What is the main purpose of these amendments to Royal Caribbean's Articles of Incorporation?

The primary purpose is to ensure that Royal Caribbean Cruises Ltd. maintains its tax-exempt status on gross income derived from the international operation of ships, as provided by Section 883 of the U.S. Internal Revenue Code. The amendments are designed to prevent the company from being considered 'closely held,' which could jeopardize this tax exemption.

What is the 'Ownership Limit' and who does it apply to?

The 'Ownership Limit' generally restricts any single 'Person' (defined broadly) from 'Beneficially Owning' more than 4.9% of any class of the Corporation's shares, measured by value, vote, or number. This limit does not apply to 'Existing Holders' (A. Wilhelmsen AS, Cruise Associates) or to any class of shares specifically exempted by the Board of Directors.

What happens if an investor or entity exceeds the 4.9% ownership limit?

If a 'Transfer' or other event results in a 'Person' (other than an Existing Holder) beneficially owning shares in excess of the Ownership Limit, those excess shares are automatically designated as 'Excess Shares.' These Excess Shares are effectively transferred to an 'Excess Share Trust,' managed by an 'Excess Share Trustee,' for the benefit of a 'Charitable Beneficiary.' The original beneficial owner of these Excess Shares will not have rights to them, and they may be transferred to a permitted party or repurchased by the company.

How do these changes affect current shareholders and potential investors?

Current shareholders should be aware that their share certificates will now bear a legend detailing these restrictions. For potential investors, it means they cannot acquire more than 4.9% of any share class without potentially triggering the Excess Shares provisions. The amendments ensure that the company remains compliant with tax regulations, which is generally positive for long-term shareholder value by preserving its financial advantages.

RCL 8-K SEC Disclosure — Aug 28, 2000

Summary

This Form 6-K filing by Royal Caribbean Cruises Ltd. (RCL) on August 28, 2000, details significant amendments to its Articles of Incorporation, specifically adding Articles Tenth and Eleventh. These amendments are designed to maintain the company's tax-exempt status on gross income derived from international shipping operations under Section 883 of the U.S. Internal Revenue Code. The core of these amendments introduces restrictions on share ownership and transfers. A key provision establishes an 'Ownership Limit,' generally restricting any single person (other than 'Existing Holders') from beneficially owning more than 4.9% of any class of RCL's shares by value, vote, or number. This is intended to prevent the company from becoming 'closely held,' which could jeopardize its tax exemption. The filing also outlines a mechanism for 'Excess Shares' that would violate these limits, involving a trust and potential transfer to a charitable beneficiary or repurchase by the company.

Key Highlights

1Royal Caribbean Cruises Ltd. (RCL) filed amendments to its Articles of Incorporation, adding new Articles Tenth and Eleventh.
2These amendments implement restrictions on share ownership and transfers to maintain the company's tax exemption under Section 883 of the U.S. Internal Revenue Code.
3A key restriction sets an 'Ownership Limit' of 4.9% beneficial ownership for any person (excluding 'Existing Holders') in any class of shares.
4The amendments aim to prevent the company from becoming 'closely held,' a condition that could negatively impact its tax status.
5A new 'Excess Shares' mechanism is introduced, whereby shares exceeding the ownership limit are subject to transfer to a trust.
6The Excess Shares may be transferred to a charitable beneficiary or repurchased by the company.
7These changes were authorized by a vote of more than two-thirds of the outstanding shares entitled to vote.

ROYAL CARIBBEAN CRUISES LTD 8-K Report (Aug 28, 2000)

Summary

Key Highlights

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