UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
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:
[X] Preliminary Proxy Statement
[_] Confidential, For Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Under 14a-12
CARNIVAL CORPORATION
CARNIVAL PLC
------------------------------------------------
(Name of Registrant as Specified in its Charter)
------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement No:
(3) Filing Party:
(4) Date Filed:
[GRAPHIC OMITTED]
[LOGO CARNIVAL CORPORATION]
February 14, 2005
MICKY ARISON
Chairman of the Boards
Chief Executive Officer
To our Shareholders:
On behalf of the boards of directors of each of Carnival Corporation and
Carnival plc, it is my pleasure to invite you to attend our joint annual
meetings of shareholders. As we have shareholders in both the United Kingdom and
the United States, we plan to continue to rotate the location of the annual
meetings between the United States and the United Kingdom each year in order to
accommodate shareholders on both sides of the Atlantic. Last year we held our
annual meetings in New York City, and this year we will hold them in
Southampton, United Kingdom.
The annual meetings will be held at the Queen Elizabeth II Passenger Terminal,
Port of Southampton, Dock Gate 4, Ocean Gate, Atlantic Way, in Southampton,
United Kingdom on Wednesday, April 13, 2005. The meetings will commence at 3:00
p.m. (UK time), and although technically two separate meetings (the Carnival plc
meeting will begin first), shareholders of Carnival Corporation may attend the
Carnival plc meeting and vice-versa.
We are also offering an audio webcast of the annual meetings. If you choose to
listen to the webcast, go to one of our websites, www.carnivalcorp.com or
www.carnivalplc.com, shortly before the start of the meetings and follow the
instructions provided. For our U.S. shareholders, we will also be hosting an
audio webcast of the annual meetings at our headquarters located at 3655 N.W.
87th Avenue in Miami, Florida. Although shareholders will not be able to vote in
Miami (they must submit a proxy as described in the Carnival Corporation Notice
of Annual Meeting), they will be able to submit questions to the directors in
Southampton.
We remind our new shareholders that, as a result of our dual listed company, or
DLC, structure, the conduct of our shareholder meetings differs from the
practice you may be accustomed to as shareholders of other companies. Please see
"QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND THE ANNUAL MEETINGS" which
begins on page __ for an overview of the main differences. In addition, because
this proxy statement complies with the requirements of the U.S. Securities and
Exchange Commission, the format of the information for the Carnival plc annual
general meeting differs significantly from the format of the information that
shareholders of UK companies are accustomed to receiving.
You will find information regarding the matters to be voted on in the attached
notices of annual meetings of shareholders and proxy statement. THE CARNIVAL
CORPORATION NOTICE OF ANNUAL MEETING BEGINS ON PAGE 1 AND THE CARNIVAL PLC
NOTICE OF ANNUAL GENERAL MEETING BEGINS ON PAGE __. We are also pleased to offer
most Carnival Corporation and all Carnival plc shareholders the opportunity to
receive future shareholder communications electronically. By signing up for
electronic delivery, shareholders can receive shareholder communications faster
and can help your company reduce printing and mailing costs and minimize
consumption of natural resources and waste generation. Because of the DLC
structure, all voting will take place on a poll (or ballot).
Under the DLC structure, shareholders of both companies effectively vote
together as a single body on most significant matters, called joint electorate
actions. All of the resolutions proposed for this year's annual meetings are
joint electorate actions, which means that Carnival Corporation shareholders
will be asked to vote on resolutions for Carnival plc as well on resolutions for
Carnival Corporation, and Carnival plc shareholders will be asked to vote on
resolutions for Carnival Corporation as well on resolutions for Carnival plc.
Please see "QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND THE ANNUAL
MEETINGS" which begins on page __ for a discussion of the voting procedures
under the DLC structure.
The overall results of the joint electorate vote will be announced to the media
and the relevant stock exchanges and posted on the websites of Carnival
Corporation and Carnival plc as soon as practicable after both shareholder
meetings have closed.
Your vote is important. Whether or not you plan to attend the annual meetings in
person, please submit your vote using one of the voting methods described in the
attached materials. Submitting your voting instructions by any of these methods
will not affect your right to attend the meetings in person should you so
choose.
THE BOARDS OF DIRECTORS CONSIDER CARNIVAL CORPORATION PROPOSALS 1-11 (BEING
CARNIVAL PLC RESOLUTIONS 1-25) TO BE IN THE BEST INTERESTS OF CARNIVAL
CORPORATION & PLC AND THE SHAREHOLDERS AS A WHOLE. ACCORDINGLY, THE BOARDS OF
DIRECTORS UNANIMOUSLY RECOMMEND THAT YOU CAST YOUR VOTE "FOR" CARNIVAL
CORPORATION PROPOSALS 1-11 (BEING CARNIVAL PLC RESOLUTIONS 1-25).
Thank you for your ongoing support of, and continued interest in, Carnival
Corporation & plc.
Sincerely,
/s/ Micky Arison
Micky Arison
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TABLE OF CONTENTS
NOTICE OF ANNUAL MEETING OF CARNIVAL CORPORATION SHAREHOLDERS..................1
NOTICE OF ANNUAL GENERAL MEETING OF CARNIVAL PLC SHAREHOLDERS..................4
QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND THE ANNUAL MEETINGS........6
QUESTIONS SPECIFIC TO SHAREHOLDERS OF CARNIVAL CORPORATION....................11
QUESTIONS SPECIFIC TO SHAREHOLDERS OF CARNIVAL PLC............................14
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT..................16
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE.......................20
PROPOSAL 1 (RESOLUTIONS 1-15) ELECTION OR RE-ELECTION OF DIRECTORS...........20
PROPOSAL 2 (RESOLUTION 16) APPROVAL OF THE CARNIVAL CORPORATION AMENDED
AND RESTATED 2001 OUTSIDE DIRECTOR STOCK PLAN..........................22
PROPOSAL 3 (RESOLUTION 17) APPROVAL OF THE CARNIVAL PLC 2005 EMPLOYEE SHARE
PLAN.....................................................................25
PROPOSAL 4 (Resolution 18) APPROVAL OF THE CARNIVAL PLC 2005 EMPLOYEE STOCK
PURCHASE PLAN............... ..........................................29
PROPOSALS 5 & 6 (RESOLUTIONS 19 & 20) RE-APPOINTMENT AND REMUNERATION OF
INDEPENDENT AUDITORS FOR CARNIVAL PLC AND RATIFICATION OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS FOR CARNIVAL CORPORATION.....31
PROPOSAL 7 (RESOLUTION 21) RECEIPT OF ACCOUNTS AND REPORTS OF CARNIVAL PLC...32
PROPOSAL 8 (RESOLUTION 22) APPROVAL OF DIRECTORS' REMUNERATION REPORT........32
PROPOSALS 9 & 10 (RESOLUTIONS 23 & 24) APPROVAL OF LIMITS ON THE AUTHORITY TO
ALLOT CARNIVAL PLC SHARES AND THE DISAPPLICATION OF PRE-EMPTION RIGHTS
FOR CARNIVAL PLC.......................................................33
PROPOSAL 11 (RESOLUTION 25) GENERAL AUTHORITY TO BUY BACK CARNIVAL PLC
ORDINARY SHARES........................................................34
i
BOARD STRUCTURE AND COMMITTEE MEETINGS........................................35
DIRECTOR COMPENSATION AND STOCK OWNERSHIP GUIDELINES.........................39
EXECUTIVE COMPENSATION........................................................41
OPTION GRANTS IN LAST FISCAL YEAR.............................................42
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION VALUES....................... ..................................44
EQUITY COMPENSATION PLANS.....................................................47
DEFINED BENEFIT AND OTHER PLANS...............................................48
REPORT OF THE COMPENSATION COMMITTEES.........................................50
STOCK PERFORMANCE GRAPHS......................................................52
INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS.....................................53
REPORT OF THE AUDIT COMMITTEES................................................55
TRANSACTIONS OF MANAGEMENT AND DIRECTORS......................................56
CHANGE IN INDEPENDENT AUDITORS................................................57
Annex A Amended and Restated Carnival Corporation 2001 Outside Director Stock
Plan
Annex B Carnival plc 2005 Employee Share Plan
Annex C Carnival plc 2005 Employee Stock Purchase Plan
Annex D Carnival plc Directors' Report and UK GAAP Summary Financial Information
Annex E Carnival plc Directors' Remuneration Report
Annex F Audit Committee Charter
Annex G Carnival plc Corporate Governance Report
Annex H Environmental Policy
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[GRAPHIC OMITTED]
[LOGO CARNIVAL CORPORATION]
3655 N.W. 87TH AVENUE
MIAMI, FLORIDA 33178-2428
_______________________
NOTICE OF ANNUAL MEETING OF CARNIVAL CORPORATION SHAREHOLDERS
_______________________
DATE Wednesday, April 13, 2005
TIME 3:00 p.m. (UK time), being 10:00 a.m. (Miami time)
The Carnival Corporation annual meeting will start directly
following the annual general meeting of Carnival plc.
PLACE Queen Elizabeth II Passenger Terminal Port of Southampton,
Dock Gate 4 Ocean Gate Atlantic Way Southampton SO14 2QN
United Kingdom
WEBCAST www.carnivalcorp.com or www.carnivalplc.com
Please note that there will be a live audio webcast of the
Carnival Corporation annual meeting and the Carnival plc
annual general meeting, at Carnival Corporation's
headquarters located at 3655 N.W. 87th Avenue, Miami,
Florida 33178, from 10:00 a.m. (Miami time). All Carnival
plc and Carnival Corporation shareholders and their guests
are welcome to attend the live audio webcast, although only
Carnival plc and Carnival Corporation shareholders will be
able to submit questions to the directors from Miami.
Please note further that only shareholders attending the
meetings to be held in Southampton, United Kingdom will be
able to vote in person. Accordingly, shareholders attending
the webcast of the meetings in Miami, Florida will need to
submit a proxy (see below) to make their vote count.
ITEMS OF BUSINESS 1. To elect and re-elect 15 directors to the boards of
each of Carnival Corporation and Carnival plc;
2. To approve the Amended and Restated Carnival
Corporation 2001 Outside Director Stock Plan;
3. To approve the Carnival plc 2005 Employee Share Plan
(which includes authorization for the Compensation
Committee of Carnival plc to establish sub-plans to
into account the tax, exchange control or securities
laws in the various jurisdictions where Carnival plc
employees are located);
1
4. To approve the Carnival plc 2005 Employee Stock
Purchase Plan;
5. To re-appoint the independent auditors for Carnival
plc and to ratify the 5 selection of independent
registered public accountants for Carnival
Corporation;
6. To authorize the Audit Committee of Carnival plc to
agree the remuneration of 6 the independent auditors;
7. To receive the UK accounts and reports for Carnival
plc for the financial year 7 ended November 30, 2004
(in accordance with legal requirements applicable to
UK companies);
8. To approve the directors' remuneration report of
Carnival plc (in accordance 8 with legal requirements
applicable to UK companies);
9. To approve limits on the authority to allot shares by
Carnival plc (in 9 accordance with customary practice
for UK companies);
10. To approve the disapplication of pre-emption rights
for Carnival plc shares 1 (in accordance with
customary practice for UK companies);
11. To approve a general authority for Carnival plc to
buy back Carnival plc 1 ordinary shares in the open
market (in accordance with legal requirements
applicable to UK companies desiring to implement
share buy back programs); and
12. To transact such other business as may properly come
before the meeting.
RECORD DATE You are entitled to vote your Carnival Corporation shares
if you were a shareholder at the close of business on
February 14, 2005.
MEETING ADMISSION Attendance at the meeting is limited to shareholders. Each
Carnival Corporation shareholder may be asked to present
valid picture identification, such as a driver's license or
passport. Shareholders holding shares in brokerage accounts
("under a street name") will need to bring a copy of a
brokerage statement reflecting share ownership as of the
record date.
VOTING BY PROXY Please submit a proxy as soon as possible so that your
shares can be voted at the meeting in accordance with your
instructions. For specific instructions, please refer to
the Questions and Answers beginning on page __ of this
proxy statement and the instructions on your proxy card.
On behalf of the Board of Directors
/s/ ARNALDO PEREZ
ARNALDO PEREZ
SENIOR VICE PRESIDENT,
GENERAL COUNSEL & SECRETARY
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A proxy statement and proxy card are enclosed. All Carnival Corporation
shareholders are urged to follow the instructions attached to the proxy card and
complete, sign, date and mail the proxy card promptly. The enclosed envelope for
return of the proxy card requires no postage. Any shareholder attending the
meeting in Southampton may personally vote on all matters that are considered,
in which event the signed proxy will be revoked.
This proxy statement and accompanying proxy card are being distributed on or
about March 7, 2005.
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THIS NOTICE OF ANNUAL GENERAL MEETING IS IMPORTANT. IF YOU ARE IN ANY DOUBT AS
TO THE ACTION YOU SHOULD TAKE, YOU IMMEDIATELY SHOULD CONSULT YOUR STOCKBROKER,
BANK MANAGER, SOLICITOR, ACCOUNTANT OR OTHER INDEPENDENT FINANCIAL ADVISER
AUTHORIZSED UNDER THE FINANCIAL SERVICES AND MARKETS ACT 2000.
IF YOU HAVE SOLD OR OTHERWISE TRANSFERRED ALL YOUR SHARES IN CARNIVAL PLC,
PLEASE SEND THIS DOCUMENT AND THE ACCOMPANYING DOCUMENTS TO THE PURCHASER OR
TRANSFEREE OR TO THE STOCKBROKER, BANK OR OTHER AGENT THROUGH WHOM THE SALE OR
TRANSFER WAS EFFECTED FOR TRANSMISSION TO THE PURCHASER OR TRANSFEREE.
C A R N I V A L
P L C
CARNIVAL HOUSE
5 GAINSFORD STREET
LONDON SE1 2NE
UNITED KINGDOM
_______________________
NOTICE OF ANNUAL GENERAL MEETING OF CARNIVAL PLC SHAREHOLDERS
_______________________
NOTICE IS HEREBY GIVEN that an ANNUAL GENERAL MEETING of Carnival plc will be
held at the Queen Elizabeth II Passenger Terminal, Port of Southampton, Dock
Gate 4, Ocean Gate, Atlantic Way in Southampton, United Kingdom on April 13,
2005 at 3:00 p.m. (UK time), being 10:00 a.m. (Miami time), for the purpose of
considering and, if thought fit, passing the resolutions described below:
o Resolutions 1 through 23 will be proposed as ordinary resolutions. For
ordinary resolutions, the required majority is more than 50% of the
combined votes cast at this meeting and Carnival Corporation's annual
meeting.
o Resolution 24 and 25 will be proposed as special resolutions. For
special resolutions, the required majority is not less than 75% of the
combined votes cast at this meeting and Carnival Corporation's annual
meeting.
TO CONSIDER THE FOLLOWING RESOLUTIONS AS ORDINARY RESOLUTIONS:
ELECTION AND RE-ELECTION OF DIRECTORS
1. To re-elect Micky Arison as a director of Carnival Corporation and as a
director of Carnival plc.
2. To re-elect Ambassador Richard G. Capen, Jr. as a director of Carnival
Corporation and as a director of Carnival plc.
3. To re-elect Robert H. Dickinson as a director of Carnival Corporation
and as a director of Carnival plc.
4. To re-elect Arnold W. Donald as a director of Carnival Corporation and
as a director of Carnival plc.
5. To re-elect Pier Luigi Foschi as a director of Carnival Corporation and
as a director of Carnival plc.
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6. To re-elect Howard S. Frank as a director of Carnival Corporation and
as a director of Carnival plc.
7. To elect Richard J. Glasier as a director of Carnival Corporation and
as a director of Carnival plc.
8. To re-elect Baroness Hogg as a director of Carnival Corporation and as
a director of Carnival plc.
9. To re-elect A. Kirk Lanterman as a director of Carnival Corporation and
as a director of Carnival plc.
10. To re-elect Modesto A. Maidique as a director of Carnival Corporation
and as a director of Carnival plc.
11. To re-elect John P. McNulty as a director of Carnival Corporation and
as a director of Carnival plc.
12. To re-elect Sir John Parker as a director of Carnival Corporation and
as a director of Carnival plc.
13. To re-elect Peter Ratcliffe as a director of Carnival Corporation and
as a director of Carnival plc.
14. To re-elect Stuart Subotnick as a director of Carnival Corporation and
as a director of Carnival plc.
15. To re-elect Uzi Zucker as a director of Carnival Corporation and as a
director of Carnival plc.
EQUITY COMPENSATION AND EMPLOYEE STOCK PURCHASE PLANS
16. To consider and approve the Amended and Restated Carnival Corporation
2001 Outside Director Stock Plan.
17. To consider and approve the Carnival plc 2005 Employee Share Plan
(which includes authorization for the Compensation Committee of
Carnival plc to establish sub-plans to into account the tax, exchange
control or securities laws in the various jurisdictions where Carnival
plc employees are located).
18. To consider and approve the Carnival plc 2005 Employee Stock Purchase
Plan.
RE-APPOINTMENT AND REMUNERATION OF CARNIVAL PLC AUDITORS AND RATIFICATION OF
CARNIVAL CORPORATION AUDITORS
19. To re-appoint the UK firm of PricewaterhouseCoopers LLP as independent
auditors of Carnival plc for the period commencing upon the conclusion
of the meeting until the conclusion of the next general meeting at
which the accounts of Carnival plc are laid and to ratify the selection
of the U.S. firm of PricewaterhouseCoopers LLP as independent
registered public accountants of Carnival Corporation for the period
commencing upon the conclusion of the meeting until the conclusion of
the next annual meeting of Carnival Corporation after the date on which
this resolution is passed.
20. To authorize the Audit Committee of the board of directors of Carnival
plc to agree the remuneration of the independent auditors.
ACCOUNTS AND REPORTS
21. To receive the UK accounts of Carnival plc and the reports of the
directors and the auditors of Carnival plc for the financial year ended
November 30, 2004.
DIRECTORS' REMUNERATION REPORT
22. To approve the directors' remuneration report of Carnival plc as set
out in the accounts and the reports of the directors and the auditors
for the financial year ended November 30, 2004.
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ALLOTMENT OF SHARES
23. THAT the authority and power conferred on the directors by Article 30
of Carnival plc's articles of association be renewed for a period
commencing at the end of the meeting and expiring at the end of the
next annual general meeting of Carnival plc after the date on which
this resolution is passed and for that period the Section 80 amount
shall be U.S. $[__________].
TO CONSIDER THE FOLLOWING RESOLUTIONS AS SPECIAL RESOLUTIONS:
DISAPPLICATION OF PRE-EMPTION RIGHTS
24. THAT subject to passing ordinary resolution 23 set out in the notice,
the power conferred on the directors by Article 31 of Carnival plc's
articles of association be renewed for a period commencing at the end
of the meeting and expiring at the end of the next annual general
meeting of Carnival plc after the date on which this resolution is
passed and for that period the Section 89 amount shall be U.S.
$[_________].
GENERAL AUTHORITY TO BUY BACK CARNIVAL PLC ORDINARY SHARES
25. THAT Carnival plc be and is generally and unconditionally authorized to
make market purchases (within the meaning of Section 163(3) of the UK
Companies Act 1985 (the "Companies Act")) of ordinary shares of US$1.66
each in the capital of Carnival plc provided that:
(i) the maximum number of ordinary shares authorized to be
acquired is [_______];
(ii) the minimum price (exclusive of expenses) which may be paid
for an ordinary share is US$1.66;
(iii) the maximum price which may be paid for an ordinary share is
an amount (exclusive of expenses) equal to 105% of the average
middle market quotation for an ordinary share, as derived from
the London Stock Exchange ("LSE") Daily Official List, for the
five business days immediately preceding the day on which such
ordinary share is contracted to be purchased; and
(iv) this authority shall expire on the earlier of (i) the
conclusion of the annual general meeting of Carnival plc to be
held in 2006 and (ii) 18 months from the date of this
resolution (except in relation to the purchase of ordinary
shares, the contract of which was entered into before the
expiry of such authority).
By Order of the Board Registered Office:
Arnaldo Perez Carnival House
Company Secretary 5 Gainsford Street
London SE1 2NE
United Kingdom
February 14, 2005
Registered Number 4039524
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VOTING ARRANGEMENTS FOR CARNIVAL PLC SHAREHOLDERS
Carnival plc shareholders can vote in either of two ways:
o by attending the meeting and voting in person or by attorney or, in the
case of corporate shareholders, by corporate representatives; or
o by appointing a proxy to attend and vote on their behalf, using the
proxy form enclosed with this notice of annual general meeting.
VOTING IN PERSON (OR BY ATTORNEY)
If you come to the annual general meeting, please bring the attendance card
(attached to the enclosed proxy form) with you. This will mean you can register
more quickly. If you appoint an attorney to attend instead of you he or she
should bring an original or certified copy of the power of attorney under which
you have authorized them to attend and vote.
In order to attend and vote at the annual general meeting, a corporate
shareholder may appoint an individual to act as its representative. The
appointment must comply with the requirements of the Companies Act. The
representative should bring evidence of their appointment, including any
authority under which it is signed, to the meeting. If you are a corporation and
considering appointing a corporate representative to represent you and vote your
shareholding in Carnival plc at the annual general meeting you are strongly
encouraged to pre-register your corporate representative to make registration on
the day of the meeting more efficient. In order to pre-register, you would need
to fax your Letter of Representation to Carnival plc's registrar, Lloyds TSB
Registrars, on 01903 833168 from within the UK or +44 1903 833168 from
elsewhere.
VOTING BY PROXY
A shareholder entitled to attend and vote at the meeting is entitled to appoint
one or more proxies to attend and (on a poll) vote instead of him. A proxy need
not be a shareholder of Carnival plc.
To be effective, a duly completed proxy form and the authority (if any) under
which it is signed, or a notarially certified copy of such authority, must be
deposited (whether delivered personally or by post) at the offices of Carnival
plc's registrars, Lloyds TSB Registrars, The Causeway, Worthing, West Sussex,
BN99 6DA, UK as soon as possible and in any event no later than 3:00 p.m. (UK
time) on April 11, 2005. Alternatively, a proxy vote may be submitted via the
Internet in accordance with the instructions set out on the proxy form.
In the case of joint registered holders, the signature of one holder on a proxy
card will be accepted and the vote of the senior holder who tenders a vote,
whether in person or by proxy, shall be accepted to the exclusion of the votes
of the other joint holders. For this purpose, seniority shall be determined by
the order in which names stand on the register of members of Carnival plc in
respect of the relevant joint holding.
In order for a proxy appointment or instruction made using the CREST service to
be valid, the appropriate CREST message (a "CREST Proxy Instruction") must be
properly authenticated in accordance with CRESTCo's specifications and must
contain the information required for such instructions, as described in the
CREST Manual. The message, regardless of whether it constitutes the appointment
of a proxy or to an amendment to the instruction given to a previously appointed
proxy must, in order to be valid, be transmitted so as to be received by the
issuer's agent (ID 7RA01) by the latest time(s) for receipt of proxy
appointments specified in the notice of meeting. For this purpose, the time of
receipt will be taken to be the time (as determined by the timestamp applied to
the message by the CREST Applications Host) from which the issuer's agent is
able to retrieve the message by enquiry to CREST in the manner prescribed by
CREST. After this time any change of instructions to proxies appointed through
CREST should be communicated to the appointee through other means.
CREST members and, where applicable, their CREST sponsors or voting service
providers should note that CRESTCo does not make available special procedures in
CREST for any particular messages. Normal system timings and limitations will
therefore apply in relation to the input of CREST Proxy Instructions. It is the
responsibility of the CREST member concerned to take (or, if the CREST member is
a CREST personal member or
4
sponsored member or has appointed a voting service provider(s), to procure that
his CREST sponsor or voting service provider(s) take(s)) such action as shall be
necessary to ensure that a message is transmitted by means of the CREST system
by any particular time. In this connection, CREST members and, where applicable,
their CREST sponsors or voting service providers are referred, in particular, to
those sections of the CREST Manual concerning practical limitations of the CREST
system and timings.
Carnival plc may treat as invalid a CREST Proxy Instruction in the circumstances
set out in Regulation 35(5)(a) of the Uncertificated Securities Regulations
2001.
SHAREHOLDERS WHO ARE ENTITLED TO VOTE
Carnival plc, pursuant to Regulation 41 of the Uncertificated Securities
Regulations 2001, specifies that only those shareholders registered in the
register of members of Carnival plc at 11:00 p.m. on April 11, 2005 shall be
entitled to attend or vote at the meeting in respect of the number of shares
registered in their name at that time. Changes to the entries on the register of
members after 11:00 p.m. on April 11, 2005 shall be disregarded in determining
the rights of any person to attend or vote at the meeting.
DOCUMENTS AVAILABLE FOR INSPECTION
Copies of the following documents will be available for inspection during normal
business hours on any weekday (public holidays excluded) at the registered
office of Carnival plc from the date of this notice until and including the date
of the meeting and at the place of the meeting for at least 15 minutes prior to
and during the meeting:
o the register of interests of directors in the share capital of Carnival
plc; and
o copies of all service agreements (including letters of appointment)
between each director and Carnival plc.
* * *
There are 25 Resolutions that require shareholder approval at the annual
meetings this year. The directors unanimously recommend that you vote in favor
of Resolutions 1-25 (inclusive), and encourage you to submit your vote using one
of the voting methods described herein. Submitting your voting instructions by
any of these methods will not affect your right to attend the meeting in person
should you so choose.
5
QUESTIONS AND ANSWERS
ABOUT THE PROXY MATERIALS AND THE ANNUAL MEETINGS
Q: WHY AM I RECEIVING THESE MATERIALS?
A: The board of directors of each of Carnival Corporation and Carnival
plc (together, "Carnival Corporation & plc," "we" or "us") is providing
these proxy materials to you in connection with our joint annual
meetings of shareholders on Wednesday, April 13, 2005. The annual
meetings will be held at the Queen Elizabeth II Passenger Terminal,
Port of Southampton, Dock Gate 4, Ocean Gate, Atlantic Way in
Southampton, United Kingdom. The meetings will commence at 3:00 p.m.
(UK time), and although technically two separate meetings (the Carnival
plc meeting will begin first), shareholders of Carnival Corporation may
attend the Carnival plc meeting and vice-versa. For our U.S.
shareholders, we will be hosting a live audio webcast of the annual
meeting at Carnival Corporation's headquarters located at 3655 N.W.
87th Avenue, Miami, Florida 33156. Shareholders in Miami, Florida will
be able to submit questions to the directors in Southampton, but will
not be able to vote at that meeting.
Q: WHAT INFORMATION IS CONTAINED IN THESE MATERIALS?
A: The information included in this proxy statement relates to the
proposals to be voted on at the meetings, the voting process, the
compensation of directors and our most highly paid executive officers
and certain other information required by U.S. Securities and Exchange
Commission rules applicable to both companies. We have attached as
Annexes A, B and C the stock plans described in proposals 2, 3 and 4,
respectively. We have attached as Annexes D, E and G to this proxy
statement information that Carnival plc is required to provide to its
shareholders under applicable UK rules. Annex F is our Audit Committee
Charter and Annex H is our Environmental Policy.
Q: WHAT PROPOSALS WILL BE VOTED ON AT EACH OF THE MEETINGS?
A: The proposals to be voted on at each of the meetings are set out in the
notices of meetings starting on pages 1 and 3 of this proxy statement.
Q: WHAT IS THE VOTING RECOMMENDATION OF THE BOARDS OF DIRECTORS?
A: Your boards of directors recommend that you vote "FOR" all of the
proposals described in this proxy statement.
Q: HOW DOES THE DLC STRUCTURE AFFECT MY VOTING RIGHTS?
A: On most matters that affect all of the shareholders of Carnival
Corporation and Carnival plc, the shareholders of both companies
effectively vote together as a single decision-making body. These
matters are called "joint electorate actions." Combined voting is
accomplished through the special voting shares that have been issued by
each company. Certain matters specified in the organizational documents
of Carnival Corporation and Carnival plc where the interests of the two
shareholder bodies may diverge are called "class rights actions." These
class rights actions are voted on separately by the shareholders of
each company. If either group of shareholders does not approve a class
rights action, that action generally cannot be taken by either company.
All of the proposals to be voted on at these annual meetings are joint
electorate actions, and there are no class rights actions.
Q: GENERALLY, WHAT ACTIONS ARE JOINT ELECTORATE ACTIONS?
A: Any resolution to approve an action other than a class rights action
or a procedural resolution (described below) is designated as a joint
electorate action. The actions designated as joint electorate actions
include:
o the appointment, removal or re-election of any director of
either or both companies;
o if required by law, the receipt or adoption of the annual
accounts of both companies;
6
o the appointment or removal of the independent auditors of
either company;
o a change of name by either or both companies; or
o the implementation of a mandatory exchange of Carnival plc
shares for Carnival Corporation shares based on a change in
tax laws, rules or regulations.
The relative voting rights of Carnival plc shares and Carnival
Corporation shares are equalized based on a ratio which we refer to as
the "equalization ratio." Based on the current equalization ratio of
1:1, each Carnival Corporation share has the same voting rights as one
Carnival plc share on joint electorate actions.
Q: HOW ARE JOINT ELECTORATE ACTIONS VOTED ON?
A: Joint electorate actions are voted on as follows:
o Carnival plc shareholders vote at the annual general meeting of
Carnival plc (whether in person or by proxy). Voting is on a poll
(or ballot) which remains open for sufficient time to allow the
vote at the Carnival Corporation meeting to be held and reflected
in the Carnival plc meeting through the mechanism of the special
voting share. An equivalent vote is cast at the subsequent
Carnival Corporation meeting on each of the corresponding
resolutions through a special voting share issued by Carnival
Corporation; and
o Carnival Corporation shareholders vote at the Carnival Corporation
annual meeting (whether in person or by proxy). Voting is by
ballot (or on a poll) which remains open for sufficient time to
allow the vote at the Carnival plc meeting to be held and
reflected in the Carnival Corporation meeting through the
mechanism of the special voting share. An equivalent vote is cast
on the corresponding resolutions at the Carnival plc meeting
through a special voting share issued by Carnival plc.
A joint electorate action is approved if it is approved by:
o a simple majority of the votes cast in the case of an ordinary
resolution (or not less than 75% of the votes cast in the case of
a special resolution if required by applicable law and regulations
or Carnival plc's articles) by the holders of Carnival plc's
shares and the holder of the Carnival plc special voting share as
a single class at a meeting at which a quorum was present and
acting;
o a simple majority of the votes cast (or other majority if required
by applicable law and regulations or the Carnival Corporation
articles and by-laws) by the holders of Carnival Corporation
shares and the holder of the Carnival Corporation special voting
share, voting as a single class at a meeting which a quorum was
present and acting; and
o a minimum of one-third of the total votes available to be voted by
the combined shareholders must be cast on each resolution for it
to be effective. Formal abstentions (or votes withheld) by a
shareholder on a resolution will be counted as having been "cast"
for this purpose.
Q: HOW ARE THE DIRECTORS OF EACH COMPANY ELECTED OR RE-ELECTED?
A: Resolutions relating to the election or re-election of directors are
considered as joint electorate actions. No person may be a member of
the board of directors of Carnival Corporation or Carnival plc without
also being a member of the board of directors of the other company.
There are 15 nominees for election or re-election to the board of
directors of each company this year. Each nominee currently serves as a
director of Carnival Corporation and Carnival plc. All directors are to
be elected or re-elected to serve until the next annual meetings and
until their successors are elected.
7
Q: WHAT VOTES ARE REQUIRED TO ELECT DIRECTORS OR APPROVE THE OTHER
PROPOSALS?
A: Carnival Corporation Proposals 10 and 11 (being Carnival plc
Resolutions 24 and 25) are required to be approved by 75% of the
combined votes cast at both meetings.
Each of the other proposals, including the election or re-election of
directors, requires the approval of a majority of the combined votes
cast at both meetings. Abstentions (including votes withheld) and
broker non-votes are not deemed votes cast for purposes of calculating
the vote, but do count for the purpose of determining whether a quorum
is present.
If you are a beneficial owner of Carnival Corporation shares and do not
provide the shareholder of record with a signed voting instruction
card, your shares may constitute broker non-votes, as described in "HOW
IS THE QUORUM DETERMINED?" In tabulating the voting result for any
particular proposal, shares which constitute broker non-votes are not
deemed cast for purposes of calculating the vote.
Q: GENERALLY, WHAT ARE PROCEDURAL RESOLUTIONS?
A: Procedural resolutions are resolutions of a procedural or technical
nature that do not adversely affect the shareholders of the other
company in any material respect and are put to the shareholders at a
meeting. The special voting shares do not represent any votes on
"procedural resolutions." The chairman of each of the meetings will
determine whether a resolution is a procedural resolution.
To the extent that such matters require the approval of the
shareholders of either company, any of the following will be procedural
resolutions:
o that certain people be allowed to attend or be excluded from
attending the meeting;
o that discussion be closed and the question put to the vote
(provided no amendments have been raised);
o that the question under discussion not be put to the vote
(where a shareholder feels the original motion should not be
put to the meeting at all, if such original motion was brought
during the course of that meeting);
o to proceed with matters in an order other than that set out in
the notice of the meeting;
o to adjourn the debate (for example, to a subsequent meeting);
and
o to adjourn the meeting.
Q: WHERE CAN I FIND THE VOTING RESULTS OF THE MEETING?
A: The voting results will be announced to the media and the relevant
stock exchanges and posted on the website of Carnival Corporation
(www.carnivalcorp.com) and Carnival plc (www.carnivalplc.com), after
both shareholder meetings have closed. The results will also be
published in our quarterly report on Form 10-Q for the second quarter
of fiscal 2005 ending May 31, 2005.
Q: WHAT IS THE QUORUM REQUIREMENT FOR THE MEETINGS?
A: The quorum requirement for holding the meetings and transacting
business at the meetings is one-third of the total votes of all
shareholders of both companies entitled to be voted. Shareholders may
be present in person (or by attorney) or represented by proxy at the
meetings.
8
Q: HOW IS THE QUORUM DETERMINED?
A: For purposes of determining a quorum with respect to joint
electorate actions, the special voting shares have the maximum number
of votes attached to them as were cast on such joint electorate
actions, either for, against or abstained, at the parallel shareholder
meeting of the other company, and such maximum number of votes
(including abstentions) constitutes shares entitled to vote and present
for purposes of determining whether a quorum exists at such meeting.
In order for a quorum to be validly constituted with respect to
meetings of shareholders convened to consider a joint electorate action
or class rights action, the special voting entities must be present.
Abstentions (including votes withheld) and broker non-votes are counted
as present for the purpose of determining the presence of a quorum.
Generally, broker non-votes occur when shares held by a broker for a
beneficial owner are not voted with respect to a particular proposal
because (1) the broker has not received voting instructions from the
beneficial owner and (2) the broker lacks discretionary voting power to
vote such shares.
Q: IS MY VOTE CONFIDENTIAL?
A: Proxy instructions, ballots and voting tabulations that identify
individual shareholders are handled in a manner that protects your
voting privacy. Your vote will not be disclosed to third parties except
(1) as necessary to meet applicable legal requirements, (2) to allow
for the tabulation of votes and certification of the vote or (3) to
facilitate a successful proxy solicitation by our boards of directors.
Occasionally, shareholders provide written comments on their proxy card
which are then forwarded to management.
Q: WHO WILL BEAR THE COST OF SOLICITING VOTES FOR THE MEETINGS?
A: We will pay the entire cost of preparing, assembling, printing,
mailing and distributing these proxy materials and soliciting votes for
the meetings. We will also reimburse brokerage houses and other
custodians, nominees and fiduciaries for their reasonable out-of-pocket
expenses for forwarding proxy materials to shareholders.
Q: CAN I VIEW THE PROXY MATERIALS ELECTRONICALLY?
A: This proxy statement will be posted on our websites at
www.carnivalcorp.com and www.carnivalplc.com. We encourage you to take
advantage of the convenience of accessing these materials through the
Internet as it is simple and fast to use, saves time and money, and is
environmentally friendly.
Q: WHAT REPORTS ARE FILED BY CARNIVAL CORPORATION AND CARNIVAL PLC WITH
THE U.S. SECURITIES AND EXCHANGE COMMISSION AND HOW CAN I OBTAIN
COPIES?
A: We file joint annual reports on Form 10-K, joint quarterly reports on
Form 10-Q and joint current reports on Form 8-K with the U.S.
Securities and Exchange Commission. Copies of the Carnival Corporation
& plc joint annual report on Form 10-K for the year ended November 30,
2004 (not including documents incorporated by reference), as well as
any joint quarterly reports on Form 10-Q or joint current reports on
Form 8-K, as filed with the U.S. Securities and Exchange Commission can
be viewed or obtained without charge through the U.S. Securities and
Exchange Commission's website www.sec.gov (under Carnival Corporation
or Carnival plc) or at one of our websites, www.carnivalcorp.com or
www.carnivalplc.com. Copies will also be provided to shareholders
without charge upon written request to Investor Relations, Carnival
Corporation, 3655 N.W. 87th Avenue, Miami, Florida 33178-2428 or
Carnival plc, Carnival House, 5 Gainsford Street, London SE1 2NE,
United Kingdom. We encourage you to take advantage of the convenience
of accessing these materials through the Internet as it is simple and
fast to use, saves time and money, and is environmentally friendly.
9
Q: MAY I PROPOSE ACTIONS FOR CONSIDERATION AT NEXT YEAR'S ANNUAL MEETINGS?
A: Carnival Corporation shareholders and Carnival plc shareholders (to the
extent permitted under Carnival plc's governing documents and UK law)
may submit proposals for consideration at future shareholder meetings,
including director nominations. In order for shareholder proposals to
be considered for inclusion in our proxy statement for next year's
annual meetings, the written proposals must be received by our
Secretary no later than November 7, 2005. Such proposals also will need
to comply with U.S. Securities and Exchange Commission regulations and
UK corporate law requirements regarding the inclusion of shareholder
proposals in company sponsored proxy materials. Any proposal of
shareholders to be considered at next year's meetings, but not included
in our proxy statement, must be submitted in writing by January 13,
2006.
Q: MAY I NOMINATE INDIVIDUALS TO SERVE AS DIRECTORS?
A: You may propose director candidates for consideration by our board's
Nominating & Governance Committee. In order to have a nominee
considered by the Nominating & Governance Committee for election at the
2006 annual meetings you must submit your recommendation in writing to
the attention of our Secretary at our headquarters not later than
November 7, 2005. Any such recommendation must include:
o the name and address of the candidate;
o a brief biographical description, including his or her
occupation for at least the last five years, and a statement
of the qualifications of the candidate, taking into account
the factors referred to below in "BOARD STRUCTURE AND
COMMITTEE MEETINGS -- NOMINATIONS OF DIRECTORS"; and
o the candidate's signed consent to serve as a director if
elected and to be named in the proxy statement.
10
QUESTIONS SPECIFIC TO SHAREHOLDERS OF CARNIVAL CORPORATION
Carnival plc shareholders should refer to the "QUESTIONS SPECIFIC TO
SHAREHOLDERS OF CARNIVAL PLC" beginning on page __.
Q: WHAT CARNIVAL CORPORATION SHARES OWNED BY ME CAN BE VOTED?
A: All Carnival Corporation shares owned by you as of February 14,
2005, the record date, may be voted by you. These shares include those
(1) held directly in your name as the shareholder of record, including
shares purchased through Carnival Corporation's Dividend Reinvestment
Plan and its Employee Stock Purchase Plan and (2) held for you as the
beneficial owner though a stockbroker, bank or other nominee.
Q: WILL I BE ASKED TO VOTE AT THE CARNIVAL PLC ANNUAL MEETING?
A: No. Your vote at the Carnival Corporation annual meeting, for purposes
of determining the outcome of combined voting, is automatically
reflected as appropriate at the parallel annual meeting of Carnival plc
through the mechanism of the special voting share issued by Carnival
plc.
Q: WHAT IS THE DIFFERENCE BETWEEN HOLDING SHARES AS A SHAREHOLDER OF
RECORD AND AS A BENEFICIAL OWNER?
A: Most of the shareholders of Carnival Corporation hold their shares
through a stockbroker, bank or other nominee rather than directly in
their own name. As summarized below, there are some distinctions
between shares held of record and those owned beneficially.
SHAREHOLDER OF RECORD
If your shares are registered directly in your name with Carnival
Corporation's transfer agent, SunTrust Bank, you are considered, with
respect to those shares, the shareholder of record, and these proxy
materials are being sent directly to you by us. As the shareholder of
record, you have the right to grant your voting proxy directly to the
persons named in the proxy or to vote in person at the meeting.
Carnival Corporation has enclosed a proxy card for you to use.
BENEFICIAL OWNER
If your shares are held in a stock brokerage account or by a bank or
other nominee, you are considered the beneficial owner of shares held
in street name, and these proxy materials are being forwarded to you by
your broker or nominee who is considered, with respect to those shares,
the shareholder of record. As the beneficial owner, you have the right
to direct your broker on how to vote and are also invited to attend the
meeting. However, since you are not the shareholder of record, you may
not vote these shares in person at the meeting. Your broker or nominee
has enclosed a voting instruction card for you to use.
Q: HOW CAN I VOTE MY CARNIVAL CORPORATION SHARES IN PERSON AT THE MEETING?
A: Shares held directly in your name as the shareholder of record may be
voted in person at the annual meeting in Southampton. If you choose to
do so, please bring the enclosed proxy card or proof of identification.
Even if you plan to attend the annual meeting, we recommend that you
also submit your proxy as described below so that your vote will be
counted if you later decide not to attend the meeting. Shares held in
street name may be voted in person by you only if you obtain a signed
proxy from the record holder giving you the right to vote the shares.
Please refer to the voting instruction card included by your broker or
nominee.
Q: HOW CAN I VOTE MY CARNIVAL CORPORATION SHARES WITHOUT ATTENDING THE
MEETING?
A: Whether you hold shares directly as the shareholder of record or
beneficially in street name, you may direct your vote without attending
the meeting. You may vote by granting a proxy or, for shares held in
street
11
name, by submitting voting instructions to your broker or nominee. For
shareholders of record, you may do this by signing your proxy card and
mailing it in the enclosed envelope. If you provided specific voting
instructions, your shares will be voted as you instruct. If you sign
but do not provide instructions, your shares will be voted as described
below in "HOW ARE VOTES COUNTED?" Where your shares are held in street
name, in most instances you will be able to do this over the Internet
at www.proxyvote.com, by telephone or by mail. Please refer to the
voting instruction card included by your broker or nominee.
We are also offering an audio webcast of the annual meetings. If you
choose to listen to the webcast, go to one of our websites,
www.carnivalcorp.com or www.carnivalplc.com shortly before the start of
the meetings and follow the instructions provided.
Q: CAN I CHANGE MY VOTE?
A: You may change your proxy instruction at any time prior to the vote at
the annual meeting. For shares held directly in your name, you may
accomplish this by granting a new proxy bearing a later date (which
automatically revokes the earlier proxy) or by attending the annual
meeting and voting in person. Attendance at the meeting will not cause
your previously granted proxy to be revoked unless you specifically so
request. For shares owned beneficially by you, you may accomplish this
by submitting new voting instructions to your broker or nominee.
Q: WHAT DOES IT MEAN IF I RECEIVE MORE THAN ONE PROXY OR VOTING
INSTRUCTION CARD?
