written consent ten times. On October 14, 1996,
following the completion of fiscal 1996, the Board appointed an Audit Committee
consisting of Messrs. De Martino and Maged. The Board does not have any other
committees. During fiscal 1996, each director attended at least 75% of the
meetings of the Board of Directors.
The Audit Committee performs the following principal functions:
recommends to the Board of Directors the engagement of independent auditors for
the ensuing year; reviews the scope of the annual audit; reviews with auditors
the results of the audit engagement, including review of the financial
statements and the management letter; and, reviews the scope of and compliance
with the Company's internal controls.
COMPENSATION OF DIRECTORS
Each independent director (a director who is not an officer or employee
of the Company or appointed to satisfy Bermuda law) receives $10,000 per year,
paid quarterly, for service on the Company's Board of Directors and the
committees thereof. Because the Company appointed its current independent
directors after the close of fiscal 1996, it did not make any payments to
directors with respect to participation on the Company's Board of Directors, on
Board committees or with respect to special assignments during fiscal 1996.
Directors who are officers or employees of the Company, or appointed to satisfy
Bermuda law, receive no additional compensation for attendance at Board or
committee meetings.
-7-
<PAGE>
COMPENSATION OF OFFICERS
SUMMARY COMPENSATION TABLE
The following table sets forth information with respect to total
compensation earned or paid by the Company to the Chief Executive Officer of the
Company during the fiscal years ended September 30, 1995 and 1996, and each of
the Company's four other most highly compensated executive officers or
significant employees whose total annual salary and bonus exceeded $100,000
during such fiscal year.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
LONG TERM
COMPENSATION
AWARDS
----------------
OTHER SECURITIES ALL
NAME & PRINCIPAL FISCAL SALARY BONUS ANNUAL UNDERLYING OTHER
POSITION YEAR ($) ($) COMPENSATION OPTIONS/WARRANTS COMPENSATION(1)
- ----------------- ------ ------ ------- ------------ ---------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
FREDERICK A. MAYER, 1996 $175,000 $ 0 * 0 $67
VICE-CHAIRMAN OF THE 1995(2) 37,019 0 * 200,000 12
BOARD AND CHIEF EXECU-
TIVE OFFICER
JEFFREY I. BINDER, 1996 150,000 0 * 0 67
CHAIRMAN OF THE BOARD 1995(2) 31,250 0 * 500,000(3) 12
JAMES A. SULLIVAN, 1996 150,000 0 * 0 67
PRESIDENT 1995(2) 31,250 0 * 100,000 12
ALAN PRITZKER, 1996 112,154 0 * 0 67
VICE PRESIDENT, FINANCE 1995(2) 20,625 0 * 25,000 12
AND CHIEF FINANCIAL
OFFICER
</TABLE>
- --------------------
* Aggregate amount of Other Annual Compensation for each other person is
less than $50,000 or 10% of such person's annual salary and bonus.
(1) All Other Compensation represents premiums paid for life insurance for the
named executive officers.
(2) Fiscal 1995 compensation reflects amounts earned by the named executive
officers during the portion of the fiscal year beginning in May 1995, when
they began their employment with the Company.
(3) On July 14, 1995, in connection with the Company's acquisition of
Commodore Cruise Line, the Company issued warrants to purchase Common
Stock to Mr. Binder and his wife, Rosalie Binder, as well as to JeMJ
Financial Services, Inc., a company controlled by Mr. Binder, which
warrants are presently exercisable at $6.00 per share.
OPTION GRANTS IN LAST FISCAL YEAR
The Company did not grant stock options to any of the named executive
officers in fiscal year 1996.
-8-
<PAGE>
AGGREGATED STOCK OPTION EXERCISES IN LAST
FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
Set forth below is certain information pertaining to stock options and
warrants held by the named executive officers as of September 30, 1996. None of
the named executive officers exercised any stock options or warrants in the
fiscal year ended September 30, 1996.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES UNDERLYING UNEXER- VALUE OF UNEXERCISED
CISED OPTIONS/WARRANTS AT FISCAL YEAR-END IN-THE-MONEY OPTIONS/WARRANTS
----------------------------------------- AT FISCAL YEAR-END(1)
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------- ------------ ----------- -------------
<S> <C> <C> <C> <C>
Frederick A. Mayer 200,000 0 $300,000 $ 0
Jeffrey I. Binder 500,000(2) 0 (3) (3)
James A. Sullivan 0 100,000 0 150,000
Alan Pritzker 0 25,000 0 37,500
</TABLE>
- --------------------
(1) Based on a fair market value of $2.50 per share for the Common Stock, as
determined by using the closing bid quotation on the Nasdaq National Market
on September 30, 1996.
