PRINCESS CRUISES CHIEF EXECUTIVE OFFICER SUPPLEMENTAL RETIREMENT PLAN

                                                                  EXHIBIT 10.1
                                                                  ------------


                               PRINCESS CRUISES
                            CHIEF EXECUTIVE OFFICER
                         SUPPLEMENTAL RETIREMENT PLAN

                               2006 RESTATEMENT

                                   PREAMBLE

A.       Effective as of November 1, 1998 (the "Effective Date"), Princess
         Cruises, Inc. (the "Former Sponsor") established the "Princess
         Cruises, Inc. President's Retirement Plan" (the "Plan"), for the
         Participant (as defined in Section 2.21 below), who was then the
         President of Former Sponsor. The name of the Plan was changed to the
         "Princess Cruises, Inc. Special Senior Executive Supplemental
         Retirement Plan," and was changed again to the "Princess CRUISES
         Special Senior Executive Supplemental Retirement Plan." Effective as
         of the Restatement Effective Date of this 2006 Restatement of the
         Plan, the name of the Plan is changed to the "Princess Cruises Chief
         Executive Officer Supplemental Retirement Plan."

B.       In connection with the sale of substantially all of Former Sponsor's
         assets to Princess Cruise Lines, Ltd., a corporation organized under
         the laws of Bermuda ("PCLL"), PCLL adopted and assumed sponsorship of
         the Plan and all of Former Sponsor's rights, liabilities and
         obligations under and with respect to the Plan (except as otherwise
         set forth in the Asset Purchase Agreement).

C.       Before October 16, 2000, the Participant was a member in the P&O
         Pension Scheme. At that date a new scheme was established by P&O
         Princess Cruises plc and the Participant's benefit under the P&O
         Pension Scheme was transferred to the new scheme. Effective as of
         October 16, 2000 the Participant became a member in the new scheme,
         which is called the "P&O Princess Cruises Pension Scheme." The
         scheme, as modified by certain agreements dated January 16, 2001 and
         October 17, 2001, is herein referred to as the "UK Pension Scheme"

D.       With effect on and from April 5, 2006 (the "Opt Out Date"), the
         Participant elected to opt out of the UK Pension Scheme. As a member
         of the UK Pension Scheme whose active membership has ceased, the
         Participant is entitled to a deferred pension. However, future
         accruals under the scheme ceased as of the Opt Out Date.

E.       Pursuant to Section 6.3 of the Participant's Employment Agreement (as
         defined in Section 2.15), generally effective as of the Opt Out Date,
         the Plan is being amended and completely restated into this document,
         which is referred to herein as the "2006 Restatement." The primary
         purpose of the 2006 Restatement is to maintain the benefit structure
         provided to the Participant before the Opt Out Date. Accordingly,
         under the 2006 Restatement, the Participant is entitled to receive
         substantially the same benefits he was entitled to under this Plan
         and the UK Pension Scheme, both as in effect immediately before the
         Opt Out Date.

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                            ARTICLE I. INTRODUCTION

1.1      PURPOSE. The purpose of the Plan is to enable the Sponsor to attract,
         retain and motivate the Participant by providing to such executive
         certain retirement income as more fully set forth herein.

1.2      EFFECTIVE DATE AND TERM. The effective date of the Plan is November
         1, 1998 (the "Effective Date"), provided, however that the effective
         date of this 2006 Restatement is the Restatement Effective Date The
         Plan shall continue in effect until terminated by the Committee
         pursuant to the provisions of Section 7.5.

1.3      PARTICIPATION. Participation in this Plan is open only to Peter G.
         Ratcliffe. The participation in this Plan and the payment of any
         benefits under this Plan shall be governed by the terms of this Plan.
         Participant shall execute a copy of this Plan evidencing his
         acceptance of the terms and conditions hereof and his participation
         in the Plan.

1.4      APPLICABILITY OF ERISA. This Plan is intended to be a "top-hat"
         plan--that is, an unfunded plan maintained primarily for the purpose
         of providing deferred compensation to a select group of management or
         highly compensated employees within the meaning of ERISA.

                            ARTICLE II. DEFINITIONS

2.1      409A CHANGE IN CONTROL EVENT. "409A Change in Control Event" means an
         event described in Code Section 409A(a)(2)(A)(v) as further defined
         in applicable regulations thereunder.