A: It means your shares are registered differently or are in more than one
account. Please provide voting instructions on each proxy or voting
card you receive and mail each, as directed.
Q: WHO CAN ATTEND THE CARNIVAL CORPORATION MEETING?
A: All Carnival Corporation shareholders of record as of February 14,
2005, or their duly appointed proxies, may attend and vote at the
meeting. Each shareholder may be asked to present valid picture
identification, such as a driver's license or passport.
If you hold your shares through a stockbroker or other nominee, you
will need to provide proof of ownership by bringing either a copy of
the voting instruction card provided by your broker or a copy of a
brokerage statement showing your share ownership as of February 14,
2005 together with proof of identification. Cameras, recording devices
and other electronic devices will not be permitted at the meeting.
Q: WHAT CLASS OF SHARES ARE ENTITLED TO BE VOTED AT THE CARNIVAL
CORPORATION MEETING?
A: Carnival Corporation has only one class of common stock outstanding.
Each share of Carnival Corporation common stock outstanding as of the
close of business on February 14, 2005, the record date, is entitled to
one vote at the annual meeting. On the record date, Carnival
Corporation had approximately [___________] shares of common stock
issued and outstanding. The trust shares of beneficial interest in the
P&O Princess Special Voting Trust that are paired with your shares of
common stock do not give you separate voting rights.
Q: HOW ARE VOTES COUNTED?
A: In the election of directors, you may vote "FOR" all of the nominees or
you may "WITHHOLD" your vote with respect to one or more of the
nominees. In the election of directors, a vote "withheld" on the
Carnival Corporation proxy card has the same effect as a vote against
the indicated nominee or nominees. You may vote "FOR," "AGAINST" or
"ABSTAIN" for each of the other proposals. If you "ABSTAIN," it has no
effect on the outcome of the votes, although abstentions will be
counted for purposes of determining if a quorum is present for joint
electorate actions. If you sign your proxy card or broker voting
instruction card with no further instructions, your shares will be
voted in accordance with the recommendations of the boards of
directors.
12
Q: WHAT HAPPENS IF ADDITIONAL PROPOSALS ARE PRESENTED AT THE MEETING?
A: Other than the proposals described in this proxy statement, Carnival
Corporation does not expect any matters to be presented for a vote at
the annual meeting. If you grant a proxy, the persons named as proxy
holders, Micky Arison, Carnival Corporation's Chairman of the Board and
Chief Executive Officer, and Arnaldo Perez, Carnival Corporation's
Senior Vice President, General Counsel and Secretary, will have the
discretion to vote your shares on any additional matters properly
presented for a vote at the meeting. If for any unforeseen reason any
of our nominees is unable to accept nomination or election (which is
not anticipated), the persons named as proxy holders will vote your
proxy for such other candidate or candidates as may be nominated by the
boards of directors.
Q: WHO WILL COUNT THE VOTE?
A: A representative of SunTrust Bank, our transfer agent, will tabulate
the votes and act as the inspector of elections.
13
QUESTIONS SPECIFIC TO SHAREHOLDERS OF CARNIVAL PLC
Carnival Corporation shareholders should refer to "QUESTIONS SPECIFIC TO
SHAREHOLDERS OF CARNIVAL CORPORATION" beginning on page __.
Q: WHO IS ENTITLED TO ATTEND AND VOTE AT THE ANNUAL GENERAL MEETING OF
CARNIVAL PLC?
A: If you are a Carnival plc shareholder registered in the register of
members of Carnival plc at 11:00 p.m. (UK time) on April 11, 2005, you
will be entitled to attend in person and vote at the annual general
meeting to be held in Southampton, United Kingdom. in respect of the
number of Carnival plc shares registered in your name at that time. You
may also appoint one or more proxies to attend and (on a poll) vote
instead of you. If you are a corporation you may appoint a corporate
representative to represent you and vote your shareholding in Carnival
plc at the annual general meeting to be held in Southampton, United
Kingdom. For further details regarding appointing a proxy or corporate
representative please see below.
We are also offering an audio webcast of the annual meetings. If you
choose to listen to the webcast, go to one of our websites,
www.carnivalcorp.com or www.carnivalplc.com shortly before the start of
the meetings and follow the instructions provided.
Q: WILL I BE ASKED TO VOTE AT THE CARNIVAL CORPORATION ANNUAL MEETING?
A: No. Your vote at the Carnival plc annual general meeting, for purposes
of determining the outcome of combined voting, will automatically be
reflected as appropriate at the parallel annual meeting of Carnival
Corporation through the mechanism of a special voting share issued by
Carnival Corporation.
Q: HOW DO I VOTE MY CARNIVAL PLC SHARES WITHOUT ATTENDING THE ANNUAL
GENERAL MEETING?
A: You may vote your Carnival plc shares at the annual general meeting
by completing and signing the enclosed form of proxy in accordance with
the instructions set out on the form and returning it as soon as
possible, but in any event so as to be received by Carnival plc's
registrar, Lloyds TSB Registrars, The Causeway, Worthing, West Sussex,
BN99 6DA, by not later than 3:00 p.m. (UK time) on April 11, 2005.
Alternatively, a proxy vote may be submitted via the Internet in
accordance with the instructions set out in the proxy form. It is also
possible to appoint a proxy via the CREST system, please see the
Carnival plc Notice of Annual General Meeting for further details.
Voting by proxy does not preclude you from attending the annual general
meeting and voting in person should you wish to do so.
If you are a corporation you can vote your Carnival plc shares at the
annual general meeting by appointing a corporate representative. You
are strongly encouraged to pre-register your corporate representative
to make registration on the day of the annual meeting more efficient.
In order to pre-register you would need to fax your Letter of
Representation to Carnival plc's registrar, Lloyds TSB Registrars, on
01903 833168 from within the UK or +44 1903 833168 from elsewhere.
Corporate representatives themselves are urged to arrive at least two
hours before commencement of the annual general meeting to assist
Carnival plc's registrar with the appropriate registration formalities.
Whether or not you intend to appoint a corporate representative, you
are strongly encouraged to return the enclosed form of proxy to
Carnival plc's registrar.
Q: CAN I CHANGE MY VOTE GIVEN BY PROXY OR BY MY CORPORATE REPRESENTATIVE?
A: Yes, in certain circumstances. You may change your proxy vote by
either completing, signing and dating a new form of proxy in accordance
with its instructions and returning it to Carnival plc's registrars by
no later than 3:00 p.m. (UK time) on April 11, 2005, or by attending
and voting in person at the annual general meeting. If you do not
attend and vote in person at the annual general meeting and wish to
revoke the appointment of your proxy or corporate representative you
must do so by delivering a notice of such revocation to Carnival plc's
registrars at least three hours before the start of the annual general
meeting.
14
Q: WHAT CLASS OF SHARES ARE ENTITLED TO BE VOTED AT THE CARNIVAL PLC
MEETING?
A: Carnival plc has only one class of ordinary shares in issue. Each
Carnival plc ordinary share in issue as of the close of business on
April 11, 2005, is (on a poll) entitled to one vote at the annual
general meeting.
Q: HOW ARE VOTES COUNTED?
A: You may vote "FOR," "AGAINST" or "WITHHOLD" your vote for each of
the resolutions. If you "WITHHOLD," it has no effect on the outcome of
the votes, although withheld votes will be counted for purposes of
determining if a quorum is present for joint electorate actions.
15
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Set forth below is information concerning the share ownership of (1) all persons
known by us to be the beneficial owners of 5% or more of the [___________]
shares of Carnival Corporation common stock and trust shares of beneficial
interest in the P&O Princess Special Voting Trust outstanding as of February 14,
2005, (2) all persons known by us to be the beneficial owners of 5% or more of
the [___________] ordinary shares of Carnival plc outstanding as of February 14,
2005 (41,679,877 of which are owned by Carnival Corporation and have no voting
rights), (3) each of our executive officers named in the Executive Compensation
Table which appears elsewhere in this proxy statement, (4) each of our other
directors and (5) all directors and executive officers as a group.
Micky Arison, Chairman of the board and Chief Executive Officer of each of
Carnival Corporation and Carnival plc, certain other members of the Arison
family and trusts for their benefit (collectively, the "Principal
Shareholders"), beneficially own shares representing approximately [__%] of the
voting power of Carnival Corporation and approximately [__]% of the combined
voting power of Carnival Corporation & plc and have informed us that they intend
to cause all such shares to be voted in favor of the 15 nominees to the boards
of directors named in this proxy statement and in favor of Proposals 2 through
11 listed in the accompanying Carnival Corporation Notice of Meeting. The table
begins with ownership of the Principal Shareholders.
The number of shares beneficially owned by each entity, person, director,
nominee or executive officer is determined under rules of the U.S. Securities
and Exchange Commission, and the information is not necessarily indicative of
beneficial ownership for any other purpose. Under such rules, beneficial
ownership includes any shares as to which the individual has the sole or shares
voting power or investment power and also any shares which the individual would
have the right to acquire as of April 15, 2005 (60 days after the Carnival
Corporation record date of February 14, 2005) through the conversion of a
convertible security or the exercise of any stock option or other right.
BENEFICIAL OWNERSHIP TABLE
AMOUNT AND
AMOUNT AND NATURE NATURE OF
OF BENEFICIAL BENEFICIAL PERCENT
OWNERSHIP OWNERSHIP OF PERCENT
OF CARNIVAL PERCENT OF CARNIVAL CARNIVAL OF
CORPORATION CARNIVAL PLC PLC COMBINED
NAME AND ADDRESS OF BENEFICIAL OWNERS OR SHARES AND CORPORATION ORDINARY ORDINARY VOTING
IDENTITY OF GROUP(1) TRUST SHARES* COMMON STOCK SHARES SHARES POWER**
- ------------------------------------------------- -------------------- ------------ ---------- -------- ---------
Micky Arison.................................... [___________](2)(4) % 0 0 %
Shari Arison.................................... 5,103,908(2)(5) % 0 0 ***
c/o The Ted Arison Family Foundation
USA, Inc.
3655 N.W. 87 Avenue
Miami, FL 33178
James M. Dubin.................................. [___________](2)(6) % 0 0 %
c/o Paul, Weiss, Rifkind, Wharton &
Garrison LLP
1285 Avenue of the Americas
New York, NY 10019
John J. O'Neil.................................. [___________] (2)(7) % 0 0 %
c/o Paul, Weiss, Rifkind, Wharton &
Garrison LLP
1285 Avenue of the Americas
New York, NY 10019
MA 1994 B Shares, L.P........................... 106,114,284(2)(8) % 0 0 %
MA 1994 B Shares, Inc........................... 106,114,284(2)(8) % 0 0 %
Nickel 1994 "B" Trust........................... 106,114,284(2)(8) % 0 0 %
MA 1997 Holdings, L.P........................... 2,599,265(2)(9) *** 0 0 ***
MA 1997 Holdings, Inc........................... 2,599,265 (2)(9) *** 0 0 ***
Nickel 2003 Revocable Trust..................... 2,599,265 (2)(9) *** 0 0 ***
Artsfare 1992 Irrevocable Trust................. [___________] (2)(10) % 0 0 %
23-25 Broad Street
P.O. Box 6, St. Helier
Jersey JE4 8ND
Channel Islands
Coutts (Jersey) Limited [___________] (11) % 0 0 %
23-25 Broad Street
P.O. Box 6, St. Helier
Jersey JE4 8ND
Channel Islands
16
AMOUNT AND
AMOUNT AND NATURE NATURE OF
OF BENEFICIAL BENEFICIAL PERCENT
OWNERSHIP OWNERSHIP OF PERCENT
OF CARNIVAL PERCENT OF CARNIVAL CARNIVAL OF
CORPORATION CARNIVAL PLC PLC COMBINED
NAME AND ADDRESS OF BENEFICIAL OWNERS OR SHARES AND CORPORATION ORDINARY ORDINARY VOTING
IDENTITY OF GROUP(1) TRUST SHARES* COMMON STOCK SHARES SHARES POWER**
- ------------------------------------------------- -------------------- ------------ ---------- -------- ---------
JJO Delaware, Inc............................... [___________] (7)(11) % %
JMD Delaware, Inc............................... [___________] (6)(11) % %
Eternity One Trust.............................. 5,102,708(2)(12) *** 0 0 ***
500 Stanton Christiana Road
Newark, DE 19713
JMD Protector, Inc.............................. [___________] % 0 0 %
c/o Paul, Weiss, Rifkind, (2)(6)(10)
Wharton & Garrison LLP
1285 Avenue of the Americas
New York, NY 10019
Nickel 2003 GRAT................................ 3,622,922(2) *** 0 0 ***
Nickel Continued Irrevocable Trust............. 2,124,560(2) *** 0 0 ***
Ted Arison Continued Irrevocable Trust for Shari 3,759,010(2)(3) *** 0 0 ***
Arison.....................................
Jafasa Continued Irrevocable Trust............. 3,759,010(2)(3) *** 0 0 ***
MBA I, L.P...................................... 1,432,440(2)(3)(13) *** 0 0 ***
Artsfare 2003 Trust............................. 1,432,440(2)(3)(13) *** ***
TAMMS Investment Company, Limited Partnership... 3,653,168(2)(3) *** 0 0 ***
TAMMS Management Corporation.................... 3,653,168(2)(3) *** 0 0 ***
Citigroup Inc. 77,816,386(14) 0 0 ***
399 Park Avenue
New York, NY 10043
Smith Barney Corporate Trust Company 71,801,025(14) *** 0 0 ***
824 Market Street
Wilmington, DE 19801
Robert H. Dickinson............................. 625,000(15) *** 0 0 ***
Howard S. Frank................................. 909,355(16) *** 0 0 ***
A. Kirk Lanterman............................... 170,671(17) *** 0 *** ***
c/o Holland America Line Inc.
300 Elliott Avenue West
Seattle, WA 98119
Peter Ratcliffe................................. 37,974(18) *** 14,342(19) *** ***
c/o Princess Cruise Lines
24305 Town Center Drive
Santa Clarita, CA 91355
Ambassador Richard G. Capen, Jr................. 38,602(20) *** 0 0 ***
6077 San Elijo
Rancho Santa Fe, CA 92067
Arnold W. Donald................................ 12,600(21) *** 0 0 ***
c/o Merisant Company
1 North Brentwood Blvd., Suite 510
Clayton, MO 63105
Pier Luigi Foschi............................... 0 *** 0 0 ***
Richard J. Glasier.............................. 1,000 *** 0 0 ***
c/o Argosy Gaming Company
219 Piasa Street
Alton, IL 62002
Baroness Hogg................................... 0 *** 1,874 *** ***
c/o 3i Group plc
91 Waterloo Road
London SE1 8XP
United Kingdom
Modesto A. Maidique............................. 24,800(22) *** 0 0 ***
c/o Florida International University
Office of the President
University Park Campus
107th Avenue and S.W. 8th Street
Miami, FL 33199
John P. McNulty................................. 1,200(23) *** 0 0 ***
1300 3rd Street South, Suite 300
Naples, Florida 34102
Sir John Parker................................. 0 *** 3,004 *** ***
c/o National Grid Transco plc
1-3 Strand
London WC2N 5EH
United Kingdom
Stuart Subotnick................................ 12,800(24) *** 0 0 ***
c/o Metromedia Company
810 7th Avenue, 29th Floor
New York, NY 10019
Uzi Zucker...................................... 64,800(25) *** 0 0 ***
870 5th Avenue
New York, NY 10021
Capital Research and Management Company......... 55,875,900(26) % 0 0 %
333 South Hope Street
Los Angeles, CA 90071
17
AMOUNT AND
AMOUNT AND NATURE NATURE OF
OF BENEFICIAL BENEFICIAL PERCENT
OWNERSHIP OWNERSHIP OF PERCENT
OF CARNIVAL PERCENT OF CARNIVAL CARNIVAL OF
CORPORATION CARNIVAL PLC PLC COMBINED
NAME AND ADDRESS OF BENEFICIAL OWNERS OR SHARES AND CORPORATION ORDINARY ORDINARY VOTING
IDENTITY OF GROUP(1) TRUST SHARES* COMMON STOCK SHARES SHARES POWER**
- ------------------------------------------------- -------------------- ------------ ---------- -------- ---------
FMR Corp. and Fidelity International Limited and 0 0 8,504,907(27) 4.5% ***
their direct and indirect subsidiaries.....
82 Devonshire Street
Boston, MA 02109
All directors and executive officers as a group ___________
(23 persons) [___________](28) % [ (29) ] *** %
- -------------------
* As part of the establishment of the DLC structure, Carnival plc issued a
special voting share to Carnival Corporation, which transferred such share
to the trustee of the P&O Princess Special Voting Trust (the "Trust"), a
trust established under the laws of the Cayman Islands. Trust shares of
beneficial interest in the Trust were transferred to Carnival Corporation.
The trust shares represent a beneficial interest in the Carnival plc
special voting share. Immediately following the transfer, Carnival
Corporation distributed such trust shares by way of a dividend to holders
of shares of common stock of Carnival Corporation. Under a pairing
agreement, the trust shares of beneficial interest in the Trust are paired
with, and evidenced by, certificates representing shares of Carnival
Corporation common stock on a one-for-one basis. In addition, under the
pairing agreement, when a share of Carnival Corporation common stock is
issued to a person after the implementation of the DLC structure, a paired
trust share will be issued at the same time to such person. Each share of
Carnival Corporation common stock and the paired trust share may not be
transferred separately. The Carnival Corporation common stock and the trust
shares (including the beneficial interest in the Carnival plc special
voting share) are listed and trade together on the New York Stock Exchange
("NYSE") under the ticker symbol "CCL." Accordingly, each holder of
Carnival Corporation common stock is also deemed to be the beneficial owner
of an equivalent number of trust shares.
** As a result of the DLC structure, on most matters that affect all of the
shareholders of Carnival Corporation and Carnival plc, the shareholders of
both companies effectively vote together as a single decision-making body.
Combined voting is accomplished through the special voting shares that have
been issued by each company.
*** Less than one percent.
(1) The address of each natural person named, unless otherwise noted, is 3655
N.W. 87 Avenue, Miami, Florida 33178-2428. The address of all other
entities, unless otherwise noted, is 1201 North Market Street, Wilmington,
Delaware 19899.
(2) The Principal Shareholders have filed a joint statement on Schedule 13D
with respect to the shares of Carnival Corporation common stock and trust
shares (representing a beneficial interest in a special voting share) held
by such persons.
(3) TAMMS Investment Company Limited Partnership ("TAMMS") owns 3,653,168
shares of common stock. TAMMS' general partner is TAMMS Management
Corporation ("TAMMS Corp."), which is wholly-owned by MBA I, L.P. ("MBA
I"). TAMMS' limited partners are various trusts established for the benefit
of certain members of Mr. Arison's family, including Shari Arison (the
"Family Trusts"). By virtue of the limited partnership agreement of TAMMS,
TAMMS Corp. may also be deemed to beneficially own such 3,653,168 shares of
common stock. By virtue of its interest in TAMMS, JMD Delaware, Inc. and
JJO Delaware, Inc. as trustees of certain of the Family Trusts, may be
deemed to beneficially own the portion of the 3,653,168 shares of common
stock held by TAMMS which corresponds to their partnership interest in
TAMMS. Such amounts are included in the number of shares set forth next to
its name in the table above. Because of authority granted under the trust
instrument for the Artsfare 2003 Trust, Mr. Arison may be deemed to
beneficially own the 1,032,440 shares held by the Artsfare 2003 Trust by
virtue of the limited partnership interest of MBA I in TAMMS. Because of
his position as President and Treasurer of TAMMS Corp., Mr. Arison may be
deemed to beneficially own the remaining 2,620,728 shares of common stock
owned by TAMMS; however, Mr. Arison disclaims beneficial ownership of the
2,620,728 shares which are beneficially owned by TAMMS. Accordingly, Mr.
Arison has not reported beneficial ownership of any of the shares owned by
TAMMS.
(4) Includes (i) 696,000 shares of common stock issuable to Mr. Arison upon his
exercise of stock options granted to him in January 1998, 1999, 2000 and
2001, October 2001, December 2002 and October 2003, (ii) 2,599,265 shares
of common stock held by the MA 1997 Holdings, L.P., (iii) 106,114,284
shares of common stock held by the MA 1994 B Shares, L.P., (iv) [_____]
shares of common stock held by the Artsfare 1992 Irrevocable Trust,
Eternity Four Trust and the Nickel 1997 Irrevocable Trust by virtue of the
authority granted to Mr. Arison under the last will of Ted Arison and (v)
1,432,440 shares of common stock held by the Artsfare 2003 Trust by virtue
of authority granted under the trust instrument all of which may be deemed
to be beneficially owned by Mr. Arison.
(5) Under the terms governing the Eternity One Trust, Shari Arison has the sole
right to vote and shares the right to direct the sale of the 4,000,000
shares of common stock held directly by such trust and the 1,102,708 shares
of common stock held by TAMMS which corresponds to such trust's respective
ownership interest in TAMMS. In addition, the shares described above
include 1,200 shares of common stock owned by Shari Arison's children.
Because Shari Arison is Chairman and President of the Ted Arison Family
Foundation USA, Inc. (the "Foundation"), she may be deemed to beneficially
own the common stock held by the Foundation. Shari Arison disclaims
beneficial ownership of the shares owned by the Foundation and her
children.
(6) By virtue of being the sole shareholder of JMD Delaware, Inc. and JMD
Protector, Inc. and the sole trustee of the Artsfare 2003 Trust, Mr. Dubin
may be deemed to own the aggregate of [________] shares of common stock
beneficially owned by such entities, as to which he disclaims beneficial
ownership. Mr. Dubin beneficially owns 1,000 shares of common stock held
directly.
(7) By virtue of being the sole shareholder of JJO Delaware, Inc., Mr. O'Neil
may be deemed to own the aggregate of [_________] shares of common stock
beneficially owned by such entity, as to which he disclaims beneficial
ownership.
(8) MA 1994 B Shares, L.P. ("MA 1994, L.P.") owns 106,114,284 shares of common
stock. The general partner of MA 1994, L.P. is MA 1994 B Shares, Inc. ("MA
1994, Inc."), which is wholly-owned by the Nickel 1994 "B" Trust, a trust
established for the benefit of Mr. Arison and his heirs (the "B Trust").
The sole limited partner of MA 1994, L.P. is the B Trust. Under the terms
of the instrument governing the B Trust, Mr. Arison has the sole right to
vote and direct the sale of the common stock indirectly held by the B
Trust. By virtue of the limited partnership agreement of MA 1994, L.P., MA
1994, Inc. may be deemed to beneficially own all such 106,114,284 shares of
common stock. By virtue of Mr. Arison's interest in the B Trust and the B
Trust's interest in MA 1994, L.P., Mr. Arison may be deemed to beneficially
own all such 106,114,284 shares of common stock. The trustee of the B Trust
is JMD Delaware, Inc., a corporation wholly-owned by James M. Dubin.
(9) MA 1997 Holdings, L.P. ("MA 1997, L.P.") owns 2,599,265 shares of common
stock. The general partner of MA 1997, L.P. is MA 1997 Holdings, Inc. ("MA
1997, Inc."), which is wholly-owned by the Nickel 2003 Revocable Trust, a
trust established for the benefit of Mr. Arison and his heirs (the "Nickel
2003 Trust"). The sole limited partner of MA 1997, L.P. is the Nickel 2003
Trust. By virtue of the limited partnership agreement of MA 1997, L.P., MA
1997, Inc. may be deemed to beneficially own all of such 2,599,265 shares
of common stock. By virtue of Nickel 2003 Trust's interest in MA 1997,
L.P., the Nickel 2003 Trust may be deemed to beneficially own all such
2,599,265 shares of common stock. Under the terms of
18
the instrument governing the Nickel 2003 Trust, Mr. Arison has the sole
right to vote and direct the sale of the common stock indirectly held by
the Nickel 2003 Trust. The trustee of the Nickel 2003 Trust is JMD
Delaware, Inc., a corporation wholly-owned by James M. Dubin.
(10) JMD Protector, Inc., a Delaware corporation, is the protector of the
Artsfare 1992 Irrevocable Trust and has certain voting and dispositive
rights with respect to the common stock held by such trust.
(11) Coutts (Jersey) Limited, JMD Delaware, Inc. and JJO Delaware, Inc. act as
co-trustees for the Artsfare 1992 Irrevocable Trust.
(12) JPMorgan Trust Company of Delaware acts as trustee for the Eternity One
Trust.
(13) MBA I owns 400,000 shares of common stock and a limited partnership
interest in TAMMS (See Note 3 above). MBA I may be deemed to own 1,032,440
shares of common stock held by TAMMS which corresponds to its respective
partnership interest in TAMMS and TAMMS Corp. The Artsfare 2003 Trust owns
a controlling interest in MBA I; therefore, the Artsfare 2003 Trust be
deemed to beneficially own all such 1,432,440 shares of common stock.
(14) Smith Barney Corporate Trust Company acts as trustee for the Eternity Four
Trust. Pursuant to the will of Ted Arison, Knight Protector, Inc., a
Delaware Corporation, shares the right to vote and direct the sale of the
46,701,809 shares of common stock owned by such trust with Mr. Arison.
Under the terms governing the Eternity Four Trust, Knight Protector, Inc.
has the sole power to vote and direct the sale of the remaining 25,085,716
shares of common stock held by such trust. Smith Barney Corporate Trust
Company disclaims beneficial ownership of the 71,787,525 shares of common
stock held by such trust.
(15) Includes 272,000 shares of common stock issuable to Mr. Dickinson upon his
exercise of stock options granted to him in August 1997, 1998, 1999, 2000
and 2001 and January, October 2001 and October 2003. Also includes 323,000
shares of common stock owned by Dickinson Enterprises Limited Partnership
(the "Dickinson Partnership") and 25,000 shares of common stock owned by
the Dickinson Foundation, of which Mr. Dickinson is the President. The
general partner of the Dickinson Partnership is Dickinson Enterprises,
Inc., which is wholly owned by a revocable trust established for the
benefit of Mr. Dickinson and his heirs (the "Dickinson Trust"). Under the
terms of the instrument governing the Dickinson Trust, Mr. Dickinson has
the sole right to vote and direct the sale of the common stock indirectly
held by the Dickinson Trust.
(16) Includes (i) 580,000 shares of common stock issuable to Mr. Frank upon his
exercise of stock options granted to him in January 1998, 1999, 2000 and
2001, October 2001, December 2002 and October 2003 and (ii) 4,000 shares of
common stock owned by the Jackson S. Woolworth Irrevocable Trust and the
Cassidy B. Woolworth Trust (Mr. Frank is trustee), as to which Mr. Frank
disclaims beneficial ownership.
(17) Includes 8,000 shares of common stock held by the Helen K. Lanterman Trust
(Mr. Lanterman is trustee).
(18) Includes 13,892 shares held by Mr. Ratcliffe's wife.
(19) Includes 14,432 shares held by Mr. Ratcliffe's wife. Does not include Mr.
Ratcliffe's conditional right to receive 22,167 and 13,304 matching awards
under the P&O Princess Cruises Deferred Bonus and Co-Investment Matching
Plan after a three-year retention period, during which Mr. Ratcliffe does
not have the right to vote or direct the sale of those shares.
(20) Includes 30,800 shares of common stock issuable to Mr. Capen upon his
exercise of stock options granted to him in April 1999 and 2001, October
2001, December 2002 and October 2003. Also includes 7,000 shares owned by
the Capen Trust, of which Mr. Capen is co-trustee. Also includes 802 shares
of common stock owned by Mr. Capen's wife as to which he disclaims
beneficial ownership.
(21) Includes 10,800 shares of common stock issuable to Mr. Donald upon his
exercise of stock options granted to him in April and October 2001,
December 2002 and October 2003. Also includes 1,800 shares owned by The
Arnold and Hazel Donald Charitable Trust (Mr. Donald is trustee).
(22) Includes 24,800 shares of common stock issuable to Dr. Maidique upon his
exercise of stock options granted to him in April 1999 and 2001 and October
2001, December 2002 and October 2003.
(23) Includes 1,200 shares of common stock issuable to Mr. McNulty upon his
exercise of stock options granted to him in October 2003.
(24) Includes 10,800 shares of common stock issuable to Mr. Subotnick upon his
exercise of stock options granted to him in April and October 2001,
December 2002 and October 2003.
(25) Includes 4,800 shares of common stock issuable to Mr. Zucker upon his
exercise of stock options granted to him in April and October 2001,
December 2002 and October 2003.
(26) As reflected in Amendment No. 3 to Schedule 13G, dated February 13, 2004,
as filed with the U.S. Securities and Exchange Commission.
(27) Based on notifications to Carnival plc of interests of 3% or more in the
share capital of Carnival plc as required by the Companies Act.
(28) Includes an aggregate of 2,205,398 shares of Carnival Corporation common
stock issuable to directors and executive officers upon their exercise of
previously granted stock options.
(29) Includes an aggregate of 50,000 shares of Carnival plc issuable to
executive officers upon their exercise of previously granted stock options.
19
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based upon a review of Forms 3 and 4 and amendments thereto furnished to
Carnival Corporation and Carnival plc during and with respect to their most
recent fiscal year and upon written representations from persons known to
Carnival to be subject to Section 16 of the U.S. Securities Exchange Act of
1934, as amended (the "Exchange Act") (a "reporting person") that no Form 5 is
required to be filed for such reporting person, all reporting persons filed on a
timely basis reports required by Section 16(a) of the Exchange Act during the
fiscal year ended November 30, 2004, with the exception of one late report filed
by each of Alan Buckelew, Micky Arison 1997 Holdings Trust, MA 1997 Holdings LP,
MA 1997 Holdings Inc and the Dickinson Partnership.
PROPOSAL 1 (RESOLUTIONS 1-15)
ELECTION OR RE-ELECTION OF DIRECTORS
The DLC structure requires the boards of Carnival plc and Carnival Corporation
to be identical. Shareholders are required to approve the election or
re-election of directors to each board. There are 15 nominees for election or
re-election to each board of directors. Each nominee currently serves as a
director of both companies. All directors are to be elected or re-elected to
serve until the next annual meeting and until their successors are elected.
With respect to each nominee set forth below, the information presented includes
such person's age, the month and year in which such person first became a
director, any other position held with Carnival Corporation and Carnival plc,
such person's principal occupations during the past five years and any
directorships held by such nominee in public or certain other companies.
During fiscal 2004, the Nominating & Governance Committees conducted performance
evaluations on the members of our boards of directors and reported the results
to the boards. The boards determined that each director was an effective member
of the boards and, therefore, that each director should be proposed for election
or re-election.
ACCORDINGLY, THE BOARDS OF DIRECTORS UNANIMOUSLY RECOMMEND A VOTE FOR THE
ELECTION OF EACH OF THE FOLLOWING NOMINEES:
MICKY ARISON, age 55, has been Chairman of the board of directors of Carnival
Corporation since October 1990 and a director since June 1987. He became a
director and Chairman of the board of directors of Carnival plc in April 2003.
He has been Chief Executive Officer of Carnival Corporation since 1979 and
became Chief Executive Officer of Carnival plc in April 2003.
AMBASSADOR RICHARD G. CAPEN, JR., age 70, has been a director of Carnival
Corporation since April 1994 and a director of Carnival plc since April 2003. He
is currently a corporate director, author and business consultant. From 1992 to
1993, Ambassador Capen served as United States Ambassador to Spain. From 1989 to
1991, Ambassador Capen served as Vice Chairman of Knight-Ridder, Inc. Ambassador
Capen was the Chairman and Publisher of the Miami Herald from 1983 to 1989.
Ambassador Capen is a member of the board of directors of the Fixed Income Funds
of The Capital Group, the New Economy Fund and Smallcap World Fund.
ROBERT H. DICKINSON, age 62, has been a director of Carnival Corporation since
June 1987 and a director of Carnival plc since April 2003. Since May 2003, Mr.
Dickinson has served as President and Chief Executive Officer of the Carnival
Cruise Lines division of Carnival Corporation ("CCL"). From May 1993 through May
2003, Mr. Dickinson was President and Chief Operating Officer of CCL. Mr.
Dickinson was Senior Vice President-Sales and Marketing of CCL from 1979 through
May 1993.
ARNOLD W. DONALD, age 50, has been a director of Carnival Corporation since
January 2001 and a director of Carnival plc since April 2003. Since March 2000,
Mr. Donald has been the Chairman of Merisant Company, a manufacturer and
marketer of tabletop sweetener products, including the Equal(R) and Canderel(R)
brands. From January 1998 to March 2000 he was Senior Vice-President of Monsanto
Company, a company which develops agricultural products and consumer goods, and
president of its nutrition and consumer sector. Prior to that he was President
of Monsanto Company's agricultural sector. He is a member of the board of
directors of Crown Cork & Seal Company, Inc., The Laclede Group, Oil-Dri
Corporation of America, Russell Corporation and The Scotts Company.
20
PIER LUIGI FOSCHI, age 58, has been a director of Carnival Corporation and of
Carnival plc since April 2003. He has been Chief Executive Officer of Costa
Crociere S.p.A. ("Costa"), a subsidiary of Carnival Corporation, since October
1997 and chairman of its board since January 2000. From 1974 to 1997, he held
senior positions with OTIS, a world leader in the field of elevators, which is a
subsidiary of United Technologies Corporation, and from 1990-1997 he was
Executive Vice President of Otis's Asia-Pacific operations.
HOWARD S. FRANK, age 64, has been Vice Chairman of the board of directors of
Carnival Corporation since October 1993 and a director since April 1992. He has
been a director, Vice Chairman of the board of directors and Chief Operating
Officer of Carnival plc since April 2003. He was appointed Chief Operating
Officer of Carnival Corporation in January 1998. From July 1989 to January 1998,
he was Chief Financial Officer and Chief Accounting Officer of Carnival
Corporation. From July 1975 through June 1989, he was a partner with Price
Waterhouse.
RICHARD J. GLASIER, age 59, has been a director of Carnival Corporation and
Carnival plc since July 2004. Mr. Glasier has served as President of Argosy
Gaming Company, an owner and operator of casinos, since July 2002 and its Chief
Executive Officer since May 2003. He is also a member of its Board of Directors.
From November 1995 to July 2002, Mr. Glasier was Executive Vice President and
Chief Financial Officer of Royal Caribbean Cruises Ltd. From November 1985 to
November 1995 he was Chief Financial Officer of Royal Caribbean Cruises Ltd.
BARONESS HOGG, age 58, has been a director of Carnival Corporation since April
2003 and a director of Carnival plc since October 2000. She is Chairman of 3i
Group Plc and Frontier Economics Ltd. and Deputy Chairman of GKN plc. She is
also a member of the Financial Reporting Counsel. Sarah Hogg was Head of the
Prime Minister's Policy Unit, with the rank of Second Permanent Secretary, from
1990-1995 and served as a non-executive director of The Peninsular and Oriental
Steam Navigation Company ("P&O") between 1999 and October 2000.
A. KIRK LANTERMAN, age 73, has been a director of Carnival Corporation since
April 1992 and a director of Carnival plc since April 2003. He has been
non-executive Chairman of the Board of Holland America Line Inc. ("HAL"), a
subsidiary of Carnival plc, since December 2004. He was Chairman of the Board
and Chief Executive Officer of HAL from November 2003 to November 2004. From
August 1999 to November 2003, he was Chairman of the Board, President and Chief
Executive Officer of HAL. Since 1983, Mr. Lanterman has served as either
President or Chief Executive Officer of HAL.
MODESTO A. MAIDIQUE, age 65, has been a director of Carnival Corporation since
April 1994 and a director of Carnival plc since April 2003. He has been
President of Florida International University ("FIU") since 1986. Prior to
assuming the presidency of FIU, Dr. Maidique taught at the Massachusetts
Institute of Technology, Harvard University and Stanford University. Dr.
Maidique has also served as Vice President and General Manager of the
Semiconductor Division of Analog Devices, Inc. which he co-founded in 1969, as
President and Chief Executive Officer of Gerome Therapeutics Collaborative
Research, Inc., a genetics engineering firm, and as General Partner of Hambrecht
& Quist, a venture capital firm. Dr. Maidique is a director of Ivax Corporation
and National Semiconductor, Inc.
JOHN P. MCNULTY, age 52, has been a director of Carnival Corporation and
Carnival plc since June 25, 2003. From July 1998 through July 7, 2001, Mr.
McNulty was a member of the Management Committee, head of the Investment
Management Division, and Partner, Managing Director of Goldman Sachs & Co.,
whose principal business is financial services. From July 7, 2001 he has been
retired from Goldman Sachs.
SIR JOHN PARKER, age 62, has been a director of Carnival Corporation since April
2003 and a non-executive director of Carnival plc since October 2000. He was
Deputy Chairman of Carnival plc from September 2002 to April 2003. He is the
non-executive Chairman of National Grid Transco plc and Deputy Chairman of P&O.
He is also Senior Non-executive Director designate of the Court of the Bank of
England. He was formerly a non-executive director of Brambles Industries plc,
Chairman of Babcock International Group plc, Chairman of RMC Group plc and a
President of the Royal Institution of Naval Architects. Sir John Parker has been
a member of the General Committee of Lloyds Register of Shipping since 1983 and
Chairman of its Technical Committee from 1993 until 2002.
21
PETER RATCLIFFE, age 57, has been a director of Carnival Corporation since April
2003 and a director of Carnival plc since October 2000. He was Carnival plc's
Chief Executive Officer until April 2003. He is now Chief Executive Officer of
P&O Princess Cruises International comprised of Cunard Line, Ocean Village, P&O
Cruises, P&O Cruises (Australia), P&O Travel, Princess Cruises, Princess Tours
and Swan Hellenic. He was previously an executive director of P&O and head of
its cruise division, having served as President of Princess Cruises since 1993
and its Chief Operating Officer since 1989. His early career was spent with P&O
Containers Limited in London and Sydney.
STUART SUBOTNICK, age 63, has been a director of Carnival Corporation since July
1987 and a director of Carnival plc since April 2003. Mr. Subotnick has been a
general partner and the Executive Vice President of Metromedia Company since
July 1986. He was a director of Metromedia Inc., a predecessor company, from
1982 and its Executive Vice President from 1986. Prior to 1986, Mr. Subotnick
was Senior Vice President-Finance of Metromedia Inc. from October 1983 and a
member of the Office of the President from 1982. He is a director of Big City
Radio Inc., Abovenet Inc. (formerly Metromedia Fiber Networks Inc.) and
Metromedia International Group, Inc.
UZI ZUCKER, age 69, has been a director of Carnival Corporation since July 1987
and a director of Carnival plc since April 2003. Mr. Zucker joined Bear, Stearns
& Co. in 1967, became a General Partner in 1982, a Senior Managing Director in
1986 and retired in December 2002. Mr. Zucker is now a private investor.
PROPOSAL 2 (RESOLUTION 16)
APPROVAL OF THE CARNIVAL CORPORATION AMENDED AND RESTATED
2001 OUTSIDE DIRECTOR STOCK PLAN
GENERAL. On February 16, 2001, the board of directors of Carnival Corporation
adopted the 2001 Outside Director Stock Option Plan, and our shareholders
approved it on April 17, 2001. On July 19, 2004, our boards of directors amended
the 2001 Outside Director Stock Option Plan to increase the amount of the
automatic annual option grant to non-executive directors from 6,000 to 10,000
shares, subject to approval of our shareholders. On January 18, 2005, our boards
of directors amended and restated the 2001 Outside Director Stock Option Plan in
the form of the Amended and Restated 2001 Outside Director Stock Plan (the
"Outside Director Plan"), subject to approval of our shareholders, primarily in
order (i) increase the number of shares of Carnival Corporation common stock
which may be issued under the Outside Director Plan from 800,000 to 1,000,000,
(ii) to permit awards of restricted stock and restricted stock units, (iii) to
change the name of the 2001 Outside Director Stock Option Plan to the 2001
Outside Director Stock Plan to reflect the amendment of the plan to permit
awards of restricted stock and restricted stock units, (iv) to allow the
Compensation Committee discretion in determining whether grants of annual awards
are to be in the form of stock options, restricted stock, restricted stock units
or any combination thereof (as described further below) and (v) to reflect the
changes to Carnival Corporation common stock as a result of the dual listed
company ("DLC") structure, which requires that each share of common stock be
paired with a share of beneficial interest (a "trust share") in the P&O Princess
Special Voting Trust. A share of Carnival Corporation common stock and the
paired trust share are collectively referred to in this description of Proposal
2 as a "share." The Outside Director Plan is attached as Annex A to this proxy
statement.
The principal provisions of the Outside Director Plan, as amended and restated,
are summarized below. This summary is not complete and is qualified in its
entirety by the terms of the Outside Director Plan. Approval of the Outside
Director Plan is required in order to meet the requirements of the NYSE in
respect of (A) the increase in the number of shares of Carnival Corporation
common stock reserved for issuance under the Outside Director Plan from 800,000
to 1,000,000, (B) the addition of restricted stock awards and restricted stock
unit awards as awards available for grant under the Outside Director Plan, (C)
the increase in the number of shares of Carnival Corporation common tock subject
to the automatic annual award grant from 6,000 to 10,000 shares (determined as
described below) and (D) to reflect the changes to the Carnival Corporation
common stock as a result of the DLC structure.
DESCRIPTION OF THE OUTSIDE DIRECTOR PLAN
PURPOSE. The purpose of the Outside Director Plan is to provide our outside
(non-executive) directors with the opportunity to acquire a proprietary interest
in Carnival Corporation. We believe that offering stock options and other awards
provided under the Outside Director Plan will strengthen our ability to attract
and retain the services of
22
experienced and knowledgeable non-executive directors and more closely align the
interests of such directors with those of our shareholders.
ADMINISTRATION. The Outside Director Plan is administered by the Compensation
Committee of Carnival Corporation. The composition of the Compensation Committee
is described in the section of this proxy statement entitled "BOARD STRUCTURE
AND COMMITTEE MEETINGS - BOARD COMMITTEES." The Compensation Committee has no
discretion to determine the non-executive directors to whom awards are granted,
the number of shares to be covered by each annual award or, with respect to
options, the option price or the exercise period. Subject to these limitations
and those described under "ANNUAL AWARD GRANT" below, the Compensation Committee
has discretion to determine the type of award granted and has plenary authority
to interpret the Outside Director Plan and to make all determinations deemed
necessary and advisable for its administration.
ELIGIBILITY. All of our directors who are not employees of Carnival Corporation
or Carnival plc or any of their subsidiaries are eligible to participate in the
Outside Director Plan. As of the date of the Annual Meeting, 10 persons are
eligible to participate in the Outside Director Plan. However, A. Kirk Lanterman
has agreed not to receive compensation for his services as a non-executive
director and, as a result, will not receive awards under the Outside Director
Plan. In addition, Baroness Hogg and Sir John Parker, as UK non-executive
directors, have elected not to receive options under the Outside Director Plan.
However, these UK directors will accept restricted stock and/or restricted stock
unit awards under the Outside Director Plan.
TYPES OF AWARDS. The Outside Director Plan provides for the granting of annual
awards of options to purchase shares of Carnival Corporation common stock,
restricted shares of Carnival Corporation common stock and/or restricted stock
units, to our non-executive directors, being directors who are not employees of
Carnival Corporation or Carnival plc or any of their subsidiaries. None of the
awards relates to Carnival plc ordinary shares. Each award granted under the
Outside Director Plan is governed by an award agreement between Carnival
Corporation and the director.
