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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
MID OCEAN LIMITED
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(Exact name of registrant as specified in its charter)
CAYMAN ISLANDS Not Applicable
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(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
Richmond House, 12 Par la Ville Road, Hamilton HM08, Bermuda
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(Address of principal executive offices)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
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Rights to Purchase Class A Ordinary Shares New York Stock Exchange
Securities to be registered pursuant to Section 12(g) of the Act:
None
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(Title of Class)
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Item 1. Description of Registrant's Securities to b Registered:
On September 12, 1996 the Board of Directors of Mid Ocean Limited (the
"Company") declared a distribution of one Right for each outstanding Ordinary
Share, U.S. $0.20 par value (the "Ordinary Shares"), of the Company. The
distribution is payable on October 1, 1996 (the "Record Date") to the
shareholders of record on the Record Date. Each Right entitles the registered
holder to purchase from the Company one Class A Ordinary Share, U.S. $0.20 par
value, at a price of $140 per shar (the "Purchase Price"), subject to
adjustment. The description and terms of the Rights are set forth in a Rights
Agreement (the "Rights Agreement") between the Company and The Bank of New York,
as Rights Agent (the "Rights Agent").
Distribution Date; Transfer of Rights
Until the earlier to occur of (i) ten days following the date (the
"Shares Acquisition Date") of the public announcement that a person or group of
affiliated or associated persons (an "Acquiring Person") has acquired, or
obtained the right to acquire, beneficial ownership of a number of Ordinary
Shares equal to 20% or more of the outstanding Ordinary Shares or voting
securities having the right to vote 20% or more of the total votes or (ii) ten
days following the commencement or announcement of an intention to make a tender
offer or exchange or any other offer if, upon consummation thereof, such person
would be an Acquiring Person (the earlier of such dates being called the
"Distribution Date"), the Rights will be evidenced, with respect to any of the
Company's Ordinary Share certificates outstanding as of the Record Date, by such
Ordinary Share certificate. An Acquiring Person does not include any Person who
would otherwise be an Acquiring Person as of the date of the Rights Agreement,
as long as that person does not subsequently acquire any additional securities
of the Company, (except in the limited circumstances permitted in the Rights
Agreement) and certain other Persons as set forth in the Rights Agreement. The
Rights Agreement provides that, until the Distribution Date, the Rights will be
transferred with and only with the Company's Ordinary Shares. Until the
Distribution Date (or earlier redemption or expiration of the Rights), new
Ordinary Share certificates issued after the Record Date upon transfer or new
issuance of the Company's Ordinary Shares will contain a notation incorporating
the Rights Agreement by reference. Until the Distribution Date (or earlier
redemption or expiration of the Rights), the surrender for transfer of any of
the Company's Ordinary Share certificates outstanding as of the Record Date will
also constitute the transfer of the Rights associated with the Ordinary Shares
represented by such certificate. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights ("Right
Certificates") will be mailed to holders of record of the Company's Ordinary
Shares as of the close of business on the Distribution Date and such separate
Right Certificates alone will evidence the Rights.
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The Rights are not exercisable until the Distribution Date. The Rights
will expire at the close of business on October 1, 2006, unless earlier redeemed
or exchanged by the Company as described below.
Exercise of Rights for Class A Ordinary Shares of the Company
In the event that a Person becomes an Acquiring Person, each holder of
a Right will thereafter have the right to receive, upon exercise, Class A
Ordinary Shares (or, in certain circumstances, cash, property or other
securities of the Company) having a value equal to two times the Purchase Price
of the Right then in effect. Notwithstanding any of the foregoing, following the
occurrence of the event set forth in this paragraph, all Rights that are, or
(under certain circumstances specified in the Rights Agreement) were,
beneficially owned by any Acquiring Person will be null and void.
Under certain circumstances as described in the Rights Agreement, the
holder of a Right will have the right to receive Class C Ordinary Shares of the
Company in lieu of Class A Ordinary Shares upon exercise or exchange of the
Rights.
Exercise of Rights for Shares of the Acquiring Company
In the event that, at any time following the Shares Acquisition Date,
(i) the Company is acquired in a merger or other business combination
transaction, or (ii) 50% or more of the Company's assets or earning power is
sold or transferred, then the Company shall not enter into any agreement, or
facilitate any plan, with respect to any such event unless proper provision
shall have been made to provide that each holder of a Right (except Rights which
previously have been voided as set forth above) shall thereafter have the right
to receive, upon exercise, Class A Ordinary Shares or their equivalents of the
acquiring company having a value equal to two times the Purchase Price of the
Right then in effect. The events set forth in this paragraph and in the first
paragraph under the heading "Exercise of Rights for Class A Ordinary Shares of
the Company" above are referred to as the "Triggering Events."
Adjustments to Purchase Price
The Purchase Price payable, and the number of Class A Ordinary Shares
(or other securities, as the case may be) issuable upon exercise of the Rights
are subject to adjustment from time to time to prevent dilution (i) in the event
of a dividend of shares on, or a subdivision, combination or reclassification of
, the Ordinary Shares, (ii) upon the grant to holders of the Ordinary Shares of
certain rights or warrants to subscribe for Ordinary Shares or convertible
securities at less than the current market price of the Ordinary Shares or (iii)
upon the distribution to holders of Ordinary Shares of evidences of indebtedness
or assets (excluding regular periodic cash dividends or dividends payable in
Ordinary Shares) or of subscription rights or warrants (other than those
referred to
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above). Prior to the Distribution Date, the Board of Directors of the Company
may make such equitable adjustments as it deems appropriate in the circumstances
in lieu of any adjustment otherwise required by the foregoing.
