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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )*
IPC HOLDINGS, INC.
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(Name of Issuer)
Common Stock, without par value
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(Title of Class of Securities)
G4933P 10 l
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(CUSIP Number)
AMERICAN INTERNATIONAL GROUP, INC.
70 PINE STREET
New York, New York 10270
Attn: General Counsel (212) 770-5457
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(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
March 7, 1996
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box / /.
Check the following box if a fee is being paid with the statement / /. (A fee
is not required only if the reporting person: (1) has a previous statement on
file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities,
and for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
(Continued on folloginw page(s))
PAGE 1 OF 12
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SCHEDULE 13D
CUSIP NO. G4933P 10 1 PAGE 2 OF 12 PAGES
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
AMERICAN INTERNATIONAL GROUP, INC.
IRS I.D. NO.: 13-2592361
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) / /
(b) / /
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(D) OR 2(E) / /
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware, U.S.A.
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7 SOLE VOTING POWER
NUMBER OF
SHARES 6,100,000 shares
BENEFICIALLY -----------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH
REPORTING
PERSON -----------------------------------------------------------------
WITH 9 SOLE DISPOSITIVE POWER
6,100,000 shares
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10 SHARED DISPOSITIVE POWER
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
6,100,000 shares
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
24.4%
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14 TYPE OF REPORTING PERSON*
HC, CO
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
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ITEM 1. SECURITY AND ISSUER.
This statement relates to the common shares, without par value ("Common
Shares"), of IPC Holdings, Inc., a Bermuda corporation ("Company"). The
principal executive offices of the Company are located at American
International Building, 29 Richmond Road, Pembroke HM 08, Bermuda.
ITEM 2. IDENTITY AND BACKGROUND.
(a) through (c). This statement is filed by American International
Group, Inc., a Delaware corporation ("AIG").
On March 7, 1996 ("Effective Date"), the Securities and Exchange
Commission ("SEC") declared effective the Company's registration statement on
Form S-1, Registration No. 333-00088 ("Registration Statement"), pursuant to
which the shareholders of the Company (other than AIG and General Re
Corporation) offered for sale in an initial public offering ("IPO") 13,521,739
Common Shares. The Common Shares are listed on the Nasdaq National Market under
the symbol "IPCRF" and registered by the Company under Section 12(g) of the
Securities Exchange Act of 1934.
AIG, which first sponsored the formation of the Company in 1993, owns
6,100,000 Common Shares ("AIG Common Shares") representing 24.4% of the share
capital of the Company (none of which AIG Common Shares were offered for sale
in the IPO), as well as an option ("Option") to purchase up to an additional
2,775,000 Common Shares (i.e., an additional 10% on a fully diluted basis,
excluding employee stock options of the Company) at a purchase price of
$12.7746 per share.
A copy of the Option is attached hereto as Exhibit A and incorporated
in its entirety by reference. The descriptions set forth in this Form 13D are
qualified in their entirety by reference to the Option as attached hereto. In
addition, reference is made to the Registration Statement, a copy of which is
on file with the SEC.
AIG is a holding company which, through its subsidiaries, is primarily
engaged in a broad range of insurance and insurance-related activities and
financial services in the United States and abroad. The principal executive
offices of AIG are located at 70 Pine Street, New York, New York 10270.
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Starr International Company, Inc., a private holding company
incorporated in Panama ("SICO"), The Starr Foundation, a New York
not-for-profit corporation ("The Starr Foundation"), and C.V. Starr & Co.,
Inc., a private holding company incorporated in Delaware ("Starr"), have the
right to vote approximately 16.0%, 3.5% and 2.4%, respectively, of the
outstanding common stock of AIG. the principal offices of SICO are located at 29
Richmond Road, Pembroke, Bermuda. The principal offices of The Starr Foundation
and Starr are located at 70 Pine Street, New York, New York 10270. A list of
the executive directors and officers ("Covered Persons") of AIG, SICO, The
Starr Foundation and Starr, their business addresses and principal occupations
is attached hereto as Exhibit B. Each of the Covered Persons is a citizen of
the United States, except for Messrs. Manton and Edmund Tse who are British
subjects, Mr. Cohen who is a Canadian subject and Mr. Joseph Johnson who is a
Bermudian subject.
(d) and (e). During the last five years, none of AIG, SICO, The Starr
Foundation and Starr, or any of the Covered Persons, has (i) been convicted in
a criminal proceeding (excluding traffic violations or similar misdemeanors) or
(ii) been a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding was or is subject to
a judgment, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to federal or state securities laws
or finding any violations with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Pursuant to the terms of a Subscription Agreement dated June 29, 1993
by and among the Company the Company's Shareholders, AIG purchased the AIG
Common Shares for US$58,560,000 in cash and received the Option. At the time of
the purchase, AIG used its available working capital to purchase the AIG Common
Shares.
ITEM 4. PURPOSE OF TRANSACTION.
The purpose of the acquisition of the AIG Common Shares and the Option
by AIG in 1993 was investment and the formation of the Company. The purpose of
the IPO was to enable the Selling Shareholders of the Company to conclude their
respective investments in the Company by selling their Common Shares into the
public market.
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A. ACQUISITION OF ADDITIONAL SECURITIES OF THE ISSUER
In addition to its current ownership of the AIG Common Shares, AIG may,
after the Effective Date, purchase additional Common Shares from the Company
upon exercise of the Option.
The Option entitles AIG to purchase up to 2,775,000 Common Shares at an
exercise price of $12.7746 per share. The Option is exercisable once, in whole
or in part, only on or after various exercise dates. If notice of exercise of
the Option is not made on or prior to June 29, 2003, the Option expires. The
Option has customary antidilution provisions. AIG has agreed with the Company
that it will dispose of any Common Shares obtained pursuant to exercise of the
Option that results in AIG becoming the holder (a "U.S. 25% Shareholder") of
25% or more of the total combined voting power or total value of the Company's
capital stock within 29 days of exercise of the Option.
In connection with the IPO, AIG also entered into a letter agreement
dated March 6, 1996 ("Lock-Up Letter") with Morgan Stanley & Co. Incorporated
and Merrill, Lynch, Pierce, Fenner & Smith Incorporated (acting severally on
behalf of themselves and the several underwriters of the IPO), pursuant to
which AIG agreed that, for a period 180 days after the Effective Date, AIG
(with respect to the AIG Common Shares and Common Shares issuable upon exercise
of the Option) shall not, without the prior written consent of Morgan Stanley &
Co. Incorporated or Merrill, Lynch, Pierce, Fenner & Smith Incorporated:
(i) offer, pledge, sell, contract to sell, sell any option or contract
to purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase, or otherwise transfer or dispose of,
directly or indirectly, any Common Shares or any securities convertible
into or exercisable or exchangeable for Common Shares, or
(ii) enter into any swap or similar agreement that transfers, in whole
or in part, the economic consequences of ownership of the Common Shares.
Notwithstanding the foregoing, AIG may engage in such transaction in certain
circumstances involving either (A) sales in connectionn with an amalgamation or
merger of the Company (in which the Company is not the surviving entity) or the
sale of substantially
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all of the assets of the Company, or (B) sales necessary in the judgment of AIG
to comply with its obligations to dispose of any Common Shares obtained
pursuant to the exercise of the Option that would result in AIG becoming the
holder (a "U.S. 25% Shareholder") of 25% or more of the total combined voting
power or total value of the Company's capital stock.
A copy of the Lock-Up Letter is attached as Exhibit C hereto and
incorporated in its entirety by reference. The descriptions set forth in this
Form 13D are qualified in their entirety by reference to the Lock-Up Letter as
attached hereto.
No additional plans or proposals are presently contemplated by AIG
other than those described elsewhere in this Form.
B. EXTRAORDINARY CORPORATE TRANSACTION
No plans or proposals are presently contemplated by AIG with respect to
any extraordinary corporate transaction involving the Company. Notwithstanding
the foregoing, AIG has the right, except as described in Item 4(a) above, freely
to acquire securities of the Company in any manner whatsoever and engage in any
of the activities described above.
C. SALE OR TRANSFER OF A MATERIAL AMOUNT OF ASSETS OF THE ISSUER OR ANY OF ITS
SUBSIDIARIES
No plans or proposals are presently contemplated by AIG with respect to
any sale or transfer of a material amount of assets of the Company and/or its
subsidiaries.
D. ANY CHANGE IN THE PRESENT BOARD OF DIRECTORS OR MANAGEMENT OF THE ISSUER
Prior to the IPO, the number of members of the Company's Board of
Directors was increased from five to seven. Thereafter, no shareholder of the
Company was contractually entitled to elect any of the Board's directors,
except as part of the vote of a simple majority of Common Shareholders at a
duly constituted shareholder meeting of the Company. No other plans or
proposals are presently contemplated by AIG with respect to any change in the
Company's present board of directors or management.
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E. ANY MATERIAL CHANGE IN THE PRESENT CAPITALIZATION OR DIVIDEND POLICY OF THE
ISSUER
No plans or proposals are presently contemplated by AIG with respect to
any material change in the present capitalization or dividend policy of the
Company.
F. ANY OTHER MATERIAL CHANGE IN THE ISSUER'S BUSINESS OR CORPORATE STRUCTURE
No plans or proposals are presently contemplated by AIG with respect to
any other material change in the business or corporate structure of the Company.
G. CHANGES IN THE ISSUER'S CHARTER, BY-LAWS OR INSTRUMENTS CORRESPONDING THERETO
OR OTHER ACTIONS WHICH MAY IMPEDE THE ACQUISITION OF CONTROL OF THE ISSUER BY
ANY PERSON
In connection with the IPO, the Company amended its Bye-Laws to
implement transfer restrictions ("Transfer Restrictions") on the capital stock
of the Company designed to restrict transfers of the Common Shares that may
result in the treatment of the Company as a "controlled foreign corporation"
under the U.S. Internal Revenue Code of 1986 ("Code"). A copy of the Amended
and Restated Bye-Laws of the Company ("Bye-Laws") is attached as Exhibit D
hereto and incorporated in its entirety by reference. The descriptions set
forth in this Form 13D are qualified in their entirety by reference to the
Bye-Laws as attached hereto.
Transfer Restrictions on Company Securities
Under the Bye-Laws, the Company's directors are generally required to
decline to register any transfer of Common Shares that would result in a person
(or any group of which such person is a member), other than AIG and its
affiliates, beneficially owning, directly or indirectly, 10% or more of the
Common Shares, or in AIG and its affiliates beneficially owning, directly or
indirectly, more than 25% of such Common Shares. Similar restrictions apply to
the Company's ability to issue or repurchase shares other than in connection
with AIG's exercise of the Option. The directors (or their designee) also may,
in their absolute discretion, decline to register the transfer of any Common
Shares if they have reason to believe that (i) such transfer may expose the
Company, any subsidiary thereof, any
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shareholder or any person ceding insurance to the Company or any such
subsidiary to adverse tax or regulatory treatment in any jurisdiction of, and
(ii) registration of such transfer under the Securities Act or under any U.S.
state securities laws or under the laws of any other jurisdiction is required
and such registration has not been duly effected. A transferor of Common Shares
will be deemed to own such shares for dividend, voting and reporting purposed
until a transfer of such Common Shares has been registered on the Register of
Members of the Company. The Company is authorized to request information from
any holder or prospective acquiror of Common Shares as necessary to give effect
to the transfer, issuance and repurchase restrictions referred to above, and
may decline to effect any such transaction if complete and accurate information
is not received as requested.
Voting Rights of the Common Shares
In addition, the Bye-Laws generally provide that any person (or any
group of which such person is a member) holding, directly or by attribution, or
otherwise beneficially owning Common Shares carrying 10% or more of the total
voting rights attached to all of the Company's outstanding capital shares, will
have the voting rights attached to its issued shares reduced so that it may not
exercise more than approximately 9.9% of such total voting rights. Because of
the attribution provisions of the Code and the rules of the SEC regarding
determination of beneficial ownership, this requirement may have the effect of
reducing the voting rights of a shareholder whether or not such shareholder
directly holds 10% or more of the Common Shares. Further, the directors (or
their designee) have the authority to request from any shareholder certain
information for the purpose of determining whether such shareholder's voting
rights are to be reduced. Failure to respond to such a notice, or submitting
incomplete or inaccurate information, give the directors (or their designee)
discretion to disregard all votes attached to such shareholder's Common Shares.
Registration Rights Agreement
As of the Effective Date, the AIG Common Shares and the Common Shares
issuable upon exercise of the Option were not registered with the SEC for sale
by AIG and are restricted securities. In connection with the IPO, the Company
entered into a Registration Rights Agreement, pursuant to which AIG will be
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entitled to certain registration rights under the Securities Act with respect
to the Common Shares issuable to AIG upon exercise of the Option. A copy of the
Registration Rights Agreement is attached as Exhibit E hereto. Additionally,
under the Lock-Up Letter, AIG has agreed (with respect to the AIG Common Shares
and Common Shares issuable upon exercise of the Option) that, for a period 180
days after the Effective Date, it shall not make any demand for or exercise any
right with respect to the registration of any Common Shares or any securities
convertible into or exercisable or exchangeable for Common Shares.
H. CAUSING A CLASS OF SECURITIES OF THE ISSUER TO BE DELISTED FROM A NATIONAL
SECURITIES EXCHANGE OR TO CEASE TO BE AUTHORIZED TO BE QUOTED IN AN
INTER-DEALER QUOTATION SYSTEM OF A REGISTERED NATIONAL SECURITIES
ASSOCIATION
No plans or proposals are presently contemplated by AIG which would
cause a class of securities of the Company to be delisted from a national
securities exchange or to cease to be authorized to be quoted in an
inter-dealer quotation system of a registered national securities association.
I. CAUSING A CLASS OF SECURITIES OF THE ISSUER TO BECOME ELIGIBLE FOR
TERMINATION OF REGISTRATION PURSUANT TO SECTION 12(g)(4) OF THE SECURITIES
EXCHANGE ACT OF 1934
No plans or proposals are presently contemplated by AIG which would
cause a class of securities of the Company to become eligible for termination
of registration pursuant to Section 12(g)(4) of the Securities Exchange Act of
1934.
J. ANY ACTION SIMILAR TO ANY OF THOSE ENUMERATED ABOVE
No additional plans or proposals are presently contemplated by AIG
other than those described elsewhere in this Form.
ITEM 5. INTEREST IN SECURITIES OF ISSUER.
(a) and (b). The information required by these paragraphs is set forth
in Items 7 through 11 and 13 of each of the cover pages of this Schedule 13D
and is based upon the number of shares of Common Stock outstanding as of March
7, 1996 (25,000,000) as contained in the Registration Statement.
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(c). AIG, SICO, The Starr Foundation and Starr, and, to the best of
AIG's knowledge, the Covered Persons, have not engaged in any transactions in
the Common Stock within the past 60 days other than in connection with a
recapitalization of the capital stock of the Company prior to the IPO.
(d) and (e). Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS & RELATIONSHIPS WITH RESPECT TO
SECURITIES OF THE ISSUER.
Contracts, arrangements, understandings and relationships with respect
to securities of the Company consist of the Option, the Lock-Up Letter, the
Bye-Laws and the Registration Rights Agreement, each of which is attached as an
exhibit hereto and is incorporated in its entirety by reference.
In addition, prior to February 15, 1996, the Company and its existing
shareholders were parties to a Shareholders' Agreement and a Subscription
Agreement, each dated June 29, 1993, which contained, among other things,
provisions relating to the corporate governance of the Company. The Company and
its existing shareholders entered into a Termination Agreement on February 15,
1996 whereby, subject to consummation of the Offering, the Shareholder's
Agreement and the Subscription Agreement terminated upon consummation of the
IPO other than with respect to certain contingent liabilities relating to
pre-termination events. The Company has agreed in the Termination Agreement to
indemnify the Selling Shareholders in the IPO against certain liabilities in
connection with the IPO, including liabilities under the Securities Act.
In addition to the foregoing agreements, subsidiaries of AIG, in the
ordinary course of their business, provide investment advisory, administrative
and custodial services to the Company.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
(A) Amended and Restated Option Agreement dated March 13, 1996 by and
between IPC Holdings, Ltd. and American International Group, Inc.
(B) List of the Directors and Officers of American International Group,
Inc., Starr International Company,
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Inc., The Starr Foundation and C.V. Starr & Co., Inc.,
Their Business Addresses and Principal Occupations.
(C) Letter Agreement dated March 6, 1996 among American
International Group, Inc., Morgan Stanley & Co.
Incorporated and Merrill, Lynch, Pierce, Fenner &
Smith Incorporated (acting on behalf of itself and the
several underwriters of the IPO).
(D) Bye-Laws of IPC Holdings, Ltd. as at March 13, 1996.
(E) Registration Rights Agreement dated as of March 13, 1996
by and between IPC Holdings, Ltd. and the Rightsholders
identified therein (including without limitation
American International Group, Inc.).
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SIGNATURE
After reasonsable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: April 9, 1996
AMERICAN INTERNATIONAL GROUP, INC.
By:/s/ Edward E. Matthews
------------------------
Edward E. Matthews
Vice Chairman - Finance
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EXHIBIT INDEX
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Exhibit
No. Description
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(A) Amended and Restated Option Agreement dated March 13, 1996 by and
between IPC Holdings, Ltd. and American International Group, Inc.
(B) List of the Directors and Officers of American International Group,
Inc., Starr International Company, Inc., The Starr Foundation and
C.V. Starr & Co., Inc., Their Business Addresses and Principal
Occupations.
(C) Letter Agreement dated March 6, 1996 among American International
Group, Inc., Morgan Stanley & Co. Incorporated and Merrill, Lynch,
Pierce, Fenner & Smith Incorporated (acting on behalf of itself
and the several underwriters of the IPO).
(D) Bye-Laws of IPC Holdings, Ltd. as at March 13, 1996.
(E) Registration Rights Agreement dated as of March 13, 1996 by and
between IPC Holdings, Ltd. and the Rightsholders identified
therein (including without limitation American International
Group, Inc.).
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ITEM (7A)
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AMENDED AND RESTATED
OPTION AGREEMENT
NEITHER THIS OPTION AGREEMENT, NOR THE COMMON SHARES DELIVERABLE UPON EXERCISE
HEREOF, HAVE BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933 (THE
"SECURITIES ACT"). NEITHER THIS OPTION NOR ANY INTEREST HEREIN MAY BE ASSIGNED
OR OTHERWISE TRANSFERRED, DISPOSED OF OR ENCUMBERED EXCEPT FOLLOWING RECEIPT BY
IPC HOLDINGS, LTD. (THE "COMPANY") OF AN OPINION OF UNITED STATES COUNSEL TO THE
COMPANY THAT SUCH TRANSFER DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES
ACT OR STATE SECURITIES LAWS AND UPON OBTAINMENT OF ANY REQUIRED GOVERNMENT
APPROVALS. TRANSFER OF THIS OPTION OR ANY INTEREST HEREIN MAY BE DISAPPROVED BY
THE BOARD OF DIRECTORS OF THE COMPANY IF, IN THEIR REASONABLE JUDGMENT, THEY
HAVE REASON TO BELIEVE THAT SUCH TRANSFER MAY EXPOSE THE COMPANY, ANY SUBSIDIARY
THEREOF, ANY SHAREHOLDER OR ANY PERSON CEDING INSURANCE TO THE COMPANY OR ANY
SUCH SUBSIDIARY TO ADVERSE TAX OR REGULATORY TREATMENT IN ANY JURISDICTION.
COMMON SHARES OBTAINED UPON EXERCISE OF THIS OPTION AGREEMENT ARE SUBJECT TO
SUBSTANTIAL RESTRICTIONS ON TRANSFER AS SET FORTH IN THE TERMINATION AGREEMENT,
DATED AS OF FEBRUARY 15, 1996, AMONG THE COMPANY AND THE SHAREHOLDERS IDENTIFIED
THEREIN AND THE REGISTRATION RIGHTS AGREEMENT, DATED AS OF MARCH 13, 1996, AMONG
THE COMPANY AND THE RIGHTHOLDERS IDENTIFIED THEREIN.