2.2      ACTIVE PARTICIPANT. "Active Participant" means the Participant so
         long as he has not Separated from Service and the Committee has not
         elected to terminate his Active Participation pursuant to Section
         4.6. "Active Participation" means participation as an Active
         Participant. Active Participation will cease on the earlier of the
         Participant's Separation from Service or the date the Committee
         terminates the Participant's Active Participation under Section 4.6.

2.3      ADJUSTMENT DATE. "Adjustment Date" means the date upon which Pension
         increases shall be effective under Section 3.3, which shall be April
         1.

2.4      AFFILIATED COMPANY. "Affiliated Company" means any entity that
         constitutes the Employer other than the Sponsor.

2.5      ALTERNATE PAYEE. "Alternate Payee" means the Participant's spouse or
         former spouse.

2.6      AVERAGE ANNUAL COMPENSATION. "Average Annual Compensation" means,
         with respect to the Participant and as of any date of reference (the
         "Determination Date"), the quotient obtained by dividing (a) the
         highest aggregate amount of Pensionable Earnings earned by such
         Participant during any consecutive 60-month period prior to (or
         ending on) such Determination Date, by (b) a factor of five.

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2.7      BENEFICIARY. "Beneficiary" means the Surviving Spouse, who shall be
         entitled to receive the lump sum death benefit pursuant to Section
         5.2(b), but if there is no Surviving Spouse at the Participant's
         death or the Surviving Spouse dies within the five-year period
         following the Participant's Separation from Service, such person or
         persons or entity or entities designated or deemed designated
         pursuant to Section 3.9 to receive the lump sum death benefit under
         Section 5.2.

2.8      BENEFIT ENTITLEMENT STATEMENT. "Benefit Entitlement Statement" means
         the statement of a Participant's benefit entitlement referenced in
         Section 3.10 of the Plan.

2.9      CHANGE IN CONTROL.

         (a)      "Change in Control" means the following and shall be deemed
                  to occur if any of the following events occurs:

                  (i)      Any "person," as such term is used in Sections
                           13(d) and 14(d) of the Securities Exchange Act of
                           1934, as amended (the "Exchange Act"), other than
                           an entity created by Carnival as part of a
                           reorganization of the structure of the Carnival
                           Corporation and plc Group ("Carnival Created
                           Holding Company") is or becomes the "beneficial
                           owner" (as defined in Rule 13d-3 under the Exchange
                           Act), directly or indirectly, of securities of
                           Carnival representing more than 50% of the combined
                           voting power of Carnival's then outstanding voting
                           securities.

                  (ii)     Any "person," as such term is used in Sections
                           13(d) and 14(d) of the Exchange Act, other than
                           Carnival or a direct or indirect subsidiary of
                           Carnival ("Carnival Subsidiary") is or becomes the
                           "beneficial owner" (as defined in Rule13d-3 under
                           the Exchange Act), directly or indirectly, of
                           securities of Sponsor representing more than 50% of
                           the combined voting power of Sponsor's then
                           outstanding voting securities.

                  (iii)    The stockholders of Carnival approve a merger or
                           consolidation of Carnival with any other
                           corporation, other than the following:

                           (A)      A merger or consolidation which would
                                    result in the voting securities of
                                    Carnival outstanding immediately prior
                                    thereto continuing to represent (either by
                                    remaining outstanding or by being
                                    converted into voting securities or
                                    another entity) 50% or more of the
                                    combined voting power of the voting
                                    securities of Carnival or such other
                                    entity outstanding

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                                    immediately after such merger or
                                    consolidation; or

                           (B)      A merger or consolidation effected to
                                    implement a recapitalization or
                                    reorganization of Carnival (or similar
                                    transaction) in which no person acquires
                                    more than 50% of the combined voting power
                                    of Carnival's then outstanding voting
                                    securities; or

                           (C)      A merger or consolidation with a Carnival
                                    Created Holding Company.

                  (iv)     The stockholders of Sponsor approve a merger or
                           consolidation of Sponsor with any other
                           corporation, other than the following:

                           (A)      A merger or consolidation which would
                                    result in the voting securities of Sponsor
                                    outstanding immediately prior thereto
                                    continuing to represent (either by
                                    remaining outstanding or by being
                                    converted into voting securities or
                                    another entity) 50% or more of the
                                    combined voting power of the voting
                                    securities of Sponsor or such other entity
                                    outstanding immediately after such merger
                                    or consolidation; or

                           (B)      A merger or consolidation effected to
                                    implement a recapitalization or
                                    reorganization of Sponsor (or similar
                                    transaction) in which no person acquires
                                    more than 50% of the combined voting power
                                    of Sponsor's then outstanding voting
                                    securities; or

                           (C)      A merger or consolidation with a Carnival
                                    Subsidiary or Carnival Created Holding
                                    Company.

