Exhibit 3.1
RIGHTS AGREEMENT
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AGREEMENT dated as of December 10, 1997, between The Bank of Bermuda Limited, a
Bermuda company (the "Company") and Bermuda Trust Company Limited, a Bermuda
company, as Rights Agent (the "Rights Agent")
WITNESSETH
WHEREAS, on November 24, 1997 the Board of Directors of the Company, in
accordance with a resolution of the shareholders of the Company approved on June
12, 1997 delegated to a Committee of the said Board the power to authorise a
distribution of rights, and the said Committee on December 3, 1997 authorised a
distribution of rights ("Rights") to the holders of Shares (as hereinafter
defined) now outstanding and issued in the future, Warrants (as hereinafter
defined) and Options (as hereinafter defined) on the basis of one Right for each
Share in issue and one Right for each Share for which each Warrant Holder (as
hereinafter defined) is entitled to subscribe under the Warrant Agreement (as
hereinafter defined) and one Right for each Share for which each Option Holder
(as hereinafter defined) would be entitled to subscribe under the Option Plan
(as hereinafter defined) if all Options (as hereinafter defined) were fully
vested, in each case, at the close of business on December 12, 1997 (the "Record
Date"), and has authorised the issuance, upon the terms and subject to the
conditions hereinafter set forth, of one Right in respect of each Share issued
after the Record Date (except for Shares issued upon exercise of such Warrants
and Options), each Right representing the right initially to subscribe for one
quarter of one Share upon the terms and subject to the conditions hereinafter
set forth;
NOW, THEREAFTER, the parties hereto agree as follows:
Section 1
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Certain Definitions
-------------------
The following terms, as used herein, have the following meanings:
"Acquiring Person" means any Person who, together with all Affiliates and
Associates of such Person, shall be the Beneficial Owner of 15% or more of the
Shares then in issue from time to time, but shall not include the Company, any
of its Subsidiaries, any employee benefit plan of the Company or any of its
Subsidiaries, any Person organised, appointed or established by the Company or
any of its Subsidiaries for or pursuant to the terms of any such plan; provided,
however, that if a majority of the Continuing Directors determines in good faith
1that a Person who would otherwise be an "Acquiring Person" became such
inadvertently, and if such Person as promptly as practicable divests itself of
Beneficial Ownership of a sufficient number of Shares so that such Person would
no longer be an "Acquiring Person" then such Person shall not be deemed to be or
to have become an "Acquiring Person" for any purposes of this Agreement.
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Notwithstanding the foregoing, no person shall become an "Acquiring Person" as
the result of an acquisition of Shares by the Company which, by reducing the
number of shares in issue, increases the proportionate number of Shares
beneficially owned by such Person to 15% or more of the Shares then in issue;
provided however that if a Person shall become the Beneficial Owner of 15% or
more of the Shares then in issue by reason of such share acquisition by the
Company and shall thereafter become the Beneficial Owner of any additional
Shares representing 1% or more of the Shares then in issue which causes the
proportionate number of Shares beneficially owned by such Person to further
increase to 15% or more of the Shares then in issue, then such person shall be
deemed to be an "Acquiring Person".
"Affiliate" of a Person means a Person that directly, or indirectly through one
or more intermediaries, controls, or is controlled by, or is under common
control with the first Person.
"Associate" of a Person means (1) any corporation or organisation of which such
Person is an officer or partner or is, directly or indirectly, the beneficial
owner of 10 percent or more of any class of equity securities, (2) any trust or
other estate in which such Person has a substantial beneficial interest or as to
which such Person serves as trustee or in a similar fiduciary capacity, and (3)
any relative or spouse of such Person, or any relative or spouse, who has the
same home as such Person or who is a director or officer of the Person.
A Person shall be deemed the "Beneficial Owner" of, and shall be deemed to
"beneficially own", any securities in which the Person has an interest, and the
word "interest" means (and "interests" and "interested in shares" shall be
construed accordingly) an interest of any kind whatsoever in securities
(disregarding any restraints or restrictions to which the exercise of any right
attached to the interest is or may be subject) including but not limited to the
following:
(a) any interest in securities comprised in property held
on trust;
(b) any contractual right to purchase securities whether
for cash or other consideration;
(c) any interest by virtue of any right or obligation
(whether subject to conditions or not) to exercise
any right conferred by the holding of securities
including but not limited to voting rights or any
entitlement to control the exercise of any such
right;
(d) any right to call for delivery of securities;
(e) the right to acquire an interest in the securities or
an obligation to take an interest in securities; or
(f) the power to dispose of securities.
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Provided always:
(g) Persons having a joint interest shall be taken each
of them to have that interest;
(h) a Person shall be taken to be interested in any
securities in which the spouse or a person with whom
that person is living in a conjugal relationship
outside marriage or any relative living with that
person or any minor child or step child of that
person is interested;
(i) a Person shall be taken to be interested in shares if
a body corporate is interested in them and:
(i) that body corporate or its directors are
accustomed to act in accordance with the
directions or instructions of that Person,
or
(ii) that Person is entitled by virtue of any
right or obligation (whether subject to
conditions or not) to exercise or control
the exercise of one third or more of the
voting power at general meetings of that
body coporate, provided that where a Person
is entitled to exercise or control the
exercise of one third or more of the voting
power at general meetings of a body
corporate and that body corporate is
entitled to control the exercise of any of
the voting power at general meetings or of
another body corporate such voting power is
taken as exercisable by that Person;
(j) a Person shall be taken to be interested in any
shares in which a partnership of which that person is
a general partner is interested;
(k) a Person shall be taken to have an interest in shares
in which another Person with whom he is acting in
concert has an interest and for the purposes of this
definition persons shall be deemed to be acting in
concert if pursuant to an agreement or understanding
(whether formal or informal, verbal or written) they
agree to act jointly or in concert in respect of
securities in which they have an interest;
(l) it shall be immaterial that the securities in which a
Person has an interest are unidentifiable.
Provided always that the following interests shall be
disregarded if the Person in question is under any obligation
to exercise or control the exercise of the voting rights of
the securities concerned at the instance of any other Person:-
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(m) any interest of a custodian trustee or a bare
trustee;
(n) any interest of a licensed bank or other financial
institution held by way of security for the purposes
of a transaction entered into in the ordinary course
of banking business;
(o) an interest of a personal representative;
(p) any interest of a Person arising by reason only that
that Person has been appointed a proxy to vote at a
specified meeting of the holders of such securities
and at any adjournment of that meeting or has been
appointed to act as a representative at any meeting
of the holders of such securities;
(q) any interest of any underwriter or sub-underwriter of
any offer of the securities provided the agreement or
interest is confined to that purpose and any matters
incidental to it;
(r) any interest of any market maker in the securities
which has been approved by the Board of Directors of
the Company, provided the interest is confined to
that purpose and any matters incidental to it;
(s) any interest as a beneficiary under a pension or
retirement benefits scheme;
(t) the interests of any Subsidiary of the Company.
"Business Day" means any day other than a Saturday, Sunday or a day on which
banking institutions in or in the Islands of Bermuda are authorised or obligated
by law or executive order to close.
"Close of Business" on any given date means 5:00 P.M., Bermuda time, on such
date; provided that if such date is not a Business Day "close of business" means
5:00 P.M., Bermuda time, on the next succeeding Business Day.
"Companies Act" means the Companies Xxx 0000 of Bermuda, as amended from time to
time.
"Continuing Director" means any member of the Board of Directors of the Company,
while such Person is a member of the Board, who is not (i) an Acquiring Person
or an Affiliate or Associate of an Acquiring Person or (ii) a representative or
nominee of an Acquiring Person or of an Affiliate or Associate of an Acquiring
Person or (iii) any Person elected to the Board as a result of a proxy
solicitation or initiative referred to in Section 23(a)(y), and who either (a)
was a member of the Board immediately prior to the time any Person becomes an
Acquiring Person or (b) subsequently becomes a member of the Board, with the
approval of a majority of the
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Continuing Directors.
"Distribution Date" means the close of business on the tenth day (or such later
day as may be designated by action of a majority of the Continuing Directors)
after the Share Acquisition Date.
"Expiration Date" means the earlier of (a) the Final Expiration Date and (b) the
time at which all the Rights are redeemed as provided in Section 23.
"Final Expiration Date" means the close of business on December 31, 2007.
"Option" means an option to acquire Shares pursuant to the Option Plan.
"Option Deed" means a deed of grant of Options issued pursuant to the Option
Plan from time to time.
"Option Holder" means a holder of one or more Options from time to time.
"Option Plan" means the Company's executive share option plan as adopted by the
Board of Directors on June 30, 1997 as amended from time to time.
"Person" means an individual, firm, corporation, partnership, association, trust
or any other entity or organisation whether incorporated or unincorporated.
"Purchase Price" means the price (subject to adjustment as provided herein) at
which a holder of a Right may subscribe for one-quarter of one Share (subject to
adjustment as provided herein) upon exercise of a Right, which price shall
initially be $50 .
"Section 11(a)(ii) Event" means any event described in the first clause of
Section 11(a)(ii).
"Section 13 Event" means any even described in clauses (i), (ii) or (iii) or
Section 13(a).
"Securities Act" means the United States Securities Act of 1933, as amended.
"Share Acquisition Date" means the date of the first public announcement
(including the filing of a public announcement or report with any securities
exchange or pursuant to any applicable law or regulation) by the Company or a
Person indicating that such Person has become an Acquiring Person.
"Shares" means the common shares, par value $1.00 per share, of the Company,
except that, when used with reference to any Person other than the Company,
"Shares" means the capital shares of such Person with the greatest voting power,
or the equity securities or other equity interest having power to control or
direct the management, of such Person.
"Stock Exchange" means the Bermuda Stock Exchange or such other securities
exchange or
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quotation system as may be the primary market for the Shares.
"Subsidiary" of any Person means any other Person of which securities or other
ownership interests having ordinary voting power, in the absence of
contingencies, to elect a majority of the board of directors or other Persons
performing similar functions are at the time directly or indirectly owned by
such first Person.
"Total Voting Power" means the total number of votes that are permitted to be
cast by the shareholders of the Company entitled to vote in the election of
directors.
"Trading Day" means a day on which the principal securities exchange on which
the Shares are listed or admitted to trading is open for the transaction of
business or, if the Shares are not listed or admitted to trading on any
securities exchange, a Business Day.
"Triggering Event" means any Section 11(a)(ii) Event or any Section 13 Event.
"United States" means the United States of America.
"Warrant Agreement" means the deed of the Company titled "Warrant Instrument"
and dated 22nd August, 1994.
"Warrant Certificates" means the warrant certificates issued to the Warrant
Holders in accordance with the Warrant Agreement.
"Warrant Holders" means the registered holders of the Warrants from time to
time.
"Warrants" means the warrants issued pursuant to the Warrant Agreement.
"$" means Bermuda dollars.
Section 2
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Appointment of Rights Agent
---------------------------
(a) The Company hereby appoints the Rights Agent to act as agent for the
Company and the holders of the Rights in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such
appointment.
(b) The Company may from time to time appoint such Co-Rights Agents as it
may deem necessary or desirable upon ten (10) days' prior written
notice to the Rights Agent. The Rights Agent shall have no duty to
supervise, and shall in no event be liable for, the acts or omissions
of any such Co-Rights Agent. If the Company appoints one or more
Co-Rights Agents, the respective duties of the Rights Agent and any
Co-Rights Agents shall
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be as the Company shall determine.
(c) The Rights Agent may from time to time delegate all or some of its
functions hereunder to any Person, including to the Company, subject to
the consent of the Company.
Section 3
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Issue of Certificates
---------------------
(a) Prior to the Distribution Date, subject to clauses (e) and (f) of this
Section 3 (i) the Rights will be evidenced by the certificates for the
Shares and not by separate Right Certificates (as hereinafter defined)
and the registered holders of the Shares shall be deemed to be the
registered holders of the associated Rights, and (ii) the Rights will
be transferable only in connection with the transfer of the underlying
Shares. As soon as practicable after the Record Date, the Company will
send a summary of the Rights substantially in the form of Exhibit B
hereto, by first-class, postage prepaid mail, to each registered holder
of the Shares as of the close of business on the Record Date at the
address of such holder shown in the register of members of the Company.
(b) The Company shall give the Rights Agent prompt written notice of the
Distribution Date. As soon as practicable after the Company has
notified the Rights Agent of the occurrence of the Distribution Date,
the Rights Agent will send, by first-class, postage prepaid mail, to
each registered holder of the Shares as of the close of business on the
Distribution Date, at the address of such holder shown in the register
of members of the Company, one or more Right Certificates evidencing
one Right (subject to adjustment as provided herein) for each Share so
held. If an adjustment in the number of Rights per Share has been made
pursuant to Section 11(a)(i), the Company shall, at the time of the
distribution of the Rights Certificates, make the necessary and
appropriate rounding adjustments (in accordance with Section 14(a)) so
that Right Certificates representing only whole numbers of Rights are
distributed. From and after the Distribution Date, the Rights will be
evidenced solely by such Right Certificates.