This AMENDED AND RESTATED OPTION AGREEMENT made this 13th day of March,
1996 between IPC HOLDINGS, LTD., a company incorporated under the laws of the
Islands of Bermuda (hereinafter called "the Company") of the one part, and
AMERICAN INTERNATIONAL GROUP, INC., a company incorporated under the laws of the
State of Delaware in the United States of America (hereinafter called "AIG") of
the second part.
W I T N E S S E T H:
WHEREAS, AIG purchased 60 shares of the Voting Common Stock, par value
U.S. $200 per share (the "Voting Common Stock"), and 184 shares of the
Non-Voting Common Stock, par value U.S. $200 per share (the "Non-Voting Common
Stock", the Voting
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and Non-Voting Common Stock being sometimes referred to collectively herein as
the "Common Stock") of the Company pursuant to the Subscription Agreement, dated
as of June 29, 1993, among the Company and the investors named therein (the
"Subscription Agreement") and has entered into the Shareholders' Agreement,
dated as of June 29, 1993, among the Company and the shareholders named therein
(the "Shareholders' Agreement");
WHEREAS, in connection with the entering into by AIG of the
Subscription Agreement and the Shareholders' Agreement, the Company granted AIG
an option to purchase additional shares of Common Stock on the terms and
conditions specified in the Option Agreement, dated June 29, 1993, between the
Company and AIG (the "Original Option Agreement");
WHEREAS, in connection with a proposed Initial Public Offering (as
defined in the Shareholders' Agreement), the shareholders of the Company have
approved a recapitalization of the Company's capital stock, pursuant to which
each share of Voting Common Stock and Non-Voting Common Stock shall be converted
into 25,000 Common Shares, par value U.S. $.01 per share (the "Common Shares");
WHEREAS, in connection with the proposed Initial Public Offering and
such recapitalization, AIG and the Company, with the unanimous approval of the
Company's shareholders, wish to amend certain provisions of the Original Option
Agreement and restate such agreement as so amended, effective upon consummation
of the Initial Public Offering;
NOW, THEREFORE, AIG and the Company agree as follows, effective upon
consummation of the Initial Public Offering:
1. (a) In consideration of AIG entering into the Subscription Agreement
and Shareholders' Agreement and for other value received, receipt of which is
acknowledged, the Company hereby grants to AIG the option (the "Option")
exercisable at the
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times and subject to the conditions set forth in paragraph (d) of this Section
1, to subscribe for and be allotted up to 2,775,000 Common Shares (the "Option
Shares") at the price of U.S. $12.7746 per share. The number of Option Shares
and the amount payable hereunder in respect of each such Option Share
(hereinafter referred to as the "Option Price") shall be subject to adjustments
from time to time in accordance with the provisions of Section 3 hereof.
(b) The Option shall be exercisable at all times to the full extent
of the Option Shares granted pursuant to paragraph (a) of this Section 1,
notwithstanding that the purchase by AIG of all the Option Shares may at any
time cause it to be a U.S. 25% Shareholder (as defined below). In the event that
AIG becomes a U.S. 25% Shareholder as a result of any exercise of the Option,
AIG shall, within 29 days of the effective date of the exercise of the Option,
dispose of such number of Common Shares as shall be necessary, in AIG's
determination, for AIG to cease being a U.S. 25% Shareholder. As used herein, a
"U.S. 25% Shareholder" means any U.S. person who is a shareholder of the Company
owning, directly or by application of the attribution and constructive ownership
rules of Section 958(a) and 958(b) of the U.S. Internal Revenue Code of 1986, as
amended (the "Code"), more than 25% of either (i) the total combined voting
rights attaching to the issued Common Shares and the issued shares of any other
class of the Company or (ii) the total combined value of the issued Common
Shares and any other issued shares of the Company, determined pursuant to
Section 957 of the Code.
(c) The Option Shares shall upon issue rank equally in all respects
with the other Common Shares of the Company, but in no case will any Option
Shares carry any option or other right to subscribe for further additional
shares.
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(d) The Option may be exercised once in whole or in part only on the
earlier of (i) on or about (as provided in the last sentence of Section 2(a)
below) June 29, 2003, or any of June 29, 2001, December 29, 2001, June 29, 2002
or December 29, 2002, provided, however, that the Option is exercisable on or
about any such date only if the book value per share of the Option Shares on
such date, as reflected on the books of the Company (assuming exercise of only
the Option Shares being exercised and reflecting such dilution by other
contingently issuable Common Shares as is required under U.S. generally accepted
accounting principles), is at least 175% of the Option Price in effect on such
date, or (ii) (A) a registration of the Common Shares under the U.S. Securities
Act of 1933 (the "Securities Act") subsequent to the Initial Public Offering in
connection with either a primary or secondary distribution (or both) (unless
such registration has been undertaken by the Company at the sole request of AIG)
(a "Subsequent Offering") or (B) as provided in Section 1(g) below.
(e) If notice of exercise has not previously been provided pursuant
to Section 2, the Option shall expire upon the earlier of (i) the close of
business on June 29, 2003 or (ii) the commencement of the winding up of the
Company; thereafter AIG shall cease to have any rights in respect thereof. If
notice of exercise has been provided prior to expiration pursuant to the
foregoing sentence, exercise of the Option in due course following June 29, 2003
shall be consummated.
(f) AIG shall not, solely by virtue hereof, be entitled to any
rights of a shareholder in the Company either at law or in equity.
(g) In case of any amalgamation of the Company with or merger of the
Company into another person or of any sale, transfer or lease to another person
of all or substantially all the assets of the Company (other than in connection
with a reincorporation),
-4-
<PAGE> 6
AIG shall have the right to exercise this Option, in whole or in part, prior to
consummation of such amalgamation, merger, sale, transfer or lease. In such
event, upon payment of the Option Price in effect immediately prior to such
exercise, AIG shall be entitled to purchase the kind and amount of shares, other
securities, cash and/or other property which AIG would have owned or have been
entitled to receive after the happening of such amalgamation, merger, sale,
transfer or lease had the Option been exercised immediately prior to such
action, reflecting exercise by AIG of any rights of election provided to the
holders of Common Shares as to the kind or amount of shares, securities, cash or
other property receivable upon such amalgamation, merger, sale, transfer or
lease.
2. (a) To exercise the Option in accordance with Section 1(d)(i)
hereof, AIG shall provide written notice to the Company of its intention to
exercise all or a portion of the Option at least sixty (60) days prior to the
intended date of exercise from among those permitted by Section 1(d)(i) (such
notice will indicate the number of Option Shares AIG intends to purchase upon
exercise of the Option and shall be in writing signed by or on behalf of AIG and
delivered or sent by registered post to the Company at its registered office).
Upon such notice, if and to the extent requested by AIG, the Company shall
promptly commence the preparation of a registration statement in the manner
provided in the Registration Rights Agreement to be entered into among the
Company and Rightholders identified therein (including AIG as holder of the
Option) (as it may be amended from time to time, the "Registration Rights
Agreement") in order to permit AIG to resell to the public up to the full number
of Option Shares to be purchased by it pursuant to the Option's exercise
(including, but not limited to, in order to satisfy AIG's obligations pursuant
to Section 1(b) hereof). In the event the closing of any resale by AIG of Option
Shares pursuant to said registration statement is not effected precisely on the
applicable date specified in Section 1(d)(i) hereof,
-5-
<PAGE> 7
exercise of the Option shall be effective only immediately prior to, and
contingent upon, the closing of the public offering to which the requested
registration relates.
(b) In connection with exercise of the Option in accordance with
Section 1(d)(ii)(A) hereof, the Company shall provide AIG written notice of the
intention to effect a registration of the Common Shares under the Securities Act
in connection with a Subsequent Offering, either primary or secondary or both,
in the manner specified in the Registration Rights Agreement. AIG shall provide
written notice to the Company of its intention to exercise all or a portion of
the Option in the manner provided in the Registration Rights Agreement
(including, but not limited to, in order to satisfy AIG's obligations pursuant
to Section 1(b) hereof). Any such exercise shall be effective only immediately
prior to, and contingent upon, the consummation of such Subsequent Offering.
AIG's notice will indicate the number of Option Shares AIG intends to purchase
upon exercise of the Option and shall be in writing signed by or on behalf of
AIG and delivered or sent by registered post to the Company at its registered
office.
(c) In connection with exercise of the Option in accordance with
Section 1(d)(ii)(B) hereof, the Company shall provide AIG written notice of its
intention to effect a transaction specified in Section 1(g) as soon as
practicable prior to such transaction (but in no event later than approval by
the Board of Directors of such transaction), and AIG shall provide written
notice to the Company of its intention to exercise all or a portion of the
Option as promptly as practicable thereafter. Any such exercise shall be
effective only immediately prior to, and contingent upon, the consummation of
such transaction. AIG's notice will indicate the number of Option Shares as to
which AIG intends to exercise and shall be in writing signed by or on behalf of
AIG and delivered or sent by registered post to the Company at its registered
office.
-6-
<PAGE> 8
(d) AIG may require the Option Shares to be allotted to any nominee
of AIG.
(e) The Company shall issue and allot the Option Shares upon
exercise of the Option and payment of the total price payable therefor.
3. (a) In case the Company shall at any time after the date of this
Amended and Restated Agreement (i) declare or pay a dividend or make any other
distribution with respect to its capital stock in Common Shares such that the
number of Common Shares outstanding is increased, (ii) subdivide or split-up its
outstanding Common Shares, such that the number of Common Shares outstanding is
increased, (iii) combine its outstanding Common Shares into a smaller number of
Common Shares or (iv) effect any reclassification of the Common Shares other
than a change in par value (including any such reclassification in connection
with an amalgamation or merger in which the Company is the surviving entity or a
reincorporation of the Company), the number of Common Shares purchasable upon
exercise of this Option shall be proportionately adjusted so that AIG shall be
entitled to receive the kind and number of Common Shares or other securities of
the Company which it would have owned or have been entitled to receive after the
happening of any of the events described above had this Option been exercised
immediately prior to the happening of such event or any record date with respect
thereto. An adjustment made pursuant to this paragraph 3(a) shall become
effective immediately after the effective date of such event retroactive to the
record date, if any, for such event.
(b) In case the Company shall issue rights, options or warrants to all
holders of its outstanding Common Shares entitling them to subscribe for or
purchase Common Shares at a price per share which is lower at the record date
mentioned below than the then Current Market Value (as defined in Section 3(d)
below), the number of Option
-7-
<PAGE> 9
Shares thereafter purchasable upon the exercise of this Option shall be
determined by multiplying the number of Option Shares theretofore purchasable
upon exercise of this Option by a fraction, of which the numerator shall be the
sum of (A) the number of Common Shares outstanding on the record date for
determining shareholders entitled to receive such rights, options or warrants
plus (B) the number of additional Common Shares offered for subscription or
purchase, and of which the denominator shall be the sum of (A) the number of
Common Shares outstanding on the record date for determining shareholders
entitled to receive such rights, options or warrants plus (B) the number of
shares which the aggregate offering price of the total number of Common Shares
so offered would purchase at the Current Market Value (as defined below) per
share of Common Shares at such record date. Such adjustment shall be made
whenever such rights, options or warrants are issued, and shall become effective
immediately after the record date for the determination of shareholders entitled
to receive such rights, options or warrants.
(c) In the event the Company shall distribute to all holders of its
Common Shares shares of the capital stock of International Property Catastrophe
Reinsurance Company, Ltd. ("IPC Re"), the Option shall upon such distribution be
deemed to be an option to purchase the kind and number of shares of the capital
stock of IPC Re which AIG would have owned or have been entitled to receive
after such distribution had this Option been exercised immediately prior to such
distribution or any record date with respect thereto. The roll-over of the
Option into an option to purchase shares of capital stock of IPC Re pursuant to
this paragraph 3(c) shall become effective immediately after the effective date
of the distribution of shares of the capital stock of IPC Re to shareholders of
the Company described above.
-8-
<PAGE> 10
(d) For the purpose of any computation under paragraph (b) of this
Section 3, the "Current Market Value" of such Common Shares on a specified date
shall be deemed to be the average of the daily closing prices per share for the
ten consecutive Trading Days (as defined below) ending on the day before the
applicable record date. "Trading Day" means each Monday, Tuesday, Wednesday,
Thursday and Friday, other than any day on which the Common Shares are not
traded on the applicable securities exchange or on the applicable securities
market. The closing price for each day shall be the reported last sale price
regular way or, in case no such reported sale takes place on such day, the
average of the reported closing bid and asked prices regular way, in either case
on the New York Stock Exchange or, if the Common Shares are not listed or
admitted to trading on such Exchange, on the principal national securities
exchange on which the Common Shares are listed or admitted to trading or, if not
listed or admitted to trading on any national securities exchange, on the NASDAQ
National Market or, if the Common Shares are not listed or admitted to trading
on any national securities exchange or quoted on the NASDAQ National Market, the
average of the closing bid and asked prices in the over-the-counter market as
furnished by any New York Stock Exchange member firm reasonably selected from
time to time by the Board of Directors of the Company for that purpose.
(e) Whenever the number of Common Shares purchasable by AIG upon the
exercise of the Option is adjusted, as herein provided, the Option Price shall
be adjusted by multiplying such Option Price immediately prior to such
adjustment by a fraction, of which the numerator shall be the number of Option
Shares purchasable upon the exercise of the Option immediately prior to such
adjustment, and of which the denominator shall be the number of Option Shares
purchasable immediately thereafter.
-9-
<PAGE> 11
(f) No adjustment in the number of Option Shares purchasable upon
the exercise of the Option need be made under paragraphs (b) and (c) if the
Company issues or distributes, pursuant to this Agreement, to AIG the shares,
rights, options, warrants, securities or assets referred to in those paragraphs
which AIG would have been entitled to receive had the Option been exercised
prior to the happening of such event or the record date with respect thereto. No
adjustment need be made for a change in the par value of the Option Shares.
(g) For the purpose of this Section 3, the term "Common Shares"
shall mean (i) the class of stock consisting of the Common Shares of the
Company, or (ii) any other class of stock resulting from successive changes or
reclassification of such shares consisting solely of changes in par value. In
the event that at any time, as a result of an adjustment made pursuant to
paragraph (a) above, AIG shall become entitled to receive any securities of the
Company other than Common Shares, thereafter the number of such other securities
so receivable upon exercise of the Option and the Option Price of such
securities 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
Option Shares contained in paragraphs (a) through (f), inclusive, above;
provided, however, that the Option Price shall at no time be less than the
aggregate par value of the Common Shares or other securities of the Company
obtainable upon exercise of the Option, provided, further, that the Company
shall reduce the par value of its Common Shares or other securities from time to
time as necessary so that the foregoing shall not occur.
(h) In the case of paragraph (b) of this Section 3, upon the
expiration of any rights, options or warrants or if any thereof shall not have
been exercised, the Option Price and the number of Common Shares purchasable
upon the exercise of the Option shall,
-10-
<PAGE> 12
upon such expiration, be readjusted and shall thereafter be such as it would
have been had it been originally adjusted (or had the original adjustment not
been required, as the case may be) as if (A) the only Common Shares so issued
were the Common Shares, if any, actually issued or sold upon the exercise of
such rights, options or warrants and (B) such Common Shares, if any, were issued
or sold for the consideration actually received by the Company upon such
exercise plus the aggregate consideration, if any, actually received by the
Company for the issuance, sale or grant of all such rights, options or warrants
whether or not exercised; provided, further, that no such readjustment shall
have the effect of increasing the Option Price or decreasing the number of
Common Shares purchasable upon the exercise of the Option by an amount in excess
of the amount of the adjustment initially made in respect to the issuance, sale
or grant or such rights, options or warrants.
(i) In the case of paragraph (b) of this Section 3, on any change in
the number of Common Shares deliverable upon exercise of any such rights,
options or warrants, other than a change resulting from the antidilution
provisions hereof, the number of Option Shares thereafter purchasable upon the
exercise of the Option shall forthwith be readjusted to such number as would
have been obtained had the adjustment made upon the issuance of such rights,
options or warrants not converted prior to such change (or rights, options or
warrants related to such securities not converted prior to such change) been
made upon the basis of such change.
(j) The Company may at its option, at any time during the term of
the Option, reduce the then current Option Price to any amount and for any
period of time deemed appropriate by the Board of Directors of the Company,
including such reductions in the exercise price as the Company considers to be
advisable in order that any event treated for
-11-
<PAGE> 13
Federal income tax purposes as a dividend of stock or stock rights shall not be
taxable to the recipients.
4. The Company undertakes to increase its authorized share capital
prior to the date upon which the Option shall become exercisable to a level
sufficient to satisfy any exercise of the Option.
5. (a) This Option may not be assigned or otherwise transferred,
disposed of or encumbered by AIG (or any subsequent transferee) in whole or in
part except as provided in this Section 5.
(b) In the event of an amalgamation of the Company with or merger of
the Company into another person, or a sale, transfer or lease to another person
(each such person, a "Successor Person") of all or substantially all the assets
of the Company, this Option may be transferred to a person which is a
shareholder, partner or other affiliated person (directly or indirectly) of such
Successor Person.
(c) On and after the date which is the second anniversary of the
closing date of the Initial Public Offering, AIG may transfer this Option, in
whole or in part, in one or more private transaction(s) to up to three
institutional investors; provided, however, that any proposed transfer shall be
conditioned upon (i) receipt by the Company of an opinion of United States
counsel to the Company that such transfer would not require registration under
the Securities Act or state securities laws and upon the obtainment of any
required government approvals (which approvals the Company agrees to use its
reasonable efforts to assist in obtaining); and (ii) the proposed transferee
executing and delivering instruments reasonably acceptable to the Company
acknowledging (a) that the transferee shall become a Section 3 Shareholder
pursuant to the Termination Agreement, dated February 15, 1996, among the
Company and the Shareholders named in Schedule 1 thereto, with the attendant
-12-
<PAGE> 14
rights and obligations specified in Sections 3, 3.1, 3.2 and 3.3 thereof and (b)
that the transferee shall become a party to the Registration Rights Agreement,
dated March __, 1996, among the Company and the Rightholders named therein, with
the attendant rights and obligations thereunder; provided, further, that any
proposed transfer may be disapproved by the Board of Directors of the Company
if, in their reasonable judgment, they have reason to believe that such transfer
may expose the Company, any subsidiary thereof, any shareholder or any person
ceding insurance to the Company or any such subsidiary to adverse tax or
regulatory treatment in any jurisdiction.
(d) In connection with any transfer of all or a portion of this
Option pursuant to Section 5(c) hereof, the Company shall prepare an Option
Agreement (or, in the case of a partial transfer, Option Agreements) issuable to
the transferee (and transferor, in the case of partial transfer) upon surrender
to the Company of the existing Option Agreement upon consummation of the
transfer. Upon said consummation, the transferee shall have such rights and
obligations with respect to the number of Option Shares covered by the portion
of this Option transferred to such transferee as the rights and obligations of
AIG hereunder; provided, that with respect to any such transferee all references
in Section 1(b) hereof to "United States 25% Shareholder" shall be replaced by
references to "10% Shareholder" (as defined below). As used herein, "10%
Shareholder" means a person who owns, in aggregate, (i) directly, (ii) with
respect to persons who are United States persons, by application of the
attribution and constructive ownership rules of Sections 958(a) and 958(b) of
the Code or (iii) beneficially, directly or indirectly, within the meaning of
Section 13(d)(3) of the United States Securities Exchange Act of 1934, issued
shares of the Company carrying 10% or more of the total combined voting rights
attaching to all issued shares.
-13-
<PAGE> 15
(e) Any transferee of all or part of this Option pursuant to Section
5(c) hereof (or any subsequent transferee who holds any portion of this Option
as a result of a transfer pursuant to this Section 5(e)) may transfer, in whole
but not in part, its portion of this Option to a subsequent transferee; provided
that any such transfer shall be subject to the terms and conditions set forth in
Section 5(c) and 5(d) hereof.
6. The issuance of share certificates upon the exercise of the Option
shall be without charge to AIG. The Company shall pay, and indemnify AIG from
and against, any issuance, stamp, documentary or other taxes (other than
transfer taxes and income taxes), or charges imposed by any governmental body,
agency or official by reason of the exercise of the Option or the resulting
issuance of Common Shares.