                   (v)     The stockholders of Carnival approve (i) a plan of
                           complete liquidation of Carnival or (ii) an
                           agreement for the sale or other disposition by the
                           Carnival of all or substantially all of the
                           Carnival's assets to an entity other than one
                           created by Carnival as part of a reorganization of
                           the structure of the Carnival Corporation and plc
                           Group.

                  (vi)     The stockholders of Sponsor approve a plan of
                           complete liquidation of Sponsor or an agreement for
                           the sale or other disposition by Sponsor of all or
                           substantially all of Sponsor's assets to a person
                           that is not a Carnival Subsidiary.

         (b)      Notwithstanding the preceding provisions of this Section
                  2.9, a Change in Control shall not be deemed to have
                  occurred (A) if the "person" described in the preceding
                  provisions of this Section 2.9 is an underwriter or

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                  underwriting syndicate that has acquired the ownership of
                  50% or more of the combined voting power of Carnival's then
                  outstanding voting securities solely in connection with a
                  public offering of Carnival's securities, or (B) if the
                  "person" described in the preceding provisions of this
                  Section 2.9 is an underwriter or underwriting syndicate that
                  has acquired the ownership of 50% or more of the combined
                  voting power of Sponsor's then outstanding voting securities
                  solely in connection with a public offering of Sponsor's
                  securities.

         (c)      Wherever in the Plan there is reference of "Carnival", this
                  shall mean both Carnival Corporation, a corporation
                  organized under the laws of the Republic of Panama, and
                  Carnival plc, a company incorporated under the laws of
                  England and Wales, and reference to Carnival's outstanding
                  voting securities shall be a reference to the combined
                  voting power on joint electorate actions of the outstanding
                  voting securities of both Carnival Corporation and Carnival
                  plc.

2.10     CODE.  "Code" means the Internal Revenue Code of 1986, as amended.

2.11     COMMITTEE. "Committee" means the committee established to administer
         this Plan as set forth in Section 3.1 hereof, which shall be
         comprised of at least two persons who are members of the Compensation
         Committee of the Board of Directors of Carnival Corporation and
         Carnival plc, other than the Participant.

2.12     DESIGNATED PARTICIPANT. "Designated Participant" shall have the
         meaning given such term in the Trust Agreement.

2.13     EFFECTIVE DATE. "Effective Date" means the original effective date of
         the Plan, which is November 1, 1998.

2.14     EMPLOYER. "Employer" means Carnival plc, a company incorporated in
         England and Wales, Carnival Corporation, a corporation organized
         under the laws of the Republic of Panama, and any other employers
         whose employees are treated as employed by the same employer with
         Carnival plc or Carnival Corporation pursuant to Code Section 414(b)
         and (c).

2.15     EMPLOYMENT AGREEMENT. "Employment Agreement" means the agreement by
         and between P&O Princess Cruises International, Ltd. and the
         Participant dated April 17, 2003, as amended July 19, 2004.

2.16     ERISA. "ERISA" means the Employee Retirement Income Security Act of
         1974, as amended.

2.17     FINAL PENSIONABLE EARNINGS. "Final Pensionable Earnings" means the
         higher of

         (a)      the Pensionable Earnings received by the Participant in the
                  twelve months

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                  ending on the last day of his Active Participation; and

         (b)      the annual average of Pensionable Earnings over the period
                  of three consecutive Tax Years which gives the highest
                  result out of the 13 years ending on the last day of the
                  Participant's Active Participation. For this purpose, a Tax
                  Year means a year ending April 5.

2.18     FORMER SPONSOR. "Former Sponsor" means Princess Cruises, Inc., a
         former Sponsor of the Plan.

2.19     LEGAL FEES. "Legal Fees" means the reasonable legal fees and expenses
         incurred by Participant and his beneficiaries in connection with
         lawsuits, actions or other proceedings brought by such persons to
         enforce their rights under the Plan for which Sponsor is obligated to
         reimburse the Participant after the earlier of the Participant's
         Separation from Service or a 409A Change in Control Event.