ANNUAL AWARD GRANT. Each non-executive director elected or appointed to the
board of directors shall receive, upon initial election to office by the
shareholders and thereafter annually on the date of our annual meeting of
shareholders at which such non-executive director is re-elected to office, an
award representing 10,000 "points." The board of directors may authorize a date
for granting annual awards other than the date of the Company's annual meeting
of shareholders, so long as awards granted to each non-executive director do not
exceed more than 10,000 points in any given calendar year. Each option to
purchase one share shall represent one point; each share of restricted stock
award and each restricted stock unit shall represent 4 points. An award may be
composed of options, restricted stock, restricted stock units or a combination
thereof, at the discretion of the Compensation Committee. Individual
non-executive directors may be granted varying combinations of options,
restricted stock and restricted stock units, at the discretion of the
Compensation Committee.
OPTIONS. The option price will be equal to the "fair market value" of a share of
Carnival Corporation common stock at the time the option is granted, as
determined in accordance with the Outside Director Plan. Such options shall vest
and become exercisable in five equal annual installments beginning one year from
the grant date. Such options shall also vest and become exercisable in full upon
the death or disability of the director, and shall continue to vest in
accordance with the original five-year vesting schedule if a director ceases to
be a director for any other reason after serving as a director for at least one
year. Options granted under the Outside Director Plan shall expire upon the
occurrence of certain conditions, including: (a) the expiration of 10 years
after the date of the grant, (b) the expiration of one year after termination of
services as a director due to death or disability and (c) the cessation of
service as a director for any reason other than death or disability prior to one
year of service as a director.
RESTRICTED STOCK. An award of restricted shares of Carnival Corporation common
stock is a grant of shares on terms and conditions determined by the
Compensation Committee. Holders of an award of restricted stock will have, with
respect to the restricted stock granted, all of the rights of a shareholder of
Carnival Corporation, including the right to vote the shares. However, the
Compensation Committee has discretion to determine whether cash and stock
dividends with respect to the restricted stock will be currently paid to the
director or withheld by us and credited for the director's account, and interest
may be credited on such dividends at a rate determined by the Compensation
Committee. Any cash or stock dividends withheld by the Compensation Committee
(and any earnings thereon, if applicable) will be distributed to the director
upon vesting of the shares to which the dividends are attributable, and if the
shares are forfeited, the director shall also forfeit his or her right to any
cash or stock dividends attributable to
23
the forfeited shares. The vesting of restricted stock shall be on the same
schedule as is described above with respect to stock options.
RESTRICTED STOCK UNITS. An award of restricted stock units is a grant of a
hypothetical investment in shares of Carnival Corporation common stock on terms
and conditions (including vesting) determined by the Compensation Committee,
with each restricted stock unit representing a hypothetical investment in one
share. A holder of restricted stock units will receive one share, or the cash
equivalent of one share (as determined by the Compensation Committee), in
respect of each restricted stock unit upon the satisfaction of the applicable
vesting conditions, which shall be the same as those applicable to stock options
and restricted stock. Holders of an award of restricted stock units shall not
have, with respect to the restricted stock units granted, any of the rights of a
shareholder of Carnival Corporation. The Compensation Committee has discretion
to determine whether dividend equivalents with respect to the restricted stock
units (being equal to the cash and stock dividends on the shares represented by
the restricted stock units) will be currently paid to the director or withheld
by us and credited for the director's account, and interest may be credited on
such dividend equivalents at a rate determined by the Compensation Committee.
Any dividend equivalents withheld by the Compensation Committee (and any
earnings thereon, if applicable) will be distributed to the director upon the
satisfaction of the vesting conditions on the restricted stock units to which
the dividends are attributable, and if the restricted stock units are forfeited,
the director shall also forfeit his or her right to any dividend equivalents
attributable to the forfeited restricted stock units.
NUMBER OF SHARES AUTHORIZED. The number of shares issuable pursuant to awards
granted under the Outside Director Plan is subject to adjustment in the event of
any stock split, stock dividend, stock change, reclassification,
recapitalization or combination of shares which changes the character or amount
of the outstanding shares after the date of grant of any award. The maximum
number of shares which may be made subject to awards under the Outside Director
Plan is 1,000,000. The fair market value of a share on February 14, 2005, as
determined in accordance with the Outside Director Plan, was $[___] per share.
The amended and restated Outside Director Plan does not increase the number of
shares previously authorized by the shareholders.
TRANSFERABILITY. Other than in connection with certain divorce decrees or estate
planning transfers specifically approved by the Compensation Committee, each
stock option granted under the Outside Director Plan may be exercised during the
director's lifetime only by the director or, if permissible under applicable
law, by the director's legal representative, and no award granted under the
Outside Director Plan may be assigned, alienated, pledged, attached, sold or
otherwise transferred or encumbered by a director other than by will or by the
laws of descent and distribution.
AMENDMENT AND TERMINATION. The Outside Director Plan provides that it will
terminate, unless earlier terminated as provided therein, on January 1, 2011.
The boards of directors may amend the Outside Director Plan at any time and from
time to time in such respects as it may deem advisable, subject to any
shareholder or regulatory approval required by law or the rules of any stock
exchange on which shares may be traded.
TAX EFFECTS OF PLAN PARTICIPATION
The following summary generally describes the principal U.S. federal (and not
foreign, state and local) income tax consequences of awards granted under the
Outside Director Plan. It is general in nature and is not intended to cover all
tax consequences that may apply to a particular director or to us. The
provisions of the U.S. Internal Revenue Code of 1986 (the "Code") and the
regulations thereunder relating to these matters ("Treasury Regulations") are
complicated and their impact in any one case may depend upon the particular
circumstances. EACH HOLDER OF AN AWARD UNDER THE OUTSIDE DIRECTOR PLAN SHOULD
CONSULT HIS OR HER OWN ACCOUNTANT, LEGAL COUNSEL OR OTHER FINANCIAL ADVISOR
REGARDING THE TAX CONSEQUENCES OF PARTICIPATION IN THE OUTSIDE DIRECTOR PLAN.
This discussion is based on the Code as currently in effect.
OPTIONS. Options granted under the Outside Director Plan will not be qualified
as "incentive stock options" as defined under Section 422 of the Code. The grant
of a nonqualified stock option has no U.S. federal tax consequences to a
director or us. Upon exercise, a director will recognize ordinary income in an
amount equal to the excess of the fair market value of the shares on such date
over the exercise price of such shares. We expect a grant of options to a
director under the Outside Director Plan to be exempt from the application of
Section 16(b) of the Exchange Act due to the grant meeting the requirement of
Rule 16b-3 promulgated under the Exchange Act. The basis of shares transferred
to a director pursuant to the exercise of an option is the price paid for such
shares plus an
24
amount equal to any income recognized by the director as a result of the
exercise. If a director sells shares acquired upon exercise of an option, any
amount realized over the basis of such shares will constitute long-term or short
term capital gain to such director for U.S. federal income tax purposes
(depending on whether or not the director holds the shares for at least one year
after exercise of the related option).
RESTRICTED STOCK. A director will not be subject to tax upon the grant of an
award of restricted stock unless the director otherwise elects to be taxed
pursuant to Section 83(b) of the Code. On the date an award of restricted stock
becomes transferable or is no longer subject to a substantial risk of
forfeiture, the director will have taxable compensation equal to the excess of
the fair market value of the shares on that date over the amount the director
paid for such shares, unless the director made an election under Section 83(b)
of the Code to be taxed at the time of grant. (Special rules would normally
apply to the receipt and disposition of restricted shares to directors on
account of Section 16(b) of the Exchange Act, but, as previously stated, we
expect that awards granted under the Outside Director Plan will be exempt from
the application of Section 16(b). The director will have a tax basis in the
shares equal to the amount the director paid for such shares (generally, zero)
plus the amount taxable as compensation to the director. Upon the sale of the
shares, any gain or loss is generally long-term or short-term capital gain or
loss, depending on the holding period.
RESTRICTED STOCK UNITS. A director will not be subject to tax upon the grant of
a restricted stock unit award. A director who receives a cash payment pursuant
to a restricted stock unit will have taxable compensation equal to the full
amount of such payment. If a director receives shares pursuant to a restricted
stock unit award, the director will have taxable compensation equal to the fair
market value of the shares on the date of receipt and the director will have a
tax basis in the shares equal the amount taxable as compensation to the
director. Upon the sale of the shares, any gain or loss is generally long-term
or short-term capital gain or loss, depending on the holding period.
NEW PLAN BENEFITS
Because the composition of the awards to be granted in the future under the
Outside Director Plan is at the discretion of the Compensation Committee, it is
not possible to determine the benefits or amounts which will be received in the
future under the Outside Director Plan by the non-executive directors. However,
as noted above, each non-executive director participating in the Outside
Director Plan (except as described under "Eligibility") will receive an annual
grant of an award representing 10,000 "points" (as described above) which award
may be composed of options, restricted stock, restricted stock units or a
combination thereof, at the discretion of the Compensation Committee, which
represents an increase from the current annual grant of options in respect of
6,000 shares.
During fiscal 2004, 10,000 options were granted on July 20, 2004 under the 2001
Outside Director Stock Option Plan at an exercise price equal to $45.92 to each
of Messrs. Capen, Donald, Glasier, Maidique, McNulty, Subotnick and Zucker. Of
each of these, 4,000 were granted subject to shareholder approval of the Outside
Director Plan as described above. Baroness Hogg and Sir John Parker, as UK
non-executive directors, have elected not to receive options under the 2001
Outside Director Stock Option Plan.
THE BOARDS OF DIRECTORS UNANIMOUSLY RECOMMEND A VOTE FOR THE AMENDMENT AND
RESTATEMENT OF THE OUTSIDE DIRECTOR PLAN.
PROPOSAL 3 (RESOLUTION 17)
APPROVAL OF THE CARNIVAL PLC 2005 EMPLOYEE SHARE PLAN
GENERAL. The Compensation Committee of Carnival plc has reviewed Carnival plc's
compensation policy. It concluded that it was desirable to have greater
flexibility than the current Carnival plc Executive Share Option Plan allows to
provide incentives to employees having regard to local tax and regulatory
regimes and the market practice in the different countries in which Carnival plc
has operations.
As a result, on January 18, 2005, the board of directors of Carnival plc adopted
the Carnival plc 2005 Employee Share Plan (the "PLC Share Plan") subject to
shareholder approval. The PLC Share Plan is designed for maximum flexibility as
to the types of options and other share awards that may be granted to employees
and executive directors. The PLC Share Plan will, if it is approved by
shareholders, replace the Carnival plc Executive Share Option Plan and no
further options will be granted under that plan. The PLC Share Plan mirrors the
existing Amended and Restated Carnival Corporation 2002 Stock Plan, which was
previously approved by our shareholders,
25
in all material respects. The Compensation Committee believes that the PLC Share
Plan will strengthen Carnival plc's ability to recruit and retain talented
employees and more closely align their interests with those of shareholders.
The PLC Share Plan is attached as Annex B to this proxy statement. The principal
provisions of the PLC Share Plan are summarized below. This summary is not
complete and is qualified in its entirety by the terms of the PLC Share Plan.
DESCRIPTION OF THE PLC SHARE PLAN
PURPOSE. The purpose of the PLC Share Plan is to create an employment incentive
by providing an opportunity to selected employees who are important to the
success and growth of the business of Carnival Corporation & plc to own Carnival
plc ordinary shares.
TYPES OF AWARDS. The PLC Share Plan allows three types of awards to be granted:
options to purchase Carnival plc ordinary shares; restricted shares of Carnival
plc ordinary shares; and restricted share units. These may be granted separately
to any eligible employee or in any combination that the Compensation Committee
may decide. The Compensation Committee will determine the value of any award to
be granted to an individual taking into account an individual's present and
potential contribution to the success of Carnival Corporation & plc and the
market practice for companies with global operations in the country where a
participant is based.
ADMINISTRATION. The PLC Share Plan will be administered by the Compensation
Committee. The composition of the Compensation Committee is described in the
section of this proxy statement entitled "BOARD STRUCTURE AND COMMITTEE MEETINGS
- - BOARD COMMITTEES." Subject to the limitations described below, the
Compensation Committee has discretion to determine the type of award granted and
has authority to interpret the PLC Share Plan and to make all determinations
deemed necessary and advisable for its administration.
ELIGIBILITY. The PLC Share Plan provides that all employees of Carnival plc and
its subsidiaries (the "PLC Group") are eligible to participate in the PLC Share
Plan at the discretion of the Compensation Committee. It is anticipated that
awards will be granted primarily to management and supervisory level employees,
including executive directors. As of February 14, 2005, approximately
[_________] employees are eligible to participate in the PLC Share Plan.
OPTIONS. Options to acquire Carnival plc ordinary shares may be granted at an
exercise price determined by the Compensation Committee, which may not be less
than the fair market value of a Carnival plc ordinary share at the time the
option is granted. Options may be granted over American Depositary Shares
("ADSs"), each representing one ordinary share of Carnival plc, where
appropriate for U.S.-based executives. In the UK and U.S., we intend that
options may be granted as Inland Revenue approved options or as incentive stock
options, respectively, to qualify for income tax relief on exercise, or as
unapproved or non-qualified options. The Compensation Committee has discretion
to decide the appropriate vesting schedule to be applied to an option which will
determine when the option may be exercised. Typically, options will vest in
equal installments over a five year period beginning one year from the date of
grant.
RESTRICTED SHARES. An award of restricted shares is a grant of Carnival plc
ordinary shares on terms and conditions determined by the Compensation
Committee. The Compensation Committee has discretion to determine the vesting
schedule for restricted shares as it does for share options. Restricted shares
may be forfeited in certain circumstances (see "LEAVING EMPLOYMENT" below).
Holders of an award of restricted shares will have all the rights of a
shareholder of Carnival plc with regard to the restricted shares during the
vesting period, including the right to vote the restricted shares. However, the
Compensation Committee has discretion to determine whether cash or share
dividends with respect to the restricted shares will be paid to the participant
as they arise or whether they will be withheld and credited to the participant's
account, together with interest at a rate determined by the Compensation
Committee to be paid to the participant when and if the restricted shares vest.
If cash or share dividends are withheld by the Compensation Committee they will
be forfeited if the restricted shares to which they are attributable are
forfeited.
RESTRICTED SHARE UNITS. An award of restricted share units is a grant of a
hypothetical investment in Carnival plc ordinary shares on terms and conditions
(including vesting) determined by the Compensation Committee, with each
restricted share unit representing a hypothetical investment in one Carnival plc
ordinary share. A holder of
26
restricted share units will receive one Carnival plc ordinary share, or the cash
equivalent of one share (as determined by the Compensation Committee) in respect
of each restricted share unit upon the satisfaction of the applicable vesting
conditions. The Compensation Committee has discretion to determine the vesting
schedule for restricted share units as it does for share options and restricted
shares as well as whether the award will be settled in cash or by ordinary
shares. During the vesting period, restricted share units may be forfeited in
certain circumstances. Holders of an award of restricted share units shall not
have any of the rights of a shareholder of Carnival plc with respect to the
restricted share units. The Compensation Committee has discretion to determine
whether dividend equivalents with respect to the restricted share units (being
equal to the cash and share dividends on the shares represented by the
restricted share units) will be paid to the participant as they arise or
withheld and credited for the participant's account, and interest may be
credited on such dividend equivalents at a rate determined by the Compensation
Committee. If dividend equivalents are withheld by the Compensation Committee
they will be forfeited if the restricted share to which they are attributable
are forfeited.
ANNUAL AWARD GRANT. Awards will usually be granted to eligible employees on an
annual basis. However, the Compensation Committee has discretion to grant
additional awards to eligible employees at any time during the year when it
deems advisable. Awards may not be granted when dealings in Carnival plc
ordinary shares would not be permitted under the UK Listing Authority's Model
Code on restrictions in dealing in securities. Benefits under the PLC Share Plan
will not be pensionable.
PERFORMANCE CONDITIONS. The Compensation Committee has discretion to determine
whether the grant or vesting of an award is subject to performance conditions.
In determining whether performance conditions shall apply, the Compensation
Committee shall have regard to the local practice in the country in which the
participant is based.
LEAVING EMPLOYMENT. Unvested options will not normally be exercisable, and
unvested restricted share awards and restricted share unit awards will normally
be forfeited, if a participant leaves the employment of the PLC Group. There may
be exceptions if a participant leaves employment in special circumstances, such
as by reason of death, injury or disability, retirement at normal retirement age
or if the company or business in which the participant works is sold outside the
PLC Group or for any other reason in the Compensation Committee's discretion.
Where awards have been granted subject to performance conditions, the
Compensation Committee in its discretion may decide whether such performance
conditions will continue to apply. The Compensation Committee may also reduce
the number of Carnival plc ordinary shares that the participant may acquire on a
time pro-rated basis to reflect the early vesting of the option or award. A
participant who ceases to be employed by the PLC Group for the purpose of
accepting employment with Carnival Corporation or any of its subsidiaries, will
not be treated as ceasing employment with the PLC Group.
NUMBER OF SHARES AVAILABLE. The maximum number of Carnival plc ordinary shares
that may be issued pursuant to awards under the PLC Share Plan when aggregated
with any ordinary shares issued or remaining issuable pursuant to rights granted
in any ten year period under any employee share plan adopted by Carnival plc,
may not exceed 10% of Carnival plc's issued ordinary share capital from time to
time. As of February 14, 2005, the closing price of one Carnival plc ordinary
share was (pound)[_____].
CHANGE OF CONTROL. In the event of a change of control of Carnival plc, a sale
of substantially all the assets of the business of Carnival plc, a situation
where the current members of the board of directors no longer represent a
majority of the board (other than in the normal course of appointments and
re-election of directors), a court sanctioning a scheme of arrangement of
Carnival plc, or a merger or other business combination affecting Carnival plc,
awards will be capable of early exercise or release in full. The Compensation
Committee may determine that awards should be exchanged for equivalent rights in
respect of shares of the acquiring company (subject to the consent of that
company) or that some other arrangement is more appropriate in which case early
exercise of options and vesting of awards will not be permitted.
VARIATIONS OF SHARE CAPITAL. In the event of a variation of share capital such
as a rights or bonus issue, a share subdivision or the implementation by
Carnival plc of a demerger or a special dividend or other corporate transaction
which in the Compensation Committee's opinion would materially affect the
current or future value of awards, the number of Carnival plc ordinary shares
which may be acquired pursuant to an award (and in the case of an option, the
exercise price) may be adjusted in such manner as the Compensation Committee
determines is appropriate.
TRANSFERABILITY. Awards granted under the PLC Share Plan may not be transferred
during a participants lifetime, except that the Compensation Committee may in
its discretion allow certain transfers of non-qualified options and restricted
shares by gift for estate planning purposes.
27
AMENDMENT AND TERMINATION. The Compensation Committee may amend the PLC Share
Plan. However, the provisions governing eligibility requirements, equity
dilution and the adjustments that may be made following a rights issue or any
other variation of capital cannot be altered to the advantage of eligible
employees or participants without the prior approval of Carnival plc's
shareholders (except for minor amendments to benefit the administration of the
PLC Share Plan, to take account of a change in legislation or developments in
the law affecting the PLC Share Plan, or to obtain or maintain favorable tax,
exchange control or regulatory treatment for participants in the PLC Share Plan
or any member of the PLC Group). In addition, no alteration may be made that
would materially affect any subsisting rights of any participants without their
prior consent. The Compensation Committee intends to adopt a sub-plan to the PLC
Share Plan under which Inland Revenue approved options capable of attracting
preferential tax treatment may be granted to UK employees. The Compensation
Committee may adopt further sub-plans to the PLC Share Plan without shareholder
approval to take account of tax, exchange control or securities laws which apply
to employees in countries outside the UK. Shares made available under any
sub-plan will count towards equity dilution limits. The PLC Share Plan will
terminate 10 years from the date of approval by the shareholders of Carnival
plc, except that the rights of existing participants will not be affected by any
termination.
OPERATION OF THE PLAN. Carnival plc ordinary shares used to satisfy awards may
be purchased in the market or issued by Carnival plc. Ordinary shares held in
treasury by Carnival plc may also be used to satisfy awards. The PLC Share Plan
may be operated in conjunction with an employee trust. The trust may acquire and
hold Carnival plc ordinary shares required to satisfy awards. Outstanding
ordinary shares may be acquired by the trustee of the trust in the market or new
ordinary shares may be issued by Carnival plc to the trustee.
TAX EFFECTS OF PLAN PARTICIPATION
The following summary generally describes the principal U.S. federal (and not
foreign, state and local) income tax consequences of awards granted under the
PLC Share Plan. It is general in nature and is not intended to cover all tax
consequences that may apply to a particular participant or to us. The provisions
of the Code and Treasury Regulations are complicated and their impact in any one
case may depend upon the particular circumstances. Each holder of an award under
the PLC Share Plan should consult his or her own accountant, legal counsel or
other financial advisor regarding the tax consequences of participation in the
PLC Share Plan. This discussion is based on the Code as currently in effect.
OPTIONS. If an option is granted to an employee in accordance with the terms of
the PLC Share Plan, no income will be recognized by such employee at the time
the option is granted. Generally, on exercise of a nonqualified option, the
amount by which the fair market value of the shares on the date of exercise
exceeds the purchase price of such shares will be taxable to the employee as
ordinary income. The disposition of shares acquired upon exercise of a
nonqualified option under the PLC Share Plan will ordinarily result in long-term
or short-term capital gain or loss (depending on the applicable holding period)
in an amount equal to the difference between the amount realized on such
disposition and the sum of the purchase price and the amount of ordinary income
recognized in connection with the exercise of the nonqualified option.
Pursuant to currently applicable rules under Section 16(b) of the Exchange Act,
the grant of an option (and not its exercise) to a person who is subject to the
reporting and short-swing profit provisions under Section 16 of the Exchange Act
(a "Section 16 Person") begins the six-month period of potential short-swing
liability. The taxable event for the exercise of an option that has been
outstanding at least six months ordinarily will be the date of exercise. If an
option is exercised by a Section 16 Person within six months after the date of
grant, however, taxation ordinarily will be deferred until the date which is six
months after the date of grant, unless the person has filed a timely election
pursuant to Section 83(b) of the Code to be taxed on the date of exercise.
However, the six month period of potential short-swing liability may be
eliminated if the option grant (i) is approved in advance by the Carnival plc
board of directors (or a committee composed solely of two or more non-employee
directors) or (ii) is approved in advance, or subsequently ratified by the
shareholders no later than the next annual meeting of shareholders.
Consequently, the taxable event for the exercise of an option that satisfies
either of the conditions described in clauses (i) or (ii) above will be the date
of exercise.
Generally, on exercise of an incentive option, an employee will not recognize
any income and neither Carnival plc nor any of its subsidiaries will be entitled
to a deduction for tax purposes. However, the difference between the purchase
price and the fair market value of the shares received on the date of exercise
will be treated as a positive adjustment in determining alternative minimum
taxable income and the employee may be subject to the alternative
28
minimum tax. The disposition of shares acquired upon exercise of an incentive
option under the PLC Share Plan will ordinarily result in long-term or
short-term capital gain or loss (depending on the applicable holding period).
Generally, however, if the employee disposes of shares of Carnival plc acquired
upon exercise of an incentive option within two years after the date of grant or
within one year after the date of exercise (as "disqualifying disposition"), the
employee will recognize ordinary income in the amount of the excess of the fair
market value of the shares on the date of exercise over the purchase price (or,
in certain circumstances, the gain on sale, if less). Any excess of the amount
realized by the holder on the disqualifying disposition over the fair market
value of the shares on the date of exercise of the incentive option will
ordinarily constitute capital gain.
RESTRICTED SHARES. An employee will not be subject to tax upon the grant of an
award of restricted shares unless the employee otherwise elects to be taxed
pursuant to Section 83(b) of the Code. On the date an award of restricted shares
becomes transferable or is no longer subject to a substantial risk of
forfeiture, the employee will have taxable compensation equal to the excess of
the fair market value of the shares on that date over the amount the employee
paid for such shares, unless the employee made an election under Section 83(b)
of the Code to be taxed at the time of grant. (As discussed above, special rules
would normally apply to the receipt and disposition of restricted shares to
directors on account of Section 16(b) of the Exchange Act). The employee will
have a tax basis in the shares equal to the amount the employee paid for such
shares (generally, zero) plus the amount taxable as compensation to the
employee. Upon the sale of the shares, any gain or loss is generally long-term
or short-term capital gain or loss, depending on the holding period.
RESTRICTED SHARE UNITS. An employee will not be subject to tax upon the grant of
a restricted share unit award. An employee who receives a cash payment pursuant
to a restricted share unit will have taxable compensation equal to the full
amount of such payment. If an employee receives shares pursuant to a restricted
share unit award, the employee will have taxable compensation equal to the fair
market value of the shares on the date of receipt and the employee will have a
tax basis in the shares equal the amount taxable as compensation to the
employee. Upon the sale of the shares, any gain or loss is generally long-term
or short-term capital gain or loss, depending on the holding period.
NEW PLAN BENEFITS
Because the composition of the awards to be granted in the future under the PLC
Share Plan is at the discretion of the Compensation Committee, it is not
possible to determine the benefits or amounts which will be received in the
future under the PLC Share Plan by the Carnival plc executive directors.
THE BOARDS OF DIRECTORS UNANIMOUSLY RECOMMEND A VOTE FOR THE ADOPTION OF THE PLC
SHARE PLAN.
PROPOSAL 4 (RESOLUTION 18)
APPROVAL OF THE CARNIVAL PLC 2005 EMPLOYEE STOCK PURCHASE PLAN
GENERAL. As a result of an internal corporate restructuring, certain
subsidiaries of Carnival Corporation, including Holland America Line Inc.
("HAL"), were transferred to the Carnival plc side of the DLC. As a result,
employees of HAL were no longer eligible to participate in Carnival
Corporation's 1993 Employee Stock Purchase Plan. At the time of the
restructuring, it was determined that management would evaluate proposals to
adopt another employee stock purchase plan in relation to ADSs for employees of
Carnival plc with substantially similar terms to the Carnival Corporation 1993
Employee Stock Purchase Plan. Accordingly, on January 18, 2005, the boards of
directors adopted, subject to shareholder approval, the Carnival plc 2005
Employee Stock Purchase Plan (the "2005 ESPP"). The 2005 ESPP is attached as
Annex C to this proxy statement. The 2005 ESPP establishes an employee stock
purchase plan for eligible employees of Carnival plc that is substantially
similar to the Carnival Corporation 1993 Employee Stock Purchase Plan. The
principal provisions of the 2005 ESPP are summarized below. This summary is not
complete and is qualified in its entirety by the terms of the 2005 ESPP.
Approval of the 2005 ESPP is required in order to satisfy the requirements of
Section 423 of the Code in order for the participants to qualify for favorable
U.S. federal income tax treatment for shares purchased under the 2005 ESPP.
DESCRIPTION OF THE 2005 ESPP
29
PURPOSE. The purpose of the 2005 ESPP is to provide eligible employees with the
opportunity to acquire a proprietary interest in Carnival plc ordinary shares
represented by ADSs. We believe that offering this opportunity will strengthen
our ability to attract and retain the services of experienced and knowledgeable
employees and more closely align the interests of such employees with those of
our shareholders.
ADMINISTRATION. The 2005 ESPP is administered by the Compensation Committee of
Carnival plc. The composition of the Compensation Committee is described in the
section of this proxy statement entitled "BOARD STRUCTURE AND COMMITTEE MEETINGS
- - BOARD COMMITTEES." The Compensation Committee has the authority to interpret
the 2005 ESPP, to prescribe, amend and rescind the rules and regulations
relating to it and to make all other determinations necessary for the
administration of the 2005 ESPP.
ELIGIBILITY. Employees of Carnival plc, to the extent the 2005 ESPP is offered
to its employees, and employees of each of its subsidiaries to whom the 2005
ESPP is offered, are eligible to participate in the 2005 ESPP, except that the
following may be excluded at the discretion of the Compensation Committee: (i)
employees whose customary employment is 15 hours or less per week; (ii)
employees whose customary employment is for not more than 5 months per year; and
(iii) employees whose period of employment with Carnival plc or any subsidiary
is less than six months. In addition, employees who own five percent or more of
the voting stock of Carnival plc may not participate in the 2005 ESPP. As of
February 14, 2005, we expect approximately [_________] employees are eligible to
participate in the 2005 ESPP.
PARTICIPATION AND TERMS. An eligible employee may elect to enroll in the 2005
ESPP at any time during the period from the 90th day to the 10th day prior to
any offering by completing an enrollment form and either a withholding election
form or a deposit election form approved by the Compensation Committee which
indicates the amounts to be deducted from his or her salary or deposited and
applied to the purchase of ADSs for that offering. The right to purchase ADSs
under the 2005 ESPP is made available to eligible employees in a series of
semi-annual offerings beginning on the first business day of each January and
July. The payroll deduction or deposit must be within limits set by the
Compensation Committee.
A purchase account is established for each participating employee and all
payroll deductions or deposits made on behalf of each employee are credited to
each such employee's respective purchase account. As of each Investment Date
(defined as the last Friday of each offering period), the amount credited to
each participating employee's purchase account is applied to purchase as many
ADSs as may be purchased with such amount at the applicable purchase price. No
participating employee may be granted an option that permits him or her to
purchase in excess of $17,647.06 of ADSs per calendar year.
If the eligible employee elects to make deposits, such deposit must be delivered
to Carnival plc on or before the 20th day prior to the Investment Date (defined
as the last Friday of each offering period). The deposit election form is
effective only for the offering for which it is filed. If the eligible employee
files a withholding election form, such employee will be deemed to continue
participation through payroll deductions for each subsequent offering until the
election form ceases to be effective. If an eligible employee who has filed a
withholding election form ceases to be eligible for payroll deductions at any
time during an offering, any balance in his or her purchase account will be
applied towards the purchase of ADSs on the next Investment Date. Any eligible
employee who ceases to be eligible for participation at any time during an
offering will be deemed to have ceased participation in the 2005 ESPP and the
balance of his or her purchase account will be returned.
The purchase price for the ADSs shall be equal to the lesser of (A) the greater
of (1) 85% of the average fair market values on the grant date and the
Investment Date and the last Friday of each month within the offering period of
one ADS or (2) 85% of the fair market value of one ADS on the grant date or (B)
85% of the fair market value of one ADS on the Investment Date. Participating
employees are precluded from selling the ADSs purchased until one year from the
Investment Date.
NUMBER OF SHARES AUTHORIZED. The maximum number of ADSs which may be purchased
pursuant to the 2005 ESPP is 2,000,000 ADSs ($1.66 stated value) (subject to
adjustment for any dividend, stock split or other relevant changes in Carnival
plc's capitalization or change in the ratio of ADSs to shares as set forth in
the ADS Deposit Agreement). The 2005 ESPP is intended to go into effect on
January 1, 2005. As of February 14, 2005, the closing price of one Carnival plc
ADSs was $[_____].
30
AMENDMENT AND TERMINATION. The board of directors of Carnival plc may amend the
2005 ESPP at any time, provided that if shareholder approval is required for the
plan to continue to comply with the requirements of Rule 16b-3 promulgated under
the Exchange Act or Section 423 of the Code, such amendment shall not be
effective unless approved by Carnival plc's shareholders within twelve months
after the date of the adoption by the board of directors. The 2005 ESPP may be
terminated by the board of directors at any time.
Participation in the 2005 ESPP is solely at the discretion of the eligible
participants, and we cannot determine at this time the number of ADSs that will
be acquired in the future by any particular employee or group.
TAX EFFECTS OF PLAN PARTICIPATION
The 2005 ESPP is intended to be an "employee stock purchase plan" as defined in
Section 423 of the Code. As a result, an employee participant will pay no
federal income tax upon enrolling in the 2005 ESPP or upon purchase of the ADSs.
A participant may recognize income and/or gain or loss upon the sale or other
disposition of ADSs purchased under the plan, the amount and character of which
will depend on whether the ADSs are held for two years from the first day of the
offering period.
If the participant sells or otherwise disposes of the ADSs within that two-year
period, the participant will recognize ordinary income at the time of
disposition in an amount equal to the excess of the market price of the ADSs on
the date of purchase over the purchase price and Carnival plc will be entitled
to a tax deduction for the same amount.
If the participant sells or otherwise disposes of the ADSs after holding the
ADSs for the two-year period, the participant will recognize ordinary income at
the time in an amount equal to the lesser of (i) the excess of the market price
of the ADSs on the first day of the offering period over the purchase price, or
(ii) the excess of the market price of the ADSs at the time of disposition over
the purchase price. Carnival plc will not be entitled to any tax deduction with
respect to ADSs purchased under the 2005 ESPP if the ADSs are held for the
requisite two-year period.
The employee may also recognize capital gain or loss at the time of disposition
of the ADSs, either short-term or long-term, depending on the holding period for
the ADSs.
THE BOARDS OF DIRECTORS UNANIMOUSLY RECOMMEND A VOTE FOR THE ADOPTION OF THE
2005 ESPP.
PROPOSALS 5 & 6 (RESOLUTIONS 19 & 20)
RE-APPOINTMENT AND REMUNERATION OF INDEPENDENT AUDITORS
FOR CARNIVAL PLC AND RATIFICATION OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTANTS
FOR CARNIVAL CORPORATION
The Audit Committee of the board of directors of Carnival plc has selected the
UK firm of PricewaterhouseCoopers LLP as Carnival plc's independent auditors for
the year ending November 30, 2005, subject to approval of our shareholders. The
Audit Committee of the board of directors of Carnival Corporation has selected
the U.S. firm of PricewaterhouseCoopers LLP as Carnival Corporation's
independent registered public accountants for the year ending November 30, 2005.
Representatives of both the U.S. and UK firms of PricewaterhouseCoopers LLP will
be present at the annual meetings and will have an opportunity to make a
statement if they desire to do so. The PricewaterhouseCoopers LLP
representatives will be available to respond to appropriate questions from
shareholders.
This resolution would re-appoint PricewaterhouseCoopers LLP as the independent
auditors of Carnival plc until the conclusion of the next general meeting at
which accounts are laid. It is a requirement of Section 385(2) of the Companies
Act that Carnival plc appoint its independent auditors at a general meeting at
which accounts are laid. You are also being asked to authorize the Audit
Committee of Carnival plc to determine the remuneration of
PricewaterhouseCoopers LLP as independent auditors of Carnival plc.
Although ratification by our shareholders of the appointment of independent
certified public accountants for Carnival Corporation is not legally required,
our boards of directors believe that such action is desirable. If our
shareholders do not approve Proposal 5, the Audit Committees will consider the
selection of another accounting firm for 2005 and future years.
31
THE BOARDS OF DIRECTORS UNANIMOUSLY RECOMMEND A VOTE FOR THE RE-APPOINTMENT OF
THE UK FIRM OF PRICEWATERHOUSECOOPERS LLP AS CARNIVAL PLC'S INDEPENDENT AUDITORS
FOR THE 2005 FISCAL YEAR, THE AUTHORIZATION OF THE AUDIT COMMITTEE OF CARNIVAL
PLC TO AGREE THE REMUNERATION OF PRICEWATERHOUSECOOPERS LLP AND THE RATIFICATION
OF THE SELECTION OF THE U.S. FIRM OF PRICEWATERHOUSECOOPERS LLP AS CARNIVAL
CORPORATION'S INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS FOR THE 2005 FISCAL
YEAR.
PROPOSAL 7 (RESOLUTION 21)
RECEIPT OF ACCOUNTS AND REPORTS OF CARNIVAL PLC
The directors of Carnival plc are required by the Companies Act to present the
financial statements, the UK statutory Directors' Report and the auditors'
report relating to those accounts to the Carnival plc shareholders. Accordingly,
the directors of Carnival plc lay before the annual meetings the Carnival plc
accounts and the reports of the directors and auditors for the financial year
ended November 30, 2004, which have been approved by and signed on behalf of
Carnival plc's board of directors and will be delivered to Companies House in
the UK following the annual meetings. Shareholders are voting to approve receipt
of these documents, as UK law does not require shareholder approval of the
substance and content of these documents. The UK statutory Directors' Report and
the UK GAAP summary financial information for the financial year ended November
30, 2004 are attached to this proxy statement as Annex D. The full accounts and
reports of Carnival plc will be available for inspection prior to and during the
annual meetings.
Only Carnival plc is subject to these rules and, accordingly, no action is
required in respect of the Carnival Corporation & plc consolidated financial
statements.
THE BOARDS OF DIRECTORS UNANIMOUSLY RECOMMEND A VOTE FOR THE RECEIPT OF THE
ACCOUNTS AND REPORTS OF CARNIVAL PLC FOR THE FINANCIAL YEAR ENDED NOVEMBER 30,
2004.
PROPOSAL 8 (RESOLUTION 22)
APPROVAL OF DIRECTORS' REMUNERATION REPORT
The UK Directors' Remuneration Report Regulations 2002 (the "Regulations")
require companies listed on the Official List of the UK Listing Authority to
prepare a directors' remuneration report, which must be put to a shareholder
vote. Shareholders are voting to approve adoption of the Directors' Remuneration
Report, which is attached to this proxy statement as Annex E. UK law does not
require shareholder approval of the substance and content of the Directors'
Remuneration Report. Accordingly, disapproval of the Directors' Remuneration
Report will not require us to amend the report although under applicable UK
guidelines the boards and Compensation Committees are expected to take into
account both the voting result and the views of our shareholders in their
application, development and implementation of remuneration policies and
schemes.
The Directors' Remuneration Report sets out the board's remuneration policy for
the next and subsequent financial years and other details required by the
Regulations and the Combined Code appended to the Listing Rules of the UK
Listing Authority (the "UK Combined Code").
No action is required in respect of the Report of the Compensation Committees of
Carnival Corporation and Carnival plc included in this proxy statement as it is
responsive to the rules of the U.S. Securities and Exchange Commission.
THE BOARDS OF DIRECTORS UNANIMOUSLY RECOMMEND A VOTE FOR THE APPROVAL OF THE
CARNIVAL PLC DIRECTORS' REMUNERATION REPORT.
PROPOSALS 9 & 10 (RESOLUTIONS 23 & 24)
APPROVAL OF LIMITS ON THE AUTHORITY TO ALLOT CARNIVAL PLC SHARES
AND THE DISAPPLICATION OF PRE-EMPTION RIGHTS FOR CARNIVAL PLC
At the last Carnival plc annual general meeting, the shareholders of Carnival
plc approved appropriate limits on the authority and power granted to directors
by Carnival plc's articles of association to allot ordinary shares of Carnival
plc and to allot shares for cash without making a pre-emptive offer to existing
shareholders. These prior authorizations lapse at the upcoming annual general
meeting.
32
Under Article 30 of Carnival plc's articles of association, the directors have,
for a "prescribed period," unconditional authority to allot ordinary shares in
Carnival plc up to an aggregate nominal amount known as the "Section 80 amount."
The prescribed period and the Section 80 amount are approved by shareholders
passing an ordinary resolution. By passing an ordinary resolution, shareholders
are authorizing the board of Carnival plc to issue, during the prescribed
period, up to an amount of shares having an aggregate nominal value equal to the
Section 80 amount, without further shareholder approval. In the absence of such
approval, the issuance of any additional shares would require shareholder
approval.
Under Article 31, the directors have, for the same prescribed period, power to
allot ordinary shares for cash without making a pre-emptive offer to existing
shareholders up to an aggregate nominal amount known as the "Section 89 amount."
The Section 89 amount is approved by shareholders passing a special resolution.
By passing a special resolution, shareholders are authorizing the board of
Carnival plc to issue, during the same prescribed period, an amount of shares
having an aggregate nominal value equal to the Section 89 amount, for cash
without first offering them to existing shareholders of Carnival plc.
Carnival Corporation's articles of incorporation do not contain provisions
similar to Articles 30 and 31 of Carnival plc's articles of association and
holders of Carnival Corporation shares do not have pre-emption rights.
Accordingly, no action is required in respect of Carnival Corporation's
authority to allot shares or to disapply pre-emption rights.
In common with many UK companies, resolutions to renew the prescribed period and
re-establish the Section 80 amount and the Section 89 amount are normally
proposed each year as the directors believe occasions may arise from time to
time when it would be beneficial for shares to be allotted and for shares to be
allotted for cash without making a pre-emptive offer. This is the purpose of
Resolution 23 (an ordinary resolution) and Resolution 24 (a special resolution).
As usual, the prescribed period is the period from the passing of the
resolutions until the next annual general meeting.
Guidelines issued by the Association of British Insurers, whose member insurance
companies are some of the largest institutional investors in UK listed
companies, require the Section 80 amount to be limited to the lesser of (a) the
authorized but unissued ordinary share capital and (b) one-third of the issued
ordinary share capital. By reference to Carnival plc's issued ordinary share
capital on February 14, 2005, the maximum Section 80 amount is U.S.$[________],
which is the nominal value of the authorized but unissued ordinary share capital
of Carnival plc and is equivalent to approximately [____]% of Carnival plc's
issued share capital.
Guidelines issued by the Pre-emption Group, a group comprising representatives
of UK listed companies, investment institutions and corporate finance
practitioners and formed under the support of the LSE to monitor the operation
of the Guidelines, recommend that a resolution to disapply Section 89 of the
Companies Act should be limited to an amount of equity securities not exceeding
5% of the nominal value of the company's issued ordinary share capital. By
reference to Carnival plc's issued ordinary share capital on February 14, 2005,
the maximum Section 89 amount is U.S.$[______________].
The directors have no commitment or plans to allot additional shares of Carnival
plc.
Carnival plc's authorized share capital is $375 million and (pound)100,002
divided into 225,903,614 ordinary shares of $1.66 each, two subscriber shares of
(pound)1 each, 99,998 preference shares of (pound)1 each, a special voting share
of (pound)1 and an equalization share of (pound)1. As of February 14, 2005,
there were [_______________] ordinary shares allotted and issued. The proposals
you are voting on do not increase the authorized share capital of Carnival plc.
THE BOARDS OF DIRECTORS UNANIMOUSLY RECOMMEND A VOTE FOR THE APPROVAL OF LIMITS
ON THE AUTHORITY TO ALLOT CARNIVAL PLC SHARES AND THE DISAPPLICATION OF
PRE-EMPTION RIGHTS FOR CARNIVAL PLC.
PROPOSAL 11 (RESOLUTION 25)
GENERAL AUTHORITY TO BUY BACK CARNIVAL PLC ORDINARY SHARES
On October 25, 2004, Carnival Corporation and Carnival plc announced that their
boards of directors had authorized the repurchase of up to an aggregate of $1
billion of Carnival Corporation and Carnival plc shares. Shareholder approval is
not required for us to buy back shares of Carnival Corporation, but is required
under the Companies Act for us to buy back shares of Carnival plc. Accordingly,
shareholder approval to effect market purchases (within the
33
meaning of Section 163(3) of the Companies Act) of up to [_________] ordinary
shares of Carnival plc (being approximately [___________]% of Carnival plc's
ordinary shares in issue) is being sought.
Carnival plc's board of directors confirms that the authority to purchase
Carnival plc's shares will only be exercised after careful consideration of
prevailing market conditions and the position of Carnival plc. In particular the
program will only proceed if we believe that it is in the best interests of
Carnival plc and its shareholders generally. The boards of directors are making
no recommendation as to whether shareholders should sell any shares in Carnival
plc and/or Carnival Corporation.