With certain exceptions, no adjustment in the Purchase Price will be
required until the earlier of (i) three years from the date of the event giving
rise to such adjustment and (ii) the time at which cumulative adjustments
require an adjustment of at least 1% in such adjustment and Purchase Price. No
fractional shares will be issued and, in lieu thereof, an adjustment in cash
will be made based on the market price of the Class A Ordinary Shares on the
last trading date prior to the date of exercise.
Redemption and Exchange of Rights
At any time prior to 5:00 P.M. New York City time on the tenth day
following the Shares Acquisition Date (or such later date as a majority of the
Independent Directors may designate), the Company may redeem the Rig ts in
whole, but not in part, at a price of U.S. $.01 per Right (the "Redemption
Price"). Under certain circumstances set forth in the Rights Agreement, the
decision to redeem shall require the concurrence of a majority of the
Independent Directors. Immediately upon the action of the Board of Directors of
the Company electing to redeem the Rights with, if required, the concurrence of
the Independent Directors, the Company shall make announcement thereof, and upon
such action, the right to exercise the Rights will terminate and the only right
of the holders of Rights will be to receive the Redemption Price.
At any time after the occurrence of the event set forth under the
heading "Exercise of Rights for Class A Ordinary Shares of the Company" above,
the Board of Directors may exchange the Rights (other than Rights owned by an
Acquiring Person which have become void), in whole or in part, at an exchange
ratio of one Class A Ordinary Share, and/or other securities, cash or other
assets deemed to ave the same value as one Class A Ordinary Share, per Right,
subject to adjustment and, if any Class A Ordinary Shares are so delivered, the
receipt by the Company of an amount in U.S. dollars equal to the par value of
each Class A Ordinary Share so delivered.
Until the Rights are exercised or exchanged for Class A Ordinary
Shares, the holders thereof, as such, will have no rights as shareholders of the
Company, including, without limitation, the right to vote or to receive
dividends.
Amendments to Terms of the Rights
Any of the provisions of the Rights Agreement may be amended by the
Board of Directors of the Company prior to the Distribution Date. After the
Distribution Date, the provisions of the Rights Agreement may be amended by the
Board in order to cure any ambiguity, defect or inconsistency, or to make
changes which do not adversely affect the
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interests of holders of Rights (excluding the interest of any Acquiring Person);
provided that no supplement or amendment may be made on or after the
Distribution Date which changes those provisions relating to the principal
economic terms of the Rights.
The term "Independent Directors" means any member of the Board of
Directors of the Company who was a member of the Board prior to the time that
any person becomes an Acquiring Person, and any person who is subsequently
elected to the Board if such person is recommended or elected by a majority of
the Independent Directors, but shall not include an Acquiring Person or any
representative thereof.
Item 2. Exhibits
1 and 2. Rights Agreement dated as of September 12,
1996 between Mid Ocean Limited and The Bank
of New York, as Rights Agent, which includes
as Exhibit A thereto the form of Right
Certificate.
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant has duly caused this registration statement to be
signed on its behalf by the undersigned thereto duly authorized.
MID OCEAN LIMITED
By: /s/ Michael A. Butt
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Name: Michael A. Butt
Title: President and CEO
Dated: September 20, 1996
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EXHIBIT INDEX
1 and 2. Rights Agreement dated as of September 12,
1996 between Mid Ocean Limited and The Bank
of New York, as Rights Agent, which includes
as Exhibit A thereto the form of Right
Certificate.
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EXHIBIT 1 AND 2
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MID OCEAN LIMITED
AND
THE BANK OF NEW YORK, RIGHTS AGENT
RIGHTS AGREEMENT
DATED AS OF SEPTEMBER 12, 1996
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TABLE OF CONTENTS
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PAGE
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SECTION 1. Definitions........................................................1
SECTION 2. Appointment of Rights Agent........................................6
SECTION 3. Issue of Right Certificates........................................6
SECTION 4. Form of Right Certificates.........................................8
SECTION 5. Countersignature and Registration..................................8
SECTION 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates...............................................9
SECTION 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights....................................................10
SECTION 8. Cancellation and Destruction of Right Certificates................13
SECTION 9. Reservation and Availability of Class A Ordinary Shares...........13
SECTION 10. Class A Ordinary Shares Record Date..............................14
SECTION 11. Adjustment of Purchase Price, Number of Shares or
Number of Rights..........................................15
SECTION 12. Certificate of Adjusted Purchase Price or Number of
Shares....................................................22
SECTION 13. Combination, Consolidation, Merger or Sale or Transfer of
Assets or Earning Power...................................23
SECTION 14. Fractional Rights and Fractional Shares..........................25
SECTION 15. Rights of Action.................................................26
SECTION 16. Agreement of Right Holders.......................................26
SECTION 17. Right Certificate Holder Not Deemed a Shareholder................27
SECTION 18. Concerning the Rights Agent......................................28
SECTION 19. Merger or Consolidation or Change of Name of Rights
Agent.....................................................28
SECTION 20. Duties of Rights Agent...........................................29
SECTION 21. Change of Rights Agent...........................................31
SECTION 22. Issuance of New Right Certificates...............................32
SECTION 23. Redemption and Termination.......................................33
SECTION 24. Exchange.........................................................34
SECTION 25. Notice of Certain Events.........................................35
SECTION 26. Notices..........................................................36
SECTION 27. Supplements and Amendments.......................................36
SECTION 28. Successors.......................................................37
SECTION 29. Determinations and Actions by the Board of Directors, etc........37
SECTION 30. Benefits of this Agreement.......................................38
SECTION 31. Severability.....................................................38
SECTION 32. Governing Law....................................................38
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PAGE
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SECTION 33. Counterparts.....................................................38
SECTION 34. Descriptive Headings.............................................38
Exhibit A - Form of Right Certificate
- Form of Assignment
- Certificate
- Notice
- Form of Election to Purchase
- Certificate
- Notice
Exhibit B - Summary of Rights to Purchase
Class A Ordinary Shares
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RIGHTS AGREEMENT
Rights Agreement, executed as a deed and dated as of September 12, 1996
(the "Agreement"), between Mid Ocean Limited, a company incorporated with
limited liability under the Cayman Islands Companies Law (the "Company"), and
The Bank of New York, a New York banking corporation (the "Rights Agent").