7. This Agreement shall be governed by and construed in accordance with
the laws of Bermuda, without regard to principles regarding conflicts of laws.
-14-
<PAGE> 16
IN WITNESS WHEREOF the COMMON SEAL
of the parties hereto was hereunto
affixed on the date first above mentioned.
IPC HOLDINGS, LTD.
By: /s/ John P. Dowling
--------------------------------------------
Title: President and Chief Executive Officer
AMERICAN INTERNATIONAL GROUP, INC.
By: /s/ Edward E. Matthews
--------------------------------------------
Title: Vice Chairman - Finance
By: /s/ Kathleen E. Shannon
--------------------------------------------
Title: Vice President, Secretary
and Associate General Counsel
-15-
<PAGE> 1
ITEM 7(B)
<PAGE> 2
AMERICAN INTERNATIONAL GROUP, INC.
DIRECTORS
M. Bernard Aidinoff Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Lloyd M. Bentsen 2600 Texas Commerce Tower
600 Travis Street
Houston, Texas 77002
Marshall A. Cohen The Molson Companies Limited
40 King Street West
Toronto, Ontario M5H 3Z5
Barber B. Conable, Jr. P.O. Box 218
Alexander, New York 14005
Martin Feldstein National Bureau of Economic
Research, Inc.
1050 Massachusetts Avenue
Cambridge, Massachusetts 02138
Houghton Freeman American International Group, Inc.
70 Pine Street
New York, New York 10270
Leslie L. Gonda International Lease Finance
Corporation
1999 Avenue of the Stars
Los Angeles, California 90067
M. R. Greenberg American International Group, Inc.
70 Pine Street
New York, New York 10270
Carla A. Hills Hills & Company
1200 19th Street, N.W. - 5th Fl.
Washington, DC 20036
Frank Hoenmeyer 7 Harwood Drive
Madison, New Jersey 07940
<PAGE> 3
AMERICAN INTERNATIONAL GROUP, INC.
DIRECTORS
John I. Howell Indian Rock Corporation
P.O. Box 2606
Greenwich, Connecticut
Edward E. Matthews American International Group, Inc.
70 Pine Street
New York, New York 10270
Dean P. Phypers 220 Rosebrook Road
New Canaan, Connecticut 06840
John J. Roberts American International Group, Inc.
70 Pine Street
New York, New York 10270
Ernest E. Stempel American International Group, Inc.
70 Pine Street
New York, New York 12070
Thomas R. Tizzio American International Group, Inc.
70 Pine Street
New York, New York 10270
Honorary Directors
Marion E. Fajen 5608 North Waterbury Road
Des Moines, Iowa 50312
The Honorable Douglas 2101 Connecticut Ave., N.W.
MacArthur, II Washington, DC 20008
Apartment #4
Edwin A.G. Manton American International Group, Inc.
70 Pine Street
New York, New York 10270
K.K. Tse American International Group, Inc.
70 Pine Street
New York, New York 10270
<PAGE> 4
AMERICAN INTERNATIONAL GROUP, INC.
EXECUTIVE OFFICERS, NAME, TITLE AND BUSINESS ADDRESS
M.R. Greenberg Chairman & Chief Executive Officer
70 Pine Street
New York, New York 10270
Edward E. Matthews Vice Chairman - Finance
70 Pine Street
New York, New York 10270
John J. Roberts Vice Chairman - External Affairs
70 Pine Street
New York, New York 10270
Ernest E. Stempel Vice Chairman - Life Insurance
70 Pine Street
New York, New York 10270
Thomas R. Tizzio President
70 Pine Street
New York, New York 10270
Edwin A.G. Manton Senior Advisor
70 Pine Street
New York, New York 12070
Evan G. Greenberg Executive Vice President -
70 Pine Street Foreign General Insurance
New York, New York 10270
Robert Sandler Executive Vice President, Senior
70 Pine Street Casualty Actuary & Senior Claims
New York, New York 12070 Officer
Howard Smith Executive Vice President &
70 Pine Street Comptroller
New York, New York 12070
Edmund S.W. Tse Executive Vice President - Life
1 Stubbs Road Insurance
Hong Kong
<PAGE> 5
AMERICAN INTERNATIONAL GROUP, INC.
EXECUTIVE OFFICERS, NAME, TITLE AND BUSINESS ADDRESS
Lawrence W. English Senior Vice President -
70 Pine Street Administration
New York, New York 10270
Axel I. Freudmann Senior Vice President -
72 Wall Street Human Resources
New York, New York 10270
Win J. Neuger Senior Vice President & Chief
70 Pine Street Investment Officer
New York, New York 12070
Petros K. Sabatacakis Senior Vice President -
70 Pine Street Financial Services
New York, New York 12070
William D. Smith Senior Vice President -
70 Pine Street Domestic General Insurance
New York, New York 10270
Florence A. Davis Vice President & General Counsel
70 Pine Street
New York, New York 10270
Robert E. Lewis Vice President & Chief Credit
70 Pine Street Officer
New York, New York 10270
Frank Petralito II Vice President & Director of Taxes
70 Pine Street
New York, New York 10270
Kathleen E. Shannon Vice President, Secretary &
70 Pine Street Associate General Counsel
New York, New York 10270
John T. Wooster, Jr. Vice President - Communications
72 Wall Street
New York, New York 10270
<PAGE> 6
AMERICAN INTERNATIONAL GROUP, INC.
EXECUTIVE OFFICERS, NAME, TITLE AND BUSINESS ADDRESS
William N. Dooley Treasurer
70 Pine Street
New York, New York 10270
<PAGE> 7
STARR INTERNATIONAL COMPANY, INC.
EXECUTIVE OFFICERS & DIRECTORS
Houghton Freeman 70 Pine Street
Director New York, New York 10270
Maurice R. Greenberg 70 Pine Street
Director & Chairman of New York, New York 10270
the Board
Joseph C.H. Johnson American International Building
Executive Vice President Richmond Road
& Treasurer Pembroke 543 Bermuda
Edwin A.G. Manton 70 Pine Street
Director New York, New York 10270
Edward E. Matthews 70 Pine Street
Director New York, New York 10270
L. Michael Murphy American International Building
Director & Secretary Richmond Road
Pembroke 543d Bermuda
John J. Roberts 70 Pine Street
Director New York, New York 12070
Robert M. Sandler 70 Pine Street
Director New York, New York 10270
Ernest E. Stempel 70 Pine Street
Director & President New York, New York 10270
Thomas R. Tizzio 70 Pine Street
Director New York, New York 10270
Edmund Tse 1 Stubbs Road
Director Hong Kong
<PAGE> 8
THE STARR FOUNDATION
EXECUTIVE OFFICERS & DIRECTORS
M.R. Greenberg 70 Pine Street
Director and Chairman New York, New York 10270
T.C. Hsu 70 Pine Street
Director and President New York, New York 10270
Marion Breen 70 Pine Street
Director and Vice President New York, New York 10270
John J. Roberts 70 Pine Street
Director New York, New York 10270
Ernest E. Stempel 70 Pine Street
Director New York, New York 10270
Houghton Freeman 70 Pine Street
Director New York, New York 10270
Edwin A.G. Manton 70 Pine Street
Director New York, New York 10270
Gladys Thomas 70 Pine Street
Vice President New York, New York 10270
Frank Tengi 70 Pine Street
Treasurer New York, New York 10270
Ida Galler 70 Pine Street
Secretary New York, New York 10270
<PAGE> 9
C.V. STARR & CO., INC.
EXECUTIVE OFFICERS & DIRECTORS
Houghton Freeman 70 Pine Street
Director & Senior Vice New York, New York 10270
President
Evan G. Greenberg 70 Pine Street
Director & Vice President New York, New York 10270
Maurice R. Greenberg 70 Pine Street
Director, President & New York, New York 10270
Chief Executive Officer
Edwin A.G. Manton 70 Pine Street
Director New York, New York 10270
Edward E. Matthews 70 Pine Street
Director, Senior Vice New York, New York 10270
President & Secretary
John J. Roberts 70 Pine Street
Director & Senior Vice New York, New York 10270
President
Robert M. Sandler 70 Pine Street
Director & Vice President New York, New York 10270
Howard I. Smith 70 Pine Street
Director & Vice President New York, New York 10270
Ernest E. Stempel 70 Pine Street
Director & Senior Vice New York, New York 10270
President
Thomas R. Tizzio 70 Pine Street
Director & Vice President New York, New York 10270
Edmund S.W. Tse 1 Stubbs Road
Director & Vice President Hong Kong
Stephen Y.N. Tse 70 Pine Street
Director & Vice President New York, New York 10270
<PAGE> 10
C.V. STARR & CO., INC.
EXECUTIVE OFFICERS & DIRECTORS
Gary Nitzsche 70 Pine Street
Treasurer New York, New York 10270
<PAGE> 1
ITEM 7(C)
<PAGE> 2
ITEM 7(7)
American International Group, Inc.
70 Pine Street
New York, New York 102570
March 6, 1996
Morgan Stanley & Co. Incorporated
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Dear Sirs and Mesdames:
The undersigned understands that you, as U.S. Representative of the
several Underwriters, propose to enter into an Underwriting Agreement with IPC
Holdings, Ltd., a Bermuda company (the "Company") and the Selling Shareholders
(as defined therein), providing for the public offering (the "Public Offering")
by the several Underwriters, including yourselves, of 13,521,739 shares (the
"Shares") of the Common Shares, $.01 par value per share, of the Company (the
"Common Shares").
In consideration of the several Underwriters' agreement to purchase and
make the Public Offering of the Shares, and for other good and valuable
consideration receipt of which is hereby acknowledged, the undersigned hereby
agrees that, without the prior written consent of the U.S. Representatives on
behalf of the Underwriters, the undersigned will not, during the period
commencing on the date of the prospectus relating to the Public Offering of the
Shares (the "Prospectus") and ending 180 days thereafter, (1) offer, pledge,
sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase, or
otherwise transfer or dispose of, directly or indirectly, any Common Shares or
any securities convertible into or exercisable or exchangeable for Common
Shares, or (2) enter into any swap or other agreement that transfers, in whole
or in part, any of the economic consequences of ownership of the Common Shares,
whether any such transaction described in clause (1) or (2) above is to be
settled by delivery of Common Shares or such other securities, in
<PAGE> 3
cash or otherwise. The foregoing sentence shall not apply to (A) the Shares to
be sold pursuant to the Public Offering or (B) Common Shares issuable to
American International Group, Inc. ("AIG") upon exercise of the AIG Option (as
defined in the Prospectus) in certain limited circumstances, involving either
(i) sales in connection with an amalgamation or merger of the Company (in which
the Company is not the surviving entity) or the sale of substantially all of the
assets of the Company or (ii) sales necessary in the judgment of AIG to comply
with its obligation to dispose of any Common Shares obtained pursuant to the
exercise of the AIG Option that would result in AIG becoming a "United States
25% Shareholder" (as defined in the Prospectus). In addition, the undersigned
agrees that, without the prior written consent of the U.S. Representatives on
behalf of the Underwriters, it will not, during the period ending 180 days after
the date of the Prospectus, make any demand for or exercise any right with
respect to, the registration of any Common Shares or any security convertible
into or exercisable or exchangeable for Common Shares.
American International Group, Inc.
By: /s/ Edward E. Matthews
------------------------------
Accepted as of the date
first set forth above:
Morgan Stanley & Co. Incorporated
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Acting severally on behalf
of themselves and the several
Underwriters
By Morgan Stanley & Co. Incorporated
By: /s/ Stephanie B. Kaplan
----------------------------------
<PAGE> 1
ITEM 7(D)
<PAGE> 2
ITEM 7(D)
B Y E - L A W S
of
IPC HOLDINGS, LTD.
I, Vernelle Flood, Assistant Secretary of IPC HOLDINGS, LTD.,
DO HEREBY CERTIFY, that the attached is a true and correct copy of the Bye-laws
of the said Company, which were adopted by the Shareholders on February 15,
1996 and effective March 13, 1996, in place of the Bye-laws adopted on July 24,
1995.
/s/ Vernelle Flood
[SEAL] ----------------------------
Vernelle Flood, Assistant Secretary
<PAGE> 3
RESTATED BYE-LAWS
OF
IPC HOLDINGS, LTD.
(As amended and restated by resolution of the Members adopted
on February 15, 1996 and effective March 13, 1996)
TABLE OF CONTENTS
Bye-Law Page
- ------- ----
1. Interpretation 1
BOARD OF DIRECTORS
2. Board of Directors 7
3. Management of the Company 7
4. Power to appoint managing director or
chief executive officer 8
5. Power to appoint manager 8
6. Power to authorise specific actions 8
7. Power to appoint attorney 9
8. Power to appoint and dismiss employees 9
9. Power to borrow and charge property 9
10. Power to purchase shares of the Company 10
11. Election of Directors 12
12. Defects in appointment of Directors 13
13. Alternate Directors 13
14. Removal of Directors 14
15. Vacancies on the Board 15
16. Notice of meetings of the Board 16
17. Quorum at meetings of the Board 17
18. Meetings of the Board 17
19. Unanimous written resolutions 18
20. Contracts and disclosure of Directors' interest 18
21. Remuneration of Directors 19
22. Other interests of Directors 19
COMMITTEES
23. Power to delegate to a Committee 20
OFFICERS
24. Officers of the Company 21
25. Appointment of Officers 21
26. Remuneration of Officers 22
27. Duties of Officers 22
28. Chairman of meetings 22
29. Register of Directors and Officers 22
MINUTES
30. Obligations of Board to keep minutes 23
INDEMNITY
31. Indemnification of Directors and Officers
of the Company 24
32. Waiver of claim by Member 25
<PAGE> 4
<TABLE>
<S> <C> <C>
MEETINGS
33. Notice of annual general meeting 26
34. Notice of special general meeting 26
35. Accidental omission of notice of general meeting 27
36. Meeting called on requisition of members 27
37. Short notice 27
38. Postponement of meetings 28
39. Quorum for general meeting 28
40. Adjournment of meetings 29
41. Attendance at meetings 29
42. Written resolutions 29
43. Attendance of Directors 31
44. Voting at meetings 31
45. Voting on show of hands 31
46. Decision of chairman 32
47. Demand for a poll 32
48. Seniority of joint holders voting 34
49. Instrument of proxy 34
50. Representation of corporations at meetings 34
SHARE CAPITAL AND SHARES
51. Rights of shares 35
52. Limitation on voting
rights of Controlled Shares 38
53. Power to issue shares 42
54. Variation of rights and alteration of
share capital 43
55. Registered holder of shares 44
56. Death of a joint holder 47
57. Share certificates 47
58. Calls on shares 46
REGISTER OF MEMBERS
59. Contents of Register of Members 46
60. Inspection of Register of Members 47
61. Determination of record dates 47
62. Instrument of transfer 48
63. Restriction on transfer 48
64. Transfers by joint holders 51
LIEN ON SHARES
65. Lien on Shares 51
TRANSMISSION OF SHARES
66. Registration on bankruptcy 53
DIVIDENDS
67. Declaration of dividends by Board 53
68. Other distributions 54
69. Reserve fund 54
70. Deduction of amounts due to the Company 54
71. Unclaimed dividends 54
72. Interest on dividend 55
</TABLE>
(ii)
<PAGE> 5
<TABLE>
<S> <C> <C>
CAPITALIZATION
73. Issue of bonus shares 55
ACCOUNTS AND FINANCIAL STATEMENTS
74. Records of account 55
75. Financial year end 56
76. Financial statements 56
AUDIT
77. Appointment of Auditor 56
78. Remuneration of Auditor 57
79. Vacation of office of Auditor 57
80. Access to books of the Company 57
81. Report of the Auditor 57
NOTICES
82. Notices to Members of the Company 58
83. Notices to joint Members 58
84. Service and delivery of notice 59
SEAL OF THE COMPANY
85. The Seal 59
86. Manner in which seal is to be affixed 59
WINDING-UP
87. Determination to wind-up Company 60
88. Winding-up/distribution by liquidator 60
ALTERATION OF BYE-LAWS
89. Alteration of Bye-laws 61
</TABLE>
(iii)
<PAGE> 6
B Y E - L A W S
of
IPC HOLDINGS, LTD.