If Carnival plc's board of directors exercises the authority conferred by
Proposal 11 (Resolution 25), we would have the option of holding the shares in
treasury, or canceling them. Shares held in treasury can be re-sold for cash,
used for employee share schemes or later cancelled. The board of directors
thinks it prudent to maintain its discretion as to dealing with the purchased
shares.
The Carnival plc board of directors considers that any buy back of Carnival plc
may include the purchase of its American Depositary Receipts with a subsequent
cancellation of the underlying ADSs. If the underlying ADSs are so cancelled,
Carnival plc will either cancel or hold in treasury the ordinary share
represented by such ADSs.
The minimum price (exclusive of expenses) which may be paid for each Carnival
plc ordinary share is $1.66, and the maximum price which may be paid is an
amount (exclusive of expenses) equal to 105% of the average middle market
quotations for an ordinary share, as derived from the LSE Daily Official List,
for the five business days immediately preceding the day on which such ordinary
share is contracted to be purchased.
As of February 14, 2005, there are options outstanding to subscribe for [_____]
ordinary shares, which represent approximately [_____________]% of Carnival
plc's issued share capital. If [_______] ordinary shares of Carnival plc were
purchased, these options would represent approximately [_____________]% of
Carnival plc's issued share capital.
The authority to purchase Carnival plc ordinary shares will expire at the
conclusion of the Carnival plc annual general meeting in 2006 or on October 15,
2006, whichever is earlier (except in relation to any purchases of shares the
contract for which was entered before the expiry of such authority).
THE BOARDS OF DIRECTORS UNANIMOUSLY RECOMMEND A VOTE FOR THE GENERAL AUTHORITY
TO BUY BACK CARNIVAL PLC ORDINARY SHARES.
34
BOARD STRUCTURE AND COMMITTEE MEETINGS
INDEPENDENCE OF BOARD MEMBERS
The boards of directors has determined that each of the following directors is
an "independent director" in accordance with the corporate governance rules of
the NYSE as a result of having no material relationship with Carnival
Corporation & plc other than (1) serving as a director and board committee
member, (2) receiving related fees as disclosed in this proxy statement and (3)
having beneficial ownership of Carnival Corporation and/or Carnival plc
securities as disclosed in the section of this proxy statement entitled "STOCK
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT": Ambassador Richard G.
Capen, Jr., Arnold W. Donald, Richard J. Glasier, Baroness Hogg, Modesto A.
Maidique, John P. McNulty, Sir John Parker, Stuart Subotnick and Uzi Zucker.
BOARD MEETINGS
During the year ended November 30, 2004, the board of directors of each of
Carnival Corporation and Carnival plc held a total of 10 meetings.
During the year ended November 30, 2004, each Carnival Corporation director and
each Carnival plc director attended either telephonically or in person at least
75% of all Carnival Corporation board of directors and applicable committee
meetings.
Our corporate governance guidelines provide that our non-management directors
will meet privately in executive session at least quarterly. Our non-management
directors (all of whom satisfy the independence requirements of the NYSE),
acting in executive session, elected Stuart Subotnick as the Presiding Director
to preside at these meetings. Mr. Subotnick also acts as the senior independent
director under the UK Combined Code.
All board members are expected to attend our annual meetings of shareholders. At
the 2004 annual meetings, all of the current board members of each company were
in attendance, except for Richard J. Glasier who was not a director at that
time.
BOARD COMMITTEES
The board of directors of each of Carnival Corporation and Carnival plc has
established standing Audit, Nominating & Governance, Compensation and Executive
Committees, which are comprised of the same directors for each company. A
majority of the directors of each company and all of the members of the Audit
Committee, Nominating & Governance Committee and Compensation Committee of each
company are independent (as defined by the listing standards of the NYSE and the
UK Combined Code).
The membership and function of each committee is described below and a copy of
the charter of each of the Audit, Nominating & Governance and Compensation
Committees is available on either of our websites, www.carnivalcorp.com or
www.carnivalplc.com and is available in print to any shareholder who requests
it. Our Audit Committee charter, which we revised on January 17, 2005, is also
attached as Annex F to this proxy statement. Each committee will periodically
review its charter in light of new developments in applicable regulations and
may make additional recommendations to the boards to reflect evolving best
practices.
Additional information with respect to Carnival plc's corporate governance
practices during the 2004 financial year is included in the Carnival plc
Corporate Governance Report attached to this proxy statement as Annex G.
35
NUMBER OF MEETINGS/
CONSENT ACTIONS IN
NAME OF COMMITTEE AND MEMBERS FUNCTIONS OF THE COMMITTEE FISCAL 2004
AUDIT: o Inspects the work and written reports
Stuart Subotnick, Chair of our internal audit department 12
Richard G. Capen, Jr. o Reviews submissions from independent
Arnold W. Donald auditors
Richard J. Glasier o Selects independent auditors and
Sir John Parker approves audit and non-audit fee services
o Assists board oversight of:
-- the integrity of our financial
statements;
-- our compliance with legal and
regulatory requirements;
-- the independent auditors'
qualifications and independence; and
-- the performance of the internal audit
function and the independent auditors
o Prepares the report of the Audit
Committee to be included in our proxy
statement
NOMINATING & o Develops and recommends to the boards 5
GOVERNANCE: Corporate Governance Guidelines
Uzi Zucker, Chair reflecting the requirements applicable to
Baroness Hogg companies listed for trading on the NYSE
Stuart Subotnick and the LSE
o Identifies individuals qualified to
become board members
o Recommends to the boards the director
nominees for the next annual meetings of
shareholders
o Recommends to the boards director
nominees for each committee
o Assists the boards with such other
matters as may be set forth in its
charter from time to time
COMPENSATION: o Discharges the board's
Modesto A. Maidique, Chair responsibilities relating to the 7
Richard J. Glasier compensation of independent directors and
John P. McNulty executive officers
Sir John Parker o Administers stock incentive plans
o Approves grants of stock and option
awards
o Prepares the annual report on
executive compensation to be included in
our proxy statement
o Makes recommendations to the board
with respect to incentive compensation
and equity-based plans
EXECUTIVE: o Exercises the authority of the full
Micky Arison, Chair board of directors in between board 11
Howard S. Frank meetings
Uzi Zucker
36
CORPORATE GOVERNANCE GUIDELINES
Our Corporate Governance Guidelines address various governance issues and
principles, including director qualifications and responsibilities, access to
management personnel, director compensation, director orientation and continuing
education and annual performance evaluations of the boards and directors. Our
Corporate Governance Guidelines are posted on our websites at
www.carnivalcorp.com and www.carnivalplc.com.
NOMINATIONS OF DIRECTORS
Carnival Corporation and Carnival plc are two separate legal entities and,
therefore, each has a separate board of directors, each of which in turn has its
own Nominating & Governance Committee. As the DLC structure requires that there
be identical boards of directors, the Committees make one set of determinations
in relation to both companies.
The Nominating & Governance Committees actively seek individuals qualified to
become board members and recommend to the boards the nominees to stand for
election as directors at the annual meetings of shareholders or, if applicable,
at a special meeting of shareholders.
When evaluating prospective candidates for director, regardless of the source of
the nomination, the Nominating & Governance Committees will consider, in
accordance with their charter, such factors, as they deem appropriate,
including:
o the candidate's judgment;
o the candidate's skill;
o diversity considerations;
o the candidate's experience with businesses and other
organizations of comparable size;
o the interplay of the candidate's experience with the
experience of other board members; and
o the extent to which the candidate would be a desirable
addition to the boards and any committees of the boards.
The Nominating & Governance Committees will also use their best efforts to seek
to ensure that the composition of the boards at all times adheres to the
independence requirements applicable to companies listed for trading on the NYSE
and the LSE. The Nominating & Governance Committees may consider candidates
proposed by management, but is not required to do so. Other than the foregoing,
there are no stated minimum criteria for director nominees.
The Nominating & Governance Committees identify nominees by first evaluating the
current members of the boards willing to continue in service. Current members of
the boards with skills and experience that are relevant to our business and who
are willing to continue in service are considered for re-nomination, balancing
the value of continuity of service by existing members of the boards with that
of obtaining a new perspective. If any member of the boards does not wish to
continue in service or if the Nominating & Governance Committees or the boards
decide not to re-nominate a member for re-election, the Nominating & Governance
Committees identify the desired skills and experience of a new nominee in light
of the criteria above. Current members of the Nominating & Governance Committees
and the boards are polled for suggestions as to individuals meeting the criteria
of the Nominating & Governance Committees. The Nominating and Governance
Committees may engage a third party search firm to identify or evaluate or
assist in identifying potential nominees.
PROCEDURES REGARDING DIRECTOR CANDIDATES RECOMMENDED BY SHAREHOLDERS
The Nominating & Governance Committees will also consider shareholder
recommendations of qualified nominees when such recommendations are submitted in
accordance with the procedures below. In order to have a nominee considered by
the Nominating & Governance Committees for election at the 2006 annual meetings,
a shareholder must submit its recommendation in writing to the attention of our
Secretary at our headquarters not later than November 7, 2005. Any such
recommendation must include:
37
o the name and address of the candidate;
o a brief biographical description, including his or her
occupation for at least the last five years, and a statement
of the qualifications of the candidate, taking into account
the qualification requirements set forth above; and
o the candidate's signed consent to serve as a director if
elected and to be named in the proxy statement.
Once we receive the recommendation, we will deliver to the candidate a
questionnaire that requests additional information about the candidate's
independence, qualifications and other matters that would assist the Nominating
& Governance Committees in evaluating the candidate, as well as certain
information that must be disclosed about the candidate in our proxy statement or
other regulatory filings, if nominated. Candidates must complete and return the
questionnaire within the time frame provided to be considered for nomination by
the Committees.
COMMUNICATIONS BETWEEN SHAREHOLDERS AND THE BOARDS
Shareholders who wish to communicate with the boards should address their
communications to the attention of the Secretary of Carnival Corporation and
Carnival plc at 3655 N.W. 87th Avenue, Miami, Florida 33178-2428. The Secretary
will maintain a log of all such communications, promptly forward to the
Presiding Director those which the Secretary believes require immediate
attention, and also periodically provide the Presiding Director with a summary
of all such communications and any responsive actions taken. The Presiding
Director will notify the boards or the chairs of the relevant board committees
as to those matters that he believes are appropriate for further action or
discussion.
COMMUNICATIONS BETWEEN INTERESTED PARTIES AND THE PRESIDING DIRECTOR
Interested parties who wish to communicate with the Presiding Director should
address their communications to the attention of Stuart Subotnick at 3655 N.W.
87th Avenue, Miami, Florida 33178-2428. The Presiding Director will notify the
boards or the chairs of the relevant board committees as to those matters that
he believes are appropriate for further action or discussion.
CODE OF BUSINESS CONDUCT AND ETHICS
On January 21, 1997, Carnival Corporation adopted a Code of Business Conduct and
Ethics, which Carnival Corporation has amended periodically to remain in line
with best practices. The Code of Business Conduct and Ethics was amended most
recently on January 20, 2004 and has been adopted by the board of Carnival plc.
The Code of Business Conduct and Ethics applies to all employees and members of
the boards of Carnival Corporation and Carnival plc. Our Code of Business
Conduct and Ethics is posted on our websites at www.carnivalcorp.com and
www.carnivalplc.com and is available in print to any shareholder who requests
it.
38
DIRECTOR COMPENSATION AND STOCK OWNERSHIP GUIDELINES
Our non-employee directors are entitled to receive an annual retainer of $40,000
per year, an attendance fee per board meeting of $5,000 ($2,000 if meeting
attended by telephone), equity compensation in the form of options to acquire
shares of Carnival Corporation common stock (or, if the Outside Director Plan
described in Proposal 2 is approved by our shareholders, restricted stock or
restricted stock units, as further described below) and reimbursement for
travel, meals and accommodation expenses attendant to their board membership. In
certain circumstances, we request that the directors' spouses attend a special
event and we reimburse the directors for travel expenses incurred. In addition,
non-employee directors receive additional compensation for serving as a member
of a board committee, as follows:
RETAINER ATTENDANCE FEE
---------------------- ----------------------
CHAIR MEMBER IN PERSON BY TELEPHONE
----- ------ --------- ------------
Audit Committees................ $ 15,000 $ 7,500 $ 3,000 $ 1,500
All other Committees............ $ 7,500 $ 3,750 $ 2,500 $ 1,250
The fees in the table above reflect increases effective in October 2004 in
committee retainer fees (generally by 50%) and increases in committee attendance
fees by $500 (except telephonic participation in committee meetings other than
the Audit Committee, which increased $250).
Baroness Hogg and Sir John Parker also received an additional $5,000 for each
board meeting held outside the UK attended in person.
For purposes of calculating fees, a board or committee meeting of Carnival
Corporation and a concurrent or related board or committee meeting of Carnival
plc constitute a single meeting. Directors who are employed by us or our
subsidiaries do not receive any additional compensation for their board
activities.
Carnival Corporation currently has a 2001 Outside Director Stock Option Plan,
which was amended by our boards of directors on July 19, 2004 to increase the
amount of the automatic annual option grant to non-executive directors from
6,000 to 10,000 shares, subject to approval of our shareholders, and further
amended and restated by our boards of directors on January 18, 2005, also
subject to shareholder approval, to, among other things, permit awards of
restricted stock and restricted stock units and allow the Compensation Committee
of Carnival Corporation discretion in determining whether grants of annual
awards are to be in the form of stock options, restricted stock, restricted
stock units or a combination thereof. See PROPOSAL 2, APPROVAL OF THE CARNIVAL
CORPORATION AMENDED AND RESTATED 2001 OUTSIDE DIRECTOR STOCK PLAN. If this plan
is approved by the shareholders, the Compensation Committee of Carnival
Corporation will have the discretion to grant options, restricted stock or
restricted stock units in the amounts and in the manner described in Proposal 2.
During fiscal 2004, 10,000 options were granted on July 20, 2004 under the 2001
Outside Director Stock Option Plan at an exercise price equal to $45.92 to each
of Messrs. Capen, Donald, Glasier, Maidique, McNulty, Subotnick and Zucker. Of
each of these, 4,000 were granted subject to shareholder approval of the Outside
Director Plan as described above. Baroness Hogg and Sir John Parker, as UK
directors, have elected not to receive options under the 2001 Outside Director
Stock Option Plan.
In October 2004, upon recommendation of our Compensation Committees, our boards
of directors approved the increases in committee retainer fees and attendance
fees described above and approved two new policies as follows:
o STOCK OWNERSHIP GUIDELINES. All non-executive directors should
own at least 5,000 shares of either Carnival Corporation
common stock or Carnival plc ordinary shares. This guideline
should be achieved within five years from the date the
guidelines were approved or three years if the amendments to
the 2001 Outside Director Stock Option Plan are approved to
permit the grant of restricted stock and restricted stock
units to directors.
o PRODUCT FAMILIARIZATION. All non-executive directors should
take two cruises (up to a total of 14 days) per year for
product familiarization and pay $35 per day for such cruises.
39
CARNIVAL PLC
Additional information with respect to Carnival plc's compensation and
reimbursement practices during fiscal 2004 for non-employee directors is
included in the Carnival plc Directors' Remuneration Report, which is attached
as Annex E to this proxy statement.
40
EXECUTIVE COMPENSATION
Although Carnival Corporation and Carnival plc are two separate entities with
separate officers, our business is run by a single management team. The
following table sets forth all compensation awarded to, earned by, or paid to
our Chief Executive Officer and our four other most highly compensated executive
officers (each of whom are also members of our boards of directors) for the
years ended November 30, 2004 and 2003. The compensation information for the
year ended November 30, 2002 relates to Carnival Corporation only.
SUMMARY COMPENSATION TABLE
LONG TERM COMPENSATION
ANNUAL COMPENSATION AWARDS PAYOUTS
------------------------------------- -------------------------- -----------
OTHER RESTRICTED NUMBER OF
ANNUAL STOCK SECURITIES LTIP ALL
NAME AND COMPENSATION AWARDS UNDERLYING PAYOUTS OTHER
PRINCIPAL POSITION YEAR SALARY BONUS($) ($)(1) ($)(2) OPTIONS(#)(3 ($) COMPENSATION($)
Micky Arison 2004 $700,000 $ 2,400,000 $ 389,500 $ 3,475,200 120,000 -- --
Chairman and 2003 500,000 1,675,000 101,200 2,654,000 120,000 -- --
CEO 2002 500,000 1,675,000 96,500 1,546,200 120,000 -- --
Howard S. Frank 2004 600,000 2,300,000 193,400 2,896,000 100,000 -- --
Vice Chairman 2003 400,000 1,645,000 198,100 4,913,650 100,000 -- --
and COO 2002 400,000 1,645,000 92,000 1,288,500 100,000 -- --
Robert H.
Dickinson 2004 400,000 1,393,200(5) 137,600 1,849,200 80,000 -- --
President and 2003 400,000 1,256,200(5) 98,900 5,688,400 80,000 -- --
CEO of CCL 2002 400,000 1,304,300(5) 64,500 1,028,000 -- -- --
A. Kirk Lanterman 2004 214,000 2,352,100(6) -- -- -- -- $18,450(7)
Chairman and 2003 214,000 1,675,900(6) -- -- -- -- 16,000(7)
CEO of HAL 2002 214,000 2,425,000(6) -- -- -- -- 15,700(7)
Peter Ratcliffe 2004 1,100,000 814,000(9) 60,500 1,393,200(10) 50,000 -- 12,300(13)
CEO of P&O 2003 996,833(8) 419,800(9) 57,800 864,900(10) 51,188(11) $3,130,000(12) 12,000(13)
Princess
Cruises
International
- --------------------
(1) This column includes our aggregate incremental cost of providing
perquisites and personal benefits to the named executive officers. The
amounts of personal benefits shown in this column for fiscal 2004 that
represent more than 25% of the applicable executive's total Other Annual
Compensation include: personal use of season tickets to Miami Heat
basketball team home games of $178,211; personal use of the Carnival
Corporation aircraft of $148,336 to Mr. Arison and $135,636 to Mr. Frank;
personal air travel of $80,597 to Mr. Dickinson; and private club
membership of $21,669 and automobile lease of $21,977 to Mr. Ratcliffe. In
accordance with U.S. Securities and Exchange Commission rules, as to any
named executive officer, benefits aggregating less than $50,000 have been
omitted.
(2) Represents the value, based on the closing market price of Carnival
Corporation common stock on the NYSE on the date of grant. As of November
30, 2004, Messrs. Arison, Frank, Dickinson and Ratcliffe held 300,000
shares, 330,000 shares, 328,000 and 10,000 shares of restricted Carnival
Corporation common stock, respectively. The restricted shares owned by
Messrs. Frank and Dickinson include a special one-time grant in April 2003
of 100,000 restricted shares of Carnival Corporation common stock to Mr.
Frank in recognition of Mr. Frank's additional role and responsibilities
during the period leading up to competition clearance of the P&O Princess
acquisition and the completion of the DLC transaction and 160,000
restricted shares of Carnival Corporation common stock to Mr. Dickinson in
recognition of his continuing services as the President and Chief Executive
Officer of CCL. Mr. Lanterman does not own any shares of restricted
Carnival Corporation common stock. At November 30, 2004, based on the
closing price of Carnival Corporation common stock on such date of $53.01
per share, such restricted shares of common stock owned by Messrs. Arison,
Frank, Dickinson and Ratcliffe had a value of $15,903,000, $17,493,300,
$17,387,280, and $530,100, respectively. The restricted shares of Carnival
Corporation common stock held by such executive officers have the same
rights with respect to dividends and other distributions as all other
outstanding shares of Carnival Corporation common stock.
(3) Except as otherwise indicated, represents options in respect of Carnival
Corporation common stock. No stock appreciation rights were granted to any
of the named executive officers.
(4) In certain instances, options are granted to executive officers during the
subsequent fiscal year in recognition of services rendered during the prior
fiscal year.
(5) Represents payments to Mr. Dickinson pursuant to the 1994 Carnival Cruise
Lines Key Management Incentive Plan, which allows key management employees
of CCL to participate in an incentive award pool based upon the net income
of CCL reaching certain predetermined levels.
(6) Represents amounts payable to Mr. Lanterman under an arrangement pursuant
to which he receives a bonus based on a specified percentage of the
consolidated net income of HAL Antillen N.V. and HAL, our subsidiaries.
(7) Represents amounts paid on behalf of Mr. Lanterman pursuant to the Holland
America Line Inc. Profit Sharing Plan (the "Profit Sharing Plan") and the
Holland America Line Inc. Employee Savings Plan (the "Savings Plan"). The
amounts paid or accrued to Mr. Lanterman under the Profit Sharing Plan in
fiscal 2004, 2003 and 2002 were $14,350, $12,000 and $12,000, respectively.
The employer contributions made on behalf of Mr. Lanterman
41
under the Savings Plan for fiscal 2004, 2003 and 2002 were $4,100, $4,000
and $3,700, respectively. The Profit Sharing Plan and the Savings Plan are
generally available to all employees of HAL.
(8) Represents Mr. Ratcliffe's compensation for the fiscal year ended November
30, 2003 (including for the period through April 16, 2003, as Chief
Executive Officer of P&O Princess Cruises plc).
(9) Represents cash amounts payable to Mr. Ratcliffe under his employment
agreement pursuant to which he receives a bonus contingent upon the net
income of certain of specified cruise and tour brands, including Cunard
Line, Ocean Village, P&O Cruises, P&O Cruises (Australia), P&O Travel,
Princess Cruises, Princess Tours, Seabourn Cruise Line and Swan Hellenic
units. The cash amount represents 50% of Mr. Ratcliffe's bonus, the other
50% of which is payable in shares of Carnival plc pursuant to the Deferred
Bonus Plan described in note (10) below.
(10) Represents (a) the value of 10,000 shares of restricted Carnival
Corporation common stock, based on the closing market price of Carnival
Corporation common stock on the NYSE on the date of grant, and (b) the
value of awards over shares in Carnival plc in respect of 50% of Mr.
Ratcliffe's annual bonus described in note (9) above. We anticipate that
the share awards in respect of Mr. Ratcliffe's 2004 bonus will be granted
to him in February 2005. Pursuant to the terms of the P&O Princess Cruises
Deferred Bonus and Co-Investment Matching Plan (the "Deferred Bonus Plan"),
50% of Mr. Ratcliffe's bonus is payable in the form of a conditional right
to receive Carnival plc shares after a three-year retention period. As of
November 30, 2004, Mr. Ratcliffe held 22,167 share awards under the
Deferred Bonus Plan, which were granted in respect of his 2002 and 2003
bonuses. At November 30, 2004, based on the closing price of Carnival plc
ordinary shares on such date of (pound)29.24, such 22,167 restricted shares
had a value of (pound)648,163 (or $1,227,621 based on the November 30, 2004
exchange rate of $1.894:(pound)1), which shares do not have the right to
dividenDs until the end of the retention period.
(11) Represents options to purchase ordinary shares of Carnival plc granted to
Mr. Ratcliffe on April 15, 2003.
(12) Represents the value of 128,473 Carnival plc ordinary shares at the April
15, 2003 share price of $24.37 (based on an exchange rate of
$1.5748:(pound)1) acquired by Mr. Ratcliffe on April 15, 2003 through tHe
acceleration resulting from the DLC transaction of LTIP options, LTIP
awards, share awards and matching awards, granted to him by P&O Princess
Cruises plc in his capacity as Chief Executive Officer of P&O Princess
Cruises plc.
(13) Represents employer contributions made on behalf of Mr. Ratcliffe under the
Princess Cruises Retirement Savings Plan.
Additional information with respect to Carnival plc's compensation and
reimbursement practices during fiscal 2004 for non-employee (or non-executive)
directors is included in the Carnival plc Directors' Remuneration Report, which
is attached as Annex E to this proxy statement.
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth all stock options granted to our Chief Executive
Officer and our four other most highly compensated executive officers during
fiscal 2004.
INDIVIDUAL GRANTS
------------------------------------------------------------------------------
NUMBER OF PERCENT OF
SECURITIES TOTAL OPTIONS
UNDERLYING GRANTED TO EXERCISE OR GRANT DATE
OPTIONS GRANTED EMPLOYEES IN BASE PRICE EXPIRATION PRESENT
NAME (#)(1)(2) FISCAL YEAR(3) ($/SH)(4) DATE VALUE ($)(5)
- ------------------- --------------- -------------- ----------- ------------ ------------
Micky Arison 120,000 2.42% $49.085 10/18/2014 $1,998,000
Howard S. Frank 100,000 2.02% 49.085 10/18/2014 1,665,000
Robert H. Dickinson 80,000 1.61% 46.230 08/02/2014 1,289,600
A. Kirk Lanterman -- -- -- -- --
Peter Ratcliffe 50,000 1.01% 43.610 04/21/2014 751,500
- ----------------------
(1) Represents options granted in respect of Carnival Corporation common stock,
as no options in respect of Carnival plc ordinary shares were granted to
our CEO and four other most highly compensated executive officers during
fiscal 2004. No stock appreciation rights were granted to the executive
officers in fiscal 2004.
(2) The term for each option is ten years and, subject to accelerated vesting
upon the death or disability of the option holder, each option is
exercisable in amounts equal to twenty percent of the aggregate number of
shares underlying the option, on the first through fifth anniversaries of
the grant date.
(3) Represents the percent of the aggregate of Carnival Corporation and
Carnival plc options granted.
(4) Represents fair market value of Carnival Corporation common stock at date
of grant.
(5) The Black-Scholes option pricing model was chosen to estimate the Grant
Date Present Value of the Carnival Corporation options set forth in this
table at $15.03 per share at April 21, 2004, $16.12 per share at August 2,
2004 and $16.65 per share at October 18, 2004. Our use of this model should
not be construed as an endorsement of its accuracy at valuing options. All
stock option models require a prediction about the future movement of the
stock price. The Grant Date Present Values presented in the table were
determined in part using the following assumptions:
CARNIVAL CORPORATION
APRIL 21, 2004 AUGUST 2, 2004 OCTOBER 18, 2004
Expected volatility......... 35.00% 35.00% 35.00%
Risk-free interest rate..... 3.76% 3.76% 3.56%
Expected dividend yield..... 1.35% 1.35% 1.43%
Expected option life........ 5.75 years 5.75 years 5.75 YEars
42
The real value of the options in this table depends upon the actual
performance of Carnival Corporation common stock during the applicable
period and upon when they are exercised. The approach used in developing
the assumptions upon which the Black-Scholes valuation was done is
consistent with the requirements of Statement of Financial Accounting
Standards No. 123, "Accounting for Stock-Based Compensation."
43
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES(1)
The following table provides information on the values of the exercised and
unexercised options held by our Chief Executive Officer and our four other most
highly compensated executive officers at November 30, 2004.
NUMBER OF SECURITIES
UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS AT
FISCAL YEAR END(#) FISCAL YEAR END ($)
----------------------------------------------------------
SHARES VALUE
ACQUIRED REALIZED
NAME ON EXERCISE(#)(1) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------- ----------------- -------- ----------- ------------- ----------- -------------
Micky Arison -- -- 600,000 480,000 $8,727,930(2) $8,358,360(2)
Howard S. Frank -- -- 500,000 400,000 8,147,575(2) 6,965,300(2)
Robert H. Dickinson 128,000 $3,007,740 320,000 256,000 4,482,980(2) 5,054,860(2)
A. Kirk Lanterman -- -- -- -- -- --
Peter Ratcliffe -- -- 0 50,000 0 470,500(2)
0 0 1,587,340(4)
51,188(3)
- -------------------
(1) Except as otherwise indicated, represents options granted in respect of
Carnival Corporation common stock. No stock appreciation rights are held by
any of the named executive officers.
(2) The value of the unexercised options is based upon the difference between
the exercise price and the average of the high and low market prices of
Carnival Corporation common stock on November 30, 2004 of $53.02.
(3) Represents stock options granted in respect of Carnival plc ordinary
shares.
(4) The value of the unexercised options is based upon the difference between
the exercise price and the mid-market price of Carnival plc ordinary shares
on November 30, 2004 of $55.38 (based on an exchange rate of
$1.894:(pound)1).
Additional information with respect to option values for the directors of
Carnival plc for the financial year ended November 30, 2004 is included in the
Carnival plc Directors' Remuneration Report, which is attached as Annex E to
this proxy statement.
44
COMPENSATION AGREEMENTS
EXECUTIVE LONG-TERM COMPENSATION AGREEMENTS
Carnival Corporation has entered into Executive Long-Term Compensation
Agreements (the "Compensation Agreements") with Micky Arison, its Chairman of
the Board and Chief Executive Officer, Howard S. Frank, its Vice Chairman of the
Board and Chief Operating Officer, and Robert H. Dickinson, President and Chief
Executive Officer of CCL (each an "Officer"). The Compensation Agreements
provide that during the term of such Officer's employment, Carnival Corporation
will provide long-term compensation (in addition to his annual compensation
consisting of a base salary and annual bonus, which in the case of Mr. Dickinson
is awarded under the 1994 Carnival Cruise Lines Key Management Incentive Plan)
in the form of annual grants to each Officer, contingent upon satisfactory
performance, as follows: Mr. Arison, 60,000 restricted shares of common stock
and 120,000 options to purchase common stock; Mr. Frank, 50,000 restricted
shares of common stock and 100,000 options to purchase common stock; and Mr.
Dickinson, 40,000 restricted shares of common stock and 80,000 options to
purchase common stock.
The options vest in five equal annual installments beginning one year from the
date of grant and the restricted shares of common stock vest five years from the
date of grant. Unvested options and restricted shares of common stock are
forfeited if an Officer's employment is terminated for cause, if he engages in
competition with Carnival Corporation or if he violates the nondisclosure
provisions of the Compensation Agreement.
EMPLOYMENT AGREEMENTS
EMPLOYMENT AGREEMENT WITH A. KIRK LANTERMAN. On December 1, 2004, HAL entered
into a letter agreement with Mr. Lanterman regarding the terms of his employment
for the month of December 2004 (the "December Employment Agreement"). Pursuant
to the December Employment Agreement, Mr. Lanterman was paid $62,500, less
applicable taxes and other standard deductions, including, but not limited to,
medical insurance premiums and previously authorized 401(k) contributions, if
any. In accordance with the December Employment Agreement, Mr. Lanterman
resigned as a HAL employee effective December 31, 2004.
EMPLOYMENT AGREEMENT WITH PETER RATCLIFFE. Peter Ratcliffe has entered into an
employment agreement under which he acts as Chief Executive Officer of P&O
Princess Cruises International responsible for the Cunard Line, Ocean Village,
P&O Cruises, P&O Cruises (Australia), P&O Travel, Princess Cruises, Princess
Tours, Seabourn Cruise Line and Swan Hellenic units (the "Covered Operations").
Beginning December 1, 2004, Seabourn Cruise Line will no longer be included
among the Covered Operations. Mr. Ratcliffe's base salary is $1.1 million with
an annual bonus based on a specified percentage of the adjusted net income from
the Covered Operations. Fifty percent of the annual bonus is payable in cash
with the remaining fifty percent payable in the form of a right to receive
shares in Carnival plc ("share awards") after a retention period of three years
pursuant to the terms of the Deferred Bonus Plan. The employment agreement
provides that Carnival Corporation will provide an annual grant of options to
purchase 50,000 shares of Carnival Corporation common stock, contingent upon
satisfactory performance. The options vest in five equal annual installments
beginning one year from the date of grant. Unvested options are forfeited if Mr.
Ratcliffe's employment is terminated for cause or because he is in material
violation of the non-competition, non-disclosure or intellectual property
provisions of his employment agreement, or by Mr. Ratcliffe prior to the age of
60 other than as a result of a terminal medical condition or for good reason as
defined in his employment agreement.
Mr. Ratcliffe is also entitled to certain fringe benefits available to other
senior executives as well as participation in the P&O Princess Cruises Pension
Scheme and the Princess Cruises Supplemental Executive Retirement Plan.
If Mr. Ratcliffe's employment agreement is terminated by Carnival plc without
"cause" or is terminated by Mr. Ratcliffe with "good reason" (as such terms are
defined in the employment agreement), Mr. Ratcliffe is entitled to compensation
of base salary, a bonus equal to the bonus paid the year prior to termination
and certain other benefits unless Mr. Ratcliffe becomes eligible for similar
benefits from another employer prior to expiration of 12 months from the date of
termination. If Mr. Ratcliffe's employment is terminated for cause, no
additional compensation is due. Termination for reasons other than termination
for cause, termination by Mr. Ratcliffe without good reason or termination by
reason of a material breach of the non-disclosure or intellectual property
provisions of
45
the employment agreement, permits Mr. Ratcliffe to retain his share awards and
matching awards for the full retention period, subject to certain exceptions.
Additional long-term compensation information for the directors of Carnival plc
for the financial year ended November 30, 2004 is included in the Carnival plc
Directors' Remuneration Report, which is attached as Annex E to this proxy
statement.
CONSULTING AGREEMENTS
In 1999 and years prior thereto, A. Kirk Lanterman deferred receipt of a portion
of his annual bonus. In exchange, Carnival Corporation and Mr. Lanterman entered
into a Retirement and Consulting Agreement, which provides that Carnival
Corporation will pay him the deferred bonus amounts plus interest in monthly
installments over the 15 years following his retirement.
On November 30, 2004, HAL entered into an 11-month Consulting Agreement (the
"Consulting Agreement") with Mr. Lanterman. Pursuant to the Consulting
Agreement, Mr. Lanterman resigned, effective as of the close of business on
November 30, 2004, with respect to all positions as an officer and/or director
of all affiliates and divisions of HAL, other than his positions as a director
of Carnival Corporation and Carnival plc. Effective December 1, 2004 and through
the term of the Consulting Agreement, Mr. Lanterman will have the title of
"Chairman" of HAL, which shall be a non-executive title. During the term of the
Consulting Agreement, Mr. Lanterman will provide such consulting services and
other assistance as may be required by HAL's President on strategic, financial
and historical analyses and other various services that are specified by HAL's
President, up to a maximum of 1,000 hours annually.
The initial term of the Consulting Agreement will be from January 1, 2005
through November 30, 2005, and renews automatically for one additional year
unless earlier terminated by either party, but in no event will the consulting
agreement be extended beyond November 30, 2006.
The Consulting Agreement provides that Mr. Lanterman will receive annual
compensation of $788,000, payable in monthly installments. He will not
participate in any incentive compensation plans offered by HAL or any affiliate
of HAL, but will be eligible for medical and dental insurance and certain other
benefits. The Consulting Agreement contains confidentiality and indemnification
provisions and may be terminated by HAL for good cause or upon the death or
disability of Mr. Lanterman. HAL has also agreed to indemnify Mr. Lanterman from
any losses arising from his provision of the consulting services subject to the
Consulting Agreement, subject to customary exceptions. At the end of the term of
the Consulting Agreement, no further severance or other payments shall be
provided to Mr. Lanterman, except as set forth in the Retirement and Consulting
Agreement between Mr. Lanterman and HAL as discussed above.
46
EQUITY COMPENSATION PLANS
CARNIVAL CORPORATION
Set forth below is a table that summarizes compensation plans (including
individual compensation arrangements) under which Carnival Corporation equity
securities are authorized for issuance as of November 30, 2004.
NUMBER OF SECURITIES
NUMBER OF SECURITIES TO WEIGHTED-AVERAGE REMAINING AVAILABLE FOR FUTURE
BE ISSUED UPON EXERCISE EXERCISE PRICE OF ISSUANCE UNDER EQUITY
OF OUTSTANDING OPTIONS, OUTSTANDING OPTIONS, COMPENSATION PLANS (EXCLUDING
PLAN CATEGORY WARRANTS AND RIGHTS WARRANTS AND RIGHTS SECURITIES REFLECTED IN COLUMN(A))
- ------------------------------ ----------------------- -------------------- ----------------------------------
Equity compensation plans
approved by security holders 14,913,832(1) $34.99 34,407,041(2)(3)
Equity compensation plans not
approved by security holders 28,000(4) 0 0
----------------------- -------------------- ----------------------------------
Total 14,941,832 $34.99 34,407,041
(1) Includes outstanding options to purchase Carnival Corporation common stock
under the Carnival Cruise Lines, Inc. 1987 Stock Option Plan, Carnival
Corporation 1992 Stock Option Plan, Carnival Corporation 2002 Stock Plan,
Carnival Corporation 1993 Outside Directors' Stock Option Plan and Carnival
Corporation 2001 Outside Director Stock Plan. Also includes restricted
stock units outstanding under the Carnival Corporation 2002 Stock Plan.
(2) Includes Carnival Corporation common stock available for issuance as of
November 30, 2004 as follows: 2,746,018 under the Carnival Corporation
Employee Stock Purchase Plan, 31,111,023 under the Carnival Corporation
2002 Stock Plan and 550,000 under the Carnival Corporation 2001 Outside
Director Stock Option Plan. This figure excludes securities reflected in
column (a).
(3) In addition to options, the Carnival Corporation 2002 Stock Plan and, in
the event the shareholders approve the Outside Director Plan as described
above, such plans provide for the award of restricted stock without
limitation on the number of shares than can be awarded in either form.
(4) Includes outstanding options to purchase Carnival Corporation common stock
under the Outside Director Plan which were granted subject to shareholder
approval as described above.
CARNIVAL PLC
Set forth below is a table that summarizes compensation plans (including
individual compensation arrangements) under which Carnival plc equity securities
are authorized for issuance as of November 30, 2004.
NUMBER OF SECURITIES
NUMBER OF SECURITIES TO WEIGHTED-AVERAGE REMAINING AVAILABLE FOR FUTURE
BE ISSUED UPON EXERCISE EXERCISE PRICE OF ISSUANCE UNDER EQUITY
OF OUTSTANDING OPTIONS, OUTSTANDING OPTIONS, COMPENSATION PLANS (EXCLUDING
PLAN CATEGORY WARRANTS AND RIGHTS WARRANTS AND RIGHTS(1) SECURITIES REFLECTED IN COLUMN(A))
- ------------------------------ ----------------------- ---------------------- ----------------------------------
Equity compensation plans
approved by security holders 3,283,367 $38.20 3,187,049
Equity compensation plans not
approved by security holders 0 0 0
----------------------- ---------------------- ----------------------------------
Total 3,283,367 $38.20 3,187,049
- ---------------------
(1) Converted from sterling, if applicable, using the exchange rate of
$1.894:(pound)1 on November 30, 2004.
47
DEFINED BENEFIT AND OTHER PLANS
CARNIVAL CORPORATION
The following table sets forth the combined estimated pension benefits payable
at age 65 (the "Normal Retirement Date"), pursuant to Carnival Corporation's
Supplemental Executive Retirement Plan (the "SERP") and Nonqualified Retirement
Plan for Highly Compensated Employees (the "Carnival Corporation Retirement
Plan").
YEARS OF SERVICE
-----------------------------------------------------------------
PAY 15 20 25 30 35
- ---------- -------- ---------- ---------- ---------- ----------
$1,750,000 $500,728 $ 675,728 $ 850,728 $ 850,728 $ 850,728
$2,000,000 $575,728 $ 775,728 $ 975,728 $ 975,728 $ 975,728
$2,250,000 $650,728 $ 875,728 $1,100,728 $1,100,728 $1,100,728
$2,500,000 $725,728 $ 975,728 $1,225,728 $1,225,728 $1,225,728
$2,750,000 $800,728 $1,075,728 $1,350,728 $1,350,728 $1,350,728
Carnival Corporation established the SERP to provide benefits to a select group
of management or highly compensated employees. Currently, only Robert H.
Dickinson and Howard S. Frank are eligible to participate. The SERP provides a
benefit equal to 50% of cash compensation (as defined in the SERP) reduced
proportionately for each year of service less than 25. Mr. Dickinson and Mr.
Frank have already satisfied the 25-year service requirement. The SERP provides
an early retirement benefit at age 55 after completion of 15 years of service,
subject to a reduction of 0.25% for each month that distribution of benefits
precedes the participant's Normal Retirement Date. The SERP benefit is offset
for any benefit payable under the Carnival Corporation Retirement Plan and for
Social Security benefits. The form of payment is either a lump-sum, life annuity
(with either a 5-year or 10-year certain benefit) or a joint and survivor
annuity for married participants.
A participant's benefits under the Carnival Corporation Retirement Plan are
calculated based on an employee's length of service with Carnival Corporation
and the average of the participant's five highest consecutive years of
compensation (including base pay, overtime, bonuses and commissions) out of the
last ten years of service. The eligible compensation with respect to the
individuals named in the Summary Compensation Table includes base salary and
cash bonuses. The Carnival Corporation Retirement Plan provides an early
retirement benefit at age 55 after completion of 15 years of service, subject to
a reduction of 0.5% for each month that distribution of benefits precedes the
participant's Normal Retirement Date.
The normal form of payment is a straight life annuity with benefits ceasing at
the later of the death of the participant or five years from the date of first
payment. If the employee is married, pension benefits are presumptively payable
on a reduced 50% joint and survivor annuity basis with the employee's spouse as
the contingent annuitant. If the employee is not married, pension benefits are
paid as a lump sum to the participant's beneficiary or estate, as applicable.
For retired or terminated employees, other forms of distribution are available
under the Carnival Corporation Retirement Plan.
The Carnival Corporation Retirement Plan does not reduce benefits on account of
Social Security (or any other benefit), other than as reflected in the benefit
formula which is integrated with Social Security.
As of December 31, 2004, the years of credited service under the Carnival
Corporation Retirement Plan for each of the executive officers named in the
Summary Compensation Table, except for A. Kirk Lanterman and Peter Ratcliffe,
who are not eligible for participation in the Carnival Corporation Retirement
Plan, was as follows: Micky Arison, age 55, with 30 credited years of service;
Robert H. Dickinson, age 62, 30 years; and Howard S. Frank, age 64, 16 years. In
consideration of Mr. Frank's forfeiture of retirement benefits from his prior
employer, on April 17, 1995, the Compensation Committee approved an agreement
with Mr. Frank whereby Carnival Corporation agreed to compensate Mr. Frank upon
his retirement for benefits he would have received under the Carnival
Corporation Retirement Plan if he had been credited with an additional 13 years
of service in addition to the actual years of credited service, reduced by the
amounts payable to him under the Carnival Corporation Retirement Plan. He is
also credited with an additional 13 years of service under the SERP.
48
Carnival Corporation has a benefit limitation policy for the Carnival
Corporation Retirement Plan consistent with Section 415 of the Internal Revenue
Code of 1986 (the "Code") applicable only to Mr. Arison. The annual compensation
covered by the Carnival Corporation Retirement Plan for the calendar year 2004
for Mr. Arison is limited to $301,903 (as may be indexed) pursuant to Section
401(a)(17) of the Code. Based on Mr. Arison's level of compensation and his 30
credited years of service, the estimated benefits payable to Mr. Arison at the
Normal Retirement Date pursuant to the Carnival Corporation Retirement Plan is
$132,850, being the maximum benefit under the plan, which will not change with
additional years of credited service.
CARNIVAL PLC
UK PENSION SCHEME
Pursuant to the P&O Princess Cruises Pension Scheme (the "UK Scheme"), a UK
Inland Revenue approved defined-benefit scheme, participants generally accrue
pension rights at a rate of up to 1/60th of final salary for each year of
service, although the accrual rate varies by employee. For this purpose, final
salary is generally defined as the basic salary received in the final 12 months
of service, subject to certain adjustments. Normal retirement age is 63 for
general employees and 60 for sea staff and certain senior executives. Additional
cash supplements are paid depending on the number of years of pensionable
service.