W I T N E S S E T H:
WHEREAS, the Board of Directors of the Company on September 12, 1996
(the "Rights Dividend Declaration Date") authorized and declared a distribution
(the "Distribution") of one Right for each outstanding Ordinary Share, U.S.
$0.20 par value, of the Company (the "Ordinary Shares") outstanding at the close
of business on October 1, 1996 (the "Record Date") and has authorized the
issuance of one Right (as such number may hereinafter be adjusted pursuant to
the provisions of Section 11(i) hereof) in respect of each Ordinary Share issued
between the Record Date and the earlier of the Distribution Date or the
Expiration Date (as such terms are hereinafter defined), each Right initially
representing the right to purchase, under certain circumstances, one Class A
Ordinary Share, U.S. $0.20 par value, of the Company (the "Class A Ordinary
Shares"), upon the terms and subject to the conditions hereinafter set forth
(the "Rights");
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
SECTION 1. Definitions. For purposes of this Agreement, the following
terms have the meanings indicated:
"Acquiring Person" shall mean any Person who or which, together with
all Affiliates and Associates of such Person, shall be the Beneficial Owner of
securities of the Company constituting a Substantial Block, but shall not
include (i) the Company, any Subsidiary of the Company, any employee benefit
plan of the Company or of any Subsidiary of the Company or any Person organized,
appointed or established by the Company or any Subsidiary of the Company for or
pursuant to the terms of any such plan, (ii) any Person who or which, together
with all Affiliates and Associates of such Person, becomes the Beneficial Owner
of a Substantial Block solely as a result of a change in the aggregate number of
Ordinary Shares or other voting securities of the Company outstanding since the
last date on which such Person acquired Beneficial Ownership of any securities
of the Company, (iii) any Person who or which, together with all Affiliates and
Associates of such Person, would on the date of this Agreement but for this
clause (iii) have been an "Acquiring Person" (a "Pre-existing Holder"), as long
as such Pre-existing Holder does not subsequently become the Beneficial Owner of
additional securities of, or otherwise increase its Beneficial Ownership of
securities of, the Company in any manner other than (A) as a result of a
purchase or acquisition (or agreement in respect thereof) of
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Beneficial Ownership of additional securities of the Company (each an
"Acquisition") by such Pre-existing Holder so long as such Acquisition does not
cause such Pre-existing Holder to become the Beneficial Owner of more than 30%
of the voting securities of the Company or 25% of all shares of the Company on a
fully diluted basis, or (B) solely as a result of an acquisition by the Company
of, or other change by the Company in, its securities which, by reducing the
number of shares of the Company outstanding, increases the proportionate number
of shares of the Company beneficially owned by such Pre-existing Holder, in
which event (other than as provided in subclause (A) or (B)) such Person shall
no longer be considered a Pre-existing Holder, (iv) any Person who or which,
together with all Affiliates and Associates of such Person, at any time after
the date of this Agreement, is a Transferee Holder (as defined below), or (v)
any Person who or which, together with all Affiliates and Associates of such
Person, becomes the Beneficial Owner of a Substantial Block in the good faith
belief that such acquisition would not (x) cause such Person and its Affiliates
and Associates to become the Beneficial Owner of a Substantial Block and such
Person relied in good faith in computing the percentage of its voting power on
publicly filed reports or documents of the Company which are inaccurate or
out-of-date or (y) otherwise cause a Distribution Date or the adjustment
provided for in Section 11(a) to occur. For purposes hereof, the term
"Transferee Holder" shall mean any Person who or which, together with all
Affiliates and Associates of such Person, acquires securities of the Company
from a Pre-existing Holder, and immediately after giving effect to such transfer
is the Beneficial Owner of up to but not more than the number of voting shares
of which the Pre-existing Holder is the Beneficial Owner prior to such transfer,
as long as such Person, together with all Affiliates and Associates of such
Person, does not subsequently become the Beneficial Owner of any additional
securities of the Company in any manner other than that referred to in subclause
(A) (if, and only if, such Transferee Holder has acquired all securities of the
Company held by a Pre-existing Holder) or (B) above, in which event (other than
as provided in subclause (A) (if, and only if, such Transferee Holder has
acquired all securities of the Company held by a Pre-existing Holder) or (B))
such Person shall no longer be considered a Transferee Holder. Notwithstanding
clause (v) of the first sentence of this definition, if any Person that is not
an Acquiring Person due to such clause (v) does not cease to be the Beneficial
Owner of a Substantial Block by the close of business on the last Business Day
of a period to be determined by the Board of Directors of the Company and
specified in a notice from the Company that such Person is the Beneficial Owner
of a Substantial Block, such Person shall, at the end of such specified period,
become an Acquiring Person (and such clause (v) shall no longer apply to such
Person). No failure by the Board of Directors of the Company to give such notice
for a period of time, and no notice specifying a particular time period by which
such Person must cease to be the Beneficial Owner of a Substantial Block, shall
be deemed a waiver of the right of the Board of Directors to subsequently give
or modify such notice. For purposes of this definition, the determination
whether any Person acted in good faith shall be conclusively determined by the
Board of Directors of the Company, acting by a vote of those directors of the
Company whose approval would be required to redeem the Rights under Section 23
hereof.
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"Act" shall have the meaning set forth in Section 9(c) hereof.
"Adjustment Shares" shall have the meaning set forth in Section
11(a)(ii) hereof.
"Affiliate" and "Associate" shall have the respective meanings ascribed
to such terms in Rule 12b-2 of the General Rule and Regulations under the U.S.