INTERPRETATION
1. Interpretation
(1) In these Bye-laws the following words and expressions shall,
where not inconsistent with the context, have the following meanings
respectively:-
(a) "Act" means the Companies Act 1981 as amended from time to
time;
(b) "Affiliate" has the meaning ascribed thereto in Rule 144
promulgated under the Securities Act;
(c) "Alternate Director" means an alternate Director;
(d) "AIG Option" means the option to purchase Common Shares granted
to American International Group, Inc., a Delaware Corporation,
by the Company pursuant to the Amended and Restated Option
Agreement, dated the effective date hereof, between the Company
and American International Group, Inc.;
(e) "AIG Person" means any of American International Group, Inc., a
Delaware corporation ( and its successors) and its Affiliates;
(f) "Auditor" includes any individual or partnership;
(g) "Board" means the Board of Directors appointed or elected
pursuant to these Bye-laws and acting by resolution in
accordance with the Act and these Bye-laws or the Directors
present at a meeting of Directors at which there is a quorum;
(h) "Business Day" means any day, other than a Saturday, a Sunday or
any day on which banks in Hamilton, Bermuda or The City of New
York, United States are authorized or obligated by law or
executive order to close;
<PAGE> 7
(i) "Code" means the United States Internal Revenue Code of 1986, as
amended from time to time, or any federal statute from time to
time in effect that has replaced such statute, and any reference
in these Bye-laws to a provision of the Code or a rule or
regulation promulgated thereunder means such provision, rule or
regulation as amended from time to time or any provision of a
federal law, or any federal rule or regulation, from time to
time in effect that has replaced such provision, rule or
regulation;
(j) "Common Shares" means the common shares, par value U.S.$0.01
per share, or the Company and includes a fraction of a Common
Share;
(k) "Company" means the company for which these Bye-laws are
approved and confirmed;
(l) "Controlled Shares" of any Person means all Common Shares owned
by such Person, whether:
(i) directly;
(ii) with respect to Persons who are U.S. Persons, by
application of the attribution and constructive
ownership rules of Sections 958(a) and 958(b) of the
Code; or,
(iii) beneficially owned directly or indirectly within the
meaning of Section 13(d)(3) of the Exchange Act and the
rules and regulations thereunder;
(m) "debenture" means debenture stock, mortgages, bonds and any
other such debt securities of the Company whether constituting a
charge on the assets of the Company or not;
(n) "Director" means a director of the Company and shall include an
Alternate Director;
(o) "dividend" includes a bonus or capitalization issue of shares;
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<PAGE> 8
(p) "Exchange Act" means the United States Securities Exchange Act of 1934
as amended from time to time or any federal statute from time to time
in effect that has replaced such statute, and any reference in these
Bye-laws to a provision of the Exchange Act or a rule or regulation
promulgated thereunder means such provision, rule or regulation as
amended from time to time or any provision of a federal law, or any
federal rule or regulation, from time to time in effect that has
replaced such provision, rule or regulation;
(r) "Fair Market Value" means, with respect to a repurchase of any shares
of the Company in accordance with these Bye-laws, (i) if such shares
are listed on a securities exchange (or quoted in a securities
quotation system), the average closing sale price of such shares on
such exchange (or in such quotation system), or, if such shares are
listed on (or quoted in) more than one exchange (or quotation system),
the average closing sale price of the shares on the principal
securities exchange (or quotation system) on which such shares are then
traded, or, if such shares are not then listed on a securities exchange
(or quotation system) but are traded in the over-the-counter market,
the average of the latest bid and asked quotations for such shares in
such market, in each case for the last five trading days immediately
preceding the day on which notice of the repurchase of such shares is
sent pursuant to these Bye-laws or (ii) if no such closing sales prices
or quotations are available because such shares are not publicly traded
or otherwise, the fair value of such shares as determined by one
independent nationally recognized investment banking firm chosen by the
Company and reasonably satisfactory to the Member whose shares are to
be so repurchased by the Company, provided that the calculation of the
Fair Market Value of the shares made by such appointed investment
banking firm (i) shall not include any discount relating to the absence
of a public trading market for, or any transfer restrictions on, such
shares, and (ii) such calculation shall be final and the fees and
expenses stemming from such calculation shall be borne by the Company
or its assignee, as the case may be;
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<PAGE> 9
(s) "Formula" has the meaning ascribed thereto in Bye-law 52";
(t) "Member" means the person registered in the Register of Members
as the holder of shares in the Company and, when two or more
persons are so registered as joint holders of shares, means the
person whose name stands first in the Register of Members as one
of such joint holders or all of such persons as the context so
requires;
(u) "notice" means written notice as further defined in these
Bye-laws unless otherwise specifically stated;
(v) "Officer" means any person appointed by the Board to hold an
office in the Company;
(w) "Person" means any individual, company, corporation, firm,
partnership, trust or any other business, entity or person,
whether or not recognized as constituting a separate legal entity;
(x) "Preferred Shares" means the preferred shares, par value
U.S.$0.01 per share, of the Company and includes a fraction of
a Preferred Share;
(y) "Register of Directors and Officers" means the Register of
Directors and Officers referred to in Bye-law 29;
(z) "Register of Members" means the Register of Members referred
to in Bye-law 59;
(aa) "Secretary" means the person appointed to perform any or all the
duties of secretary of the Company and includes any deputy or
assistant secretary;
(bb) "Securities Act" means the United States Securities Act of 1933
as amended from time to time or any federal statute from time to
time in effect which has replaced such statute, and any
reference in these Bye-laws to a provision of the Securities
Act or a rule or regulation promulgated thereunder means
4
<PAGE> 10
such provision, rule or regulation as amended from time to time or any
provision of a federal law, or any federal rule or regulation, from
time to time in effect that has replaced such provision, rule or
regulation;
(cc) "share" means a share of any class of shares in the capital of the
Company (including, where the context so admits, Common Shares) and
includes a fraction of a share;
(dd) "subsidiary", with respect to any Person, means a company more than
fifty percent (50%) (or, in the case of a wholly owned subsidiary, one
hundred percent (100%)) of the outstanding Voting Shares of which is
owned, directly or indirectly, by such Person or by one or more other
subsidiaries, or any such Person and one or more other subsidiaries;
(ee) "10% Shareholder" means a Person who owns, in the aggregate, (i)
directly, (ii) with respect to Persons who are U.S. Persons, by
application of the attribution and constructive ownership rules of
Sections 958(a) and 958(b) of the Code or (iii) beneficially, directly
or indirectly within the meaning of Section 13(d)(3) of the Exchange
Act, issued shares of the Company representing ten percent (10%) or
more of the total combined voting rights attaching to the issued
Common Shares and the issued shares of any other class or classes of
shares of the Company;
(ff) "Unadjusted Basis", when used with respect to the aggregate voting
rights held by any Member, refers to the determination of such rights
without reference to the provisions relating to the adjustment of
voting rights contained in Bye-law 52;
(gg) "United States" means the United States of America and dependent
territories or any part thereof;
(hh) "United States 25% Shareholder" means a U.S. Person who owns, directly
or by application of the
5
<PAGE> 11
constructive ownership rules of Sections 958(a) and 958(b) of the
Code, issued shares representing either (i) more than twenty-five
percent (25%) of the total combined voting rights attaching to the
issued Common Shares and the issued shares of any other class or
classes of shares of the Company or (ii) more than twenty-five
percent (25%) of the total combined value of the Common Shares and
any other shares of the Company, in each case determined pursuant to
Section 957 of the Code;
(ii) "U.S. Person" means (i) an individual who is a citizen or resident of
the United States, (ii) a corporation or partnership that is, as to
the United States, a domestic corporation or partnership and (iii) an
estate or trust that is subject to United States Federal income tax
on its income regardless of its source; and
(jj) "Voting Share" of any Person means any share in such Person conferring
voting rights on the holder thereof (other than such voting rights as
would exist solely in relation to a proposal to alter or vary the
rights attaching to such shares solely upon the future occurrence of
a contingency or voting rights attaching solely by virtue of the
provisions of the Act).
(2) In these Bye-laws, where not inconsistent with the context:
(a) words denoting the plural number include the singular number and vice
versa;
(b) words denoting the masculine gender include the feminine gender;
(c) words importing persons include companies, associations or bodies of
persons whether corporate or not;
(d) the word:
(i) "may" shall be construed as permissive;
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<PAGE> 12
(ii) "shall" shall be construed as imperative; and
(e) unless otherwise provided herein words or expressions
defined in the Act shall bear the same meaning in these
Bye-laws.
(3) Expressions referring to writing or written shall, unless the
contrary intention appears, include facsimile, printing, lithography,
photography and other modes of representing words in a visible form.
(4) Headings used in these Bye-laws are for convenience only and are
not to be used or relied upon in the construction hereof.
BOARD OF DIRECTORS
2. Board of Directors
The business of the Company shall be managed and conducted by the
Board.
3. Management of the Company
(1) In managing the business of the Company, the Board may exercise
all such powers of the Company as are not, by statute or by these Bye-laws,
required to be exercised by the Company in general meeting subject,
nevertheless, to these Bye-laws, the provisions of any statute, and to such
regulations as may be prescribed by the Company in general meeting.
7
<PAGE> 13
(2) No regulation or alteration to these Bye-laws made by the Company
in general meeting shall invalidate any prior act of the Board which would have
been valid if that regulation or alteration had not been made.
(3) The Board may procure that the Company pays to Members or third
parties all expenses incurred in promoting and incorporating the Company.
4. Power to appoint chief executive officer
The Board may from time to time appoint one or more Persons to the
office of chief executive officer of the Company who shall, subject to the
control of the Board, supervise and administer all of the general business and
affairs of the Company.
5. Power to appoint manager
The Board may appoint a Person to act as manager of the Company's day
to day business and may entrust to and confer upon such manager such powers and
duties as it deems appropriate for the transaction or conduct of such business.
6. Power to authorise specific actions
The Board may from time to time and at any time authorise any Director,
Officer or other Person of body of Persons to act on behalf of the Company for
any specific purpose and in connection therewith to execute any agreement,
document or instrument on behalf of the Company.
8
<PAGE> 14
7. Power to appoint attorney
The Board may from time to time and at any time by power of attorney
appoint any company, firm, Person or body of Persons, whether nominated
directly or indirectly by the Board, to be an attorney of the Company for such
purposes and with such powers, authorities and discretions (not exceeding those
vested in or exercisable by the Board) and for such period and subject to such
conditions as they may think fit and any such power of attorney may contain
such provisions for the protection and convenience of persons dealing with any
such attorney as the Board may think fit and may also authorise any such
attorney to sub-delegate all or any of the powers, authorities and discretions
so vested in the attorney. Such attorney may, if so authorised under the seal
of the Company, execute any deed or instrument under their personal seal with
the same effect as the affixation of the seal of the Company.
8. Power to appoint and dismiss employees
The Board may appoint, suspend or remove any manager, secretary, clerk,
agent or employee of the Company and may fix their remuneration and determine
their duties.
9. Power to borrow and charge property
The Board may exercise all the powers of the Company to borrow money
and to mortgage or charge its undertaking, property
9
<PAGE> 15
and uncalled capital, or any part thereof, and may issue debentures, debenture
stock and other securities whether outright or as security for any debt,
liability or obligation of the Company or any third party.
10. Power to purchase shares of the Company
(1) Exercise of Power to Repurchase Shares of the Company
The Board may exercise all the powers of the Company to purchase all or
any part of its own shares pursuant to Sections 42 and 42A of the Act or to
discontinue the Company to a named country or jurisdiction outside Bermuda
pursuant to Section 132G of the Act.
(2) Unilateral Repurchase Right
Subject to Section 42A of the Act, if the Board in its absolute and
unfettered discretion, on behalf of the Company, determines that share
ownership by any Member may result in adverse tax, regulatory or legal
consequences to the Company, any of its subsidiaries or any of the Members, the
Company will have the option, but not the obligation, to repurchase all or part
of the shares held by such Member (to the extent the Board, in the reasonable
exercise of its discretion, determines it is necessary to avoid or cure such
adverse consequences) for immediately available funds in an amount equal to the
Fair Market Value of such shares on the date the Company sends the Repurchase
Notice referred to below (the "Repurchase Price"); provided, that the Board
will use its best efforts to exercise this option equally among similarly
situated Members (to the extent possible under the
10
<PAGE> 16
circumstances). In that event, the Company will also be entitled to assign its
repurchase right to a third party or parties including the other Members, with
the consent of such assignee. Each Member shall be bound by the determination
by the Company to repurchase or assign its right to repurchase such Member's
shares and, if so required by the Company, shall sell the number of shares that
the Company requires it to sell.
In the event that the Company or its assignee(s) determines to
repurchase any such shares, the Company shall provide each Member concerned
with written notice of such determination (a "Repurchase Notice") at least
seven (7) calendar days prior to such repurchase or such shorter period as each
such Member may authorize, specifying the date on which any such shares are to
be repurchased and the Repurchase Price. The Company may revoke the Repurchase
Notice at any time before it (or its assignee(s)) pays for the shares. Neither
the Company nor its assignee(s) shall be obliged to give general notice to the
Members of any intention to purchase or the conclusion of any purchase of
shares. Payment of the Repurchase Price by the Company or its assignee(s) shall
be by wire transfer and made at a closing to be held no less than seven (7)
calendar days after receipt of the Repurchase Notice by the Member.
3. Restrictions on repurchases
If the Company redeems or purchases shares pursuant to this Bye-law 10,
it shall do only in a manner it believes would not result, upon consummation of
such redemption or purchase, in (i)
11
<PAGE> 17
the number of total Controlled Shares of any Person other than an AIG Person,
as a percentage of the shares of the Company, increasing to ten percent (10%)
or any higher percentage or (ii) an AIG Person becoming or continuing to be a
United States 25% Shareholder, in each case (i) and (ii) on an Unadjusted Basis.
11. Election of Directors
(1) Number and term of office
The Board shall consist of seven (7) Directors, each having one vote,
who shall be elected, except in the case of casual vacancy, by the Members in
the manner set forth in paragraph (2) of this Bye-law 11 at the annual general
meeting or any special general meeting called for the purpose and who shall
hold office until the next succeeding annual general meeting or until their
successors are elected or appointed or their office is otherwise vacated.
Candidates for election at each annual general meeting or special general
meeting called for the purpose shall be nominated by the Board.
(2) Election by cumulative voting
Notwithstanding any other provisions of these Bye-laws, the principle
of cumulative voting shall apply in any election of Directors pursuant to
paragraph (1) of this Bye-law 11. Each Member entitled to vote in such election
(including any Member owning Controlled Shares) shall have a number of votes
equal to the product of (x) the number of votes conferred by such Member's
Common Shares (as adjusted pursuant to Bye-law 52, if applicable)
12
<PAGE> 18
and (y) seven (7). Each Member may divide and distribute such Member's votes,
as so calculated, among any one or more candidates for the directorships to be
filled, or such Member may cast such Member's votes for a single candidate. At
such election, the candidates receiving the highest number of votes, up to the
number of directors to be chosen, shall stand elected, and an absolute majority
of the votes cast is not a prerequisite to the election of any candidate to
the Board.
12. Defects in appointment of Directors
All acts done bona fide by any meeting of the Board or by a committee
of the Board or by any person acting as a Director shall, notwithstanding that
it be afterwards discovered that there was some defect in the appointment of
any Director or person acting as aforesaid, or that they or any of them were
disqualified, be as valid as if every person had been duly appointed and was
qualified to be a Director.
13. Alternate Directors
(1) Each Director may appoint an Alternate Director and such
appointment shall become effective upon the Secretary receiving written notice
of such appointment. Any person so appointed shall have all the rights and
powers of the Director or Directors for whom such person is appointed in the
alternate, provided that such person shall not be counted more than once in
determining whether or not a quorum is present.
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(2) An Alternate Director shall be entitled to receive notice of
all meetings of the Board and to attend and vote at any such meeting at which a
Director for whom such Alternate Director was appointed in the alternative is
not personally present and generally to perform at such meeting all the
functions of such Director for whom such Alternate Director was appointed.
(3) An Alternate Director shall cease to be such if the Director
for whom such Alternate Director was appointed ceases for any reason to be a
Director but may be re-appointed by the Board as alternate to the person
appointed to fill the vacancy in accordance with these Bye-laws.
14. Removal of Directors
(1) Subject to any provision to the contrary in these Bye-laws, the
Members may, at any special general meeting convened for that purpose and held
in accordance with these Bye-laws, remove any Director provided that the notice
of any such meeting convened for the purpose of removing a Director shall
contain a statement of the intention so to do and be served on such Director
not less than 14 days before the meeting and at such meeting such Director
shall be entitled to be heard on the motion for such Director's removal.
(2) A vacancy on the Board created by the removal of a Director
under the provisions of subparagraph (1) of this Bye-law may be filled by the
Members at the meeting at which such Director is removed. A Director so
appointed shall hold office until the next annual general meeting or until such
Director's successor is
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elected or appointed or such Director's office is otherwise vacated and, in the
absence of such election or appointment, the Board may fill any such vacancy
in accordance with Bye-law 15.
15. Vacancies on the Board
(1) The Board shall have the power from time to time and at any
time to appoint any person as a Director to fill a vacancy on the Board
occurring as the result of the death, disability, disqualification or
resignation of any Director or if such Director's office is otherwise vacated.
A Director so appointed by the Board shall hold office until the next
succeeding annual general meeting or until such Director's successor is elected
or appointed or such Director's office is otherwise vacated.
(2) The Board may act notwithstanding any vacancy in its number
but, if and so long as its number is reduced below the number fixed by these
Bye-laws, or such greater number as may have been determined by the Members, as
the quorum necessary for the transaction of business at meetings of the Board,
the continuing Directors or Director may act only for the purpose of (i)
summoning a general meeting of the Company or (ii) preserving the assets of
the Company.
(3) The office of Director shall be vacated if the Director:
(a) is removed from office pursuant to these Bye-laws or
is prohibited from being a Director by law;
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(b) is or becomes bankrupt or makes any arrangement or
composition with his creditors generally;
(c) is or becomes of unsound mind or dies;
(d) resigns his or her office by notice in writing to the
Company.
16. Notice of meetings of the Board
(1) The Chairman or Deputy Chairman, or any two (2) Directors may,
and the Secretary on the requisition of the Chairman or Deputy Chairman, or any
two (2) Directors shall, at any time summon a meeting of the Board by at least
three (3) Business Days' notice to each Director and Alternate Director, unless
such Director or Alternate Director consents to shorter notice.
(2) Notice of a meeting of the Board shall specify the general
nature of the business to be considered at such meeting and shall be deemed to
be duly given to a Director if it is given to such Director in person or
otherwise communicated or sent to such Director by registered mail, courier
service, cable, telex, telecopier, facsimile or other mode of representing
words in a legible and non-transitory form at such Director's last known
address or any other address given by such Director to the Company for this
purpose. If such notice is sent by next-day courier, cable, telex, telecopier
or facsimile, it shall be deemed to have been given the Business Day following
the sending thereof and, if by registered mail, five (5) Business Days
following the sending thereof.
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(3) Meetings of the Directors may be held within or outside
of Bermuda.
17. Quorum at meetings of the Board
The quorum necessary for the transaction of business at a meeting of
the Board shall be a majority of the Directors then in office, present in
person or represented or such greater number as the Members shall determine.
18. Meetings of the Board
(1) The Board may meet for the transaction of business, adjourn and
otherwise regulate its meetings as it sees fit.
(2) Directors may participate in any meeting of the Board by means
of such telephone, electronic or other communication facilities as permit all
persons participating in the meeting to communicate with each other
simultaneously and instantaneously, and participation in such a meeting shall
constitute presence in person at such meeting.
(3) A resolution put to the vote at a duly constituted meeting of
the Board at which a quorum is present and acting throughout shall be carried
by the affirmative votes of a majority of the votes cast and in the case of an
equality of votes, the resolution shall fail.
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19. Unanimous written resolutions
A resolution in writing signed by all the Directors which may be in
counterparts, shall be as valid as if it had been passed at a meeting of the
Board duly called and constituted, such resolution to be effective on the date
on which the last Director signs the resolution. For the purposes of this
Bye-law only, "Director" shall not include an Alternate Director.
20. Contracts and disclosure of Directors' interests
(1) Any Director, or any Director's firm, partner or any company
with whom any Director is associated, may act in a professional capacity for
the Company and such Director or such Director's firm, partner or such company
shall be entitled to remuneration for professional services as if such Director
were not a Director, provided that nothing herein contained shall authorise a
Director or Director's firm, partner or such company to act as Auditor of the
Company.
(2) A Director who is directly or indirectly interested in a
contract or proposed contract or arrangement with the Company shall declare the
nature of such interest as required by the Act.
(3) Following a declaration being made pursuant to this Bye-law,
and unless disqualified by the chairman of the relevant Board meeting, a
Director may vote in respect of any contract or proposed contract or
arrangement in which such Director is interested and may be counted in the
quorum at such meeting.
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21. Remuneration of Directors
(1) The remuneration, (if any) of the Directors shall be determined by
the Company in general meeting and shall be deemed to accrue from day to day.
The Directors may also be paid all travel, hotel and other expenses properly
incurred by them in attending and returning from meetings of the Board, any
committee appointed by the Board, general meetings of the Company, or in
connection with the business of the Company or their duties as Directors
generally.
(2) A Director may hold any other office or place of profit under the
Company (other than the office of Auditor) in conjunction with his office of
Director for such period and on such terms as to remuneration and otherwise as
the Directors may determine.
22. Other interests of Directors
A Director may be or become a director or other officer of or otherwise
interested in any company promoted by the Company or in which the Company may
be interested as member or otherwise, and no such Director shall be accountable
to the Company for any remuneration or other benefits received by him as a
director or officer of, or from his interest in, such other company. The Board
may also cause the voting power conferred by the shares in any other company
held or owned by the Company to be exercised in such manner in all respects as
the Board thinks fit, including the exercise thereof in favour of any
resolution appointing the Directors or any of them to be directors or officers
of such other
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company, or voting or providing for the payment of remuneration to the
directors or officers of such other company.
COMMITTEES
23. Power to delegate to a committee
The Board may appoint one or more Board committees and may delegate any
of its powers to any such committee. Without limiting the generality of the
foregoing, such committees may include:
(a) an Executive Committee, which shall have the power of the Board
between meetings of the Board;
(b) an Audit Committee, which shall, among other things, advise the
Board with respect to the Company's financial reporting
responsibilities and related matters;
(c) a Stock Option and Stock Purchase Committee, which shall, among
other things, advise the Board with respect to the Company's
employee stock option and stock purchase plans, and approve and
administer such plans in accordance with Rule 16b-3 under the
Exchange Act; and
(d) a Compensation Committee, which shall, among other things,
advise the Board with respect to compensation of Officers.
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All Board committees shall conform to such directions as the Board
shall impose on them, provided that each member shall have one (1) vote, and
each committee shall have the right as it deems appropriate to retain outside
experts. Each committee may adopt rules for the conduct of its affairs,
including rules governing the adoption of resolutions by unanimous written
consent, and the place, time, and notice of meetings, as such committee shall
consider advisable and as shall not be inconsistent with these Bye-laws or with
any applicable resolution adopted by the Board. Each committee shall cause
minutes to be made of all meetings of such committee and of the attendance
thereat and shall cause such minutes and copies of resolutions adopted by
unanimous consent to be promptly inscribed or incorporated by the Secretary in
the Company's minute book.
OFFICERS
24. Officers of the Company
The Officers of the Company shall consist of a Chief Executive Officer,
a Chairman, a Deputy Chairman, a Secretary and such additional Officers as the
Board may from time to time determine all of whom shall be deemed to be Officers
for the purposes of these Bye-laws.
25. Appointment of Officers
(1) The Board shall, as soon as possible after each annual general
meeting elect one of its number to be Chairman of the Company and another of
its number to be Deputy Chairman.