Peter Ratcliffe, our only named executive officer who is eligible for pension
benefits from Carnival plc, has 34 years of credited service under the UK
Scheme. Under the UK Scheme, in the event of compulsory early retirement, or
voluntary early retirement after the age of 55, Mr. Ratcliffe would receive a
minimum pension of two-thirds of his final salary subject to UK Inland Revenue
limits. The estimated annual benefits payable upon retirement to Mr. Ratcliffe
under the UK Scheme at the normal retirement age of 60 is $802,933 based on
unchanged basic salary.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
Carnival plc has established the Princess Cruises Supplemental Executive
Retirement Plan in the United States (the "Supplemental Plan"). This plan
provides benefits to supplement those received from other plans, including the
UK Scheme. The overall effect is to provide, on retirement, a pension of 65% of
final salary, subject to having completed 15 years of service. For this purpose,
final salary is the average basic salary for the five years immediately
preceding retirement. Peter Ratcliffe's service in the Supplemental Plan
commenced on September 1, 1986, so as his service exceeds 15 years, the maximum
pension would be payable on retirement. Normal retirement age is 60. If benefits
from the U.K. Scheme exceed those resulting from the Supplemental Plan, no
further amounts are payable under the Supplemental Plan. Currently, benefits
payable to Mr. Ratcliffe under the UK Scheme exceed those resulting from the
Supplemental Plan and, accordingly, no amounts are payable to him under the
Supplemental Plan.
Additional information with respect to pension plan arrangements for Carnival
plc for the financial year ended November 30, 2004 is included in the Carnival
plc Directors' Remuneration Report, which is attached as Annex E to this proxy
statement.
49
REPORT OF THE COMPENSATION COMMITTEES
Carnival Corporation and Carnival plc are two separate legal entities and,
therefore, each has a separate board of directors, each of which in turn has its
own Compensation Committee. As there is a single management team, the
Compensation Committees (which have four identical members), make one set of
determinations in relation to both companies.
This report of the Compensation Committees sets out the compensation policies of
the Compensation Committee with respect to the Chief Executive Officer and the
four other most highly compensated executive officers for the year ended
November 30, 2004, details of whose compensation is set forth under "EXECUTIVE
COMPENSATION" in accordance with U.S. Securities and Exchange Commission
requirements. Further information on our compensation policies as required under
applicable UK law is set out in the Carnival plc Directors' Remuneration Report,
which is attached as Annex E to this proxy statement.
The Compensation Committees are responsible for annually approving the cash
compensation payable to the executive officers and for the administration of the
Carnival Corporation and Carnival plc equity-based incentive plans.
The Compensation Committee for each of Carnival Corporation and Carnival plc is
currently comprised of Modesto A. Maidique, Richard J. Glasier, John P. McNulty
and Sir John Parker, each of whom is independent as defined by the listing
standards of the NYSE and the UK Combined Code.
COMPENSATION PHILOSOPHY
The key components of the compensation of the Chief Executive Officer and the
other executive officers are base salary, annual bonus and equity-based
incentives. The overall objective is to create compensation packages for
executive officers, including equity-based incentives, that are at approximately
the 75th percentile of comparable peer companies, as well as to provide both
short-term rewards and long-term incentives for positive individual and
corporate performance.
Carnival Corporation & plc is a global entity with executives working and living
in different parts of the world with a majority of senior employees located in
the U.S., and the remainder in the UK and Italy. As a global entity, it is
challenging to establish consistent compensation practices across geographic and
corporate lines that satisfy the particular requirements of all jurisdictions.
Since the largest presence of executives is in the U.S., U.S. compensation
practice shapes our compensation policy. However, the Compensation Committees
seek to incorporate UK compensation principles, including the UK Combined Code,
as far as practicable, unless the application of those principles would be
uncompetitive in the U.S. or other markets, would result in substantial
inconsistencies within the Carnival Corporation & plc group, or would restrict
the Carnival Corporation & plc group's ability to transfer executives between
brands. The overall remuneration objective is to pay high rewards for the
continued delivery of high performance..
The various components of executive compensation are discussed below.
BASE SALARIES
Overall, the base salaries of executive officers, including the base salary of
the Chief Executive Officer, are set at a level the Compensation Committees
believe to be at approximately the 50th percentile comparable peer companies.
The objective is to emphasize the variable annual bonus as the most important
cash compensation feature of executive compensation as a reward for
contributions made towards achieving Carnival Corporation & plc's goals,
including profitability.
BONUSES
The emphasis on the annual discretionary bonus for the Chief Executive Officer,
Chief Operating Officer and other corporate level executive officers allows
Carnival Corporation & plc greater flexibility in rewarding favorable individual
and corporate performance than possible under a salary-oriented structure.
Although there is no specific
50
relationship between the bonuses for each of the Chief Executive Officer and the
Chief Operating Officer and their respective performances for the 2004 fiscal
year, the Compensation Committees considered generally the individual
performance of such executives, as well as the financial performance of Carnival
Corporation & plc for fiscal 2004 and the shareholder return reflected in the
Stock Performance Graphs appearing elsewhere in this proxy statement.
The annual bonuses to the heads of our operating companies are based on the
financial performance of their respective operating units. The annual bonus to
Robert H. Dickinson is based on the financial performance of Carnival Cruise
Lines and is determined pursuant to the terms of the 1994 Carnival Cruise Lines
Key Management Incentive Plan (the "CCL Plan"). The annual bonus for A. Kirk
Lanterman, the former Chief Executive Officer of HAL was based on the financial
performance of Hal Antillen N.V and HAL. The annual bonus for Peter Ratcliffe is
based on the financial performance of the brands for which he was responsible
during the fiscal year (for 2004 being Cunard Line, Ocean Village, P&O Cruises,
P&O Cruises (Australia), P&O Travel, Princess Cruises, Princess Tours, Seabourn
Cruise Line and Swan Hellenic).
EQUITY-BASED INCENTIVES
The third component of Carnival Corporation & plc's executive compensation is
comprised of stock-based incentive plans. Whereas the cash bonus payments are
intended to reward positive short-term individual and corporate performance,
grants under the equity-based plans are intended to provide executives with
longer-term incentives, which appreciate in value with the continued favorable
future performance of Carnival Corporation & plc. The Compensation Committees
approve grants of stock options and restricted stock pursuant to the 2002 Stock
Plan, the Carnival plc Executive Share Option Plan and the other equity-based
incentive plans described elsewhere in this proxy statement based on the
individual performance of the executive officers taking into account the
following:
o The overall financial performance of Carnival Corporation & plc in the
previous fiscal year; and
o The personal contribution that each executive has made to the:
o Development of the applicable division's strategy to deliver
future growth;
o Ongoing creation of a competitive cost structure; and
o Overall corporate success of Carnival Corporation & plc through
the spread of best practice.
OTHER COMPENSATION
Carnival Corporation and Carnival plc have entered into various
compensation-related agreements with individual officers. See "EXECUTIVE
COMPENSATION--EXECUTIVE LONG-TERM COMPENSATION AGREEMENTS" and "EXECUTIVE
COMPENSATION--EMPLOYMENT AGREEMENTS." Such agreements include stock compensation
agreements and employment agreements. The Compensation Committees and the boards
of directors will continue to consider such arrangements in the future in
connection with circumstances that warrant an individualized compensation
arrangement.
In fiscal 2004, some of Carnival Corporation's executive officers also
participated in Carnival Corporation's nonqualified defined benefit pension plan
and all were able to participate in Carnival Corporation's nonqualified
401(k)/profit sharing plan. In addition, two of Carnival Corporation's executive
officers participated in Carnival Corporation's supplemental executive
retirement plan and Peter Ratcliffe participated in the Carnival plc UK Scheme
and Supplemental Plan.
ADVISORS
The Compensation Committees have engaged an outside compensation consultant,
Watson, Wyatt & Company, to advise them regarding the compensation policies of
Carnival Corporation & plc.
THE COMPENSATION COMMITTEE THE COMPENSATION COMMITTEE
OF CARNIVAL CORPORATION OF CARNIVAL PLC
- ----------------------------- -----------------------------
Modesto A. Maidique, Chairman Modesto A. Maidique, Chairman
Richard J. Glasier Richard J. Glasier
John P. McNulty John P. McNulty
Sir John Parker Sir John Parker
51
STOCK PERFORMANCE GRAPHS
CARNIVAL CORPORATION
The following graph compares the Price Performance of $100 if invested in
Carnival Corporation common stock with the Price Performance of $100 if invested
in each of the S&P 500 Index, the Dow Jones Industry Group REQ (recreational
product and services index) and the FTSE 100 Index. The Price Performance, as
used in the Performance Graph, is calculated by assuming $100 is invested at the
beginning of the period in Carnival Corporation common stock at a price equal to
the market value. At the end of each fiscal year the total value of the
investment is computed by taking the number of shares owned, assuming Carnival
Corporation dividends are reinvested on an annual basis, times the market price
of the shares at the end of each fiscal year.
[INSERT GRAPH]
1999 2000 2001 2002 2003 2004
---- ---- ---- ---- ---- ----
Carnival Corporation 100 52 61 67 85 130
Dow Jones Industry Group/REQ 100 85 76 79 82 112
S&P 500 Index 100 95 84 70 81 91
FTSE 100 Index 100 95 83 68 74 83
CARNIVAL PLC
The following graph compares the Price Performance of $100 invested in Carnival
plc ADSs", each representing one ordinary share of Carnival plc (prior to April
17, 2003 each ADS represented four ordinary shares of Carnival plc), with the
Price Performance of $100 invested in each of the S&P 500 Index, the Dow Jones
Industry Group REQ (recreational product and services index) and the FTSE 100
Index. The Price Performance, as used in the Performance Graph, is calculated by
assuming $100 was invested in Carnival plc ADSs at a price equal to the market
value on October 23, 2000, the date on which Carnival plc ordinary shares and
ADSs were originally listed on the LSE and the NYSE, respectively, upon the
demerger of the cruise business of P&O. Prior to October 23, 2000, there was no
public market for Carnival plc equity securities. The total value of the
investment at the end of each subsequent fiscal year is computed by taking the
number of ADSs owned, assuming Carnival plc dividends are reinvested on an
annual basis, times the market price of ADSs at the end of each fiscal year.
[INSERT GRAPH]
OCT. 23,
2000 2000 2001 2002 2003 2004
---- ---- ---- ---- ---- ----
Carnival plc 100 88 133 185 257 415
Dow Jones Industry Group/REQ 100 104 104 110 119 162
S&P 500 Index 100 92 81 68 78 88
FTSE 100 100 97 85 70 76 85
52
INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS
AUDIT AND NON-AUDIT FEES
PricewaterhouseCoopers were the auditors of Carnival Corporation during 2003 and
2004 and of Carnival plc since April 18, 2003. KPMG Audit plc were the auditors
of Carnival plc for the period January 1, 2003 through April 17, 2003. Aggregate
fees for professional services rendered by PricewaterhouseCoopers LLP for the
years ended November 30, 2004 and 2003 and by KPMG Audit plc for the period
January 1, 2003 through April 17, 2003 are set forth below.
CARNIVAL PLC
CARNIVAL CARNIVAL JANUARY 1,
CORPORATION & CORPORATION & 2003 THROUGH
PLC 2004 PLC 2003 APRIL 17, 2003
(IN MILLIONS)(1) MILLIONS)(1)(2) (IN MILLIONS)(3)
---------------- --------------- ----------------
Audit Fees $3.9 $1.5 $0.1
Audit-Related Fees 0.0(4) 0.7 0.8
Tax Fees .5 0.2 0.9
All Other Fees 0.2 0.1 --
---------------- --------------- ----------------
Total $4.6 $2.5 $1.8
================ =============== ================
- ------------------
(1) Represents fees for professional services rendered by
PricewaterhouseCoopers LLP for Carnival Corporation & plc.
(2) Includes fees for audit and audit related services for Carnival Corporation
for 2003 and for Carnival plc for the period April 18, 2003 through
November 30, 2003.
(3) Represents fees for professional services rendered by KPMG Audit plc for
Carnival plc.
(4) Audit-Related Fees were $48,000, primarily for employee benefit plan
audits.
AUDIT FEES for PricewaterhouseCoopers LLP for 2004 and 2003 were for
professional services rendered for the audits of the consolidated financial
statements of Carnival Corporation & plc, quarterly review of these consolidated
financial statements included in our joint quarterly reports on Form 10-Q,
consents, opinions on management's assessment of and our effectiveness of
internal control over financial reporting in connection with our compliance with
Section 404 of the Sarbanes-Oxley Act of 2002, comfort letters, registration
statements, statutory audits of various international subsidiaries and other
agreed upon procedures required to complete the year end audits of the
consolidated financial statements. Substantially all of the increase in Audit
Fees in 2004 compared to 2003 is attributable to the Section 404 report. Audit
fees for KPMG Audit plc for the period from January 1, 2003 through April 17,
2003 were for professional services rendered for a quarterly review.
AUDIT-RELATED FEES for PricewaterhouseCoopers LLP for 2003 were for assurance
and related services primarily associated with the DLC transaction with P&O
Princess Cruises plc, other due diligence services, employee benefit plan audits
and internal control reviews. Audit-related fees for KPMG Audit plc for the
period from January 1, 2003 through April 17, 2003 were primarily for services
related to the DLC transaction.
TAX FEES for PricewaterhouseCoopers LLP for 2004 and 2003 were for services
related to tax compliance and tax planning. Tax fees for KPMG Audit plc for the
period from January 1, 2003 through April 17, 2003 were primarily for services
related to the DLC transactions.
ALL OTHER FEES for PricewaterhouseCoopers LLP for 2004 and 2003 were primarily
for actuarial services and employee benefit plan consulting and Immigration and
Naturalization Service certifications.
All of the services described above were approved by the Audit Committees, and
in doing so, the Audit Committees did not rely on the DE MINIMIS exception set
forth in Rule 2-01(c)(7)(i)(C) under Regulation S-X.
53
POLICY ON AUDIT COMMITTEE PRE-APPROVAL OF AUDIT AND PERMISSIBLE NON-AUDIT
SERVICES OF INDEPENDENT AUDITORS
In December 2003, the Audit Committees adopted Key Policies and Procedures which
address, among other matters, pre-approval of audit and permissible non-audit
services provided by the independent auditors. The Key Policies and Procedures
require that all services to be provided by the independent auditors must be
approved by the Audit Committees. To facilitate smaller projects that may arise
between scheduled meetings of the Audit Committees, the Committees have
pre-approved the provision of certain defined services by the independent
auditors, subject to an annual threshold of $100,000. For both types of
pre-approval, the Audit Committees consider whether such services are consistent
with the rules of the U.S. Securities and Exchange Commission on auditor
independence.
54
REPORT OF THE AUDIT COMMITTEES
Carnival Corporation and Carnival plc are two separate legal entities and,
therefore, each has a separate board of directors, each of which in turn has its
own Audit Committee. In accordance with their charter (a copy of which is
attached as Annex F to this proxy statement), each Audit Committee assists the
relevant board of directors in carrying out its oversight of:
o the integrity of the relevant financial statements;
o the company's compliance with legal and regulatory requirements;
o the independent auditors' qualifications and independence; and
o the performance of the company's internal audit functions and
independent auditor and independent registered public accountants.
Both Audit Committees are subject to the audit committee independence
requirements under the corporate governance standards of the NYSE and relevant
U.S. Securities and Exchange Commission rules, and the Audit Committee of
Carnival plc is also subject to the requirements of the UK Combined Code. The
two Audit Committees have identical members and each currently consists of five
independent (as defined by the listing standards of the NYSE currently in effect
and the UK Combined Code), non-employee directors. Each board of directors has
determined that Stuart Subotnick is both "independent" and an "audit committee
financial expert," as defined by SEC rules. In addition, the board of Carnival
plc has determined that Stuart Subotnick has "recent and relevant financial
experience" for purposes of the UK Combined Code.
Management has primary responsibility for Carnival Corporation & plc's financial
reporting process, including its system of internal control, and for the
preparation of consolidated financial statements. Carnival Corporation & plc's
independent auditors are responsible for performing an independent audit of
those financial statements and expressing an opinion on the conformity of those
financial statements with U.S. generally accepted accounting principles. The
Audit Committees are responsible for monitoring and overseeing the financial
reporting process and the preparation of consolidated financial statements and
for supervising the relationship between Carnival Corporation & plc and its
independent auditors, as well as reviewing the group's systems of internal
controls and compliance with the group Code of Business Conduct and Ethics. The
Audit Committees have met and held discussions with management of Carnival
Corporation & plc and the independent auditors. In this context, management
represented to the Audit Committees that Carnival Corporation & plc's
consolidated financial statements were prepared in accordance with U.S.
generally accepted accounting principles.
The Audit Committees (i) reviewed and discussed Carnival Corporation & plc's
audited financial statements for the year ended November 30, 2004 with Carnival
Corporation & plc's management and with Carnival Corporation & plc's independent
auditors; (ii) discussed with Carnival Corporation & plc's independent auditors
the matters required to be discussed by Statement on Auditing Standards No. 61;
and (iii) received the written disclosures and the letter from Carnival
Corporation & plc's independent accountants required by Independence Standards
Board Statement No. 1 (Independence Discussions with Audit Committees) and
discussed with Carnival Corporation & plc's independent auditors the independent
auditor's independence. The Audit Committees also considered whether the
provision to the relevant entity by the independent auditors of non-audit
services was compatible with maintaining the independence of the independent
auditors. Based on the reviews and discussions described above, the Audit
Committees recommended to the boards of directors that the audited consolidated
financial statements of Carnival Corporation & plc be included in Carnival
Corporation & plc's Annual Report on Form 10-K for the year ended November 30,
2004 for filing with the U.S. Securities and Exchange Commission.
THE AUDIT COMMITTEE THE AUDIT COMMITTEE
OF CARNIVAL CORPORATION OF CARNIVAL PLC
-------------------------- --------------------------
Stuart Subotnick, Chairman Stuart Subotnick, Chairman
Richard G. Capen, Jr. Richard G. Capen, Jr.
Arnold W. Donald Arnold W. Donald
Richard J. Glasier Richard J. Glasier
Sir John Parker Sir John Parker
55
TRANSACTIONS OF MANAGEMENT AND DIRECTORS
TRANSACTIONS WITH MICKY ARISON. Micky Arison, our Chairman and Chief Executive
Officer is also the Chairman and Chief Executive Officer and the indirect sole
shareholder of Florida Basketball Associates, Inc., the sole general partner of
the Miami Heat Limited Partnership ("MHLP"), the majority owner of the Miami
Heat, a professional basketball team. Pursuant to a five-year advertising and
promotion agreement between CCL and MHLP, CCL agreed to pay an aggregate of
$240,000 per year (subject to a 3% increase for each additional year) for the
advertising and promotion of CCL during Miami Heat games played at the American
Airlines Arena, located in Miami, Florida. In addition, Carnival Corporation
entered into a seven-year agreement with Basketball Properties, Ltd. for the use
of six courtside lounge seats at the Miami Heat games played at the American
Airlines Arena and other public events at the arena. Under the agreement,
Carnival Corporation agreed to pay $180,000 per year for the first five years,
subject to a 5% increase in years six and seven.
TRANSACTIONS WITH THE TED ARISON FAMILY FOUNDATION USA, INC. Shari Arison is the
Chairman of the Board of Trustees and President of the Ted Arison Family
Foundation USA, Inc. (the "Foundation"), a charitable foundation established by
Carnival Corporation's founder, Ted Arison. Carnival Corporation leases
approximately 100 square feet of office space to the Foundation and employs one
of its employees. During fiscal 2004, Carnival Corporation received
approximately $115,000 from the Foundation for both lease payments and for all
costs incurred by Carnival Corporation related to this employee. It is expected
that Carnival Corporation will continue these arrangements with the Foundation
in the future.
REGISTRATION RIGHTS. Pursuant to a letter agreement (the "Trust Registration
Rights Agreement") dated July 11, 1989, Carnival Corporation granted to the Ted
Arison Irrevocable Trust (the "Irrevocable Trust") and the Arison Children's
Irrevocable Trust (the "Children's Trust," and together with the Irrevocable
Trust, the "Trusts") certain registration rights with respect to certain shares
of Carnival Corporation common stock held for investment by the Trusts (the
"Shares"). The beneficiaries of the Trusts included the children of Ted Arison,
including Micky Arison, our Chairman of the boards and Chief Executive Officer,
and Shari Arison, a major shareholder. Effective December 26, 1991, the
Children's Trust was divided into three separate continued trusts, including
continued trusts for Micky Arison, Shari Arison and Michael Arison.
Under the Trust Registration Rights Agreement, Carnival Corporation has granted
the Trusts demand and piggyback registration rights. Carnival Corporation is not
required to effect any demand registration unless all of the Shares owned by
either of the Trusts are included in the demand. Carnival Corporation has agreed
to bear all expenses relating to such demand and piggyback registrations, except
for fees and disbursements of counsel for the Trusts, selling costs,
underwriting discounts and applicable filing fees.
Under a registration rights agreement dated June 14, 1991 (the "Arison
Registration Rights Agreement"), Carnival Corporation granted certain
registration rights to Ted Arison with respect to certain shares of common stock
beneficially owned by him (the "Arison Shares") in consideration for $10,000.
The registration rights were held by the Estate of Ted Arison. The Estate of Ted
Arison subsequently transferred the Arison Shares to the Nickel 1997 Irrevocable
Trust (formerly known as The 1997 Irrevocable Trust of Micky Arison), the
Artsfare 1992 Irrevocable Trust (formerly known as the Ted Arison 1992
Irrevocable Trust for Lin No. 2) and the Eternity Four Trust (formerly known as
the Ted Arison 1994 Irrevocable Trust for Shari No. 1) (collectively, the
"Family Trusts"). The Arison Registration Rights Agreement provides for demand
and piggyback registration rights. Carnival Corporation has agreed to bear all
expenses relating to such demand and piggyback registrations, except for fees
and disbursements of counsel for the Family Trusts, selling costs, underwriting
discounts and applicable filing fees.
TRANSACTIONS WITH CRUISE SPECIALISTS. Until January 2005, Janet Olczak
Lanterman, the wife of A. Kirk Lanterman, one of our directors and a former
executive officer, was the owner of a travel agency located in Seattle,
Washington, named Cruise Specialists. Under the laws of the State of Washington,
Ms. Lanterman's ownership interest in Cruise Specialists was her separate
property and, accordingly, Mr. Lanterman did not have any ownership interest in
the agency. Cruise Specialists sells cruises and other similar products for
various travel providers, including us, under arrangements that are common
throughout the travel industry, whereby Cruise Specialists receives a commission
based on sales generated. In fiscal 2004, Cruise Specialists generated
approximately $15.2 million of gross revenues for Carnival Corporation & plc. In
connection with such revenues, Cruise Specialists received from Carnival
Corporation & plc approximately $3.2 million in commissions and other marketing
incentives. Carnival Corporation and Carnival plc believe that the terms and
conditions of the agreement with
56
Cruise Specialists are no less favorable to Carnival Corporation & plc than
those terms and conditions available for comparable transactions with
unaffiliated persons.
BROTHER OF ROBERT H. DICKINSON. CCL entered into an agreement with Waste
Management National Services, Inc. ("WMNS") for the analytical, management,
collection, transportation, disposal and recycling services for certain wastes
generated or accumulated by is vessels in U.S. and foreign ports. We have been
advised that John Dickinson, the brother of Robert H. Dickinson (President and
Chief Executive Officer of CCL and a member of our boards of directors), served
as a consultant to WMNS in connection with the negotiation of this agreement and
receives fees based on CCL's usage of WMNS under the agreement. During fiscal
2004, CCL paid approximately [$3.7] million to WMNS for their services. John
Dickinson advised us that he received approximately $40,500 during fiscal 2004
from WMNS.
LOAN TO STEIN KRUSE. In February 2000, HAL made a $250,000 advance to Stein
Kruse, currently the President and Chief Executive Officer of HAL, against
amounts he was expected to receive under the Holland America Line Key Management
Incentive Plan during the following five years. In March 2002, when the unpaid
balance under the advance was $150,000, HAL agreed that no further deductions
would be made from Mr. Kruse's Key Management Incentive Plan awards in respect
of this advance and the loan would be forgiven in full if he remained employed
by HAL through November 30, 2004. As of November 30, 2004, Mr. Kruse was
employed by HAL. As a result, the outstanding balance of the loan was forgiven.
TRANSACTIONS WITH RELATIVES OF PIER LUIGI FOSCHI. The son of Pier Luigi Foschi,
one of our executive officers and a director, is a minority partner in Studio
Biscozzi-Nobili, an Italian tax consulting firm, which is retained from time to
time to provide tax advice to Costa Crociere, S.p.A., one of our subsidiaries.
During fiscal 2004, Studio Biscozzi-Nobili earned approximately $151,000 for
providing such services to Costa.
TRANSACTIONS WITH AFFILIATED ENTITIES. Carnival Corporation & plc has adopted a
policy of dealing with affiliated entities on an arm's-length basis and Carnival
Corporation & plc may not engage in business transactions with any affiliate on
terms and conditions less favorable to Carnival Corporation & plc than terms and
conditions available at the time for comparable transactions with unaffiliated
persons. All contracts between us and an entity in which a director or senior
employee of Carnival Corporation & plc has an interest must be approved by the
boards of directors.
CHANGE IN INDEPENDENT AUDITORS
As previously disclosed, on April 17, 2003, KPMG Audit Plc ("KPMG") resigned as
the independent auditors for Carnival plc. The report of KPMG on Carnival plc's
financial statements for the years ended December 31, 2002 and December 31, 2001
contained no adverse opinion or disclaimer of opinion and was not qualified or
modified as to uncertainty, audit scope or accounting principles. During the
years ended December 31, 2001 and December 31, 2002 and the subsequent interim
period through April 17, 2003, there were no disagreements with KPMG on any
matter of accounting principles or practices, financial statement disclosure, or
auditing scope or procedures, which disagreements, if not resolved to the
satisfaction of KPMG, would have caused it to make reference thereto in its
reports on the financial statements for such periods.
On April 17, 2003, based on a decision to have one audit firm to audit the
consolidated financial statements of Carnival Corporation & plc, Carnival plc
engaged PricewaterhouseCoopers LLP to serve as its independent auditors for the
financial period ended November 30, 2003 and this appointment was approved by
Carnival plc shareholders at their annual general meeting on June 23, 2003. The
decision to engage PricewaterhouseCoopers LLP was approved by the Audit
Committee of the board of directors of Carnival plc.
During the years ended December 31, 2001 and 2002 and the subsequent interim
period through April 17, 2003, Carnival plc did not consult
PricewaterhouseCoopers LLP with respect to the application of accounting
principles to a specified transaction, either completed or proposed, or the type
of audit opinion that might be rendered on Carnival plc's financial statements,
or any other matters or reportable events as set forth in Item 304(a)(1)(v) of
Regulation S-K.
57
ANNEX A
CARNIVAL CORPORATION
AMENDED AND RESTATED
2001 OUTSIDE DIRECTOR STOCK PLAN
(ADOPTED BY THE BOARD OF DIRECTORS ON FEBRUARY 16, 2001 AND APPROVED BY THE
SHAREHOLDERS ON APRIL 17, 2001, EFFECTIVE AS OF JANUARY 1, 2001, AMENDED BY THE
BOARD OF DIRECTORS ON OCTOBER 8, 2001, FURTHER AMENDED BY THE BOARD OF DIRECTORS
ON JULY 19, 2004 AND, FURTHER AMENDED AND RESTATED BY THE BOARD OF DIRECTORS ON
JANUARY 18, 2005)
1. PURPOSE.
The purpose of the Plan is to promote the interests of the
Combined Group by strengthening the Combined Group's ability to attract and
retain the services of experienced and knowledgeable non-executive directors and
by encouraging such directors to acquire an increased proprietary interest in
the Combined Group and more closely align the interests of such directors with
those of the Combined Group's shareholders.
The Plan provides for granting of Options, Restricted Stock
Awards, and Restricted Stock Units Awards.
2. DEFINITIONS.
The following definitions shall be applicable throughout the
Plan.
(a) "Affiliate" means (i) any entity that directly or
indirectly is controlled by, controls or is under common control with the
Company or Carnival plc, and (ii) to the extent provided by the Committee, any
entity in which the Company or Carnival plc has a significant equity interest.
(b) "Award" means, individually or collectively, any
Option, Restricted Stock Award or Restricted Stock Unit Award.
(c) "Award Agreement" means a Stock Option Agreement,
Restricted Stock agreement or Restricted Stock Unit agreement.
(d) "Board" means the Board of Directors of the Company.
(e) "Carnival plc" means the entity previously known as
P&O Princess Cruises plc, a public limited company incorporated under the laws
of England and Wales, and any successor thereto.
(f) "Code" means the Internal Revenue Code of 1986, as
amended. Reference in the Plan to any section of the Code shall be deemed to
include any amendments or successor provisions to such section and any
regulations under such section.
(g) "Committee" means the Compensation Committee of the
Board.
(h) "Common Stock" means the common stock, par value
$0.01 per share, of the Company and any stock into which such common stock may
be converted or into which it may be exchanged.
(i) "Combined Group" means the Company and Carnival plc
and any successor thereto.
(j) "Company" means Carnival Corporation, a corporation
organized under the laws of the Republic of Panama, and any successor thereto.
(k) "Date of Grant" means the date on which the granting
of an Award is authorized, or such other date as may be specified in such
authorization or, if there is no such date, the date indicated on the applicable
Award Agreement.
(l) "Disability" means a condition that would entitle a
Participant to receive benefits under the long-term disability plan of a member
of the Combined Group or an Affiliate, as if such Participant were eligible to
participate in such plan whether or not any such plan is applicable to such
Participant, the existence of such condition to be reasonably determined by the
Board.
(m) "Effective Date" means January 1, 2001.
(n) "Eligible Director" shall have the meaning assigned
to it in Section 6.
(o) "Exchange Act" means the Securities Exchange Act of
1934, as amended.
(p) "Fair Market Value", on a given date, means (i) if
the Shares are listed on a national securities exchange, the average of the
highest and lowest sale prices reported as having occurred on the primary
exchange with which the Shares are listed and traded on such date, or, if there
is no such sale on that date, then on the last preceding date on which such a
sale was reported; (ii) if the Shares are not listed on any national securities
exchange but is quoted in the Nasdaq National Market ("Nasdaq") on a last sale
basis, the average between the high bid price and low ask price reported on the
date prior to such date, or, if there is no such sale on that date, then on the
last preceding date on which a sale was reported; or (iii) if the Shares are not
listed on a national securities exchange nor quoted in the Nasdaq on a last sale
basis, the amount determined by the Committee to be the fair market value based
upon a good faith attempt to value the Shares accurately and computed in
accordance with applicable regulations of the Internal Revenue Service.
(q) "Mature Shares" means Shares owned by a Participant
which are not subject to any pledge or security interest and have either been
held by the Participant for six months, previously acquired by the Participant
on the open market or meet such other requirements as the Committee may
determine are necessary in order to avoid an accounting earnings charge on
account of the use of such Shares to pay the Option Price or satisfy any
applicable withholding obligation in respect of an Option.
(r) "Option" means an Award granted under Section 8.
(s) "Option Price" means the exercise price for an Option
as described in Section 8(a).
(t) "Pairing Agreement" means the Pairing Agreement,
dated April 17, 2003, among the Company, The Law Debenture Trust Corporation
(Cayman) Limited, as trustee of the Carnival plc Special Voting Trust, and Sun
Trust Bank, as transfer agent, as it may be amended from time to time.
(u) "Participant" means each Eligible Director receiving
an Award pursuant to the Plan.
(v) "Plan" means this Carnival Corporation Amended and
Restated 2001 Outside Director Stock Plan.
(w) "Restricted Period" means, with respect to any Share
of Restricted Stock or any Restricted Stock Unit, the period of time during
which such Award is subject to restrictions set forth in Section 9 and the
applicable Award Agreement.
(x) "Restricted Stock" means Shares issued or transferred
to a Participant subject to forfeiture and the other restrictions set forth in
Section 9 and the applicable Award Agreement.
(y) "Restricted Stock Award" means an Award of Restricted
Stock granted under Section 9.
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(z) "Restricted Stock Unit" means a hypothetical
investment equivalent to one Share granted in connection with an Award made
under Section 9.
(aa) "Restricted Stock Unit Award" means an Award of
Restricted Stock Units granted under Section 9.
(bb) "Securities Act" means the Securities Act of 1933, as
amended.
(cc) "Share" means the aggregate of one share of Common
Stock and one Trust Share.
(dd) "Stock Option Agreement" means any agreement between
the Company and a Participant who has been granted an Option pursuant to Section
8 which defines the rights and obligations of the parties thereto.
(ee) "Subsidiary" means any subsidiary of the Company as
defined in Section 424(f) of the Code.
(ff) "Trust Share" has the meaning assigned to it in the
Pairing Agreement.
(gg) "Vested Unit" has the meaning assigned to it in
Section 9(d).
3. EFFECTIVE DATE, DURATION AND SHAREHOLDER APPROVAL.
(a) The Plan is effective as of the Effective Date, and
the Plan was approved by shareholders at a meeting held on April 17, 2001 in a
manner intended to comply with the shareholder approval requirements of the New
York Stock Exchange. This amendment and restatement shall be effective as of
January 18, 2005, subject to approval by the Company's shareholders in a manner
intended to comply with the shareholder approval requirements of the New York
Stock Exchange. The validity of any and all Awards granted after January 18,
2005 to Participants are contingent upon approval of the January 18, 2005
amendment and restatement of the Plan by the shareholders of the Company in a
manner intended to comply with the shareholder approval requirements of the New
York Stock Exchange.
(b) The expiration date of the Plan, on and after which
no Awards may be granted hereunder, shall be January 1, 2011; provided, however,
that the administration of the Plan shall continue in effect until all matters
relating to Awards previously granted have been settled.
4. ADMINISTRATION.
(a) The Plan shall be administered by the Committee. A
majority of the Committee will constitute a quorum and the acts of a majority of
the members present at any meeting at which a quorum is present, or acts
approved in writing by all members of the Committee without a meeting, will be
acts of the Committee.
(b) 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. No member of the Committee shall be liable for anything done or omitted to
be done by him or by any other member of the Committee in connection with the
Plan, except for his own willful misconduct or gross negligence. All decisions
which are made by the Committee with respect to interpretation of the terms of
the Plan and with respect to any questions or disputes arising under the Plan
shall be final and binding on the Company and the participants, their heirs or
beneficiaries. The Committee shall not be empowered to take any action, whether
or not otherwise authorized under the Plan, which would result in any Eligible
Director failing to qualify as a "disinterested person."
5. SHARES SUBJECT TO AWARDS.
(a) Subject to the adjustment provisions of Section
10(e), the aggregate number of Shares in respect of which Awards may be granted
under the Plan shall not exceed 1,000,000.
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(b) Shares shall be deemed to have been used in
settlement of Awards whether or not they are actually delivered. In the event
any Award shall be surrendered, terminate, expire, be forfeited or be cancelled
for any reason whatsoever without the Participant having benefited therefrom,
the number of Shares no longer subject thereto shall thereupon be released and
shall thereafter be available for new Awards under the Plan. For purposes of the
foregoing sentence, a Participant shall not be deemed to have received any
"benefit" in the case of forfeited Restricted Stock Awards by reason of having
enjoyed voting rights and dividend rights prior to the date of forfeiture.
(c) Shares delivered by the Company in settlement of
Awards may be authorized and unissued Shares or Shares held in the treasury of
the Company or purchased on the open market or by private purchase.
(d) There shall be reserved at all times for sale under
the Plan a number of Shares, of either authorized and unissued Shares, Shares
held in the Company's treasury, or both, equal to the maximum number of shares
in respect of which Awards may be granted under the Plan.
6. PARTICIPATION IN PLAN. Each member of the Company's Board of
Directors who is not otherwise an employee of the Company or any Affiliate or
subsidiary of the Company within the meaning of the Employee Retirement Income
Security Act of 1974 (an "Eligible Director") shall be eligible to participate
in the Plan. A director who is an employee and who retires or resigns from
employment with the Company and/or its Affiliates, but remains an Eligible
Director of the Company, shall become eligible to participate in the Plan in
accordance with Section 7, effective as of the first annual meeting of
shareholders held after his termination of employment.
7. ANNUAL AWARD GRANTS. Each Eligible Director shall receive upon
initial election to office by the shareholders and thereafter annually on the
date of the Company's annual meeting of shareholders at which such Eligible
Director is re-elected to office, or on any other date properly approved
pursuant to this Section 7, an Award representing 10,000 "points." An Option
shall represent one point; and each Share of Restricted Stock or a Restricted
Stock Unit shall represent four points. An Award may be composed of Options,
Restricted Stock, Restricted Stock Units or a combination thereof, at the
discretion of the Committee which discretion shall be exercised not later than
the Date of Grant of such Award. The Board may authorize a Date of Grant other
than the date of the Company's annual meeting of shareholders, PROVIDED, that
Awards granted to each Participant do not exceed 10,000 points in any given
calendar year.
8. TERMS OF OPTIONS.
(a) OPTION PRICE. The Option Price per Share for each
Option shall be the Fair Market Value at the Date of Grant.
(b) VESTING. Subject to Section 8(e), Options shall vest
and become exercisable in five equal annual installments commencing on the first
anniversary of the Date of Grant.
(c) DURATION OF OPTIONS. Subject to Section 8(e), each
Option granted hereunder shall be exercisable for a period of ten years from the
Date of Grant.
(d) MANNER OF EXERCISE AND FORM OF PAYMENT.
(i) An Option granted under the 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, specifying the number of shares with respect to which the
option is exercised and the price per share designated in the Stock
Option Agreement, (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 Section 8 of the Plan.
4
(ii) Full payment for Shares purchased by the
Participant shall be made at the time of any exercise, in whole or in
part, of an Option, and certificates for such Shares shall be delivered
to the Participant as soon thereafter as is reasonably possible. No
Shares shall be transferred to the Participant until full payment
therefor has been made and the Participant shall have none of the
rights of a shareholder with respect to any Shares subject to an Option
until a certificate for such shares shall have been issued and
delivered to the Participant. Such payment shall be made in cash or by
check or by money order payable to the Company, in each case payable in
U.S. currency. In the Committee's discretion, such payment may be made
by delivery of Mature Shares having a Fair Market Value (determined as
of the date of the Option is so exercised in whole or in part), that,
when added to the value of any cash, check or money order satisfying
the foregoing requirements, will equal the aggregate purchase price.
(e) TERMINATION OF BOARD MEMBERSHIP.
(i) DEATH OR DISABILITY. Upon a Participant's
ceasing to be a member of the Board due to death or Disability, all
unvested Options shall immediately vest and become exercisable and all
vested Options shall continue to be exercisable by the Participant or
his estate, as applicable, until the earlier to occur of (i) the
original expiration date of such Option, and (ii) one year from such
cessation.
(ii) OTHER TERMINATION. Except as provided in the
proviso to this Section, upon a Participant's ceasing to be a member of
the Board for any reason other than death or Disability, all unvested
Options shall continue to vest in accordance with their initial terms,
and all vested Options shall continue to be exercisable until the
original expiration date of such Option; PROVIDED, HOWEVER, that if the
Participant ceases to be a member of the Board prior to serving in such
capacity for one year, all of such Participant's Options shall
immediately expire upon such termination.
9. RESTRICTED STOCK AND RESTRICTED STOCK UNITS.
(a) AWARDS OF RESTRICTED STOCK AND RESTRICTED STOCK
UNITS.
(i) Each Participant granted a Restricted Stock
Award shall execute and deliver to the Company a Restricted Stock
agreement with respect to the Restricted Stock setting forth the
restrictions and other terms and conditions applicable to such
Restricted Stock including the Restricted Period set forth in Section
9(c). If the Committee determines that the Restricted Stock shall be
held in escrow rather than delivered to the Participant pending the
release of the applicable restrictions, the Committee may require the
Participant to additionally execute and deliver to the Company (A) an
escrow agreement satisfactory to the Committee and (B) the appropriate
blank stock powers with respect to the Restricted Stock covered by such
agreement. If a Participant shall fail to execute an agreement
evidencing an Award of Restricted Stock and, if applicable, an escrow
agreement and stock powers, the Award shall be null and void. Subject
to the restrictions set forth in Section 9(b) and Section 9(c), the
Participant generally shall have the rights and privileges of a
stockholder as to such Restricted Stock, including the right to vote
such Restricted Stock. At the discretion of the Committee, cash
dividends and stock dividends with respect to the Restricted Stock may
be either currently paid to the Participant or withheld by the Company
for the Participant's account, and interest may be credited on the
amount of cash dividends withheld at a rate and subject to such terms
as determined by the Committee. To the extent applicable, the cash
dividends or stock dividends so withheld by the Committee and
attributable to any particular share of Restricted Stock (and earnings
thereon, if applicable) shall be distributed to the Participant upon
the release of restrictions on such share and, if such share is
forfeited, the Participant shall have no right to such cash dividends,
stock dividends or earnings.
(ii) Upon the grant of an Award of Restricted
Stock, the Committee shall cause a stock certificate registered in the
name of the Participant to be issued and, if it so determines,
deposited together with the stock powers with an escrow agent
designated by the Committee. If an escrow arrangement is used, the
Committee may cause the escrow agent to issue to the Participant a
receipt evidencing any stock certificate held by it registered in the
name of the Participant.
5
(iii) The terms and conditions of a grant of
Restricted Stock Units shall be reflected in a written Restricted Stock
Unit agreement. No Shares shall be issued at the time an Award of
Restricted Stock Units is made, and the Company will not be required to
set aside a fund for the payment of any such Award. At the discretion
of the Committee, each Restricted Stock Unit (representing one Share)
awarded to a Participant may be credited with cash and stock dividends
paid by the Company in respect of one Share ("Dividend Equivalents").
At the discretion of the Committee, Dividend Equivalents may be either
currently paid to the Participant or withheld by the Company for the
Participant's account, and interest may be credited on the amount of
cash Dividend Equivalents withheld at a rate and subject to such terms
as determined by the Committee. Dividend Equivalents credited to a
Participant's account and attributable to any particular Restricted
Stock Unit (and earnings thereon, if applicable) shall be distributed
to the Participant upon settlement of such Restricted Stock Unit and,
if such Restricted Stock Unit is forfeited, the Participant shall have
no right to such Dividend Equivalents.
(b) RESTRICTIONS; FORFEITURE.
(i) Restricted Stock awarded to a Participant
shall be subject to the following restrictions until the expiration of
the Restricted Period, and to such other terms and conditions as may be
set forth in the applicable Restricted Stock agreement: (A) if an
escrow arrangement is used, the Participant shall not be entitled to
delivery of the stock certificate; and (B) the Shares shall be subject
to the restrictions on transferability set forth in the applicable
Restricted Stock agreement. Restricted Stock awarded to a Participant
who has not been a member of the Board for at least one year at the
time of such award shall be forfeited, and the applicable stock
certificates returned to the Company, if the Participant ceases to be a
member of the Board for any reason other than death or Disability prior
to the one-year anniversary of his or her initial election to the
Board. In the event of such a forfeiture, all rights of the Participant
to such Restricted Stock, and as a shareholder in respect thereof,
shall terminate without further obligation on the part of the Company.