2.20     NORMAL RETIREMENT DATE. "Normal Retirement Date" means the date on
         which the Participant attains age 60.

2.21     PARTICIPANT. "Participant" means Peter G. Ratcliffe, who was
         President of Former Sponsor on the Effective Date, and who is the
         Chief Executive Officer of P&O Princess Cruises International on the
         Restatement Effective Date.

2.22     PAYMENT DATE. "Payment Date" means the date upon which monthly
         installments of a Pension payable under the Plan shall be made, which
         shall be the first day of each calendar month.

2.23     PCLL. "PCLL" means Princess Cruises Lines, Ltd., a corporation
         organized under the laws of Bermuda.

2.24     PENSION. "Pension" means a pension payable under this Plan, as
         further defined in Section 3.4.

2.25     PENSIONABLE EARNINGS. "Pensionable Earnings" means, in relation to
         the Participant, basic pay from the Employer that is payable during
         Active Participation (a) including (i) any sums paid by Employer to
         the Participant as director's fees or their equivalent, (ii) any
         amounts not currently includible in such Participant's gross income
         by reason of Code Section 402(e)(3) and/or Code Section 125, and
         (iii) any portion of base salary deferred pursuant to the Princess
         Cruises Deferred Compensation Plan, provided that benefit payments
         under the Deferred Compensation Plan shall not be included in
         Pensionable Earnings, and (b) excluding any fixed allowances,
         overtime, bonus, commission or other fluctuating emoluments which are
         not pensionable under the terms of the Participant's employment,
         including without limitation the Participant's car allowance payable
         under Section 5.4 of his Employment Agreement and his

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         recreational and/or health club membership fees under Section 5.5 of
         his Employment Agreement.

2.26     PENSIONABLE SERVICE. "Pensionable Service" means, in relation to the
         Participant, 35 years and 57 days as of March 31, 2006 plus any
         additional Service credited after such date and before the
         Participant ceases Active Participation.

2.27     PLAN. "Plan" means this Princess Cruises Chief Executive Officer
         Supplemental Retirement Plan adopted as of the Effective Date and as
         it has been and may be amended from time to time.

2.28     POTENTIAL PENSIONABLE SERVICE. "Potential Pensionable Service" means
         the Pensionable Service that the Participant would have had if he had
         continued as an Active Participant up to Normal Retirement Date.

2.29     RECORDKEEPER. "Recordkeeper" means the person appointed by the
         Compensation Committee of the Board of Directors of Carnival
         Corporation in accordance with the relevant provisions of the Trust
         Agreement.

2.30     REDETERMINATION DATE. "Redetermination Date" means the date as of
         which Pension increases under Section 3.3 and offset redeterminations
         under Section 3.4(c) shall be made, which shall be September 30.

2.31     RESTATEMENT EFFECTIVE DATE. "Restatement Effective Date" means the
         effective date of this 2006 Restatement, which shall be April 5,
         2006, provided, however, the effective date of Section 7.14 and the
         amendments set forth in Exhibit B, which are designed to bring the
         Plan into compliance with Code Section 409A, shall be January 1,
         2005.

2.32     SEPARATION FROM SERVICE. "Separation from Service" means a separation
         from service with the Employer, as such term is used in Code Section
         409A(a)(2)(A(i), and as defined in applicable regulations thereunder.
         To "Separate from Service" means to experience a Separation from
         Service. In general, the Participant will have a Separation from
         Service with the Employer if he dies, retires or otherwise has a
         termination of employment with the Employer. Whether a termination of
         employment has occurred with respect to the Participant shall be
         based upon the facts and circumstances as determined by the
         Committee, in its discretion, in accordance with applicable
         regulations.

2.33     SERVICE. "Service" means employment with the Employer.

2.34     SPECIFIED RATE. "Specified Rate" means the annual interest rate (as
         such rate may change from time to time) that is credited on new
         monies deposited to the fixed income investment offered under the
         401(k) plan that Sponsor offers to its employees.

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2.35     SPONSOR. "Sponsor" means Princess Cruises Lines, Ltd., a company
         organized under the laws of Bermuda.

2.36     SPOUSE. "Spouse" means, with respect to the Participant, only that
         person (if any) to whom such Participant is married as of such
         Participant's Separation from Service, provided, however, that a
         person who has been married to the Participant for less than one year
         as of such Participant's Separation from Service shall not be deemed
         to be the "Spouse" of such Participant.