Securities Exchange Act of 1934, as amended (the "Exchange Act"), as in effect
on the date hereof.
"Agreement" shall have the meaning set forth in the introduction
hereto.
A Person shall be deemed the "Beneficial Owner" of and shall be deemed
to "beneficially own", any securities:
(i) which such Person or any of such Person's Affiliates or
Associates has, directly or indirectly, the right to acquire (whether
such right is exercisable immediately or only after the passage of time
or upon the occurrence of an event) pursuant to any agreement,
arrangement or understanding (whether or not in writing), or upon the
exercise of conversion rights, exchange rights, rights, warrants or
options, or otherwise, provided that a Person shall not be deemed the
"Beneficial Owner" of, or to "beneficially own", (1) securities
tendered pursuant to a tender or exchange offer made by or on behalf of
such Person or any of such Person's Affiliates or Associates until such
tendered securities are accepted for purchase or exchange, (2)
securities issuable upon exercise of Rights at any time prior to the
occurrence of a Triggering Event or (3) securities issuable upon
exercise of Rights from and after the occurrence of a Triggering Event,
which Rights were acquired by such Person or any of such Person's
Affiliates or Associates prior to the Distribution Date or pursuant to
Section 3(a) hereof ("Original Rights") or pursuant to Section 11(i) or
Section 22 hereof in connection with an adjustment made with respect to
Original Rights;
(ii) which such Person or any of such Person's Affiliates or
Associates has, directly or indirectly, the right to vote or dispose of
or has "beneficial ownership" of (as determined pursuant to Rule 13d-3
of the General Rules and Regulations under the Exchange Act), including
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 subparagraph (ii) if the agreement, arrangement or understanding
to vote such security (1) arises solely from a revocable proxy given in
response to a public proxy or consent solicitation made pursuant to,
and in accordance with, the applicable rules and regulations of the
Exchange Act and (2) is not then reportable on Schedule 13D under the
Exchange Act (or any comparable or successor report);
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(iii) which are beneficially owned, directly or indirectly, by
any other Person (or any Affiliate or Associate thereof) with which
such Person or any of such Person's 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 (ii) above) or disposing
of any securities of the Company; or
(iv) which are directly, indirectly or constructively owned by
such Person or any of such Person's Affiliates or Associates, within
the meaning of Section 958 of the U.S. Internal Revenue Code of 1986,
as amended.
Notwithstanding the foregoing, nothing contained in this definition shall cause
a Person ordinarily engaged in business as an underwriter of securities to be
the "Beneficial Owner" of, or to "beneficially own", any securities acquired in
a bona fide firm commitment underwriting pursuant to an underwriting agreement
with the Company.
"Business Day" shall mean any day other than a Saturday, Sunday, or a
day on which banking institutions in the State of New York, U.S.A., are
authorized or obligated by law or executive order to close.
"Cayman Islands Companies Law" shall mean the Companies Law of the
Cayman Islands, as amended, modified or re-enacted from time to time.
"Certification" shall have the meaning set forth in Section 18 hereof.
"Close of Business" on any given date shall mean 5:00 P.M., New York
City time, on such date, provided that if such date is not a Business Day,
"Close of Business" shall mean 5:00 P.M., New York City time, on the next
succeeding Business Day.
"Current Value" shall have the meaning set forth in Section 11(a)(iii)
hereof.
"Distribution Date" shall have the meaning set forth in Section 3(a)
hereof.
"Equivalent Ordinary Shares" shall have the meaning set forth in
Section 11(b) hereof.
"Exchange Act" shall have the meaning set forth in the definitions of
"Affiliate" and "Associate" above.
"Exchange Ratio" shall have the meaning set forth in Section 24(a)
hereof.
"Expiration Date" shall have the meaning set forth in Section 7(a)
hereof.
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"Final Expiration Date" shall have the meaning set forth in Section
7(a) hereof.
"Independent Director" shall mean 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 prior to the time that 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 Independent Directors.
"Original Rights" shall have the meaning set forth in the definition of
"Beneficial Owner" above.
"Person" shall mean any individual, firm, corporation, company,
partnership or other entity, including any "group" within the meaning of Section
13(d)(3) of the Exchange Act and the General Rules and Regulations thereunder.
"Principal Party" shall have the meaning set forth in Section 13(b)
hereof.
"Purchase Price" shall have the meaning set forth in Section 4(a)
hereof.
"Redemption Price" shall have the meaning set forth in Section 23(a)
hereof.
"Right Certificate" shall have the meaning set forth in Section 3(a)
hereof.
"Section 11(a)(ii) Event" shall mean any Event described in Section
11(a)(ii).
"Section 11(a)(ii) Trigger Date" shall have the meaning set forth in
Section 11(a)(iii).
"Section 13 Event" shall mean any event described in Section 13(a).
"Shares Acquisition Date" shall mean the first date of public
announcement (which announcement, for purposes of this definition, includes the
filing of a report pursuant to Section 13(d) of the Exchange Act) by the Company
or an Acquiring Person that an Acquiring Person has become such.
"Spread" shall have the meaning set forth in Section 11(a)(iii) hereof.
"Subsidiary" shall mean, with reference to any Person, any company (or
other entity) of which an amount of voting securities (or comparable ownership
interests) sufficient to elect at least a majority of the directors (or
comparable persons) of such
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company (or other entity) is beneficially owned or otherwise controlled,
directly or indirectly, by such Person.
"Substantial Block" shall mean a number of (i) Ordinary Shares equal to
or in excess of 20% of the number of Ordinary Shares then outstanding or (ii)
voting securities of the Company having the right to vote 20% or more of the
total votes entitled to be cast at any general meeting of the Company.
"Substitution Period" shall have the meaning set forth in Section
11(a)(iii) hereof.
"Summary of Rights" shall have the meaning set forth in Section 3(b)
hereof.