(ii) Restricted Stock Units awarded to any
Participant who has not been a member of the Board for at least one
year at the time of such award shall be forfeited, and all rights of
the Participant to in respect thereof, shall terminate without further
obligation on the part of the Company if the Participant ceases to be a
member of the Board for any reason other than death or Disability prior
to the one-year anniversary of his or her initial election to the
Board. Restricted Stock Units shall be subject to such other terms and
conditions as may be set forth in the applicable Restricted Stock Unit
agreement.
(iii) The Committee shall have the authority to
remove any or all of the restrictions on the Restricted Stock and
Restricted Stock Units whenever it may determine that, by reason of
changes in applicable laws or other changes in circumstances arising
after the date of the Restricted Stock Award or Restricted Stock Unit
Award, such action is appropriate.
(c) RESTRICTED PERIOD. The Restricted Period of
Restricted Stock Awards and Restricted Stock Unit Awards granted to any
Participant shall commence on the Date of Grant and shall expire as to twenty
percent (20%) of the Restricted Stock or Restricted Stock Units, as applicable,
subject thereto on each of the first, second, third, fourth and fifth
anniversaries of the Date of Grant whether or not such Participant continues to
be a member of the Board; PROVIDED, HOWEVER, that upon a Participant's ceasing
to be a member of the Board due to death or Disability, the Restricted Period
shall expire as to one hundred percent (100%) of the Shares subject thereto.
(d) DELIVERY OF RESTRICTED STOCK AND SETTLEMENT OF
RESTRICTED STOCK UNITS.
(i) Upon the expiration of the Restricted Period
with respect to any Shares covered by an Award of Restricted Stock
which has not been forfeited in accordance with the second sentence of
Section 9(b)(i), the restrictions set forth in this Section 9 and the
Restricted Stock agreement shall be of no further force or effect with
respect to shares of Restricted Stock which have not then been
forfeited. If an escrow arrangement is used, upon such expiration, the
Company shall deliver to the Participant, or his beneficiary, without
charge, the stock certificate evidencing the shares of Restricted Stock
with respect to which the Restricted Period has expired (to the nearest
full share) and any cash dividends or stock
6
dividends credited to the Participant's account with respect to such
Restricted Stock and the interest thereon, if any.
(ii) Upon the expiration of the Restricted Period
with respect to any Restricted Stock Units covered by a Restricted
Stock Unit Award which has not been forfeited in accordance with
Section 9(b)(ii), the Company shall deliver to the Participant, or his
beneficiary, without charge, one Share for each Restricted Stock Unit
with respect to which the Restricted Period has expired ("Vested Unit")
and cash equal to any Dividend Equivalents credited with respect to
each such Vested Unit in accordance with Section 9(a)(iii) hereof and
the interest thereon, if any; PROVIDED, HOWEVER, that, if explicitly
provided in the applicable Restricted Stock Unit agreement, the
Committee may, in its sole discretion, elect to pay cash or part cash
and part Shares in lieu of delivering only Shares for Vested Units. If
a cash payment is made in lieu of delivering Shares, the amount of such
payment shall be equal to the Fair Market Value of the Shares as of the
date on which the Restricted Period lapsed with respect to such Vested
Unit.
(e) STOCK RESTRICTIONS. Each certificate representing
Restricted Stock awarded under the Plan shall bear a legend substantially in the
form of the following until the lapse of all restrictions with respect to the
Shares subject to the Award as well as any other information the Company deems
appropriate:
Transfer of this certificate and the shares represented hereby
is restricted pursuant to the terms of the Carnival
Corporation Amended and Restated 2001 Outside Director Stock
Plan and a Restricted Stock Agreement, dated as of __________,
between Carnival Corporation and __________________. Copies of
such Plan and Agreement are on file at the offices of Carnival
Corporation.
Stop transfer orders shall be entered with the Company's transfer agent and
registrar against the transfer of legended securities.
10. GENERAL.
(a) NONTRANSFERABILITY OF AWARDS. No Award 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 a Participant,
only the Participant (or the Participant's court-appointed legal representative)
may exercise an Option. In the Committee's discretion, an Award may be
transferred pursuant to a "qualified domestic relations order," as defined in
section 414(p) of the Code or any similar domestic relations order enforceable
in the jurisdiction in which such Participant resides.
(b) RIGHTS OF PARTICIPANT. Neither the Participant nor
the Participant's executor or administrator shall have any of the rights of a
shareholder 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.
(c) RIGHT TO TERMINATE RELATIONSHIP. Nothing in the Plan
or in any Award shall confer upon any Participant the right to continue to serve
as a director of the Company.
(d) 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.
7
(e) ADJUSTMENT UPON CHANGES IN CAPITALIZATION, ETC.
(i) Awards granted under the Plan, any Award
Agreements, and the maximum number of Shares subject to all Awards
stated in Section 5(a) shall be subject to adjustment or substitution,
as determined by the Committee in its sole discretion, as to the
number, price or kind of a share of stock or other consideration
subject to such Awards or as otherwise determined by the Committee to
be equitable in the event of any stock split, stock dividend, stock
change, reclassification, an unpairing of the shares of Common Stock
from the Trust Shares, recapitalization or combination of shares which
changes the character or amount of Shares (x) in the case of Options,
prior to exercise of any portion of an Option theretofore granted under
the Plan, such that such option, to the extent that it shall not have
been exercised, shall entitle the Participant (or the Participant's
executor or administrator) upon its exercise to receive in substitution
therefor such number and kind of shares as the Participant would have
been entitled to receive if the Participant had actually owned the
Shares 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 Participant, 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 Participant (or the
Participant'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; and (y) in the case of Restricted Stock and
Restricted Stock Units, occurring after the Date of Grant of any such
Awards.
(ii) 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 Shares subject to any unexercised Option
or subject to any Award with respect to which the Restricted Period has
not expired, 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 Awards may thereafter be granted under the
Plan shall be adjusted to give effect thereto.
(f) PURCHASE FOR INVESTMENT. Whether or not the Options
and Shares covered by the Plan have been registered under the Securities Act of
1933, 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 Participant
upon the exercise of any Option granted under the Plan.
(g) FORM OF AGREEMENTS WITH PARTICIPANTS. Each Award
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 Award. Each Participant shall be notified
promptly of such grant, and an Award shall be promptly executed and delivered by
the Company and the Participant.
(h) TERMINATION AND AMENDMENT OF PLAN AND AWARDS.
(i) Unless the Plan shall theretofore have been
terminated as hereinafter provided, Awards may be granted under the
Plan at any time, and from time to time, prior to the tenth anniversary
of the Effective Date, on which date the Plan will expire, except as to
Awards then outstanding under the Plan. Such Awards shall remain in
effect until they have been exercised, have expired or have been
canceled.
(ii) The Board, without further approval of the
Company's shareholders, may terminate, modify or amend this Plan at any
time and from time to time in such respects as the Board may deem
advisable, subject to any shareholder or regulatory approval required
by law or the New York Stock Exchange; PROVIDED, that any such
amendment shall comply with the applicable requirements for exemption
(to the extent necessary) under Rule 16b-3 under the Exchange Act.
(iii) No termination, modification or amendment of
the Plan, without the consent of the Participant, may adversely affect
the rights of such person with respect to such Award. With the consent
of the Participant and subject to the terms and conditions of the Plan,
the Committee may amend outstanding Award agreements with any
Participant.
8
(i) GOVERNMENT AND OTHER REGULATIONS. The obligation of
the Company with respect to Awards 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,
the rules and regulations of any securities exchange on which the Shares may be
listed.
(j) WITHHOLDING. A Participant may be required to pay to
a member of the Combined Group or any Affiliate, and each member of the Combined
Group or any Affiliate shall have the right and is hereby authorized to withhold
from any Shares or other property deliverable under any Award or from any
compensation or other amounts owing to a Participant the amount (in cash, Shares
or other property) of any required tax withholding in respect of an Award, its
exercise, or any payment or transfer under an Award or under the Plan and to
take such other action as may be necessary in the opinion of the Company to
satisfy all obligations for the payment of such taxes.
(k) SEPARABILITY. If any of the terms or provision of the
Plan conflict with the requirements of Rule 16b-3 under the Exchange Act, then
such terms or provisions shall be deemed inoperative to the extent they so
conflict with the requirements of Rule 16b-3.
(l) GOVERNING LAW. The Plan shall be governed by and
construed in accordance with the internal laws of the State of Florida without
regard to the principles of conflicts of law thereof, or principles of conflicts
of laws of any other jurisdiction which could cause the application of the laws
of any jurisdiction other than the State of Florida.
9
ANNEX B
CARNIVAL PLC 2005 EMPLOYEE SHARE PLAN
(As adopted by the board of directors of Carnival plc on 18 January 2005
and to be approved by shareholders of Carnival plc
in general meeting on 13 April 2005)
1. PURPOSE
The purpose of the Plan is to provide a means through which each member of the
plc Group may attract able persons to enter and remain in the employ of members
of the plc Group and to provide a means whereby employees and executive
directors of each member of the plc Group can acquire and maintain Share
ownership, or be paid incentive compensation measured by reference to the value
of Shares, thereby strengthening their commitment to the welfare of the members
of the plc Group and promoting an identity of interest between shareholders and
these persons. It is intended that the Plan will be an employees' share scheme
within the meaning of section 743 of the Companies Act 1985.
The Plan provides for the granting of Options (Incentive Share Options,
Nonqualified Share Options, Unapproved Options and Approved Options), Restricted
Shares and Restricted Share Units to eligible employees. Inland Revenue Approved
Options may be granted under an Appendix to the Plan approved by the Inland
Revenue.
2. DEFINITIONS
The following definitions shall be applicable throughout the Plan;
ADRS means American Depositary Receipts evidencing American Depositary Shares
deposited by the Company with a depositary pursuant to a depositary agreement;
AFFILIATE means:
(a) any entity that directly or indirectly is Controlled by, Controls or is
under common Control with the Company or Carnival Corporation; and
(b) to the extent provided by the Committee, any entity in which the
Company or Carnival Corporation has a significant equity interest.
APPROVED OPTION means an Option granted under an Inland Revenue approved share
plan contained in the Appendix to this Plan;
AWARD means, individually or collectively, any Incentive Share Option,
Nonqualified Share Option, Unapproved Option, Approved Option, Restricted Share
Award or Restricted Share Unit Award;
AWARD AGREEMENT means a Share Option Agreement, Restricted Share Agreement or
Restricted Share Unit Agreement;
BOARD means the board of directors of the Company;
CAPITAL REORGANISATION means any variation in the share capital or reserves of
the Company (including, without limitation, by way of capitalisation issue,
rights issue, sub-division, consolidation, or reduction);
CARNIVAL CORPORATION means Carnival Corporation, a corporation organised under
the laws of the Republic of Panama;
CAUSE means a member of the plc Group having a right to terminate a
Participant's employment summarily either in accordance with the terms of the
Participant's contract of employment with that member or otherwise at common law
including without limitation:
(a) the determination by the Committee that the Participant has ceased to
perform his duties to a member of the plc Group (other than as a result
of his incapacity due to physical or mental illness or injury), which
failure amounts to an intentional and extended neglect of his duties to
his employer;
(b) the Committee's determination that the Participant has engaged or is
about to engage in wilful misconduct or conduct which causes or may
reasonably be expected to cause substantial damage to a member of the
plc Group;
(c) the Participant having been convicted of, or pleaded guilty to, an
offence involving as a material element fraud or dishonesty; or
(d) the failure of the Participant to follow the lawful instructions of the
Board or any of his superiors;
CHANGE OF CONTROL means the occurrence of any of the following:
(a) a person (either alone or together with any person acting in concert
with him) obtaining Control of the Company as a result of a general
offer or otherwise for the whole of the share capital of the Company
(other than those shares which are already owned by him and/or any
person acting in concert with him);
(b) a person (either alone or together with any person acting in concert
with him) acquiring 50% or more (on a fully diluted basis) of either:
(i) the then outstanding Shares taking into account as outstanding
for this purpose such Shares as are issuable upon the exercise
of options or warrants, the conversion of convertible shares
or debt and the exercise of any similar right to acquire such
Shares (the "OUTSTANDING SHARES"); or
(ii) the combined voting power of the then outstanding voting
shares or securities of the Company entitled to vote generally
in the election of directors (the OUTSTANDING COMPANY VOTING
SECURITIES);
provided, however, that for purposes of this Plan, the
following acquisitions shall not constitute a Change of
Control:
(A) any acquisition by the Company or any Affiliate,
(B) any acquisition by any employee benefit plan
sponsored or maintained by the Company or any
Affiliate,
(C) any acquisition by Marilyn B. Arison, Micky Arison,
Shari Arison, Michael Arison or their spouses or
lineal descendents, any trust established for the
benefit of any of the aforementioned Arison family
members, or any person directly or indirectly
controlling, controlled by or under common control
with any of the aforementioned Arison family members
or any trust established for the benefit of any of
the aforementioned Arison family members or any
charitable trust or non-profit entity established by
any person or entity described in this sub-paragraph
(C); or
(D) any acquisition by any person which falls within the
proviso to paragraph (e) below or sub-paragraphs (i),
(ii) and (iii) of paragraph (h) below;
and for the purposes of this Plan an event falling within
sub-paragraphs (a) or (b) of this definition shall be referred to as an
ACQUISITION;
(c) individuals who, on the date this Plan is approved by shareholders in
general meeting, constitute the board of directors of the Company (the
INCUMBENT DIRECTORS) ceasing for any reason to constitute at least a
majority of the board, provided that any person who becomes a director
subsequently and whose election or nomination for election was approved
by a vote of at least two-thirds of the Incumbent Directors then on the
board (either by a specific vote of the directors or by approval of the
proxy statement or annual report and accounts of the Company in which
such person is nominated for election by shareholders, without written
objection to such nomination) shall be an Incumbent Director; and for
the purposes of this Plan an event falling within this sub-paragraph
(c) shall be referred to as a BOARD CHANGE;
(d) a person becoming bound or entitled to give notice under sections 428
to 430F of the Companies Act 1985 to acquire Shares (a COMPULSORY
ACQUISITION PROCEDURE);
(e) a Court directing that a meeting of the holders of Shares be convened
pursuant to section 425 of the Companies Act 1985 for the purposes of
considering a scheme of arrangement of the Company or its amalgamation
with any other company or companies and the scheme of arrangement being
approved by the shareholders' meeting or sanctioned by the Court (as
the Committee may determine) (the RELEVANT Condition) provided,
however, that the Committee may determine that the scheme of
arrangement shall not constitute a Change of Control if the purpose and
effect of the scheme of arrangement is to create a new holding company
for the Company, such company having substantially the same
shareholders with the same proportionate shareholdings as the Company
had immediately prior to the scheme of arrangement, and for the
purposes of this Plan an event falling within this sub- paragraph (e)
shall be referred to as a SCHEME OF ARRANGEMENT;
(f) notice being duly given of a resolution for the voluntary winding-up of
the Company (a VOLUNTARY WINDING UP);
(g) the sale, transfer or other disposition of all or substantially all of
the business or assets of the Company (a SALE); or
(h) the completion of a reorganization, recapitalization, merger,
consolidation, share exchange or similar form of corporate transaction
involving the Company that requires the approval of the Company's
shareholders, whether for such transaction or the issuance of
securities in the transaction (a BUSINESS COMBINATION), unless
immediately following such Business Combination:
(i) more than 50% of the total voting power of:
(A) the company or body corporate resulting from such
Business Combination (the SURVIVING COMPANY); or
(B) if applicable, the ultimate parent company or body
corporate that directly or indirectly has beneficial
ownership of sufficient voting securities eligible to
elect a majority of the directors of the Surviving
Company (the PARENT COMPANy), is represented by the
Outstanding Company Voting Securities that were
outstanding immediately prior to such Business
Combination (or, if applicable, is represented by
shares into which the Outstanding Company Voting
Securities were converted pursuant to such Business
Combination), and such voting power among the holders
thereof is in substantially the same proportion as
the voting power of the Company's Voting Securities
among the holders thereof immediately prior to the
Business Combination,
(ii) no person, is or becomes the beneficial owner, directly or
indirectly, of 50% or more of the total voting power of the
outstanding voting securities eligible to elect directors of
the Parent Company (or, if there is no Parent Company, the
Surviving Company); and
(iii) at least a majority of the members of the board of directors
of the Parent Company (or, if there is no Parent Company, the
Surviving Company) following the completion of the Business
Combination were members of the board of directors of the
Company at the time of the board's approval of the execution
of the initial agreement providing for such Business
Combination
and for the purposes of this Plan a transaction falling within this
sub-paragraph (h) shall be referred to as a CORPORATE TRANSACTION;
CODE means the United States Internal Revenue Code of 1986, as amended.
Reference in the Plan to any section of the Code shall be deemed to include any
amendments or successor provisions to such section and any regulations under
such section;
COMBINED GROUP means the plc Group and Carnival Corporation and any subsidiary
of Carnival Corporation as that term is defined in section 736 of the Companies
Act 1985;
COMMITTEE means the Compensation Committee of the board of directors. Unless the
Board determines otherwise, each member of the Committee shall, at the time he
takes any action with respect to an Award under the Plan, be an Eligible
Director. However, the mere fact that a Committee member shall fail to qualify
as an Eligible Director shall not invalidate any Award which is otherwise
validly granted under the Plan;
COMPANY means Carnival plc, a company incorporated under the laws of England and
Wales;
CONTROL has the meaning given to it by section 840 of ICTA;
DATE OF GRANT means the date on which the granting of an Award is authorized, or
such other date as may be specified in such authorization or, if there is no
such date, the date indicated on the applicable Award Agreement;
DEALING DAY means any day on which the London Stock Exchange is open for the
transaction of business;
EFFECTIVE DATE means the date on which the Plan is approved by the Company's
shareholders in general meeting;
ELIGIBLE DIRECTOR means a person who is a "non-employee director" within the
meaning of Rule 16b-3 under the Exchange Act, or a person meeting any similar
requirement under any successor rule or regulation;
EMPLOYEE means any employee (including an executive director) of a member of the
plc Group whose terms of service require him to devote substantially the whole
of his working time to the affairs of a member of the Combined Group;
EMPLOYEE SHARE PLAN means any share option plan or other employees' share
incentive plan established by the Company including the P&O Princess Cruises
Deferred Bonus & Co-Investment Matching Plan;
EXCHANGE ACT means the U.S. Securities Exchange Act of 1934, as amended;
FAIR MARKET VALUE means, on a given date:
(a) for so long as the Shares are traded on the London Stock Exchange, the
closing middle market quotation for a Share as derived from the Daily
Official List of the London Stock Exchange for that day; or
(b) subject to (a) above, its market value determined in accordance with
Part VIII of the Taxation of Chargeable Gains Act 1992 and in the case
of any Award under which Shares are to be issued, the nominal value of
a Share;
ICTA means the United Kingdom Income and Corporation Taxes Act 1988;
ITEPA means the United Kingdom Income Tax (Earnings and Pensions) Act 2003;
INCENTIVE SHARE OPTION means an Option granted by the Committee to a US
Participant under the Plan which is designated by the Committee as an incentive
stock option as described in Section 422 of the Code and which otherwise meets
the requirements set forth herein;
THE LONDON STOCK EXCHANGE means London Stock Exchange plc or any successor body
thereto;
NONQUALIFIED SHARE OPTION means an Option granted by the Committee to a US
Participant under the Plan, which is not designated by the Committee as an
Incentive Share Option;
OPTION means an Award granted under Section 7 being either an Incentive Share
Option, a Nonqualified Share Option, an Unapproved Option or an Approved Option;
OPTION HOLDER means any individual who holds a subsisting Option (including,
where the context permits, the legal personal representatives of a deceased
Option Holder);
OPTION PERIOD means such period commencing on the Date of Grant and not
exceeding ten years, as the Committee may be determine under Section 7.6 in
respect of an Option or portions of an Option;
OPTION PRICE means the exercise price of an Option as described in Section 7.3;
PARTICIPANT means an Employee who has been selected by the Committee to
participate in the Plan and to receive an Award;
PERFORMANCE GOALS means the performance objectives which may be established by
the Committee for the purpose of determining whether, and to what extent, Awards
will vest or be subject to a Restricted Period.
PLAN means this Carnival plc 2005 Employee Share Plan, as amended from time to
time;
THE PLC GROUP means the Company and the Subsidiaries and MEMBER OF THE GROUP
shall be construed accordingly;
REGISTERED HOLDER means any person or persons nominated by the Committee to hold
Restricted Shares on behalf of a Participant;
RELEVANT PERIOD means in the case of:
(a) an Acquisition, the period of three months from the date of completion
of the acquisitions and if the acquisitions occur as a result of an
offer which is made subject to conditions, the period of three months
from the date when the offer becomes or is declared unconditional in
all respects;
(b) a Board Change, the period of three months from the date that the
relevant majority no longer subsists;
(c) a Compulsory Acquisition Procedure, the period of 30 days from the date
on which a notice of compulsory acquisition is first issued;
(d) a Scheme of Arrangement, the period between the date of the Court's
direction and twelve noon on the day immediately preceding the date for
which the shareholders' meeting is convened or such longer period up to
the date on which the Court sanctions the Scheme of Arrangement as the
Committee may determine;
(e) a Voluntary Winding Up, the period of two months from the date the
resolution;
(f) a Sale, the period of three months from the date of completion of the
relevant transaction; and
(g) a Corporate Transaction, the period of three months from the date of
completion of the relevant transaction;
RESTRICTED PERIOD means, with respect to any Restricted Shares or any Restricted
Share Unit, the period of time determined by the Committee during which such
Award is subject to the restrictions set forth in Section 9 (unless
foreshortened pursuant to the rules of this Plan);
RESTRICTED SHARES means Shares issued or transferred to a Participant subject to
forfeiture and the other restrictions set forth in Section 9;
RESTRICTED SHARE AWARD means an Award of Restricted Shares granted under Section
9;
RESTRICTED SHARE UNIT means a hypothetical investment equivalent to one Share
granted in connection with an Award made under Section 9;
RESTRICTED SHARE UNIT AWARD means an Award of Restricted Share Units granted
under Section 9;
RETIREMENT means the cessation of a Participant's employment with a member of
the plc Group on or after the earlier of:
(a) age 65 with at least five years of service with a member of the plc
Group; or
(b) age 55 with at least 15 years of service with a member of the plc
Group;
RETIREMENT AGE means age 55 for the purposes of paragraph 35A of Schedule 4 to
ITEPA;
SECURITIES ACT means the Securities Act of 1933, as amended;
SHARES means fully paid and irredeemable ordinary shares in the capital of the
Company or shares representing those shares following any Capital
Reorganisation;
SHARE OPTION AGREEMENT means any agreement between the Company and a Participant
who has been granted an Option pursuant to Section 7 which evidences the grant
of an Option and in the case of an Option granted by way of a share option
certificate, shall mean the share option certificate;
SUBSIDIARY means any subsidiary of the Company, as defined in Section 736 of the
Companies Act 1985, of which the Company has Control;
UKLA means the United Kingdom Listing Authority;
UNAPPROVED OPTION means an Option granted to a Participant other than a US
Participant under the Plan which is not designated by the Committee as an
Approved Option; and
VESTED UNIT shall have the meaning assigned to it in Section 9.12.
3. EFFECTIVE DATE, DURATION AND SHAREHOLDER APPROVAL
3.1 The Plan is effective as of the Effective Date [, and the Plan was
approved by shareholders at a general meeting held on 13 April 2005 in a manner
intended to comply with the shareholder approval requirements of Sections
422(b)(1) of the Code and the New York Stock Exchange]1.
3.2 The expiration date of the Plan, on and after which no Awards may be
granted hereunder, shall be the tenth anniversary of the Effective Date;
PROVIDED, HOWEVER, that the administration of the Plan shall continue in effect
until all matters relating to Awards previously granted have been settled.
- --------------------------------------------------------------------------------
1 Square brackets to be removed if the Plan approved by shareholders in
general meeting on 13 April 2005.
4. ADMINISTRATION
4.1 The Committee shall administer the Plan.
4.2 Subject to the provisions of the Plan and applicable law, the Committee
shall have the power, in addition to other express powers and authorizations
conferred on the Committee by the Plan, to:
(a) designate Participants;
(b) determine the type or types of Awards to be granted to a Participant;
(c) determine the number of Shares to be covered by, or with respect to
which payments, rights, or other matters are to be calculated in
connection with, Awards;
(d) determine the terms and conditions of any Awards;
(e) determine whether, to what extent, and under what circumstances Awards
may be settled or exercised in cash, Shares, other securities, other
Awards or other property, or cancelled, forfeited or suspended and the
method or methods by which Awards may be settled, exercised, cancelled,
forfeited or suspended;
(f) determine whether, to what extent, and under what circumstances the
delivery of cash, Shares, other securities, other Awards, other
property and other amounts payable with respect to an Award shall be
deferred either automatically or at the election of the holder thereof
or of the Committee;
(g) interpret, administer, reconcile any inconsistency, correct any defect
and/or supply any omission in the Plan and any instrument or agreement
relating to, or Award granted under, the Plan;
(h) establish, amend, suspend, or waive such rules and regulations and
appoint such agents as it shall deem appropriate for the proper
administration of the Plan; and
(i) make any other determination and take any other action specified under
the Plan or that the Committee deems necessary or desirable for the
administration of the Plan.
4.3 Unless otherwise expressly provided in the Plan, all designations,
determinations, interpretations and other decisions under or with respect to the
Plan or any Award or any documents evidencing Awards shall be within the sole
discretion of the Committee, may be made at any time and shall be final,
conclusive and binding upon all parties, including, without limitation, each
member of the Combined Group, any Participant, any holder or beneficiary of any
Award, and any shareholder.
5. GRANT OF AWARDS; SHARES SUBJECT TO THE PLAN
5.1 The Committee may, from time to time, grant Awards of Options,
Restricted Shares or Restricted Share Units to one or more Employees provided
that no Award to subscribe for Shares shall be granted to the extent that the
aggregate number of Shares that could be issued pursuant to that Award and any
other Awards granted at the same time when added to the number of Shares that:
(a) could be issued on the exercise of any other subsisting share options
or awards granted during the preceding ten years under the Plan or any
other Employee Share Plan; and
(b) have been issued on the exercise of any share options or awards granted
during the preceding ten years under the Plan or any other Employee
Share Plan; and
(c) have been issued during the preceding ten years under any Employee
Share Plan or any profit sharing or other employee share incentive plan
established by the Company;
would exceed 10% of the ordinary share capital of the Company for the time being
in issue.
5.2 Shares delivered by or on behalf of the Company in settlement of Awards
may be authorized and unissued Shares or Shares held in the treasury of the
Company or purchased on the open market or by private purchase.
5.3 Any member of the plc Group may provide money to the trustees of any
trust or any other person to enable them or him to acquire Shares to be held for
the purposes of the Plan, or enter into any guarantee or indemnity for those
purposes, to the extent not prohibited by section 151 of the Companies Act 1985.
6. ELIGIBILITY
Participation shall be limited to Employees who have received written
notification from the Committee, or from a person designated by the Committee,
that they have been selected to participate in the Plan.
7. TERMS OF OPTIONS
7.1 The Committee is authorized to grant one or more Approved Options,
Unapproved Options, Incentive Share Options or Nonqualified Share Options to any
Employee. Each Option so granted shall be subject to the conditions set forth in
this Section 7, or to such other conditions consistent with this Plan as may be
reflected in the applicable Share Option Agreement.
OPTION PRICE
7.2 The Option Price per Share for each Option shall be set by the
Committee at the Date of Grant but shall not be less than the Fair Market Value
of a Share on the Date of Grant and, if the Shares are to be issued, the nominal
value of a Share.
MANNER OF EXERCISE AND FORM OF PAYMENT
7.3 No Shares shall be delivered pursuant to any exercise of an Option
until payment in full of the Option Price therefor is received by the Company or
the Participant has made arrangements acceptable to the Company for the payment
of the Option Price. Options which have become exercisable may be exercised by
delivery of written notice of exercise to the Company accompanied by payment of,
or an undertaking to pay, the aggregate Option Price. The Option Price shall be
payable in cash.
CONDITIONS OF GRANT
7.4 An Option may be granted subject to such conditions for payment of
taxation, employees' National Insurance contributions and employer's National
Insurance contributions liability as the Committee may determine (including
without limitation the right to sell on an Option Holder's behalf sufficient
Shares to satisfy any taxation or National Insurance contributions) and if any
condition is imposed relating to the assumption, payment or reimbursement by the
Option Holder of employer's National Insurance contributions liability, such
conditions shall comply with any applicable legislation or regulations and the
Company shall be entitled to waive in whole or in part the Option Holder's
obligation in respect of such liability.
VESTING, OPTION PERIOD AND EXPIRATION
7.5 Subject to Sections 8 and 13, Options shall vest and become exercisable
in such manner and on such date or dates as the Committee may determine at the
Date of Grant and set out in a vesting schedule (a VESTING Schedule) in the
applicable Share Option Agreement or share option certificate. The Committee may
determine that an Option may vest in full on one date only or may vest partially
as to different portions on different dates so that an Option may have one
Option Period or a number of Option Periods applying to determine when each
portion shall vest. Subject to Sections 8 and 13 Options shall lapse on the
earlier of:
(a) the expiry of the Option Period; and
(b) the Option Holder being declared bankrupt or entering into any general
composition with or for the benefit of his creditors including a
voluntary arrangement under the Insolvency Act 1986;
provided, however, that notwithstanding any vesting dates set by the Committee,
the Committee may, in its sole discretion, accelerate the exercisability of any
Option, which acceleration shall not affect the terms and conditions of such
Option provided for in this Plan other than with respect to exercisability. If
an Option is exercisable in instalments, such instalments or portions thereof
which vest and become exercisable shall remain exercisable until the Option
lapses but subject to any earlier lapse provisions under Sections 8 and 13.
PERFORMANCE GOALS
7.6 The Committee shall determine prior to the Date of Grant whether any
Performance Goals shall apply to the vesting of an Option and if so these shall
be set out in the applicable Share Option Agreement or share option certificate.
OTHER TERMS AND CONDITIONS
7.7 Each Option granted under the Plan shall be evidenced by a Share Option
Agreement or a share option certificate. Immediately prior to the granting of
any Options, the Committee may, in its absolute discretion, enter into a deed
poll recording its intention to be bound by the share option certificates to be
issued to the Option Holder in respect of such Option. Except as specifically
provided otherwise in a Share Option Agreement or a share option certificate,
each Option granted under the Plan shall be subject to the following terms and
conditions:
(a) each Option or portion thereof that is exercisable shall be exercisable
for the full amount or for any part thereof;
(b) each Share acquired through the exercise of an Option shall be treated
as fully paid up at the time of issue or transfer. Each Option shall
cease to be exercisable, as to any Share, when the Participant acquires
the Share or when the Option lapses;
(c) subject to Sections 11.9 and 11.10, Options shall not be transferable
by the Participant except by will or the laws of inheritance and shall
be exercisable during the Participant's lifetime only by him;
(d) each Option shall vest and become exercisable by the Participant in
accordance with the Vesting Schedule established by the Committee and
set forth in the Share Option Agreement;
(e) at the time of any exercise of an Option, a Participant must take
whatever action is reasonably required by the Committee to ensure
compliance with applicable securities laws; and
(f) each Participant awarded an Incentive Share Option under the Plan shall
notify the Company in writing immediately after the date he makes a
disqualifying disposition of any Shares acquired pursuant to the
exercise of such Incentive Share Option. A disqualifying disposition is
any disposition (including any sale) of such Shares before the later of
(i) two years after the Date of Grant of the Incentive Share Option or
(ii) one year after the date the Participant acquired the Shares by
exercising the Incentive Share Option.
INCENTIVE SHARE OPTION GRANTS TO 10% SHAREHOLDERS
7.8 Notwithstanding anything to the contrary in this Section 7, if an
Incentive Share Option is granted to a Participant who owns shares representing
more than ten percent of the voting power of all classes of shares of the
Company or of a Subsidiary or a parent of the Company, the Option Period shall
not exceed five years from the Date of Grant of such Option and the Option Price
shall be at least 110 percent of the Fair Market Value (on the Date of Grant) of
the Shares subject to the Option.
TIME OF GRANT
7.9 The Committee shall not grant Options at any time when it would be
prohibited from doing so by the Model Code for Securities Transactions by
Directors of Listed Companies (or the Company's dealing code).
$100,000 PER YEAR LIMITATION FOR INCENTIVE SHARE OPTIONS
7.10 To the extent the aggregate Fair Market Value (determined as of the
Date of Grant) of Shares for which Incentive Share Options are exercisable for
the first time by any Participant during any calendar year (under all plans of
the Company) exceeds $100,000, such excess Incentive Share Options shall be
treated as Nonqualified Share Options.
8. EXERCISE AND LAPSE OF OPTIONS - CESSATION OF EMPLOYMENT
8.1 Save as otherwise provided in these rules, an Option shall lapse
automatically on the Option Holder ceasing to be an employee of the plc Group
(whether lawfully or unlawfully).
8.2 Where an Option Holder ceases to be an employee of the plc Group before
the end of the Option Period by reason of his employment with a member of the
plc Group being terminated by a member of the plc Group without Cause or by the
Participant for any reason other than Retirement, the Option shall lapse on the
earlier of:
(a) the last day of the Option Period; and
(b) the date that is three months after the date of such termination;
provided, however, that any Participant whose employment with a member of the
plc Group is terminated and who is subsequently re-hired or re-engaged by a
member of the plc Group prior to the lapse of the Option shall not be treated as
if his employment had terminated.
In the event of a termination described in this Section 8.2, the Option shall
remain exercisable by the Participant until its lapse only to the extent the
Option was exercisable at the time of such termination.
8.3 Where an Option Holder ceases to be an employee of the plc Group before
the end of the Option Period by reason of his death or his disability (as
determined by the Committee) while still in the employment of a member of the
plc Group, or he dies following a cessation of employment described in this
Section 8.2, the Option shall lapse on the earlier of:
(a) the last day of the Option Period; and
(b) the date that is one year after the date of such death or cessation on
account of disability of the Participant, as applicable.
In such event, the Option shall remain exercisable by the Participant or his or
her personal representatives or beneficiaries determined in accordance with
Section 11, as applicable, until its lapse only to the extent the Option was
exercisable by the Participant at the time of such event.
8.4 Where the Participant ceases to be an employee of a member of the plc
Group by reason of Retirement prior to the end of the Option Period, the Option
shall:
(a) lapse at the end of the Option Period; and
(b) continue vesting in accordance with the Vesting Schedule set forth in
the share option certificate or Share Option Agreement (as applicable),
without regard to any requirement that the Participant remain employed
with a member of the plc Group as a condition to vesting.
8.5 For the avoidance of doubt, an Option exercisable under Sections 8.2 to
8.4 may lapse at an earlier date by virtue of Section 13 and may not be
exercised after the expiry of the Option Period.
8.6 For the purposes of Sections 8.1 to 8.5 a female Option Holder shall
not be treated as ceasing to be an employee of a member of the plc Group if
absent from work wholly or partly because of pregnancy or confinement until she
ceases to be entitled to exercise any statutory or contractual right to return
to work.
8.7 Where any exercise of an Option under Sections 8.2 to 8.5 would be
prohibited by law or the Model Code for Securities Transactions by Directors of
Listed Companies (or the Company's dealing rules) the period during which the
Option Holder may exercise his Options shall be extended by an additional period
equal to the length of the period of prohibition but not beyond the expiry of
the Option Period.
9. RESTRICTED SHARE AWARDS AND RESTRICTED SHARE UNIT AWARDS
AWARDS OF RESTRICTED SHARES AND RESTRICTED SHARE UNIT AWARDS
9.1 The Committee shall have the authority:
(a) to grant Restricted Share Awards and Restricted Share Unit Awards to
Employees;
(b) to issue or transfer Restricted Shares to Registered Holders on behalf
of Participants; and
(c) to establish terms, conditions and restrictions applicable to such
Restricted Shares and Restricted Share Units, including the Restricted
Period, which may differ with respect to each Participant, the time or
times at which Restricted Shares or Restricted Share Units shall become
vested and the number of Shares or units to be covered by each grant
and whether the Award shall be subject to Performance Goals.
No Restricted Share Awards or Restricted Share Unit Awards shall be granted at
any time when the Committee is prohibited from doing so by the Model Code for
Securities Transactions by Directors of Listed Companies (or the Company's
dealing rules).
9.2 The Committee may require a Participant granted a Restricted Share
Award to execute and deliver to the Company a Restricted Share Agreement with
respect to the Restricted Shares setting forth the restrictions applicable to
such Restricted Shares. The Committee shall determine whether:
(a) the Restricted Shares shall be held in escrow rather than delivered to
the Participant pending the release of the applicable restrictions, in
which case the Committee may require the Participant to additionally
execute and deliver to the Company an escrow agreement satisfactory to
the Company; or
(b) the Restricted Shares shall be registered in the name of the nominated
Registered Holder during the Restricted Period; or
(c) other arrangements shall apply to the holding of Restricted Shares
during the Restricted Period, the terms of such arrangements being
consistent with the terms of this Plan.
9.3 If an escrow arrangement is used, the Committee shall cause a share
certificate registered in the name of the Participant to be issued and, if it so
determines, deposited together with the share powers with any escrow agent
designated by the Committee. The Committee may cause the escrow agent to issue
to a Participant a receipt evidencing any share certificate held by it
registered in the name of the Participant.
9.4 If a nominated Registered Holder is used, the Committee shall cause a
share certificate registered in the name of the Participant to be issued and, if
it so determines, deposited together with the share powers with any Registered
Holder nominated by the Committee. The Participant shall not be entitled to
delivery of the share certificate until the Restricted Period has expired and
the Registered Holder shall retain custody of such shares during the Restricted
Period.
9.5 Subject to the restrictions set forth in Section 9.7 to 9.9, the
Participant generally shall have the rights and privileges of a beneficial owner
as to such Restricted Shares, including the right to direct the Registered
Holder how to vote such Restricted Shares. At the discretion of the Committee,
cash dividends and share dividends with respect to the Restricted Shares may be
either currently paid to the Participant or withheld by the Company or the
Registered Holder for the Participant's account, and interest may be credited on
the amount of cash dividends withheld at a rate and subject to such terms as
determined by the Committee. The cash dividends or share dividends so withheld
by the Committee and attributable to any particular Restricted Shares (and
earnings thereon, if applicable) shall be distributed to the Participant upon
the release of restrictions on such Restricted Shares and, if such Restricted
Share is forfeited, the Participant shall have no right to such cash or share
dividends.
9.6 The terms and conditions of a grant of a Restricted Share Unit Award
will be reflected in a written Restricted Share Unit Award Agreement. The
Committee may determine that a Restricted Share Unit Award be granted in the
form of a nil cost option or a conditional or contingent right to acquire
shares. Where a Restricted Share Unit Award is granted in the form of a nil cost
option, any reference to the Restricted Period expiring in respect of Restricted
Share Units shall be construed as meaning that a Participant may call for the
Restricted Share Units within the period determined by the Committee. A
Participant shall not have any beneficial interest in any Shares during the
Restricted Period as a result of being granted a Restricted Stock Unit Award.
The Company will not be required to set aside a fund for the payment of any such
Award. At the discretion of the Committee, each Restricted Share Unit
(representing one Share) awarded to a Participant may be credited with cash and
share dividends paid in respect of one Share (DIVIDEND EQUIVALENTS). At the
discretion of the Committee, Dividend Equivalents may be either currently paid
to the Participant or withheld by the Company for the Participant's account, and
interest may be credited on the amount of cash Dividend Equivalents withheld at
a rate and subject to such terms as determined by the Committee. Dividend
Equivalents credited to a Participant's account and attributable to any
particular Restricted Share Unit (and earnings thereon, if applicable) shall be
distributed to the Participant upon settlement of such Restricted Share Unit
and, if such Restricted Share Unit is forfeited, the Participant shall have no
right to such Dividend Equivalents.
RESTRICTIONS
9.7 Restricted Shares comprised in a Restricted Share Award granted to a
Participant shall be subject to the following restrictions until the expiration
of the Restricted Period and the attainment of any other vesting criteria
established by the Committee, and to such other terms and conditions as may be
set forth in the applicable Restricted Share Award Agreement:
(a) the Participant shall not be entitled to delivery of the share
certificate;
(b) the Restricted Shares shall be subject to the restrictions on
transferability set forth in the Restricted Share Award Agreement; and
(c) the Restricted Shares shall be subject to forfeiture to the extent
provided in the Rules and the applicable Restricted Share Agreement
and, to the extent such Restricted Shares are forfeited, the share
certificates shall be returned to the Company, and all rights of the
Participant to such Restricted Shares and as a shareholder shall
terminate without further obligation on the part of the Company.
9.8 Restricted Share Units awarded to any Participant shall be subject to:
(a) forfeiture until the expiration of the Restricted Period and the
attainment of any other vesting criteria established by the Committee,
to the extent provided in these Rules and the applicable Restricted
Share Unit Agreement, and to the extent such Restricted Share Units are
forfeited, all rights of the Participant to such Restricted Share Units
shall terminate without further obligation on the part of the Company;
and
(b) such other terms and conditions as may be set forth in the applicable
Restricted Share Unit Agreement.
9.9 The Committee shall have the authority to remove any or all of the
restrictions on the Restricted Shares and Restricted Share Units whenever it may
determine that, by reason of changes in applicable laws or other changes in
circumstances arising after the date of the Restricted Share Award or Restricted
Share Unit Award, such action is appropriate.
RESTRICTED PERIOD
9.10 The Restricted Period applicable to Restricted Shares and Restricted
Share Units comprised in an Award shall commence on the Date of Grant and shall
expire from time to time as to that part of the Restricted Shares and Restricted
Share Units indicated in a schedule (the VESTING SCHEDULE) established by the
Committee in the applicable Restricted Share Agreement or Restricted Share Unit
Agreement.
DELIVERY OF RESTRICTED SHARES AND SETTLEMENT OF RESTRICTED SHARE UNITS
9.11 Upon the expiration of the Restricted Period with respect to any
Restricted Shares covered by a Restricted Share Award and the attainment of any
other vesting criteria established by the Committee, the restrictions set forth
in Section 9.7 to 9.9 and the Restricted Share Agreement shall be of no further
force or effect with respect to the Restricted Shares which have not then been
forfeited. The Company shall deliver or procure the delivery to the Participant,
or his beneficiary, without charge, the share certificate evidencing the
Restricted Shares which have not then been forfeited and with respect to which
the Restricted Period has expired and any other vesting criteria established by
the Committee has been attained (to the nearest full share) and any cash
dividends or share dividends credited to the Participant's account with respect
to such Restricted Shares and the interest thereon, if any.
9.12 Upon the expiration of the Restricted Period and the attainment of any
other vesting criteria established by the Committee, with respect to any
Restricted Share Units covered by a Restricted Share Unit Award, the Company
shall determine whether the Award shall be settled in Shares or cash. If the
Committee determines that the Award shall be settled in Shares, the Company
shall procure the delivery to the Participant, or his beneficiary, without
charge, one Share for each Restricted Share Unit which has not then been
forfeited and with respect to which the Restricted Period has expired and any
other such vesting criteria are attained (VESTED UNIT). If the Committee has
elected to pay cash (or part cash and part Shares) for Vested Units, the amount
of such payment shall be equal to the Fair Market Value of the Shares as of the
date on which the Restricted Period lapsed with respect to such Vested Unit.