2.37     SURVIVING SPOUSE. "Surviving Spouse" means the Participant's Spouse
         at the time of his death, if the Participant has a Spouse at the time
         of his death.

2.38     TOTAL INCAPACITY. "Total Incapacity" means in relation to a
         Participant, a physical or mental condition which in the opinion of
         the Employer is likely permanently to prevent the Participant from
         doing his or her job with the Employer and from doing a suitable job
         with any other employer. "Suitable job" means a job which it is
         reasonable to expect the Participant to take (on the assumption that
         such jobs are available) and which allows the Participant to maintain
         his or her basic standard of living.

2.39     TRUST. "Trust" means the trust that funds certain benefits payable
         under the Plan in accordance with the applicable provisions of the
         Trust Agreement.

2.40     TRUST AGREEMENT. "Trust Agreement" means the agreement pursuant to
         which the Trust is established.

2.41     TRUSTEE. "Trustee" means the initial trustee of the Trust and any
         successor or individual or entity acting as a trustee of the Trust.

2.42     UK PENSION SCHEME. "UK Pension Scheme" means the P&O Princess Cruises
         Pension Scheme effective as of October 16, 2000, as modified by the
         agreements dated January 16, 2001 and October 17, 2001, all as in
         effect on April 5, 2006.

2.43     UNDISPUTED BENEFIT ENTITLEMENT STATEMENT. "Undisputed Benefit
         Entitlement Statement" means (a) any Benefit Entitlement Statement
         which is not initially disputed by the Participant (or Beneficiary)
         in the manner and within the time period specified in Section
         3.10(c), and (b) any Benefit Entitlement Statement reissued by the
         Committee pursuant to Section 3.10(c) and with respect to which the
         Participant (or Beneficiary) does not file a statement of objection
         in the manner and within the time period specified in Section
         3.10(d).


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                   ARTICLE III.  ADMINISTRATION OF THE PLAN

3.1      COMMITTEE AUTHORITY: RULES AND REGULATIONS. The Committee shall
         administer the Plan. The Committee shall have discretionary authority
         to (a) make, amend, interpret and enforce all appropriate rules and
         regulations for the administration of the Plan, and (b) decide or
         resolve, in its discretion, any and all questions, including
         interpretations of the Plan, as may arise in connection with the
         Plan. The Committee shall have authority to take or approve, in its
         discretion, all such actions relating to the Plan (including, without
         limitation, actions described in the preceding sentence). Any
         decision or action of the Committee (and, subject to the provisions
         of Section 3.6 hereof, any decision or action of the Committee) in
         respect of any question arising out of or in connection with the
         administration, interpretation and application of this Plan and the
         rules and regulations promulgated hereunder shall be final,
         conclusive and binding upon the Participant.

3.2      APPOINTMENT OF AGENTS. In the administration of this Plan, the
         Committee may from time to time employ agents (which may include
         officers and/or employees of the Sponsor) and delegate to them such
         administrative duties as the Committee (as applicable) deems
         appropriate.

3.3      PENSION INCREASES.

         (a)      A Pension will be increased in payment under this Section
                  3.3. Increases will be effective once every calendar year on
                  April 1 (the "Adjustment Date").

         (b)      Subject to (c) below, the rate of the increase for that part
                  of a Pension that is attributable to Pensionable Service
                  before April 6, 1997 will be 3%, or if less the percentage
                  increase in the Consumer Price Index - Urban Wage Earners
                  and Clerical Workers ("CPI-W") over the twelve-month period
                  ending on the Redetermination Date immediately preceding the
                  Adjustment Date. The rate increase for that part of a
                  Pension that is attributable to Pensionable Service on or
                  after April 6, 1997 will be 5%, or if less, the percentage
                  increase in the CPI-W over the twelve-month period ending on
                  the Redetermination Date immediately preceding the
                  Adjustment Date. In the event there is a decrease in the
                  CPI-W for any year, the percentage increase in the amount of
                  the Pension for that year shall be zero, and the percentage
                  increase in the CPI-W for any subsequent year shall be
                  calculated taking into account such prior year decrease in
                  the CPI-W.