"Trading Day" shall have the meaning set forth in Section 11(d) hereof.
"Triggering Event" shall mean any Section 11(a)(ii) Event or Section 13
Event.
SECTION 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company shall act as Co-Rights agent and may from time to time appoint such
other Co-Rights Agents as it may deem necessary or desirable upon ten calendar
days' written notice to the Rights Agent. In no event shall the Rights Agent
have any duty to supervise or in any way be liable for such Co-Rights Agents.
SECTION 3. Issue of Right Certificates. (a) Until the earlier of (i)
the close of business on the tenth calendar day after the Shares Acquisition
Date (or such later date as may be designated by action of a majority of the
Independent Directors) or (ii) the close of business on the tenth calendar day
after the date of the commencement of, or first public announcement of the
intent of any Person to commence, a tender or exchange or any other offer if,
upon consummation thereof, such Person would be an Acquiring Person (or such
later date as may be designated by action of a majority of the Independent
Directors) (the earlier of the dates in subsection (i) and (ii) hereof being
herein referred to as the "Distribution Date"), (x) the Rights will be evidenced
(subject to the provisions of paragraph (b) of this Section 3) by the
certificates for the Ordinary Shares registered in the names of the holders of
Ordinary Shares (which certificates for the Ordinary Shares shall be deemed also
to be Right Certificates) and not by separate Right Certificates, and (y) the
right to receive Right Certificates will be transferable only in connection with
the transfer of the Ordinary Shares. As soon as practicable after receipt by the
Rights Agent of written notice from the Company of the Distribution Date, the
Rights Agent, at the Company's expense, will send by first-class, postage
prepaid mail, to each record holder of Ordinary Shares as of the close of
business on the Distribution Date, at the address of such holder shown on the
records of the Company, a Right Certificate, in substantially the form of
Exhibit A hereto, evidencing one Right for each Ordinary Share so held, subject
to
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adjustment as provided herein. As of the Distribution Date, the Right will be
evidenced solely by such Right Certificates.
(b) As soon as practicable following the Record Date, the Company will
send a copy of a Summary of Rights to Purchase Class A Ordinary Shares, in
substantially the form attached hereto as Exhibit B (the "Summary Rights"), by
first-class, postage prepaid mail, to each record holder of Ordinary Shares as
of the close of business on the Record Date, at the address of such holder shown
on the records of the Company. With respect to certificates for the Ordinary
Shares outstanding as of the Record Date, until the Distribution Date, the
Rights will be evidenced by such certificates for the Ordinary Shares, and the
registered holders of Ordinary Shares shall also be the registered holders of
the associated Rights. Until the Distribution Date (or earlier redemption or
expiration of the Rights), the surrender for transfer of any of the certificates
for the Ordinary Shares outstanding on the Record Date shall also constitute the
transfer of the Rights associated with the Ordinary Shares represented by such
certificate.
Rights shall be issued in respect of all Ordinary Shares issued after
the Record Date but prior to the earlier of the Distribution Date or the
Expiration Date, or, in certain circumstances provided in Section 22 hereof,
after the Distribution Date. Certificates representing such Ordinary Shares
shall have impressed on, printed on, written on or otherwise affixed to them the
following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement between Mid Ocean
Limited and The Bank of New York dated as of September 12, 1996 (the
"Rights Agreement"), the terms of which are hereby incorporated herein
by reference and a copy of which is on file at the principal executive
offices of Mid Ocean Limited. Under certain circumstances, as set forth
in the Rights Agreement, such Rights will be evidenced by separate
certificates and will no longer be evidenced by this certificate. Mid
Ocean Limited will mail to the holder of this certificate a copy of the
Rights Agreement as in effect on the date of mailing without charge
within five Business Days after receipt of a written request therefor.
Under certain circumstances set forth in the Rights Agreement, Rights
may become null and void.
After the due execution of any supplement or amendment to this Agreement in
accordance with the terms hereof, the reference to this Agreement in the
foregoing legend shall mean the Agreement as so supplemented or amended. Until
the Distribution Date, the Rights associated with the Ordinary Shares
represented by certificates containing the foregoing legend shall be evidenced
by such certificates alone, and the surrender for transfer of any of such
certificates shall also constitute the transfer of the Rights associated with
the Ordinary Shares represented by such certificates.
7
<PAGE> 11
SECTION 4. Form of Right Certificates. (a) The Right Certificates (and
the forms of election to purchase shares and of assignment to be printed on the
reverse thereof) shall be substantially the same as Exhibit A hereof 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 or with any rule or regulation made pursuant
thereto 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
shall be in machine-printable format and in a form reasonably satisfactory to
the Rights Agent. Subject to the provisions of Section 11 and Section 22 hereof,
the Right Certificates, whenever distributed, shall be dated as of the Record
Date, shall show the date of countersignature, and on their face shall entitle
the holders thereof to purchase such number of Class A Ordinary Shares (or
following a Triggering Event, other securities, cash or other assets, as the
case may be) as shall be set forth therein at the price per share set forth
therein (the "Purchase Price"), but the number of such shares and the Purchase
Price shall be subject to adjustment as provided herein.
(b) Any Right Certificate issued pursuant to Section 3(a) or 22 hereof
that represents Rights beneficially owned by: (i) an Acquiring Person or any
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 to holders of equity interests in such Acquiring Person or to
any Person with whom such Acquiring Person has any continuing agreement,
arrangement or understanding (whether or not in writing) regarding the
transferred Rights or (B) a transfer which the Board of Directors of the Company
has determined is part of a plan, arrangement or understanding (whether or not
in writing) which has as a primary purpose or effect avoidance of Section 7(e)
hereof, and any Right Certificate issued pursuant to Section 6 or 11 hereof upon
transfer, exchange, replacement or adjustment of any other Right Certificate
referred to in this sentence, shall contain (to the extent feasible) 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). Accordingly, this Right Certificate
and the Rights represented hereby may be or may become null and void in
the circumstances specified in Section 7(e) of such Agreement.