(c) Rights shall be issued in respect of all Shares in issue as of the
Record Date or issued after the Record Date (except pursuant to the
exercise of Warrants or Options) but prior to the earlier of the
Distribution Date and the Expiration Date. In addition, in connection
with the issue or sale of the Shares following the Distribution Date
and prior to the Expiration Date, the Company (i) shall, with respect
to Shares so issued or sold (x) pursuant to the exercise of share
options or under any employee plan or arrangement (other than in
respect of Options, which shall be dealt with as otherwise set out
herein) or (y) upon the exercise , conversion or exchange of other
securities issued by the Company prior to the Distribution Date (except
pursuant to the exercise of the Warrants) and (ii) may, in any other
case, if deemed necessary or appropriate by the Board of Directors of
the Company, issue Rights Certificates representing the appropriate
number of Rights in
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connection with such issue or sale; provided that no such Right
Certificate shall be issued if, and to the extent that, (i) the Company
shall be advised by counsel that such issue would create a significant
risk of material adverse tax consequences to the Company or the Person
to whom such Right Certificate would be issued or (ii) appropriate
adjustment shall otherwise have been made in lieu of such issue.
(d) Certificates for the Shares issued after the Record Date but prior to
the earlier of the Distribution Date and the Expiration Date shall have
impressed on, printed on, written on or otherwise affixed to them the
following legend:
"This Certificate also evidences certain Rights as set forth in
a Rights Agreement between The Bank of Bermuda Limited and
Bermuda Trust Company Limited dated as of December 10, 1997
(the "Rights Agreement"), the terms of which are hereby
incorporated herein by reference and a copy of which is
available for inspection by members at the registered office of
the Company. The Company will mail to the holder of this
certificate a copy of the Rights Agreement without charge
promptly after receipt of a written request therefor. Under
certain circumstances, as set forth in the Rights Agreement,
such Rights may be evidenced by separate certificates and no
longer be evidenced by this certificate, may be redeemed or
exchanged or may expire. As set forth in the Rights Agreement,
Rights issued to, or held by, any Person who is, was or becomes
an Acquiring Person or an Affiliate or Associate thereof (as
such terms are defined in the Rights Agreement), whether
currently held by or on behalf of such Person or by any
subsequent holder, may be null and void. Rights shall not be
exercisable for securities in any jurisdiction if (i) the
requisite qualification in such jurisdiction shall not have
been obtained, (ii) such exercise shall not be permitted under
applicable law or (iii) if applicable, a registration statement
in respect of such securities shall not have been declared
effective. The Rights Agreement is subject to amendment as set
out therein."
(e) Rights shall be issued in respect of all Shares for which a Warrant
Holder is entitled to subscribe as of the Record Date. Prior to the
Distribution Date, (x) such Rights will be evidenced by the Warrant
Certificates and not by any separate Right Certificates and the Warrant
Holders shall be deemed to be registered holders of the associated
Rights, (y) the Rights evidenced by any Warrant Certificate will only
be transferable in connection with the transfer of such Warrant
Certificates and, upon the expiration unexercised of such Warrants, the
Rights shall not be transferable, and (z) Warrant Certificates issued
after the Record Date but prior to the earlier of the Distribution Date
and the Expiration Date shall have impressed on, printed on, written on
or otherwise affixed to them the legend specified in clause (d) of this
Section 3. As soon as practicable after the Record Date, the Company
will send a summary of the Rights substantially in the form of Exhibit
B hereto, by first class, postage prepaid mail, to each Warrant Holder
as of the close of business on the Record Date at the address of such
Warrant Holder shown in the register of the Company. As soon as
practicable after the Company has notified the Rights Agent of the
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occurrence of the Distribution Date, the Rights Agent will send, by
first-class, postage prepaid mail, to each Warrant Holder as of the
close of business on the Distribution Date, at the address of such
Warrant Holder shown in the register of the Company, one or more Right
Certificates evidencing one Right (subject to adjustment as provided
herein) for each Share for which a Warrant Holder is entitled to
subscribe. From and after the Distribution Date, the Rights will be
evidenced solely by such Right Certificates. Upon the exercise by any
Warrant Holder of its subscription rights under the Warrant Agreement,
and immediately upon the issuance of Shares to such Warrant Holder, (x)
the Rights evidenced by such Warrant Holder's Warrant Certificate will
be deemed to be the Rights associated with such Shares and (y) no
additional Rights will be issued to such Warrant Holder in connection
with the exercise of its subscription rights.
(f) Rights shall be issued in respect of all Shares for which an Option
Holder would be entitled to subscribe as of the Record Date as if his
Options were fully vested on the Record Date. Prior to the Distribution
Date, (x) such Rights will be evidenced by the Option Deeds and not by
any separate Right Certificates and the Option Holders shall be deemed
to be registered holders of the associated Rights, (y) the Rights
evidenced by any Option Deed will only be transferrable in connection
with the transfer of such Option Deed and, upon the expiration
unexercised of such Options, the Rights shall not be transferable , and
(z) Option Deeds issued after the Record Date but prior to the earlier
of the Distribution Date and the Expiration Date shall have impressed
on, printed on, written on or otherwise affixed to them the legend
specified in clause (d) of this Section 3. As soon as practicable after
the Record Date, the Company will send a summary of the Rights
substantially in the form of Exhibit B hereto, by first class, postage
prepaid mail, or personal delivery, to each Option Holder as of the
close of business on the Record Date. As soon as practicable after the
Company has notified the Rights Agent of the occurrence of the
Distribution Date, the Rights Agent will send, by first-class, postage
prepaid mail, or personal delivery, to each Option Holder as of the
close of business on the Distribution Date, at the address of such
Option Holder as is known to the Company, one or more Rights
Certificates evidencing one Right (subject to adjustment as provided
herein) for each Share for which a Option Holder would be entitled to
subscribe as set out above. From and after the Distribution Date, the
Rights will be evidenced solely by such Right Certificates. Upon the
exercise by any Option Holder of its subscription rights under the
Option Plan, and immediately upon the issuance of Shares to such Option
Holder, (x) the Rights evidenced by such Option Holder's Option Deed
will be deemed to be the Rights associated with such Shares and (y) no
additional Rights will be issued to such Option Holders in connection
with the exercise of its subscription rights.
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Section 4
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Form of Right Certificates
--------------------------
(a) The certificates evidencing the Rights (and the forms of assignment,
election to purchase and certificates to be printed on the reverse
thereof) (the "Rights Certificates") shall be substantially in the form
of Exhibit A hereto and may have such marks as identification or
designation and such legends, summaries or endorsements printed thereon
as the Company may deem appropriate and as are not inconsistent with
the provisions of this Agreement, or as may be required to comply with
any applicable law, rule or regulation or with any rule or regulation
of any stock exchange on which the Shares, or Rights may from time to
time be listed, or to conform to usage. The Rights Certificates,
whenever distributed, shall be dated as of the Record Date.
(b) Any Right Certificate representing Rights beneficially owned by any
Person referred to in clauses (i), (ii) or (iii) of the first sentence
of Section 7(d) shall (to the extent feasible) contain the following
legend.
"The Rights represented by this Right Certificate are or were
beneficially owned by a Person who was or became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person (as
such terms are defined in the Rights Agreement). This Right
Certificate and the Rights represented hereby may be or may
become null and void in the circumstances specified in Section
7(d) of the Rights Agreement."
Section 5
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Execution and Registration
--------------------------
(a) The Right Certificates shall be executed on behalf of the Company in
any manner authorised by the Bye-laws of the Company with respect to
certificates for Shares of the Company. In case any authorised
signatory of the Company whose manual or facsimile signature affixed to
the Right Certificates shall cease to be such an authorised signatory
of the Company before issuance and delivery by the Company, such Right
Certificate may, nevertheless, be issued and delivered with the same
force and effect as though the Person who signed such Right
Certificates had not ceased to be such an authorised signatory of the
Company. Any Right Certificate may be signed on behalf of the Company
by an Person who, at the actual date of the execution of such Right
Certificate, shall be a proper authorised signatory of the Company to
sign such Right Certificate, although at the date of the execution of
this Rights Agreement any such Person was not such an authorised
signatory.
(b) Following the Distribution Date, the Rights Agent will keep or cause to
be kept, at its principal office or offices designated as the place for
surrender of Right Certificates upon exercise, transfer or exchange,
books for registration and transfer of the Rights
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Certificates. Such books shall show with respect to each Right
Certificate the name and address of the registered holder thereof, the
number of Rights indicated on the certificate and the certificate
number.
Section 6
---------
Transfer and Exchange of Rights Certificates;
---------------------------------------------
Mutilated, Destroyed, Lost or Stolen Right Certificates
-------------------------------------------------------
(a) At any time after the Distribution Date and prior to the Expiration
Date, any Right Certificate or Certificates may, upon the terms and
subject to the conditions set forth below in this Section 6(a), be
transferred or exchanged for another Right Certificate or Certificates
evidencing a like number of Rights as the Right Certificate or
Certificates surrendered. Any registered holder desiring to transfer or
exchange any Right Certificate or Certificates shall surrender such
Right Certificate or Certificates (with, in the case of a transfer, the
form of assignment and certificate on the reverse side thereof duly
executed) to the Rights Agent, along with a signature guarantee and
such other and further documentation as the Rights Agent may reasonably
require, at the principal office or offices of the Rights Agent
designated for such purpose. Neither the Rights Agent nor the Company
shall be obligated to take any action whatsoever with respect to the
transfer of any such surrendered Right Certificate or Certificates
until the registered holder of the Rights has complied with the
requirements of Section 7(e). Upon satisfaction of the foregoing
requirements, the Rights Agent shall, subject to Sections 4(b), 7(d)
and 14, countersign and deliver to the Person entitled thereto a Right
Certificate or Certificates as so requested . The Company may require
payment of a sum sufficient to cover any transfer tax or other
government charge that may be imposed in connection with any transfer
or exchange of any Right Certificate or Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a
Right Certificate, and, in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to them, and, at the
Company's request, reimbursement to the Company and the Rights Agent of
all reasonable expenses incidental thereto, and upon surrender to the
Rights Agent along with a signature guarantee and such other and
further documentation as the Rights Agent may reasonably require, and
cancellation of the Right Certificate if mutilated, the Company will
issue and deliver a new Right Certificate of like tenor to the Rights
Agent for countersignature and delivery to the registered owner in lieu
of the Right Certificate so lost, stolen, destroyed or mutilated.
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Section 7
---------
Exercise of Rights; Purchase Price; Expiration of Rights
--------------------------------------------------------
(a) The registered holder of any Right Certificate may exercise the Rights
evidenced thereby (except as otherwise provided herein, including
Sections 7(d) and (e), 9(c) and (d), 11(a) and 23) in whole or in part
at any time after the Distribution Date and prior to the Expiration
Date upon surrender of the Right Certificate, with the form of election
to purchase and the certificate on the reverse side thereof duly
executed, to the Rights Agent at the principal office or offices of the
Rights Agent designated for such purpose, along with such other
documentation as the Rights Agent may reasonably require, together with
payment (in lawful money of Bermuda (or equivalent in lawful money of
the United States at the exchange rate determined by the Company) by
bank draft or cheque drawn on an account in Bermuda with a licensed
bank, payable to the order of the Company, or by such other means as
the Company may authorise) of the aggregate Purchase Price with respect
to the Rights then to be exercised.
(b) Upon satisfaction of the requirements of Section 7(a). the Rights Agent
shall thereupon promptly (i)(A) requisition from any transfer agent of
the Shares (or make available, if the Right Agent is the transfer agent
therefor) certificates for the total number of Shares to be purchased
(and the Company hereby irrevocably authorises its transfer agent to
comply with all such requests) or (B) if the Company shall have elected
to deposit the Shares issuable upon exercise of the Rights with a
depositary agent, requisition from the depositary agent depositary
receipts representing such number or Shares as are to be purchased (in
which case certificates for the shares or Shares represented by such
receipts shall be deposited by the transfer agent with the depository
agent) and the Company will direct the depositary agent to comply with
such request and (ii) after receipt of such certificates or depositary
receipts, cause the same to be delivered to or upon the order of the
registered holder of such Right Certificate (with such certificates or
receipts registered in such name or names as may be designated by such
holder). If the Company is obligated to deliver Shares, other
securities or assets pursuant to this Agreement, the Company will make
all arrangements necessary so that such Shares, other securities and
assets are available for delivery by the Rights Agent, if and when
appropriate.
(c) In case the registered holder of any Right Certificate shall exercise
less than all the Rights evidenced thereby, a new Right Certificate
evidencing the number of Rights remaining unexercised shall be issued
by the Rights Agent and delivered to, or upon the order of, the
registered holder of such Right Certificate, registered in such name or
names as may be designated by such holder, subject to the provisions of
Section 14.