         (c)      The rate of increase under this Section 3.3 for a retirement
                  Pension under Article IV, which has been in payment for less
                  than nine months at the Adjustment Date will be a percentage
                  of the rate that would have been paid if it had been in
                  payment for a full year, depending on how long the

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                  Pension has been in payment as set out below:

                           PERIOD IN PAYMENT            PERCENTAGE OF FULL RATE
                           INCREASE

                           Less than 3 months                     25%

                           Less than 6 months                     50%

                           Less than 9 months                     75%

3.4      CALCULATION AND PAYMENT OF BENEFITS.

         (a)      PENSIONS PAYABLE FOR LIFE. Unless the contrary is expressly
                  stated, a Pension is payable for life and its amount as
                  described in Article IV and V is its annual amount.

         (b)      PAYMENT OF PENSIONS / LUMP SUMS.

                  (i)      All Pensions payable under the Plan will be paid in
                           United States Dollars by monthly installments in
                           arrear on the Payment Date. Except as provided by
                           (ii) below, the first installment will fall due on
                           the Payment Date next following the date on which
                           the Pension was due to commence (that is, upon
                           Separation from Service or the Participant's death)
                           and will be apportioned to take into account part
                           of a month. The last installment will fall due on
                           the Payment Date next following the date on which
                           the event giving rise to the cessation of such
                           Pension occurs and will not be apportioned to the
                           date of such event.

                  (ii)     Where a Pension commences as a result of the death
                           of the Participant if he is in receipt of a Pension
                           under the Plan, the first installment of such
                           Pension will fall due on the second Payment Date
                           following the Participant's death and will not be
                           apportioned.

                  (iii)    Where a lump sum is payable as a result of the
                           death of the Participant under Section 5.1 or
                           Section 5.2(b) or as a result of the Surviving
                           Spouse's death under Section 5.2(c), such lump sum
                           shall be paid in United States Dollars within a
                           period of ninety (90) days following the
                           Participant's death or the Surviving Spouse's
                           death, whichever is applicable.

         (c)      UK PENSION SCHEME OFFSET.

                  (i)      The amount of any Pension payable under the Plan
                           shall be offset by the amount of the pension that
                           the Participant would be entitled to receive under
                           the UK Pension Scheme if he had elected to

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                           receive such pension at the same time and in the
                           same form as the Pension payable under this Plan,
                           all as determined under this subparagraph (i).

                           (A)      The offset for the initial payment of any
                                    Pension to be paid under the Plan shall be
                                    determined as of the date (the "Initial
                                    Offset Determination Date") that is 30
                                    days before the initial Payment Date. As
                                    of the Initial Offset Determination Date,
                                    the amount of the pension that would be
                                    payable under the UK Pension Scheme, which
                                    is expressed in Pounds Sterling, shall be
                                    converted into an equivalent amount
                                    expressed in terms of United States
                                    Dollars, using the average of exchange
                                    rates published in the Wall Street Journal
                                    on the first day of each month during the
                                    one-year period ending on the Initial
                                    Offset Determination Date.

                           (B)      The amount of the offset used in
                                    determining the amount of a Pension
                                    payable under the Plan shall be
                                    redetermined annually on the
                                    Redetermination Date in accordance with
                                    the provisions of this subparagraph (B)
                                    with the first such redetermination to be
                                    made as of the Redetermination Date
                                    following the initial Payment Date for the
                                    Pension and with redeterminations to be
                                    made each subsequent Redetermination Date.
                                    The effective date of any redetermination
                                    shall be the Adjustment Date following the
                                    Redetermination Date. As of each
                                    Redetermination Date following the initial
                                    Payment Date, the amount of the offset
                                    shall be redetermined based on the amount
                                    of the pension that would be payable under
                                    the UK Pension Scheme after adjustment for
                                    the increase under the terms of the UK
                                    Pension Scheme that would be effective on
                                    the following Adjustment Date. The
                                    redetermined offset shall be converted
                                    into an equivalent amount expressed in
                                    terms of United States Dollars, using the
                                    average of exchange rates published in the
                                    Wall Street Journal on the first day of
                                    each month during the one-year period
                                    ending on the Redetermination Date at
                                    which the redetermination is to be made.

                           (C)      As of each Redetermination Date, the
                                    offset redetermined and converted into an
                                    amount expressed in terms of United States
                                    Dollars in accordance with subparagraph
                                    (B) above shall be used to determine the
                                    Pension payable under the Plan annually at
                                    the same time as the Pension increase is
                                    determined under the provisions of Section
                                    3.3, with any

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                                    change in the amount of such Pension to be
                                    effective at the Adjustment Date following
                                    the redetermination of the offset.

