Euro Conversion Option for Seagoing Employment Agreement (SEA) Officers

In response to concerns about the weakening U.S. Dollar, Holland America Line is very pleased to announce the Euro conversion option that is available for most SEA officers. Officers taking advantage of this option will have their wages calculated in Euros on a going forward basis starting with the payroll period beginning April 1, 2008.

To understand this new system, it is important to distinguish between the currency in which compensation is calculated and the currency in which compensation is paid. Presently, all SEA officers have their compensation calculated in U.S. Dollars. Those SEA officers who do not participate in the SEAwire program also have their compensation paid in U.S. Dollars. Those SEA officers who participate in the existing SEAwire program have their compensation paid in U.S. Dollars, Euros, British Pounds, Canadian Dollars or Australian Dollars, as they have elected, with the actual amount paid based on the U.S. Dollar foreign exchange rate at the time of payment. For these people, the amount of U.S. Dollars does not change but the amount of Euros, British Pounds, Canadian Dollars of Australian Dollars will change from month-to-month based on changes in the U.S. Dollar foreign exchange rates. All payments to SEA officers are net of onboard U.S. Dollar cash draws they have previously received.

Under this new program, most SEA officers will have the option of having their compensation calculated in Euros on a going forward basis or they can continue having their compensation calculated in U.S. Dollars. The compensation, whether calculated in U.S. Dollars or Euros, can then be paid in any of the currencies available under our SEAwire program or by a U.S. Dollar check if you do not want to participate in the SEAwire program. As explained in Question 14 below, we are expanding the SEAwire program to offer numerous currencies in addition to the five that are now available.

Frequently Asked Questions:

Who is eligible for this program?

All nautical, technical and marine hotel officers working under Seagoing Employment Agreements (SEA) except for the following individuals:

People residing in Indonesia, the Philippines, India, United States, Latin America, South America and the Caribbean.
People in the Entertainment Department. This will be extended to Entertainment Department personnel in the near future.
People who are eligible for bonuses under our Hotel Service Charge Plan.

Am I required to convert to Euros?

No, you are not. This is a one-time conversion option, however. Consequently, if you choose not to convert to a Euro-based SEA Contract now, you should not anticipate being given the option to do so in the future.

Can I exercise the Euro conversion option and then change my mind later?

No. The Euro conversion option election is irrevocable.

How do I sign-up for the Euro conversion and by when must I do it?

The Human Resource Officer has a Euro conversion form that you need to fill out and sign. Election forms for SEA officers now on leave are also available on our www.welcome2hal.com web site (User Name: welcome; Password: aboard). The signed form must be scanned and sent to Ade Suchyar in the Seattle Human Resources Department at ASuchyar@hollandamerica.com. All forms must be received by Ade no later than March 25, 2008.

My monthly wage is now USD$3000. What will my wage be if I elect to convert to Euros?

Starting with the pay period beginning April 1, 2008, your monthly wage will be the Euro equivalent of USD $3,000 determined with reference to the foreign exchange rate in effect on March 31, 2008 as published by Reuters. If, for example, the rate was 1 Euro = USD $1.50 on March 31, 2008, your new monthly wage would be 2,000 Euros ($3,000/1.5), effective April 1, 2008.

What happens when the US Dollar-Euro foreign exchange rate changes in the future?

There will be no further adjustment to your wages based on future changes in the U.S. Dollar-Euro foreign exchange rate. In the example in Question 5, your wages would remain at 2,000 Euros until such time as you receive your next regular merit wage adjustment. If, for example, your merit wage adjustment was a 4% increase effective January 1, 2009, your new wage at that time would be 2,080 Euros.

I do not live in a Euro country. What if I want to have my wages calculated in my home currency?

At this time, we are only offering the Euro conversion option. In the future, we may elect to offer additional currency options as we recognize that utilizing an officer’s home currency will more appropriately align the amount a person earns will remain in line with the costs in their home country and not be subject to loss of value due to foreign exchange rate changes. If a new currency is added in the future, an officer living in that country, whether or not s/he previously converted to Euros, will have the option of converting to that currency based on the foreign exchange rate then in effect.

If I elect the Euro pay option, what about premiums and other items of compensation that are now calculated in U.S. Dollars?

The Euro conversion option only applies to an officer’s daily or hourly compensation (including overtime), vacation percentage and SARB (Sailing Assignment Return Bonus), OIP (Officer Incentive Plan) and SOIP (Senior Officer Incentive Plan) bonuses. All other compensation, including premiums and other incentives, will continue to be calculated in U.S. dollars. If the premium or incentive is based on performance or work during a specific cruise, your premium or incentive will be converted to Euros based on the foreign exchange rate that is in effect on the last day of the cruise (or, if that is not a business day, on the previous business day). If the other compensation is not based on your performance or work during a specific cruise, your other compensation will be converted to Euros based on the foreign exchange rate in effect at the time of payment of your monthly compensation. At the end of the month, the Euros will be paid to you by one of the two methods described in the next question.

I now receive a U.S. Dollar check or U.S. Dollars on every payday. What will happen when I convert to Euros?