(d) Notwithstanding anything in this Agreement to the contrary, from and
after the first occurrence of a Section 11(a)(ii) Event, any Rights
beneficially owned by (i) an Acquiring Person or an Associate or
Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring
Person (or of any such Associate or Affiliate) who becomes a transferee
after the Acquiring Person becomes such or (iii) a transferee of an
Acquiring Person (or
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of any such Associate or Affiliate) who becomes a transferee prior to
or concurrently with the Acquiring Person becoming such and receives
such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person (or any such Associate or
Affiliate) to holders of equity interests in such Acquiring Person (or
in any such Associate or Affiliate) or to any Person with whom the
Acquiring Person (or any such Associate or Affiliate) has any
continuing agreement, arrangement or understanding, whether written or
oral, regarding the transferred Rights or (B) a transfer which a
majority of the Continuing Directors have determined is part of a plan,
arrangement or understanding, whether written or oral, which has a
primary purpose or effect the avoidance of this Section 7(d), shall
become null and void without any further action, and no holder of such
Rights shall have any rights whatsoever with respect to such Rights,
whether under any provision of this Agreement or otherwise. The Company
shall use all reasonable efforts to insure that the provisions of this
Section 7(d) are complied with, but shall have no liability to any
holder of Right Certificates or other Person as a result of its failure
to make any determinations with respect to an Acquiring Person or its
Affiliates and Associates or any transferee or any of them hereunder.
(e) Notwithstanding anything in this Agreement to the contrary, neither the
Rights Agent nor the Company shall be obligated to undertake any action
with respect to a registered holder of Rights upon the occurrence of
any purported transfer pursuant to Section 6 or exercise pursuant to
Section 7 unless such registered holder (i) shall have completed and
signed the certificate contained in the form of assignment or election
to purchase, as the case may be, set forth on the reverse side of the
Right Certificate surrendered for such transfer or exercise, as the
case may be, (ii) shall not have indicated an affirmative response to
clause 1 or 2 thereof and (iii) shall have provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial
Owner) or Affiliates or Associates thereof as the Company shall
reasonably request.
Section 8
---------
Cancellation and Destruction of Right Certificates
--------------------------------------------------
All Right Certificates surrendered for exercise, transfer or exchange shall, if
surrendered to the Company or to any of its agents, be delivered to the Rights
Agent for cancellation or in cancelled form, or if surrendered to the Rights
Agent, shall be cancelled by it, and no Right Certificates shall be issued in
lieu thereof except as expressly permitted by this Agreement. The Company shall
deliver to the Rights Agent for cancellation, and the Rights Agent shall cancel,
any other Right Certificate purchased or acquired by the Company otherwise than
upon the exercise thereof. The Rights Agent shall deliver all cancelled Right
Certificates to the Company, or shall, at the written request of the Company,
destroy such cancelled Right Certificates, and in such case shall deliver a
certificate of destruction thereof to the Company.
- 13 -
Section 9
---------
Reservation and Availability of Capital
---------------------------------------
(a) Subject to Section 11(a)(iii), the Company covenants and agrees that it
will use its best efforts to cause to be reserved and kept available
out of its authorised and unissued Shares sufficient to permit the
exercise in full of all outstanding Rights as provided in this
Agreement.
(b) So long as the Shares issuable upon the exercise of Rights may be
listed on any securities exchange, the Company shall use its best
efforts to cause, from and after such time as the Rights become
exercisable, all securities reserved for issue pursuant to the Rights
to be listed on any such exchange.
(c) In the event that any Shares of the Company are listed or quoted on a
stock exchange or quotation system in the United States of America, the
Company shall use its best efforts (i) to file, as soon as practicable
following the earliest date after the occurrence of Section 11(a)(ii)
Event as of which the consideration to be delivered by the Company upon
exercise of the Rights has been determined in accordance with Section
11(a)(iii), or as soon as is required by law following the Distribution
Date, as the case may be, a registration statement under the Securities
Act with respect to the securities issuable upon exercise of the Rights
in respect of such Shares, (ii) to cause such registration statement to
become effective as soon as practicable after such filing and (iii) to
cause such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the Securities Act)
until the earlier of (A) the date as of which the Rights are no longer
exercisable for such securities and (B) the Expiration Date. The
Company will also take such action as may be appropriate under, or to
ensure compliance with, the laws of Bermuda, the federal securities
laws of the United States or "blue sky" laws of the various states of
the United States and all other applicable laws in connection with the
exercisability of the Rights. The Company may temporarily suspend, for
a period of time not to exceed 90 days after the date set forth in
clause (i) of the first sentence of this Section 9(c), the
exercisability of the Rights in order to take any such action. Upon any
such suspension, the Company shall issue a public announcement stating
that the exercisability of the Rights has been temporarily suspended,
and a public announcement at such time as the suspension is no longer
in effect.
(d) Notwithstanding any such provision of this Agreement to the contrary,
the Rights shall not be exercisable for securities in any jurisdiction
if the requisite qualification in such jurisdiction shall not have been
obtained, such exercise shall not be permitted under applicable law or
a registration statement in respect of such securities shall not have
been declared effective. In particular, the Rights do not constitute an
offer to, and may not be exercised by, any Person in Bermuda (a
"Subject Person") unless and until, or to the extent that, a majority
of the Continuing Directors determine that any securities which would
be acquired on the exercise of any Rights by a Subject Person (or by
Subject Persons generally) may lawfully be offered to that Subject
Person (or to Subject
- 14 -
Persons generally). The Company shall use its best efforts to prepare,
file and publish, on the Distribution Date or as soon as practicable
thereafter (if and to the extent that such steps have not previously
been taken), a prospectus or other appropriate documents and/or take
such other steps as a majority of the Continuing Directors deem
expedient under applicable laws in Bermuda in order to extend the offer
of such securities to Subject Persons generally. If and to the extent
that a majority of the Continuing Directors determine that compliance
with the laws of Bermuda or any other territory would be impracticable
or unduly onerous in order for the securities which would be acquired
on the exercise of any Rights lawfully to be offered within that
territory, a majority of the Continuing Directors may arrange for the
securities which would otherwise be issued on the exercise of Rights by
Persons in the relevant territory or territories ("Excluded Persons")
to be allotted or issued to some other Person nominated by a majority
of the Continuing Directors for the purpose and on the terms that:
(x) such securities shall be sold in the market or otherwise for
the benefit of the Excluded Persons, if they can be sold at a
price in excess of the total Purchase Price referable to such
securities and the expenses of sale; and
(y) the proceeds of sale, after deducting a sum equal to the total
Purchase Price and expenses of sale, will be distributed to the
Excluded Persons in the proportions to which, but for the
provisions of this paragraph, they would otherwise have been
entitled to exercise Rights, provided that no distribution need
be made to any Excluded Person of a sum of less than $5 (any
such sums being payable to the Company for its own benefit).
(e) The Company covenants and agrees that it will take all such action as
may be necessary to ensure that all Shares issuable upon exercise of
Rights shall, at the time of delivery of the certificates for such
securities (subject to payment of the Purchase Price), be duly and
validly authorised and issued and fully paid or credited as fully paid
and shall rank pari passu in all respects with all other Shares in
issue at that time.
(f) The Company further covenants and agrees that it will pay when due and
payable any and all Bermuda governmental charges which may be payable
in respect of the issuance or delivery of the Right Certificates and of
any certificates for Shares upon the exercise of Rights. The Company
shall not, however, be required to pay any stamp duty, transfer tax or
other governmental charge which may be payable in respect of any
transfer involved in the issuance or delivery of any Right Certificates
or of any certificates for Shares to a Person other than the registered
holder of the applicable Right Certificate, and prior to any such
transfer, issuance or delivery, any such tax or other governmental
charge shall have been paid by the holder of such Right Certificate or
it shall have been established to the Company's satisfaction that no
such tax or other governmental charge is due.
- 15 -
(g) The Rights Agent may assume that any Right exercised is permitted to be
exercised under applicable law and shall have no liability for acting
in reliance upon such assumption.
Section 10
----------
Shares Record Date
------------------
Each Person in whose name any certificate for Shares is issued upon the exercise
of Rights shall be entered into the register of members of the Company as the
holder of such Shares represented thereby on, and such certificate shall be
dated, the date upon which the Right Certificate evidencing such Rights was duly
surrendered and payment of the Purchase Price (and any transfer taxes or other
governmental charges) was made; provided that if the date of such surrender and
payment is a date upon which the books of the Company relating to the Shares are
closed, such Person shall be deemed to have become the registered holder of such
shares on, and such certificate shall be dated, the next succeeding Business Day
on which the applicable transfer books of the Company are open. Prior to the
exercise of the Rights evidenced thereby, the holder of a Right Certificate
shall not be entitled to any rights of a shareholder of the Company with respect
to shares for which the Rights shall be exercisable, including but not limited
to the right to vote, to receive dividends or other distributions or to
participate in any winding up or to exercise any preemptive rights, and shall
not be entitled to receive any notice of any proceedings of the Company except
as provided herein.
Section 11
----------
Adjustment of Purchase Price
----------------------------
Number and Kind of Shares or Number of Rights
---------------------------------------------
(a) (i) If the Company shall at any time after the date of this Agreement
(A) pay a dividend on the Shares payable in Shares, (B) subdivide the
outstanding Shares into a greater number of shares, or (C) consolidate
the Shares into a smaller number of shares, the Purchase Price in
effect at the record date for such dividend or the effective date of
such action, and the number of Shares issuable on such date shall be
proportionally adjusted so that the holder of the any Rights exercised
after such time shall be entitled to receive, upon payment of the
Purchase Price then in effect, the aggregate number of Shares which,
if such Right had been exercised immediately prior to such date, such
holder would have owned upon such exercise and been entitled to
receive by virtue of such dividend or other action. If an event occurs
which requires an adjustment under both this Section 11(a)(i) and
Section 11(a)(ii), the adjustment provided for in this Section
11(a)(i) shall be in addition to, and shall be made prior to, any
adjustment required pursuant to Section 11(a)(ii).
(ii) If any Person, alone or together with its Affiliates and Associates,
shall at any time after the date of this Agreement, become an
Acquiring Person, each holder of a
- 16 -
Right shall (except as otherwise provided herein, including Section 7(d))
thereafter be entitled to receive, upon exercise thereof at the Purchase
Price in effect immediately prior to the first occurrence of a Section
11(a)(ii) Event such number of duly authorised, validly issued and fully
paid Shares of the Company (such shares being referred to herein as the
"Adjustment Shares") as shall be equal to the result obtained by dividing:
(I) the product obtained by multiplying the Purchase Price in effect
immediately prior to the first occurrence of a Section 11(a)(ii) Event
by the number of one-quarters of a Share for which a Right was
exercisable immediately prior to such first occurrence (such product
being thereafter referred to as the "Purchase Price" for each Right
and for all purposes of this Agreement) by
(II) 50% of the current market price (determined pursuant to Section
11(d)(i)) per Share on the date of such first occurrence;
provided that if the transaction that would otherwise give rise to the
foregoing adjustment is also subject to the provisions of Section 13, then
only the provisions of Section 13 shall apply and no adjustment shall be
made pursuant to this Section 11(a)(ii); and
provided further if the transaction that would otherwise give rise to the
foregoing adjustment is an acquisition of Shares pursuant to a tender offer
or an exchange offer for all outstanding Shares at a price and on terms
determined by at least a majority of the Continuing Directors, after
receiving advice from one or more investment banking firms, to be (a) at a
price that is fair to holders of Shares (taking into account all factors
that the Continuing Directors deem relevant including, without limitation,
prices that could reasonably be achieved if the Company or its assets were
sold on an orderly basis designed to realise maximum value) and (b)
otherwise in the best interests of the Company and the holders of its
Shares then no adjustment shall be made pursuant to this Section 11(a)(ii);
and
provided further if after giving effect to the other provisions of this
Agreement, the foregoing provision would result in the issuance of a
greater number of Shares than permitted by applicable law, the number of
Shares included in the Adjustment Shares shall be reduced to the maximum
number permitted by applicable law and the Company shall, to the fullest
extent permitted by applicable law, substitute for the remainder of the
Adjustment Shares other consideration in the manner provided in clauses (B)
and (C) of Section 11(a)(iii).
(iii) If the number of Shares which are authorised by the Company's Memorandum
of Association and any and all Certificates of Deposit of Memorandum of
Increase
- 17 -
of Share Capital of the Company on file with the Registrar of Companies in
Bermuda but not outstanding or reserved for issuance other than upon
exercise of the Rights is not sufficient to permit the exercise in full of
the Rights in accordance with Section 11(a)(ii), the Company shall to the
fullest extent permitted by applicable law, with respect to each Right,
make adequate provision to substitute for the Adjustment Shares, upon
payment of the Purchase Price then in effect,
(A) (to the extent available) Shares and then,
(B) (to the extent available) other equity securities of the Company
which a majority of the Continuing Directors has determined to be
essentially equivalent to the Shares in respect to dividend,
liquidation and voting rights (such securities being referred to
herein as " share equivalents") and then,
(C) other equity or debt securities of the Company, cash or other
assets, a reduction in the Purchase Price or
any combination of the foregoing, having an aggregate value (as determined
by the Continuing Directors based upon the advice of an investment banking
firm selected by the Continuing Directors) equal to the value of the
Adjustment Shares; provided that (x) the Company may, and (y) if the
Company shall not have made adequate provision as required above to deliver
value within 30 days following the later of the first occurrence of a
Section 11(a)(ii) Event and the first date that the right to redeem the
Rights pursuant to Section 23 shall expire, the Company shall, deliver to
the fullest extent permitted by applicable law, upon the surrender for
exercise of a Right and without requiring payment of the Purchase Price,
(1) (to the extent available) Shares and then (2) (to the extent available)
share equivalents and then, if necessary, (3) other equity or debt
securities of the Company, cash or other assets, a reduction in the
Purchase Price or any combination of the foregoing, having an aggregate
value (as determined by the Continuing Directors based upon the advice of
an investment banking firm selected by the Continuing Directors) equal to
the excess of the value of the Adjustment Shares over the Purchase Price.
