As filed with the Securities and Exchange Commission on February 10, 1997
Registration No. 333-[ ]
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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ADT Limited
(Exact name of registrant as specified in its charter)
Bermuda Not Applicable
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Cedar House
41 Cedar Avenue
Hamilton HM12, Bermuda*
(441) 295-2244
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
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Stephen J. Ruzika
c/o ADT, Inc.
1750 Clint Moore Road
Boca Raton, FL 33431
(561) 988-3600
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
*ADT Limited maintains its registered and principal executive offices at Cedar
House, 41 Cedar Avenue, Hamilton HM12 Bermuda. The executive offices of the
subsidiary which supervises ADT Limited's North American activities are
located at 1750 Clint Moore Road, Boca Raton, Florida 33431. The telephone
number there is (561) 988-3600.
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Copies to:
J.J. McCarthy, Jr., Esq.
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
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Approximate date of commencement of proposed sale to the public: From
time to time after the effective date of this Registration Statement as
determined by market conditions.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [ ]
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.
If delivery of the prospectus is expected to be made
pursuant to Rule 434, please check the following box: [ ]
[CAPTION]
<TABLE>
Calculation of Registration Fee
- ---------------------------------------------------------------------------------------------------------------------
TITLE OF EACH
CLASS OF PROPOSED MAXIMUM PROPOSED MAXIMUM
SECURITIES TO BE AMOUNT TO BE OFFERING PRICE PER AGGREGATE AMOUNT OF
REGISTERED REGISTERED SHARE(1) OFFERING PRICE(1) REGISTRATION FEE
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Shares of
nominal value $0.10 each 15,086,698 $22.125 $333,793,194 $101,150
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
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(1) Estimated solely for purposes of calculation of the registration fee based
on the average of the high and low prices of the Registrant's Common
Shares on the New York Stock Exchange on February 6, 1997.
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The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
Subject to Completion
Prospectus dated February 10, 1997
15,086,698 Shares
ADT Limited
Common Shares
of $.10 nominal value each
--------------------
This Prospectus relates to the public offering of common shares of $.10
nominal value each (the "Shares" or the "Common Shares") of ADT Limited, a
Bermuda company limited by shares ("ADT" or the "Company"), offered from time
to time by one or both of the Selling Shareholders named herein (each, a
"Selling Shareholder" and together, the "Selling Shareholders") for their own
respective benefits. The Shares to which this Prospectus relates have been
issued in private placements or will be issued upon the exercise of a warrant
(the "Warrant") to purchase Shares that was issued in a private placement.
None of the Shares offered pursuant to this Prospectus have been registered
prior to the filing of the Registration Statement of which this Prospectus is
a part.
The Shares may be sold from time to time by the Selling Shareholders,
directly or through brokers, dealers or agents designated from time to time.
If necessary, a supplemental Prospectus will describe the method of sale in
greater detail. The Company will not receive any of the proceeds from the
sale of the Shares offered hereby. See "Use of Proceeds" and "Plan of
Distribution."
All expenses of registration incurred in connection with this offering
are being borne by the Company, but all selling and other expenses incurred by
a Selling Shareholder will be borne by such Selling Shareholder.
The Common Shares are listed on the New York Stock Exchange under the
symbol ADT.
See "Risk Factors" on pages 4 to 6 for a description of certain factors
that should be considered by purchasers of the Shares offered hereby.
The Selling Shareholders, agents, brokers or dealers may be deemed to be
"underwriters" within the meaning of the Securities Act of 1933, as amended
(the "Securities Act"). Commissions received by them and any profit on the
resale of the Shares may be deemed to be underwriting compensation under the
Securities Act. See "Plan of Distribution."
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED ON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
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The date of this Prospectus is February ___, 1997.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL
OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
No dealer, salesman or other person has been authorized to give any
information or to make any representation not contained or incorporated by
reference in this Prospectus, and, if given or made, such information or
representation must not be relied upon as having been authorized by the
Company or by any Selling Shareholder. This Prospectus shall not constitute
an offer to sell or a solicitation of an offer to buy any of the Shares
offered hereby in any jurisdiction to any person to whom it is unlawful to
make such offer or solicitation in such jurisdiction. Neither the delivery of
this Prospectus nor any sale made thereunder shall, under any circumstances,
create any implication that the information therein is correct as of any time
subsequent to the date thereof.
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ENFORCEMENT OF CIVIL LIABILITIES
ADT is organized in Bermuda and certain of its directors, officers and
controlling persons, certain of the experts named herein and one of the
Selling Shareholders named herein are resident outside the United States. All
or a substantial portion of the assets of such persons are located outside the
United States. Consequently, it may not be possible to effect service of
process on such persons within the United States or to enforce, in U.S.
courts, judgments against such persons obtained in U.S. courts and predicated
upon the civil liability provisions of the U.S. federal securities laws.
Furthermore, since all directly owned assets of ADT are outside the United
States any judgment against ADT may not be collectable within the United
States. ADT has been advised by its legal counsel in Bermuda, Appleby,
Spurling & Kempe, that there is doubt as to the enforcement in Bermuda, in
original actions or in actions for enforcement of judgments of U.S. courts, of
liabilities predicated upon U.S. federal securities laws. Such counsel has
also advised ADT that the Bermuda courts will enforce foreign judgments for
liquidated amounts in civil matters, subject to certain conditions and
exceptions.
TABLE OF CONTENTS
Page Page
---- ----
Available Information.......... 2 Use of Proceeds................ 7
Incorporation of Certain
Information by Reference.. 3 Plan of Distribution........... 7
The Company.................... 4 Recent Developments............ 8
Risk Factors................... 4 Experts........................ 10
Selling Shareholders........... 6 Legal Matters.................. 10
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports and other information with the Securities
and Exchange Commission (the "Commission"). Reports, proxy statements and
other information filed by the Company with the Commission can be inspected
and copied at the public reference facilities maintained by the Commission at
Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549 or at its Regional
Offices located at Suite 1400, Northwestern Atrium Center, 500 West Madison
Street, Chicago, Illinois 60661-2511 and at Seven World Trade Center, 13th
Floor, New York, New York 10048, and copies of such material can be obtained
from the Public Reference Section of the Commission, 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. Such material may also be
accessed electronically by means of the Commission's home page on the Internet
at http://www.sec.gov. The Common Shares are listed on the New York Stock
Exchange, Inc. (the "New York Stock Exchange"). In addition, reports, proxy
statements and other information concerning the Company can be inspected at
the offices of the New York Stock Exchange, 20 Broad Street, New York, New
York 10005.
This Prospectus constitutes a part of Registration Statement on Form S-3
(together with all amendments and exhibits thereto, the "Registration
Statement") filed with the Commission under the Securities Act. This
Prospectus omits certain of the information set forth in such Registration
Statement in accordance with the rules and regulations of the Commission.
Reference is hereby made to such Registration Statement and to the exhibits
relating thereto for further information with respect to the Company and the
Securities. Any statements contained herein concerning the provisions of any
document are not necessarily complete, and in each instance reference is made
to the copy of such document filed as an exhibit to the Registration Statement
or otherwise filed with the Commission for a more complete description of the
matter involved. Each such statement is qualified in its entirety by such
reference.
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INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents, which have been filed with the Commission, are
hereby incorporated by reference:
1. Annual Report on Form 10-K of the Company for the year ended
December 31, 1995; and
2. Quarterly Reports on Form 10-Q of the Company for the quarters
ended March 31, 1996, June 30, 1996 and September 30, 1996, as
amended;
3. Current Reports on Form 8-K of the Company filed on January 16,
1996 (as amended on Form 8-K/A on March 12, 1996); June 27, 1996;
July 10, 1996; July 16, 1996; September 19, 1996 (as amended on
Form 8-K/A-1 on October 21, 1996 and Form 8- K/A-2 on
November 12, 1996) and September 30, 1996;
4. the Company's current Registration Statement on Form 8-A with
respect to registration of Common Shares under Section 12(b) of
the Exchange Act.
All documents filed by the Company after the date of this Prospectus
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to
the termination of the offering of the Shares offered hereby, shall be deemed
to be incorporated herein by reference and to be a part hereof from the date
of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed
to be modified or superseded for purposes of this Prospectus to the extent
that a statement contained herein (or in any other subsequently filed document
which also is or is deemed to be incorporated by reference herein) modifies or
supersedes such statement. Any statements so modified or superseded shall be
deemed to constitute a part of this Prospectus, except as so modified or
superseded.
The Company will provide without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus is delivered, upon written
or oral request of such person, a copy of any or all of the documents referred
to above which have been or may be incorporated by reference in this
Prospectus (other than certain exhibits to such documents). Requests for such
documents should be directed to ADT, Inc., 1750 Clint Moore Road, Boca Raton,
Florida 33431, Attention: Mr. Stephen J. Ruzika (telephone (561) 988-3600).
THE COMPANY
The Company is engaged in two service businesses, electronic security
services in North America and Europe and vehicle auction and related services
in the United States. ADT sells, installs, monitors and maintains electronic
security devices in customers' businesses or residences that provide detection
of events, such as intrusion or fire, and surveillance and control of access.
ADT believes that it is the largest provider of electronic security services
in North America and the United Kingdom. ADT also operates a network of large
modern vehicle auction centers in the United States providing a comprehensive
range of vehicle redistribution services, including the collection and
transportation of a seller's vehicles to an auction center, reconditioning the
vehicles to retail standards, matching the vehicles with an appropriate
auction market and delivering the vehicles to the buyer. ADT auction centers
provide an organized and efficient means for the wholesale vehicle marketplace
to sell and purchase used vehicles. The Company is the second largest
provider of vehicle auction services in the United States. ADT currently
intends to divest its vehicle auction business.
The Company was organized in Bermuda in September 1984 under the name
Hawley Group Limited and maintains its registered and principal executive
offices at Cedar House, 41 Cedar Avenue, Hamilton HM12 Bermuda. The executive
offices of the subsidiary which supervises ADT's North American activities are
located at 1750 Clint Moore Road, Boca Raton, Florida 33431. The telephone
number there is (561) 988-3600.
RISK FACTORS
In addition to reviewing the documents incorporated herein by reference
and the other information in this Prospectus, prospective purchasers of the
Shares offered hereby should consider carefully the following factors in
evaluating the Company and its business before purchasing the Shares offered
hereby.
Principal Shareholder; Exchange Offer
Western Resources, Inc. ("Western") and its affiliates owned
approximately 27.1% of the Common Shares outstanding as of December 18, 1996,
according to Amendment No. 9 to Schedule 13D filed by Western on December 18,
1996. Western is a public corporation, and its shares are listed on the NYSE.
On December 18, 1996, Western filed with the Commission a preliminary
prospectus for an offer by Western of $7.50 net in cash and a number of shares
of Western common stock valued at a maximum of $15 (depending on a pricing
formula) in exchange for each of the Common Shares. Western has also demanded
a special general meeting of ADT shareholders for the stated purpose of
facilitating the consummation of its proposed offer. See "Recent Developments
- -- Exchange Offer."
No predictions can be made as to the effect, if any, that the sale of
any such shares, the availability of such shares for future sales, Western's
proposed exchange offer or the special general meeting of ADT shareholders
will have on the market price of the Common Shares prevailing from time to
time. Sales of substantial numbers of Common Shares by Western and its
affiliates, or the perception that such sales could occur, could adverse
affect prevailing market prices for the Common Shares and could impair ADT's
future ability to raise capital through an offering of its equity securities.
Certain Litigation against the Company
Certain litigation has been commenced against the Company and its
directors, including litigation in connection with Western's proposed exchange
offer. See "Recent Developments -- Certain Litigation against the Company."
Possible Acquisitions
The electronic security services market in the United States, where
ADT's service delivery infrastructure is substantially complete, is highly
fragmented with well over 12,000 providers. ADT believes that attractive
acquisition opportunities exist and may expand its electronic security
services business by acquisition in the future. Any such acquisitions may
include multi-regional, regional or local electronic security services
businesses. ADT continually evaluates such acquisition opportunities in the
electronic security services market. Any such acquisition may be financed
through the incurrence of additional indebtedness, cash on hand and cash
generated from operations, including asset sales, if any, or a combination
thereof.
ADT is not currently party to any material agreement or understanding to
acquire any electronic security services businesses, and no assurances can be
given that ADT will succeed in consummating any acquisitions or as to the
financial or operating effect on ADT of any acquired business. Acquisitions,
by their nature, involve risks including, among others, difficulties in
integrating the acquired operations and possible negative effects of diverting
management resources.
Divestiture of Vehicle Auction Business
In November 1996, ADT announced that it intended to divest its vehicle
auction business. There can be no assurance that a buyer will be found or, if
found, that ADT will consummate the sale at a favorable price or on favorable
terms.
Competition
The electronic security services business in North America is highly
competitive and highly fragmented and new competitors are continually entering
the field. ADT may encounter competition from future market entrants. In
addition, certain of ADT's competitors have, and new competitors may have,
greater financial resources than ADT.
The vehicle auction services division faces competition in the United
States from two other significant auction chains and a number of independently
owned local auctions.
Preferred Stock and Takeover Measures
The authorized capital of the Company includes 125 million preference
shares (the "First Preference Shares"). The board of directors of ADT, in its
sole discretion, may designate and issue one or more series of First
Preference Shares from the authorized and unissued First Preference Shares.
Subject to limitations imposed by law or ADT's Memorandum of Association and
Bye-Laws, the board of directors of the Company is empowered to determine the
designation of, and the number of shares constituting, each series of First
Preference Shares; the dividend rate for each series; the terms and conditions
of any voting and conversion rights for each series; the amounts payable on
each series upon redemption or ADT's liquidation, dissolution or winding-up;
the provisions of any sinking fund for the redemption or purchase of any
series; and the preferences and the relative rights among the series of First
Preference Shares. At the discretion of the board of directors of ADT, and
subject to its fiduciary duties, the First Preference Shares could be used to
deter any takeover attempt, by tender offer or otherwise. In addition, First
Preference Shares could be issued with voting and conversion rights which
could adversely affect the voting power of holders of Common Shares. The
issuance of First Preference Shares could also result in a series of
securities outstanding that would have preferences over the Common Shares with
respect to dividends and in liquidation.
The board of directors of ADT Limited has adopted a shareholder rights
plan, which permits shareholders, in certain circumstances, to purchase Series
A First Preference Shares of ADT. See "Recent Developments -- Shareholder
Rights Plan."
The Company's Bye-laws apply the provisions of the United Kingdom City
Code on Take-Overs and Mergers (the "City Code") to ADT, together with the
United Kingdom Rules Governing Substantial Acquisitions of Shares (the
"U.K. Rules"). The U.K. Rules regulate increases in interests in the
share capital of ADT representing between 15% and 29.9% of voting rights.
ADT's board of directors may by notice require compliance with the U.K.
Rules in relation to acquisitions and disposals of shares carrying voting
rights.
The Bye-laws of ADT also provide that the board of directors may by
notice require a person who is or becomes interested in shares of the Company
in circumstances in which he would be obliged to make or extend an offer or
offers to shareholders or holders of convertible securities under the City
Code to pursue the offer as provided under the City Code and to conduct
himself before, during and after the lapse of an offer in a manner that would
be required by the City Code. The board of directors may require that offers
be made to holders of convertible securities and holders of subscription
rights on comparable terms to those offered to holders of Common Shares. If a
person has acquired 30% or more of ADT's Common Shares, the board of directors
may require such person to make an offer to purchase all shares of every class
of ADT's share capital in cash pursuant to terms set forth in the Bye-laws.
SELLING SHAREHOLDERS
The following table shows (i) the name of each Selling Shareholder, (ii)
the number of Common Shares beneficially owned by such Selling Shareholder
prior to the offering, (iii) the number of Common Shares to be sold pursuant
to this Prospectus and (iv) the number of shares beneficially owned after the
offering:
Number of Common Shares
-----------------------------------------------
Owned Prior to Owned after
Name Offering Offered the Offering
- ------------------------- -----------------------------------------------
Republic Industries, Inc. 15,000,000 (1) 15,000,000 --
Mourant & Co. Trustees
Limited 86,698 (2) 86,698 --
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(1) Represents shares issuable upon exercise of the Warrant. The Warrant,
which was granted to Republic Industries, Inc. ("Republic") in
connection with a proposed amalgamation between the Company and
Republic, is exercisable through March 26, 1997 and represents the
right to purchase 15,000,000 Common Shares of the Company at $20 per
share. Pursuant to the terms of the Warrant, Republic has exercised
its right to demand registration of all of the Common Shares underlying
the Warrant. Following the effective date of the registration
statement, subject to the Company's right to suspend the use of the
registration statement under certain circumstances, the Company is
required to maintain the effectiveness of the Registration Statement
for 120 days. See "Recent Developments -- Certain Litigation against
the Company."
(2) Represents shares held in trust for the benefit of an employees' share
ownership plan ("ESOP") of Automated Security (Holdings) PLC. The ESOP
received shares of ADT in exchange for shares of Automated Security
(Holdings) PLC in connection with ADT's acquisition of Automated
Security (Holdings) PLC.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
Shares.