                           (D)      The amount of any Pension payable under
                                    the Plan shall not be offset by the
                                    payment of any cash supplement under the
                                    UK Pension Scheme.

                           (E)      If the Participant has the right to
                                    commute (that is, exchange) the whole or
                                    part of any pension payable under the UK
                                    Pension Scheme for a cash sum, the offset
                                    described in this subparagraph (i) shall
                                    be determined assuming that the
                                    Participant has elected not to exercise
                                    such right to commute his pension for a
                                    cash sum.

                           (F)      The six-month delay required under Section
                                    4.9 and the resulting lump sum that is
                                    payable on account of the delay under
                                    Section 4.4 shall be disregarded in
                                    determining the offset described in this
                                    subparagraph (i), that is, the offset
                                    shall be determined as if the six-month
                                    delay had not occurred and the lump sum
                                    had not been paid.

                   (ii)    Notwithstanding the provisions of subparagraph (i)
                           above, if a lump sum is payable under paragraphs
                           (b) or (c) of Section 5.2 of the Plan, then the
                           amount of such lump sum shall be offset by the
                           amount of the lump sum that the Participant would
                           have been entitled to receive under the
                           corresponding provisions of the UK Pension Scheme
                           had the Participant elected to receive the pension
                           payable to the Participant under the UK Pension
                           Scheme at the same time and in the same form as the
                           Pension payable under this Plan. The amount of the
                           lump sum that would be payable under the UK Pension
                           Scheme, which is expressed in terms of Pounds
                           Sterling, shall be converted to United States
                           Dollars using the average of the exchange rates
                           published in the Wall Street Journal on the first
                           day of each month during (A) the one-year period
                           ending on the death of the Participant in the case
                           of a payment under Section 5.2(b), or (B) the
                           one-year period ending on the death of the
                           Surviving Spouse in the case of a payment under
                           5.2(c).

                  (iii)    If the Participant (or in the case of a spouse's
                           benefit, the Participant's Spouse) is not entitled
                           to a benefit (pension or lump sum) under the UK
                           Pension Scheme for whatever reason including as the
                           result of a waiver of the benefit by the
                           Participant (or

                                      12
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                           Participant's Spouse), then the offset under this
                           Section 3.4(c) in respect of all or that part of
                           the benefit that the Participant (or Participant's
                           Spouse) is not entitled to receive shall be zero.
                           Nothing in this Plan shall restrict in any way the
                           right of the Participant (or Participant's Spouse)
                           to waive a benefit payable under the UK Pension
                           Scheme.

3.5      INITIAL ACTION ON APPLICATION. If the Plan fails to pay the benefits
         provided under the terms of the Plan to the Participant and/or his
         Beneficiary (the "Claimant"), then the Claimant or the Claimant's
         authorized representative may make application for such benefits.
         Within 60 days (45 days in the case of a determination regarding
         Total Incapacity) following receipt of an application for benefits
         and all necessary documents and information, the Committee shall:

         (a)      determine whether the Participant claiming benefits (or with
                  respect to whom benefits are claimed) has incurred
                  Separation from Service and is otherwise entitled to
                  benefits under this Plan, and

         (b)      furnish the Claimant with written notice of the decision
                  rendered with respect to such application. Should special
                  circumstances require an extension of time for processing
                  the claim, written notice of the extension shall be
                  furnished to the Claimant prior to the expiration of the
                  initial 60 (or 45) day period. The notice shall indicate the
                  special circumstances requiring an extension of time and the
                  date by which a final decision is expected to be rendered.
                  In no event shall the period of the extension exceed 90 days
                  (30 days in the case of a determination of Total Incapacity)
                  from the end of the initial 60 day (or 45 day) period. In
                  the case of a denial of the claimant's application, the
                  written notice thereof shall set forth specific reasons for
                  the denial, with references to the Plan provisions upon
                  which the denial is based, a description of any additional
                  information or material necessary to perfect the application
                  (together with an explanation why such material or
                  information is necessary), and an explanation of the Plan's
                  claim review procedure including the right of the Claimant
                  to bring a civil action under ERISA Section 502(a) following
                  an adverse benefit determination on review.

3.6      APPEAL OF INITIAL DECISION.

         (a)