If the Continuing Directors of the Company shall determine in good faith
that it is likely that sufficient additional Shares could be authorised for
issuance upon exercise in full of the Rights, the 30 day period set forth
above (such period, as it may be extended, being referred to herein as the
"Substitution Period") may be extended to the extent necessary, but not
more than 90 days following the first occurrence of a Section 11(a)(ii)
Event, in order that the Company may seek shareholder approval for the
authorisation of such additional Shares. To the extent that the Company
determines that some action is to be taken pursuant to the first and/or
second sentence of this Section 11(a)(iii), the Company (X) shall provide,
subject to Section 7(d), that such action shall apply uniformly to all
outstanding Rights and (Y) may suspend the exercisability of the Rights
until the expiration of
- 18 -
the Substitution Period in order to seek any authorsiation of additional
Shares and/or to decide the appropriate form and value of any consideration
to be delivered as referred to in such first and/or second sentence. If any
such suspension occurs, the Company shall issue a public announcement
stating that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the suspension
is no longer in effect. For purposes of this Section 11(a)(iii), the value
of the Shares shall be the current market price per Share (as determined
pursuant to Section 11(d)) on the later of the date of the first occurrence
of a Section 11(a)(ii) Event and the first date that the right to redeem
the Rights pursuant to Section 23 shall expire, share equivalents shall be
deemed to have the same value as the Shares on such date, and the value of
other securities or assets shall be determined pursuant to Section
11(d)(ii).
(b) In case the Company shall fix a record date for the issuance of rights,
options or warrants to all holders of Shares entitling them to subscribe
for or purchase (for a period expiring within 45 calendar days after such
record date) Shares (or share equivalents) or securities convertible into
or exercisable for Shares (or share equivalents) at a price per Share (or
share equivalents) (in each case, taking account of any conversion or
exercise price) less than the current market price (as determined pursuant
to Section 11(d)) per Share on such record date, the Purchase Price to be
in effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such date by a fraction, the
numerator of which shall be the number of Shares outstanding on such record
date, plus the number of Shares which the aggregate price (taking account
of any conversion or exercise price) of the total number of Shares (and/or
share equivalents) so to be offered would purchase at such current market
price and the denominator of which shall be the number of Shares
outstanding on such record date plus the number of additional Shares
(and/or share equivalents) so to be offered. In case such subscription
price may be paid by delivery of consideration part or all of which shall
be in a form other than cash, the value of such consideration shall be as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent
and shall be conclusive for all purposes. Shares held for the account of
the Company shall not be deemed outstanding for the purpose of any such
computation. Such adjustment shall be made successively whenever such a
record date is fixed, and if such rights, options or warrants are not
issued, the Purchase Price shall be adjusted to be the Purchase Price which
would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a
distribution to all holders of Shares (including any such distribution made
in connection with an amalgamation or merger involving the Company) of
evidences of indebtedness, equity securities other than Shares, assets
(other than a regular periodic cash dividend out of the earnings or
retained earnings of the Company) or rights, options or warrants (excluding
those referred to in Section 11(b)), the Purchase Price to be in effect
after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record
- 19 -
date by a fraction, the numerator of which shall be the current market
price (as determined pursuant to Section 11(d)) per Share on such record
date, less the value (as determined pursuant to Section 11(d)(ii)) of such
evidence of indebtedness, equity securities, assets, rights, options or
warrants so to be distributed with respect to one Share and the denominator
of which shall be such current market price per Share. Such adjustment
shall be made successively whenever such a record date is fixed, and if
such distribution is not so made, the Purchase Price shall be adjusted to
be the Purchase Price which would then be in effect if such record date had
not been fixed.
(d) (i) For the purpose of any computation other than computations made
pursuant to Section 11(a)(iii) or 14, the "current market price" per Share
on any date shall be deemed to be the average of the daily closing prices
per share of such Shares for the 30 consecutive Trading Days immediately
prior to such date, for purposes of computations made pursuant to Section
11(a)(iii), the "current market price" per Share on any date shall be
deemed to be the average of the daily closing prices per share of such
Shares for the 10 consecutive Trading Days immediately following such date;
and for purposes of computations made pursuant to Section 14, the "current
market price" per Share for any Trading Day shall be deemed to be the
closing price per Share for such Trading Day; provided that if the current
market price per share of the Shares is determined during a period
following the announcement by the issuer of such Shares of (A) a dividend
or distribution on such Share payable in such Shares or securities
exercisable for or convertible into such Shares (other than the Rights), or
(B) any subdivision, consolidation or reclassification of such Shares, and
prior to the expiration of the requisite 30 Trading Day or 10 Trading Day
period, as set forth above, after the ex-dividend date for such dividend or
distribution, or the record date for such subdivision, consolidation or
reclassification, then, and in each such case, the "current market price"
shall be properly adjusted to take into account ex-dividend trading. The
closing price for each day shall be (i) the average of the closing bid and
asked prices as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to trading
on the Stock Exchange or (ii) if the Shares are not listed or admitted to
trading on any securities exchange or quotation system, the last quoted
price or (iii) if not so quoted, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in the
Shares selected by the Board of Directors of the Company except if at the
time of such selection there is an Acquiring Person, by a majority of the
Continuing Directors. If on any such date no market maker is making a
market in the Shares, the fair value of such shares on such date as
determined in good faith by the Board of Directors of the Company (or, if
at the time of such determination there is an Acquiring Person, by a
majority of the Continuing Directors) shall be used. If the Shares are not
publicly held or not so listed or traded, the "current market price" per
share means the fair value per share as determined in good faith by the
Board of Directors of the Company, or, if at the time of such determination
- 20 -
there is an Acquiring Person, by a majority of the Continuing
Directors, or if there are no Continuing Directors, by an investment
banking firm selected by the Board of Directors, which determination
shall be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes.
(ii) For the purpose of any computation hereunder, the value of any
securities or assets other than Shares shall be the fair value as
determined in good faith by the Board of Directors of the Company, or,
if at the time of such determination there is an Acquiring Person, by
a majority of the Continuing Directors then in office, or, if there
are no Continuing Directors, by an investment banking firm selected by
the Board of Directors, which determination shall be described in a
statement filed with the Rights Agent and shall be conclusive for all
purposes.
(e) Anything herein to the contrary notwithstanding, no adjustment in the
Purchase Price shall be required unless such adjustment would require
an increase or decrease of at least 1% in the Purchase Price; provided
that any adjustments which by reason of this Section 11(e) are not
required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Section 11 shall
be made to the nearest cent or to the nearest ten-thousandth of an
Share.
(f) If at any time, as a result of an adjustment made pursuant to Section
11(a)(ii) or Section 13(a), the holder of any Right shall be entitled
to receive upon exercise of such Right any shares other than Shares,
thereafter the number of such other shares so receivable upon exercise
of any Right and the Purchase Price thereof shall be subject to
adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the Shares
contained in Section 11(a), (b), (c), (e), (g), (h), (i), (j), (k) and
(m), and the provisions of Sections 7, 9, 10, 13 and 14 with respect to
the Shares shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made hereunder shall evidence the right to purchase, at the
Purchase Price then in effect, the then applicable number of
one-quarters of a Share and other capital shares of the Company
issuable from time to time hereunder upon exercise of the Rights, all
subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided in
Section 11(i), upon each adjustment of the Purchase Price as a result
of the calculations made in Section 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Purchase
Price, that number of one-quarters of a Share (calculated to the
nearest ten-thousandth) obtained by (i) multiplying (x) the number of
one-quarters of a Share for which a Right was exercisable immediately
prior to this adjustment by (y) the Purchase Price in effect
immediately prior
- 21 -
to such adjustment of the Purchase Price and (ii) dividing the product
so obtained by the Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Rights, in lieu of any
adjustment in the number of one-quarters of a Share issuable upon the
exercise of a Right. Each of the Rights outstanding after such
adjustment of the number of Rights shall be exercisable for the number
of one-quarters of a Share for which such Right was exercisable
immediately prior to such adjustment. Each Right held prior to such
adjustment of the number of Rights shall be adjusted to that number of
Rights (calculated to the nearest ten-thousandth) obtained by dividing
the Purchase Price in effect immediately prior to adjustment of the
Purchase Price by the Purchase Price in effect immediately after
adjustment of the Purchase Price. The Company shall make a public
announcement of its election to adjust the number of Rights, indicating
the record date for the adjustment, and, if known at the time, the
amount of the adjustment to be made. This record date may be the date
on which the Purchase Price is adjusted or any date thereafter, but ,
if the Right Certificates have been issued, shall be at least 10 days
later than the date of the public announcement. If Right Certificates
have been issued, upon each adjustment of the number of Rights pursuant
to this Section 11(i), the Company shall, as promptly as practicable,
cause to be distributed to registered holders of Right Certificates on
such record date Right Certificates evidencing, subject to Section 14,
the additional Rights to which such holders shall be entitled as a
result of such adjustment, or, at the option of the Company, shall
cause to be distributed to such registered holders in substitution and
replacement for the Right Certificates held by such holders prior to
the date of adjustment, and upon surrender thereof, if required by the
Company, new Right Certificates evidencing all the Rights to which such
holders shall be entitled after such adjustment. Right Certificates so
to be distributed shall be issued, executed and countersigned in the
manner provided for herein (and may bear, at the option of the Company,
the adjusted Purchase Price) and shall be registered in the names of
the registered holders of Right Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or the
number of one-quarters of a Share issuable upon the exercise of the
Right, the Right Certificates theretofore and thereafter issued may
continue to express the Purchase Price per one-quarters of a Share and
the number of Shares which were expressed in the initial Right
Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing the
Purchase Price below the par value, if any, of the number of
one-quarter of a Share issuable upon exercise of the Rights, the
Company shall take any corporate action which may, in the opinion of
its counsel, be necessary in order that the Company may validly and
legally issue fully paid such number of one-quarters of a Share at such
adjusted Purchase Price.
- 22 -
(l) In any case in which this Section 11 shall require that an adjustment
in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of
such event the issuance to the holder of any Right exercised after such
record date the number of one-quarters of a Share or other capital
shares of the Company, if any, issuable upon such exercise over and
above the number of one-quarters of a Share or other capital shares of
the Company, if any, issuable upon such exercise on the basis of the
Purchase Price in effect prior to such adjustment; provided that the
Company shall deliver to such holder a certificate or other appropriate
instrument evidencing such holder's right to receive such additional
shares upon the occurrence of the event requiring such adjustment.
(m) Notwithstanding anything in this Section 11 to the contrary, the
Company shall be entitled to make such reductions in the Purchase
Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that it, in its sole discretion, shall
determine to be advisable in order that any consolidation or
subdivision of the Shares, issuance wholly for cash of any Shares at
less than the current market price, issuance wholly for cash of Shares
or securities which by their terms are convertible into or exercisable
for Shares, dividends of shares or issuance of rights, options or
warrants referred to in this Section 11, hereafter made by the Company
to the holders of its Shares, shall not be taxable to such
shareholders.
(n) The Company covenants and agrees that it will not at any time after the
Distribution Date (i) restructure, merge, amalgamate or otherwise
combine or effect any scheme of arrangement with or (ii) sell or
otherwise transfer (and/or permit any of its Subsidiaries to sell or
otherwise transfer), in one transaction or a series of related
transactions, assets or earning power aggregating more than 50% of the
assets or earning power of the Company and its Subsidiaries, taken as a
whole, to any other Person or Persons if (x) at the time of or
immediately after such restructuring, merger, amalgamation,
combination, scheme of arrangement or sale there are any rights,
warrants or other instruments or securities outstanding or any
agreements or arrangements in effect which would substantially diminish
or otherwise eliminate the benefits intended to be afforded by the
Rights or (y) prior to, simultaneously with or immediately after such
restructuring, merger, amalgamation, combination, scheme of arrangement
or sale, the shareholders of a Person who constitutes, or would
constitute, the "Principal Party" for the purposes of Section 13 shall
have received a distribution of Rights previously owned by such Person
or any of its Affiliates or Associates.
(o) The Company covenants and agrees that after the Distribution Date, it
will not, except as permitted by Sections 23, 24 and 27, take (or
permit any Subsidiary to take) any action if at the time such action is
taken it is reasonably foreseeable that such action will substantially
diminish or otherwise eliminate the benefits intended to be afforded by
the Rights.