PLAN OF DISTRIBUTION
The Company has been advised by each of the Selling Shareholders that
they intend to sell all or a portion of the Shares that they own or are
entitled to receive upon exercise of the Warrant, as the case may be, on the
New York Stock Exchange or such other national securities exchange or
automated interdealer quotation system on which shares of Common Stock are
then listed, through negotiated transactions or otherwise at market prices
prevailing at the time of the sale or at negotiated prices. Alternatively,
from time to time a Selling Shareholder may offer Shares through brokers,
dealers or agents, who may receive compensation in the form of concessions or
commissions from any such Selling Shareholders, agents and/or the purchasers
for whom they may act as agent or to a broker-dealer acting as principal. In
the latter case, the broker-dealer may then resell such Shares to the public
at varying prices to be determined by such broker-dealer at the time of
resale. The Shares may be sold in connection with equity swap, put or call,
margin and similar transactions entered into by a Selling Shareholder,
including sales by or at the direction of the counterparty to any such
transactions. If necessary, a supplemental Prospectus will describe the
method of sale in greater detail. In addition, any of the Shares which
qualify for sale pursuant to Rule 144 under the Securities Act may be sold
under Rule 144 rather than pursuant to this Prospectus.
The Selling Shareholders and any such brokers, dealers or agents that
participate in the distribution of the Shares may be deemed to be
"underwriters" within the meaning of the Securities Act, and any profits on
the sale of Shares by them and any associated discounts, commissions or
concessions that are received may be deemed to be underwriting compensation
under the Securities Act. To the extent a Selling Shareholder may be deemed
to be an underwriter, he or it may be subject to certain statutory liabilities
under the Securities Act, including but not limited to Sections 11 and 12 of
the Securities Act.
Shares may be sold from time to time in transactions at a fixed offering
price, which may be changed, or at varying prices determined at the time of
sale or at negotiated prices. If applicable, such prices will be determined
by agreement between the Selling Shareholders and any such dealers. The
Selling Shareholders may, from time to time, authorize dealers, acting as the
Selling Shareholders' respective agents, to solicit offers to purchase Shares
upon the terms and conditions set forth in any supplemental Prospectus.
The Selling Shareholders and any other person participating in a sale or
distribution of Shares will be subject to applicable provisions of the
Exchange Act and the rules and regulations thereunder, including without
limitation Rules 10b-5 and 10b-6, which provisions may limit the timing of
purchases and sales of any of the Shares by the Selling Shareholders and any
other such person.
All expenses of registration incurred in connection with this offering
are being borne by the Company, but all selling and other expenses incurred by
a Selling Shareholder will be borne by such Selling Shareholder.
In order to comply with securities laws in certain jurisdictions, the
Shares offered hereby will be offered or sold in such jurisdiction only
through registered or licensed brokers or dealers. In addition, in certain
jurisdictions, the securities offered hereby may not be offered or sold unless
they have been registered or qualified for sale in such jurisdictions or an
exemption from registration or qualification is available and is complied
with.
There can be no assurance that the Selling Shareholders will sell any or
all of the Shares offered by them hereunder.
The Company has agreed to indemnify the Selling Shareholders against
certain civil liabilities, including certain liabilities under the Securities
Act, in connection with the sale of the Shares.
RECENT DEVELOPMENTS
Exchange Offer
On December 18, 1996, Western filed with the Commission a preliminary
prospectus for an offer by Western of $7.50 net in cash and a number of shares
of Western common stock valued at a maximum of $15 (depending on a pricing
formula) in exchange for each of ADT's Common Shares. Western has also
demanded a special general meeting of ADT shareholders for the purposes of (i)
removing the present members of the ADT board, (ii) reducing the number of
seats on the ADT board from eight to two and (iii) electing Western's nominees
to the ADT board. Western has stated that the purpose of these proposals is
to facilitate consummation of its offer. If Western obtains control of the
board of directors, Western has stated that its directors intend to eliminate
the protections for shareholders contained in the Company's Bye-Laws and in
the Shareholder Rights Plan described below. Pursuant to Western's
requisition, ADT has scheduled a special general meeting of shareholders of
ADT to be held on July 8, 1997.
ADT has indicated that its board of directors will review Western's
proposals in due course. ADT has also stated that its shareholders need not
take any action at this time with respect to Western's proposals, and
requested that they await the final recommendation of ADT's board.
Certain Litigation against the Company
On December 18, 1996, Western, through an affiliate, commenced
litigation against the Company, the directors of the Company and Republic in
the U.S. District Court for the Southern District of Florida. Western's
complaint, as amended and modified by subsequent filings, alleges that the
Company and its directors breached their fiduciary duties to Western and the
Company's other shareholders (i) by issuing the Warrant to Republic in
connection with the proposed merger transaction with Republic, (ii) by
adopting the Company's shareholder rights plan, (iii) by holding shares of the
Company in one of the Company's subsidiaries with the intention of voting
those shares as needed to entrench existing management and (iv) by setting a
July 8, 1997 date for a meeting of the Company's shareholders. The complaint
also alleges, inter alia, that the Company and its directors interfered with
Western's voting rights. Western seeks various injunctive remedies, including
a declaration voiding the Warrant and an order compelling the Company to hold
the shareholders meeting on or before March 20, 1997. The Company and the
board of directors believe that Western's allegations are without merit and
intend to vigorously defend against them.
On December 26, 1996, Charles Gachot filed a complaint in the Circuit
Court for the Fifteenth Judicial Circuit in Palm Beach County, Florida against
the Company, certain of its directors, Western and an affiliate of Western.
The complaint was brought on behalf of a class of all shareholders of the
Company and alleges that Western has breached its fiduciary duties to the
Company's shareholders by offering an inadequate price for the outstanding
Common Shares. The complaint seeks to enjoin Western from acquiring the
outstanding Common Shares. The complaint also alleges that the Company and
its directors have refused to negotiate with Western and that the Warrant and
the shareholder rights plan are improper. The complaint seeks unspecified
monetary relief from all defendants. The Company and the board of directors
believe that the allegations in Mr. Gachot's complaint against the Company and
the directors are without merit and intend to vigorously defend against them.
Shareholder Rights Plan
On November 4, 1996, the board of directors declared a distribution of
one Series A First Preference Share purchase right (a "Right") for each Common
Share outstanding on November 15, 1996. Each Right will entitle the holder to
purchase from the Company shares of a new series of First Preference Shares at
an initial purchase price of $90 (per one-hundredth of a share). The rights
will become exercisable and will detach from the Common Shares a specified
period of time after any person has become the beneficial owner of 15% or more
of ADT's Common Shares or has commenced a tender or exchange offer which, if
consummated, would result in any person becoming the beneficial owner of 15%
or more of ADT's Common Shares. The rights will not become exercisable on
account of any person being the beneficial owner of 15% or more of ADT's
Common Shares as at November 4, 1996 at 5 p.m., Eastern Standard Time, but
will become exercisable if such person increases his beneficial ownership
after this time.
If any person becomes the beneficial owner of 15% or more of the Common
Shares, or if any person who is already the beneficial owner of 15% or more of
the Common Shares increases his beneficial ownership, each Right will entitle
the holder, other than the acquiring person, to purchase, for the rights
purchase price, Common Shares having a market value of twice the rights
purchase price.
If, following an acquisition of 15% or more of the Common Shares, ADT is
involved in certain mergers or other business combinations or sells or
transfers more than 50% of its assets or earning power, each Right will
entitle the holder to purchase, for the rights purchase price, common shares
of the other party to such transaction having a market value of twice the
rights purchase price.
ADT may redeem the Rights at a price of $0.01 per Right at any time
prior to a specified period of time after a person has become the beneficial
owner of 15% or more of the Common Shares. The Rights will expire on November
14, 2005, unless redeemed earlier.
EXPERTS
The consolidated financial statements of the Company included in the
Annual Report on Form 10-K of the Company for the year ended December 31,
1995 have been audited by Coopers & Lybrand, independent accountants, as
stated in their report dated February 29, 1996 and are incorporated herein
by reference in reliance upon the report of such firm, which report is
given upon their authority as experts in accounting and auditing.
Any consolidated financial statements hereafter incorporated by
reference in the registration statement of which this prospectus is a part
that have been audited and are the subject of a report by independent
accountants will be incorporated herein by reference in reliance upon such
reports and upon the authority of such firms as experts in accounting and
auditing to the extent covered by consents filed with the Commission.
LEGAL MATTERS
The validity of the Shares offered hereby will be passed upon for the
Company by Appleby, Spurling & Kempe, Hamilton, Bermuda.
John D. Campbell, the Secretary of ADT, is also a member of the law firm
of Appleby, Spurling & Kempe, legal counsel for ADT in Bermuda, which has
rendered an opinion in connection with the offering of the Shares.
==============================================================================
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
Registration fee...................................... $ 101,150
Legal fees and expenses............................... 180,000
Accounting fees and expenses.......................... 5,000
---------
Total........................................... $ 286,150
=========
=========
All amounts estimated except for registration fees.
Item 15. Indemnification of Directors and Officers.
Section 103 of the Bye-Laws of ADT provides, in part, that ADT shall
indemnify its directors and officers for all costs, losses and expenses which
they may incur in the performance of their duties as director or officer,
provided that such indemnification is not otherwise prohibited under The
Companies Act 1981 (as amended) of Bermuda. Section 98 of The Companies Act
1981 (as amended) prohibits such indemnification against any liability arising
out of the fraud or dishonesty of the director or officer. However, such
section permits ADT to indemnify a director or officer against any liability
incurred by him in defending any proceedings, whether civil or criminal, in
which judgment is given in his favor or in which he is acquitted or when other
similar relief is granted to him.
The Company maintains liability insurance covering its directors and
officers and those of its subsidiaries.
Pursuant to the terms of the Warrant, the Company has agreed to
indemnify certain of the Selling Shareholders against certain civil
liabilities, including certain liabilities under the Securities Act, in
connection with the sale of the Shares.
Item 16. List of Exhibits and Exhibit Index
Exhibit 4.1- Memorandum of Association (as altered) of the Company, filed as
an exhibit to the Company's Annual Report on Form 10-K for the
year ended December 31, 1992, is incorporated by reference
herein.
Exhibit 4.2- Bye-laws, as amended, of the Company, filed as an exhibit to the
Company's Annual Report on Form 10-K for the year ended December
31, 1992, is incorporated by reference herein.
Exhibit 4.3- Rights Agreement dated as of November 6, 1996 between ADT
Limited and Citibank, N.A. as Rights Agent (including Exhibit A
as a supplement to the Bye-laws of the Company).
Exhibit 5.1- Opinion of Appleby, Spurling & Kempe as to legality of Shares
offered.
Exhibit 10.1- Common Share Purchase Warrant dated as of July 1, 1996, as
amended on September 27, 1996, filed as exhibits to the
Company's Forms 8-K on July 10, 1996 and September 30, 1996, is
incorporated by reference herein.
Exhibit 23.1- Consent of Coopers & Lybrand, Independent Accountants.
Exhibit 23.2- Consent of Appleby, Spurling & Kempe (included in Exhibit 5.1).
Exhibit 24.1- Power of Attorney (contained on page II-4).
Item 17. Undertakings. The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made
of the securities registered hereby, a post-effective amendment to this
registration statement;
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in this registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered
(if the total dollar value of securities offered would not exceed
that which was registered) and any deviation from the low or high
end of the estimated maximum offering range may be reflected in the
form of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price
represent no more than 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee"
table in this registration statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in this registration
statement or any material change to such information in this
registration statement;
provided, however, that the undertakings set forth in paragraphs (i) and (ii)
above do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic reports
filed with or furnished to the Commission by the registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in this registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered herein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination
of the offering.
The undersigned registrant hereby further undertakes that, for purposes
of determining any liability under the Securities Act of 1933, each filing of
the registrant's annual report pursuant to Section 13(a) or Section 15(d) of
the Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in this
registration statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrants pursuant to the provisions set forth or described in Item 15
of this Registration Statement, or otherwise, the registrant has been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrants of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person, in
connection with the securities registered hereby, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in Boca Raton, Florida, on the 7th day of February,
1997.
ADT LIMITED
By /s/ Stephen J. Ruzika
-----------------------
Stephen J. Ruzika
Director and Executive
Vice President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Stephen J. Ruzika his true and lawful
attorney-in-fact and agent, with full power of substitution, for him and in
his name, and in any and all capacities, to sign all amendments (including
post-effective amendments) to the Registration Statement to which this power
of attorney is attached, and to file all such amendments and all exhibits to
them and other documents to be filed in connection with them, with the
Securities and Exchange Commission.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities as Directors and Officers of ADT Limited and on the date indicated.
Signature Title Date
--------- ----- ----
/s/ Michael A. Ashcroft Chairman of the Board and February 7, 1997
- --------------------------- Chief Executive Officer
Michael A. Ashcroft (Principal Executive
Officer)
/s/ Stephen J. Ruzika Chief Financial Officer, February 7, 1997
- --------------------------- Executive Vice President
Stephen J. Ruzika and Director (Principal
Financial Officer and
Principal Accounting
Officer)
/s/ John E. Danneberg Director February 7, 1997
- ---------------------------
John E. Danneberg
/s/ Alan B. Henderson Director February 7, 1997
- ---------------------------
Alan B. Henderson
/s/ James S. Pasman, Jr. Director February 7, 1997
- ---------------------------
James S. Pasman, Jr.
/s/ W. Peter Slusser Director February 7, 1997
- ---------------------------
W. Peter Slusser
/s/ William W. Stinson Director February 7, 1997
- ---------------------------
William W. Stinson
/s/ Raymond S. Troubh Director February 7, 1997
- ---------------------------
Raymond S. Troubh
File No: 333-[ ]
==============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
--------------------
EXHIBITS
to
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
--------------------
ADT Limited
(Exact name of Registrant as specified in its charter)
==============================================================================
LIST OF EXHIBITS
Exhibit 4.1- Memorandum of Association (as altered) of the Company, filed as
an exhibit to the Company's Annual Report on Form 10-K for the
year ended December 31, 1992, is incorporated by reference
herein.
Exhibit 4.2- Bye-laws, as amended, of the Company, filed as an exhibit to the
Company's Annual Report on Form 10-K for the year ended December
31, 1992, is incorporated by reference herein.
Exhibit 4.3- Rights Agreement dated as of November 6, 1996 between ADT
Limited and Citibank, N.A. as Rights Agent (including Exhibit A
as a supplement to the Bye-laws of the Company).
Exhibit 5.1- Opinion of Appleby, Spurling & Kempe as to legality of Shares
offered.
Exhibit 10.1- Common Share Purchase Warrant dated as of July 1, 1996, as
amended on September 27, 1996, filed as exhibits to the
Company's Forms 8-K on July 10, 1996 and September 30, 1996, is
incorporated by reference herein.
Exhibit 23.1- Consent of Coopers & Lybrand, Independent Accountants.
Exhibit 23.2- Consent of Appleby, Spurling & Kempe (included in Exhibit 5.1).
Exhibit 24.1- Power of Attorney (contained on page II-4).
RIGHTS AGREEMENT
dated as of
November 6, 1996
between
ADT LIMITED
and
CITIBANK, N.A.
as Rights Agent
TABLE OF CONTENTS(1)
Page
----
Section 1. Definitions 1
Section 2. Appointment of Rights Agent 6
Section 3. Issue of Right Certificates 6
Section 4. Form of Right Certificates 7
Section 5. Countersignature and Registration 8
Section 6. Transfer and Exchange of Right Certificates;
Mutilated, Destroyed,
Lost or Stolen Right Certificates 8
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights 9
Section 8. Cancellation and Destruction of Right
Certificates 10
Section 9. Reservation and Availability of Shares 11
Section 10. Series A First Preference Shares Record Date 13
Section 11. Adjustment of Purchase Price,
Number and Kind of Shares or Number
of Rights 13
Section 12. Certificate of Adjusted Purchase
Price or Number of Shares 21
Section 13. Consolidation, Amalgamation or Sale or
Transfer of Assets or Earning Power 22
(1) The Table of Contents is not a part of this Agreement.
Section 14. Prohibition on issue of Fractional Rights
and Fractional Shares 24
Section 15. Rights of Action 25
Section 16. Agreement of Right Holders 26
Section 17. Right Certificate Holder Not Deemed
a Shareholder 27
Section 18. Concerning the Rights Agent 27
Section 19. Merger or Consolidation or Change of
Name of Rights Agent 27
Section 20. Duties of Rights Agent 28
Section 21. Change of Rights Agent 30
Section 22. Issuance of New Right Certificates 31
Section 23. Redemption 31
Section 24. Notice of Proposed Actions 32
Section 25. Notices 33
Section 26. Supplements, Deletions and Amendments 34
Section 27. Successors 34
Section 28. Determinations and Actions
by the Board of Directors, etc. 34
Section 29. Benefits of this Agreement 35
Section 30. Severability 35
Section 31. Governing Law 35
Section 32. Counterparts 36
Section 33. Descriptive Headings 36
Exhibit A - Extract from Minutes of Meeting of Board of Directors of ADT
Limited creating the Series A First Preference Shares
Exhibit B - Form of Right Certificate
RIGHTS AGREEMENT
AGREEMENT dated as of November 6, 1996, between ADT Limited, a
Bermuda company limited by shares (the "Company"), and Citibank, N.A., New York
branch, a national banking association organized under the laws of the United
States of America acting solely through its branch located at 111 Wall Street,
New York, NY 10043 (the "Rights Agent").