CONDITIONS OF GRANT
9.13 Restricted Share Awards and Restricted Share Unit Awards may be granted
subject to such conditions for payment of tax and employees' National Insurance
contributions and employer's National Insurance contributions as the Committee
may determine, including that, with respect to Awards of Restricted Shares which
qualify as employment related restricted securities under Chapter 2 of Part VII
of ITEPA, any member of the plc Group may require a Participant to enter into an
election under section 430 or section 431 of ITEPA.
10. FORFEITURE
RESTRICTED SHARES
10.1 Save as otherwise provided in these rules and unless otherwise stated
in the applicable Restricted Share Award Agreement, Restricted Shares shall be
forfeited automatically on the Participant ceasing to be an employee of the plc
Group (whether lawfully or unlawfully) before the end of the Restricted Period.
10.2 Where a Participant ceases to be an employee of the plc Group before
the end of the Restricted Period by reason of Retirement, the Restricted Shares
shall not be forfeited and the restrictions attaching to the Restricted Shares
shall continue and shall lapse in accordance with the terms of the Restricted
Share Award provided, however, that the Committee may in its discretion
determine that some or all of the Restricted Shares may be released early.
10.3 Where a Participant ceases to be an employee of the plc Group before
the end of the Restricted Period by reason of his death while still in the
employment of a member of the plc Group, or he dies following a cessation of
employment described in Section 10.2 the Restricted Shares shall not be
forfeited and the Restricted Period shall expire forthwith and the restrictions
shall lapse.
RESTRICTED SHARE UNITS
10.4 Save as otherwise provided in these rules and unless otherwise stated
in the applicable Restricted Share Unit Award Agreement, Restricted Share Units
shall be forfeited automatically on the Participant ceasing to be an employee of
the plc Group (whether lawfully or unlawfully) before the end of the Restricted
Period.
10.5 Where a Participant ceases to be an employee of the plc Group before
the end of the Restricted Period by reason of Retirement, the Restricted Share
Units shall not be forfeited and the restrictions attaching to the Restricted
Share Units shall continue and shall lapse in accordance with the terms of the
Restricted Share Unit Award provided, however, that the Committee may in its
discretion determine that some or all of the Restricted Share Units may be
released early.
10.6 Where a Participant ceases to be an employee of the plc Group before
the end of the Restricted Period by reason of his death while still in the
employment of a member of the plc Group, or he dies following a cessation of
employment described in Section 10.2 the Restricted Share Units shall not be
forfeited and the Restricted Period shall expire forthwith and the restrictions
shall lapse.
10.7 For the avoidance of doubt, an Award that is retained under this
Section 10 may lapse at an earlier date by virtue of Section 13.
10.8 For the purposes of Sections 10.1 to 10.6 a female Participant shall
not be treated as ceasing to be an employee of a member of the plc Group if
absent from work wholly or partly because of pregnancy or confinement until she
ceases to be entitled to exercise any statutory or contractual right to return
to work.
10.9 Where any release or exercise of an Award under this Section 10 would
be prohibited by law or the Model Code for Securities Transactions by Directors
of Listed Companies (or the Company's dealing rules) the period during which the
Restricted Shares or Restricted Share Units may be released to a Participant
shall be extended by an additional period equal to the length of the period of
prohibition.
11. GENERAL
ADDITIONAL PROVISIONS OF AN AWARD
11.1 Awards granted to a Participant under the Plan also may be subject to
such other provisions (whether or not applicable to Awards granted to any other
Participant) as the Committee determines appropriate including, without
limitation, provisions to assist the Participant in financing the acquisition of
Shares upon the exercise of Options (provided that the Committee determines that
providing such financing does not violate the Sarbanes-Oxley Act of 2002 and
applicable UK law), provisions for the forfeiture of or restrictions on resale
or other disposition of Shares acquired under any Award, provisions giving the
Company the right to repurchase Shares acquired under any Award in the event the
Participant elects to dispose of such Shares, provisions allowing the
Participant to elect to defer the receipt of Shares upon the exercise of Awards
for a specified period or until a specified event, and provisions to comply with
US Federal and state securities laws and US Federal and state tax withholding
requirements. Any such provisions shall be reflected in the applicable Award
Agreement.
PRIVILEGES OF SHARE OWNERSHIP
11.2 Except as otherwise specifically provided in the Plan, no person shall
be entitled to the privileges of ownership in respect of Shares which are
subject to Awards hereunder until such Shares have been issued or transferred to
that person.
GOVERNMENT AND OTHER REGULATIONS
11.3 The obligation of the Company to issue Shares upon the exercise of
Options or otherwise settle Awards in Shares shall be subject to all applicable
laws, rules, and regulations, and to such approvals by governmental agencies as
may be required.
TAX WITHHOLDING
11.4 A Participant may be required to pay to a member of the Combined Group,
and each member of the Combined Group shall have the right and is hereby
authorized to withhold from any Shares or other property deliverable under any
Award or from any compensation or other amounts owing to a Participant the
amount (in cash, Shares or other property) of any required tax withholding and
payroll taxes in respect of an Award, its exercise, or any payment or transfer
under an Award or under the Plan and to take such other action as may be
necessary in the opinion of the Company to satisfy all obligations for the
payment of such taxes.
11.5 Without limiting the generality of clause 11.4 above, the Committee
may, in its sole discretion, permit a Participant to satisfy, in whole or in
part, the foregoing withholding liability (but no more than the minimum required
withholding liability if using method (b) or (c) of this subsection) by:
(a) payment in cash;
(b) delivery of Shares owned by the Participant with a Fair Market Value
equal to such withholding liability;
(c) having the Company withhold from the number of Shares otherwise
issuable pursuant to the exercise of the Award a number of Shares with
a Fair Market Value equal to such withholding liability; or
(d) authorising the Company to arrange the sale of sufficient Shares to
generate proceeds sufficient to discharge any withholding liability.
CLAIM TO AWARDS AND EMPLOYMENT RIGHTS
11.6 The rights and obligations of an Employee under the terms and
conditions of his office or employment shall not be affected by his
participation in the Plan or any right he may have to participate in the Plan.
An individual who participates in the Plan waives all and any rights to
compensation and damages in consequence of the termination of his office or
employment with any company for any reason whatsoever (whether lawfully or
unlawfully) insofar as those rights arise, or may arise, from his ceasing to
have rights under or his entitlement to an Award under the Plan as a result of
such termination or from the loss or diminution in value of such rights or
entitlements. In the event of conflict between the terms of this Section 11.6
and the Employee's terms of employment, this Section will take precedence.
GOVERNING LAW
11.7 The Plan shall be governed by, and construed in accordance with, the
laws of England. All disputes arising out of or in connection with the rules
shall be subject to the exclusive jurisdiction of the courts of England and
Wales.
FUNDING
11.8 No provision of the Plan shall require the Company, for the purpose of
satisfying any obligations under the Plan, to purchase assets or place any
assets in a trust or other entity to which contributions are made or otherwise
to segregate any assets, nor shall the Company maintain separate bank accounts,
books, records or other evidence of the existence of a segregated or separately
maintained or administered fund for such purposes. Participants shall have no
rights under the Plan other than as unsecured general creditors of the Company,
except that insofar as they may have become entitled to payment of additional
compensation by performance of services, they shall have the same rights as
other employees under general law.
NONTRANSFERABILITY
11.9 Each Award shall be exercisable only by a Participant during the
Participant's lifetime, or, if permissible under applicable law, by the
Participant's legal guardian or personal representative. No Award may be
assigned, alienated, pledged, attached, sold or otherwise transferred or
encumbered by a Participant otherwise than by will or by the laws of inheritance
and any such purported assignment, alienation, pledge, attachment, sale,
transfer or encumbrance shall be void and unenforceable against each member of
the plc Group.
11.10 Notwithstanding the foregoing, the Committee may, in its sole
discretion, permit Awards other than Incentive Share Options to be transferred
by a Participant, without consideration, subject to such rules as the Committee
may adopt consistent with any applicable Award Agreement to preserve the
purposes of the Plan, to:
(a) any person who is a spouse or child or step child under the age of 18
of the Participant (an IMMEDIATE FAMILY MEMBER);
(b) a trust solely for the benefit of the Participant and his or her
Immediate Family Members;
(c) a partnership or limited liability company whose only partners or
shareholders are the Participant and his Immediate Family Members;
(each transferee described in clauses (a), (b) and (c) above is hereinafter
referred to as a PERMITTED Transferee); PROVIDED that the Participant gives the
Committee advance written notice describing the terms and conditions of the
proposed transfer and the Committee notifies the Participant in writing that
such a transfer would comply with the requirements of the Plan.
11.11 The terms of any Award transferred in accordance with Section 11.10
shall apply to the Permitted Transferee and any reference in the Plan, or in any
applicable Award Agreement or share option certificate, to a Participant shall
be deemed to refer to the Permitted Transferee, except that:
(a) Permitted Transferees shall not be entitled to transfer any Award,
other than by will or the laws of inheritance;
(b) Permitted Transferees shall not be entitled to exercise a transferred
Nonqualified Share Option unless there shall be in effect a
registration statement on an appropriate form covering the Shares to be
acquired pursuant to the exercise of such Nonqualified Share Option if
the Committee determines, consistent with any applicable Share Option
Agreement, that such a registration statement is necessary or
appropriate,
(c) the Committee or any member of the plc Group shall not be required to
provide any notice to a Permitted Transferee, whether or not such
notice is or would otherwise have been required to be given to the
Participant under the Plan or otherwise; and
(d) the consequences of a Participant no longer being employed by, or in
the services of, a member of the plc Group under the terms of the Plan
and the applicable Award Agreement or share option certificate shall
continue to be applied with respect to the Participant, including,
without limitation, that a Nonqualified Share Option shall be
exercisable by the Permitted Transferee only to the extent, and for the
periods, specified in the Plan and the applicable Share Option
Agreement.
RELATIONSHIP TO OTHER BENEFITS
11.12 No payment under the Plan shall be taken into account in determining
any benefits under any pension, retirement, profit sharing, group insurance or
other benefit plan of a member of the Combined Group except as otherwise
specifically provided in such other plan.
EXPENSES
11.13 The expenses of administering the Plan shall be borne by the plc Group.
GENDER AND NUMBER
11.14 Where the context admits, masculine pronouns and other words of
masculine gender shall refer to both men and women, words in the singular shall
include the plural and words in the plural shall include the singular.
TERMINATION OF EMPLOYMENT
11.15 For all purposes herein, a person who transfers from employment with a
member of the plc Group to employment or service with a member of the Combined
Group shall not be deemed to have terminated employment or service with a member
of the plc Group.
TITLES AND HEADINGS
11.16 The titles and headings of the sections in the Plan are for convenience
of reference only, and in the event of any conflict, the text of the Plan,
rather than such titles or headings shall control.
SEVERABILITY
11.17 If any provision of the Plan or any Award Agreement is or becomes or is
deemed to be invalid, illegal, or unenforceable in any jurisdiction or as to any
person or Award, or would disqualify the Plan or any Award under any law deemed
applicable by the Committee, such provision shall be construed or deemed amended
to conform to the applicable laws, or if it cannot be construed or deemed
amended without, in the determination of the Committee, materially altering the
intent of the Plan or Award, such provision shall be stricken as to such
jurisdiction, person or Award and the remainder of the Plan and any such Award
shall remain in full force and effect.
12. CHANGES IN CAPITAL STRUCTURE
12.1 In the event of any:
(a) Capital Reorganisation;
(b) Corporate Transaction; or
(c) the implementation by the Company of a demerger, or the payment by the
Company of a dividend in specie or a super dividend or other
transaction or any change in applicable laws or any change in
circumstances which in the opinion of the Committee (acting fairly and
reasonably and taking into account any criteria it may consider to be
relevant) would materially affect (whether by increasing or reducing)
the current or future value of an Award
the number or type of shares subject to an Award and the Option Price per Share
may be adjusted or the Awards may be subject to substitution in such manner as
the Committee may determine is fair and reasonable, PROVIDED THAT:
(i) in respect of an Award under which Shares are to be
transferred, prior notification shall be given to the person
holding the Shares to which the Award relates;
(ii) no adjustment shall be made pursuant to this Section which
would decrease the aggregate Option Price of any Option; and
(iii) except as provided in this sub-paragraph (iii), no adjustment
may have the effect of reducing the Option Price of any Option
to less than the nominal value of a Share. Where an Option
subsists
over both issued and unissued Shares, any such adjustment may
only be made if the reduction of the Option Price of Options
over both issued and unissued Shares can be made to the same
extent. Any adjustment to the Option Price of Options over
unissued Shares shall only be made if and to the extent that
the Committee shall be authorised to capitalise from the
reserves of the Company a sum equal to the amount by which the
nominal value of the Shares in respect of which the Option is
exercisable exceeds the adjusted Option Price. The Company may
apply such sum in paying up such amount on such Shares and so
that, on exercise of any Option in respect of which such
reduction shall have been made, the Company shall capitalise
such sum (if any) and apply the same in paying up such amount
as aforesaid; and
(iv) any adjustment in Incentive Stock Options under this Section
12 shall be made only to the extent not constituting a
"modification" within the meaning of Section 424(h)(3) of the
Code, and any adjustments under this Section 12 shall be made
in a manner which does not adversely affect the exemption
provided pursuant to Rule 16b-3 under the Exchange Act.
12.2 Notwithstanding the above, in the event of any of the following:
(a) the Company is merged or consolidated with another company or body
corporate and, in connection therewith, consideration is received by
shareholders of the Company in a form other than shares or other equity
interests of the surviving entity;
(b) a Sale;
(c) the reorganization or liquidation of the Company; or
(d) the Company enters into a written agreement to undergo an event
described in sub-paragraphs (a), (b) or (c) above,
then the Committee may, in its discretion and upon at least 10 days advance
notice to the affected persons, cancel any outstanding Awards and cause the
holders thereof to be paid, in cash or shares, or any combination thereof, the
value of such Awards based upon the price per share of the shares or other
consideration received or to be received by shareholders of the Company in the
event.
12.3 The Company shall give each Participant notice of an adjustment
hereunder and, upon notice, such adjustment shall be conclusive and binding for
all purposes.
13. EFFECT OF CHANGE OF CONTROL
13.1 In the event of a Change of Control which is not a Scheme of
Arrangement, notwithstanding any provision of the Plan to the contrary and
notwithstanding that the Option Period may not have commenced nor the
Performance Goals been satisfied, an Option shall forthwith vest and become
exercisable with respect to 100 per cent of the Shares subject to such Option.
An Option Holder may exercise his Options during the Relevant Period. Failing
any permitted exercise the Options shall without prejudice to the operation of
Section 13.7, cease to be exercisable and shall automatically lapse upon the
expiry of the Relevant Period, and if more than one Relevant Period is running
concurrently, the Option shall cease to be exercisable and lapse upon the expiry
of whichever of those periods is the first to expire.
13.2 In the event of a Change of Control which is a Scheme of Arrangement,
notwithstanding any provision of the Plan to the contrary and notwithstanding
that the Option Period may not have commenced nor the Performance Goals been
satisfied, an Option shall forthwith vest and become exercisable with respect to
100 per cent of the Shares subject to such Option conditionally upon
satisfaction of the Relevant Condition. An Option Holder may exercise his
Options during the Relevant Period. Failing any permitted exercise the Options
shall cease to be exercisable between the last date upon which permitted
exercises may occur and the first date when it can be determined whether or not
the Relevant Condition is satisfied. If the Relevant Condition is not satisfied
the Options shall continue subject to the terms of this Plan. If the Relevant
Condition is satisfied the Options shall, without
prejudice to the operation of Section 13.7, lapse automatically on the date upon
which the scheme of arrangement is sanctioned by the Court.
13.3 In the event of a Change of Control which is not a Scheme of
Arrangement, notwithstanding any provision of the Plan to the contrary and
notwithstanding that the Restricted Period may not have expired nor any
Performance Goals been satisfied, the Restricted Period shall forthwith expire
with respect to 100 per cent of the Shares comprised in a Restricted Stock Award
or a Restricted Stock Unit Award. The Restricted Period shall expire immediately
upon the commencement of the Relevant Period and the Company shall satisfy its
obligations under Section 9.11 and 9.12 of this Plan in respect of the
Restricted Share Awards and Restricted Share Unit Awards within 30 days thereof
at the end of which period, without prejudice to the operation of Section 13.7,
the Awards shall lapse.
13.4 In the event of a Change of Control which is a Scheme of Arrangement,
notwithstanding any provision of the Plan to the contrary and notwithstanding
that the Restricted Period may not have expired nor any Performance Goals been
satisfied, the Restricted Period shall expire with respect to 100 per cent of
the Shares comprised in a Restricted Stock Award or a Restricted Stock Unit
Award conditionally upon satisfaction of the Relevant Condition. If the Relevant
Condition is not satisfied the Restricted Period shall not expire and the
Restricted Share Awards and Restricted Share Unit Awards shall continue subject
to the terms of this Plan. If the Relevant Condition is satisfied the Restricted
Period shall expire on the date upon which the scheme of arrangement is
sanctioned by the Court and the Company shall satisfy its obligations under
Section 9.11 and 9.12 of this Plan in respect of the Restricted Share Awards and
Restricted Share Unit Awards within 30 days thereof at the end of which period,
without prejudice to the operation of Section 13.7, the Awards shall lapse.
CANCELLATION OF AWARDS
13.5 In the event of a Change of Control, the Committee may in its
discretion and upon at least 10 days' advance notice to the affected persons,
cancel any outstanding Award and pay to the holders thereof, in cash or shares,
or any combination thereof, the value of such Awards based upon the price per
Share received or to be received by other shareholders of the Company in the
event.
DEMERGER
13.6 If the Committee becomes aware that the Company is or is expected to be
affected by any demerger, dividend in specie, super-dividend or other
transaction which, in the opinion of the Committee, would materially affect
(whether by increasing or reducing) the current or future value of any Awards,
the Committee (acting fairly and reasonably and taking into account criteria it
may consider to be relevant) may, in its absolute discretion, allow Options to
be exercised (whether or not the Option Period has commenced) and the Restricted
Period to expire in respect of Restricted Shares and Restricted Share Units, in
each case in respect of such number of Shares as the Committee may determine in
its discretion. The Committee shall specify the period in which such Options
shall be exercisable and whether such Options shall lapse at the end of the
specified period. The Committee shall notify any Participant who is affected by
the discretion exercised under this Section.
ROLL-OVER OF AWARDS
13.7 In the event of a Change of Control the Committee may, in its absolute
discretion, with the consent of any acquiring company determine that:
(a) Options shall not be exercisable and that the Restricted Period shall
not expire in respect of Restricted Shares and Restricted Share Units
but that Participants shall be required within the Relevant Period to
release any outstanding Awards (whether vested or unvested) in
consideration for the grant of equivalent Awards over shares or
restricted shares or restricted share units in the capital of the
acquiring company or any company which Controls such acquiring company,
on such terms as the Committee may determine; or
(b) Participants may at any time within the Relevant Period by agreement
with the acquiring company, release any outstanding Awards (whether
vested or unvested) in consideration for the grant of equivalent Awards
over shares or restricted shares or restricted share units in the
capital of the acquiring company or any company which Controls such
acquiring company, on such terms as the Committee may determine.
14. NON EXCLUSIVITY OF THE PLAN
Neither the adoption of this Plan by the Committee nor the submission of this
Plan to the shareholders of the Company for approval shall be construed as
creating any limitations on the power of the Committee to adopt such other
incentive arrangements as it may deem desirable, including, without limitation,
the granting of share options otherwise than under this Plan, and such
arrangements may be either applicable generally or only in specific cases.
15. AMENDMENTS AND TERMINATION
15.1 The Committee may at any time discontinue the grant of further Awards.
15.2 The Committee may amend any of the provisions of the Plan in any way it
thinks fit, provided that:
(a) the Committee shall not make any amendment that would materially
prejudice the interests of existing Participants except with the prior
consent or sanction of Participants who, if they exercised their
Options in full or the Restricted Period in respect of their Award
expired, would thereby become entitled to not less than three-quarters
of all the Shares which would fall to be allotted, transferred or
released upon exercise in full of all outstanding Options and expiry of
the Restricted Period; and
(b) no amendment to the advantage of Employees or may be made to:
(i) the definition of EMPLOYEE in Section 2;
(ii) the limitations on the number of Shares subject to the Plan;
(iii) the basis for determining an Executive's entitlement to Shares
under the Plan;
(iv) the terms of Shares to be provided under the Plan;
(v) the adjustment provisions of Section 12 of the Plan;
without the prior approval of the Company in general meeting except in
the case of minor amendments to benefit the administration of the Plan,
to take account of a change in legislation or to obtain or maintain
favourable tax, exchange control or regulatory treatment for Employees
or any member of the Combined Group; and
(c) without prejudice to any provision of the Plan which provides for the
lapse of an Option, the Committee may not cancel an Option unless the
Option Holder agrees in writing to such cancellation.
15.3 Notwithstanding any other provision of the Plan, the Committee may
establish appendices to the Plan for the purpose of granting Approved Options to
Employees who are primarily liable to tax in the United Kingdom and Awards to
Employees who are or may become primarily liable to tax outside the United
Kingdom on their remuneration, subject to such modifications as may be necessary
or desirable to take account of overseas tax, exchange control or securities
laws provided that any shares made available under such appendices shall count
towards the limit set out in Section 5.1.
15.4 Benefits under the Plan shall not be pensionable.
APPENDIX 1
UNITED KINGDOM INLAND REVENUE SHARE OPTION PLAN
APPENDIX 2
UNITED STATES PART OF THE PLAN
For any Employee whose remuneration is (or, at the time of Option exercise, is
expected wholly to be) subject to taxation in the United States of America and
to whom the Committee wishes to grant Options under this Plan which will be
treated as Incentive Stock Options, the following provisions shall apply:
(A) All the provisions of the Plan shall apply to the grant of Options
subject to the modifications contained in the following paragraphs.
(B) The number of Shares issued or transferred pursuant to the exercise of
Incentive Share Options shall not, in aggregate, exceed 40 million
Shares. The number of Shares available for issuance pursuant to the
preceding sentence shall not exceed the limit in Section 5.1 and shall
be subject to appropriate adjustment on the occurrence of any event
described in Section 12.
(C) The term "disability" in Section 8.3 shall have the meaning given by
Section 22(e)(3) of the Code.
ANNEX C
CARNIVAL PLC
2005 EMPLOYEE STOCK PURCHASE PLAN
Carnival plc, a corporation duly organized and existing under the laws
of England and Wales (the "Company"), hereby formulates and adopts the following
Carnival plc 2005 Employee Stock Purchase Plan (the "PLAN") for Eligible
Employees (as defined in Paragraph 5(a) of the Plan) of the Company and each
Subsidiary (as defined in Paragraph 5(b) of the Plan) of the Company that has
adopted the Plan with the consent of the Board of Directors of the Company (the
"BOARD OF DIRECTORS"). The Company, if adopted for its employees, and each
Subsidiary so adopting the Plan are referred to for purposes of the Plan
collectively as the "EMPLOYERS" and separately as an "EMPLOYER." The Plan is
effective on January 1, 2005, (the "EFFECTIVE DATE"), subject, however, to
approval of the Plan by the Company's shareholders within 12 months after the
date of such adoption.
1. PURPOSE.
The purpose of the Plan is to secure for the Company and the other
Employers the benefits of the additional incentive inherent in the ownership by
Eligible Employees of Carnival plc ordinary shares represented by American
Depositary Shares ("ADS") ($1.66 stated value) and to help the Company and the
other Employers secure and retain the services of the Eligible Employees. The
Plan is intended to comply with the provisions of sections 421, 423 and 424 of
the Internal Revenue Code of 1986, as amended (the "CODE") and the rules and
regulations promulgated thereunder (the "REGULATIONS"), and the Plan shall be
administered, interpreted and construed in accordance with such provisions.
2. ADMINISTRATION.
(a) COMPLIANCE WITH RULE 16B-3.
The Plan shall be administered in a manner consistent with the
requirements for exemptive relief under Rule 16b-3 or any successor provision
under the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT")
unless the Board of Directors shall determine that it is not in the best
interests of the Corporation and the other Employers that the Plan be so
administered.
(b) THE COMMITTEE.
The Plan shall be administered by a committee (the
"COMMITTEE") consisting of at least two or more members. Each member of the
Committee shall be a member of the Board of Directors and a "disinterested
person" within the meaning of Rule 16b-3 under the Exchange Act unless the Board
has made a determination not to comply with Rule 16b-3 in accordance with
subparagraph 2(a) or that it is not necessary to comply with the provisions of
Rule 16b-3 that mandate the composition of the Committee administering the Plan,
and, in either such case, the Committee shall consist of such members as shall
be determined by the Board of Directors. 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 majority of the members of the Committee present at a meeting at which
a quorum is present shall be the act of the Committee (with all determinations
as to whether a member or a quorum is present being made in accordance with the
Company's By-laws and applicable corporate law). 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 may resign from the Committee by providing written
notice to the Board of Directors of such resignation. Any vacancy on the
Committee may be filled at any time by resolution adopted by the Board of
Directors.
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(c) INTERPRETATION OF THE PLAN.
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. ADSS SUBJECT TO PLAN.
Subject to the adjustment provisions of Paragraph 11 below, a maximum
of two million shares (2,000,000) of ADSs may be made available for purchase
under the Plan.
4. OFFERINGS OF ADSS.
(a) OFFERINGS.
The right to purchase ADSs pursuant to the Plan shall be made
available to Eligible Employees in a series of semi-annual offerings beginning
on the first Business Day (as defined in subparagraph 4(b) below) of each
January and July during which the Plan is in effect (individually an "OFFERING"
and collectively the "OFFERINGS"). If and to the extent that any right to
purchase reserved ADSs shall not be exercised by any Participating Employee (as
defined in Paragraph 6(a)(ii) of the Plan) for any reason or if any such right
to purchase shall terminate as provided herein, ADSs that have not been so
purchased under the Plan shall again become available for the purposes of the
Plan unless the Plan has been terminated.
(b) BUSINESS DAY.
For purposes of the Plan, "BUSINESS DAY" shall mean any day on
which both the Company and the New York Stock Exchange (the "NYSE") are open for
business.
5. ELIGIBILITY TO PARTICIPATE IN THE PLAN.
(a) ELIGIBLE EMPLOYEES.
All members of the Board of Directors of an Employer, all
corporate officers of an Employer, and any other person employed by an Employer
shall be eligible to participate in the Plan, PROVIDED that each of such persons
at the time of any determination of eligibility (i) is classified by his or her
Employer as (A) a regular full-time employee of such Employer, or (B) a
part-time employee of such Employer whose customary employment is for fifteen
(15) hours or more per week and for five (5) months or more per year, (ii) has
been employed by any Employer or any other Subsidiary for at least six months'
Continuous Service (as defined in subparagraph 5(c) below), and (iii) is not a
Five Percent Holder (as defined in Paragraph 9(b)(i) of the Plan), each of whom
are referred to for purposes of the Plan as "ELIGIBLE EMPLOYEE" and collectively
as "ELIGIBLE EMPLOYEES."
(b) SUBSIDIARY.
For purposes 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. An entity shall be deemed a Subsidiary of the Company only for such
periods as the requisite ownership relationship is maintained.
(c) CONTINUOUS SERVICE.
For purposes of the Plan, "CONTINUOUS SERVICE" means with
respect to any Eligible Employee the period of time during which the Eligible
Employee has been employed (i) by any Employer or any other Subsidiary or (ii)
with the approval of the Committee, (A) by a predecessor business acquired by
any Employer or any other Subsidiary or (B) by a predecessor company merged or
consolidated with or into any Employer or any other Subsidiary, and during which
period there has been no interruption of the Eligible Employee's employment by
such
2
Employer, such Subsidiary or such predecessor employer; PROVIDED, HOWEVER, that,
for this purpose, Continuous Service shall include periods prior to the
Effective Date; and PROVIDED FURTHER, HOWEVER, that any change of employment by
the Eligible Employee shall not be considered to be an interruption of
Continuous Service so long as the Eligible Employee has continued to be employed
by an Employer or any other Subsidiary.
6. ENROLLMENT; ELECTION TO PARTICIPATE BY DEPOSITS AND PAYROLL DEDUCTIONS.
(a) ENROLLMENT.
(i) ENROLLMENT FORM. Any Eligible Employee may elect at any
time to enroll in the Plan by correctly completing, executing and filing with
his or her Paymaster (as defined in subparagraph 6(a)(iii) below) an enrollment
form approved by the Committee (an "ENROLLMENT FORM") indicating that he or she
(A) is an Eligible Employee and (B) elects to enroll in the Plan. The effective
date of a Eligible Employee's election to enroll in the Plan shall be the date
on which his or her Paymaster receives from him or her the properly completed
and executed Enrollment Form.
(ii) PARTICIPATING EMPLOYEE. Any Eligible Employee who has
on file with his or her Paymaster an effective Enrollment Form shall be referred
to for purposes of the Plan as a "PARTICIPATING EMPLOYEE."
(iii) PAYMASTER. For purposes of the Plan, "PAYMASTER" means
with respect to each Eligible Employee, the person(s) or department(s) charged
by the Committee with the responsibility for administering the Plan for the
Employer of the Eligible Employee.
(b) PARTICIPATING DEPOSITING EMPLOYEES.
(i) DEPOSIT ELECTION FORM. At any time during the period
from the ninetieth (90th) day to and including the tenth (10th) Business Day
prior to the first day of any Offering, any Participating Employee may elect to
actively participate in the Plan by correctly completing, executing and filing
with his or her Paymaster an election form approved by the Committee (a "DEPOSIT
ELECTION FORM") indicating that he or she (1) is a Participating Employee, (2)
elects to actively participate in the Plan by making Deposits (as defined in
subparagraph 6(b)(v) below), which is specifically identified as to the amount
thereof, to his or her Stock Purchase Account (as defined in Paragraph 7 of the
Plan) during that Offering, which Deposit he or she commits to deliver to his or
her Paymaster on or before the twentieth (20th) Business Day prior to the
Investment Date (as defined in subparagraph 8(c)(i) of the Plan) for that
Offering and (3) authorizes his or her Employer to deposit in his or her Stock
Purchase Account the Deposit referred to in the Deposit Election Form.
The effective date of a Deposit Election Form and the
election set forth therein shall be the first day of the Offering next following
the date on which the Paymaster of any Participating Employee receives from him
or her the properly completed, executed and timely filed Deposit Election Form.
Any effective Deposit Election Form shall remain effective only for the Offering
with respect to which it is filed and until such time as the Participating
Employee filing such Deposit Election Form (A) shall have ceased to be an
Eligible Employee in accordance with subsection 6(b)(iii) below, or (B) shall be
deemed to have elected to cease to actively participate in the Plan as a
Participating Depositing Employee including, without limitation, in accordance
with subsections 6(b)(v)(A) or 6(c)(ix) below.
(ii) PARTICIPATING DEPOSITING EMPLOYEE. Any Participating
Employee who has on file with his or her Paymaster an effective Deposit Election
Form shall be referred to for purposes of the Plan as a "Participating
Depositing Employee."
(iii) CHANGE IN STATUS DURING AN OFFERING TO AN INELIGIBLE
EMPLOYEE. If at any time during an Offering a Participating Depositing Employee
ceases to be an Eligible Employee for any reason, including, without limitation,
upon his or her death or retirement or termination of his or her employment,
then the Participating Depositing Employee will be deemed to have made an
election to cease to actively participate in the Plan as a
3
Participating Depositing Employee and to have authorized his or her Employer to
return to him or her the balance standing to his or her credit in his or her
stock Purchase Account in accordance with Paragraph 7(e). Such deemed election
shall be effective as of the date of the occurrence causing the Participating
Depositing Employee to cease to be an Eligible Employee.
(iv) MANDATORY CONTINUING REELECTION TO PARTICIPATE. A
Participating Depositing Employee must elect, with respect each successive
Offering, to continue to actively participate in the Plan as a Participating
Depositing Employee during such Offering, which election must be made by
complying with subparagraph 6(b)(i) above. Any Participating Depositing Employee
not making an effective election with respect to any Offering to continue to
actively participate in the Plan as a Participating Depositing Employee during
such Offering shall be deemed to have voluntarily elected to cease to actively
participate in the Plan as a Participating Depositing Employee for such Offering
and shall cease to be a Participating Depositing Employee for such Offering and
for each successive Offering. The effective date of any such deemed election
shall be the first day of the Offering to which such deemed election relates.
(v) FAILURE TO MAKE DEPOSITS IN A TIMELY MANNER AND IN THE
AGREED AMOUNTS.
(A) INSUFFICIENT DEPOSIT. If a Participating
Depositing Employee who has on file an effective Deposit Election Form fails to
timely make the Deposit in the dollar amount to which he or she committed in the
Deposit Election Form for any reason, such insufficient Deposit shall be
deposited in the Stock Purchase Account of the Participating Depositing
Employee. Any balance standing to the credit of a Participating Depositing
Employee in his or her Stock Purchase Account after making such an insufficient
Deposit shall remain in the Stock Purchase Account of the Participating
Depositing Employee and be applied on the Investment Date for that Offering in
accordance with Paragraph 8 of the Plan. Such Participating Depositing Employee
may elect to actively participate in the Plan with respect to any subsequent
Offering by completing an effective Election Form in accordance with
subparagraph 6(b)(i) or 6(c)(i), as appropriate.
(B) RETURN OF EXCESSIVE DEPOSIT. If a Participating
Depositing Employee makes a timely Deposit in an amount greater than the dollar
amount specified in his or her effective Deposit Election Form, any amount in
excess of the amount specified in the Deposit Election Form shall be returned by
his or her Employer to the Participating Depositing Employee.
(vi) DEPOSIT. For purposes of the Plan, a "DEPOSIT" means
cash in U.S. dollars or a money order that is payable in U.S. dollars, that is
identified in an effective Deposit Election Form and delivered to the Paymaster
of the Participating Depositing Employee receiving such Deposit Election Form.
(c) PARTICIPATING WITHHOLDING EMPLOYEES.
(i) WITHHOLDING ELECTION FORM. At any time during the
period from the ninetieth (90th) day to and including the tenth (10th) Business
Day prior to the first day of any Offering, any Participating Employee may elect
to actively participate in the Plan by correctly completing, executing and
filing with his or her Paymaster an election form approved by the Committee (an
"WITHHOLDING ELECTION FORM") indicating that he or she (A) is a Participating
Employee and is not a Restricted Employee (as defined in subparagraph 6(c)(iv)
below), (B) elects to actively participate in the Plan through Payroll
Deductions (as defined below), and (C) authorizes his or her Employer to make
the amount of payroll deductions specified therein ("PAYROLL DEDUCTIONS") from
each subsequent Paycheck as provided in subparagraph 6(c)(ii) below. Restricted
Employees may not file a Withholding Election Form. The effective date of a
Withholding Election Form authorizing Payroll Deductions and the election set
forth therein shall be the first day of the Offering next following the date on
which the Paymaster of any Participating Employee receives from him or her the
properly completed, executed and timely filed Withholding Election Form. Any
effective Withholding Election Form shall remain effective until such time as
the Participating Employee filing such Withholding Election Form (1) shall have
filed with his or her Paymaster an effective Withholding Election Form replacing
the previously effective Withholding Election Form in accordance with subsection
6(c)(viii) or 6(c)(ix) below or (2) shall be deemed to have elected to cease to
actively participate in the Plan through Payroll
4
Deductions, including, without limitation, in accordance with subsection
6(b)(v)(A) above or subsection 6(c)(ix) below.
(ii) OFFERINGS TO WHICH PAYROLL DEDUCTIONS ARE TO BE
APPLIED. Payroll Deductions for a Participating Employee shall begin on the
issue date of his or her Paycheck for the first complete pay period coincident
with or next following the effective date of a Withholding Election Form and
shall continue thereafter until the issue date of the Paycheck for the first
complete pay period next following the date on which such Withholding Election
Form ceases to be effective. Any Payroll Deductions that are made during a
Paycheck that includes an Investment Date for any Offering shall be deposited in
the Participating Employee's Stock Purchase Account after such Investment Date
and applied on the Investment Date for the next Offering in accordance with
subparagraph 8(a) of the Plan.
(iii) PARTICIPATING WITHHOLDING EMPLOYEE. Any Participating
Employee who has on file with his or her Paymaster an effective Withholding
Election Form shall be referred to for purposes of the Plan as a "Participating
Withholding Employee."
(iv) RESTRICTED EMPLOYEES. For purposes of the Plan a
"RESTRICTED EMPLOYEE" shall mean any Participating Employee from whose Paycheck
(as defined in subparagraph 6(c)(v) below) his or her Employer pursuant to any
applicable law may not make payroll deductions. A Restricted Employee may not
actively participate in the Plan as a Participating Withholding Employee.
(v) PAYCHECK. For purposes of the Plan, a "PAYCHECK" means
any check for compensation received by an Eligible Employee from his or her
Employer at the end of a regular pay period of the Eligible Employee.
(vi) CHANGE IN STATUS DURING AN OFFERING.
(A) CHANGE IN STATUS TO A RESTRICTED EMPLOYEE. If
an Eligible Employee who is a Participating Withholding Employee shall become a
Restricted Employee at any time during an Offering, such Eligible Employee
immediately shall be treated as a Restricted Employee for purposes of the Plan
and immediately upon the occurrence of the event causing him or her to be a
Restricted Employee shall be deemed to have made an election to cease to
actively participate in the Plan as a Participating Withholding Employee and to
have authorized his or her Employer to discontinue his or her Payroll
Deductions. The effective date of any such deemed election shall be the date of
the event causing the Eligible Employee to be classified as a Restricted
Employee, which deemed election shall remain effective until such time as the
Restricted Employee shall have on file with his or her Paymaster an effective
Withholding Election Form. Any balance standing to the credit of a Participating
Withholding Employee in his or her Stock Purchase Account after such a change in
status to a Restricted Employee shall remain in his or her Stock Purchase
Account and be applied on the next Investment Date in accordance with Paragraph
8 of the Plan.
(B) CHANGE IN STATUS TO AN INELIGIBLE EMPLOYEE. If
at any time during an Offering a Participating Withholding Employee ceases to be
an Eligible Employee for any reason, including, without limitation, upon his or
her death or retirement or termination of his or her employment, then the
Participating Withholding Employee will be deemed to have made an election to
cease to actively participate in the Plan as a Participating Withholding
Employee and to have authorized his or her Employer to discontinue his or her
Payroll Deductions, in each case as of the date of the occurrence causing the
Participating Withholding Employee to cease to be an Eligible Employee. Any
balance standing to the credit of a Participating Withholding Employee in his or
her Stock Purchase Account after ceasing to be an Eligible Employee shall be
returned to him or her in accordance with Paragraph 7(e) of the Plan.
(vii) DEEMED ELECTION REGARDING CONTINUING PARTICIPATION AS A
PARTICIPATING WITHHOLDING EMPLOYEE. A Participating Withholding Employee will be
deemed to have elected to continue to actively participate through Payroll
Deductions in each Offering subsequent to becoming a Participating Withholding
Employee,
5
provided, that on the first day of such Offering he or she is an Eligible
Employee and is not a Restricted Employee and has not filed with his or her
Paymaster, in accordance with subparagraph 6(c)(ix) below, an effective
Withholding Election Form authorizing his or her Employer to discontinue his or
her Payroll Deductions. A Participating Withholding Employee will also be deemed
to have elected to have his or her Employer make the same Payroll Deduction for
each subsequent Offering, provided, that on the first day of such Offering he or
she is an Eligible Employee and is not a Restricted Employee and has not filed
with his or her Paymaster, in accordance with subparagraph 6(c)(viii) below, an
effective Election Form authorizing his or her Employer to increase or decrease
his or her Payroll Deductions. A Participating Withholding Employee who as of
the first day of any offering after he or she becomes a Participating
Withholding Employee (A) is a Restricted Employee or (B) is not an Eligible
Employee, in any such case shall be deemed to have elected to cease to actively
participate in the Plan as a Participating Withholding Employee for such
Offering. The effective date of any such deemed election shall be the first day
of the Offering to which such deemed election relates.
(viii) CHANGING PAYROLL DEDUCTIONS PRIOR TO ANY OFFERING. A
Participating Withholding Employee may increase or decrease his or her Payroll
Deductions for any entire Offering at any time during the period from the
ninetieth (90th) day to and including the tenth (10th) Business Day prior to the
first day of any Offering by correctly completing, executing and filing with his
or her Paymaster a Withholding Election Form authorizing his or her Employer to
increase or decrease his or her previously authorized Payroll Deductions to the
amount of Payroll Deductions specified therein. Any such increase or decrease
shall become effective on the issue date of the Paycheck for the first complete
pay period next following the first day of the Offering next following the date
on which his or her Paymaster receives from the Participating Withholding
Employee a properly completed, executed and timely filed Withholding Election
Form indicating such an election.
(ix) DISCONTINUING PAYROLL DEDUCTIONS DURING ANY OFFERING. A
Participating Withholding Employee may at any time elect to cease to actively
participate in the Plan as a Participating Withholding Employee during any
Offering by correctly completing, executing and filing with his or her Paymaster
a Withholding Election Form authorizing his or her Employer to discontinue his
or her Payroll Deductions and identifying the first full Paycheck with respect
to which the discontinuation is to be effective. Any such Withholding Election
Form authorizing the discontinuation of Payroll Deductions and the election set
forth therein shall become effective on the issue date of the Paycheck that is
identified in the properly completed, executed and timely filed Withholding
Election Form indicating such an election. If a Participating Withholding
Employee so elects to cease to actively participate in the Plan through Payroll
Deductions during any Offering prior to the last Paycheck from which Payroll
Deductions are applied during such Offering in accordance with subparagraph
6(c)(ii), any balance standing to the credit of a Participating Withholding
Employee in his or her Stock Purchase Account after making such an election to
discontinue Payroll Deductions shall remain in the Stock Purchase Account of the
Participating Withholding Employee and be applied on the Investment Date for
that Offering in accordance with Paragraph 8 of the Plan. If a Participating
Withholding Employee so elects to cease to actively participate in the Plan
through Payroll Deductions during any Offering after the last Paycheck from
which Payroll Deductions are applied during such Offering and with respect to
the first Paycheck from which Payroll Deductions are applied during the next
Offering, all in accordance with subparagraph 6(c)(ii) above, then the
Participating Withholding Employee shall be deemed to have made an election in
accordance with subparagraph 6(c)(viii) above to decrease his or her Payroll
Deductions to zero for the next Offering.
(d) GENERAL.
(i) ELECTION FORMS. Deposit Election Forms and Withholding
Election Forms shall be referred to collectively for purposes of the Plan as
"ELECTION FORMS."
(ii) INACTIVE PARTICIPATING EMPLOYEE. Any Participating
Employee who does not have on file with his or her Paymaster an effective
Election Form shall be referred to for purposes of the Plan as an "INACTIVE
PARTICIPATING EMPLOYEE." Any Inactive Participating Employee may elect to
actively participate in the Plan by completing an effective Election Form in
accordance with subparagraph 6(b)(i) or 6(c)(i), as appropriate.