- 23 -
Section 12
----------
Certificate of Purchase Price
-----------------------------
Whenever an adjustment is made as provided in Sections 11 and 13, the Company
shall (a) promptly prepare a certificate setting forth such adjustment and a
brief statement of the facts accounting for such adjustment, (b) promptly file
with the Rights Agent and with each transfer agent for the Shares a copy of such
certificate and (c) mail a brief summary thereof to each holder of a Right
Certificate (or, if prior to the Distribution Date, to each holder of a
certificate representing Shares or a Warrant Certificate or an Option Deed) in
the manner set forth in Section 26. The Rights Agent shall be fully protected in
relying on any such certificate and on any adjustment therein contained and
shall not be deemed to have knowledge of such adjustment unless and until it
shall have received such certificate.
Section 13
----------
Amalgamation, Merger or Sale or Transfer of Assets or Earning Power
-------------------------------------------------------------------
(a) If, following the Share Acquisition Date, directly or indirectly:
(i) the Company shall under any applicable law amalgamate, merge
into, or otherwise combine with, any other Person, other than
with a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof:
(ii) any Person, other than with a Subsidiary of the Company in a
transaction which complies with Section 11(o) hereof, shall
under any applicable law amalgamate, merge into, or otherwise
combine with, the Company and, in connection with such merger
or amalgamation, all or part of the outstanding Shares shall be
changed into or exchanged for other shares or securities of the
Company or any other Person, cash or any other property; or
(iii) the Company and/or one or more of its Subsidiaries shall sell
or otherwise transfer, in one transaction or a series of
related transactions, assets or earning power aggregating more
than 50% of the assets or earning power of the Company and its
Subsidiaries, taken as a whole, to any other Person or Persons
(other than the Company or any Subsidiary of the Company in one
or more transactions each of which complies with Section 11(o)
hereof);
then, and in each such case, proper provision shall promptly be made
so that
(A) each holder of a Right shall thereafter be entitled to
receive, upon exercise thereof at the Purchase Price
in effect immediately prior to the first occurrence of
any Triggering Event, such number of duly authorised,
- 24 -
validly issued and fully paid freely tradeable Shares
of the Principal Party (as hereinafter defined), not
subject to any rights of call or first refusal, liens,
encumbrances or other claims, as shall be equal to the
result obtained by dividing
(1) the product obtained by multiplying the
Purchase Price in effect immediately prior to
the first occurrence of any Triggering Event by
the number of one quarters of a Share for which
a Right was exercisable immediately prior to
such first occurrence (such product being
thereafter referred to as the "Purchase Price"
for each Right and for all purposes of this
Agreement) by
(2) 50% of the current market price (determined
pursuant to Section 11(d)(i)) per Share of such
Principal Party on the date of consummation of
such combination, merger, amalgamation, sale or
transfer;
(B) the Principal Party shall thereafter be liable for,
and shall assume, by virtue of such amalgamation,
merger, combination, sale or transfer, all the
obligations and duties of the Company pursuant to this
Agreement;
(C) the Term "Company" shall thereafter be deemed to refer
to such Principal Party, it being specifically
intended that the provisions of Section 11 shall apply
only to such Principal Party following the first
occurrence of a Section 13 Event; and
(D) such Principal Party shall take such steps (including
the authorisation and reservation of a sufficient
number of its Shares to permit exercise of all
outstanding Rights in accordance with this Section
13(a)) in connection with the consummation of any such
transaction as may be necessary to assure that the
provisions hereof shall thereafter be applicable, as
nearly as reasonably may be, in relation to its Shares
thereafter deliverable upon the exercise of the
Rights.
(b) "Principal Party" means
(i) in the case of any transaction described in Section 13(a)(i) or
(ii), the Person that is the issuer of any securities into
which Shares of the Company are converted or cancelled in
exchange for the right to receive securities or other
consideration in such merger, amalgamation or combination, and
if no securities are so issued, the Person that survives or
results from such merger, amalgamation or combination; and
- 25 -
(ii) in the case of any transaction described in Section 13(a)(iii),
the Person that is the party receiving the greatest portion of
the assets or earning power transferred pursuant to such
transaction or transactions;
provided that in any such case, (A) if the Shares of such
Person are not at such time and have not been continuously over
the preceding 12-month period listed on an appointed stock
exchange (as described in the Companies Act), and such Person
is a direct or indirect Subsidiary of another Person Shares of
which are and have been so listed, "Principal Party" shall
refer to such Person, and (B) in case such Person is a
Subsidiary, directly or indirectly, of more than one Person,
the Shares of two or more of which are and have been so listed,
"Principal Party" shall refer to whichever of such Persons is
the issuer of the Shares having the greatest aggregate market
value.
(c) The Company shall not consummate any such amalgamation, merger,
combination, sale or transfer unless the Principal Party shall have a
sufficient number of authorised Shares which are not in issue or
otherwise reserved for issuance to permit the exercise in full of the
Rights in accordance with this Section 13 and unless prior thereto the
Company and such Principal Party shall have executed and delivered to
the Rights Agent a supplemental agreement providing for the terms set
forth in Section 13(a) and (b) and providing that, as soon as
practicable after the date of any amalgamation, merger, combination,
sale or transfer mentioned in Section 13(a), the Principal Party will;
(i) take all steps as are required under applicable laws in all
relevant jurisdictions to enable the exercise in full of the
Rights in accordance with this Section 13 including if
appropriate preparation and filing of a prospectus in Bermuda
under the Companies Act and/or a registration statement under
the Securities Act with respect to the securities issuable upon
exercise of the Rights, and will use its best efforts to cause
such registration statement (A) to become effective as soon as
practicable after such filing and (B) to remain effective (with
a prospectus at all times meeting the requirements of the
Securities Act) until the Expiration Date; and
(ii) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates
which comply in all respects with the requirements for a
prospectus under the Companies Act.
The provisions of this Section 13 shall similarly apply to successive
mergers, amalgamations, combinations, sales or other transfers. If any
Section 13 Event shall occur at any time after the occurrence of a
Section 11(a)(ii) Event, the Rights which have not theretofore been
exercised shall thereafter become exercisable in the manner described
in Section 13(a).
- 26 -
(d) Notwithstanding anything in this Agreement to the contrary, Section 13
shall not be applicable to a transaction described in subparagraphs (i)
and (ii) of Section 13(a) if (i) such transaction is consummated with a
Person or Persons who acquired Shares pursuant to a tender offer or
exchange offer for all outstanding Shares which complies with the
provisions of the second proviso of Section 11(a)(ii) hereof (or wholly
owned subsidiary of any such Person or Persons), (ii) the price per
Share offered in such transaction is not less than the price per Share
paid to all holders of Shares of whose Shares were purchased pursuant
to such tender offer or exchange offer and (iii) the form consideration
being offered to the remaining holders of Shares pursuant to such
transaction is the same as the form of consideration paid pursuant to
such tender offer or exchange offer. Upon consummation of any such
transaction contemplated by this Section 13(d), all Rights hereunder
shall expire.
(e) In no event shall the Rights Agent have any liability in respect of any
such Principal Party transactions, including, without limitation, the
propriety thereof. The Rights Agent may rely and be fully protected in
relying upon a certificate of the Company stating that the provisions
of this Section 13 have been fulfilled. Notwithstanding anything in
this Agreement to the contrary, the prior written consent of the Rights
Agent must be obtained in connection with any supplemental agreement
which alters the rights or duties of the Rights Agent.
Section 14
----------
Fractional Rights and Fractional Shares
---------------------------------------
(a) On or after the Distribution Date, and in lieu of any fractional
Rights, each registered holder of a Right Certificate otherwise
entitled to a fractional Right will be entitled to receive in
accordance with the provisions of this Section 14(a) from the Company a
cash payment in lieu of such fractional Rights representing such
holder's proportionate interest in the net proceeds from the sale by
the Company in one or more transactions (which sale transactions shall
be made at such times, in such manner and on such terms as the Company
shall determine in its reasonable discretion) on behalf of all such
holders of the aggregate of the fractional Rights which would otherwise
have been issued (the "Excess Rights"). All fractional Rights of each
holder of a Right Certificate shall be aggregated, and no holder of a
Right Certificate will receive cash in lieu of fractional Rights in an
amount equal to or greater than the value of one Share. The sale of the
Excess Rights by the Company shall be executed on the principal market
on which the Rights are traded. Until the net proceeds of such sale or
sales have been distributed to the holders of such Rights, the Company
will hold such proceeds in trust (the "Rights Trust") for the holders
of the Rights. The Company shall pay all commissions, transfer taxes
and other out-of-pocket transaction costs incurred in connection with
this sale of the Excess Rights. The Company shall determine the
portions of the Rights Trust to which each holder of Rights shall be
entitled, if any, by multiplying the amount of the aggregate net
proceeds
- 27 -
comprising the Rights Trust by a fraction the numerator of which is the
amount of the fractional Rights interest to which such holder of Rights
is entitled and the denominator of which is the number of Rights
comprised in the Excess Rights. As soon as practicable after the
determination of the amount of cash, if any, to be paid to the holders
of the Rights in lieu of any fractional Rights, the Company shall make
available such amounts to such holders of the Rights without interest.
(b) Following the occurrence of any Triggering Event or upon any exchange
pursuant to Section 24 or otherwise, the Company shall not issue
fractions of Shares upon exercise of the Rights or distribute
certificates which evidence fractional Shares. In lieu of any such
fractions Shares, each registered holder of a Right Certificate
otherwise entitled to a fractional Share, at the time such Rights are
exercised as herein provided, will be entitled to receive in accordance
with the provisions of this Section 14(b) from the Company a cash
payment in lieu of such fractional Share representing such holder's
proportionate interest in the net proceeds from the sale by the Company
in one or more transactions (which sale transactions shall be made at
such times, in such manner and on such terms as the Company shall
determine in its reasonable discretion) on behalf of all such holders
of the aggregate of the fractional Shares which would otherwise have
been issued (the "Excess Shares"). All fractional Shares of each holder
of a Right Certificate shall be aggregated, and no holder of a Right
Certificate will receive cash in lieu of fractional Shares in an amount
equal to or greater than the value of one Share. The sale of the Excess
Shares by the Company shall be executed on the principal market on
which the Shares are traded. Until the net proceeds of such sale or
sales have been distributed to the holders of such Right Certificates,
the Company will hold such proceeds in trust (the "Share Trust") for
the holders of the Right Certificates. The Company shall pay all
commissions, transfer taxes and other out-of-pocket transaction costs
incurred in connection with this sale of Excess Shares. The Company
shall determine the portions of the Shares Trust to which each holder
of Right Certificates shall be entitled, if any, by multiplying the
amount of the aggregate net proceeds comprising the Share Trust by a
fraction the numerator of which is the amount of the fractional Share
interest to which such holder of Right Certificates is entitled and the
denominator of which is the Excess Shares. As soon as practicable after
the determination of the amount of cash, if any, to be paid to the
holders of the Right Certificates in lieu of any fractional Shares, the
Company shall make available such amounts to such holders of the Right
Certificates without interest.
(c) The holder of a Right by the acceptance of the Right expressly waives
his right to receive any fractional Rights or any fractional shares
upon exercise of a Right except as permitted by this Section 14.
- 28 -
Section 15
----------
Rights of Action
----------------
Every holder of a Right accepting the same consents and agrees with the Company
and the Rights Agent and with every other holder of a Right that all rights of
action in respect of the benefit of the Rights evidenced by this Agreement are
vested in the respective registered holders of the Right Certificates (and,
prior to the Distribution Date, the registered holders of certificates
representing Shares or Warrant Certificates and the parties to the Option
Deeds); and any registered holder of any Right Certificate (or, prior to the
Distribution Date, of any certificate representing Shares or Warrant
Certificates or any party to Option Deeds), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of any certificate representing Shares or Warrant
Certificates or any party to Option Deeds), may, in his own behalf and for his
own benefit, enforce, and may institute and maintain any suit, action or
proceeding against the Company to enforce, or otherwise act in respect of, his
right to exercise the Rights evidenced by such Right Certificate in the manner
provided in such Right Certificate and in this Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and will be entitled to specific performance of
the obligations under, and injunctive relief against actual or threatened
violations of the obligations of, any Person subject to this Agreement.
Section 16
----------
Agreement of Right Holders
--------------------------
Every holder of a Right by accepting the same consents and agrees with the
Company and the Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable only in
connection with the transfer of Shares or as specified in Section 3(e)
and (f);
(b) after the Distribution Date, the Right Certificates are transferable
only on the registry books of the Rights Agent if surrendered at the
principal office or offices of the Rights Agent designated for such
purposes, duly endorsed or accompanied by a proper instrument of
transfer and with the appropriate forms and certificates fully
executed, along with a signature guarantee and such other and further
documentation as the Rights Agent may reasonably request;
(c) subject to Sections 6 and 7, the Company and the Rights Agent may deem
and treat the Person in whose name a Right Certificate (or, prior to
the Distribution Date, a certificate representing Shares or Warrant
Certificates) is registered as the absolute owner thereof and of the
Rights evidenced thereby (notwithstanding any notations of ownership or
- 29 -
writing on the Right Certificate or the certificate representing Shares
or Warrant Certificates made by anyone other than the Company or the
Rights Agent) for all purposes whatsoever, and neither the Company nor
the Rights Agent, subject to the last sentence of Section 7(d), shall
be affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary, neither the
Company nor the Rights Agent shall have any liability to any holder of
a Right or other Person as a result of its inability to perform any of
its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree or ruling issued by a court
of competent jurisdiction or by a governmental, regulatory or
administrative agency or commission, or any statute, rule, regulation
or executive order promulgated or enacted by any governmental authority
prohibiting or otherwise restraining performance of such obligation;
provided that the Company must use its best efforts to have any such
order, decree or ruling lifted or otherwise overturned as soon as
possible.