W I T N E S S E T H
WHEREAS, on November 4, 1996 the Board of Directors of the
Company authorized and declared a distribution of one Right (as hereinafter
defined) for each Common Share (as hereinafter defined) in issue at the close
of business on November 15, 1996 (the "Record Date") and has authorized and
declared the issuance, upon the terms and subject to the conditions
hereinafter set forth, of one Right in respect of each Common Share issued
after the Record Date, each Right representing the right to subscribe for,
upon the terms and subject to the conditions hereinafter set forth,
one-hundredth of a Series A First Preference Share (as hereinafter defined).
NOW, THEREFORE, the parties hereto agree as follows:
Section 1. Definitions. The following terms, as used herein,
have the following meanings:
"Acquiring Person" means any Person who, together with all
Affiliates and Associates of such Person, shall be the Beneficial
Owner of 15% or more of the Common Shares then issued and
outstanding, provided that Acquiring Person shall not include the
Company, any of its Subsidiaries, any employee benefit plan of the
Company or any of its Subsidiaries or any Person organized, appointed
or established by the Company or any of its Subsidiaries for or
pursuant to the terms of any such plan; provided further that the
term "Acquiring Person" shall not include any Grandfathered Person,
unless such Grandfathered Person after the Grandfathered Time becomes
the Beneficial Owner of more than the Grandfathered Percentage of the
Common Shares then issued and outstanding. Any Grandfathered Person
who after the Grandfathered Time becomes the Beneficial Owner of less
than 15% of the Common Shares then issued and outstanding shall cease
to be a Grandfathered Person.
In addition, notwithstanding the foregoing, a Person shall not
be an "Acquiring Person" if a majority of the Continuing Directors
determine that a person who would otherwise be an "Acquiring Person",
as defined pursuant to the foregoing provisions of this Section 1,
has become such inadvertently, and such Person divests as promptly as
practicable a sufficient number of Common Shares so that such Person
shall no longer be an "Acquiring Person".
"Affiliate" and "Associate" have the respective meanings
ascribed to such terms in Rule 12b-2 under the Exchange Act as in
effect on the date hereof.
A Person shall be deemed the "Beneficial Owner" of, and shall
be deemed to "beneficially own", any securities:
(a) which such Person or any of its Affiliates or
Associates, directly or indirectly, beneficially owns (as
determined pursuant to Rule 13d-3 under the Exchange Act as in
effect on the date hereof);
(b) which such Person or any of its Affiliates or
Associates, directly or indirectly, has
(i) the right to acquire (whether such right is
exercisable immediately or only upon the occurrence of
certain events or the passage of time or both) pursuant
to any agreement, arrangement or understanding (whether
or not in writing) or otherwise (other than pursuant to
the Rights); provided that a Person shall not be deemed
the "Beneficial Owner" of or to "beneficially own"
securities tendered pursuant to a tender or exchange
offer made by or on behalf of such Person or any of its
Affiliates or Associates until such tendered securities
are accepted for payment or exchange; or
(ii) the right to vote (whether such right is
exercisable immediately or only upon the occurrence of
certain events or the passage of time or both) pursuant
to any agreement, arrangement or understanding (whether
or not in writing) or otherwise; provided that a Person
shall not be deemed the "Beneficial Owner" of or to
"beneficially own" any security under this clause (ii) as
a result of an agreement, arrangement or understanding to
vote such security if such agreement, arrangement or
understanding (A) arises solely from a revocable proxy or
consent given in response to a public proxy or consent
solicitation made pursuant to, and in accordance with,
the applicable rules and regulations under the Exchange
Act and (B) is not also then reportable by such Person on
Schedule 13D under the Exchange Act (or any comparable or
successor report); or
(c) which are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or Associate
thereof) with which such Person or any of its Affiliates or
Associates has any agreement, arrangement or understanding
(whether or not in writing) for the purpose of acquiring,
holding, voting (except pursuant to a revocable proxy as
described in subparagraph (b)(ii) immediately above) or
disposing of any such securities.
"Business Day" means any day other than a Saturday, Sunday or a
day on which banking institutions in the State of New York or the
Islands of Bermuda are authorized or obligated by law or executive
order to close.
"Close of business" on any given date means 5:00 P.M., New York
City time, on such date; provided that if such date is not a Business
Day "close of business" means 5:00 P.M., New York City time, on the
next succeeding Business Day.
"Common Shares" means the Common Shares of nominal value $0.10
each of the Company, except that, when used with reference to any
Person other than the Company, "Common Shares" means the capital
stock of such Person with the greatest voting power, or the equity
securities or other equity interest having power to control or direct
the management, of such Person.
"Continuing Director" means any member of the Board of
Directors of the Company, while such Person is a member of the Board,
who is not an Acquiring Person or an Affiliate or Associate of an
Acquiring Person or a representative or nominee of an Acquiring
Person or of any such Affiliate or Associate and either (a) was a
member of the Board immediately prior to the time any Person becomes
an Acquiring Person or (b) subsequently becomes a member of the
Board, if such Person's nomination for election or election to the
Board is recommended or approved by a majority of the Continuing
Directors.
"Distribution Date" means the earlier of (a) the close of
business on the tenth day (or such later day as may be designated by
action of a majority of the Continuing Directors) after the Share
Acquisition Date and (b) the close of business on the tenth Business
Day (or such later day as may be designated by action of a majority
of the Continuing Directors) after the date of the commencement of a
tender or exchange offer by any Person if, upon consummation thereof,
such Person would be an Acquiring Person.
"Exchange Act" means the United States Securities Exchange Act
of 1934, as amended.
"Expiration Date" means the earlier of (a) the Final Expiration
Date and (b) the time at which all Rights are redeemed as provided in
Section 23.
"Final Expiration Date" means the close of business on November
14, 2005.
"Grandfathered Percentage" means, with respect to any
Grandfathered Person, the percentage of the Common Shares then in
issue that such Grandfathered Person, together with all Affiliates
and Associates of such Grandfathered Person, beneficially owns as of
the Grandfathered Time; provided that, in the event that the
percentage of Common Shares then in issue that a Grandfathered Person
beneficially owns shall decrease (whether due to the sale, transfer
or other disposition of Common Shares by the Grandfathered Person or
due to the dilution of the Grandfathered Person's interest in Common
Shares as a result of the issuance of additional Common Shares) after
the Grandfathered Time, the Grandfathered Percentage, with respect to
such Grandfathered Person, shall mean, subsequent to such sale,
transfer, disposition or dilution, the percentage of Common Shares
then in issue that such Grandfathered Person, together with all
Affiliates and Associates of such Grandfathered Person, beneficially
owns immediately following such sale, transfer, disposition or
dilution.
"Grandfathered Person" means any Person who, together with all
Affiliates and Associates of such Person is, as of the Grandfathered
Time, the Beneficial Owner of 15% or more of the Common Shares then
in issue.
"Grandfathered Time" means 5:00 p.m., New York City time, on
November 4, 1996.
"Person" means an individual, firm, corporation, partnership,
association, trust or any other entity or organization.
"Purchase Price" means the price (subject to adjustment as
provided herein) at which a holder of a Right may subscribe for
one-hundredth of a Series A First Preference Share (subject to
adjustment as provided herein) upon exercise of a Right, which price
shall initially be $90.
"Right" means a right to subscribe, upon the terms and subject
to the conditions hereinafter set forth, for one-hundredth of a
Series A First Preference Share (subject to adjustment as provided
herein) and "Rights" shall be construed accordingly.
"Series A First Preference Shares" means the Series A First
Preference Shares of nominal value $1.00 each of the Company,
comprising a series of the Convertible Cumulative Redeemable
Preference Shares of nominal value $1.00 each of the Company, having
the terms set forth in the extract from the minutes of a meeting of
the Board of Directors of the Company held on November 4, 1996
attached as an appendix to the Bye-laws of the Company and also
attached hereto as Exhibit A.
"Section 11(a)(ii) Event" means any event described in the
first clause of Section 11(a)(ii).
"Section 13 Event" means any event described in clauses (x),
(y) or (z) of Section 13(a).
"Securities Act" means the United States Securities Act of
1933, as amended.
"Share Acquisition Date" means the date of the first public
announcement (including the filing of a report on Schedule 13D under
the Exchange Act (or any comparable or successor report)) by the
Company or an Acquiring Person indicating that an Acquiring Person
has become such.
"Subsidiary" shall have the same meaning as defined for the
purposes of the Bye-laws of the Company.
"Trading Day" means a day on which the principal national
securities exchange on which the Common Shares are listed or admitted
to trading is open for the transaction of business or, if the Common
Shares are not listed or admitted to trading on any national
securities exchange, a Business Day.
"Triggering Event" means any Section 11(a)(ii) Event or any
Section 13 Event.
"$" means United States dollars.
"United States" means the United States of America.
Section 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as rights agent in respect of the Rights in
accordance with the terms and conditions hereof, and the Rights Agent hereby
accepts such appointment. The Company may from time to time appoint such
Co-Rights Agents as it may deem necessary or desirable. If the Company
appoints one or more Co-Rights Agents, the respective duties of the Rights
Agent and any Co-Rights Agents shall be as the Company shall determine.
Section 3. Issue of Right Certificates. (a) Prior to the
Distribution Date, (i) the Rights will be evidenced by the certificates for
the Common Shares and not by separate Right Certificates (as hereinafter
defined) and the registered holders of the Common Shares shall be deemed to be
the registered holders of the associated Rights, and (ii) the Rights will be
transferable only in connection with the transfer of the underlying Common
Shares.
(b) As soon as practicable after the Company has notified the
Rights Agent in writing of the occurrence of the Distribution Date, the
Company will prepare, sign and deliver to the Rights Agent, and the Rights
Agent will send, by first-class, postage prepaid mail, to each record holder
of the Common Shares as of the close of business on the Distribution Date, at
the address of such holder shown on the records of the Company, one or more
Right Certificates evidencing one Right (subject to adjustment as provided
herein) for each Common Share so held. If an adjustment in the number of
Rights per Common Share has been made pursuant to Section 11(p), the Company
shall, at the time of distribution of the Right Certificates, make the
necessary and appropriate rounding adjustments (in accordance with Section
14(a)) so that Right Certificates representing only whole numbers of Rights
are distributed and cash is paid in lieu of any fractional Rights. From and
after the Distribution Date, the Rights will be evidenced solely by such Right
Certificates.
(c) Rights shall be issued in respect of all Common Shares in
issue as of the Record Date or issued after the Record Date but prior to the
earlier of the Distribution Date and the Expiration Date. In addition, in
connection with the issuance of Common Shares following the Distribution Date
and prior to the Expiration Date, the Company (i) shall, with respect to
Common Shares so issued (x) pursuant to the exercise of any share options or
under any employee plan or arrangement or (y) upon the exercise, conversion or
exchange of other securities issued by the Company prior to the Distribution
Date and (ii) may, in any other case, if deemed necessary or appropriate by
the Board of Directors of the Company, issue Right Certificates representing
the appropriate number of Rights in connection with such issue; provided that
no such Right Certificate shall be issued if, and to the extent that, (i) the
Company shall be advised by counsel that such issuance would create a
significant risk of material adverse tax consequences to the Company or the
Person to whom such Right Certificate would be issued or (ii) appropriate
adjustment shall otherwise have been made in lieu of the issue thereof.
(d) Certificates for the Common Shares issued after the Record
Date but prior to the earlier of the Distribution Date and the Expiration Date
shall have impressed on, printed on, written on or otherwise affixed to them
the following legend:
This certificate also evidences certain Rights as set forth in a
Rights Agreement between ADT Limited and Citibank, N.A. dated as of
November 6, 1996 (the "Rights Agreement"), the terms of which are
hereby incorporated herein by reference and a copy of which is on
file at the registered office of the Company. The Company will mail
to the holder of this certificate a copy of the Rights Agreement
without charge promptly after receipt of a written request therefor.
Under certain circumstances, as set forth in the Rights Agreement,
such Rights may be evidenced by separate certificates and no longer
be evidenced by this certificate, may be redeemed or may expire. As
set forth in the Rights Agreement, Rights issued to, or held by, any
Person who is, was or becomes an Acquiring Person or an Affiliate or
Associate thereof (as such terms are defined in the Rights
Agreement), whether currently held by or on behalf of such Person or
by any subsequent holder, may be null and void. Rights shall not be
exerciseable for securities in any jurisdiction if the requisite
qualification in such jurisdiction shall not have been obtained, such
exercise therefor shall not be permitted under applicable law or a
registration statement in respect of such securities shall not have
been declared effective.
Section 4. Form of Right Certificates. (a) The certificates
evidencing the Rights (and the forms of assignment, forms of election and
certificates to be printed on the reverse thereof) (the "Right Certificates")
shall be substantially in the form of Exhibit B hereto and may have such marks
of identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law, rule or regulation or with any rule or
regulation of any stock exchange on which the Rights may from time to time be
listed, or to conform to usage. The Right Certificates, whenever distributed,
shall be dated as of the Record Date.
(b) Any Right Certificate representing Rights beneficially
owned by any Person referred to in clauses (i), (ii) or (iii) of the first
sentence of Section 7(d) shall (to the extent feasible) contain the following
legend:
The Rights represented by this Right Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person
or an Affiliate or Associate of an Acquiring Person (as such terms
are defined in the Rights Agreement). This Right Certificate and the
Rights represented hereby may be or may become null and void in the
circumstances specified in Section 7(d) of such Agreement.
Section 5. Countersignature and Registration. (a) The Right
Certificates shall be executed on behalf of the Company in any manner
permitted by the Bye-laws of the Company. The Right Certificates shall be
manually countersigned by the Rights Agent and shall not be valid for any
purpose unless so countersigned. In case any officer of the Company whose
manual or facsimile signature is affixed to the Right Certificates shall cease
to be such officer of the Company before countersignature by the Rights Agent
and issuance and delivery by the Company, such Right Certificates may,
nevertheless, be countersigned by the Rights Agent and issued and delivered
with the same force and effect as though the Person who signed such Right
Certificates had not ceased to be such officer of the Company. Any Right
Certificate may be signed on behalf of the Company by any Person who, at the
actual date of the execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate, although at the date of
the execution of this Rights Agreement any such Person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will
keep or cause to be kept, at its principal office or offices designated as the
place for surrender of Right Certificates upon exercise, transfer or exchange,
books for registration and transfer of the Right Certificates. Such books
shall show with respect to each Right Certificate the name and address of the
registered holder thereof, the number of Rights indicated on the certificate
and the certificate number.
Section 6. Transfer and Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen Right Certificates. (a) At any time
after the Distribution Date and prior to the Expiration Date, any Right
Certificate or Certificates may, upon the terms and subject to the conditions
set forth below in this Section 6(a), be transferred or exchanged for another
Right Certificate or Certificates evidencing a like number of Rights as the
Right Certificate or Certificates surrendered. Any registered holder desiring
to transfer, split up, combine or exchange any Right Certificate or
Certificates shall make such request in writing delivered to the Rights Agent
and shall surrender such Right Certificate or Certificates (with, in the case
of a transfer, the form of assignment and certificate on the reverse side
thereof duly executed) to the Rights Agent at the principal office or offices
of the Rights Agent designated for such purpose. Neither the Rights Agent nor
the Company shall be obligated to take any action whatsoever with respect to
the transfer of any such surrendered Right Certificate or Certificates until
the registered holder of the Rights has complied with the requirements of
Section 7(e). Upon satisfaction of the foregoing requirements, the Rights
Agent shall, subject to Sections 4(b), 7(d), 14 and 24, countersign and
deliver to the Person entitled thereto a Right Certificate or Certificates as
so requested. The Company may require payment of a sum sufficient to cover
any transfer tax or other governmental charge that may be imposed in connection
with any transfer or exchange of any Right Certificate or Certificates.