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(2) The Secretary, the Chief Executive Officer and any additional
Officers shall be appointed by the Board from time to time.
26. Remuneration of Officers
The Officers shall receive such remuneration as the Board may from time
to time determine.
27. Duties of Officers
The Officers shall have such powers and perform such duties in the
management, business and affairs of the Company as may be delegated to them by
the Board from time to time.
28. Chairman of meetings
The Chairman shall act as chairman at all meetings of the Members and
of the Board at which such person is present. In his absence the Deputy
Chairman, if present, shall act as chairman and in the absence of both of them
a chairman shall be appointed or elected by those present at the meeting and
entitled to vote.
29. Register of Directors and Officers
(1) The Board shall cause to be kept in one or more books at its registered
office a Register of Directors and Officers and shall enter therein the
following particulars with respect to each Director and the Chairman, Deputy
Chairman, provided each such person is a Director, and the Chief Executive
Officer and
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Secretary, that is to say:
(a) first name and surname; and
(b) address.
(2) The Board shall, within the period of fourteen days from the occurrence
of -
(a) any change among its Directors and in the Chairman, Deputy
Chairman, Chief Executive Officer or Secretary; or
(b) any change in the particulars contained in the Register of
Directors and Officers,
cause to be entered on the Register of Directors and Officers the particulars
of such change and the date on which such change occurred.
(3) The Register of Directors and Officers shall be open to inspection at
the office of the Company on every Business Day, subject to such reasonable
restrictions as the Board may impose, so that not less than two hours in each
Business Day be allowed for such inspection.
MINUTES
30. Obligations of Board to keep minutes
The Board shall cause minutes to be duly entered in books provided for
the purpose:-
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(a) of all elections and appointments of Officers;
(b) of the names of the Directors present at each meeting of the
Board and of any committee appointed by the Board; and
(c) of all resolutions and proceedings of general meetings of the
Members, meetings of the Board, meetings of managers and
meetings of committees appointed by the Board.
INDEMNITY
31. Indemnification of Directors and Officers of the Company
(a) The Directors, Secretary and other Officers for the time being
of the Company and the liquidator or trustees (if any) for the time being
acting in relation to any of the affairs of the Company and every one of them,
and their heirs, executors and administrators, shall be indemnified and secured
harmless out of the assets of the Company from and against all actions, costs,
charges, losses, damages and expenses which they or any of them, their heirs,
executors or administrators, shall or may incur or sustain by or by reason of
any act done, concurred in or omitted in or about the execution of their duty,
or supposed duty, or in their respective offices or trusts, and none of them
shall be answerable for the acts, receipts, neglects or defaults of the others
of them or for joining in any receipts for the sake of conformity, or for the
acts of or the solvency or honesty of any bankers or other
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persons with whom any moneys or effects belonging to the Company shall or may be
lodged or deposited for safe custody, or for insufficiency or deficiency of any
security upon which any moneys of or belonging to the Company shall be placed
out on or invested, or for any other loss, misfortune or damage which may happen
in the execution of their respective offices or trusts, or in relation thereto,
PROVIDED THAT this indemnity shall not extend to any matter in respect of any
wilful negligence, wilful default, fraud or dishonesty which may attach to any
of said persons.
(b) Every Director and Officer of the company shall be indemnified out
of the funds of the Company against all liabilities incurred by him as such
Director or Officer of the Company in defending any proceedings, whether civil
or criminal, in which judgment is given in his favour, or in which he is
acquitted, or in connection with any application under the Companies Acts in
which relief from liability is granted to him by the court. Such funds shall be
advanced to such Director or Officer on his incurring liability prior to
judgment provided that should he be found guilty of a criminal or other offence
for which he cannot by law be indemnified he shall reimburse the Company the
funds advanced.
32. Waiver of claim by Member
Each Member agrees to waive any claim or right of action such Member
might have, whether individually or by or in the right of the Company, against
any Director or Officer on account of any action taken by such Director or
Officer, or the failure of such Director or Officer to take any action in the
performance of his
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duties with or for the Company, PROVIDED THAT such waiver shall not extend to
any matter in respect of any wilful negligence, wilful default, fraud or
dishonesty which may attach to such Director or Officer.
MEETINGS
33. Notice of annual general meeting
The annual general meeting of the Company shall be held in each year at
such time and place as the Chairman or any two Directors or any Director and
the Secretary or the Board shall appoint. At least ten days' written notice of
such meeting shall be given to each Member stating the date, place and time at
which the meeting is to be held, that the election of Directors will take place
thereat, and as far as practicable, the other business to be conducted at the
meeting.
34. Notice of special general meeting
The Chairman or any two Directors or any Director and the Secretary or
the Board may convene a special general meeting of the Company whenever in
their judgment such a meeting is necessary, upon not less than ten days'
written notice which shall state the time, place and the general nature of the
business to be considered at the meeting.
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35. Accidental omission of notice of general meeting
The accidental omission to give notice of a general meeting to, or the
non-receipt of notice of a general meeting by, any person entitled to receive
notice shall not invalidate the proceedings at that meeting.
36. Meeting called on requisition of Members
Notwithstanding anything herein, the Board shall, on the requisition of
Members holding at the date of the deposit of the requisition not less than
one-tenth of such of the paid-up share capital of the Company as at the date of
the deposit carries the right to vote at general meetings of the Company,
forthwith proceed to convene a special general meeting of the Company and the
provisions of section 74 of the Act shall apply.
37. Short notice
A general meeting of the Company shall, notwithstanding that it is
called by shorter notice than that specified in these Bye-laws, be deemed to
have been properly called if it is so agreed by (i) all the Members entitled to
attend and vote thereat in the case of an annual general meeting; and (ii) by a
majority in number of the Members having the right to attend and vote at the
meeting, being a majority together holding not less than 95% in nominal value
of the shares giving a right to attend and vote thereat in the case of a
special general meeting.
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38. Postponement of Meetings
The Board may postpone any general meeting called in accordance with the
provisions of these Bye-laws (other than a meeting requisitioned under Bye-law
36) provided that notice of postponement is given to each Member before the time
for such meeting. Fresh notice of the date, time and place for the postponed
meeting shall be given to each Member in accordance with the provisions of these
Bye-laws.
39. Quorum For General Meeting
At any general meeting of the Company two or more persons present in person
and representing in person or by proxy in excess of 50% (on an Unadjusted Basis)
of the total issued and outstanding Common Shares throughout the meeting shall
form a quorum for the transaction of business; provided, that if the Company
shall at any time have only one Member, one Member present in person or by proxy
shall constitute a quorum. If within half an hour from the time appointed for
the meeting a quorum is not present, the meeting shall stand adjourned to the
same day two (2) weeks later, at the same time and place or to such other day,
time or place as the Chairman (if there be one) or failing him the Deputy
Chairman or any Director in attendance may determine. Unless the meeting is
adjourned to a specific date and time, fresh notice of the date, time and place
for the adjourned meeting shall be given to each Member in accordance with the
provisions of these Bye-laws.
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40. Adjournment of meetings
The chairman of a general meeting may, with the consent of the Members
at any general meeting at which a quorum is present (and shall if so directed),
adjourn the meeting. Unless the meeting is adjourned to a specific date and
time, fresh notice of the date, time and place for the resumption of the
adjourned meeting shall be given to each Member in accordance with the
provisions of these Bye-laws.
41. Attendance at meetings
Members may participate in any general meeting by means of such
telephone, electronic or other communication facilities as permit all persons
participating in the meeting to communicate with each other simultaneously and
instantaneously, and participation in such a meeting shall constitute presence
in person at such meeting.
42. Written resolutions
(1) Subject to subparagraph (6), anything which may be done by
resolution of the Company in general meeting or by resolution of a meeting of
any class of the Members of the Company, may, without a meeting and without any
previous notice being required, be done by resolution in writing signed by,
or, in the case of a Member that is a corporation whether or not a company
within the meaning of the Act, on behalf of, all the Members who at the date of
the resolution would be entitled to attend the meeting and vote on the
resolution.
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(2) A resolution in writing may be signed by, or, in the case of a
Member that is a corporation whether or not a company within the meaning of the
Act, on behalf of, all the Members, or any class thereof, in as many
counterparts as may be necessary.
(3) For the purposes of this Bye-law, the date of the resolution is
the date when the resolution is signed by, or, in the case of a Member that is
a corporation whether or not a company within the meaning of the Act, on behalf
of, the last Member to sign and any reference in any Bye-law to the date of
passing of a resolution is, in relation to a resolution made in accordance with
this Bye-law, a reference to such date.
(4) A resolution in writing made in accordance with this Bye-law is
as valid as if it had been passed by the Company in general meeting or by a
meeting of the relevant class of Members, as the case may be, and any reference
in any Bye-law to a meeting at which a resolution is passed or to Members
voting in favour of a resolution shall be construed accordingly.
(5) A resolution in writing made in accordance with this Bye-law
shall constitute minutes for the purposes of sections 81 and 82 of the Act.
(6) This Bye-law shall not apply to:-
(a) a resolution passed pursuant to section 89(5) of the
Act; or
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(b) a resolution passed for the purpose of removing a
Director before the expiration of his term of office
under these Bye-laws.
43. Attendance of Directors
The Directors of the Company shall be entitled to receive notice of and
to attend and be heard at any general meeting.
44. Voting at meetings
Subject to the provisions of the Act and these Bye-laws, any question
proposed for the consideration of the Members at any general meeting shall be
decided by the affirmative votes of a majority of the votes cast in accordance
with the provisions of these Bye-laws and in the case of an equality of votes
the resolution shall fail.
45. Voting on show of hands
At any general meeting a resolution put to the vote of the meeting
shall, in the first instance, be voted upon by a show of hands and, subject to
any rights or restrictions for the time being lawfully attached to any class of
shares and subject to the provisions of these Bye-laws, every Member present in
person and every person holding a valid proxy at such meeting shall be entitled
to one vote and shall cast such vote by raising his or her hand.
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46. Decision of chairman
At any general meeting a declaration by the chairman of the meeting
that a question proposed for consideration has, on a show of hands, been
carried, or carried unanimously, or by a particular majority, or lost, or an
entry to that effect in a book containing the minutes of the proceedings of the
Company shall, subject to the provisions of these Bye-laws, be conclusive
evidence of that fact.
47. Demand for a poll
(1) Notwithstanding the provisions of the immediately preceding two
Bye-laws, at any general meeting of the Company, in respect of any question
proposed for the consideration of the Members (whether before or on the
declaration of the result of a show of hands as provided for in these
Bye-laws), a poll may be demanded by any of the following persons: -
(a) the chairman of such meeting; or
(b) at least two Members present in person or represented
by proxy; or
(c) any Member or Members present in person or represented
by proxy and holding between them not less than
one-tenth of the total voting rights of all the Members
having the right to vote at such meeting; or
(d) any Member or Members present in person or represented
by proxy holding Common Shares on which an aggregate
sum has been paid up equal to not less than one-tenth
of the total sum paid up on all Common Shares.
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(2) Where, in accordance with the provisions of paragraph (1) of
this Bye-law, a poll is demanded, subject to any rights or restrictions for the
time being lawfully attached to any class of shares, including any limitation
on the voting power of any Controlled Shares pursuant to Bye-law 52, every
Person present at such meeting shall have one vote for each share of which such
Person is the holder or for which such person holds a proxy and such vote shall
be counted in the manner set out in paragraph (4) of this Bye-law or in the
case of a general meeting at which one or more Members are present by telephone
in such manner as the chairman of the meeting may direct and the result of such
poll shall be deemed to be the resolution of the meeting at which the poll was
demanded and shall replace any previous resolution upon the same matter which
has been the subject of a show of hands.
(3) A poll demanded in accordance with the provisions of paragraph
(1) of this Bye-law, for the purpose of electing a chairman or on a question of
adjournment, shall be taken forthwith and a poll demanded on any other question
shall be taken in such manner and at such time and place as the chairman may
direct and any business other than that upon which a poll has been demanded may
be proceeded with pending the taking of the poll.
(4) Where a vote is taken by poll each person present and entitled
to vote shall be furnished with a ballot paper on which such person shall
record his or her vote in such manner as shall be determined at the meeting
having regard to the nature of the question on which the vote is taken, and
each ballot paper shall be signed or initialled or otherwise marked so as to
identify the
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voter and the registered holder in the case of a proxy. At the conclusion of
the poll the ballot papers shall be examined and counted by a committee of not
less than two Members or proxy holders appointed by the chairman for the
purpose and the result of the poll shall be declared by the chairman.
48. Seniority of joint holders voting
In the case of joint holders the vote of the senior who tenders a vote,
whether in person or by proxy, shall be accepted to the exclusion of the votes
of the other joint holders, and for this purpose seniority shall be determined
by the order in which the names stand in the Register of Members.
49. Instrument of proxy
The instrument appointing a proxy shall be in writing in the form, or
as near thereto as circumstances admit, a Form "A" in the Schedule hereto,
under the hand of the appointor or of his attorney duly authorised in writing,
or if the appointor is a corporation, either under its seal, or under the hand
of a duly authorised officer or attorney. The decision of the chairman of any
general meeting as to the validity of any instrument of proxy shall be final.
50. Representation of corporations at meetings
A corporation which is a Member may be written instrument authorise
such person as it thinks fit to act as its representative
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at any meeting of the Members and the person so authorised shall be entitled to
exercise the same powers on behalf of the corporation which such person
represents as that corporation could exercise if it were an individual Member.
Notwithstanding the foregoing, the chairman of the meeting may accept such
assurances as he or she thinks fit as to the right of any person to attend and
vote at general meetings on behalf of a corporation which is a Member.
SHARE CAPITAL AND SHARES
51. Rights of shares
(1) The share capital of the Company shall initially be divided
into two classes of shares consisting of (i) 75,000,000 Common Shares and (ii)
25,000,000 Preferred Shares.
(2) The holders of Common Shares shall, subject to the provisions
of these Bye-laws:
(a) be entitled to one vote per Common Share or, in the case of
Controlled Shares, if applicable, a fraction of a vote per
Controlled Share as determined pursuant to Bye-law 52;
(b) be entitled to such dividends as the Board may from time
to time declare;
(c) in the event of a liquidation, winding-up or dissolution of the
Company, whether voluntary or
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involuntary or for the purpose of a reorganisation or
otherwise or upon any distribution of capital, be entitled
to share equally and ratably in the assets of the Company,
if any, remaining after the payment of all debts and
liabilities of the Company and the liquidation preference
of any outstanding Preferred Shares; and
(d) generally be entitled to enjoy all of the rights attaching
to shares.
(3) The Board is authorised, subject to limitations prescribed by
law, to issue the Preferred Shares in series, to establish from time to time
the number of Preferred Shares to be included in each such series, and to fix
the designation, powers, preferences and rights to the Preferred Shares of each
such series and the qualifications, limitations or restrictions thereof. The
terms of any series of Preferred Shares shall be set forth in a Certificate of
Designation in the minutes of the Board.
The authority of the Board with respect to each series of Preferred
Shares shall include, but not be limited to, determination of the following:
(a) the number of Preferred Shares constituting that series and
the distinctive designation of that series;
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(b) the rate of dividend, and whether (and if so, on what terms and
conditions) dividends shall be cumulative (and if so, whether
unpaid dividends shall compound or accrue interest) or shall be
payable in preference or in any other relation to the dividends
payable on any other class or classes of shares or any other
series of the Preferred Shares;
(c) whether that series shall have voting rights in addition to the
voting rights provided by law and, if so, the terms and extent
of such voting rights;
(d) whether the Preferred Shares may be redeemed and, if so, the
terms and conditions on which they may be redeemed (including,
without limitation, the dates upon or after which they may be
redeemed and the price or prices at which they may be
redeemed, which price or prices may be different in different
circumstances or at different redemption dates);
(e) whether the Preferred Shares shall be issued with the privilege
of conversion or exchange and, if so, the terms and conditions
of such conversion or exchange (including, without limitation
the price or prices or the rate or rates of conversion or
exchange or any terms for adjustment thereof);
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(f) the amounts, if any, payable upon the Preferred Shares in
the event of voluntary liquidation, dissolution or winding up
of the Company in preference of shares of any other class or
series and whether the Preferred Shares shall be entitled
to participate generally in distributions on the Common Shares
under such circumstances;
(g) the amounts, if any, payable upon the Preferred Shares in the
event of involuntary liquidation, dissolution or winding up of
the Company in preference of shares of any other class or
series and whether the Preferred Shares shall be entitled to
participate generally in distributions on the Common Shares
under such circumstances;
(h) sinking fund provisions, if any, for the redemption or purchase
of the Preferred Shares (the term "sinking fund" being
understood to include any similar fund, however designated); and
(i) any other relative rights, preferences, limitations and powers
of that series.
52. Limitation on voting rights of Controlled Shares
(1) Subject to any rights or restrictions for the time being
attached to any class or classes of shares, on a poll at a general meeting
every Member of record present in person or by
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proxy shall have one vote for each Common Share registered in his name in the
register; PROVIDED, however, that, subject to the following provisions of this
Bye-law 52, if and for so long as the number of issued Controlled Shares of any
Person would constitute ten percent (10%) or more of the total combined voting
rights attaching to the issued Common Shares of the Company (calculated after
giving effect to any prior reduction in voting rights attaching to Common
Shares of other Persons as provided in this Bye-law 52), each such issued
Controlled Share, regardless of the identity of the registered holder thereof,
shall confer only a fraction of a vote as determined by the following formula
(the "Formula"):
(T - C) Divided By (9.1 x C)
Where: "T" is the aggregate number of votes conferred by all the
issued Common Shares immediately prior to that application
of the Formula with respect to such issued Controlled Shares,
adjusted to take into account each reduction in such aggregate
number of votes that results from a prior reduction in the
exercisable votes conferred by any issued Controlled Shares
pursuant to Bye-law 52(4) as at the same date;
"C" is the number of issued Controlled Shares attributable to
such Person.
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(2) The Directors may, by notice in writing, require any Member to
provide within not less than ten (10) Business Days, complete and accurate
information to the registered office or such other place as the Directors may
designate in respect of any or all of the following matters:
(a) the number of Common Shares in which such Member is legally or
beneficially interested;
(b) the Persons who are beneficially interested in Common Shares in
respect of which such Member is the registered holder;
(c) the relationship, association or affiliation of such Member with
any other Member or Person whether by means of common control or
ownership or otherwise; or
(d) any other facts or matters which the Directors may consider
relevant to the determination of the number of Controlled Shares
attributable to any Person.
(3) If any Member does not respond to any notice given pursuant to
Bye-law 52(2) above within the time specified therein or the Directors shall
have reason to believe that any information provided in relation thereto is
incomplete or inaccurate, the Directors may determine that the votes attaching
to any Common Shares registered in the name of such Member shall be
disregarded
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for all purposes until such time as a response (or additional response) to such
notice reasonably satisfactory to the Directors has been received as specified
therein.
(4) The Formula shall be applied successively as many times as may be
necessary to ensure that no Person shall be a 10% Shareholder at any time. For
the purposes of determining the votes exercisable by Members as at any date,
the Formula shall be applied to the shares of each Member in declining order
based on the respective numbers of total Controlled Shares attributable to each
Member. Thus, the Formula will be applied first to the votes of shares held by
the Member to whom the largest number of total Controlled Shares is
attributable and thereafter sequentially with respect to the Member with the
next largest number of total Controlled Shares. In each case, calculations are
made on the basis of the aggregate number of votes conferred by the issued
Common Shares as of such date, as reduced by the application of the Formula to
any issued Common Shares of any Member with a larger number of total Controlled
Shares as of such date.
(5) Notwithstanding the provisions of paragraphs (1) and (2) of this
Bye-law 52 above, having applied the provisions thereof as best as they
consider reasonably practicable, the Directors may make such final adjustments
to the aggregate number of votes attaching to the Common Shares of any Member
that they consider fair and reasonable in all the circumstances to ensure that
no Person shall be a 10% Shareholder at any time.