Section 17
----------
Right Certificate Holder not Deemed a Shareholder
-------------------------------------------------
No holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the shares which may at any
time be issuable on the exercise of the Rights represented thereby, nor shall
anything contained herein or in any Right Certificate be construed to confer
upon the holder of any Right Certificate, as such, any of the rights of a
shareholder of the Company or any right to vote for the election of directors or
upon any matter submitted to shareholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting shareholders (except as provided in Section 25), or to
receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by such Right Certificates shall have been exercised in
accordance with the provisions hereof.
Section 18
----------
Concerning the Rights Agent
---------------------------
(a) The Company agrees to pay to the Rights Agent reasonable compensation for
all services rendered by it hereunder and, from time to time, on demand of
the Rights Agent, its reasonable expenses and counsel fees and
disbursements and other disbursements incurred in the execution or
administration of this Agreement and the exercise and performance or its
duties hereunder. The Company also agrees to indemnify the Rights Agent
for, and to hold it harmless against, any loss, liability, or expense,
incurred without negligence, bad faith or willful misconduct on the part of
the Rights Agent, for anything done or omitted by the Rights Agent in
connection with the administration of this Agreement or the exercise or
performance of its duties hereunder, including the costs and
- 30 -
expenses of defending against any claim or liability. The provisions of
this Section 18(a) shall survive the expiration of the Rights and the
termination of this Agreement.
(b) The Rights Agent shall be protected and shall incur no liability for or
in respect of any action taken, suffered or omitted by it in connection
with the administration of this Agreement or the exercise or
performance of its duties hereunder in reliance upon any Right
Certificate or certificate for Shares or Warrant Certificates or for
other securities of the Company, instrument of assignment or transfer,
power of attorney, endorsement, affidavit, letter, notice, instruction,
direction, consent, certificate, statement, or other paper or document
believed by it to be genuine and to be signed, executed and, where
necessary, verified or acknowledged, by the proper Person or Persons.
Section 19
----------
Merger or Consolidation or Change of Name of Rights Agent
---------------------------------------------------------
(a) Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the
Rights Agent or any successor Rights Agent shall be a party, or any
corporation succeeding to the business of the Rights Agent or any
successor Rights Agent, shall be the successor to the Rights Agent
under this Agreement without the execution or filing of any paper or
any further act on the part of any of the parties hereto; provided that
such corporation would be eligible for appointment as a successor
Rights Agent under the provisions of Section 21. In case at the time
such successor Rights Agent shall succeed to the agency created by this
Agreement, any of the Right Certificates shall have been countersigned
but not delivered, any such successor Rights Agent may adopt the
countersignature of a predecessor Rights Agent and deliver such Right
Certificates so countersigned, and in case at that time any of the
Right Certificates shall not have been countersigned, any successor
Rights Agent may countersign such Right Certificates either in the name
of the predecessor Rights Agent or in the name of the successor Rights
Agent, and in all such cases such Right Certificates shall have the
full force provided in the Right Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be changed and
at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Right Certificates so
countersigned; and in case at that time any of the Right Certificates
shall not have been countersigned, the Rights Agent may countersign
such Right Certificates either in its prior name or in its changed
name; and in all such cases such Right Certificates shall have the full
force provided in the Right Certificates and in this Agreement.
- 31 -
Section 20
----------
Duties of Rights Agent
----------------------
The Rights Agent undertakes the duties and obligations imposed by this Agreement
upon the following terms and conditions, by all of which the Company and the
holders of Right Certificates, by their acceptance thereof, shall be bound, and
no implied duties or obligations shall be read into this Agreement against the
Rights Agent:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel shall be full
and complete authorisation and protection to the Rights Agent as to any
action taken or omitted by it in good faith and in accordance with such
opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or
matter (including, without limitation, the identity of any "Acquiring
Person" and the determination of "current market price") be proved or
established by the Company prior to taking, suffering or omitting to
take any action hereunder, such fact or matter (unless other evidence
in respect thereof be herein specifically prescribed) may be deemed to
be conclusively proved and established by a certificate signed by any
Director or the Secretary of the Company and delivered to the Rights
Agent; and such certificate shall be full authorisation to the Rights
Agent for any action taken, suffered or omitted in good faith by it
under the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable hereunder only for its own negligence,
bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the
Right Certificates (except its countersignature thereof) or be required
to verify the same, but all such statements and recitals are and shall
be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect of
the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of
the validity or execution of any Right Certificate (except its
countersignature thereof); nor shall it be responsible for any breach
by the Company or any covenant or condition contained in this Agreement
or in any Right Certificate; nor shall it be responsible for any change
in the exercisability of the Rights (including the Rights becoming void
pursuant to Section 7(d)) or any adjustment in the terms of the Rights
(including the manner, method or amount thereof) provided for in
Sections 3, 11, 13, 23 or 24, or the ascertaining of the existence of
facts that would require any such adjustment (except with respect to
the exercise of Rights evidenced by Right Certificates
- 32 -
after actual notice of any such adjustment); nor shall it by any act
hereunder be deemed to make any representation or warranty as to the
authorisation or reservation of any Shares to be issued pursuant to
this Agreement or any Right Certificate or as to whether any Shares
will, when issued, be duly authorised, validly issued and fully paid.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered
all such further and other acts, instruments and assurances as may be
reasonably be required by the Rights Agent for the carrying out or
performing by the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorised and directed to accept
instructions with respect to the performance of its duties hereunder
from any Director or the Secretary of the Company, and to apply to such
officers for advice or instructions in connection with its duties, and
it shall not be liable for any action taken, suffered or omitted to be
taken by it in good faith in accordance with instructions of any such
officer or for any delay in acting while waiting for those
instructions. Any application by the Rights Agent for written
instructions from the Company may, at the option of the Rights Agent,
set forth in writing any action proposed to be taken or omitted by the
Rights Agent under this Agreement and the date on and/or after which
such action shall be taken or such omission shall be effective. The
Rights Agent shall not be liable for any action taken by, or omission
of, the Rights Agent in accordance with a proposal included in such
application on or after the date specified in such application (which
date shall not be less than three Business Days after the date any
officer of the Company actually receives such application, unless such
officer shall have consented in writing to any earlier date) unless
prior to taking any such action (or the effective date in the case of
an omission), the Rights Agent shall have received written instructions
in response to such application specifying the action to be taken or
omitted.
(h) The Rights Agent and any shareholder, director, officer or employee of
the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or
lend money to the Company or otherwise act as fully and freely as
though it were not the Rights Agent under this Agreement. Nothing
herein shall preclude the Rights Agent from acting in any other
capacity for the Company or for any other Person.
(i) The Rights Agent may execute and exercise any of the rights or powers
hereby vested in it or perform any duty hereunder either itself or by
or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct
of any such attorneys or agents or for any loss to the Company or to
any holders of Rights resulting from any such act, defaults, neglect or
misconduct, provided that reasonable care was exercised in the
selection and continued employment thereof.
- 33 -
(j) No provision of this Agreement shall require the Rights Agent to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its
rights if there shall be reasonable grounds for believing that
repayment of such funds or adequate indemnification against such risk
or liability is not reasonably assured to it.
(k) If, with respect to any Right Certificate surrendered to the Rights
Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the cases may be, has
either not been completed or indicates an affirmative response to
clause 1 or 2 thereof, the Rights Agent shall not take any further
action with respect to such requested exercise or transfer without
first consulting with the Company.
(l) In addition to the foregoing, the Rights Agent shall be protected and
shall incur no liability for, or in respect of, any action taken or
omitted by it in connection with its administration of this Agreement
if such acts or omissions are in reliance upon (i) the proper execution
of the certification concerning beneficial ownership appended to the
form of assignment and the form of election to purchase attached hereto
unless the Rights Agent shall have actual knowledge that, as executed
such certification is untrue, or (ii) the non-execution of such
certification including, without limitation, any refusal to honor any
otherwise permissible assignment or election by reason of such
non-execution.
(m) The Company agrees to give the Rights Agent prompt written notice of
any event or ownership which would prohibit the exercise or transfer of
the Right Certificates.
Section 21
----------
Change of Rights Agent
----------------------
The Rights Agent or any successor Rights Agent may resign and be discharged from
its duties under this Agreement effective upon 30 days' notice in writing mailed
to the Company and to the transfer agent of the Shares by registered or
certified mail, and, subsequent to the Distribution Date, to the holders of the
Right Certificates by first-class mail. The Company may remove the Rights Agent
or any successor Rights Agent upon 30 days' notice in writing, mailed to the
Rights Agent or successor Rights Agent, as the case may be, and to the transfer
agent of the Shares by registered or certified mail, and, subsequent to the
Distribution Date, to the holders of the Right Certificates by first-class mail.
If the Rights Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the Rights Agent.
If the Company shall fail to make such appointment within a period of 30 days
after giving notice of such removal or after it has been notified in writing of
such resignation or incapacity by the resigning or incapacitated Rights Agent or
by the holder of a Right Certificate (who shall, with such notice, submit his
Right Certificate for inspection by the Company), then the registered holder of
any Right Certificate may apply to any court of competent jurisdiction for the
- 34 -
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
by the Company or by such a court, shall be (a) a bank or trust company licensed
under the laws of Bermuda or the United States of America or of any state of the
United States, in good standing, which is authorised under such laws to exercise
stock transfer or corporate trust powers and is subject to supervision or
examination by a regulatory authority or (b) an Affiliate of a corporation
described in clause (a) of this sentence. After appointment the successor Rights
Agent shall be vested with the same powers, rights, duties and responsibilities
as if it had been originally named as Rights Agent without further act or deed;
but the predecessor Rights Agent shall deliver and transfer to the successor
Rights Agent any property at the time held by it hereunder, and execute and
deliver any further assurance, conveyance, act or deed necessary for the
purpose. Not later than the effective date of any such appointment, the Company
shall file notice thereof in writing with the predecessor Rights Agent and the
transfer agent of the Shares, and, subsequent to the Distribution Date, mail a
notice thereof in writing to the registered holders of the Right Certificates.
Failure to give any notice provided for in this Section 21, or any defect
therein, shall not affect the legality or validity of the resignation or removal
of the Rights Agent or the appointment of the successor Rights Agent, as the
case may be.
Section 22
----------
Issuance of New Right Certificates
----------------------------------
Notwithstanding any of the provisions of this Agreement or of the Rights to the
contrary, the Company may, at its option, issue new Right Certificates
evidencing Rights in such form as may be approved by its Board of Directors to
reflect any adjustment or change in the Purchase Price and the number or kind of
class of shares issuable upon exercise of the Rights made in accordance with the
provisions of this Agreement.
Section 23
----------
Redemption of Rights
--------------------
(a) The Board of Directors of the Company may, at its option, at any time
prior to the earlier of (i) the close of business on the tenth day
after the Share Acquisition Date (or such later date as a majority of
the Continuing Directors may designate prior to such time as the Rights
are no longer redeemable) and (ii) the Final Expiration Date, redeem
all but not less than all the then outstanding Rights at a redemption
price of $.001 per Right, as such amount may be appropriately adjusted
to reflect any share subdivision or consolidation, dividend of shares
or similar transaction occurring after the date hereof (such redemption
price being hereinafter referred to as the "Redemption Price");
provided that, if the Board of Directors of the Company authorises
redemption of the Rights in either of the circumstances set forth in
clauses (x) or (y) below then there must be Continuing Directors in
office and such authorisation shall also require the concurrence of a
majority of such Continuing Directors: (x) such authorisation occurs on
or after the Share
- 35 -
Acquisition Date; or (y) such authorisation occurs on or after the date
of a change (resulting from a proxy or consent solicitation or similar
shareholder initiative) in a majority of the directors of the Company
in office at the commencement of such solicitation if any Person who is
a participant in such solicitation or initiative has stated (or if upon
the commencement of such solicitation or initiative a majority of the
directors of the Company has determined in good faith) that such Person
(or any of its Affiliates or Associates) intends to take, or may
consider taking, any action which would result in such Person becoming
an Acquiring Person or which would cause the occurrence of a Triggering
Event. Notwithstanding anything contained in this Agreement to the
contrary, the Rights shall not be exercisable after the first
occurrence of a Section 11(a)(ii) Event until such time as the
Company's right of redemption hereunder has expired, as the same may be
extended pursuant to the terms of this Agreement.
(b) In deciding whether or not to exercise the Company's right of
redemption hereunder, the directors of the Company shall act in good
faith, in a manner they reasonably believe to be in the best interests
of the Company and with such care, including reasonable inquiry, skill
and diligence, as a person or ordinary prudence would use under similar
circumstances.