(b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Right Certificate, and, in case of loss, theft or destruction,
of indemnity or security reasonably satisfactory to them, and, at the
Company's request, reimbursement to the Company and the Rights Agent of all
reasonable expenses incidental thereto, and upon surrender to the Rights Agent
and cancellation of the Right Certificate if mutilated, the Company will issue
and deliver a new Right Certificate of like tenor to the Rights Agent for
countersignature and delivery to the registered owner in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date
of Rights. (a) The registered holder of any Right Certificate may exercise
the Rights evidenced thereby (except as otherwise provided herein, including
Sections 7(d) and (e), 9(c), 11(a)) in whole or in part at any time after the
Distribution Date and prior to the Expiration Date upon surrender of the Right
Certificate, with the form of election and the certificate on the reverse side
thereof duly executed, to the Rights Agent at the principal office or offices
of the Rights Agent designated for such purpose, together with payment (in
lawful money of the United States by certified check or bank draft payable to
the order of the Company) of the aggregate Purchase Price with respect to the
Rights then to be exercised and an amount equal to any applicable transfer tax
or other governmental charge.
(b) Upon satisfaction of the requirements of Section 7(a) and
subject to Section 20(k), the Rights Agent shall thereupon promptly (i)(A)
requisition from the registrar of the Company or any transfer agent of the
Series A First Preference Shares (or make available, if the Rights Agent is
the registrar of the Company or the transfer agent therefor) certificates for
the total number of Series A First Preference Shares to be subscribed (and the
Company hereby irrevocably authorizes the Rights Agent to instruct the
Company's registrar or its transfer agent to comply with all such requests) or
(B) if the Company shall have elected to deposit the Series A First Preference
Shares issuable upon exercise of the Rights with a depositary agent,
requisition from the depositary agent depositary receipts representing such
number of Series A First Preference Shares as are to be subscribed (in which
case certificates for the Series A First Preference Shares represented by such
receipts shall be deposited by the registrar of the Company or transfer agent
with the depositary agent) and the Company will direct the depositary agent to
comply with such request, (ii) requisition from the Company the amount of
cash, if any, to be paid in lieu of issuance of fractional shares in
accordance with Section 14 and (iii) after receipt of such certificates or
depositary receipts and cash, if any, cause the same to be delivered to or
upon the order of the registered holder of such Right Certificate (with such
certificates or receipts registered in such name or names as may be designated
by such holder). If the Company is obligated to deliver Common Shares, other
securities or assets pursuant to this Agreement, the Company will make all
arrangements necessary so that such other securities and assets are available
for delivery by the Rights Agent, if and when appropriate.
(c) In case the registered holder of any Right Certificate
shall exercise less than all the Rights evidenced thereby, a new Right
Certificate evidencing the number of Rights remaining unexercised shall be
issued by the Rights Agent and delivered to, or upon the order of, the
registered holder of such Right Certificate, registered in such name or names
as may be designated by such holder, subject to the provisions of Section 14.
(d) Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of a Section 11(a)(ii) Event,
any Rights beneficially owned by (i) an Acquiring Person or an Associate or
Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or
of any such Associate or Affiliate) who becomes a transferee after the
Acquiring Person becomes such or (iii) a transferee of an Acquiring Person (or
of any such Associate or Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and receives such Rights
pursuant to either (A) a transfer (whether or not for consideration) from the
Acquiring Person (or any such Associate or Affiliate) to holders of equity
interests in such Acquiring Person (or in any such Associate or Affiliate) or
to any Person with whom the Acquiring Person (or any such Associate or
Affiliate) has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer which a majority of the
Continuing Directors has determined is part of a plan, arrangement or
understanding which has as a primary purpose or effect the avoidance of this
Section 7(d) shall become null and void without any further action, and no
holder of such Rights shall have any rights whatsoever with respect to such
Rights, whether under any provision of this Agreement or otherwise. The
Company shall use all reasonable efforts to insure that the provisions of this
Section 7(d) and Section 4(b) are complied with, but shall have no liability
to any holder of Right Certificates or other Person as a result of its failure
to make any determinations with respect to an Acquiring Person or its
Affiliates and Associates or any transferee of any of them hereunder.
(e) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder of Rights upon the
occurrence of any purported transfer pursuant to Section 6 or exercise
pursuant to this Section 7 unless such registered holder (i) shall have
completed and signed the certificate contained in the form of assignment or
form or election, as the case may be, set forth on the reverse side of the
Right Certificate surrendered for such transfer or exercise, as the case may
be, (ii) shall not have indicated an affirmative response to clause 1 or 2
thereof and (iii) shall have provided such additional evidence of the identity
of the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request.
Section 8. Cancellation and Destruction of Right Certificates.
All Right Certificates surrendered for exercise or transfer shall, if
surrendered to the Company or to any of its agents, be delivered to the Rights
Agent for cancellation or in cancelled form, or, if surrendered to the Rights
Agent, shall be cancelled by it, and no Right Certificates shall be issued in
lieu thereof except as expressly permitted by this Agreement. The Company
shall deliver to the Rights Agent for cancellation, and the Rights Agent shall
cancel and retire, any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall
deliver all cancelled Right Certificates to the Company, or shall, at the
written request of the Company, destroy such cancelled Right Certificates, and
in such case shall deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Shares. (a) The
Company covenants and agrees that it will cause to be reserved and kept
available a number of Series A First Preference Shares which are authorized
but not issued or otherwise reserved for issuance sufficient to permit the
exercise in full of all outstanding Rights as provided in this Agreement.
(b) So long as any Series A First Preference Shares issuable
upon the exercise of Rights may be listed on any national securities exchange,
the Company shall use its best efforts to cause, from and after such time as
the Rights become exercisable, all securities reserved for such issue to be
listed on any such exchange upon official notice of issuance upon such
exercise.
(c) The Company shall use its best efforts (i) to file, as
soon as practicable following the earliest date after the occurrence of a
Section 11(a)(ii) Event as of which the consideration to be delivered by the
Company upon exercise of the Rights has been determined in accordance with
Section 11(a)(iii), or as soon as is required by law following the
Distribution Date, as the case may be, a registration statement under the
Securities Act with respect to the securities issuable upon exercise of the
Rights, (ii) to cause such registration statement to become effective as soon
as practicable after such filing and (iii) to cause such registration
statement to remain effective (with a prospectus at all times meeting the
requirements of the Securities Act) until the earlier of (A) the date as of
which the Rights are no longer exercisable for such securities and (B) the
Expiration Date. The Company will also take such action as may be appropriate
under, or to ensure compliance with, the laws of Bermuda, the federal
securities laws of the United States and blue sky laws of the various states
of the United States in connection with the exercisability of the Rights. The
Company may temporarily suspend, for a period of time not to exceed 90 days
after the date set forth in clause (i) of the first sentence of this Section
9(c), the exercisability of the Rights in order to prepare and file such
registration statement and permit it to become effective. Upon any such
suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a
public announcement at such time as the suspension is no longer in effect.
(d) Notwithstanding any such provision of this Agreement to
the contrary, the Rights shall not be exercisable for securities in any
jurisdiction if the requisite qualification in such jurisdiction shall not
have been obtained, such exercise therefor shall not be permitted under
applicable law or a registration statement in respect of such securities shall
not have been declared effective. In particular, the Rights do not constitute
an offer to, and may not be exercised by, any Person in the United Kingdom (a
"UK Person") unless and until, or to the extent that, a majority of the
Continuing Directors determine that any securities which would be acquired on
the exercise of any Rights by a UK Person (or by UK Persons generally) may
lawfully be offered to that UK Person (or to UK Persons generally). The
Company shall use its reasonable endeavours to prepare and publish, as soon as
practicable after the Distribution Date (if and to the extent that such steps
have not previously been taken), a prospectus or other appropriate documents
and/or take such other steps as a majority of the Continuing Directors deem
expedient under applicable laws in the United Kingdom in order to extend the
offer of such securities to UK Persons generally.
If and to the extent that a majority of the Continuing Directors
determine that compliance with the laws of the United Kingdom or any other
territory would be impracticable or unduly onerous in order for the securities
which would be acquired on the exercise of any Rights lawfully to be offered
within that territory, a majority of the Continuing Directors may arrange for
the securities which would otherwise be issued on the exercise of Rights by
Persons in the relevant territory or territories ("Excluded Persons") to be
allotted or issued to some other person nominated by a majority of the
Continuing Directors for the purpose on terms that:
(x) such securities shall be sold in the market or otherwise for
the benefit of the Excluded Persons, if they can be sold at a price
in excess of the total Purchase Price referable to such securities
and the expenses of sale; and
(y) the proceeds of sale, after deducting a sum equal to the total
Purchase Price and expenses of sale, will be distributed to the
Excluded Persons in the proportions to which, but for the provisions
of this paragraph, they would otherwise have been entitled to
exercise Rights, provided that no distribution need be made to any
Excluded Person of a sum of less than $5 (any such sums being payable
to the Company for its own benefit).
(e) The Company covenants and agrees that it will take all
such action as may be necessary to ensure that all Series A First Preference
Shares issuable upon exercise of Rights shall, at the time of allotment of
such securities (subject to payment of the Purchase Price), be duly and
validly authorized and issued fully paid or credited as fully paid and shall
rank pari passu in all respects with all other Series A First Preference Shares
in issue at that time provided that the Company shall not be obligated to
issue a Series A First Preference Share pursuant to any obligation contained
or referred to in this Agreement if such issue would require the Company to
issue that Series A First Preference Share for a Purchase Price less than the
nominal value of such Series A First Preference Share on the date of issue
thereof.
(f) The Company further covenants and agrees that it will pay
when due and payable any and all Bermuda, United States federal and state
transfer taxes and other governmental charges which may be payable in respect
of the issuance or delivery of the Right Certificates and of any certificates
for Series A First Preference Shares upon the exercise of Rights. The Company
shall not, however, be required to pay any transfer tax or other governmental
charge which may be payable in respect of any transfer involved in the
issuance or delivery of any Right Certificates or of any certificates for
Series A First Preference Shares to a Person other than the registered holder
of the applicable Right Certificate, and prior to any such transfer, issuance
or delivery any such tax or other governmental charge shall have been paid by
the holder of such Right Certificate or it shall have been established to the
Company's satisfaction that no such tax or other governmental charge is due.
Section 10. Series A First Preference Shares Record Date.
Each Person (other than the Company) in whose name any certificate for Series
A First Preference Shares is issued upon the exercise of Rights shall for all
purposes be deemed to have become the holder of record of such Series A First
Preference Shares represented thereby on the date upon which the Right
Certificate evidencing such Rights was duly surrendered and payment of the
Purchase Price (and any transfer taxes or other governmental charges) was
made; provided that if the date of such surrender and payment is a date upon
which the transfer books of the Company relating to the Series A First
Preference Shares are closed, such Person shall be deemed to have become the
record holder of such shares on the next succeeding Business Day on which the
applicable transfer books of the Company are open. Prior to the exercise of
the Rights evidenced thereby, the holder of a Right Certificate shall not be
entitled to any rights of a shareholder of the Company with respect to shares
for which the Rights shall be exercisable, including the right to vote, to
receive dividends or other distributions or to exercise any preemptive rights,
and shall not be entitled to receive any notice of any proceedings of the
Company except as provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind of
Shares or Number of Rights. (a)(i) If the Company shall at any time after
the date of this Agreement (A) pay a dividend on the Series A First Preference
Shares payable in Series A First Preference Shares, (B) subdivide the Series A
First Preference Shares into a greater number of shares, (C) consolidate the
outstanding Series A First Preference Shares into a smaller number of shares
or (D) issue any shares of its capital stock in a reclassification of the
Series A First Preference Shares (including any such reclassification in
connection with a consolidation or amalgamation involving the Company), the
Purchase Price in effect immediately prior to the record date for such
dividend or of the effective date of such subdivision, consolidation or
reclassification, and the number and kind of Series A First Preference Shares
or other capital stock issuable on such date shall be proportionately adjusted
so that each holder of a Right shall (except as otherwise provided herein,
including Section 7(d)) thereafter be entitled to receive, upon exercise
thereof at the Purchase Price in effect immediately prior to such date, the
aggregate number and kind of Series A First Preference Shares or other capital
stock, as the case may be, which, if such Right had been exercised immediately
prior to such date and at a time when the applicable transfer books of the
Company were open, such holder would have been entitled to receive upon such
exercise and by virtue of such dividend, subdivision, consolidation or
reclassification. If an event occurs which requires an adjustment under both
this Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in
this Section 11(a)(i) shall be in addition to, and shall be made prior to, any
adjustment required pursuant to Section 11(a)(ii).
(ii) If any Person, alone or together with its Affiliates and
Associates, shall, at any time after the date of this Agreement, become an
Acquiring Person, then proper provision shall promptly be made so that each
holder of a Right shall (except as otherwise provided herein, including
Section 7(d)) thereafter be entitled to receive, upon exercise thereof at the
Purchase Price in effect immediately prior to the first occurrence of a
Section 11(a)(ii) Event, in lieu of Series A First Preference Shares, such
number of duly authorized, validly issued and fully paid Common Shares of the
Company (such shares being referred to herein as the "Adjustment Shares") as
shall be equal to the result obtained by dividing
(x) the product obtained by multiplying the Purchase Price in
effect immediately prior to the first occurrence of a Section
11(a)(ii) Event by the number of one-hundredths of a Series A First
Preference Share for which a Right was exercisable immediately prior
to such first occurrence (such product being thereafter referred to
as the "Purchase Price" for each Right and for all purposes of this
Agreement) by
(y) 50% of the current market price (determined pursuant to
Section 11(d)(i)) per Common Share on the date of such first
occurrence;
provided that if the transaction that would otherwise give rise to the
foregoing adjustment is also subject to the provisions of Section 13, then
only the provisions of Section 13 shall apply and no adjustment shall be made
pursuant to this Section 11(a)(ii); and
provided further that the Company shall not be obligated to issue a Common
Share pursuant to this Section 11(a)(ii) if such issue would require the
Company to issue that Common Share for a Purchase Price less than the nominal
value of such Common Share on the date of issue thereof and in such event a
Person electing to receive such Common Share pursuant to this Section
11(a)(ii) shall be deemed to have elected to receive Series A First Preference
Shares.
(iii) If the number of Common Shares which are authorized by the
Company's Memorandum of Association but not outstanding or reserved for
issuance other than upon exercise of the Rights is not sufficient to permit
the exercise in full of the Rights in accordance with Section 11(a)(ii), the
Company shall, with respect to each Right, make adequate provision to
substitute for the Adjustment Shares, upon payment of the Purchase Price then
in effect, (A) (to the extent available) Common Shares and then, (B) (to the
extent available) other equity securities of the Company which a majority of
the Continuing Directors has determined to be essentially equivalent to Common
Shares in respect to dividend, capital and voting rights (such securities
being referred to herein as "common share equivalents") and then, if
necessary, (C) other equity or debt securities of the Company, cash or other
assets, a reduction in the Purchase Price or any combination of the foregoing,
having an aggregate value (as determined by a majority of the Continuing
Directors based upon the advice of an internationally recognized investment
banking firm selected by a majority of the Continuing Directors) equal to the
value of the Adjustment Shares; provided that (x) the Company may, and (y) if
the Company shall not have made adequate provision as required above to
deliver value within 30 days following the later of the first occurrence of a
Section 11(a)(ii) Event and the first date that the right to redeem the Rights
pursuant to Section 23 shall expire, then the Company shall be obligated to,
deliver, upon the surrender for exercise of a Right and without requiring
payment of the Purchase Price, (1) (to the extent available) Common Shares and
then (2) (to the extent available) common share equivalents and then, if
necessary, (3) other equity or debt securities of the Company, cash or other
assets or any combination of the foregoing, having an aggregate value (as
determined by a majority of the Continuing Directors based upon the advice of
an internationally recognized investment banking firm selected by a majority
of the Continuing Directors) equal to the excess of the value of the Adjustment
Shares over the Purchase Price. If a majority of the Continuing Directors of
the Company shall determine in good faith that it is likely that sufficient
additional Common Shares could be authorized for issuance upon exercise in
full of the Rights, the 30 day period set forth above (such period, as it may
be extended, being referred to herein as the "Substitution Period") may be
extended to the extent necessary, but not more than 90 days following the
first occurrence of a Section 11(a)(ii) Event, in order that the Company may
seek shareholder approval for the authorization of such additional shares. To
the extent that the Company determines that some action is to be taken
pursuant to the first and/or second sentence of this Section 11(a)(iii), the
Company (X) shall provide, subject to Section 7(d), that such action shall
apply uniformly to all outstanding Rights and (Y) may suspend the
exercisability of the Rights until the expiration of the Substitution Period
in order to seek any authorization of additional shares and/or to decide the
appropriate form and value of any consideration to be delivered as referred to
in such first and/or second sentence. If any such suspension occurs, the
Company shall issue a public announcement stating that the exercisability of
the Rights has been temporarily suspended, as well as a public announcement at
such time as the suspension is no longer in effect. For purposes of this
Section 11(a)(iii), the value of the Common Shares shall be the current market
price per Common Share (as determined pursuant to Section 11(d)) on the later
of the date of the first occurrence of a Section 11(a)(ii) Event and the first
date that the right to redeem the Rights pursuant to Section 23 shall expire;
any common share equivalent shall be deemed to have the same value as the
Common Shares on such date; and the value of other securities or assets shall
be determined pursuant to Section 11(d)(iii).