SECTION 5. Countersignature and Registration. The Right Certificates
shall be executed on behalf of the Company by one of its authorized officers,
either manually or by
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<PAGE> 12
facsimile signature. The Right Certificates shall be countersigned by an
authorized signatory of the Rights Agent either manually or by facsimile
signature and shall not be valid for any purpose unless so countersigned. In
case any officer of the Company who shall have signed any of 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, nevertheless, may be countersigned by the Rights Agent,
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;
and 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.
In case any authorized signatory of the Rights Agent who shall have
countersigned any of the Right Certificates shall cease to be such signatory
before delivery by the Company, such Right Certificates, nevertheless, may be
issued and delivered by the Company with the same force and effect as though the
person who countersigned such Right Certificates had not ceased to be such
signatory; and any Right Certificates may be countersigned on behalf of the
Rights Agent by any person who, at the actual date of the countersignature of
such Right Certificate, shall be a proper signatory of the Rights Agent to
countersign such Right Certificate, although at the date of the execution of
this Rights Agreement any such person was not such a signatory.
Following the Distribution Date, the Rights Agent will keep or cause to
be kept, at its office designated for such purpose, books for registration and
transfer of the Right Certificates issued hereunder. Such books shall show the
names and addresses of the respective holders of the Right Certificates issued
hereunder. Such books shall show the names and addresses of the respective
holders of the Right Certificates, the number of Rights evidenced on its face by
each of the Right Certificates and the date of countersignature of each of the
Right Certificates.
SECTION 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates. Subject
to the provisions of Section 14 hereof, at any time after the close of business
on the Distribution Date, and at or prior to the close of business on the
Expiration Date, any Right Certificate or Certificates may be transferred, split
up, combined or exchanged for another Right Certificates or Right Certificates,
entitling the registered holder to purchase a like number of Class A Ordinary
Shares (or following a Triggering Event, other securities, cash or other assets,
as the case may be) as the Right Certificate or Right Certificates surrendered
then entitled such holder (or former holder in the case of a transfer) to
purchase. Any registered holder desiring to transfer, split up, combine or
exchange any Right Certificates shall make such request in writing delivered to
the Rights Agent, and shall surrender the Right Certificate or Right
Certificates to be transferred, split up, combined or exchanged
9
<PAGE> 13
at the office of the Rights Agent designated for such purpose, along with a
signature guarantee and such other and further documentation as the Rights Agent
may reasonably request. 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 until the registered holder shall have completed
and signed the certificate contained in the form of assignment on the reverse
side of such Right Certificate and shall have provided such additional evidence,
as the Company shall reasonably request of the identity of the Beneficial Owner,
Affiliates or Associates of such Beneficial Owner or holder, or any other Person
with which such holder or any of such holder's Affiliates or Associates has any
agreement, arrangement or understanding (whether or not in writing) for the
purpose of acquiring, holding, voting or disposing of securities of the Company.
Thereupon the Rights Agent shall, subject to Section 13 and Section 20(k)
hereof, countersign and deliver to the Person entitled thereto a Right
Certificate or Right Certificates, as the case may be, as so requested. The
Company may require payment from a Right Certificates holder of a sum sufficient
to cover any tax or governmental charge that may be imposed in connection with
any transfer, split up, combination or exchange of Right Certificates.
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, along with a signature guarantee and
such other and further documentation as the Rights Agent may reasonably request,
and if requested by the Company, 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 make and deliver a new Right Certificate of like tenor to the Rights Agent
for 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) Subject to Section 7(e) hereof, the registered holder of any Right
Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein including, without limitation, the restrictions on
exercisability set forth in Sections 9(c), 11(a)(iii), 23(a) and 24(b) hereof)
in whole or in part at any time after the Distribution Date upon surrender of
the Right Certificate, with the form of election to purchase on the reverse side
thereof duly executed, to the Rights Agent at the designated office of the
Rights Agent, together with payment of the aggregate Purchase Price for the
total number of Class A Ordinary Shares (or other securities, cash or other
assets, as the case may be) as to which the Rights are then exercisable, at or
prior to the earliest of (i) the close of business on October 1, 2006 (the
"Final Expiration Date"), (ii) the time at which the Rights are redeemed as
provided in Section 23 hereof and (iii) the time at which all exercisable Rights
are exchanged as provided in Section 24 hereof (such earliest date being herein
referred to as the "Expiration Date").
10
<PAGE> 14
(b) The Purchase Price for each Class A Ordinary Share pursuant to the
exercise of a Right shall initially be $140, shall be subject to adjustment from
time to time as provided in Section 11 and 13 hereof and shall be payable in
lawful money of the United States of America in accordance with paragraph (c)
below. Notwithstanding anything in this Agreement to the contrary, the Purchase
Price for each Class A Ordinary Share shall in no event be less than the par
value of such Ordinary Share.