(c) Immediately upon the action of the Board of Directors of the Company
electing to redeem the Rights and without any further action and
without any notice, the right to exercise the Rights will terminate and
thereafter the only right of the holders of Rights shall be to receive
the Redemption Price for each Right so held. The Company shall promptly
thereafter give notice of such redemption to the Rights Agent and the
holders of the Rights in the manner set forth in Section 26, provided
that the failure to give, or any defect in, such notice shall not
affect the Validity of such redemption. Any notice which is mailed in
the manner herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of redemption will state
the method by which the payment of the Redemption Price will be made.
Neither the Company nor any of its Affiliates or Associates may redeem,
acquire or purchase for value any Rights at any time in any manner
other than that specifically set forth in Sections 23 or 24, and other
than in connection with the purchase, acquisition or redemption of
Shares prior to the Distribution Date.
(d) Notwithstanding the provisions of Section 23(a) hereof, in the event
that a majority of the Board of Directors of the Company is comprised
of persons elected at a meeting of shareholders who were not nominated
by the Board of Directors in office immediately prior to such meeting,
then for a period of one hundred and eighty (180) days following the
effectiveness of such election the Rights shall not be redeemed if such
redemption is reasonably likely to have the purpose or effect of
allowing any Person to become an Acquiring Person or otherwise
facilitating the occurrence of a Triggering Event or transaction with
an Acquiring Person.
- 36 -
Section 24
----------
Exchange of Rights
------------------
(a) At any time after any Person becomes an Acquiring Person, a majority of
the Continuing Directors may, at their option, exchange all or part of
the then outstanding and exercisable Rights (which shall not include
Rights that have become void pursuant to Section 7(d)) for Shares at an
exchange ratio of two Shares per Right, appropriately adjusted to
reflect any share subdivision or consolidation, dividend of shares or
similar transaction occurring after the date hereof (such exchange
ratio being hereinafter referred to as the "Exchange Ratio").
(b) Immediately upon the action of the Continuing Directors electing to
exchange any Rights pursuant to Section 24(a) and without any further
action and without any notice, the right to exercise such Rights will
terminate and thereafter the only right of a holder of such Rights
shall be to receive that number of Shares equal to the number of such
Rights held by such holder multiplied by the Exchange Ratio (the
"Exchange Shares"). The Company shall promptly thereafter give notice
of such exchange to the Rights Agent and the holders of the Rights to
be exchanged in the manner set forth in Section 26, provided that the
failure to give, or any defect in, such notice shall not affect the
validity of such exchange. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of exchange will state the method
by which the exchange of the Shares for Rights will be effected and, in
the event of any partial exchange, the number of Rights which will be
exchanged. Any partial exchange shall be effected pro rata based on the
number of Rights (other than Rights which have become void pursuant to
Section 7(d)) held by each holder of Rights.
(c) If either (i) after giving effect to the other provisions of this
Agreement, the foregoing provision would result in the exchange of a
greater number of Shares than permitted by applicable law, or (ii) the
number of Shares which are authorised by the Company's Memorandum of
Association and any and all Certificates of Deposit of Memorandum of
Increase of Share Capital of the Company on file with the Registrar of
Companies in Bermuda but not outstanding or reserved for issuance other
than upon the exchange of the Rights is not sufficient to permit the
exchange of the Rights in accordance with this Section 24, the Company
shall, to the fullest extent permitted by applicable law, with respect
to each Right, make adequate provision to substitute for the Exchange
Shares, (i) (to the extent available) Shares, and then, (ii) (to the
extent available) ordinary share equivalents, and then, if necessary,
(iii) other equity or debt securities of the Company, cash or other
assets, any combination of the foregoing, having an aggregate value (as
determined by the Continuing Directors based upon the advice of an
internationally recognized investment banking firm selected by the
Continuing Directors) equal to the value of the Exchange Shares.
- 37 -
Section 25
----------
Notice of Proposed Actions
--------------------------
(a) In case the Company shall propose, at any time after the Distribution
Date, (i) to pay any dividend payable in specie to the holders of
Shares or to make any other distribution to the holders of Shares
(other than a regular periodic cash dividend out of earnings or
retained earnings of the Company) or (ii) to offer to the holders of
its Shares rights or warrants to subscribe for or to purchase any
additional Shares or shares of any class or any other securities,
rights or options, or (iii) to effect any amalgamation or merger with
any other Person, or to effect and/or to permit one or more of its
Subsidiaries to effect any sale or other transfer, in one transaction
or a series of related transactions, of assets or earning power
aggregating more than 50% of the assets or earning power of the Company
and its Subsidiaries, taken as a whole, to any other Person or Persons,
or (iv) to effect the liquidation, dissolution or winding up of the
Company, then, in each such case, the Company shall give to each holder
of a Right, to the extent feasible and in accordance with Section 26, a
notice of such proposed action, which shall specify the record date for
the purposes of any such dividend, distribution or offering of rights
or warrants, or the date on which any such amalgamation, merger, sale,
transfer, liquidation, dissolution or winding up is to take place and
the date of participation therein by the holders of Shares, if any such
date is to be fixed, and such notice shall be so given in the case of
any action covered clause (i) or (ii) above at least 20 days prior to
the record date for determining holders of the Shares entitled to
participate in such dividend, distribution or offering, and in the case
of any such other action, at least 20 days prior to the date of the
taking of such proposed action or the date of participation therein by
the holders of Shares, whichever shall be the earlier. The failure to
give notice required by this Section or any defect therein shall not
affect the legality or validity of the action taken by the Company or
the vote upon any such action.
(b) Notwithstanding anything in this Agreement to the contrary, prior to
the Distribution Date a public notice in a newspaper published in
Bermuda shall constitute sufficient notice to the holders of securities
of the Company, including the Rights, for purposes of this Agreement
and no other notice need be given to such holders.
(c) If a Triggering Event shall occur, then, in any such case, (1) the
Company shall as soon as practicable thereafter give to each holder of
a Right, in accordance with Section 26, a notice of the occurrence of
such event, which shall specify the event and the consequences of the
event to holders of Rights under Section 11(a)(ii) or 13, as the case
may be, and (2) all references in Section 25(a) to Shares shall be
deemed thereafter to refer to Shares or other shares, as the case may
be.
- 38 -
Section 26
----------
Notices
-------
Notices or demands authorised by this Agreement to be given or made by the
Rights Agent or by the holder of any Right to or on the Company shall be
sufficiently given or made if sent by first-class mail (postage prepaid) to the
Company, to the attention of the Secretary, at 0 Xxxxx Xxxxxx, Xxxxxxxx XX00,
Xxxxxxx or such other address as the Company shall specify in writing to the
Rights Agent. Subject to the provisions of Section 21, any notice or demand
authorised by this Agreement to be given or made by the Company or by the holder
of any Right to or on the Rights Agent shall be sufficiently given or made if
sent by first-class mail (postage paid) to the address of the Rights Agent
indicated on the signature page hereof or such other address as the Rights Agent
shall specify in writing to the Company. Notices or demands authorised by this
Agreement to be given or made by the Company or the Rights Agent to the holder
of any Right Certificate (or, prior to the Distribution Date, to the holder of
any certificate representing Shares or Warrant Certificates) shall be
sufficiently given or made if sent by first-class mail (postage prepaid) to the
address of such holder shown on the registry books of the Company.
Section 27
----------
Supplements and Amendments
--------------------------
Prior to the Distribution Date, the Company and the Rights Agent shall, if the
Company so directs, supplement or amend any provision of this Agreement without
the approval of any holders of certificates representing Shares or Warrant
Certificates even if such change or supplement shall adversely affect the
interests of the holders of the Rights. From and after the Distribution Date,
the Company and the Rights Agent shall, if the Company so directs, supplement or
amend this Agreement without the approval of any holders of Right Certificates
in order (a) to cure any ambiguity, (b) to correct or supplement any provision
contained herein which may be defective or inconsistent with any other
provisions herein or (c) to change or supplement the provisions hereof in any
manner which the Company may deem necessary or desirable and which, in the
opinion of the Company, shall not adversely affect the interests of the holders
of the Rights (other than an Acquiring Person or an Affiliate or Associate of an
Acquiring Person). Notwithstanding the foregoing, (x) after any Person has
become an Acquiring Person or (y) on or after the date of a change (resulting
from a proxy or consent solicitation or similar shareholder initiative) in a
majority of the directors of the Company in office at the commencement of such
solicitation or initiative if any Person who is a participant in such
solicitation or initiative has stated (or upon the commencement of such
solicitation a majority of the directors of the Company has determined in good
faith) that such Person (or any of its Affiliates or Associates) intends to
take, or may consider taking, any action which would result in such Person
becoming an Acquiring Person or which would cause the occurrence of a Triggering
Event, any supplement or amendment shall be effective only if there are
Continuing Directors then in office, and such supplement or amendment shall have
been approved by a
- 39 -
majority of such Continuing Directors. Upon the delivery of a certificate from
an appropriate officer of the Company which states that the proposed supplement
or amendment is in compliance with the terms of this Section, the Rights Agent
shall execute such supplement or amendment. Prior to the Distribution Date, the
interests of the holders of Rights shall be deemed coincident with the interests
of the holders of Shares and the Warrants.
Upon the delivery of a certificate from an appropriate officer of the Company
which states that the proposed supplement or amendment is in compliance with the
terms of this Section 27, the Rights Agent shall execute such supplement or
amendment. Notwithstanding any other provision hereof, the Rights Agent's
consent must be obtained regarding any amendment or supplement pursuant to this
Section 27 which alters the Rights Agent's rights or duties.
Section 28
----------
Successors
----------
All the covenants and provisions of this Agreement by or for the benefit of the
Company or the Rights Agent shall bind and enure to the benefit of their
respective successors and assigns hereunder.
Section 29
----------
Determinations and Actions by the Board of Directors
----------------------------------------------------
The Board of Directors of the Company, or a committee to which such powers are
delegated by the Board of Directors of the Company in accordance with Bye-laws
of the Company, (or, after any Person has become an Acquiring Person, a majority
of the Continuing Directors) shall have the exclusive power and authority to
administer this Agreement and to exercise all rights and powers specifically
granted to the Board or to the Company, or as may be necessary or advisable in
the administration of this Agreement, including the right and power to (i)
interpret the provisions of this Agreement and (ii) make all determinations or
calculations deemed necessary or advisable for the administration of this
Agreement (including a determination to redeem or exchange or not to redeem or
exchange the Rights or to amend the Agreement). All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y) below,
all omissions with respect to the foregoing) which are done or made by the Board
or a committee appointed by the Board (or, after any Person has become an
Acquiring Person, by the Continuing Directors) in good faith shall (x) be final,
conclusive and binding on the Company, the Rights Agent, the holders of the
Rights and all other parties, and (y) not subject the Board of Directors of the
Company or the Continuing Directors to any liability to the holders of the
Rights.
- 40 -
Section 30
----------
Benefits of this Agreement
--------------------------
Nothing in this Agreement shall be construed to give to any Person other than
the Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the certificates representing
the Shares and Warrant Certificates) any legal or equitable right, remedy or
claim under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered holders of
the Right Certificates (and, prior to the Distribution Date, the certificates
representing the Shares and Warrant Certificates and the Option Deeds).
Section 31
----------
Severability
------------
If any term, provision, covenant or restriction of this Agreement is held by a
court of competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated, provided that, notwithstanding
anything in this Agreement to the contrary, if any such term, provision,
covenant or restriction is held by such court or authority to be invalid, void
or unenforceable and the Board of Directors of the Company (or, after any Person
has become an Acquiring Person, a majority of the Continuing Directors)
determines in its good faith judgment that severing the invalid language from
this Agreement would adversely affect the purpose or effect of this Agreement,
the right of redemption set forth in Section 23 hereof shall be reinstated and
shall not expire until the close of business on the tenth day following the date
of such determination by the Board of Directors or Continuing Directors, as the
case may be.
Section 32
----------
Governing Law
-------------
This Agreement, each Right and each Right Certificate issued hereunder shall be
deemed to be a contract made under the laws of the Islands of Bermuda and for
all purposes shall be governed by and construed in accordance with such laws
applicable to contracts to be made and performed entirely within such
jurisdiction. The Company and each Right holder hereby submit to the exclusive
jurisdiction of the courts of the Islands of Bermuda for purposes of any
proceeding seeking to enforce any provision of, or based on any matter arising
out of or in connection with this Agreement or the transactions contemplated
hereby and the Company and each Right holder hereby consents to the jurisdiction
of such courts (and the appropriate appellate courts therefrom in any such
proceeding) and irrevocably waives, to the fullest extent permitted by law, any
- 41 -
objection which it may now or hereafter have to the laying venue of any such
proceeding in any such court or that any such proceeding which is brought in any
such court has been brought in an inconvenient forum.
Section 33
----------
Counterparts
------------
This Agreement may be executed in any number of counterparts and each of such
counterparts shall for all purposes be deemed to be an original , and all such
counterparts shall together constitute one and the same instrument.