(b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Series A First
Preference Shares entitling them to subscribe for (for a period expiring
within 45 calendar days after such record date) Series A First Preference
Shares (or securities having the same rights, privileges and preferences as
the Series A First Preference Shares ("equivalent preference shares")) or
securities convertible into or exercisable for Series A First Preference
Shares (or equivalent preference shares) at a price per share of Series A
First Preference Shares (or equivalent preference shares) (in each case,
taking account of any conversion or exercise price) less than the current
market price (as determined pursuant to Section 11(d)) per Series A First
Preference Share on such record date, the Purchase Price to be in effect after
such record date shall be determined by multiplying the Purchase Price in
effect immediately prior to such date by a fraction, the numerator of which
shall be the number of Series A First Preference Shares outstanding on such
record date, plus the number of Series A First Preference Shares which the
aggregate price (taking account of any conversion or exercise price) of the
total number of Series A First Preference Shares (and/or equivalent preference
shares) so to be offered would purchase at such current market price and the
denominator of which shall be the number of Series A First Preference Shares
outstanding on such record date plus the number of additional Series A First
Preference Shares (and/or equivalent preference shares) so to be offered. In
case such subscription price may be paid by delivery of consideration part or
all of which shall be in a form other than cash, the value of such
consideration shall be as determined in good faith by the Board of Directors
of the Company, whose determination shall be described in a statement filed
with the Rights Agent and shall be conclusive for all purposes. Such
adjustment shall be made successively whenever such a record date is fixed,
and if such rights, options or warrants are not so issued, the Purchase Price
shall be adjusted to be the Purchase Price which would then be in effect if
such record date had not been fixed.
(c) In case the Company shall fix a record date for the making
of a distribution to all holders of Series A First Preference Shares
(including any such distribution made in connection with a consolidation or
amalgamation involving the Company) of evidences of indebtedness, equity
securities other than Series A First Preference Shares, assets (other than a
regular periodic cash dividend out of the earnings or retained earnings of the
Company) or rights, options or warrants (excluding those referred to in
Section 11(b)), the Purchase Price to be in effect after such record date shall
be determined by multiplying the Purchase Price in effect immediately prior to
such record date by a fraction, the numerator of which shall be the current
market price (as determined pursuant to Section 11(d)) per Series A First
Preference Share on such record date, less the value (as determined pursuant
to Section 11(d)(iii)) of such evidences of indebtedness, equity securities,
assets, rights, options or warrants so to be distributed with respect to one
Series A First Preference Share and the denominator of which shall be such
current market price per Series A First Preference Share. Such adjustment
shall be made successively whenever such a record date is fixed, and if such
distribution is not so made, the Purchase Price shall be adjusted to be the
Purchase Price which would then be in effect if such record date had not been
fixed.
(d)(i) For the purpose of any computation hereunder other than
computations made pursuant to Section 11(a)(iii) or 14, the "current market
price" per Common Share on any date shall be deemed to be the average of the
daily closing prices per share of such Common Shares for the 30 consecutive
Trading Days immediately prior to such date; for purposes of computations made
pursuant to Section 11(a)(iii), the "current market price" per Common Share on
any date shall be deemed to be the average of the daily closing prices per
share of such Common Shares for the 10 consecutive Trading Days immediately
following such date; and for purposes of computations made pursuant to Section
14, the "current market price" per Common Share for any Trading Day shall be
deemed to be the closing price per Common Share for such Trading Day; provided
that if the current market price per share of the Common Shares is determined
during a period following the announcement by the issuer of such Common Shares
of (A) a dividend or distribution on such Common Shares payable in shares of
such Common Shares or securities exercisable for or convertible into shares of
such Common Shares (other than the Rights), or (B) any subdivision,
consolidation or reclassification of such Common Shares, and prior to the
expiration of the requisite 30 Trading Day or 10 Trading Day period, as set
forth above, after the ex-dividend date for such dividend or distribution, or
the record date for such subdivision, consolidation or reclassification, then,
and in each such case, the "current market price" shall be properly adjusted
to take into account ex-dividend trading. The closing price for each day
shall be the last sale price, regular way, or, in case no such sale takes
place on such day, the average of the closing bid and asked prices, regular
way, in either case as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to trading on
the New York Stock Exchange or, if the Common Shares are not listed or
admitted to trading on the New York Stock Exchange, on the principal national
securities exchange on which the Common Shares are listed or admitted to
trading or, if the Common Shares are not listed or admitted to trading on any
national securities exchange, the last quoted price or, if not so quoted, the
average of the high bid and low asked prices in the over-the-counter market,
as reported by the National Association of Securities Dealers, Inc. Automated
Quotation System ("NASDAQ") or such other system then in use or, if on any
such date the Common Shares are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Common Shares selected by the Board of
Directors of the Company, or, if at the time of such selection there is an
Acquiring Person, by a majority of the Continuing Directors. If on any such
date no market maker is making a market in the Common Shares, the fair value
of such shares on such date as determined in good faith by the Board of
Directors of the Company (or, if at the time of such determination there is an
Acquiring Person, by a majority of the Continuing Directors) shall be used.
If the Common Shares is not publicly held or not so listed or traded, the
"current market price" per share means the fair value per share as determined
in good faith by the Board of Directors of the Company, or, if at the time of
such determination there is an Acquiring Person, by a majority of the
Continuing Directors, or if there are no Continuing Directors, by an
internationally recognized investment banking firm selected by the Board of
Directors, which determination shall be described in a statement filed with
the Rights Agent and shall be conclusive for all purposes.
(ii) For the purpose of any computation hereunder, the "current
market price" per Series A First Preference Share shall be determined in the
same manner as set forth above for the Common Shares in Section 11(d)(i)
(other than the last sentence thereof). If the current market price per
Series A First Preference Share cannot be determined in such manner, the
"current market price" per Series A First Preference Share shall be
conclusively deemed to be an amount equal to 100 (as such number may be
appropriately adjusted for such events as share subdivisions and
consolidations, scrip dividends and recapitalizations with respect to the
Common Shares occurring after the date of this Agreement) multiplied by the
current market price per Common Share (as determined pursuant to Section
11(d)(i) (other than the last sentence thereof)). If neither the Common
Shares nor the Series A First Preference Shares are publicly held or so listed
or traded, the "current market price" per share of the Series A First
Preference Shares shall be determined in the same manner as set forth in the
last sentence of Section 11(d)(i). For all purposes of this Agreement, the
"current market price" of one-hundredth of a Series A First Preference Share
shall be equal to the "current market price" of one Series A First Preference
Share divided by 100.
(iii) For the purpose of any computation hereunder, the value of
any securities or assets other than Common Shares or Series A First Preference
Shares shall be the fair value as determined in good faith by the Board of
Directors of the Company, or, if at the time of such determination there is an
Acquiring Person, by a majority of the Continuing Directors then in office,
or, if there are no Continuing Directors, by a nationally recognized
investment banking firm selected by the Board of Directors, which
determination shall be described in a statement filed with the Rights Agent
and shall be conclusive for all purposes.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such adjustment
would require an increase or decrease of at least 1% in the Purchase Price;
provided that any adjustments which by reason of this Section 11(e) are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 11 shall be made
to the nearest cent or to the nearest ten-thousandth of a Common Share or other
share or one-millionth of a Series A First Preference Share, as the case may
be.
(f) If at any time, as a result of an adjustment made pursuant
to Section 11(a)(ii) or Section 13(a), the holder of any Right shall be
entitled to receive upon exercise of such Right any shares of capital stock
other than Series A First Preference Shares, thereafter the number of such
other shares so receivable upon exercise of any Right and the Purchase Price
thereof shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with respect to
the Series A First Preference Shares contained in Section 11(a), (b), (c),
(e), (g), (h), (i), (j), (k) and (m), and the provisions of Sections 7, 9,
10, 13 and 14 with respect to the Series A First Preference Shares shall
apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to
any adjustment made hereunder shall evidence the right to purchase, at the
Purchase Price then in effect, the then applicable number of one-hundredths of
a Series A First Preference Share and other capital stock of the Company
issuable from time to time hereunder upon exercise of the Rights, all subject
to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in Section 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to subscribe, at the adjusted Purchase Price,
that number of one-hundredths of a Series A First Preference Share (calculated
to the nearest one-millionth) obtained by (i) multiplying (x) the number of
one-hundredths of a share for which a Right was exercisable immediately prior
to this adjustment by (y) the Purchase Price in effect immediately prior to
such adjustment of the Purchase Price and (ii) dividing the product so
obtained by the Purchase Price in effect immediately after such adjustment of
the Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in lieu of
any adjustment in the number of one-hundredths of a Series A First Preference
Share issuable upon the exercise of a Right. Each of the Rights outstanding
after such adjustment of the number of Rights shall be exercisable for the
number of one-hundredths of a Series A First Preference Share for which such
Right was exercisable immediately prior to such adjustment. Each Right held
of record prior to such adjustment of the number of Rights shall become that
number of Rights (calculated to the nearest ten-thousandth) obtained by
dividing the Purchase Price in effect immediately prior to adjustment of the
Purchase Price by the Purchase Price in effect immediately after adjustment of
the Purchase Price. The Company shall make a public announcement of its
election to adjust the number of Rights, indicating the record date for the
adjustment, and, if known at the time, the amount of the adjustment to be
made. This record date may be the date on which the Purchase Price is
adjusted or any day thereafter, but, if the Right Certificates have been
issued, shall be at least 10 days later than the date of the public
announcement. If Right Certificates have been issued, upon each adjustment of
the number of Rights pursuant to this Section 11(i), the Company shall, as
promptly as practicable, cause to be distributed to holders of record of Right
Certificates on such record date Right Certificates evidencing, subject to
Section 14, the additional Rights to which such holders shall be entitled as a
result of such adjustment, or, at the option of the Company, shall cause to be
distributed to such holders of record in substitution and replacement for the
Right Certificates held by such holders prior to the date of adjustment, and
upon surrender thereof, if required by the Company, new Right Certificates
evidencing all the Rights to which such holders shall be entitled after such
adjustment. Right Certificates so to be distributed shall be issued, executed
and countersigned in the manner provided for herein (and may bear, at the
option of the Company, the adjusted Purchase Price) and shall be registered in
the names of the holders of record of Right Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of one-hundredths of a Series A First Preference Share
issuable upon the exercise of the Rights, the Right Certificates theretofor
and thereafter issued may continue to express the Purchase Price per
one-hundredth of a share and the number of shares which were expressed in the
initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price multiplied by 100 below the nominal value of a
Series A First Preference Share issuable upon exercise of the Rights, the
Company shall take any corporate action which may, in the opinion of its
counsel, be necessary in order that the Company may validly and legally issue
fully paid such number of Series A First Preference Shares at such adjusted
Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record date
the number of Series A First Preference Share or other capital stock of the
Company, if any, issuable upon such exercise over and above the number of
Series A First Preference Shares or other capital stock of the Company, if
any, issuable upon such exercise on the basis of the Purchase Price in effect
prior to such adjustment; provided that the Company shall deliver to such
holder a due bill or other appropriate instrument evidencing such holder's
right to receive such additional shares upon the occurrence of the event
requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such reductions in the
Purchase Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that it, in its sole discretion, shall
determine to be advisable in order that any consolidation or subdivision of
the Series A First Preference Shares, issuance wholly for cash of any Series
A First Preference Shares at less than the current market price, issuance
wholly for cash of Series A First Preference Shares or securities which by
their terms are convertible into or exercisable for Series A First Preference
Shares, scrip dividends or issuance of rights, options or warrants referred to
in this Section 11, hereafter made by the Company to the holders of its Series
A First Preference Shares, shall not be taxable to such shareholders.
(n) The Company covenants and agrees that it will not at any
time after the Distribution Date (i) consolidate, amalgamate or otherwise
combine under any applicable law with or (ii) sell or otherwise transfer
(and/or permit any of its Subsidiaries to sell or otherwise transfer), in one
transaction or a series of related transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the Company and its
Subsidiaries, taken as a whole, to any other Person or Persons if (x) at the
time of or immediately after such consolidation, amalgamation, combination or
sale there are any rights, warrants or other instruments or securities
outstanding or any agreements or arrangements in effect which would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights or (y) prior to, simultaneously with or immediately
after such consolidation, amalgamation, combination or sale, the shareholders
of a Person who constitutes, or would constitute, the "Principal Party" for
the purposes of Section 13 shall have received a distribution of Rights
previously owned by such Person or any of its Affiliates and Associates.
(o) The Company covenants and agrees that after the
Distribution Date, it will not, except as permitted by Sections 23 and 26,
take (or permit any Subsidiary to take) any action if at the time such action
is taken it is reasonably foreseeable that such action will substantially
diminish or otherwise eliminate the benefits intended to be afforded by the
Rights.
(p) Notwithstanding anything in this Agreement to the
contrary, if at any time after the date hereof and prior to the Distribution
Date the Company shall (i) pay a dividend on the outstanding Common Shares
payable in Common Shares, (ii) subdivide the Common Shares into a larger
number of shares or (iii) consolidate the Common Shares into a smaller number
of shares, the number of Rights associated with each Common Share then
outstanding, or issued or delivered thereafter as contemplated by Section 3(c),
shall be proportionately adjusted so that the number of Rights thereafter
associated with each Common Share following any such event shall equal the
result obtained by multiplying the number of Rights associated with each
Common Share immediately prior to such event by a fraction the numerator of
which shall be the total number of Common Shares outstanding immediately prior
to the occurrence of the event and the denominator of which shall be the total
number of Common Shares outstanding immediately following the occurrence of
such event.
Section 12. Certificate of Adjusted Purchase Price or Number
of Shares. Whenever an adjustment is made as provided in Sections 11 and 13,
the Company shall (a) promptly prepare a certificate setting forth such
adjustment and a brief statement of the facts accounting for such adjustment,
(b) promptly deliver to the Rights Agent, the registrar of the Company and
each transfer agent for the Series A First Preference Shares and the Common
Shares a copy of such certificate and (c) mail a brief summary thereof to each
holder of a Right Certificate (or, if prior to the Distribution Date, to each
holder of a certificate representing Common Shares) in the manner set forth in
Section 25. The Rights Agent shall be fully protected in relying on any such
certificate and on any adjustment therein contained and shall not be deemed to
have knowledge of such adjustment unless and until it shall have actually
received such certificate.
Section 13. Consolidation, Amalgamation or Sale or Transfer of
Assets or Earning Power. (a) If, following the Share Acquisition Date,
directly or indirectly,
(x) the Company shall under any applicable law consolidate
with, amalgamate, or otherwise combine with, any other Person, and
the Company shall not be the continuing or surviving corporation of
such consolidation, amalgamation or combination,
(y) any Person shall under any applicable law amalgamate or
otherwise combine with the Company, and the Company shall be a
continuing or surviving corporation of such amalgamation or
combination and, in connection with such amalgamation or combination,
all or part of the outstanding Common Shares shall be changed into or
exchanged for other stock or securities of the Company or any other
Person, cash or any other property, or
(z) the Company and/or one or more of its Subsidiaries shall
sell or otherwise transfer, in one transaction or a series of related
transactions, assets or earning power aggregating more than 50% of
the assets or earning power of the Company and its Subsidiaries,
taken as a whole, to any other Person or Persons,
then, and in each such case, proper provision shall promptly be made so that
(1) each holder of a Right shall thereafter be entitled to
receive, upon exercise thereof at the Purchase Price in effect immediately
prior to the first occurrence of any Triggering Event, such number of duly
authorized, validly issued and fully paid shares of freely tradeable Common
Shares of the Principal Party (as hereinafter defined), not subject to any
rights of call or first refusal, liens, encumbrances or other claims, as shall
be equal to the result obtained by dividing
(A) the product obtained by multiplying the Purchase Price in
effect immediately prior to the first occurrence of any Triggering
Event by the number of one one-hundredths of a Series A First
Preference Share for which a Right was exercisable immediately prior
to such first occurrence (such product being thereafter referred to
as the "Purchase Price" for each Right and for all purposes of this
Agreement) by
(B) 50% of the current market price (determined pursuant to
Section 11(d)(i)) per share of the Common Shares of such Principal
Party on the date of consummation of such consolidation,
amalgamation, combination, sale or transfer;
(2) the Principal Party shall thereafter be liable for, and
shall assume, by virtue of such consolidation, amalgamation, combination, sale
or transfer, all the obligations and duties of the Company pursuant to this
Agreement;
(3) the term "Company" shall thereafter be deemed to refer to
such Principal Party, it being specifically intended that the provisions of
Section 11 shall apply only to such Principal Party following the first
occurrence of a Section 13 Event; and
(4) such Principal Party shall take such steps (including the
authorization and reservation of a sufficient number of shares of its Common
Shares to permit exercise of all outstanding Rights in accordance with this
Section 13(a)) in connection with the consummation of any such transaction as
may be necessary to assure that the provisions hereof shall thereafter be
applicable, as nearly as reasonably may be, in relation to the shares of its
Common Shares thereafter deliverable upon the exercise of the Rights.