(2) Of these warrants, 250,000 are held by JeMJ Financial Services, Inc., a
company controlled by Mr. Binder.
(3) Options were not in-the-money on September 30, 1996.
BOARD OF DIRECTORS' REPORT ON EXECUTIVE COMPENSATION
GENERAL. The Company's management compensation philosophy is to attract
and retain quality executives through a combination of competitive base salaries
and performance-based bonuses. The Company also believes that its officers and
key employees should have an equity interest in the Company, either through
direct stock ownership or through ownership of stock options. As a result, the
Company grants stock options to its officers and key employees.
BASE SALARY. The Company's approach to base compensation is to offer
competitive salaries in comparison to market standards. The Company has
conducted a survey of the salaries of officers of publicly held companies in the
Company's industry and has set officer salaries to be somewhat lower than these
companies, to reflect the Company's smaller size. Increases in base compensation
will be based on the performance of the Company's executives, the performance of
the Company and salaries paid to officers of similar companies. Mr. Mayer has a
two-year employment contract with the Company. His salary was established based
on the criteria described above.
BONUS COMPENSATION. The Company plans to reward its executive officers
with annual bonuses based on the performance of the Company and each executive.
Bonuses will generally not be paid until the Company surpasses a certain
financial target for annual net income. Both
-9-
<PAGE>
the performance standards for executives and the financial target for the
Company will generally be established each year by the Stock Option and
Compensation Committee, which the Company plans to form in fiscal 1997. For
fiscal 1996, no bonuses were paid to executive officers of the Company.
STOCK OPTIONS. Stock options are currently the Company's principal
vehicle for payment of long-term incentive compensation. Stock options generally
are granted at 10% over the prevailing market price on the date of grant and
will have value only if the Company's stock price increases. Options granted
under the Company's employee stock option plan will generally vest in annual
increments over 3 or 4 years beginning one year after the date of the grant.
Grants of stock options generally are based upon the performance of the Company,
the level of the executive's position within the Company and an evaluation of
the executive's past and expected future performance. The Company generally
grants stock options on an annual basis.
EMPLOYMENT AGREEMENTS
As of May 3, 1995, the Company entered into a five-year agreement with
its Chairman of the Board, Mr. Jeffrey I. Binder. Pursuant to such employment
agreement, Mr. Binder receives an annual salary of $150,000, to be increased 4%
annually, and certain perquisites. Mr. Binder's employment agreement is
renewable, at the option of the Company, for two additional years. Upon
termination of Mr. Binder's employment, he has agreed not to compete with the
Company for one year under certain circumstances described therein. In the event
a change of control of the Board of Directors of the Company occurs, he shall
receive compensation for the greater of one year or the remainder of his
employment term.
As of May 3, 1995, the Company entered into a two-year employment
agreement with Mr. Frederick A. Mayer, its Chairman of the Board of Directors,
and Chief Executive Officer. Pursuant to the employment agreement, Mr. Mayer
receives an annual salary of $175,000, to be increased 4% annually, and certain
perquisites. Mr. Mayer also received a seven-year warrant to purchase 200,000
shares of Common Stock at an exercise price of $ 1.00 per share. Mr. Mayer has
certain rights to demand registration of the shares of Common Stock underlying
his warrant; however, the sale of such shares is subject to a 12-month lock-up
period. The Company has the option to renew Mr. Mayer's employment agreement for
two additional years. Upon termination of Mr. Mayer's employment, he has agreed
not to compete with the Company for one year under certain circumstances
described therein. In the event a change of control of the Board of Directors of
the Company occurs, he shall receive compensation for the greater of one year or
the remainder of his employment term.
As of May 3, 1995, the Company entered into a two-year employment
agreement with Mr. James A. Sullivan, its President. Pursuant to the employment
agreement, Mr.Sullivan receives an annual salary of $150,000 and certain
perquisites. Mr. Sullivan also received a seven-year warrant to purchase 100,000
shares of Common Stock at an exercise price of $ 1.00 per share. The Company has
the option to renew Mr. Sullivan's employment agreement for two additional
years. Upon termination of Mr. Sullivan's employment, he has agreed not to
compete with the Company for one year under certain circumstances described
therein. In the event a
-10-
<PAGE>
change of control of the Board of Directors of the Company occurs, he shall
receive compensation for the greater of one year or the remainder of his
employment term.