Section 34
----------
Descriptive Headings
--------------------
The captions herein are included for convenience of reference only, do not
constitute a part of this Agreement and shall be ignored in the construction and
interpretation hereof.
Section 35
----------
Compliance with Statutory Requirements
--------------------------------------
Notwithstanding any other provision herein, the grant of Rights, the issue of
Shares upon the exercise of Rights and all other obligations of the Company in
connection therewith shall be conditional upon and subject to compliance with
the requirements of the Exchange Control Xxx 0000 and regulations made
thereunder, and of the Companies Act and the Banks Xxx 0000.
- 42 -
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorised officers as of the day and year first
above written.
THE COMMON SEAL )
OF THE BANK )
OF BERMUDA )
LIMITED )
was affixed to this deed )
in the presence of: )
THE COMMON SEAL )
OF BERMUDA TRUST )
COMPANY LIMITED )
was affixed to this deed )
in the presence of: )
[stamp duty]
- 43 -
EXHIBIT A
[Form of Right Certificate]
______________ Rights
NOT EXERCISABLE AFTER THE EARLIER OF DECEMBER 31, 2007 AND THE DATE ON WHICH THE
RIGHTS EVIDENCED HEREBY ARE REDEEMED OR EXCHANGED BY THE COMPANY AS SET FORTH IN
THE RIGHTS AGREEMENT. AS SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS ISSUED TO, OR
HELD BY, ANY PERSON WHO IS, WAS OR BECOMES AN ACQUIRING PERSON OR AN AFFILIATE
OR ASSOCIATE THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT),
WHETHER CURRENTLY HELD BY OR ON BEHALF OF SUCH PERSON OR BY ANY SUBSEQUENT
HOLDER, MAY BE NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHT CERTIFICATE
ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON
OR AN AFFILIATE OR AN ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE
DEFINED IN THE RIGHTS AGREEMENT). THIS RIGHT CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY MAY BE OR MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES
SPECIFIED IN SECTION 7(d) OF THE RIGHTS AGREEMENT.]/1/ THE RIGHTS SHALL NOT BE
EXERCISABLE FOR SECURITIES IN ANY JURISDICTION IF (I) THE REQUISITE
QUALIFICATION IN SUCH JURISDICTION SHALL NOT HAVE BEEN OBTAINED, (II) SUCH
EXERCISE SHALL NOT BE PERMITTED UNDER APPLICABLE LAW OR (III) IF APPLICABLE, A
REGISTRATION STATEMENT IN RESPECT OF SUCH SECURITIES SHALL NOT HAVE BEEN
DECLARED EFFECTIVE.
RIGHT CERTIFICATE
THE BANK OF BERMUDA LIMITED
This Right Certificate certifies that ___________________________, or
registered assigns, is the registered holder of the number of Rights set forth
above, each of which entitles the holder (upon the terms and subject to the
conditions set forth in the Rights Agreement dated as of (the "Rights
Agreement") between The Bank of Bermuda Limited, a Bermuda Company (the
"Company"), and Bermuda Trust Company Limited (the "Rights Agent") to purchase
from the Company, at any time after the Distribution Date and prior to the
Expiration Date, one-quarter of a fully paid Common Share (the "Shares") of the
Company at a purchase price of $50 per one-quarter of a Share (the "Purchase
Price"), payable in lawful money of Bermuda (or equivalent in lawful money of
the United States of America at the exchange rate determined by the Company),
upon surrender of this Right Certificate, with the form of election
_____________________________
/1/ If applicable, insert this portion of the legend and delete
the preceding sentence.
- 44 -
to purchase and related certificate duly executed, and payment of the Purchase
Price at an office of the Rights Agent designated for such purpose.
Terms used herein and not otherwise defined herein have the meanings
assigned to them in the Rights Agreement.
The number of Rights evidenced by this Right Certificate (and the
number and kind of shares issuable upon exercise of each Right) and the Purchase
Price set forth above are as of December 12, 1997, and may have been or in the
future be adjusted as a result of the occurrence of certain events, as more
fully provided in the Rights Agreement.
Upon the occurrence of a Section 11(a)(ii) Event, if the Rights
evidenced by this Right Certificate are beneficially owned by (a) an Acquiring
Person or an Associate or Affiliate of an Acquiring Person, (b) a transferee of
an Acquiring Person (or any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes such, or (c) under certain
circumstances specified in the Rights Agreement, a transferee of an Acquiring
Person (or any such Associate or Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such, such Rights shall become
null and void, and no holder hereof shall have any right with respect to such
Rights from and after the occurrence of such Section 11(a)(ii) Event.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under the specific circumstances set forth in the Rights Agreement.
Upon surrender at an office of the Rights Agent designated for such
purpose and subject to the terms and conditions set forth in the Rights
Agreement, any Rights Certificate or Certificates may be transferred or
exchanged for another Rights Certificate or Certificates evidencing a like
number of Rights as the Rights Certificate or Certificates surrendered.
Subject to the provisions of the Rights Agreement, the Board of
Directors of the Company may, at its option at any time prior to (i) the close
of business on the tenth day after the Share Acquisition Date (or such later
date as a majority of the Continuing Directors may designate prior to such time
as the Rights are no longer redeemable) and (ii) the Final Expiration Date,
redeem all but not less than all the then outstanding Rights at a redemption
price of $0.001 per Right.
No fractional Shares will be issued upon the exercise of any Right or
Rights evidenced hereby, but in lieu thereof a cash payment will be made, as
provided in the Rights Agreement. If
- 45 -
this Right Certificate shall be exercised in part, the holder shall be entitled
to receive upon surrender hereof another Right Certificate or Certificates for
the number of whole Rights not exercised.
No holder of this Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the shares which may at any
time be issuable on the exercise hereof, nor shall anything contained in the
Rights Agreement or herein be construed to confer upon the holder hereof, as
such, any of the rights of a shareholder of the Company or any right to vote for
the election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting shareholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal by its authorized officers
Dated as of
--------------------------------------------
THE COMMON SEAL )
OF THE BANK )
OF BERMUDA )
LIMITED )
was affixed to this deed )
in the presence of: )
- 46 -
Form of Reverse Side of Right Certificate
-----------------------------------------
FORM OF ASSIGNMENT
(To be executed if the registered holder
desires to transfer the Right Certificate)
FOR VALUE RECEIVED
hereby sells, assigns and transfers unto
(Please print name and address of transferee)
the Right Certificate, together with all right, title and interest therein.
Dated:
___________________________
Witness Signature
- 47 -
Certificate
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Right Certificate are are not
being assigned by or on behalf of a Person who is or was an Acquiring Person or
an Affiliate or Associate of any such Acquiring Person (as such terms are
defined in the Rights Agreement):
(2) after due inquiry and to the best knowledge of the
undersigned, it did did not acquire the Rights evidenced by this Right
Certificate from any Person who is, was or became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated:
-------------------------
Signature
The signatures to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
- 48 -
FORM OF ELECTION TO PURCHASE
(to be executed if the registered holder desires to exercise
Rights represented by the Right Certificate)
To: The Bank of Bermuda Limited
The undersigned hereby irrevocably elects to exercise Rights
represented by this Right Certificate to purchase Shares issuable upon the
exercise of the Rights (or such other securities of the Company or of any other
person which may be issuable upon the exercise of the Rights) and requests that
certificates for such securities be issued in the name of and delivered to:
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced by this
Right Certificate, a new Right Certificate for the balance of such Right shall
be registered in the name of and delivered to:
(Please print name and address)
Dated:
Signature
- 49 -
Certificate
The undersigned hereby certifies by checking the appropriate boxes that
(1) the Rights evidenced by this Right Certificate are are not being
exercised by or on behalf of a Person who is or was an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as such terms are defined
in the Rights Agreement):
(2) after due inquiry and to the best knowledge of the undersigned, it did
did not acquire the Rights evidenced by this Right Certificate from any Person
who is, was or became an Acquiring Person or an Affiliate or Associate of an
Acquiring Person.
(3) the undersigned is is not a Bermudian for the purposes of sections 113
of the Companies Xxx 0000 of Bermuda.
Dated: ___________________________
Signature
The signatures to the foregoing Assignment and Certificate must correspond
to the name as written upon the face of this Right Certificate in every
particular, without alteration or enlargement or any change whatsoever.
- 50 -
Exhibit B
THE BANK OF BERMUDA LIMITED
SHAREHOLDER RIGHTS PLAN
Summary of Terms
Form of Security: The Board of Directors has authorized a grant of
one purchase right for each Share held in the capital of the
Company, for each Share for which each Warrant Holder is
entitled to subscribe and for each Option held under the
Option Plan, whether or not vested, to be granted to the
registered holder as of the close of business on December 12,
1997 (each a "Right" and collectively, the "Rights").
Transfer: Prior to the Distribution Date/2/, the Rights will be
evidenced by the certificates for the Shares and Warrants and
by the Option Deeds and will be transferred with the Shares,
Warrants and Options, and the registered holders of the
Shares, Warrants and Options will be deemed to be the
registered holders of the Rights.
After the Distribution Date, the Rights Agent will mail
separate certificates evidencing the Right to each registered
holder of the Shares, Warrants and Options as of the close of
business on the Distribution Date, and thereafter the Rights
will be transferable separately from the Shares, Warrants and
Options.
Exercise: Prior to the Distribution Date, the Rights will not be
exercisable.
After the Distribution Date, each Right will be exercisable to
purchase, for $50 (the "Purchase Price"), one-quarter of one
Share, par value $1.00 per share, of the Company.
Flip-In: If any person or group (an "Acquiring Person") becomes the
beneficial owner of 15% or more of the Company's Shares, then
each Right (other than Rights beneficially owned by the
______________________
/2/ Distribution Date means the 10th day after public announcement that any
person or group has become the beneficial owner of 15% or more of the
Company's Shares (subject to extension by a majority of the Directors
not affiliated with the Acquiring Person).
- 51 -
Acquiring Person and certain affiliated persons) will entitle
the holder to purchase, for the Purchase Price, that number of
Shares having a market value of two times the Purchase Price,
unless:
(a) Inadvertent Trigger: such person became an Acquiring
-------------------
Person inadvertently, and such person as promptly as practical
divests itself of beneficial ownership of a sufficient number
of Shares so that such person would no longer be an Acquiring
Person; or
(b) Share Repurchase Exception: such person became an
--------------------------
Acquiring Person pursuant to an acquisition of Shares by the
Company which, by reducing the number of Shares in issue,
increases the proportionate number of Shares beneficially
owned by such Person to 15% or more of the Shares then
outstanding provided however that if a Person shall become the
Beneficial Owner of 15% or more of the Shares then in issue
and shall thereafter become the Beneficial Owner of additional
Shares, representing 1% or more of the Shares then
outstanding, above such threshold amount, then such person
shall be deemed to be an "Acquiring Person".
Flip-Over If, after any person has become an Acquiring Person, (1) the
Company is involved in an amalgamation, merger or other
business combination in which the Company is not the surviving
corporation or its Shares are exchanged for other securities
or assets, or (2) the Company and/or more of its subsidiaries
sell or otherwise transfer assets or earning power aggregating
more than 50% of the assets or earning power of the Company
and its subsidiaries, taken as a whole, then each Right will
entitle the holder to purchase, for the Purchase Price, a
number of Shares of the other party to such business
combination or sale (or in certain circumstances, an
affiliate) having a market value of two times the Purchase
Price.
Exchange: At any time after any person has become an Acquiring Person,
a majority of the Directors not affiliated with the Acquiring
Person may exchange all or part of the Rights (other than the
Rights beneficially owned by the Acquiring
- 52 -
Person and certain affiliated persons) for Shares at an
exchange ratio of two Shares per Right.
Redemption: The Board of Directors may redeem all of the Rights at a
price of $.001 per Right at any time prior to the close of
business on the 10th day after public announcement that any
person has become an Acquiring Person (subject to extension by
a majority of the Directors not affiliated with the Acquiring
Person).
The consent of a majority of the unaffiliated Directors will
be required for the redemption of the Rights after (i) any
person has become an Acquiring Person or (ii) there is a
change in the majority of the Board of Directors through a
shareholder initiative for the purpose of facilitating a
person becoming an Acquiring Person.
Expiration: The Rights will expire on December 31, 2007, unless earlier
exchanged or redeemed.
Amendments: Prior to the Distribution Date, the Rights Agreement may be
amended in any respect.
After the Distribution Date, the Rights Agreement may be
amended in any respect that does not adversely affect the
Rights holders (other than any Acquiring Persons and certain
affiliated persons).
The consent of a majority of the unaffiliated Directors will
be required for an amendment to Rights Agreement after (i) any
person has become an Acquiring Person or (ii) there is a
change in the majority of the Board of Directors through a
shareholder initiative for the purpose of facilitating a
person becoming an Acquiring Person.
Voting Rights: Rights holders have no rights as a shareholder of the Company,
including the right to vote and to receive dividends.
Antidilution
Provisions: The Rights Agreement includes provisions designed to prevent
dilution of the Rights.
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A copy of the Rights Agreement is available free of charge from the Company.
This summary description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement.
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