(b) "Principal Party" means
(i) in the case of any transaction described in Section
13(a)(x) or (y), the Person that is the issuer of any securities into
which Common Shares of the Company are converted in such
amalgamation, consolidation or combination, and if no securities are
so issued, the Person that survives or results from such
amalgamation, consolidation or combination; and
(ii) in the case of any transaction described in Section
13(a)(z), the Person that is the party receiving the greatest portion
of the assets or earning power transferred pursuant to such
transaction or transactions;
provided that in any such case, (A) if the Common Shares of such Person is not
at such time and has not been continuously over the preceding 12-month period
registered under Section 12 of the Exchange Act, and such Person is a direct
or indirect Subsidiary of another Person the Common Shares of which is and has
been so registered, "Principal Party" shall refer to such other Person; and
(B) in case such Person is a Subsidiary, directly or indirectly, of more than
one Person, the Common Shares of two or more of which are and have been so
registered, "Principal Party" shall refer to whichever of such Persons is the
issuer of the Common Shares having the greatest aggregate market value.
(c) The Company shall not consummate any such consolidation,
amalgamation, combination, sale or transfer unless the Principal Party shall
have a sufficient number of authorized shares of its Common Shares which are
not outstanding or otherwise reserved for issuance to permit the exercise in
full of the Rights in accordance with this Section 13 and unless prior thereto
the Company and such Principal Party shall have executed and delivered to the
Rights Agent a supplemental agreement providing for the terms set forth in
Section 13(a) and (b) and providing that, as soon as practicable after the
date of any consolidation, amalgamation, combination, sale or transfer
mentioned in Section 13(a), the Principal Party, at its own expense, will
(i) prepare and file a registration statement under the
Securities Act with respect to the securities issuable upon exercise
of the Rights, and will use its best efforts to cause such
registration statement (A) to become effective as soon as practicable
after such filing and (B) to remain effective (with a prospectus at
all times meeting the requirements of the Securities Act) until the
Expiration Date,
(ii) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which
comply in all respects with the requirements for registration on Form
10 under the Exchange Act, and
(iii) take all such other steps as are required under
applicable laws in the United States and in other relevant
jurisdictions to enable the exercise in full of the Rights in
accordance with this Section 13.
The provisions of this Section 13 shall similarly apply to successive
amalgamations, consolidations, combinations, sales or other transfers. If any
Section 13 Event shall occur at any time after the occurrence of a Section
11(a)(ii) Event, the Rights which have not theretofore been exercised shall
thereafter become exercisable in the manner described in Section 13(a).
Section 14. Prohibition on issue of Fractional Rights and
Fractional Shares. (a) The Company shall not be required to issue fractions
of Rights, except prior to the Distribution Date as provided in Section 11(p),
or to distribute Right Certificates which evidence fractional Rights. In lieu
of any such fractional Rights, the Company shall pay to the registered holders
of the Right Certificates with regard to which such fractional Rights would
otherwise be issuable an amount in cash equal to the same fraction of the
current market price of a whole Right. For purposes of this Section 14(a),
the current market price of a whole Right shall be the closing price of a
Right for the Trading Day immediately prior to the date on which such
fractional Rights would otherwise have been issuable. The closing price of a
Right for any day shall be the last sale price, regular way, or, in case no
such sale takes place on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the Rights are not listed or
admitted to trading on the New York Stock Exchange, on the principal national
securities exchange on which the Rights are listed or admitted to trading or,
if the Rights are not listed or admitted to trading on any national securities
exchange, the last quoted price, or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by NASDAQ
or such other system then in use or, if on any such date the Rights are not
quoted by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in the
Rights selected by the Board of Directors of the Company, or, if at the time
of such selection there is an Acquiring Person, by a majority of the
Continuing Directors. If on any such date no such market maker is making a
market in the Rights, the current market price of the Rights on such date
shall be as determined in good faith by the Board of Directors of the Company,
or, if at the time of such determination there is an Acquiring Person, by a
majority of the Continuing Directors.
(b) The Company shall not be required to issue fractions of
Series A First Preference Shares upon exercise of the Rights or to distribute
certificates which evidence fractional Series A First Preference Shares. In
lieu of any such fractional Series A First Preference Shares, the Company
shall pay to the registered holders of Right Certificates at the time such
Rights are exercised as herein provided an amount in cash equal to the same
fraction of the current market price of a Series A First Preference Share, as
applicable. For purposes of this Section 14(b), the current market price of a
Series A First Preference Share shall be the closing price of a Series A First
Preference Share (as determined pursuant to Section 11(d)) for the Trading Day
immediately prior to the date of such exercise.
(c) Following the occurrence of any Triggering Event, the
Company shall not be required to issue fractions of Common Shares upon
exercise of the Rights or to distribute certificates which evidence fractional
Common Shares. In lieu of fractional Common Shares, the Company shall pay to
the registered holders of Right Certificates at the time such Rights are
exercised or exchanged as herein provided an amount in cash equal to the same
fraction of the current market price of a share of Common Shares. For
purposes of this Section 14(c), the current market price of a share of Common
Shares shall be the closing price of a share of Common Shares (as determined
pursuant to Section 11(d)(i)) for the Trading Day immediately prior to the
date of such exercise or exchange.
(d) The holder of a Right by the acceptance or exercise of a
Right shall be deemed to have waived his right to receive any fractional
Rights or any fractional shares upon exercise of a Right except as permitted
by this Section 14.
Section 15. Rights of Action. All rights of action in respect
of the benefit of the Rights evidenced by this Agreement, except the rights of
action given to the Rights Agent under Section 18 hereof, are vested in the
respective registered holders of the Right Certificates (and, prior to the
Distribution Date, the registered holders of certificates representing Common
Shares); and any registered holder of any Right Certificate (or, prior to the
Distribution Date, of any certificate representing Common Shares), without the
consent of the Rights Agent or of the holder of any other Right Certificate
(or, prior to the Distribution Date, of any certificate representing Common
Shares), may, in his own behalf and for his own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, his right to exercise the Rights
evidenced by such Right Certificate in the manner provided in such Right
Certificate and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and will be entitled to specific performance of the
obligations under, and injunctive relief against actual or threatened
violations of the obligations of, any Person subject to this Agreement.
Section 16. Agreement of Right Holders. Every holder of a
Right by accepting the same consents and agrees with the Company and the
Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of Common Shares;
(b) after the Distribution Date, the Right Certificates are
transferable only on the record books of the Rights Agent if surrendered at
the principal office or offices of the Rights Agent designated for such
purposes, duly endorsed or accompanied by a proper instrument of transfer and
with the appropriate forms and certificates fully executed;
(c) subject to Sections 6 and 7, the Company and the Rights
Agent may deem and treat the Person in whose name a Right Certificate (or,
prior to the Distribution Date, a certificate representing Common Shares) is
registered as the absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the Right
Certificate or the certificate representing Common Shares made by anyone other
than the Company or the Rights Agent) for all purposes whatsoever, and neither
the Company nor the Rights Agent, subject to the last sentence of Section 7(d),
shall be affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any liability to
any holder of a Right or of a beneficial interest in a Right or other Person
as a result of its inability to perform any of its obligations under this
Agreement by reason of any preliminary or permanent injunction or other order,
decree or ruling issued by a court of competent jurisdiction or by a
governmental, regulatory or administrative agency or commission, or any
statute, rule, regulation or executive order promulgated or enacted by any
governmental authority prohibiting or otherwise restraining performance of
such obligation; provided that the Company must use its best efforts to have
any such order, decree or ruling lifted or otherwise overturned as soon as
possible.
Section 17. Right Certificate Holder Not Deemed a Shareholder.
No holder, as such, of any Right Certificate shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of the shares of
capital stock which may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein or in any Right
Certificate be construed to confer upon the holder of any Right Certificate,
as such, any of the rights of a shareholder of the Company or any right to vote
for the election of directors or upon any matter submitted to shareholders at
any meeting thereof, or to give or withhold consent to any corporate action,
or to receive notice of meetings or other actions affecting shareholders
(except as provided in Section 24), or to receive dividends or subscription
rights, or otherwise, unless and until the Right or Rights evidenced by such
Right Certificate shall have been exercised in accordance with the provisions
hereof.
Section 18. Concerning the Rights Agent. (a) The Company
agrees to pay to the Rights Agent reasonable compensation for all services
rendered by it hereunder and, from time to time, on demand of the Rights
Agent, its reasonable expenses and counsel fees and disbursements and other
disbursements incurred in the execution and/or administration of this
Agreement and the exercise and performance of its duties hereunder. The
Company also agrees to indemnify the Rights Agent for, and to hold it harmless
against, any loss, liability, or expense, incurred without negligence, bad
faith or willful misconduct on the part of the Rights Agent, for anything done
or omitted by the Rights Agent in connection with the acceptance and
administration of this Agreement or the exercise or performance of its duties
hereunder, including the costs and expenses of defending against any claim of
liability. The indemnity provided for herein shall survive the expiration of
the Rights and the termination of the Agreement.
(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it in
connection with the administration of this Agreement or the exercise or
performance of its duties hereunder in reliance upon any Right Certificate or
certificate for Common Shares or for other securities of the Company,
instrument of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, instruction, direction, consent, certificate,
statement, or other paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by the proper
Person or Persons.
Section 19. Merger or Consolidation or Change of Name of
Rights Agent. (a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be consolidated, or
any corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the corporate trust or stock transfer business of the Rights
Agent or any successor Rights Agent, shall be the successor to the Rights
Agent under this Agreement without the execution or filing of any paper or any
further act on the part of any of the parties hereto; provided that such
corporation would be eligible for appointment as a successor Rights Agent
under the provisions of Section 21. In case at the time such successor Rights
Agent shall succeed to the agency created by this Agreement, any of the Right
Certificates shall have been countersigned but not delivered, any such
successor Rights Agent may adopt the countersignature of a predecessor Rights
Agent and deliver such Right Certificates so countersigned; and in case at
that time any of the Right Certificates shall not have been countersigned, any
successor Rights Agent may countersign such Right Certificates either in the
name of the predecessor Rights Agent or in the name of the successor Rights
Agent; and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Right Certificates so
countersigned; and in case at that time any of the Right Certificates shall
not have been countersigned, the Rights Agent may countersign such Right
Certificates either in its prior name or in its changed name; and in all such
cases such Right Certificates shall have the full force provided in the Right
Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent
undertakes only those duties and obligations imposed by this Agreement upon
the following terms and conditions, by all of which the Company and the
holders of Right Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may
be legal counsel for the Company), and the opinion of such counsel shall be
full and complete authorization and protection to the Rights Agent as to any
action taken or omitted by it in good faith and in accordance with such
opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any fact
or matter (including, without limitation, the identity of any "Acquiring
Person" and the determination of "current market price") be proved or
established by the Company prior to taking, suffering or omitting to take any
action hereunder, such fact or matter (unless other evidence in respect
thereof be herein specifically prescribed) may be deemed to be conclusively
proved and established by a certificate signed by any Director or the
Secretary or any Assistant Secretary of the Company and delivered to the
Rights Agent; and such certificate shall be full authorization to the Rights
Agent for any action taken, suffered or omitted in good faith by it under the
provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its
own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement or in
the Right Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be deemed
to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Right Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Right Certificate;
nor shall it be responsible for any change in the exercisability of the Rights
(including the Rights becoming void pursuant to Section 7(d)) or any
adjustment in the terms of the Rights (including the manner, method or amount
thereof) provided for in Sections 3, 11, 13 or 23, or the ascertaining of the
existence of facts that would require any such adjustment (except with respect
to the exercise of Rights evidenced by Right Certificates after actual receipt
of the certificate described in Section 12 hereof with respect to such
adjustment); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any
Common Shares or Series A First Preference Shares to be issued pursuant to
this Agreement or any Right Certificate or as to whether any Common Shares or
Series A First Preference Shares will, when issued, be duly authorized,
validly issued and fully paid.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or performing
by the Rights Agent of its obligations under the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder
from any Director or the Secretary or any Assistant Secretary of the Company,
and to apply to such officers for advice or instructions in connection with
its duties, and it shall not be liable for any action taken, suffered or
omitted to be taken by it in good faith in accordance with instructions of any
such officer or for any delay in acting while waiting for those instructions.
Any application by the Rights Agent for written instructions from the Company
may, at the option of the Rights Agent, set forth in writing any action
proposed to be taken or omitted by the Rights Agent under this Agreement and
the date on or after which such action shall be taken or such omission shall
be effective. The Rights Agent shall not be liable for any action taken by,
or omission of, the Rights Agent in accordance with a proposal included in any
such application on or after the date specified in such application (which
date shall not be less than five Business Days after the date any officer of
the Company actually receives such application, unless any such officer shall
have consented in writing to an earlier date) unless, prior to taking any such
action (or the effective date in the case of an omission), the Rights Agent
shall receive written instructions in response to such application specifying
the action to be taken or omitted.
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were
not the Rights Agent under this Agreement. Nothing herein shall preclude the
Rights Agent from acting in any other capacity for the Company or for any
other Person.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either
itself or by or through its attorneys or agents, and the Rights Agent shall
not be answerable or accountable for any act, default, neglect or misconduct
of any such attorneys or agents or for any loss to the Company or to any
holders of Rights resulting from any such act, default, neglect or misconduct,
provided that reasonable care was exercised in the selection and continued
employment thereof.
(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or in the exercise
of its rights if there shall be reasonable grounds for believing that
repayment of such funds or adequate indemnification against such risk or
liability is not reasonably assured to it.
(k) If, with respect to any Right Certificate surrendered to
the Rights Agent for exercise or transfer, the certificate attached to the
form of assignment or form of election, as the cases may be, has either not
been completed or indicates an affirmative response to clause 1 or 2 thereof,
the Rights Agent shall not take any further action with respect to such
requested exercise or transfer without first consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon 30 days' notice in writing mailed to the Company, the registrar
of the Company and to each transfer agent of the Common Shares and Series A
First Preference Shares by registered or certified mail, and, subsequent to
the Distribution Date, to the holders of the Right Certificates by first-class
mail. The Company may remove the Rights Agent or any successor Rights Agent
upon 30 days' notice in writing, mailed to the Rights Agent or successor
Rights Agent, as the case may be, to the registrar of the Company and to each
transfer agent of the Common Shares and Series A First Preference Shares by
registered or certified mail, and, subsequent to the Distribution Date, to the
holders of the Right Certificates by first-class mail. If the Rights Agent
shall resign or be removed or shall otherwise become incapable of acting, the
Company shall appoint a successor to the Rights Agent. If the Company shall
fail to make such appointment within a period of 30 days after giving notice
of such removal or after it has been notified in writing of such resignation
or incapacity by the resigning or incapacitated Rights Agent or by the holder
of a Right Certificate (who shall, with such notice, submit his Right
Certificate for inspection by the Company), then the registered holder of any
Right Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. After appointment, the successor Rights
Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and
transfer to the successor Rights Agent any property at the time held by it
hereunder, and execute and deliver any further assurance, conveyance, act or
deed necessary for the purpose. Not later than the effective date of any such
appointment, the Company shall file notice thereof in writing with the
predecessor Rights Agent, with the registrar of the Company and each transfer
agent of the Common Shares and the Series A First Preference Shares, and,
subsequent to the Distribution Date, mail a notice thereof in writing to the
registered holders of the Right Certificates. Failure to give any notice
provided for in this Section 21, or any defect therein, shall not affect the
legality or validity of the resignation or removal of the Rights Agent or the
appointment of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates.
Notwithstanding any of the provisions of this Agreement or of the Rights to
the contrary, the Company may, at its option, issue new Right Certificates
evidencing Rights in such form as may be approved by its Board of Directors to
reflect any adjustment or change in the Purchase Price and the number or kind
or class of shares of stock issuable upon exercise of the Rights made in
accordance with the provisions of this Agreement.
Section 23. Redemption. (a) The Board of Directors of the
Company may, at its option, at any time prior to the earlier of (x) the close
of business on the tenth day following the Share Acquisition Date (or such
later date as a majority of the Continuing Directors may designate prior to
such time as the Rights are no longer redeemable) and (y) the Final Expiration
Date, redeem all but not less than all of the then outstanding Rights at a
redemption price of $.01 per Right as appropriately adjusted to reflect any
share subdivision or consolidation, dividend of shares or similar transaction
occurring after the date hereof (such redemption price being hereinafter
referred to as the "Redemption Price"); provided that, if the Board of
Directors of the Company authorizes redemption of the Rights in either of the
circumstances set forth in clauses (x) or (y) below then there must be
Continuing Directors in office and such authorization shall require the
concurrence of a majority of the Continuing Directors: (x) such authorization
occurs on or after the Share Acquisition Date or (y) such authorization occurs
on or after the date of a change (resulting from a proxy or consent
solicitation) in a majority of the directors of the Company in office at the
commencement of such solicitation if any Person who is a participant in such
solicitation has stated (or if upon the commencement of such solicitation a
majority of the directors of the Company has determined in good faith) that
such Person (or any of its Affiliates or Associates) intends to take, or may
consider taking, any action which would result in such Person becoming an
Acquiring Person or which would cause the occurrence of a Triggering Event.