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53. Power to issue shares
(1) Subject to the provisions of these Bye-laws and to any rights
attaching to issued shares of the Company, the unissued shares of the Company
(whether forming part of the original share capital or any increased share
capital) shall be at the disposal of the Board, which may issue, offer, allot,
exchange or otherwise dispose of shares or options, warrants or other rights to
purchase shares or securities convertible into or exchangeable for shares
(including any employee benefit plan providing for the issuance of shares or
options or rights in respect thereof), at such times, for such consideration
and on such terms and conditions as it may determine (including, without
limitation, such preferred or other special rights or restrictions with respect
to dividend, voting, liquidation or other rights of the shares as may be
determined by the Board).
(2) Notwithstanding the foregoing provisions of this Bye-law, the
Company shall not issue any shares in a manner that the Board believes would
cause, by reason of such issuance, (i) the total Controlled Shares of any
Person other than an AIG Person to equal or exceed ten percent (10%) of the
shares of the Company or (ii) an AIG Person to become or continue to be a
United States 25% Shareholder, in each case (i) and (ii) on an Unadjusted Basis;
PROVIDED, however, that, paragraph (ii) of this Bye-law 53(2) notwithstanding,
the Company may issue shares in a manner and amount that would cause an AIG
Person to become or continue to be a United States 25% Shareholder upon the
exercise of the AIG Option, in part or in full, in accordance with its terms.
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Notwithstanding the foregoing provisions of this Bye-law, the restrictions of
this Bye-law 53(2) shall not apply to any issuance of shares to a person acting
as an underwriter in the ordinary course of its business, purchasing such shares
pursuant to a purchase agreement to which the Company is a party, for resale.
(3) The Board shall, in connection with the issue of any share, have
the power to pay such commission and brokerage as may be permitted by law.
(4) The Company shall not give, whether directly or indirectly,
whether by means of loan, guarantee, provision of security or otherwise, any
financial assistance for the purpose of or in connection with a purchase or
subscription made or to be made by any person of or for any shares in the
Company, but nothing in this Bye-law shall prohibit transactions permitted
pursuant to Sections 39A, 39B, and 39C of the Act.
54. Variation of rights and alteration of share capital
(1) While the share capital is divided into different classes of
shares, the rights attached to any class (unless otherwise provided by the
terms of issue of the shares of that class) may, whether or not the Company is
being wound-up, be varied with the consent in writing of the holders of
three-fourths of the issued shares of that class or with the sanction of a
resolution passed by a majority of the votes cast at a separate general meeting
of the holders of the shares of the class in accordance with Section 47(7) of
the Act. The rights conferred upon the
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holders of the shares of any class issued with preferred or other rights shall
not, unless otherwise expressly provided by the terms of issue of the shares of
that class, be deemed to be varied by the creation or issue of further shares
ranking pari passu therewith.
(2) The Company may from time to time by resolution of the Members
change the currency denomination of, increase, alter or reduce its share
capital in accordance with the provisions of Sections 45 and 46 of the Act.
Where, on any alteration of share capital, fractions of shares or some other
difficulty would arise, the Board may deal with or resolve the same in such
manner as it thinks fit including, without limiting the generality of the
foregoing, the issue to Members, as appropriate, of fractions of shares and/or
arranging for the sale or transfer of the fractions of shares of Members.
55. Registered holder of shares
(1) The Company shall be entitled to treat the registered holder of any
share as the absolute owner thereof and accordingly shall not be bound to
recognise any equitable or other claim to, or interest in, such share on the
part of any other person.
(2) Any dividend, interest or other moneys payable in cash in respect
of shares may be paid by cheque or draft sent through the post directed to the
Member at such Member's address in the Register of Members or, in the case of
joint holders, to such address of the holder first named in the Register of
Members, or to such person and to such address as the holder or joint holders
may
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in writing direct. If two or more persons are registered as joint holders of
any shares any one can give an effectual receipt for any dividend paid in
respect of such shares.
56. Death of a joint holder
Where two or more persons are registered as joint holders of a share or
shares then in the event of the death of any joint holder or holders the
remaining joint holder or holders shall be absolutely entitled to the said
share or shares and the Company shall recognise no claim in respect of the
estate of any joint holder except in the case of the last survivor of such
joint holders.
57. Share certificates
(1) Every Member shall be entitled to a certificate under the seal
of the Company (or a facsimile thereof) specifying the number and, where
appropriate, the class of shares held by such Member and whether the same are
fully paid up and, if not, how much has been paid thereon. The Board may by
resolution determine, either generally or in a particular case, that any or all
signatures on certificates may be printed thereon or affixed by mechanical
means.
(2) The Company shall be under no obligation to complete and
deliver a share certificate unless specifically called upon to do so by the
person to whom such shares have been allotted.
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(3) If any such certificate shall be proved to the satisfaction of
the Board to have been worn out, lost, mislaid or destroyed the Board may cause
a new certificate to be issued and request an indemnity for the lost
certificate if they see fit.
58. Calls on shares
The Board may from time to time make such calls as it thinks fit upon
the Members in respect of any monies unpaid on the shares allotted to or held
by such Members.
REGISTER OF MEMBERS
59. Contents of Register of Members
The Board shall cause to be kept in one or more books a Register of
Members and shall enter therein the following particulars:-
(a) the name and address of each Member, the number and, where
appropriate, the class of shares held by such Member and the
amount paid or agreed to be considered as paid on such shares;
(b) the date on which each person was entered in the Register of
Members;
(c) the date on which any person ceased to be a Member for one year
after such person so ceased; and
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<PAGE> 52
(d) the country where such Member is resident.
60. Inspection of Register of Members
The Register of Members shall be open to inspection at the registered
office of the Company on every Business Day, subject to such reasonable
restrictions as the Board may impose, so that not less than two hours in each
business day be allowed for inspection. The Register of Members may, after
notice has been given by advertisement in an appointed newspaper to that
effect, be closed for any time or times not exceeding in the whole thirty days
in each year.
61. Determination of record dates
Notwithstanding any other provision of these Bye-laws, the Board may
fix any date as the record date for:
(a) determining the Members entitled to receive any dividend; and
(b) determining the Members entitled to receive notice of and to
vote at any general meeting of the Company.
47
<PAGE> 53
TRANSFER OF SHARES
62. Instrument of transfer
(1) An instrument of transfer shall be in the form or as near
thereto as circumstances admit of Form "B" in the Schedule hereto or in such
other common form as the Board may accept. Such instrument of transfer shall be
signed by or on behalf of the transferor and transferee provided that, in the
case of a fully paid share, the Board may accept the instrument signed by or on
behalf of the transferor alone. The transferor shall be deemed to remain the
holder of such share until the same has been transferred to the transferee in
the Register of Members.
(2) The Board may refuse to recognise any instrument of transfer
unless it is accompanied by the certificate in respect of the shares to which
it relates and by such other evidence as the Board may reasonably require to
show the right of the transferor to make the transfer.
63. Restriction on transfer
(1) Subject to the Act, this Bye-law 63 and such other of the
restrictions contained in these Bye-laws and elsewhere as may be applicable,
and except, in the case of any shares other than the Common Shares, as may
otherwise be provided by the terms of issuance thereof, any Member may sell,
assign, transfer or otherwise dispose of shares of the Company at the time
owned by it
48
<PAGE> 54
and, upon receipt of a duly executed form of transfer in writing, the Directors
shall procure the timely registration of the same. If the Directors refuse to
register a transfer for any reason they shall notify the proposed transferor
and transferee within thirty days of such refusal.
(2) The Directors shall decline to register a transfer of shares if
the Directors have reason to believe that the effect of such transfer would be
(i) to increase the number of total Controlled Shares of any Person other than
an AIG Person to ten percent (10%) or any higher percentage of the shares of the
Company or (ii) that an AIG Person would become or continue to be a United
States 25% Shareholder, in each case (i) and (ii) on an Unadjusted Basis.
(3) The Directors may, in their absolute and unfettered discretion,
decline to register the transfer of any shares if the Directors have reason to
believe (i) that such transfer may expose the Company, any subsidiary thereof,
any Member or any Person ceding insurance to the Company or any such subsidiary
to adverse tax or regulatory treatment in any jurisdiction or (ii) that
registration of such transfer under the Securities Act or under any blue sky or
other U.S. state securities laws or under the laws of any other jurisdiction is
required and such registration has not been duly effected (PROVIDED, however,
that in this case (ii) the Directors shall be entitled to request and rely on
an opinion of counsel to the transferor or the transferee, in form and
substance satisfactory to the Directors, that no such approval or consent is
required and no such violation would occur, and the Directors shall
49
<PAGE> 55
not be obligated to register any transfer absent the receipt of such an
opinion).
(4) Without limiting the foregoing, the Board shall decline to
approve or register a transfer of shares unless all applicable consents,
authorisations, permissions or approvals of any governmental body or agency in
Bermuda, the United States or any other applicable jurisdiction required to be
obtained prior to such transfer shall have been obtained.
(5) The registration of transfers may be suspended at such time and
for such periods as the Directors may from time to time determine; PROVIDED
that such registration shall not be suspended for more than forty-five days in
any period of three hundred and sixty five (365) consecutive days.
(6) The Directors may require any Member, or any Person proposing
to acquire shares of the Company, to certify or otherwise provide information
in writing as to such matters as the Directors may request for the purpose of
giving effect to Bye-laws 10(2), 10(4), 53(2), 63(2) and 63(3), including as to
such Person's status as a U.S. Person, its Controlled Shares and other matters
of the kind contemplated by Bye-law 52(2). Such request shall be made by
written notice and the certification or other information requested shall be
provided to such place and within such period (not less than ten (10) Business
Days after such notice is given unless the Directors and such Member or
proposed acquiror otherwise agree) as the Directors may designate in such
request. If any Member or proposed acquiror does not respond to any such
request by the
50
<PAGE> 56
Directors as requested, or if the Directors have reason to believe that any
certification or other information provided pursuant to any such request is
inaccurate or incomplete, the Directors may decline to register any transfer
or to effect any issuance or purchase of shares to which such request relates.
64. Transfers by joint holders
The joint holders of any share or shares may transfer such share or
shares to one or more of such joint holders, and the surviving holder or
holders of any share or shares previously held by them jointly with a deceased
Member may transfer any such share or shares to the executors or administrators
of such deceased Member.
65. Lien on Shares
(1) The Company shall have a first and paramount lien and charge on
all shares (whether fully paid-up or not) registered in the name of a Member
(whether solely or jointly with others) for all debts, liabilities or
engagements to or with the Company (whether presently payable or not) by such
Member or his estate, either alone or jointly with any other Person, whether a
Member or not, but the Directors may at any time declare any share to be
wholly or in part exempt from the provisions of this Bye-law. The registration
of a transfer of any such share shall operate as a waiver of the Company's lien
(if any) thereon. The Company's lien (if any) on a share shall extend to all
dividends or other monies payable in respect thereof.
51
<PAGE> 57
(2) The Company may sell, in such manner as the Directors think
fit, any shares on which the Company has a lien, but no sale shall be made
unless a sum in respect of which the lien exists is then presently payable, nor
until the expiration of fourteen days after a notice in writing stating and
demanding payment of such part of the amount in respect of which the lien
exists as is presently payable, has been given to the relevant Member, or the
Person, of which the Company has notice, entitled thereto by reason of such
Member's death or bankruptcy. Effective upon such sale, any certificate
representing such shares prior to such sale shall become null and void, whether
or not it was actually delivered to the Company.
(3) To give effect to any such sale the Directors may authorize
some Person to transfer the shares sold to the purchaser thereof. The purchaser
shall be registered as the holder of the shares comprised in any such transfer,
and he shall not be bound to see to the application of the purchase money, nor
shall his title to the shares be affected by any irregularity or invalidity in
the proceedings in reference to the sale.
(4) The proceeds of such sale shall be received by the Company and
applied in payment of such part of the amount in respect of which the lien
exists as is presently payable and the residue, if any, shall (subject to a
like lien for sums not presently payable as existed upon the shares before the
sale) be paid to the Person entitled to the shares at the date of the sale.
52
<PAGE> 58
TRANSMISSION OF SHARES
66. Registration on bankruptcy
Any person becoming entitled to a share in consequence of the
bankruptcy of any Member may be registered as a Member upon such evidence as
the Board may deem sufficient or may elect to nominate some person to be
registered as a transferee of such share, and in such case the person becoming
entitled shall execute in favour of such nominee an instrument of transfer in
the form, or as near thereto as circumstances admit, of Form "B" in the
Schedule hereto. On the presentation thereof to the Board, accompanied by such
evidence as the Board may require to prove the title of the transferor, the
transferee shall be registered as a Member but the Board shall, in either case,
have the same right to decline or suspend registration as it would have had in
the case of a transfer of the share by that Member before such Member's
bankruptcy.
DIVIDENDS AND OTHER DISTRIBUTIONS
67. Declaration of dividends by the Board
Subject to any rights or restrictions at the time lawfully attached to
any class of shares and subject to these Bye-laws, the Board may, in accordance
with Section 54 of the Act, declare a dividend to be paid to the Members, in
proportion to the number of shares held by them, and such dividend may be paid
in cash or wholly or partly in specie in which case the Board may fix the value
for distribution in specie of any assets.
53
<PAGE> 59
68. Other distributions
The Board may declare and make such other distributions (in cash or in
specie) to the Members as may be lawfully made out of the assets of the Company.
69. Reserve fund
The Board may from time to time before declaring a dividend set aside,
out of the surplus or profits of the Company, such sum as it thinks proper as a
reserve fund to be used to meet contingencies or for equalising dividends or
for any other special purpose.
70. Deduction of amounts due to the Company
The Board may deduct from the dividends or distributions payable to any
Member all monies due from such Member to the Company on account of calls or
otherwise.
71. Unclaimed dividends
Any dividend unclaimed for a period of six (6) years from the date of
declaration of such dividend shall be forfeited and shall revert to the Company
and the payment by the Board of any unclaimed dividend, interest or other sum
payable on or in respect of the share into a separate account shall not
constitute the Company a trustee in respect thereof.
54
<PAGE> 60
72. Interest on dividend
No dividend or distribution shall bear interest against the Company.
73. Issue of bonus shares
Subject to Bye-law 53(2), the Board may resolve to capitalise any part
of the amount for the time being standing to the credit of any of the Company's
share premium or other reserve accounts or to the credit of the profit and loss
account or otherwise available for distribution by applying such sum in paying
up unissued shares to be allotted as fully paid bonus shares pro rata to the
Members.
ACCOUNTS AND FINANCIAL STATEMENTS
74. Records of account
The Board shall cause to be kept proper records of account with respect
to all transactions of the Company and in particular with respect to:-
(a) all sums of money received and expended by the Company and the
matters in respect of which the receipt and expenditure
relates;
(b) all sales and purchases of goods by the Company; and
55
<PAGE> 61
(c) the assets and liabilities of the Company.
Such records of account shall be kept at the registered office of the Company
or, subject to Section 83 (2) of the Act, at such other place as the Board
thinks fit and shall be available for inspection by the Directors during normal
business hours.
75. Financial year end
The financial year end of the Company may be determined by resolution
of the Board and failing such resolution shall be 31st December in each year.
76. Financial statements
Subject to any rights to waive laying of accounts pursuant to Section
88 of the Act, financial statements as required by the Act shall be laid before
the Members in general meeting.
AUDIT
77. Appointment of Auditor
Subject to Section 88 of the Act, at the annual general meeting or at a
subsequent special general meeting in each year, an independent representative
of the Members shall be appointed by them as Auditor of the accounts of the
Company. Such Auditor may be a Member but no Director, Officer or employee of
the Company shall, during his or her continuance in office, be eligible to act
as an Auditor of the Company.
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<PAGE> 62
78. Remuneration of Auditor
The remuneration of the Auditor shall be fixed by the Company in
general meeting or in such manner as the Members may determine.
79. Vacation of office of Auditor
If the office of Auditor becomes vacant by the resignation or death of
the Auditor, or by the Auditor becoming incapable of acting by reason of
illness or other disability at a time when the Auditor's services are required,
the Board shall, as soon as practicable, convene a special general meeting to
fill the vacancy thereby created.
80. Access to books of the Company
The Auditor shall at all reasonable times have access to all books
kept by the Company and to all accounts and vouchers relating thereto, and the
Auditor may call on the Directors or Officers of the Company for any
information in their possession relating to the books or affairs of the Company.
81. Report of the Auditor
(1) Subject to any rights to waive laying of accounts or appointment of
an Auditor pursuant to Section 88 of the Act, the accounts of the Company shall
be audited at least once in every year.
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<PAGE> 63
(2) The financial statements provided for by these Bye-laws shall be
audited by the Auditor in accordance with generally accepted auditing
standards. The Auditor shall make a written report thereon in accordance with
generally accepted auditing standards and the report of the Auditor shall be
submitted to the Members in general meeting.
(3) The generally accepted auditing standards referred to in paragraph
(2) of this Bye-law shall be those of the United States of America and the
financial statements and the report of the Auditor shall disclose this fact.
NOTICES
82. Notices to Members of the Company
A notice may be given by the Company to any member either by delivering
it to such Member in person or by sending it to such Member's address in the
Register of Members or to such other address given for the purpose. For the
purposes of this Bye-law, a notice may be sent by mail, courier service, cable,
telex, telecopier, facsimile or other mode of representing words in a legible
and non-transitory form.
83. Notices to joint Members
Any notice required to be given to a Member shall, with respect to any
shares held jointly by two or more persons, be given to whichever of such
persons is named first in the Register of
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<PAGE> 64
Members and notice so given shall be sufficient notice to all the holders of
such shares.
84. Service and delivery of notice
Any notice shall be deemed to have been served at the time when the
same would be delivered in the ordinary course of transmission and, in proving
such service, it shall be sufficient to prove that the notice was properly
addressed and prepaid, if posted, and the time when it was posted, delivered to
the courier or to the cable company or transmitted by telex, facsimile or other
method as the case may be.
SEAL OF THE COMPANY
85. The Seal
The seal of the Company shall be in such form as the Board may from
time to time determine. The Board may adopt one or more duplicate seals for use
outside Bermuda.
86. Manner in which seal is to be affixed
The seal of the Company shall not be affixed to any instrument except
attested by the signature of a Director and the Secretary or any two Directors,
or some other person appointed by the Board for the purpose, provided that any
Director, or Officer, may affix the seal of the Company attested by such
Director or Officer's signature only to any authenticated copies of these
59
<PAGE> 65
Bye-laws, the incorporating documents of the Company, the minutes of any
meetings or any other documents required to be authenticated by such Director
or Officer.
87. Determination to wind up Company
The Company may be wound up voluntarily by resolution of the Members.
WINDING-UP
88. Winding-up/distribution by liquidator
If the Company shall be wound up the liquidator may, with the
sanction of a resolution of the Members, divide amongst the Members in specie
or in kind the whole or any part of the assets of the Company (whether they
shall consist of property of the same kind or not) and may, for such purpose,
set such value as he or she deems fair upon any property to be divided as
aforesaid and may determine how such division shall be carried out as between
the Members or different classes of Members. The liquidator may, with the like
sanction, vest the whole or any part of such assets in trustees upon such
trusts for the benefit of the Members as the liquidator shall think fit, but so
that no Member shall be compelled to accept any shares or other securities or
assets whereon there is any liability.
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<PAGE> 66
ALTERATION OF BYE-LAWS
89. Alteration of Bye-laws
No Bye-law shall be rescinded, altered or amended and no new Bye-law
shall be made until the same has been approved by a resolution of the Board and
by a resolution of the Members.
*****
***
*
61
<PAGE> 67
SCHEDULE - FORM A (Bye-law 49)
IPC HOLDINGS, LTD.
P R O X Y
I
of
the holder of share(s) in the above-named Company
hereby appoint ..............................................................
or failing him/her ..........................................................
or failing him/her ..........................................................
as my proxy to vote on my behalf at the General Meeting of the Company to be
held on the day of , 19 , and at any
adjournment thereof.
Dated this day of , 19
*GIVEN under the seal of the company
*Signed by the above-named
.............................................................................
.............................................................................
Witness
*Delete as applicable.
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<PAGE> 68
SCHEDULE - FORM B (Bye-law 62)
TRANSFER OF A SHARE OR SHARES
FOR VALUE RECEIVED ............................................................