As of May 3, 1995, the Company entered into a two-year employment
agreement with Mr. Alan Pritzker, its Vice President, Finance and Chief
Financial Officer. Pursuant to the employment agreement, Mr. Pritzker receives
an annual salary of $99,000, which was increased to $117,000 during fiscal 1996.
Mr. Pritzker also received a seven-year warrant to purchase 25,000 shares of
Common Stock at an exercise price of $1.00 per share. The Company has the option
to renew Mr. Pritzker's employment agreement for two additional years. Upon
termination of Mr. Pritzker's employment, he has agreed not to compete with the
Company for one year under certain circumstances described therein.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company's Board of Directors sets the compensation for the Company's
executive officers. At present, the Board has not appointed a separate committee
to perform this function. Two executive officers of the Company, Messrs. Binder
and Mayer, are members of the Company's Board of Directors. Each of Mr. Binder
and Mr. Mayer, respectively, abstains from voting on issues concerning his own
proposed compensation.
STOCK PERFORMANCE GRAPH
In accordance with Securities and Exchange Commission regulations, the
following graph compares the cumulative total stockholder return to the
Company's stockholders during the two and one-half month period ended September
30, 1996 to the Nasdaq Stock Market (U.S.) and a Nasdaq Non-Financial Index.
-11-
<PAGE>
COMPARISON OF TWO AND ONE-HALF MONTH CUMULATIVE TOTAL RETURN (1)
AMONG COMMODORE HOLDINGS LIMITED, NASDAQ (U.S.) STOCK MARKET AND NASDAQ NON-
FINANCIAL INDEX FOR THE TWO AND ONE-HALF MONTHS ENDED SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
MONTH AND YEAR JULY 16, JULY 1996 AUGUST 1996 SEPTEMBER
1996 1996
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Nasdaq US 100 103 108 117
-------------------------------------------------------------------------------
Nasdaq 100 93 99 107
Non-Financial
-------------------------------------------------------------------------------
Commodore Holdings 100 130 122 54
-------------------------------------------------------------------------------
</TABLE>
- --------------------
(1) Assumes that the value of the investment in the Company and each index
was $100 on July 16, 1996, (the date the Company's Common Stock was
first publicly traded), and that all dividends are reinvested.
-12-
<PAGE>
TRANSACTIONS WITH MANAGEMENT AND OTHERS
As part of the Purchase Price for the Commodore Assets, the Company paid
$5,000,000 to EffJohn and issued it 1,000,000 Series A Preference Shares valued
at $4.00 per share. In addition, the Lender loaned the Company $24,500,000
pursuant to the Loan. The Loan is secured by substantially all of the assets of
the Company, including first preferred ship's mortgages on the Cruise Ships.
Several of the Company's stockholders are principals in International
Marine Carriers ("IMC"), a vessel manager employed by the Company. The Company
has entered into an agreement with IMC to act as manager for the Cruise Ships
for two years, subject to successive one-year renewals at the written request of
the Company. The Company paid IMC $731,000 for services rendered during the
fiscal year ended September 30, 1996 and has agreed to pay IMC $585,000 during
the 1997 fiscal year for the management of the Enchanted Isle and $219,000 for
the management of the Universe Explorer. The initial term of the Company's
agreement with IMC expires in fiscal 1997. This transaction was made on terms no
less favorable than the Company could have obtained from an unaffiliated party.
On July 14, 1995, the Company and EffJohn entered into the Settlement
Agreement related to the Commodore Acquisition. In this agreement, EffJohn
agreed to fix certain technical deficiencies in both the Universe Explorer and
the Enchanted Isle and to pay the Company charter fees if EffJohn did not
charter the Universe Explorer. EffJohn paid the Company $425,000 pursuant to
this agreement in fiscal 1995 and paid the Company an additional $425,000 in
fiscal 1996.
As part of the Commodore Acquisition, the Company entered into a sublease
agreement with Old Commodore to lease an IBM AS/400 computer system. The lease
is treated as a capital lease for financial statement purposes, and the Company
owed $223,960 at September 30, 1995. The Company paid this amount in full during
fiscal 1996. This transaction was made on terms no less favorable than the
Company could have obtained from an unaffiliated party.