You have two choices:

You can sign up for the SEAwire program and have your pay automatically transferred every month to your bank account. As explained below, SEAwire is being expanded to include 18 different currencies rather than the 5 now being offered. Under SEAwire, the Euros you earn will be paid in Euros or converted every month to a different currency you have selected based on the Euro foreign exchange rate at the time of payment. For example, assume an officer is from New Zealand, elects the Euro conversion option and is being paid $2,000 Euros per month. If the NZD/Euro exchange rate at is 1.90 at the time of payment of the April payroll, the officer will receive NZD $3,800. If the NZD/Euro exchange rate is 1.95 at the time of payment of the May payroll, the officer will receive NZD$3,900. In both cases, the actual amount received may be less if the officer's bank imposes any charges for receiving wire transfers. Charges imposed by Holland America Line's bank are pad by the Company.
If you do not participate in SEAwire, you will receive you pay in the form of an onboard US Dollar check at the end of the month by the Purser. We are not able to issue Euro checks. Under this option, your Euro-based pay would be converted to US dollars based on the foreign exchange rate in effect at the time of payment. For example, assume an officer elects the Euro conversion option and is being paid $2,000 Euros per month. If the USD/Euro exchange rate is 1.50 at the time of payment of the April payroll, the officer will receive USD$3,000. If the USD/Euro exchange rate is 1.55 at the time of payment of the May payroll, the officer will receive the USD $3,100. If the USD/Euro exchange rate was 1.45 at the time of payment of the May payroll, the officer would receive the USD $2,900.

Under either scenario, your compensation will still be calculated in Euros.

What if I receive an onboard draw?

All onboard draws will continue to be paid in U.S. Dollars. If you elect the Euro conversion pay option, your onboard draw will be converted to Euros based on the foreign exchange rate that is in effect on the day of the draw (or, if that is not a business day, on the previous business day). That amount will then be deducted from your regular pay for purposes of the month-end calculation.

Do we have to sign a contract amendment to reflect this change?

No. Your written request to take advantage of the conversion option will be considered your agreement to amend your SEA to reflect the new Euro wage rate. Future SEA contracts will reflect the Euro pay rate.

I am already a participant in the SEAwire program. Do I have to fill out any new forms for the SEAwire program if I elect the Euro conversion option?

Answer: While you still have to notify us of your election to have your pay calculated in Euros, you do not have to change your SEAwire program registration except as explained in the next paragraph (unless, of course, your wire instructions have changed). If your U.S. Dollar pay is already being converted into Euros under the SEAwire program, you will now just start receiving your new Euro pay rate every month. If you are receiving your pay in a different currency, such as British Pounds, Canadian Dollars or Australian Dollars, you will continue to receive your pay in those currencies with the actual amount received based on the foreign exchange rate (between the SEAwire elected currency and the Euro, rather than the U.S. Dollar) that is in effect at the time of payment.

Some officers are participating in the SEAwire program but having their U.S. Dollars wired directly to a U.S. Dollar account in their home country rather than converted to the SEAwire elected currency. If you elect the Euro conversion option, you will need to change your SEAwire registration to designate a SEAwire currency account to replace the current U.S. Dollar account unless you want to continue being paid in U.S. dollars. This would mean that your pay, calculated in Euros, would be converted to U.S. dollars based on the foreign exchange rate in effect at the time of payment. Similarly, if you want to take advantage of one of the new currencies being added to the SEAwire program (described below), you will need to provide us paperwork for the new account that accepts the different currency.

I am not a participant in the SEAwire program. What will I need to do to sign up for it?

The SEAwire program is available to officers whether or not they elect the Euro conversion option. Your HRO has information on the SEAwire program and how to sign up for it. Information can also be found on the www.welcome2hal.com website (user name: welcome; password: aboard). Remember, that you will need to separately sign up for the SEAwire program in addition to exercising the voluntary Euro conversion option. You should sign-up for the SEAwire program no later than March 25, 2008 to ensure that everything is in place for your March payroll payment. If you miss this deadline, you can still sign up in April (until April 21st) but SEAwire would not begin to apply until your April payroll payment.

I do not live in the United States, a Euro country, the United Kingdom, Canada or Australia. What currency will I be paid in?

In addition to the U.S. Dollar, Euro, Pound Sterling, Canadian Dollar and Australian Dollar, the SEAwire program is being expanded to include the currencies from the following countries:

Croatia - kuna - HRK
Zcech - koruna - CZK
Hong Kong - dollar - HKD
Hungary - forint - HUG
Mexico - new peso - MXN
New Zeland - dollar - NZD
Norway - krone - NOK
Poland - zloty - PLN
Singapore - dollar - SGD
South Africa - rand - ZAR
Sweden - Krona - SEK
Switzerland - franc - CHF
Turkey - lira - TRY

Indonesia, India and the Philippines were not included as there are already systems in place that enable officers from those countries to have their pay transferred directly to their home bank accounts. Romania was excluded because our bank is unable to support payments in the Romanian currency.

Consequently, if you have an account that accepts any of the currencies listed above, you will now be able to be paid in that currency with the actual amount received based on the foreign exchange rate (between the SEAwire elected currency and the currency in which your pay is calculated – either Euro or U.S. Dollar) that is in effect at the time of payment. If you live in a country that does not use one of these currencies and you want to take advantage of SEAwire, then you will have to open a bank account that accepts deposits in one of the covered currencies.

If I decide not to convert to Euros, can I still take advantage of the expanded SEAwire program.

Yes. You can sign up for the SEAwire program. You will then be paid in one of the offered currencies with the actual amount received based on the foreign exchange rate (between the currency you have chosen and the U.S. Dollar) that is in effect at the time of payment. The bank account you designate for SEAwire must be one that accepts the selected currency.