(c) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase and the certificate duly executed
and completed accompanied by payment of the Purchase Price for the number of
Class A Ordinary Shares (or other securities, cash or other assets, as the case
may be) to be purchased and an amount equal to any applicable transfer tax, the
Rights Agent shall thereupon, subject to Section 20(k), promptly (i) requisition
from the Company certificates for the number of Class A Ordinary Shares to be
purchased, (ii) if the Company shall have elected to deposit the total number of
Class A Ordinary Shares issuable upon exercise of the Rights hereunder with a
depositary agent, requisition from the depositary agent depositary receipts
representing such number of Class A Ordinary Shares as are to be purchased (in
which case certificates for the Class A Ordinary Shares represented by such
receipts shall be deposited by the transfer agent with the depositary agent) and
the Company hereby directs the depositary agent to comply with such request,
(iii) when appropriate, requisition from the Company the amount of cash to be
paid in lieu of issuance of fractional shares in accordance with Section 14,
(iv) promptly after receipt of such certificates or depositary receipts, cause
the same to be delivered to or upon the order of the registered holder of such
Right Certificate, registered in such name or names as may be designated by such
holder and (v) when appropriate, after receipt promptly deliver such cash to or
upon the order of the registered holder of such Right Certificate. The payment
of the then Purchase Price must be made in cash or by certified bank check or
bank draft or money order repayable to the order of the Company or the Rights
Agent. In the event that the Company is obligated to issue securities,
distribute property or pay cash pursuant to Section 11(a)(iii) hereof, the
Company will make all arrangements necessary so that cash, property or
securities are available for reissuance, distribution or payment by the Rights
Agent, if and when appropriate.
(d) In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be issued
by the Rights Agent to the registered holder of such Right Certificate or to his
fully authorized assigns, subject to the provisions of Section 14 hereof.
(e) 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
11
<PAGE> 15
the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person
(or of any such Associate of Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and receives such Right
pursuant to either (A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring Person or to
any Person with whom the Acquiring Person has any continuing agreement,
arrangement or understanding (whether or not in writing) regarding the
transferred Rights or (B) a transfer which the Board of Directors of the Company
has determined is part of a plan, arrangement or understanding (whether or not
in writing) which has as a primary purpose or effect the avoidance of this
Section 7(e), 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(e) and Section 4(b) hereof 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 any of its
Affiliates, Associates or transferees hereunder.
(f) 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 upon the occurrence of any purported exercise as
set forth in this Section 7 unless such registered holder shall have (i)
completed and signed the certificate contained in the form of election to
purchase set forth on the reverse side of the Right Certificate surrendered for
such exercise, and (ii) provided such additional evidence of the identity of the
Beneficial Owner, Affiliate or Associate of such Beneficial Owner or holder, or
of any other person with which such holder or any of such holder's Affiliates or
Associates has an agreement, arrangement or understanding (whether or not in
writing) for the purpose of acquiring, holding, voting or disposing of any
securities of the Company as the Company shall reasonably request.
(g) Notwithstanding anything in the Agreement to the contrary, a holder
of a Right may elect, upon notice to the Company, to receive Class C Ordinary
Shares, U.S. $0.20 par value, of the Company in lieu of all or any part of the
Class A Ordinary Shares such holder would otherwise be entitled to purchase upon
exercise, or receive upon exchange, of the Rights if receipt of such Class C
Ordinary Shares would be necessary to insure compliance by such holder with the
provisions of the U.S. Bank Holding Company Act of 1956, as amended. Upon
receipt of such notice, the Rights held by such holder shall, without any
further action on the part of the Company or holder of the Rights, become Rights
to purchase or receive upon exchange, in accordance with the terms of this
Agreement, such number of Class C Ordinary Shares equivalent to the number of
Class A Ordinary Shares the holder of the Right would otherwise have the right
to receive.
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<PAGE> 16
(h) References in the Agreement to the purchase of Class A Ordinary
Shares upon exercise of a Right shall be construed to include a subscription for
Class A Ordinary Shares and all references to "purchase" in such context shall
be interpreted accordingly.
SECTION 8. Cancellation and Destruction of Right Certificates. All
Right Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Agreement. The Company shall deliver to the Rights
Agent for cancellation and retirement, and the Rights Agent shall so 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 Class A Ordinary Shares. (a)
The Company covenants and agrees that it will cause to be reserved and kept
available out of its authorized and unissued Ordinary Shares (and following the
occurrence of a Triggering Event, out of its authorized and unissued other
securities), the number of Class A Ordinary Shares (and, following the
occurrence of a Triggering Event, Ordinary Shares and other securities) that
will be sufficient to permit the exercise in full of all outstanding Rights (it
being understood that any of the foregoing shares or securities may also be
reserved for other purposes) or will take such other steps as are appropriate to
assure that the number of such shares or securities (or their equivalents)
sufficient to permit the exercise in full of all outstanding Rights will be
available upon such exercise.
(b) So long as the Class A Ordinary Shares (and, following the
occurrence of a Triggering Event, other securities) issuable upon the exercise
of Rights may be listed on any U.S. national securities exchange, the Company
shall use its best efforts to cause, from and after such time as the Rights
become exercisable (but only to the extent that it is reasonably likely that the
Rights will be exercised), all shares reserved for such issuance to be listed on
such exchange upon official notice of issuance upon such exercise.
(c) The Company shall use its best efforts to (i) file, as soon as
practicable following the first occurrence of a Section 11(a)(ii) Event, or as
soon as required by law, as the case may be, a registration statement under the
U.S. Securities Act of 1933, as amended (the "Act"), with respect to the
securities purchasable upon exercise of the Rights on an appropriate form, (ii)
cause such registration statement to become effective as soon as practicable
after such filing, and (iii) cause such registration statement to remain
effective (with a prospectus at all times meeting the requirements of the Act)
until the earlier of (A) the date as of which the Rights are no longer
exercisable for such
13
<PAGE> 17
securities, and (B) the Expiration Date. The Company will also take such action
as may be appropriate under the blue sky laws of the various states. The Company
may temporarily suspend, for a period of time not to exceed ninety (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 and shall give
simultaneous written notice to the Rights Agent stating that the exercisability
of the Rights has been temporarily suspended, as well as a public announcement
and notice to the Rights Agent at such time as the suspension is no longer in
effect. Notwithstanding any provisions of this Agreement to the contrary, the
Rights shall not be exercisable in any jurisdiction unless the requisite
qualifications in such jurisdiction shall have been obtained.