In the future, the Company plans to present all material proposed
transactions with affiliated parties to the Board of Directors for its
consideration and approval. Any Board Member who has an interest in such a
transaction will abstain from voting on such issue.
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has recommended the firm of Grant Thornton LLP,
Certified Public Accountants, 200 East Broward Boulevard, Suite 2000, Fort
Lauderdale, Florida 33301- 1915, as independent auditors of the Company for the
ensuing fiscal year. Although the appointment of Grant Thornton LLP as the
independent auditor of the Company does not require ratification by the
Company's stockholders, the Board of Directors considers it appropriate to
obtain such ratification. Accordingly, the vote of the Company's stockholders on
this matter is advisory in nature and has no effect upon the Board of Directors'
appointment of an independent auditor. The Board of Directors may change the
Company's auditor at any time without the
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approval or consent of the stockholders. The Board proposes and unanimously
recommends that the stockholders ratify the selection of Grant Thornton LLP.
Grant Thornton LLP was the independent public auditor of the Company for the
fiscal year ended September 30, 1996. A representative of Grant Thornton is
expected to be present at the Annual Meeting, will have an opportunity to make a
statement if such representative desires to do so, and is expected to be
available to respond to appropriate questions.
STOCKHOLDER PROPOSALS
Stockholder proposals which are to be considered for inclusion in the
proxy materials of the Company for its 1998 Annual Meeting of Stockholders must
be received by the Company by September 16, 1997. Such proposals must comply
with requirements as to the form and substance established by applicable law and
regulations in order to be included in the proxy statement.
ADDITIONAL INFORMATION
The Board of Directors is not aware of any matters to be presented at
the meeting other than the matters described herein and does not intend to bring
any other matters before the meeting. However, if any other matters should come
before the meeting, or any adjournment thereof, the persons named in the
enclosed proxy will have discretionary authority to vote all proxies in
accordance with their best judgment.
Kindly date, sign and return the enclosed proxy card.
By Order of the Board of Directors
BLANCA SANTOS
Secretary
January 14, 1997
Hollywood, Florida
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COMMODORE HOLDINGS LIMITED
4000 HOLLYWOOD BOULEVARD
SUITE 385, SOUTH TOWER
HOLLYWOOD, FLORIDA 33021
PROXY
The undersigned hereby appoints Jeffrey I. Binder and Frederick A. Mayer,
and each of them with the power to appoint his substitute, as proxies, and
hereby authorizes either of them to represent and to vote all shares of common
stock of the Company held of record by the undersigned on December 23, 1996, at
the Annual Meeting of Stockholders to be held on February 5, 1997, or any
adjournment thereof, upon the matters referred to below, and, in their
discretion, upon any other business that may come before the meeting.
1. Election of Directors
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<CAPTION>
<S> <C>
FOR ALL NOMINEES LISTED BELOW WITHHOLD AUTHORITY TO VOTE
(EXCEPT AS MARKED TO THE CONTRARY) [ ] FOR ALL SUCH NOMINEES LISTED BELOW [ ]
</TABLE>
Ralph V. De Martino Mark Maged
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
PLEASE DRAW A LINE THROUGH THAT NOMINEE'S NAME)
2. To ratify the appointment of Grant Thornton LLP as auditors of the
Company's financial statements for the fiscal year ending September 30,
1997.
[ ] For [ ] Against [ ] Abstain
3. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournment
thereof.
<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF COMMODORE
HOLDINGS LIMITED. This Proxy when executed will be voted in the manner directed
herein by the undersigned stockholder. If no direction is made, this Proxy will
be voted FOR the nominees listed in Proposal 1 and FOR Proposal 2.
The undersigned stockholder hereby acknowledges receipt of the Notice of
Annual Meeting and Proxy Statement dated January 14, 1997 and hereby revokes any
proxy or proxies heretofore given. This proxy may be revoked at any time prior
to the Annual Meeting. If you received more than one proxy card, please date,
sign and return all cards in the accompanying envelope.
Please sign exactly as name appears below. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in the corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
DATED: _________________ , 1997
_______________________________
_______________________________
Signature(s)
PLEASE MARK BOXES IN BLUE OR
BLACK INK PLEASE SIGN, DATE AND
MAIL, IN THE ENVELOPE PROVIDED
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