Notwithstanding anything contained in this Agreement to the contrary, the
Rights shall not be exercisable after the first occurrence of a Section
11(a)(ii) Event until such time as the Company's right of redemption hereunder
has expired, as the same may be extended pursuant to the terms of this
Agreement.
(b) In deciding whether or not to exercise the Company's
right of redemption hereunder, the directors of the Company shall act in good
faith, in a manner they reasonably believe to be in the best interests of the
Company and with such care, including reasonable inquiry, skill and diligence,
as a person of ordinary prudence would use under similar circumstances, and
they may consider the long-term and short-term effects of any action upon
employees, customers and creditors of the Company and upon communities in
which offices or other establishments of the Company are located, and all
other pertinent factors.
(c) Immediately upon the action of the Board of Directors of
the Company ordering the redemption of the Rights, and without any further
action and without any notice, the right to exercise the Rights will terminate
and the only right thereafter of the holders of Rights shall be to receive the
Redemption Price for each Right held. Immediately following such action of
the Board of Directors, evidence of such action shall be delivered to the
Rights Agent. Within 10 days after the action of the Board of Directors
ordering the redemption of the Rights, the Company shall give notice of such
redemption to the holders of the then outstanding Rights by mailing such
notice to the Rights Agent and to all such holders at their last addresses as
they appear upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the share register of the Company for the Common Shares.
Any notice which is mailed in the manner herein provided shall be deemed duly
given, whether or not the holder receives the notice. Each such notice of
redemption will state the method by which the payment of the Redemption Price
will be made. Neither the Company nor any of its Affiliates or Associates may
redeem, acquire or purchase for value any Rights at any time in any manner
other than that specifically set forth in this Section 23 or other than in
connection with the redemption, acquisition or purchase of Common Shares prior
to the Distribution Date.
Section 24. Notice of Proposed Actions. (a) In case the
Company shall propose, at any time after the Distribution Date, (i) to pay any
dividend payable in stock of any class to the holders of Series A First
Preference Shares or to make any other distribution to the holders of Series A
First Preference Shares (other than a regular quarterly cash dividend out of
earnings or retained earnings of the Company), or (ii) to offer to the holders
of its Series A First Preference Shares rights or warrants to subscribe for
any additional Series A First Preference Shares or shares of stock of any
class or any other securities, rights or options, or (iii) to effect any
reclassification of its Series A First Preference Shares (other than a
reclassification involving only the subdivision or consolidation of Series A
First Preference Shares) or (iv) to effect under any applicable law any
consolidation or amalgamation with any other Person, or to effect and/or to
permit one or more of its Subsidiaries to effect any sale or other transfer,
in one transaction or a series of related transactions, of assets or earning
power aggregating more than 50% of the assets or earning power of the Company
and its Subsidiaries, taken as a whole, to any other Person or Persons, or (v)
to effect the liquidation, dissolution or winding up of the Company, then, in
each such case, the Company shall give to each holder of a Right, to the
extent feasible and in accordance with Section 25, a notice of such proposed
action, which shall specify the record date for the purposes of any such
dividend, distribution or offering of rights or warrants, or the date on which
any such reclassification, consolidation, amalgamation, sale, transfer,
liquidation, dissolution or winding up is to take place and the date of
participation therein by the holders of Series A First Preference Shares, if
any such date is to be fixed, and such notice shall be so given in the case of
any action covered by clause (i) or (ii) above at least 20 days prior to the
record date for determining holders of the Series A First Preference Shares
entitled to participate in such dividend, distribution or offering, and in the
case of any such other action, at least 20 days prior to the date of the
taking of such proposed action or the date of participation therein by the
holders of Series A First Preference Shares, whichever shall be the earlier.
The Company shall deliver a certificate to the Rights Agent to this effect as
well. The failure to give notice required by this Section or any defect
therein shall not affect the legality or validity of the action taken by the
Company or the vote upon any such action.
(b) Notwithstanding anything in this Agreement to the
contrary, prior to the Distribution Date a public filing by the Company with
the United States Securities and Exchange Commission and, provided that any
class of the Company's securities is listed thereon, the London Stock Exchange
shall constitute sufficient notice to the holders of securities of the
Company, including the Rights, for purposes of this Agreement and no other
notice need be given to such holders.
(c) If a Triggering Event shall occur, then, in any such case,
(1) the Company shall as soon as practicable thereafter give to the Rights
Agent and each holder of a Right, in accordance with Section 25, a notice of
the occurrence of such event, which shall specify the event and the
consequences of the event to holders of Rights under Section 11(a)(ii) or 13,
as the case may be, and (2) all references in Section 24(a) to Series A First
Preference Shares shall be deemed thereafter to refer to Common Shares or other
capital stock, as the case may be.
Section 25. Notices. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any
Right to or on the Company shall be sufficiently given or made if sent by
first-class mail (postage prepaid) to the registered office of the Company or
such other address as the Company shall specify in writing to the Rights
Agent. Subject to the provisions of Section 21, any notice or demand
authorized by this Agreement to be given or made by the Company or by the
holder of any Right to or on the Rights Agent shall be sufficiently given or
made if sent by first-class mail (postage prepaid) to the address of the
Rights Agent indicated on the signature page hereof or such other address as
the Rights Agent shall specify in writing to the Company. Notices or demands
authorized by this Agreement to be given or made by the Company or the Rights
Agent to the holder of any Right Certificate (or, prior to the Distribution
Date, to the holder of any certificate representing Common Shares) shall be
sufficiently given or made if sent by first-class mail (postage prepaid) to
the address of such holder shown on the share register of the Company.
Section 26. Supplements, Deletions and Amendments. Prior to
the Distribution Date, the Company and the Rights Agent shall, if the Company
so directs, supplement, remove or amend any provision of this Agreement
without the approval of any holders of Rights. From and after the
Distribution Date, the Company and the Rights Agent shall, if the Company so
directs, supplement, remove or amend this Agreement without the approval of
any holders of Rights in order (a) to cure any ambiguity, (b) to correct,
remove or supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein or (c) to change, remove or
supplement the provisions hereof in any manner which the Company may deem
necessary or desirable and which, in the opinion of the Company, shall not
adversely affect the interests of the holders of Rights (other than an
Acquiring Person or an Affiliate or Associate of an Acquiring Person).
Notwithstanding the foregoing, after any Person has become an Acquiring
Person, any supplement, deletion or amendment shall be effective only if there
are Continuing Directors then in office, and such supplement, deletion or
amendment shall have been approved by a majority of such Continuing Directors.
Upon the delivery of a certificate from an appropriate officer of the Company
which states that the proposed supplement, deletion or amendment is in
compliance with the terms of this Section, the Rights Agent shall execute such
supplement, deletion or amendment. Prior to the Distribution Date, the
interests of the holders of Rights shall be deemed coincident with the
interests of the holders of Common Shares.
Section 27. Successors. All the covenants and provisions of
this Agreement by or for the benefit of the Company or the Rights Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder.
Section 28. Determinations and Actions by the Board of
Directors, etc. For all purposes of this Agreement, any calculation of the
number of Common Shares outstanding at any particular time, including for
purposes of determining the particular percentage of such outstanding Common
Shares of which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) under the Exchange
Act as in effect on the date of this Agreement. The Board of Directors of the
Company (or, after any Person has become an Acquiring Person, a majority of the
Continuing Directors) shall have the exclusive power and authority to
administer this Agreement and to exercise all rights and powers specifically
granted to the Board or to the Company, or as may be necessary or advisable in
the administration of this Agreement, including the right and power to (i)
interpret the provisions of this Agreement and (ii) make all determinations
deemed necessary or advisable for the administration of this Agreement
(including a determination to redeem or not to redeem the Rights or to amend
the Agreement). All such actions, calculations, interpretations and
determinations (including, for purposes of clause (y) below, all omissions
with respect to the foregoing) which are done or made by the Board (or, after
any Person has become an Acquiring Person, by the Continuing Directors) in
good faith shall (x) be final, conclusive and binding on the Company, the
Rights Agent, the holders of the Rights and all other parties, and (y) not
subject the Board of Directors of the Company or the Continuing Directors to
any liability to the holders of the Rights.
Section 29. Benefits of this Agreement. Nothing in this
Agreement shall be construed to give to any Person other than the Company, the
Rights Agent and the registered holders of the Right Certificates (and, prior
to the Distribution Date, the certificates representing the Common Shares) any
legal or equitable right, remedy or claim under this Agreement; but this
Agreement shall be for the sole and exclusive benefit of the Company, the
Rights Agent and the registered holders of the Right Certificates (and, prior
to the Distribution Date, the certificates representing the Common Shares).
Section 30. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated; provided that, notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and the Board of
Directors of the Company (or, after any Person has become an Acquiring Person,
a majority of the Continuing Directors) determines in its good faith judgment
that severing the invalid language from this Agreement would adversely affect
the purpose or effect of this Agreement, and if the right of redemption set
forth in Section 23 hereof shall at that time not be capable of exercise
pursuant to the terms thereof, such right of redemption shall be reinstated and
shall not expire until the close of business on the tenth day following the
date of such determination by the Board of Directors or a majority of the
Continuing Directors, as the case may be.
Section 31. Governing Law. This Agreement ,each Right and
each Right Certificate issued hereunder shall be governed by and construed in
accordance with the laws of Bermuda.
Section 32. Counterparts. This Agreement may be executed in
any number of counterparts and each of such counterparts shall for all
purposes be deemed to be an original, and all such counterparts shall together
constitute one and the same instrument.
Section 33. Descriptive Headings. The captions herein are
included for convenience of reference only, do not constitute a part of this
Agreement and shall be ignored in the construction and interpretation hereof.
IN WITNESS WHEREOF, this Agreement has been duly executed as a
deed by the parties hereto as of the day and year first above written.
ADT LIMITED
/s/ S.J. Ruzika
THE COMMON SEAL ) By: __________________________
OF ADT LIMITED ) Name: S.J. Ruzika
was affixed to this deed ) Title: Director
in the presence of: )
/s/ M.A. Ashcroft
By: __________________________
Name: M.A. Ashcroft
Title: Director
CITIBANK, N.A.
/s/ Nancy Ward
By: _________________________
Name: Nancy Ward
Title:
111 Wall Street
New York, NY 10043
Attention: Nancy Ward
Exhibit A
APPENDIX A TO BYE-LAWS OF ADT LIMITED
EXTRACT FROM MINUTES OF A
MEETING OF THE BOARD OF DIRECTORS OF ADT LIMITED
HELD ON NOVEMBER 4, 1996
relating to creation of a series of
FIRST PREFERENCE SHARES
(as defined in the Bye-Laws of the Company)
IT IS HEREBY CERTIFIED that the following constitutes an extract from the
minutes of a meeting of the Board of Directors of ADT Limited, held on
November 4, 1996, and annexed as an appendix to the Bye-laws of ADT Limited.
"IT WAS RESOLVED THAT, subject to the powers of the directors of the Company or
any duly authorised committee of the board of directors of the Company to
revoke this resolution or in any way amend the rights and restrictions
attached to the Series A First Preference Shares by this resolution at any
time before the allotment of any such shares:
(1) 2,500,000 of the First Preference Shares be and are hereby designated
as Series A First Preference Shares of US$1 each and shall have
attached to them the rights and shall be subject to the restrictions
set out in Exhibit A and Exhibit A shall be attached to these minutes
for the purpose of recording the same in these minutes; and
(2) in accordance with paragraph 9(2)(iii) of the schedule to the
bye-laws of the Company, a copy of Exhibit A be annexed as an
appendix to the bye-laws of the Company.
The rights attaching to the Series A First Preference Shares shall be as
follows:-
Section 1. As regards income.
(A) A holder of a Series A First Preference Share shall be
entitled to receive, when, as and if declared by the Directors out of funds
legally available for the purpose, quarterly dividends payable on March 31,
June 30, September 30 and December 31 of each year (each such date being
referred to herein as a "Quarterly Dividend Payment Date"), commencing on the
first Quarterly Dividend Payment Date after the first issue of any Series A
First Preference Share, in an amount per share (rounded to the nearest cent)
equal to the greater of (a) US$1.00 and (b) subject to the provision for
adjustment hereinafter set forth, 100 times the aggregate amount or value of
all cash dividends or other distributions and 100 times the aggregate amount
or value of all non-cash dividends or other distributions (other than (i) a
dividend payable in Common Shares or (ii) a subdivision of the Common Shares
(by reclassification or otherwise)), declared on each Common Share since the
immediately preceding Quarterly Dividend Payment Date, or, with respect to the
first Quarterly Dividend Payment Date, since the first issue of any Series A
First Preference Share. If the Company shall at any time after November 4,
1996 (the "Rights Date") pay any dividend on Common Shares payable in Common
Shares or effect a subdivision or consolidation of the Common Shares (by
reclassification or otherwise) into a greater or lesser number of Common
Shares, then in each such case the amount to which a holder of a Series A
First Preference Share was entitled immediately prior to such event under (b)
of the preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of Common Shares in issue
immediately after such event and the denominator of which is the number of
Common Shares that were in issue immediately prior to such event.
(B) The Company shall declare a dividend or distribution on
the Series A First Preference Shares as provided in paragraph (A) above
immediately after it declares a dividend or distribution on the Common Shares
(other than as described in (i) and (ii) of the first sentence of paragraph
(A) above); provided that if no dividend or distribution shall have been
declared on the Common Shares during the period between any Quarterly Dividend
Payment Date and the next subsequent Quarterly Dividend Payment Date (or, with
respect to the first Quarterly Dividend Payment Date, the period between the
first issue of any Series A First Preference Share and such first Quarterly
Dividend Payment Date), a dividend of US$1.00 per share on each Series A First
Preference Share shall nevertheless be payable on such subsequent Quarterly
Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on a
Series A First Preference Share from the Quarterly Dividend Payment Date next
preceding the date of issue of such Series A First Preference Share, unless
the date of issue of such share is on or before the record date for the first
Quarterly Dividend Payment Date, in which case dividends on such share shall
begin to accrue and be cumulative from the date of issue of such share, or
unless the date of issue is a date after the record date for the determination
of holders of Series A First Preference Shares entitled to receive a quarterly
dividend and on or before such Quarterly Dividend Payment Date, in which case
dividends shall begin to accrue and be cumulative from such Quarterly Dividend
Payment Date. Accrued but unpaid dividends shall not bear interest.
Dividends paid on a Series A First Preference Share in an amount less than the
total amount of such dividends at the time accrued and payable on such share
shall be allocated pro rata among all such shares at the time in issue. The
Directors may fix a record date for the determination of holders of Series A
First Preference Shares entitled to receive payment of a dividend or
distribution declared thereon, which record date shall not be more than 60
days prior to the date fixed for the payment thereof.
Section 2. As regards capital. Upon any liquidation, dissolution or winding
up of the Company, no distribution shall be made (1) to the holders of shares
ranking in order of priority after (either as regards income or capital) the
Series A First Preference Shares unless, prior thereto, the holders of Series
A First Preference Shares shall have received US$1.00 per share, plus an
amount equal to accrued and unpaid dividends and distributions thereon,
whether or not declared, to the date of such payment; provided that the
holders of shares of Series A First Preference Shares shall be entitled to
receive an aggregate amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 100 times the aggregate amount to be
distributed per share to holders of Common Shares, or (2) to the holders of
shares ranking in order of priority pari passu with the Series A First
Preference Shares (either as regards income or capital), except distributions
made rateably on the Series A First Preference Shares and all such other
shares ranking in order of priority pari passu with the Series A First
Preference Shares in proportion to the total amounts to which the holders of
all such shares are entitled upon such liquidation, dissolution or winding up.
If the Company shall at any time after the Rights Date pay any dividend on
Common Shares payable in Common Shares or effect a subdivision or
consolidation of the outstanding Common Shares (by reclassification or
otherwise) into a greater or lesser number of Common Shares, then in each such
case the aggregate amount to which holders of shares of Series A First
Preference Shares were entitled immediately prior to such event under the
proviso in (1) of the preceding sentence shall be adjusted by multiplying such
amount by a fraction the numerator of which is the number of Common Shares
outstanding immediately after such event and the denominator of which is the
number of Common Shares that were outstanding immediately prior to such event.
Section 3. As regards voting. Subject to and in accordance with the
provisions of the Companies Acts and the Bye-laws of the Company (in
particular, without limitation, paragraph (7) of the Schedule to the Bye-laws
of the Company) at any meeting of the Company each holder of a Series A First
Preference Share present in person shall be entitled to one vote on any
question to be decided on a show of hands and each such holder present in
person or by proxy shall be entitled on a poll to one vote for each Series A
Preference Share held by him.
Section 4. As to conversion. The Series A First Preference Shares shall not
be convertible into all or any other shares or securities of the Company.
Section 5. As to redemption. The Series A First Preference Shares shall not
be redeemable.