6
(iii) DEATH, RETIREMENT AND TERMINATION OF EMPLOYMENT. In the
event of a Participating Employee's death, retirement or termination of
employment, such Participating Employee shall immediately be deemed to have
ceased to be an Eligible Employee and, accordingly, he or she shall cease to
actively participate in the Plan through Payroll Deductions and Deposits and he
or she shall be deemed to have authorized his or her Employer to discontinue his
or her Payroll Deductions and to cancel his or her enrollment in the Plan.
(iv) REENROLLMENT OR ENDING INACTIVE PARTICIPATION. Any
Eligible Employee whose enrollment in the Plan has been canceled or who has
ceased to actively participate in the Plan for any reason may elect to enroll in
the Plan or continue to actively participate in the Plan, as appropriate, with
respect to any subsequent Offering as provided in subparagraph 6(a)(i), 6(b)(i)
or 6(c)(i) above, as appropriate.
7. STOCK PURCHASE ACCOUNTS.
For purposes of the Plan, "STOCK PURCHASE ACCOUNT" means for each
Participating Employee a non-interest bearing account consisting of all Payroll
Deductions and Deposits made for the account of the Participating Employee under
the Plan, reduced by all amounts applied to the purchase of ADSs for such
Participating Employee pursuant to Paragraph 8 of the Plan and all amounts
returned to the Participating Employee (or his or her court appointed legal
representative) pursuant to this Paragraph 7 or Paragraph 6(b)(v)(B) of the
Plan.
(a) MINIMUM/MAXIMUM ALLOWABLE DEPOSITS AND PAYROLL DEDUCTIONS.
The minimum allowable amount that can be deposited to the
Stock Purchase Account of a Participating Employee during any single Offering,
whether by a Deposit and/or Payroll Deductions, is U.S. $50.00 or any amount
determined by the Committee. The maximum allowable amount that can be deposited
to the Stock Purchase Account of a Participating Employee during any single
Offering, whether by a Deposit and/or Payroll Deductions, is equal to the lesser
of (i) an amount that would purchase 2,000 ADSs or (ii) an amount that would not
exceed the limits contained in 7(d) or 7(e) below.
(b) DEPOSITS.
Each Participating Employee who delivers a Deposit to his or
her Paymaster shall be given a receipt for such Deposit. Subject to Paragraph
6(b)(v)(B) of the Plan, each Deposit shall be credited on behalf of a
Participating Employee on the later to occur of (i) the date of receipt by the
Paymaster of the effective Deposit Election Form that refers to the Deposit or
(ii) the date of receipt by the Paymaster of the Deposit. Each Payroll Deduction
shall be credited on behalf of a Participating Withholding Employee on the date
of the Paycheck to which the Payroll Deduction relates. Each Payroll Deduction
and Deposit shall be credited on the records of each Employer to the Stock
Purchase Account in the name of the Participating Employee authorizing the
Payroll Deduction or Deposit as soon as practicable after each Investment Date.
Such credit shall constitute only a convenient bookkeeping entry by the Employer
and no interest will be paid or due on any money credited to such Participating
Employee's Stock Purchase Account.
(c) INACTIVE STATUS; FAILURE TO INVEST.
If a Participating Employee elects to cease to actively
participate in the Plan or to be enrolled as a Participating Employee under the
Plan, then the entire amount standing to the Participating Employee's credit in
his or her Stock Purchase Account on the effective date of such occurrence shall
be used to purchase ADSs on the Investment Date during the Offering during which
such event occurs in accordance with Paragraph 8 of the Plan. If for any reason
the Company does not invest on any Investment Date any amount standing to the
credit of a Participating Employee in his or her Stock Purchase Account, then
the entire amount standing to the Participating Employee's credit in his or her
Stock Purchase Account on the effective date of such occurrence shall be used to
purchase ADSs on the next succeeding Investment Date in accordance with
Paragraph 8 of the Plan.
7
(d) ANNUAL LIMIT OF U.S. $17,647.06.
If any Participating Employee becomes subject to the
limitations of Paragraph 9(a) of the Plan, then the entire amount standing to
the credit of such Participating Employee in his or her Stock Purchase Account
on the effective date of such occurrence shall be returned by his or her
Employer to the Participating Depositing Employee.
(e) FIVE PERCENT LIMITATIONS; INELIGIBLE EMPLOYEES.
If any Participating Employee becomes subject to the
limitations of Paragraph 9(b)(ii) of the Plan, then the entire amount standing
to the credit of such Participating Employee in his or her Stock Purchase
Account shall be returned to such Participating Employee (or his or her court
appointed legal representative) after the Investment Date on which the
safe-harbor provisions of Paragraph 9(b)(ii) of the Plan are applied with
respect to the Participating Employee's rights under Paragraph 8(a) of the Plan.
If on or before the tenth (10th) Business Day prior to any Investment Date, any
Participating Employee ceases to be an Eligible Employee for any reason,
including, without limitation, upon his or her death or retirement or
termination of his or her employment, then the entire amount standing to the
credit of such Participating Employee in his or her Stock Purchase Account shall
be returned to such Participating Employee (or his or her court appointed legal
representative) on the effective date of such occurrence (and at any time
thereafter prior to any subsequent date on which there is on file with his or
her Employer an effective Enrollment Form causing him or her to enroll in the
Plan).
(f) MAXIMUM NUMBER OF SHARES.
Except as specifically provided to the contrary in the Plan,
if the Participating Employees shall have purchased the maximum number of ADSs
available under the Plan and all rights of the Participating Employees are to be
terminated pursuant to Paragraph 16(a) of the Plan, each Participating Employee
shall be refunded any excess balance standing to his or her credit in his or her
Stock Purchase Account on the effective date of the termination of the Plan.
(g) MERGER, CONSOLIDATION, DISSOLUTION OR LIQUIDATION.
In the event of a dissolution or liquidation of the Company,
or of a merger or consolidation in which the Company is not the surviving or
resulting corporation, the Plan and any Offering hereunder shall terminate upon
the effective date of such dissolution, liquidation, merger or consolidation,
and the balance then standing to the credit of each Participating Employee in
his or her Stock Purchase Account shall be returned to him or her.
8. INVESTMENT OF MONEYS IN STOCK PURCHASE ACCOUNTS TO PURCHASE ADSS;
INVESTMENT ACCOUNTS.
(a) RIGHT TO PURCHASE ON AN INVESTMENT DATE.
Subject to Paragraphs 9(b)(ii) and 9(d) of the Plan, as of
each Investment Date each Participating Employee and each other Eligible
Employee shall have the right to purchase the number of whole and fractional
(computed to four decimal places) ADSs determined by dividing (i) the entire
amount credited on behalf of the Participating Employee in his or her Stock
Purchase Account by (ii) the Purchase Price (as defined in subparagraph 8(c)(ii)
below). Each Participating Employee and each other Eligible Employee having a
positive balance in his or her Stock Purchase Account as of an Investment Date
shall be deemed, without any further action, to have elected to purchase, and
the Employer shall cause to be purchased, with such balance the number of whole
and fractional ADSs (computed to four decimal places) that the Eligible Employee
has the right to purchase at the Purchase Price on that Investment Date.
(b) INVESTMENT ACCOUNTS.
All whole and fractional ADSs purchased under the Plan shall
be held in separate investment accounts ("INVESTMENT ACCOUNTS") maintained by
such brokerage house, investment banking firm, commercial bank or other such
similar institution as may be selected by the Committee for the Participating
Employees. If a
8
Participating Employee shall cease to be a Participating Employee without
ceasing to be an Eligible Employee, his or her Investment Account shall remain
open for his or her benefit in accordance with the Plan, except as otherwise
determined by the Committee. All cash dividends paid with respect to the whole
and fractional ADSs in an Eligible Employee's Investment Account shall be
credited to his or her Stock Purchase Account and reinvested on the day after it
is paid at the fair market value of an ADS on that date. The effect on an
Eligible Employee's Investment Account of such Eligible Employee ceasing to be
an Eligible Employee, including, without limitation, upon termination of his or
her employment or death, shall be determined by the Committee.
(c) DEFINITIONS.
(i) INVESTMENT DATE. For purposes of the Plan, "INVESTMENT
DATE" shall mean the last Friday of each Offering period or, if such Friday is
not a Business Day, the immediately preceding Business Day.
(ii) PURCHASE PRICE. The purchase price for each ADS
purchased pursuant to the Plan on any Investment Date (the "PURCHASE PRICE")
shall be equal to the lesser of (A) the greater of (1) eighty-five percent (85%)
of the average of the Fair Market Values on the Grant Date and the Investment
Date and the last Friday of each month within the Offering period of one ADS or
(2) eighty-five percent (85%) of the Fair Market Value of one ADS on the Grant
Date, or (B) eighty-five percent (85%) of the Fair Market Value of one ADS on
the Investment Date.
(iii) FAIR MARKET VALUE. For purposes of the Plan, "FAIR
MARKET VALUE" of an ADS means the last price of an ADS on the NYSE Composite
Tape on the date in question (or if such day is not a Business Day, the Business
Day immediately prior thereto); PROVIDED, HOWEVER, that if ADSs are not listed
on the NYSE on such date, "Fair Market Value" of an ADS shall be determined by
the Committee in its sole discretion.
(d) DEEMED GRANT OF OPTIONS.
For purposes of section 423 of the Code and the Regulations,
the Company shall be deemed to have granted to each Participating Employee an
option to purchase shares of ADSs on the first day of each Offering, which
option shall be deemed for such purposes to be exercised, if at all, on the
Investment Date for such Offering. Such option shall not be transferable by the
Participating Employee except as permitted by Paragraph 10 of the Plan.
9. LIMITATION OF NUMBER OF SHARES THAT AN EMPLOYEE MAY PURCHASE.
(a) ANNUAL LIMIT OF U.S. $17,647.06.
No Participating Employee may be granted an option under the
Plan that permits the employee's rights to purchase shares under all employee
stock purchase plans of the Company, its Subsidiaries or any parent corporation
of the foregoing to accrue at a rate that exceeds $17,647.06 of fair market
value of such shares (determined at the time such option is granted) for each
calendar year in which such option is outstanding at any time.
(b) LIMITATION OF FIVE PERCENT VOTING POWER.
(i) FIVE PERCENT HOLDER. For purposes of the Plan, a "Five
Percent Holder" means a Participating Employee who, for the purposes of section
423(b)(3) of the Code, immediately after a right to purchase shares is granted
to him or her under the Plan, owns or would be deemed to own stock possessing
five percent or more of the total combined voting power or value of all classes
of stock of the Company, any Subsidiary, or any parent corporation of the
foregoing. When making this determination, the rules of section 424(d) of the
Code will apply, and shares that the employee may purchase under outstanding
options (whether issued under the plan or otherwise) are treated as owned by the
employee.
(ii) SAFE HARBOR PURCHASE LIMITATIONS. Notwithstanding
anything in the Plan to the contrary, if on any Investment Date, as a result of
the application of the entire amount standing to the credit of any
9
Participating Employee in his or her Stock Purchase Account to purchase ADSs in
accordance with Paragraph 8(a) of the Plan, a Participating Employee would be
deemed for the purposes of section 423(b)(3) of the Code to own stock (including
any number of ADSs that such Participating Employee would be entitled to
purchase under the Plan) possessing five percent (5%) or more of the total
combined voting power or value of all classes of stock of the Company, any
Subsidiary, or any parent corporation of the foregoing, and, thus, as a Five
Percent Holder would otherwise no longer be an Eligible Employee, the maximum
number of ADSs that such Participating Employee shall be entitled to Purchase
pursuant to Paragraph 8(a) of the Plan shall be reduced to that number which,
when added to the number of shares of stock of the Company that such
Participating Employee is deemed to own in accordance with the foregoing
(excluding any number of shares that such Participating Employee would be
otherwise entitled to Purchase under the Plan) is one share less than five
percent (5%) of the total combined voting power or value of all classes of stock
of the Company, any Subsidiary or any parent corporation of the foregoing.
(iii) DETERMINATION OF STOCK OWNERSHIP. In determining stock
ownership of an Employee under this subparagraph 9(b), (A) the rules of sections
423(b)(3) and 424(d) of the Code shall apply in determining whether stock of the
Company, any Subsidiary or any parent corporation of the foregoing, that an
Employee may purchase under all other outstanding rights to purchase such stock
shall be treated as stock owned by the Employee and (B) the Company shall be
deemed to have granted to each Participating Employee who is not an Inactive
Participating Employee an option to purchase ADSs on the first day of each
Offering, which option shall be deemed for such purposes to be exercised, if at
all, on the Investment Date of such Offering.
(c) EFFECT ON ELIGIBILITY.
If any Participating Employee becomes subject to the
limitations of subparagraph 9(a) or if the number of shares of stock of the
Company that a Participating Employee is deemed to own in accordance with
subparagraph 9(b)(ii) above is one share less than five percent (5%) of the
total combined voting power or value of all classes of stock of the Company or
any Subsidiary, such Participating Employee shall continue to be considered an
Eligible Employee; provided, however, that such Participating Employee shall be
deemed to have involuntarily ceased to actively participate in the Plan
effective on the effective date of such event, in which event he or she shall be
deemed for purposes of the Plan to be an Inactive Participating Employee; and
provided further, however, that such Inactive Participating Employee may elect
to continue to actively participate in the Plan in accordance with Paragraph
6(b)(i) or 6(c)(i) of the Plan, as appropriate, as of the next succeeding
Offering on the first day on which he or she would be eligible to purchase at
least one ADS pursuant to subparagraphs 9(a) and 9(b)(ii). Notwithstanding the
foregoing and the safe harbor procedures established by subparagraph 9(b)(ii)
above, if any Participating Employee shall become a Five Percent Holder, he or
she shall cease to be an Eligible Employee and shall be deemed to have elected
to cease to be enrolled in the Plan, effective at 12:01 a.m., Miami, Florida
time, as of the day after the Investment Date for the Offering during which the
event causing the Participating Employee to become a Five Percent Holder shall
have occurred.
(d) INSUFFICIENT NUMBER OF SHARES.
In the event that the Plan is to be terminated pursuant to
Paragraph 16(a) because there are an insufficient number of ADSs available for
purchase, reserved ADSs remaining as of the termination date shall be issued to
Participating Employees in accordance with subparagraph 9(a) above on a pro-rata
basis.
10. RIGHTS NOT TRANSFERABLE.
No rights granted under the Plan shall be transferable by an Eligible
Employee or a Participating Employee in any manner other than by will or the
laws of descent and distribution and, during the lifetime of the person to whom
such rights are granted, may be exercised only by an Eligible Employee or a
Participating Employee (or his or her court appointed legal representative), as
appropriate.
10
11. ADJUSTMENT UPON CHANGES IN CAPITALIZATION; EFFECTS OF CERTAIN
TRANSACTIONS.
(a) CHANGES IN CAPITALIZATION.
In order to prevent the dilution or enlargement of rights
granted under the Plan, in the event of a reorganization, recapitalization,
stock split, stock dividend, combination of shares, merger, consolidation or
other change in the ADS, the Committee shall make appropriate changes in the
number and type of shares authorized by the Plan, the number and type of shares
covered by, or with respect to which payments are measured under, outstanding
rights and prices specified therein, subject to the limitations of section 424
of the Code.
(b) EFFECT OF MERGER, CONSOLIDATION, DISSOLUTION OR LIQUIDATION.
Subject to any required action by the stockholders and subject
to Paragraph 7(g) of the Plan, if the Company shall be the surviving or
resulting corporation in any merger or consolidation, or if the Company shall be
merged for the purpose of changing the jurisdiction of its incorporation, any
Offering hereunder shall pertain to and apply to the shares of stock of the
Company or the survivor.
12. SHARE OWNERSHIP.
The ADSs purchased by a Participating Employee on an Investment Date
shall, for all purposes, be deemed to have been issued and/or sold when the
Transfer Agent of the Company actually records such purchase on the share
records of the Company. Prior to that time, none of the rights of a shareholder
of the Company with respect to such ADSs shall inure to the benefit of the
Participating Employee.
A Participating Employee shall be precluded from selling or otherwise
alienating or assigning the shares of ADSs purchased by a Participating Employee
on an Investment Date until one year from such Investment Date. Such restriction
shall not apply in the case of death or disability of the Eligible Employee. In
addition, such restriction shall not apply to any ADS purchased with cash
dividends paid with respect to whole and fractional ADSs in an Eligible
Employee's Investment Account pursuant to Section 8(a).
In addition, the Company shall only issue to a Participating Employee
certificates representing ADSs granted under the Plan if the Participating
Employee specifically requests such certificates, pays any associated fees in
issuing such certificates, and the ADSs have been held by the Participating
Employee for two years from the Offering of such shares. Nothing in the
preceding sentence shall preclude a Participating Employee from selling such
ADSs if permitted under the terms of the Plan.
13. RIGHT TO TERMINATE EMPLOYMENT.
Nothing in the Plan shall confer upon any Eligible Employee the right
to continue in the employment of any Employer or affect the right of any
Employer to terminate the Eligible Employee's employment at any time.
14. NON-ALIENATION 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 under the
Plan shall in any manner be liable for or subject to the debts, contracts,
liabilities or torts of the person entitled to such benefits.
15. PURCHASE FOR INVESTMENT.
Whether or not the ADSs covered by the Plan have been registered under
the Securities Act of 1933, as amended, each Participating Employee may be
required by the Company to give a representation in writing that such
Participating Employee is acquiring such ADSs 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
11
restriction upon any certificate or certificates representing any ADSs issued or
transferred to the Participating Employee upon the exercise of any purchase
rights granted under the Plan or at any time thereafter.
16. TERMINATION AND AMENDMENT OF PLAN.
(a) INSUFFICIENT NUMBER OF SHARES.
Unless the Plan shall theretofore have been terminated as
hereinafter provided, the Plan and all rights of Eligible Employees hereunder
may be suspended or terminated at any time at the discretion of the Board of
Directors and shall terminate at 11:59 p.m., on the Investment Date that
Participating Employees become entitled to purchase a number of ADSs greater
than the number of reserved ADSs available for purchase pursuant to Paragraph 3
of the Plan.
(b) TERMINATION BY THE BOARD OF DIRECTORS.
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 section 423 of the Code), applicable stock exchange
listing requirements, and applicable requirements for exemption (to the extent
necessary) under Rule 16b-3 under the Exchange Act.
(c) EFFECT OF TERMINATION OF PLAN ON PARTICIPATING EMPLOYEES.
No termination, modification or amendment of the Plan, without
the consent of any Participating Employee, may adversely affect the rights of
such Participating Employee that is specified in the Plan with respect to his or
her right to withdraw any ADSs held in his or her Investment Account or to
withdraw or invest any balance then standing to the credit of the Participating
Employee in his or her Stock Purchase Account.
17. GOVERNMENT AND OTHER REGULATIONS.
The obligation of the Company with respect to rights under the Plan
shall be subject to all applicable laws, rules and regulations and such
approvals by and governmental agency as may be required, including, without
limitation, the effectiveness of any registration statement required under the
Securities Act of 1933, as amended, and the rules and regulations of the NYSE or
any other securities exchange on which the ADS may be listed.
18. WITHHOLDING.
The Company's obligation to deliver ADSs under the Plan shall be
subject to all applicable foreign or United States federal, state and local tax
withholding requirements. Any such federal, state and local withholding tax due
upon any disqualifying disposition of ADSs purchased under the Plan, in the
Committee's sole discretion, may be paid in ADSs (including the withholding of
ADSs subject to purchase under the Plan) upon such terms and conditions as the
Committee may determine.
19. SEVERABILITY.
If any of the terms or provisions of the Plan conflict with the
requirements of Rule 16b-3 under the Exchange Act and/or section 423 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 423 of the
Code, PROVIDED, HOWEVER, that if the Board of Directors shall have made a
determination that the Plan shall not be administered in a manner consistent
with Rule 16b-3, as provided in Paragraph 2 hereof, this Paragraph shall not
apply with respect to the requirements of Rule 16b-3. If the Plan does not
contain any provision required to be included herein under section 423 of the
Code, such provision shall be deemed to be incorporated herein with the same
force and effect as if such provision had been set out at length herein.
12
20. NON-EXCLUSIVITY OF THE PLAN.
Neither the adoption of the Plan by the Board of Directors or by any
Subsidiary 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 or any Subsidiary 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.
21. GOVERNING LAW.
The Plan shall be governed by, and construed in accordance with, the
laws of the State of Florida.
13
ANNEX F
CARNIVAL CORPORATION
CARNIVAL PLC
AUDIT COMMITTEE CHARTER
The Audit Committee is a committee of the Board of Directors of each of Carnival
Corporation and Carnival plc (the "Companies" and "the Boards"). The purpose of
the Audit Committee shall be to (a) assist the Boards of Directors oversight of
(i) the integrity of the Companies' financial statements, (ii) the Companies'
compliance with legal and regulatory requirements, (iii) the independent
auditor's qualifications and independence, and (iv) the performance of the
Companies' internal audit functions and independent auditors; and (b) prepare
the report that the SEC rules require be included in the Companies' annual proxy
statement.
The members of the Audit Committee shall meet the independence and experience
requirements of the New York Stock Exchange and the United Kingdom Listing
Authority. In particular, at least one member shall qualify as a "financial
expert" as defined in SEC regulations. The members of the Audit Committee shall
be appointed by the Boards on the recommendation of the Nominating and
Governance Committee. The duties and responsibilities of a member of the Audit
Committee are in addition to duties set out for a member of the Board of
Directors.
In meeting its responsibilities, the Audit Committee is expected to:
1. Provide an open avenue of communications between Financial Management,
Management Advisory Services ("MAS"), Environmental Compliance ("EC"),
the external auditors, the Audit Committee and the Boards of Directors.
2. Review and reassess the adequacy of this Charter annually.
3. Appoint, oversee, evaluate the performance of and approve the
compensation for the independent auditors annually, and, where
appropriate, review and approve the discharge of the external auditors.
The Chief Financial Officer ("CFO") will provide the Audit Committee
with the independent auditor's fee proposal, for approval, at the
October meeting of the Audit Committee. The external auditors are
ultimately accountable to the Boards of Directors and the Audit
Committee.
4. Review and concur in the appointment, replacement, reassignment, or
dismissal of the Senior Vice President - MAS & Chief Audit Executive
("CAE").
5. Set hiring policies for employees or former employees of the
independent auditors.
6. At least annually, obtain and review a report by the independent
auditor describing: the firm's internal quality control procedures; any
material issues raised by the most recent internal quality-control
review or peer review of the firm, or by any inquiry or investigation
by the governmental or professional authorities, within the preceding
five years, respecting one or more independent audits carried out by
the firm, and any steps taken to deal with any such issues and (to
assess the auditor's independence) all relationships between the
independent auditor and any of the Companies' significant
shareholders/affiliates, executive officers and/or directors. The Audit
Committee should engage in a dialogue with the independent auditor with
respect to any disclosed relationships that may impact the objectivity
and independence of the auditor.
7. Establish and monitor policies for pre-approval of the retention and
fees of the independent auditors for any statutorily permitted
non-audit services. .
8. Evaluate together with the Boards the performance of the independent
auditor and determine whether it is appropriate to adopt a policy of
rotating independent auditors on a regular basis.
9. Review with management, the Senior Vice President - MAS & CAE, Vice
President-EC and the external auditors:
(a) Significant risks or exposures and assess the steps management
has taken to minimize such risks to the Companies.
(b) The audit scope and plan of Audit Services, EC and external
auditors, and the coordination of any audits between them,
including the review by the external auditors of the
Companies' Quarterly Reports on Form 10-Q prior to the
Companies' filing such reports with the Securities and
Exchange Commission.
(c) The coordination of audit effort to assure completeness of
coverage, reduction of redundant efforts, and the effective
use of audit resources.
(d) The adequacy of the Companies' internal controls, including
financial, operational and compliance controls; risk
management systems; and computerized information system
controls and security.
(e) The adequacy of compliance with Environmental Compliance plan.
(f) Any significant findings and recommendations of the external
auditors, MAS and EC together with management's responses
thereto.
10. Review with CFO and the external auditors at the completion of the
quarterly and annual examination:
(a) The Companies' financial statements and related footnotes,
including the disclosures under "Management's Discussion and
Analysis of Financial Condition and Results of Operations,"
prior to release to shareholders.
(b) External auditors' audit of the financial statements and their
report thereon.
(c) Any significant changes required in external auditors' audit
plan.
(d) Any problems, difficulties or disputes with management
encountered during the course of the audit and management's
response.
(e) Other matters related to the conduct of the audit which are to
be communicated to the Committee under generally accepted
auditing standards.
(f) Any changes in significant accounting principles or FASB's.
(g) The Companies' critical accounting policies and estimates and
unusual transactions.
11. Consider and review with management and the Senior Vice President - MAS
& CAE:
(a) Significant findings during the year and management's
responses thereto.
(b) Any difficulties encountered in the course of their audits,
including any restrictions on the scope of their work or
access to required information.
(c) The MAS department budget and staffing.
(d) The MAS department charter.
(e) MAS compliance with the IIA's Standards for the Professional
Practice of Internal Auditing (Standards).
(f) Any changes in the annual proposed audit plan with an
explanation of deviations.
12. Discuss with CFO earnings press releases, as well as financial
information and earnings guidance provided to analysts and rating
agencies (which discussions may occur after issuance).
2
13. Review with the Senior Vice President - MAS & CAE and external auditors
the results of the Companies' monitoring compliance with the Companies'
code of conduct including disclosure of insider and affiliated party
transactions. Review periodically the Companies' policy statements in
terms of representing the code of conduct.
14. Review with the General Counsel legal and regulatory matters that may
have a material impact on the financial statements, the Companies'
compliance policies, and any material inquiries or reports received
from regulators or governmental agencies.
15. Meet separately, periodically, with management, with internal auditors
and with the independent auditors. The Senior Vice President - MAS &
CAE, Vice President - EC, and the external auditors should have
sufficient opportunity to initiate meetings with the Audit Committee
without management present.
16. Report regularly to the Boards of Directors with such recommendations
as the Committee may deem appropriate, including any recommendations to
ensure the independence of the external auditors.
17. The Audit Committee shall have the power to conduct or authorize
investigations into any matters within the Committee's scope of
responsibilities. The Committee shall be empowered to retain
independent counsel, accountants, or others to assist it in the conduct
of any investigation or to otherwise carry out its duties.
18. The Committee shall meet at least four times per year or more
frequently as circumstances require. The Committee may ask members of
management or others to attend the meeting and provide pertinent
information as necessary. Minutes of the Audit Committee shall be
submitted to the Boards of Directors.
19. The Committee will perform such other functions and prepare such other
reports, as assigned by law or required under applicable stock exchange
regulations, the Companies' charter, bylaws, articles of association or
the Boards of Directors.
20. Prepare a written report, to be published in the Companies' proxy
statement and/or information statement, to the extent required under
any applicable securities laws and stock exchange regulations.
21. No member of the Audit Committee may receive any compensation from the
Companies other than director's fees.
22. Prepare and review with the Boards of Directors an annual performance
evaluation of the Audit Committee. The performance evaluation by the
Audit Committee shall be conducted in such manner as the Audit
Committee deems appropriate. The report to the Boards may take the form
of an oral report by the chairperson of the Audit Committee or any
other member of the Audit Committee designated by the committee to make
the report.
23. Establish and monitor policies and procedures for (i) the receipt,
retention and treatment of complaints received by the Companies
regarding accounting, internal accounting controls and auditing matters
and (ii) the confidential, anonymous submission by employees of
concerns regarding questionable accounting or other matters.
24. Review with the Board of Directors, at least annually, the adequacy of
the Companies' internal controls, including financial, operational and
compliance controls; and risk management systems; and computerized
information system controls and security.
3
ANNEX H
ENVIRONMENTAL POLICY
Carnival Corporation & plc is an international company providing cruise
vacations worldwide. Our core values include preserving the marine environment
and in particular the pristine condition of the waters upon which our vessels
sail. We are committed to pollution prevention, regulatory compliance and
continuous improvement of our environmental management. Our goal is to be the
industry leader for environmental excellence. We will achieve this goal by
continuously improving our processes to minimize environmental impact and waste.
Carnival Corporation & plc will realize its objectives and commitment to
environmentally conscious practices by:
(a) fostering a corporate culture of environmental compliance that extends
to all shoreside and shipboard personnel;
(b) requiring its operating lines and employees not to impose budgetary
constraints when the expenditure of funds is necessary to ensure
environmental compliance;
(c) requiring its operating lines to implement procedures and install
equipment that assists in ensuring environmental compliance;
(d) developing an environmental compliance system that ensures compliance
with applicable environmental laws and regulations;
(e) implementing processes to ensure awareness of and compliance with
changing environmental regulations;
(f) implementing processes to improve onboard equipment, operating
procedures and training; and
(g) improving mechanisms for detecting, correcting and preventing
noncompliance.
To assist in ensuring we are meeting our environmental goals, we have
established the Carnival Corporation Environmental Hotline for Carnival Cruise
Lines, Costa Cruises, Cunard Line, Holland America Line, Seabourn Cruise Line,
Windstar Cruises, Princess Cruises, P&O Cruises, AIDA, Swan Hellenic, Ocean
Village and P&O Cruises Australia.
The purpose of this service is to provide a mechanism for reporting any concerns
you may have regarding environmental practices, policies or events.
Environmental Compliance staff will review the messages and address them
appropriately.
Environmental Hotline
(888) 290-5105 (North America)
(305) 406-5863 (International)
ENVIRONMENTAL@CARNIVAL.COM
3
Carnival plc logo Annual General Meeting
[GRAPHIC OMITTED]
[LOGO -- SHAREVOTE.CO.UK.]
Name of Shareholder(s)
REFERENCE NUMBER CARD I.D. ACCOUNT NUMBER
2233 4455 2715 0122 A1234567
I/We, hereby appoint The Chairman of the meeting, or [____________]( SEE NOTE 5)
to attend and vote on my/our behalf at the Annual General Meeting of Carnival
plc (the Company) to be held on Wednesday, April 13, 2005 and at any adjournment
of the meeting. I would like my proxy to vote on the resolutions proposed at the
meeting as indicated on this form.
PLEASE INDICATE YOUR VOTE BY MARKING THE APPROPRIATE BOXES IN BLACK INK LIKE
THIS: [X]
RESOLUTION FOR AGAINST WITHHELD
1. To re-elect Micky Arison as a director of
Carnival Corporation and Carnival plc [_] [_] [_]
2. To re-elect Ambassador Richard G. Capen,
Jr. as a director of Carnival Corporation
and Carnival plc [_] [_] [_]
3. To re-elect Robert H. Dickinson as a
director of Carnival Corporation and
Carnival plc [_] [_] [_]
4. To re-elect Arnold W. Donald as a
director of Carnival Corporation and
Carnival plc [_] [_] [_]
5. To re-elect Pier Luigi Foschi as a
director of Carnival Corporation and
Carnival plc [_] [_] [_]
6. To re-elect Howard S. Frank as a director
of Carnival Corporation and Carnival plc [_] [_] [_]
7. To elect Richard J. Glasier as a director
of Carnival Corporation and Carnival plc [_] [_] [_]
8. To re-elect Baroness Hogg as a director
of Carnival Corporation and Carnival plc [_] [_] [_]
9. To re-elect A. Kirk Lanterman as a
director of Carnival Corporation and
Carnival plc [_] [_] [_]
10. To re-elect Modesto A. Maidique as a
director of Carnival Corporation and
Carnival plc [_] [_] [_]
11. To re-elect John P. McNulty as a director
of Carnival Corporation and Carnival plc [_] [_] [_]
12. To re-elect Peter Ratcliffe as a director
of Carnival Corporation and Carnival plc [_] [_] [_]
13. To re-elect Sir John Parker as a director
of Carnival Corporation and Carnival plc [_] [_] [_]
14. To re-elect Stuart Subotnick as a
director of Carnival Corporation and
Carnival plc [_] [_] [_]
15. To re-elect Uzi Zucker as a director of
Carnival Corporation and Carnival plc [_] [_] [_]
16. Approve the Amended and Restated Carnival
Corporation 2001 Outside Director Stock
Plan [_] [_] [_]
17. Approve the Carnival plc 2005 Employee
Share Plan [_] [_] [_]
18. Approve the Carnival plc 2005 Employee
Stock Purchase Plan [_] [_] [_]
19. Re-appointment of Carnival plc's
independent auditors and ratification of
Carnival Corporation's independent
registered public accountants [_] [_] [_]
20. Authorisation of Carnival plc's audit
committee to agree the independent
auditors' remuneration [_] [_] [_]
21. Receiving of Carnival plc annual accounts
and reports [_] [_] [_]
22. Approval of Carnival plc remuneration report [_] [_] [_]
23. Renewal of Carnival plc Section 80 authority [_] [_] [_]
24. Renewal of Carnival plc Section 89 Authority [_] [_] [_]
25. Authorise Carnival plc to make market
purchases of ordinary shares of US$1.66
each in the capital of Carnival plc [_] [_] [_]
Signature Date
[_______________] [_______________]
This card should not be used for any comments,
change of address, or other queries.
Please send separate instruction. [ Product ID ]
{Logo} ADMISSION CARD
Carnival Annual General Meeting -
Wednesday April 13, 2005 at 3:00 pm
Venue: Queen Elizabeth II Passenger
Terminal, Port of Southampton, Dock Gate 4,
Ocean Gate, Atlantic Way in Southampton
NAME OF SHAREHOLDER.
ADDRESS OF SHAREHOLDER.
ADDRESS OF SHAREHOLDER.
ADDRESS OF SHAREHOLDER.
ADDRESS OF SHAREHOLDER.
- --------------------------
MAP
A1234567
- --------------------------
If you come to the meeting please bring
this card with you. It is evidence of
your right to attend and vote at et he
Meeting and will help you gain admission
as quickly as possible. Please also see
overleaf.
NOTES:
1. A shareholder entitled to attend and vote at the meeting may appoint one
or more proxies to attend and (on a poll) vote instead of him. All of the
proposed resolutions will be voted on a poll. A proxy need not be a
shareholder of the Company.
2. To be valid, your signed and dated proxy form must be completed, signed
and deposited together with any power of attorney or authority under which
it is signed or a certified copy of such power or authority (whether
delivered personally or by post), at the offices of the Company's
registrars, Lloyds TSB Registrars, The Causeway, Worthing, West Sussex,
BN99 6DA as soon as possible and no later than 3.00 pm on April 11, 2005.
In the case of a corporation, the proxy form should be exercised under its
common seal and/or the hand of a duly authorised officer or person. When
two or more valid proxy appointments are delivered or received in respect
of the same share for use at the same meeting, the one which was executed
last shall be treated as replacing and revoking the others in their
entirely as regards that share. If the Company is unable to determine
which was executed last, none of them shall be valid in respect of that
share.
3. The "Vote Withheld" box is provided to enable you to abstain on any
particular resolution. However, it should be noted that a "vote withheld"
is not a vote in law and will not be counted in the calculation of the
proportion of votes "for" and "against" a resolution but will be counted
to establish if a quorum is present.
4. If you would like to submit your proxy vote via the Internet, you can do
so by accessing the WWW.SHAREVOTE.CO.UK website. To do this you will need
to use the Reference Number, Card ID and Account Number which are give
opposite. Alternatively CREST members can submit their proxy through the
CREST Electronic Proxy Appointment Service (ID7RA01).
5. Only those shareholders registered in the register of members of the
Company at 11.00 pm on April 11, 2005 shall be entitled to attend or vote
at the meeting in respect of the number of shares registered in their name
at that time. Changes to the entries on the register of members after
11.00 pm April 11, 2005 shall be disregarded in determining the rights of
any person to attend or vote at the meeting.
6. In the case of joint registered holders, the signature of one holder on a
proxy card will be accepted and the vote of the senior holder who tenders
a vote, whether in person or by proxy, shall be accepted to the exclusion
of the votes of the other joint holders. For this purpose, seniority shall
be determined by the order in which the names stand on the register of
members of the Company in respect of the relevant joint holding.
7. To appoint one or more proxies or to give an instruction to a proxy
(whether previously appointed or otherwise) via the CREST system, CREST
messages must be received by the issue's agent (ID number 7RA01) by 3.00
pm on April 11, 2005. For this purpose, the time of receipt will be taken
to be the time (as determined by the timestamp generated by the CREST
System) from which the issuer's agent is able to retrieve the message. The
Company may treat as invalid a proxy appointment sent by CREST in the
circumstances set out in Regulation 35(5)(a) of the Uncertificated
Securities Regulations 2001.
8. Return of this form of proxy will not prevent a registered shareholder
from attending the meeting and voting in person.
Poll Card
PLEASE BRING THIS CARD WITH YOU TO THE MEETING. DO NOT POST THIS CARD TO THE
REGISTRAR.
- --------------------------------------------------------------------------------
RESOLUTIONS For Against Withheld
- --------------------------------------------------------- ----- ------- --------
1 To re-elect Micky Arison as a director of Carnival
Corporation and Carnival plc
- --------------------------------------------------------- ----- ------- --------
2 To re-elect Ambassador Richard G. Capen, Jr. as a
director of Carnival Corporation and Carnival plc
- --------------------------------------------------------- ----- ------- --------
3 To re-elect Robert H. Dickinson as a director of
Carnival Corporation and Carnival plc
- --------------------------------------------------------- ----- ------- --------
4 To re-elect Arnold W. Donald as a director of Carnival
Corporation and Carnival plc
- --------------------------------------------------------- ----- ------- --------
5 To re-elect Pier Luigi Foschi as a director of
Carnival Corporation and Carnival plc
- --------------------------------------------------------- ----- ------- --------
6 To re-elect Howard S. Frank as a director of Carnival
Corporation and Carnival plc
- --------------------------------------------------------- ----- ------- --------
7 To elect Richard J. Glasier as a director of Carnival
Corporation and Carnival plc
- --------------------------------------------------------- ----- ------- --------
8 To re-elect Baroness Hogg as a director of Carnival
Corporation and Carnival plc
- --------------------------------------------------------- ----- ------- --------
9 To re-elect A. Kirk Lanterman as a director of
Carnival Corporation and Carnival plc
- --------------------------------------------------------- ----- ------- --------
10 To re-elect Modesto A. Maidique as a director of
Carnival Corporation and Carnival plc
- --------------------------------------------------------- ----- ------- --------
11 To re-elect John P. McNulty as a director of Carnival
Corporation and Carnival plc
- --------------------------------------------------------- ----- ------- --------
12 To re-elect Peter Ratcliffe as a director of Carnival
Corporation and Carnival plc
- --------------------------------------------------------- ----- ------- --------
13 To re-elect Sir John Parker as a director of Carnival
Corporation and Carnival plc
- --------------------------------------------------------- ----- ------- --------
14 To re-elect Stuart Subotnick as a director of Carnival
Corporation and Carnival plc
- --------------------------------------------------------- ----- ------- --------
15 To re-elect Uzi Zucker as a director of Carnival
Corporation and Carnival plc
- --------------------------------------------------------- ----- ------- --------
16 Approve the Amended and Restated Carnival Corporation
2001 Outside Director Stock Plan
- --------------------------------------------------------- ----- ------- --------
17 Approve the Carnival plc 2005 Employee Share Plan
- --------------------------------------------------------- ----- ------- --------
18 Approve the Carnival plc 2005 Employee Stock Purchase
Plan
- --------------------------------------------------------- ----- ------- --------
19 Re-appointment of Carnival plc's independent auditors
and ratification of Carnival Corporation's independent
registered public accountants
- --------------------------------------------------------- ----- ------- --------
20 Authorisation of Carnival plc's audit committee to
agree the independent auditors' remuneration
- --------------------------------------------------------- ----- ------- --------
21 Receiving of Carnival plc annual accounts and reports
- --------------------------------------------------------- ----- ------- --------
22 Approval of Carnival plc remuneration report
- --------------------------------------------------------- ----- ------- --------
23 Renewal of Carnival plc Section 80 authority
- --------------------------------------------------------- ----- ------- --------
24 Renewal of Carnival plc Section 89 Authority
- --------------------------------------------------------- ----- ------- --------
25 Authorise Carnival plc to make market purchases of
ordinary shares of US$1.66 each in the capital of
Carnival plc
- --------------------------------------------------------- ----- ------- --------
Name:____________________________________
Signature:_________________________________
- --------------------
RESPONSE LICENCE No. 1 l l
SEA7143
- --------------------
---------------------
BARCODE
---------------------
Lloyds TSB Registrars
THE CAUSEWAY
WORTHING
BN99 6AN
CARNIVAL CORPORATION
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD APRIL 13, 2005
The undersigned shareholders of Carnival Corporation hereby revoke all prior
proxies and appoint Micky Arison and Arnaldo Perez, and each of them, proxies
and attorneys in fact, each with full power of substitution, with all the powers
the undersigned would possess if personally present, to vote all shares of
common stock of Carnival Corporation which the undersigned is entitled to vote
at the annual meeting of shareholders to be held on April 13, 2005 or any
postponement or adjournment of the annual meeting.
Please mark your vote as indicated in this example: [X]
A vote "FOR" Proposals 1 through 11 is recommended by the Board of Directors.
1. To vote for the election of the following nominees:
Micky Arison, Ambassador Richard G. Capen, Jr., Robert H. Dickinson,
Arnold W. Donald, Pier Luigi Foschi, Howard S. Frank, Richard J.
Glasier, Baroness Hogg, A. Kirk Lanterman, Modesto A. Maidique, John
P. McNulty, Peter Ratcliffe, Sir John Parker, Stuart Subotnick and Uzi
Zucker.
FOR all nominees [ ]
WITHHOLD all nominees [ ]
WITHHOLD authority to vote for any individual nominees [ ]
(INSTRUCTION: To WITHHOLD authority to vote any individual nominees, write that
nominee's name on the line below.)
__________________________________________________
2. To approve the Amended and Restated Carnival Corporation 2001 Outside
Director Stock Plan.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. To approve the Carnival plc 2005 Employee Share Plan.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
4. To approve the Carnival plc 2005 Employee Stock Purchase Plan.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
5. To re-appoint PricewaterhouseCoopers LLP as independent auditors for
Carnival plc and to ratify the selection of PricewaterhouseCoopers LLP as
independent registered public accountants for Carnival Corporation.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
6. To authorize the Audit Committee of Carnival plc to agree the remuneration
of the independent auditors.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
7. To receive the accounts and reports for Carnival plc for the financial year
ended November 30, 2004.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
8. To approve the directors' remuneration report of Carnival plc.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
9. To approve limits on the authority to allot shares by Carnival plc.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
10. To approve the disapplication of pre-emption rights for Carnival plc.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
11. To approve a general authority for Carnival plc to buy back Carnival plc
ordinary shares in the open market.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
12. In their discretion, the proxies are authorized to vote upon such other
business as may come before the annual meeting, or any adjournment(s)
thereof.
I will be attending the annual meeting [ ]. Print name below.
______________________________
PERSONS WHO DO NOT INDICATE ATTENDANCE AT THE ANNUAL MEETING ON THIS PROXY CARD
WILL BE REQUIRED TO PRESENT PROOF OF STOCK OWNERSHIP TO ATTEND.
The shares represented by this Proxy will be voted as specified herein. If not
otherwise specified, such shares will be voted by the proxies FOR Proposals 1
through 11.
Signature_________________ Signature________________________
(Please sign exactly as name appears above.)
Dated: _______________________________, 2005
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