[amount]
...............................................................................
[transferor]
hereby sell assign and transfer unto ..........................................
...............................................................................
[transferee]
of ............................................................................
[address]
...............................................................................
[number of shares]
shares of IPC HOLDINGS, LTD.
Dated ...........................
.................................
(Transferor)
In the presence of:
.................................
(Witness)
.................................
(Transferee)
In the presence of:
.................................
(Witness)
63
<PAGE> 1
ITEM 7(E)
<PAGE> 2
ITEM 7(E)
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, (this " Agreement"), dated as of March
13, 1996, among the Rightholders (as such term and certain other capitalized
terms not otherwise defined herein are defined in Article II hereof) and IPC
HOLDINGS, LTD., a company incorporated under the laws of Bermuda (the
"Company").
W I T N E S S E T H
WHEREAS, each of the Rightholders are parties to the Shareholders'
Agreement, dated as of June 29, 1993 (the "Shareholders' Agreement"), among the
Company and its shareholders specified therein, relating to the Voting Common
Stock, par value U.S.$200 per share, and the Non-Voting Common Stock, par value
U.S.$200 per share, of the Company (together "Common Stock");
WHEREAS, pursuant to a recapitalization of the Company, each
outstanding share of Common Stock shall be converted into 25,000 Common Shares,
par value U.S.$.01 per share, of the Company ("Common Shares");
WHEREAS, the Company will permit its shareholders so electing to effect
an initial public offering of certain Common Shares pursuant to a Registration
Statement on Form S-1 (File No. 333-00088) (the "IPO");
WHEREAS, the Company has agreed to provide certain registration rights
to the Rightholders following the IPO and the Company and the Rightholders are
entering into this Agreement to set forth the terms and conditions applicable to
the grant and exercise of such registration rights;
NOW, THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged by the parties hereto, the Company and the
Rightholders hereby agree as follows:
ARTICLE I
REGISTRATION RIGHTS
1.1. DEMAND RIGHTS. (a) At any time on and after the 180th day
following the date of the prospectus relating to the IPO (the "IPO Lock-Up
Date") (unless the Company consents to an earlier date), each Rightholder shall
have the right on one occasion or, in the case of AIG, on two occasions, to
require the Company to file a registration statement on Form S-1, S-2 or S-3 (or
Form F-1, F-2 or F-3) under the Securities Act for a public offering of all or
any number of the Registrable Shares held by its Rightholder Group or, in the
case of AIG, for any number of Registrable Option Shares, by delivering to the
Company written notice stating that such right is being exercised, naming the
members of its Rightholder Group whose Registrable Shares are to be included in
such registration (collectively, the "Demanding Shareholders"), specifying the
number of each such Demanding Shareholder's Registrable Shares or Registrable
Option Shares to be included in such registration and describing the intended
method of distribution thereof (a "Demand Request"); provided, however, in the
event the AIG Option becomes exercisable prior to the IPO Lock-Up Date, AIG may
of right demand one registration
<PAGE> 3
at such time for any number of Registrable Option Shares either (i) in
connection with the merger or consolidation of the Company out of existence or
the sale or lease of substantially all of the assets of the Company or (ii) if
necessary, in the judgment of AIG, to comply with its obligation to dispose of
any shares obtained pursuant to exercise of the AIG Option that would result in
AIG becoming a "United States 25% Shareholder" as defined in the AIG Option (an
"Inter Lock-Up AIG Request"). Two or more Rightholders may join together in
making a joint Demand Request. The Company shall give prompt written notice of a
Demand Request (a "Notice of Demand Request") to each Rightholder that is not
making the Demand Request. Other than with respect to an Inter Lock-Up AIG
Request, each such other Rightholder shall have the right to require that all or
any number of the Registrable Shares or Registrable Option Shares held by its
Rightholder Group be included in such registration, by delivering to the Company
a written notice stating that such right is being exercised, naming the members
of its Rightholder Group whose Registrable Shares or Registrable Option Shares
are to be included in such registration (collectively, the "Joining
Shareholders") and specifying the number of each such Joining Shareholder's
Registrable Shares or Registrable Option Shares to be included in such
Registration Statement (a "Joining Request"). To be effective, a Joining Request
must be given on or before the fifteenth (15th) day after the Notice of Demand
Request is given by the Company. In the event that AIG delivers a Demand Request
or a Joining Request with respect to Registrable Option Shares, such Demand
Request or Joining Request shall, in addition to the matters set forth above,
indicate AIG's intention to exercise the AIG Option and the number of
Registrable Option Shares to be purchased upon such exercise and to be included
in the registration to which such request relates; provided, however, that the
exercise of the AIG Option shall be effective only immediately prior to, and
contingent upon, the closing of the public offering to which the requested
registration relates. Upon receipt of a Demand Request, the Company shall use
its reasonable efforts to effect the registration under the Securities Act of
the Registrable Shares or Registrable Option Shares included in the Demand
Request and the Registrable Shares or Registrable Option Shares included in any
Joining Request, all to the extent necessary to permit the Demanding
Shareholders and the Joining Shareholders (collectively, the "Sellers") to sell
or otherwise dispose of their respective Registrable Shares or Registrable
Option Shares included in the registration in accordance with the intended
method of distribution. The rights and obligations of the parties listed under
this Section 1.1(a) are subject to the other provisions of this Agreement.
(b) The Company's obligations pursuant to Section 1.1(a) above are
subject to the following limitations and conditions:
(i) the Company shall not be obligated to fulfill a Demand Request
unless the aggregate number of Registrable Shares and Registrable
Option Shares to be included in such registration pursuant to any
Demand Request equals or exceeds 2,500,000 Common Shares; provided,
however, the Company shall be obligated to fulfill, in aggregate, one
Demand Request submitted by one or more Over-allotment Remaining
Shareholders provided the number of Registrable Shares to be included
in such registration pursuant to such Demand Request equals or exceeds
500,000 Common Shares;
(ii) the Company will, if requested, use reasonable efforts to
participate in and assist with a "road show" and other customary
marketing efforts in connection with the sale of Registrable Shares or
Registrable Option Shares pursuant to such registration, at such times
and in such manner as the Company and the Rightholders making such
Demand Request and any related Joining Request mutually may determine
(and as do not unreasonably interfere with the Company's operations);
-2-
<PAGE> 4
(iii) the Company shall not be obligated to fulfill a Demand
Request made by a Rightholder (other than AIG) if such Rightholder has
made a prior Demand Request and either (A) the Company has filed a
Securities Act registration covering Registrable Shares or Registrable
Option Shares pursuant to such Demand Request, such registration was
declared or ordered effective, such effectiveness was not suspended or
stopped by any governmental or judicial authority and such Demand
Request was not withdrawn pursuant to Section 1.1(d) below; or (B) such
Demand Request was withdrawn other than pursuant to Section 1.1(d); the
Company shall not be obligated to fulfill a Demand Request made by AIG
if AIG has made two prior Demand Requests to which either clause (A) or
(B) above is applicable;
(iv) the Common Shares to be offered in a public offering pursuant
to any Demand Request and related Joining Request shall not exceed the
number which the managing underwriter for the offering (or, if there is
none, a nationally recognized investment banking firm acting as
financial advisor to the Company) determines in good faith to be
appropriate based on market conditions and other relevant factors,
including pricing (the "Maximum Number"), and Common Shares shall be
allocated to give effect to this clause (iv) as provided in Section
1.3.
(v) the Company shall not be obligated to fulfill the requirements
herein with regard to any registration relating to a Demand Request (A)
during any period of time (not to exceed ninety (90) days in the
aggregate during any period of twelve (12) consecutive months) after
the Company has determined to proceed with a Securities Act
registration of any of its securities and is diligently proceeding to
complete such registration or any offering of securities pursuant
thereto (whether for its own account or that of any shareholder but
excluding any registration on Form S-8 under the Securities Act or any
similar or successor form) if, in the judgment of a nationally
recognized investment banking firm (which may be acting as managing
underwriter for any such offering or as financial advisor to the
Company), the fulfillment of such requirements or such filing would
have an adverse effect on the offering, (B) during any period of time
(not to exceed ninety (90) days during any period of twelve (12)
consecutive months) when the Company is in possession of material,
non-public information that the Company would not be required to
disclose publicly in the absence of any Securities Act registration of
its securities, (C) during any period of time (not to exceed ninety
(90) days during any period of twelve (12) consecutive months) when the
Company is engaged in, or has determined to engage in and is proceeding
diligently with, any program for the purchase of, or any tender offer
or exchange offer for, its Capital Securities, and determines, on
advice of independent U.S. counsel, that such program or offer and the
requested registration may not proceed concurrently without violating
Rule 10b-6 under the Exchange Act or (D) during the 180-day period
following (1) the effectiveness of any Securities Act registration
covering Capital Securities (but excluding any registration on Form S-8
under the Securities Act or any similar or successor form) or (2) the
termination of the Company's efforts to effect a Securities Act
registration pursuant to a prior Demand Request, if such termination
was not due to any fault of the Company;
(vi) the Company shall not be required to maintain the
effectiveness of a registration statement filed pursuant to Section
1.1(a) for a period in excess of 90 consecutive days and shall not be
required to file or maintain any registration statement that permits a
delayed or continuous offering to be made for more than 30 consecutive
days after such registration statement becomes effective;
-3-
<PAGE> 5
(vii) the managing underwriter of any public offering effected
pursuant to this Article I shall agree to use its best efforts to avoid
selling Registrable Shares or Registrable Option Shares to any one
person or group of related persons (other than another dealer acting as
an underwriter or member of any selling group in connection with such
public offering) if, as a result of such sale, any such person would
become a United States 10% Shareholder or any such person would become
a United States 25% Shareholder; and
(viii) the Rightholder(s) making the Demand Request and any Joining
Shareholders, following agreement amongst themselves, shall be entitled
to designate any one lawful method of distribution permitted pursuant
to the registration statement (including a firm commitment
underwriting) to be the method of distribution for the registration
pursuant to this Section 1.1, and all Sellers will sell their
Registrable Shares or Registrable Option Shares included in the
registration in the designated method (and, in the case of any
underwriting, on the same terms and conditions); the intended method of
distribution shall be indicated in the Demand Request and, following
agreement amongst the Rightholder(s) making the Demand Request and any
Joining Shareholders, shall be finally determined prior to filing the
registration statement; the method of distribution and the terms and
conditions thereof shall be subject to the Company's prior approval,
which will not be unreasonably withheld, and in any distribution
involving an underwriter, the Rightholder(s) making the Demand Request
and any Joining Shareholders, following agreement amongst themselves,
shall be entitled (after consulting with the Company and with the
Company's approval, which will not be unreasonably withheld) to select
any nationally recognized investment banking firm to act as
underwriter.
(c) Subject to Section 1.3, the Company may elect to include in any
registration statement filed pursuant to this Section 1.1 any Common Shares to
be issued by it or held by any of its subsidiaries or by any other shareholders
only to the extent such shares are offered and sold pursuant to, and on the
terms and subject to the conditions of, any underwriting agreement or
distribution arrangements entered into or effected by the Demanding
Shareholders.
(d) A Rightholder may withdraw a Demand Request if (i) the Company is
in material breach of its obligation hereunder and has not cured such breach
after having received notice thereof and a reasonable opportunity to do so or
(ii) the withdrawal occurs during a period specified in Section 1.1(b)(v). A
Demand Request withdrawn pursuant to this Section 1.1(d) shall be deemed not to
have been made for purposes of Section 1.1 and, together with any related
Joining Request, shall be of no further effect.
1.2. "PIGGY-BACK" RIGHTS. If at any time the Company proposes to
register, for its own account or for the account of any shareholder, any Common
Shares on a registration statement on Form S-1, S-2 or S-3 (or Form F-1, F-2 or
F-3) under the Securities Act for purposes of a public offering of such Common
Shares, other than pursuant to a Demand Request, each Rightholder shall have the
right on one occasion to include Registrable Shares held by it or, in the case
of AIG, any Registrable Option Shares in such registration. The Company shall
give prompt written notice of any such proposal, including the intended method
of distribution of such Common Shares, to each Rightholder that has not
previously exercised its rights under this Section 1.2. Subject to Section 1.3,
upon the written request (a "Piggy-Back Request") of any such Rightholder, given
within fifteen (15) calendar days after the transmittal of any such written
notice, the Company will use its reasonable efforts to include in such public
offering any or all of the Registrable Shares or Registrable Option Shares then
held by the Rightholder Group of which such Rightholder is a member to the
extent necessary to permit the sale of such Registrable Shares
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pursuant to the intended method of distribution; provided that any participation
in such public offering by a Rightholder shall be on substantially the same
terms as the Company's and each other shareholder's participation therein; and
provided further, that the total number of Common Shares to be included in any
such public offering shall not exceed the Maximum Number, and Common Shares
shall be allocated to give effect to this proviso as provided in Section 1.3. To
the extent the number of Registrable Shares of a Rightholder to be included in a
public offering shall be reduced as set forth in the second proviso of the prior
sentence, such Rightholder shall retain a piggy-back right with respect to the
number of Registrable Shares included in its Piggy-Back Request but not publicly
offered. Any Rightholder shall have the right to withdraw a Piggy-Back Request
by giving written notice to the Company of its election to withdraw such request
at least five (5) days prior to the proposed filing date of such registration
statement and such a withdrawn Piggy-Back Request shall not be counted as the
exercise of such Rightholder's one piggy-back right hereunder. Each Piggy-Back
Request by a Rightholder shall specify the members of its Rightholder Group
whose Registrable Shares or Registrable Option Shares are to be included in the
registration and the number of such shares for each such member. The Company
shall be entitled to select any underwriter in a registration pursuant to this
Section 1.2.
1.3. ALLOCATION OF SECURITIES INCLUDED IN A PUBLIC OFFERING. If the
managing underwriter or placement agent for any public offering effected
pursuant to Section 1.1 or Section 1.2 (or, if there is none, a nationally
recognized investment banking firm acting as financial advisor to the Company)
shall advise the Company and the Sellers in writing that the number of Common
Shares sought to be included in such public offering (including those sought to
be offered by the Company and those sought to be offered by the Sellers) exceeds
the Maximum Number, the Company shall allocate Common Shares to be included in
such public offering up to the Maximum Number as follows:
(a) in the case of any registration pursuant to Section 1.1, first
to the Demanding Shareholders, subject to allocation below the Maximum
Number in such manner as they may agree among themselves; then to the
Joining Shareholders, subject to allocation below the Maximum Number
pro rata according to the number of Registrable Shares or Registrable
Option Shares held by the Rightholder Group of which such Joining
Shareholder is a member; then, as to any excess, to the Company; and
(b) in the case of any registration pursuant to Section 1.2, first
to the Company for its own account; then to each Rightholder making a
Piggy-Back Request and each other shareholder designated by the
Company, subject to allocation below the Maximum Number pro rata
according to the number of Registrable Shares or Registrable Option
Shares held by the Rightholder Group of which such Rightholder is a
member or by such other shareholder, as the case may be.
Each Rightholder may allocate any allocation made to it pursuant to this Section
1.3 among the members of its Rightholder Group as it wishes. The Company may
allocate any allocation made to it pursuant to Section 1.3(a) among itself, its
subsidiaries and its shareholders as it wishes, and may allocate any allocation
made to it for its own account pursuant to Section 1.3(b) among itself and its
subsidiaries as it wishes.
1.4. INDEMNIFICATION. (a) The Company shall indemnify, to the extent
permitted by law, and hold harmless each Selling Shareholder against any losses,
claims, damages or liabilities, joint or several, or actions in respect thereof
("Claims"), to which such indemnified party may become subject, under the
Securities Act of 1933 ("Securities Act") or otherwise, insofar as such Claims
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in the registration
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statement, in any prospectus or preliminary prospectus included in such
registration statement or in any amendment or supplement thereto filed with the
United States Securities and Exchange Commission ("SEC") (collectively,
"Registration Documents") or insofar as such Claims arise out of or are based
upon the omission or alleged omission to state in any Registration Document a
material fact required to be stated therein or necessary to make the statements
made therein not misleading, and will reimburse any such indemnified party for
any legal or other expenses reasonably incurred by such indemnified party in
investigating or defending any such Claim as such expenses are incurred;
provided that the Company shall not be liable in any such case to the extent
that any such Claim arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in any
Registration Document in reliance upon and in conformity with written
information furnished to the Company by or on behalf of such indemnified party
or an underwriter specifically for use in the preparation of such Registration
Document; and provided further, that the Company shall not be liable to any
underwriter for such indemnification with respect to any preliminary prospectus
to the extent that any such Claim results from the fact that such underwriter
sold securities to a person as to whom it shall be established that there was
not sent or given, at or prior to the written confirmation of such sale, a copy
of the prospectus and any amendment or supplement thereto in any case where such
delivery is required by the Securities Act if the Company has previously
furnished copies thereof in sufficient quantity to such underwriter and the
Claim to which such underwriter is subject results from an untrue statement or
omission of a material fact contained in the preliminary prospectus that was
identified in writing at such time to such underwriter and corrected in such
prospectus or such amendment or supplement thereto.
(b) In connection with any registration in which any Seller is
participating, each Seller, severally and not jointly, shall indemnify, to the
extent permitted by law, and hold harmless the Company and each other Seller and
each underwriter against any Claims to which each such indemnified party may
become subject under the Securities Act or otherwise, insofar as such Claims
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in any Registration Document, or insofar as any
claims arise out of or are based upon the omission or alleged omission to state
in any Registration Document a material fact required to be stated therein or
necessary to make the statements made therein not misleading; provided, however,
that such indemnification shall be payable only if, and to the extent that, any
such Claim arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in any Registration Document in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of such Seller specifically for use in the preparation
thereof.
(c) Any person entitled to indemnification under Section 1.4(a) or (b)
above shall notify promptly the indemnifying party in writing of the
commencement of any Claim if a claim for indemnification in respect thereof is
to be made against an indemnifying party under this Section 1.4, but the
omission of such notice shall not relieve the indemnifying party from any
liability which it may have to any indemnified party otherwise than under
Section 1.4(a) or (b). In case any action is brought against an indemnified
party and it shall notify the indemnifying party of the commencement thereof,
the indemnifying party shall be entitled to participate in, and, to the extent
that it chooses, to assume the defense thereof with counsel satisfactory to the
indemnified party, who may be counsel for the indemnifying party unless the
indemnified party reasonably concludes such counsel would have a conflict of
interest in representing both indemnified and indemnifying parties (provided
that the Company shall not be responsible for the fees and expenses of more than
one counsel for all indemnified parties with respect to any Claim or group of
Claims alleged to have arisen from similar facts); and, after notice from the
indemnifying party to the indemnified party that it so chooses, the indemnifying
party shall not be liable for any legal or other expenses subsequently incurred
by the indemnified party in connection with the defense thereof other than
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<PAGE> 8
reasonable costs of investigation. The indemnifying party shall not be liable
for any settlement of any proceeding effected without its written consent, but
if settled with such consent or if there be a final judgment for the plaintiff,
the indemnifying party agrees to indemnify the indemnified party from and
against any loss or liability by reason of such settlement or judgment. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened proceeding in respect
of which any indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party, unless such settlement
includes an unconditional release of such indemnified party from all liability
on claims that are the subject matter of such proceeding.
(d) If for any reason the foregoing indemnity is unavailable to, or is
insufficient to hold harmless, an indemnified party in respect of any Claim, (i)
if the indemnified party is an underwriter, then each indemnifying party shall
contribute to the amount paid or payable by the indemnified party as a result of
any Claim in such proportion as is appropriate to reflect the relative benefits
received by the Sellers and the Company, on the one hand, and the indemnified
party, on the other, from the offering of securities to which such Registration
Documents relate, (ii) as between the Company and each Seller, the indemnifying
party shall contribute to the amount paid or payable by the indemnified party as
a result of any Claim in such proportion as is appropriate to reflect the
relative fault of the indemnifying party, on the one hand, and the indemnified
party, on the other, in connection with the statements or omissions that
resulted in such Claims, as well as any other relevant equitable considerations.