Section 6. Certain restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A First Preference Shares as provided in
Section 1 are in arrears, thereafter and until all accrued and unpaid
dividends and distributions, whether or not declared, on issued Series A First
Preference Shares shall have been paid in full, the Company shall not:
(i) declare or pay dividends on, or make any other
distributions on, any shares ranking in order of priority after the
Series A First Preference Shares (either as regards income or
capital);
(ii) declare or pay dividends on, or make any other
distributions on, any shares ranking in order of priority pari passu
with the Series A First Preference Shares (either as regards income
or capital), except dividends paid rateably on the Series A First
Preference Shares and all such other shares ranking pari passu with
them on which dividends are payable or in arrears in proportion to
the total amounts to which the holders of all such shares are then
entitled;
(iii) redeem, purchase or otherwise acquire for value any
shares ranking in order of priority after the Series A First
Preference Shares (either as regards income or capital) to the Series
A First Preference Shares; provided that the Company may at any time
redeem, purchase or otherwise acquire shares ranking in order of
priority after the Series A First Preference Shares in exchange for
shares of the Company ranking in order of priority after the Series A
First Preference Shares (either as regards income or capital); or
(iv) purchase or otherwise acquire for value any Series A
First Preference Shares, or any shares ranking pari passu with the
Series A First Preference Shares (either as regards income or
capital), except in accordance with a purchase offer made in writing
or by publication (as determined by the Directors) to all holders of
Series A First Preference Shares and all such other shares ranking
pari passu upon such terms as the Directors, after consideration of
the respective annual dividend rates and other relative rights and
preferences of the respective classes and series, shall determine in
good faith will result in fair and equitable treatment among the
respective classes or series.
(B) The Company shall not enter into any consolidation,
amalgamation, combination or other transaction under any applicable law in
which the Common Shares are exchanged for or changed into other shares or
securities, cash or any other property, unless in any such case the Series A
First Preference Shares shall at the same time be similarly exchanged for or
changed into an amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 100 times the aggregate amount of shares,
securities, cash or any other property, as the case may be, into which or for
which each Common Share is changed or exchanged. If the Company shall at any
time after the Rights Date pay any dividend on Common Shares payable in Common
Shares or effect a subdivision or consolidation of the Common Shares (by
reclassification or otherwise) into a greater or lesser number of Common
Shares, then in each such case the amount set forth in the preceding sentence
with respect to the exchange or change of shares of Series A First Preference
Shares shall be adjusted by multiplying such amount by a fraction the
numerator of which is the number of Common Shares in issue immediately after
such event and the denominator of which is the number of Common Shares that
were in issue immediately prior to such event.
Section 7. Other rights
(A) Any Series A First Preference Share purchased or otherwise
acquired by the Company in any manner whatsoever shall be cancelled on
acquisition thereof.
(B) The Series A First Preference Shares shall rank in order of
priority (as regards income and capital) after all other classes and series of
the Company's preference shares from time to time except any class or series
that expressly provides that such class or series shall rank in order of
priority after the Series A First Preference Shares. The rights conferred
upon the holders of Series A First Preference Shares shall not be deemed to be
varied by the creation or issue of further shares ranking in order of priority
before, pari passu with or after the Series A First Preference Shares.
Terms defined in the Bye-Laws (including the Schedule) of the Company shall
have the same meanings in this resolution of the Directors attached as an
Appendix to the Bye-Laws."
IN WITNESS WHEREOF, I have executed and subscribed this
extract this_______day of___________________1996
_________________________
John D. Campbell
Secretary
Exhibit B
[Form of Right Certificate]
No. R- ____________Rights
NOT EXERCISABLE AFTER THE EARLIER OF NOVEMBER 14, 2005 AND THE DATE ON WHICH
THE RIGHTS EVIDENCED HEREBY ARE REDEEMED BY THE COMPANY AS SET FORTH IN THE
RIGHTS AGREEMENT. AS SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS ISSUED TO, OR
HELD BY, ANY PERSON WHO IS, WAS OR BECOMES AN ACQUIRING PERSON OR AN AFFILIATE
OR ASSOCIATE THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT),
WHETHER CURRENTLY HELD BY OR ON BEHALF OF SUCH PERSON OR BY ANY SUBSEQUENT
HOLDER, MAY BE NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHT
CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN
ACQUIRING PERSON OR AN AFFILIATE OR AN ASSOCIATE OF AN ACQUIRING PERSON (AS
SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). THIS RIGHT CERTIFICATE AND
THE RIGHTS REPRESENTED HEREBY MAY BE OR MAY BECOME NULL AND VOID IN THE
CIRCUMSTANCES SPECIFIED IN SECTION 7(d) OF THE RIGHTS AGREEMENT.](2) THE
RIGHTS SHALL NOT BE EXERCISABLE FOR SECURITIES IN ANY JURISDICTION IF THE
REQUISITE QUALIFICATION IN SUCH JURISDICTION SHALL NOT HAVE BEEN OBTAINED,
SUCH EXERCISE THEREFOR SHALL NOT BE PERMITTED UNDER APPLICABLE LAW OR A
REGISTRATION STATEMENT IN RESPECT OF SUCH SECURITIES SHALL NOT HAVE BEEN
DECLARED EFFECTIVE.
- ------------
(2) If applicable, insert this portion of the legend and delete the
preceding sentence.
RIGHT CERTIFICATE
ADT LIMITED
This Right Certificate certifies that ______________________, or
registered assigns, is the registered holder of the number of Rights set forth
above, each of which entitles the holder (upon the terms and subject to the
conditions set forth in the Rights Agreement dated as of November 6, 1996 (the
"Rights Agreement") between ADT Limited, a Bermuda company limited by shares
(the "Company"), and Citibank, N.A. (the "Rights Agent")) to subscribe, at any
time after the Distribution Date and prior to the Expiration Date, for fully
paid Series A First Preference Shares (the "Series A First Preference Shares")
of the Company at a price calculated at the rate of $90 per one-hundredth of a
share (the "Purchase Price"), payable in lawful money of the United States of
America, upon surrender of this Right Certificate, with the form of election
and related certificate duly executed, and payment of the Purchase Price at an
office of the Rights Agent designated for such purpose.
Terms used herein and not otherwise defined herein have the
meanings assigned to them in the Rights Agreement.
The number of Rights evidenced by this Right Certificate (and
the number and kind of shares issuable upon exercise of each Right) and the
Purchase Price set forth above are as of November 15, 1996, and may have been
or in the future be adjusted as a result of the occurrence of certain events,
as more fully provided in the Rights Agreement.
Upon the occurrence of a Section 11(a)(ii) Event, if the Rights
evidenced by this Right Certificate are beneficially owned by (a) an Acquiring
Person or an Associate or Affiliate of an Acquiring Person, (b) a transferee
of an Acquiring Person (or any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes such, or (c) under certain
circumstances specified in the Rights Agreement, a transferee of an Acquiring
Person (or any such Associate or Affiliate) who becomes a transferee prior to
or concurrently with the Acquiring Person becoming such, such Rights shall
become null and void, and no holder hereof shall have any right with respect
to such Rights from and after the occurrence of such Section 11(a)(ii) Event.
This Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part hereof
and to which Rights Agreement reference is hereby made for a full description
of the rights, limitations of rights, obligations, duties and immunities
hereunder of the Rights Agent, the Company and the holders of the Right
Certificates, which limitations of rights include the temporary suspension of
the exercisability of such Rights under the specific circumstances set forth in
the Rights Agreement.
Upon surrender at the principal office or offices of the Rights
Agent designated for such purpose and subject to the terms and conditions set
forth in the Rights Agreement, any Rights Certificate or Certificates may be
transferred or exchanged for another Rights Certificate or Certificates
evidencing a like number of Rights as the Rights Certificate or Certificates
surrendered.
Subject to the provisions of the Rights Agreement, the Board of
Directors of the Company may, at its option, at any time prior to the earlier
of (i) the close of business on the tenth day after the Share Acquisition Date
(or such later date as a majority of the Continuing Directors may designate
prior to such time as the Rights are no longer redeemable) and (ii) the Final
Expiration Date, redeem all but not less than all the then outstanding Rights
at a redemption price of US$.01 per Right.
No fractions of a Series A First Preference Shares will be
issued upon the exercise of any Right or Rights evidenced hereby, but in lieu
thereof a cash payment will be made, as provided in the Rights Agreement. If
this Right Certificate shall be exercised in part, the holder shall be
entitled to receive upon surrender hereof another Right Certificate or
Certificates for the number of whole Rights not exercised.
No holder of this Right Certificate shall be entitled to vote,
receive dividends or be deemed for any purpose to be the holder of the shares
which may at any time be issuable on the exercise hereof, nor shall anything
contained in the Rights Agreement or herein be construed to confer upon the
holder hereof, as such, any of the rights of a shareholder of the Company or
any right to vote for the election of directors or upon any matter submitted
to shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in the Rights Agreement), or to receive
dividends or subscription rights, or otherwise, until the Right or Rights
evidenced by this Right Certificate shall have been exercised as provided in
the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent in
accordance with the Rights Agreement.
IN WITNESS WHEREOF, this instrument has been duly executed as a
deed by the parties hereto as of the day and year set out below.
Dated as of ________________, _____
ADT LIMITED
THE COMMON SEAL ) By: __________________________
OF ADT LIMITED ) Name:
was affixed to this deed ) Title: Director
in the presence of: )
By: __________________________
Name:
Title: Director
Countersigned:
CITIBANK, N.A.
By: _________________________
Name:
Title:
111 Wall Street
New York, NY 10043
Attention: Nancy Ward
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed if the registered holder
desires to transfer the Right Certificate.)
FOR VALUE RECEIVED _______________________________________
hereby sells, assigns and transfers unto _________________
__________________________________________________________
(Please print name and address of transferee)
__________________________________________________________
this Right Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint ______________________
Attorney, to transfer the within Right Certificate on the books of the
within-named Company, with full power of substitution.
Dated: _____________________, 19__
___________________________
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Right Certificate ___are
___are not being assigned by or on behalf of a Person who is or was an
Acquiring Person or an Affiliate or Associate of any such Acquiring Person (as
such terms are defined in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it ___did ___did not acquire the Rights evidenced by this Right
Certificate from any Person who is, was or became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated: __________, 19 __ ________________________
Signature
__________
The signatures to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
__________
FORM OF ELECTION
(To be executed if the registered holder desires to exercise
Rights represented by the Right Certificate.)
To: ADT Limited
The undersigned hereby irrevocably elects to exercise
____________ Rights represented by this Right Certificate to subscribe for
Series A First Preference Shares issuable upon the exercise of the Rights (or
such other securities of the Company or of any other person which may be
issuable upon the exercise of the Rights) and requests that such securities be
issued in the name of and certificates for such securities be delivered to:
Please insert social security
or other identifying number (if any)
__________________________________________________________
(Please print name and address)
___________________________________________________________
If such number of Rights shall not be all the Rights evidenced
by this Right Certificate, the undersigned requests that a new Right
Certificate for the balance of such Rights be issued in the name of and
delivered to:
Please insert social security
or other identifying number (if any)
___________________________________________________________
(Please print name and address)
___________________________________________________________
Dated: ________________, 19__
___________________________
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Right Certificate ___are
___are not being exercised by or on behalf of a Person who is or was an
Acquiring Person or an Affiliate or Associate of any such Acquiring Person (as
such terms are defined in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it ___did ___did not acquire the Rights evidenced by this Right
Certificate from any Person who is, was or became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated: __________, 19 __ ________________________
Signature
__________
The signature to the foregoing Election to Purchase and
Certificate must correspond to the name as written upon the face of this Right
Certificate in every particular, without alteration or enlargement or any
change whatsoever.
__________
7th February, 1997
Securities and Exchange Commission,
450 Fifth Street, N.W.,
Washington D.C. 20549
U.S.A.
- - and
ADT Limited,
Cedar House,
41 Cedar Avenue,
Hamilton, Bermuda.
Dear Sirs,
Re: ADT LIMITED (the "Company")
We have acted as attorneys in Bermuda for the Company in
connection with the issue of and subsequent sale of 15,086,698 common shares
of US$0.10 each in the capital of the Company (the "Common Shares") as
described in a Registration Statement on Form S-3 (Registration Statement No.
333-[ ]) as filed by the Company with the Securities and Exchange
Commission on the 10th February, 1997.
This opinion is based upon and confined to the laws of Bermuda
presently in force as currently applied by the Courts of Bermuda. We have
made no investigation of, nor do we express any opinion as to, the laws of any
jurisdiction other than Bermuda.
Unless otherwise defined herein, terms defined in the
Registration Statement have the same meanings when used in this opinion.
In order to render this opinion, we have been supplied with and
have reviewed and relied upon the following documents:
(a) the Certificate of Incorporation, Memorandum of Association and
Bye-laws of the Company;
(b) a copy, certified by a Director of the Company of the resolutions
adopted by the Board of Directors of the Company of the resolutions adopted
by the Board of Directors of the Company at a meeting held on 7th February,
1997 (the "Resolutions");
(c) a copy of the Registration Statement as filed; and
(d) a copy of the executed Warrant.
We have also relied upon our searches of documents of public
record maintained by the Registrar of Companies in Bermuda and of the Causes
Book of the Supreme Court of Bermuda made on the 6th February, 1997 (the
"Searches").
We have assumed:
(i) that there is no provision of the law, regulation or
public policy of any jurisdiction, other than Bermuda, which might have a
material effect on any of the opinions herein expressed;
(ii) that all matters of fact appearing in the Resolutions
and the Registration Statement are true and complete in all material
respects;
(iii) the genuineness of all signatures on each of the
documents examined by us;
(iv) the conformity to original documents, of all documents
produced to us as copies and the authenticity of all original
documents which, or copies of which, have been submitted to us; and
(v) that the information disclosed by our Searches has not
been materially altered and the searches did not fail to disclose any
material information which had been delivered for filing or
registration, but was not disclosed or did not appear on the public
file at the time of the Searches.
Based upon the foregoing, subject to the reservations set out
below, and to any matters not disclosed to us, we are of the opinion that:
(1) The Company has been duly incorporated as a limited liability
company and is validly existing and in good standing under the laws of
Bermuda and has all requisite corporate power and authority to issue the
Common Shares.
(2) All necessary action has been taken by or on behalf of the Company
and all the necessary authorisations and approvals of Governmental authorities
in Bermuda have been duly obtained for the issue of the Common Shares.
(3) When issued, as described in the Warrant, and upon payment in full
of the price set out therein, 15,000,000 Common Shares will be duly issued and
will be outstanding as fully paid and non-assessable shares of the Company and
according to the Register of Members of the Company 86,698 Common Shares
registered in the name of Mourant & Co. Trustees Limited are fully paid and
are non-assessable shares of the Company.
(4) The issue by the Company of the Common Shares will not breach or
conflict with and will not constitute a default or violation of any of the
terms or provisions of the Company's Memorandum of Association, Certificate of
Incorporation and Bye-laws.
(5) Under Bermuda law, the liability of the holders of Common Shares in
respect of obligations of the Company is limited to the amount unpaid in
respect of their Common Shares.
(6) There are no taxes, duties or other charges payable to or
chargeable by the Government of Bermuda, or any authority or agency thereof,
in respect of the issue of Common Shares.
Our reservations are:
A. Any reference in this opinion to shares being "non-assessable" shall mean,
in relation to fully paid shares of the company and subject to any contrary
provision in any agreement in writing between such company and the holder of
such shares, that no shareholder shall be bound by an alteration to the
Memorandum of Association or Bye-laws of the Company after the date on which
he became a shareholder, if and so far as the alteration requires him to take,
or subscribe for additional shares, or in any way increases his liability to
contribute to the share capital of, or otherwise to pay money to, the Company.
B. We express no opinion as to any law other than Bermuda law and none of the
opinions expressed herein relates to compliance with or matters governed by
the laws of any jurisdiction except Bermuda.
This opinion is addressed to you in connection with the
registration of the Common Shares with the Securities and Exchange Commission
and is not to be made available to, or relied on by any other person or
entity, or for any other purpose, without our prior written consent.
We hereby consent to the inclusion of this opinion as an
Exhibit to the Registration Statement. We also consent to the reference to
our Firm under the caption "Legal Matters."
This opinion is to be governed by and construed in accordance
with the laws of Bermuda and shall not give rise to legal proceedings in any
jurisdiction other than Bermuda.
Yours faithfully,
/s/ Appleby, Spurling & Kempe
Consent of Independent Accountants
We consent to the incorporation by reference in this Registration
Statement of ADT Limited on Form S-3 (File No. 333- ) of our report
dated February 29, 1996, on our audits of the consolidated financial
statements and the consolidated financial statement schedules of ADT Limited
as at December 31, 1995 and 1994, and for the years ended December 31, 1995,
1994 and 1993. We also consent to the reference to our firm under the caption
"Experts."
Coopers & Lybrand
Hamilton, Bermuda
February 7, 1997