If, however, the allocation provided in clause (i) of the immediately preceding
sentence is not permitted by applicable law, or if the indemnified party failed
to give the notice required by clause (c) above, then each indemnifying party
shall contribute to the amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect both the relative benefits and the
relative fault of the indemnifying party and the indemnified party in connection
with the statements or omissions that resulted in such Claims as well as any
other relevant equitable considerations. The relative benefits received by the
Sellers and the Company, on the one hand, and by the underwriters, on the other,
shall be deemed to be in the same proportion as the total net proceeds from the
offering of the securities (before deducting expenses) received by the Sellers
and the Company, on the one hand, bear to the total underwriting discounts and
commissions received by the underwriters, on the other hand, in connection with
such offering. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the indemnifying party or by the indemnified party and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The amount paid or payable in
respect of any Claim shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such Claim. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
(e) As a condition to their obligations under this Section 1.4, each of
the Company and the Sellers shall have received from each underwriter of
Registrable Shares included in a registration statement filed under the
Securities Act pursuant to Section 1.1 or 1.2 an undertaking to indemnify, to
the extent permitted by law, and hold harmless the Company and the Sellers
against (or if such indemnity is unavailable or is insufficient to hold harmless
an indemnified party, to provide contribution, on substantially the same basis
provided to such underwriter in accordance with Section 1.4(d), in respect of)
any Claims to which each such indemnified party may become subject under the
Securities Act or otherwise, insofar as such Claims arise out of or are based
upon any untrue statement or alleged untrue
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<PAGE> 9
statement of any material fact contained in any Registration Document, or
insofar as any claims arise out of or are based upon the omission or alleged
omission to state in any Registration Document a material fact required to be
stated therein or necessary to make the statements made therein not misleading;
provided, however, that such indemnification (or contribution, as the case may
be) shall be payable only if, and to the extent that, any such Claim arises out
of or is based upon an untrue statement or alleged untrue statement or omission
or alleged omission made in any Registration Document in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
such underwriter specifically for use in the preparation thereof.
Notwithstanding the foregoing, no underwriter shall be required to contribute
any amount in excess of the amount by which the total price at which the
Registrable Shares underwritten by it and distributed to the public were offered
to the public exceeds the amount of any damages which such underwriter otherwise
has been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. The obligation of any underwriters to provide
indemnification (or contribution, as the case may be) pursuant to this paragraph
(e) shall be several in proportion to their respective underwriting commitments
and not joint.
(f) The maximum liability of any Selling Shareholder to indemnify or
contribute payments pursuant to this Section 1.4 shall not exceed the aggregate
net proceeds from the sale of Common Shares (including the sale of Common
Shares, if any, pursuant to the exercise of an overallotment option) by such
Selling Shareholder in such registration.
(g) The obligations of the Company pursuant to this Section 1.4 shall
be in addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions, to each officer, director and
general partner of any underwriter or Seller and to each person, if any, who
controls any underwriter or Seller within the meaning of the Securities Act. The
obligations of each Seller pursuant to this Section 1.4 shall be in addition to
any liability which such Seller may otherwise have and shall extend, upon the
same terms and conditions, to each officer, director and general partner of the
Company, any underwriter or any other Seller and to each person, if any, who
controls the Company, any underwriter or any other Seller within the meaning of
the Securities Act. The obligations of any underwriter pursuant to this Section
1.4 shall be in addition to any liability which such underwriter may otherwise
have and shall extend, upon the same terms and conditions, to each officer,
director and general partner of the Company or any Seller and to each person, if
any, who controls the Company or any Seller within the meaning of the Securities
Act.
1.5. REQUIREMENTS WITH RESPECT TO REGISTRATION. If and whenever the
Company is required by the provisions hereof to use its reasonable efforts to
register any Registrable Shares or Registrable Option Shares under the
Securities Act, the Company shall, as promptly as practicable:
(a) Prepare and file with the SEC a registration statement with
respect to such Registrable Shares or Registrable Option Shares and use
its reasonable efforts to cause such registration statement to become
and remain effective.
(b) Prepare and file with the SEC such amendments and supplements
to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement
current and to comply with the provisions of the Securities Act and any
regulations promulgated thereunder with respect to the sale or other
disposition of such Registrable Shares or Registrable Option Shares,
for as long as a prospectus relating to any such Registrable Shares or
Registrable Option Shares is required to be delivered under the
Securities Act, subject to the limitation in Section 1.1(b)(vi).
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(c) Furnish to the Sellers participating in the offering copies
(in reasonable quantities) of summary, preliminary, final, amended or
supplemented prospectuses, in conformity with the requirements of the
Securities Act and any regulations promulgated thereunder, and other
documents as reasonably may be required in order to facilitate the
disposition of such Registrable Shares or Registrable Option Shares,
but only while the Company is required under the provisions hereof to
keep the registration statement current.
(d) Use its reasonable efforts to register or qualify the
Registrable Shares or Registrable Option Shares covered by such
registration statement under such other securities or blue sky laws of
such jurisdictions in the United States as the managing underwriter or
placement agent (or, if none, the Rightholders participating in the
offering) shall reasonably request, and do any and all other acts and
things which may be reasonably necessary to enable each participating
Seller or underwriter to consummate the disposition of the Registrable
Shares or Registrable Option Shares in such jurisdictions; provided,
however, that in no event shall the Company be required to qualify to
do business as a foreign corporation in any jurisdiction where it is
not so qualified; to execute or file any general consent to service of
process under the laws of any jurisdiction; to take any action that
would subject it to service of process in suits other than those
arising out of the offer and sale of the securities covered by the
registration statement; or to subject itself to taxation in any
jurisdiction where it has not theretofore done so unless the Company
shall have received a reasonably satisfactory indemnity in respect
thereto; or to subject itself to any insurance regulation in any
jurisdiction in which it has not theretofore been so subject.
(e) Notify each Seller selling Registrable Shares or Registrable
Option Shares, at any time when a prospectus relating to any such
Registrable Shares or Registrable Option Shares covered by such
registration statement is required to be delivered under the Securities
Act, of the Company's becoming aware that the prospectus included in
such registration statement, as then in effect, includes an untrue
statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing,
and, subject to the limitation in Section 1.1(b)(vi), promptly prepare
and furnish to each such Seller selling Registrable Shares or
Registrable Option Shares and each underwriter a reasonable number of
copies of a prospectus supplemented or amended so that, as thereafter
delivered to the purchasers of such Registrable Shares or Registrable
Option Shares, such prospectus shall not include an untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in
the light of the circumstances then existing.
(f) As soon as practicable after the effective date of such
registration statement, and in any event within eighteen (18) months
thereafter, make generally available to Sellers participating in the
offering an earnings statement (which need not be audited) covering a
period of at least twelve (12) consecutive months beginning after the
effective date of the registration statement, which earning statement
shall satisfy the provisions of Section 11(a) of the Securities Act,
including at the Company's option, Rule 158 thereunder.
(g) Deliver promptly to each Rightholder that is, or any of whose
Affiliates is, a Seller participating in the offering, upon such
Rightholder's written request, copies of all correspondence between the
SEC and the Company, its counsel or auditors and all memoranda relating
to discussions with the SEC or its staff with respect to the
registration statement and permit each such Rightholder to do such
investigation, upon reasonable advance notice, with
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respect to information contained in or omitted from the registration
statement as it deems reasonably necessary. Each such Rightholder
agrees that it will use its best efforts not to interfere unreasonably
with the Company's business when conducting any such investigation.
(h) Obtain "cold comfort" letters from the Company's independent
public accountants (including one letter when such registration
statement goes effective and one at the closing) in customary form and
covering such matters of the type customarily covered by such "cold
comfort" letters.
1.6. EXPENSES. The Company shall be obligated to pay Registration
Expenses incurred in connection with any Demand Request, other than a Demand
Request that is withdrawn by the Rightholder other than pursuant to Section
1.1(d), in which case such Registration Expenses shall be paid by the proposed
Sellers on a joint and several basis or pursuant to such other arrangements as
the Company and the Sellers may agree. The Company shall also be obligated to
pay Registration Expenses in connection with any Piggy-Back Request, except that
those expenses set forth in clauses (a), (b) and (c) of the definition of
Registration Expenses shall be borne by the Company and each Seller (other than
an Over-allotment Remaining Shareholder) pro rata on the basis of the number of
shares being offered on behalf of the Company and each Seller (other than an
Over-allotment Remaining Shareholder).
1.7. CERTAIN SELLERS' OBLIGATIONS. Each Seller shall provide such
information to the Company as the Company may reasonably request in connection
with any registration hereunder of Registrable Shares or Registrable Option
Shares for such Seller's account and shall dispose of any such Registrable
Shares or Registrable Option Shares pursuant to any registration hereunder in
the manner contemplated thereby. Each Rightholder shall cause the members of its
Rightholder Group to perform their respective obligations under this Agreement.
1.8. TRANSFER OF AIG OPTION. In the event AIG transfers the AIG Option
to one or more transferees pursuant to Section 5(c) thereof, following execution
by any such transferee and delivery to the Company of an instrument reasonably
acceptable to the Company acknowledging that such transferee has become a party
to this Agreement and assumed its rights and obligations hereunder, all
references herein to AIG with respect to Registrable Option Shares shall be
deemed to apply (i) in the case of a transfer of the AIG Option in whole, solely
to the transferee of the AIG Option and (ii) in the case of a transfer of the
AIG Option in part, collectively either to the transferees of the AIG Option or,
if AIG has retained a portion of the AIG Option, to AIG and such transferee(s).
The Company shall be entitled to rely solely upon the instructions of AIG or the
transferee of the AIG Option designated in writing by AIG with respect to any
rights granted hereunder to the holders of Registrable Option Shares. The number
of demand and piggy back registration rights afforded AIG hereunder shall apply
in aggregate to AIG and any and all said transferees, without any increase in
the number of said demand and piggy back registration rights. There are no
registration rights with respect to the AIG Option itself.
ARTICLE II
DEFINITIONS
2.1. DEFINED TERMS. As used in this Agreement, the following
capitalized terms have the respective meanings set forth below:
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"Affiliate" shall mean, with respect to any person, any other person
that directly or indirectly through one or more intermediaries controls or is
controlled by or is under common control with such person and with respect to
Quantum Industrial Partners LDC shall include, without limitation, one or more
of George Soros, Paul Soros or Soros Fund Management or affiliates thereof, and
any person or entity for which any such person or entity acts as investment
adviser or investment manager.
"AIG" shall mean American International Group, Inc., a Delaware
corporation.
"AIG Option" shall mean the Amended and Restated Option Agreement,
dated March __, 1996, between the Company and AIG, as the same may be further
amended from time to time.
"Bye-laws" shall mean the Amended and Restated Bye-laws of the Company,
as the same may be further amended from time to time.
"Capital Securities" shall mean all shares of each class in the capital
stock of the Company and all securities convertible into or exchangeable or
exercisable for any such shares.
"Closing" shall mean the closing of the IPO pursuant to an effective
registration statement under the Securities Act, and the day on which the
Closing occurs shall be the day confirmed as such by a director or officer of
the Company in the records maintained by the Company.
"Exchange Act" shall mean the U.S. Securities Exchange Act of 1934.
"person" shall mean any individual, corporation, company, partnership,
joint venture, trust, association, government or governmental body or other
entity.
"Registrable Option Shares" shall mean the Common Shares obtained or
obtainable on exercise of the AIG Option.
"Registrable Shares" shall mean, at any time, all Common Shares then
outstanding, other than shares that have ceased to be Registrable Shares. Common
Shares shall cease to be Registrable Shares (a) when a registration statement
with respect to the disposition of such shares shall have become effective under
the Securities Act (including the registration statement with respect to the
IPO) and such shares shall have been disposed of pursuant to such registration
statement (including in the IPO), or (b) when such shares shall have been sold
pursuant to Rule 144 under the Securities Act.
"Registration Expenses" shall mean any and all expenses incident to
performance of or compliance with the demand rights set forth in Section 1.1 and
piggy-back rights set forth in Section 1.2, including, without limitation, (a)
all SEC and stock exchange or National Association of Securities Dealers, Inc.
registration and filing fees, (b) all fees and expenses of complying with state
securities or blue sky laws (including reasonable fees and disbursements of
counsel for the underwriters in connection with blue sky qualifications of the
Registrable Shares or Registrable Option Shares), (c) the cost of printing or
preparing any registration statement, prospectus, offering circular, agreement
among underwriters, underwriting agreement, blue sky memorandum, share
certificates and any other documents in connection with the offering, purchase,
sale and delivery of the Registrable Shares or Registrable Option Shares, (d)
the costs and charges of any transfer agent and registrar and any custodian or
attorney-in-fact appointed to act on behalf of the Sellers, (e) all messenger
and delivery expenses, (f) the fees and expenses of any qualified independent
underwriter and (g) the reasonable fees and disbursements of
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counsel for the Company and the Company's independent public accountants,
including the expenses of any special audits and/or "cold comfort" letters
required by or incident to such performance and compliance; provided that each
Seller shall pay the fees and disbursements of its own counsel, if any, and all
underwriting discounts, commissions and transfer taxes, if any, relating to the
sale or disposition of such Sellers' Registrable Shares or Registrable Option
Shares.
"Rightholders" shall mean, (i) American International Group, Inc., a
Delaware corporation, (ii) General Re Corporation, a Delaware corporation, (iii)
Quantum Industrial Partners LDC, (iv) Tivadar Charitable Lead Trust and (v) any
other shareholder of the Company immediately prior to the Closing who retains
any ownership of Common Shares owned by it at the time of the Closing following
the Closing solely by virtue of non- or incomplete exercise of the underwriters
over-allotment option with respect to the IPO (these latter shareholders being
referred to as the "Over-allotment Remaining Shareholders").
"Rightholder Group" means, as to any Rightholder at any time, such
Rightholder and its Affiliates (other than the Company) at such time.
"Rule 144" shall mean Rule 144 under the Securities Act.
"Securities Act" shall mean the U.S. Securities Act of 1933, as
amended.
"SEC" shall mean the U.S. Securities and Exchange Commission or any
other U.S. federal agency at the time administering the Securities Act or the
Exchange Act.
"shareholder" shall mean, with respect to any Common Shares, the person
in whose name such shares are registered in the register of members maintained
by the Company in accordance with applicable law and the Bye-laws, and the terms
"hold," "held" and "holding" shall have meanings correlative to the foregoing.
"10% Shareholder" shall have the meaning set forth in the Bye-laws.
"United States 25% Shareholder" shall have the meaning set forth in the
Bye-laws.
2.2. GENERAL. Unless the context otherwise requires, references in this
Agreement to any "section" or "article" shall mean a section or article of this
Agreement, as the case may be, and the terms "hereof," "hereunder," "hereto" and
words of similar meaning shall mean this Agreement in its entirety and not any
particular provisions of this Agreement. Unless the context otherwise requires,
the terms defined herein include the singular as well as the plural.
Unless the context otherwise requires, each reference herein to the
Securities Act, the Exchange Act or Rule 144 (or any other rule, regulation or
form promulgated under either such statute) shall be deemed to mean, as of any
time, such statute, rule, regulation or form as then in effect, after all
amendments thereto, or, if not then in effect, any successor statute, rule,
regulation or form as then in effect, after all amendments thereto.
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ARTICLE III
RULE 144
3.1. AVAILABILITY OF RULE 144. The Company shall use its best efforts
to ensure that the information requirement set forth in paragraph (c) of Rule
144 is satisfied so that the safe harbor provided by Rule 144 is available to
the Rightholders for all transfers of Registrable Shares or Registrable Option
Shares made after the 90th day after the Company becomes subject to the
reporting requirements of Section 13 of the Exchange Act. Upon request made by
any Rightholder at any time during such period, the Company will provide such
Rightholder with a written statement confirming that the Company has been
subject to and has complied with the reporting requirements as provided in said
paragraph (c), unless the Company shall have included such a statement in its
then-latest annual or quarterly report filed with the U.S. Securities and
Exchange Commission.
ARTICLE IV
MISCELLANEOUS
4.1. TERMINATION OF CERTAIN RIGHTS. The rights of any Rightholder to
make a Demand Request or a Joining Request pursuant to Section 1.1 or a
Piggy-Back Request pursuant to Section 1.2 shall terminate on June 29, 2003;
provided that, as to any Registrable Shares or Registrable Option Shares that
are subject to a Demand Request, Joining Request or Piggy-Back Request duly
delivered on or prior to such date, such termination shall be delayed until such
shares have been disposed of pursuant to such registration statement or such
offering has been completed or abandoned.
4.2. AMENDMENT. This Agreement may not be amended except in a written
instrument signed by the Company and each Rightholder whose rights hereunder
would be adversely affected thereby.
4.3. NOTICES. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed, unless otherwise specified
herein, to have been duly given if delivered or mailed, first class postage
prepaid, or transmitted by telex or facsimile, (a) if to any Rightholder, at its
address or telex or facsimile number appearing in the register of members of the
Company and (b) if to the Company, at its principal executive office.
4.4. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements and understandings, oral and written, between
the parties hereto with respect to the subject matter hereof.
4.5. BINDING EFFECT; BENEFIT. This Agreement shall inure to the benefit
of and be binding upon the parties hereto, and their respective successors and
permitted assigns. Nothing in this Agreement, expressed or implied, is intended
to confer on any person other than the parties hereto, and their respective
successors and permitted assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement.
4.6. ASSIGNABILITY. This Agreement shall not be assignable by any party
hereto.
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<PAGE> 15
4.7. HEADINGS. The headings contained in this Agreement are for
convenience only and shall not affect the meaning or interpretation of this
Agreement.
4.8. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall be deemed to be one and the same instrument.
4.9. APPLICABLE LAW. This Agreement shall be governed by, and construed
in accordance with, the law of the State of New York (without regard to
principles of conflict of laws).
4.10. EFFECTIVENESS. This Agreement shall become effective upon the
Closing automatically and with no action on the part of any person. If the IPO
shall be abandoned in the manner and as evidenced as set forth in Section 1.1 of
the Termination Agreement, dated as of the date hereof, among the Company and
the Shareholders specified in Schedule 1 thereto, this Agreement shall be
abandoned and of no force or effect.
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<PAGE> 16
IN WITNESS WHEREOF, the parties named below have hereto set their hands
as of the day and year first above written.
IPC HOLDINGS, LTD.
By /s/ John P. Dowling
--------------------------------
Title: President and Chief
Executive Officer
SHAREHOLDERS
AMERICAN INTERNATIONAL GROUP, INC.
By /s/ Edward E. Matthews
--------------------------------
Title: Vice Chairman - Finance
GENERAL RE CORPORATION
By /s/ Ronald G. Anderson
--------------------------------
Title: Vice President,
Corporate Development
QUANTUM INDUSTRIAL PARTNERS LDC
By /s/ Michael C. Neus
--------------------------------
Title: Attorney-in-Fact
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<PAGE> 17
TIVADAR CHARITABLE LEAD TRUST
dated September 30, 1982
By /s/ Michael C. Neus
-------------------------------------
Title: Sole Trustee
THE LIFE INSURANCE COMPANY OF
VIRGINIA
By /s/ Ivan P. Berk
-------------------------------------
Title: Executive Director,
Aon Advisers, Inc.
EMPLOYERS REINSURANCE CORP.
By /s/ John M. Connelly
-------------------------------------
Title: Senior Vice President,
General Counsel and Secretary
FORD GENERAL RETIREMENT PLAN
By Alliance Capital Management, L.P.
Its Investment Adviser
By Alliance Capital Management Corp.
Its General Partner
By /s/ Mark R. Manley
-------------------------------------
Title: Assistant Secretary
CFG UK INTERNATIONAL CORP.
By /s/ Jerome C. Marcus
-------------------------------------
Title: Vice President
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<PAGE> 18
RIVERBEACH INVESTMENTS LIMITED
By /s/ John T. Schmidt
-----------------------------------
Title: Attorney-in-Fact
NASSAU CAPITAL PARTNERS, L.P.
By /s/ Jonathan A. Sweemer
-----------------------------------
Title: Member
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