(d) The Company covenants and agrees that it will take all such action
as may be necessary to ensure that all Class A Ordinary Shares (and following
the occurrence of a Triggering Event, other securities) delivered upon exercise
of Rights shall, at the time of delivery of the certificates for such shares
(subject to payment of the Purchase Price), be duly and validly authorized and
issued and fully paid and nonassessable.
(e) The Company further covenants and agrees that it will pay when due
and payable any and all federal and state transfer taxes and charges which may
be payable in respect of the issuance or delivery of the Right Certificates or
of any Class A Ordinary Shares (or other securities, as the case may be) upon
the exercise of Rights. The Company shall not, however, be required (a) to pay
any transfer tax which may be payable in respect of any transfer involved in the
transfer or delivery of Right Certificates or the issuance or delivery of
certificates for the Class A Ordinary Shares (or other securities, as the case
may be) in a name other than that of the registered holder of the Right
Certificate evidencing Rights surrendered for exercise or (b) to issue or
deliver any certificates for Class A Ordinary Shares (or other securities, as
the case may be) upon the exercise of any Rights until any such tax shall have
been paid (any such tax being payable by the holder of such Right Certificate at
the time of surrender) or until it has been established to the Company's
satisfaction that no such tax is due.
SECTION 10. Class A Ordinary Shares Record Date. Each person in whose
name any certificate for any number of Class A Ordinary Shares (or other
securities, as the case may be) is issued upon the exercise of Rights shall for
all purposes be deemed to have become the holder of record of such Class A
Ordinary Shares (or other securities, as the case may be) represented thereby
on, and such certificate shall be dated the date upon which the Right
Certificate evidencing such Rights was duly surrendered and payment of the
Purchase Price (and any applicable transfer taxes) was made and shall show the
date of countersignature; provided that if the date of such surrender and
payment is a date upon which the Class A Ordinary Shares (or other securities,
as the case may be) transfer books of the Company are closed, such person shall
be entered as the record holder of such shares on, and such certificate shall be
dated, the next succeeding Business Day in which
14
<PAGE> 18
the Class A Ordinary Shares (or other securities, as the case may be) transfer
books of the Company are open. Prior to the exercise of the Rights evidenced
thereto, 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, without limitation, 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 or general
meetings of the Company, except as provided herein.
SECTION 11. Adjustment of Purchase Price, Number of Shares or Number of
Rights. The Purchase Price, the number of shares covered by each Right and the
number of Rights outstanding are subject to adjustment from time to time as
provided in this Section 11.
(a) (i) In the event the Company shall at any time after the date of
this Agreement (A) declare a dividend on the Ordinary Shares payable in Ordinary
Shares, (B) subdivide the outstanding Ordinary Shares, (C) combine the
outstanding Ordinary Shares into a smaller number of shares or (D) issue any
share capital in a reclassification of the Ordinary Shares (including any such
reclassification in connection with a combination, consolidation or merger in
which the Company is the continuing or surviving corporation), except as
otherwise provided in this Section 11(a) and Section 7(e) hereof, the Purchase
Price in effect at the time of the record date for such dividend or of the
effective date of such subdivision, combination or reclassification, and the
number and kind of Class A Ordinary Shares or share capital, as the case may be,
issuable on such date, shall be proportionately adjusted so that the holder of
any Right exercised after such time shall be entitled to receive upon payment of
the Purchase Price then in effect the aggregate number and kind of share capital
which, if such Right had been exercised immediately prior to such date and at a
time when the Ordinary Shares (or other securities) transfer books of the
Company were open, he would have owned upon such exercise and been entitled to
receive by virtue of such dividend, subdivision, combination or
reclassification. If an event occurs which would require 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) Subject to Section 24 of this Agreement, in the event any
Person, alone or together with its Affiliates and Associates, becomes
at any time after the Rights Dividend Declaration Date, an Acquiring
Person except as the result of a transaction set forth in Section 13(a)
hereof, then, prior to the date on which the Company's right of
redemption pursuant to Section 23(a) expires (as the same may be
extended pursuant to the terms of this Agreement) proper provision
shall be made so that each holder of a Right, except as provided in
Section 7(e) hereof, shall thereafter have a right to receive, upon
exercise thereof at the then current Purchase Price in accordance with
the terms of this Agreement, such number of Class A Ordinary Shares of
the Company as shall equal the result obtained by (x)
15
<PAGE> 19
multiplying the then current Purchase Price by the number of Class A
Ordinary Shares for which a Right is then exercisable and dividing that
product by (y) 50% of the current market price per Class A Ordinary
Share of the Company (determined pursuant to Section 11(d) on the date
of the occurrence of any one of the events listed above in this
subparagraph (ii)) (such number of shares is hereinafter referred to as
the "Adjustment Shares"), provided that the Purchase Price and the
number of Adjustment Shares shall be further adjusted as provided in
this Agreement to reflect any events occurring after the date of such
first occurrence.
(iii) In the event that the number of Class A Ordinary Shares
which are authorized by the Company's Memorandum and Articles of
Association but not outstanding or reserved for issuance for purposes
other than upon exercise of the Rights is not sufficient to permit the
exercise in full of the Rights in accordance with the foregoing
subparagraph (ii), the Company shall (A) determine the excess of (1)
the value of the Adjustment Shares issuable upon the exercise of a
Right (the "Current Value") over (2) the Purchase Price (such excess,
the "Spread"), and (B) with respect to each Right, make adequate
provision to substitute for the Adjustment Shares, upon exercise of the
Rights and payment of the applicable Purchase Price, (1) cash, (2) a
reduction in the Purchase Price, (3) other equity securities of the
Company (including, without limitation, preference shares, or units of
preference shares, which a majority of the Independent Directors and
the Board of Directors of the Company have deemed to have the same
value as Class A Ordinary Shares (such preference shares, "Ordinary
Share Equivalents")), (4) debt securities of the Company, (5) other
assets, or (6) any combination of the foregoing, having an aggregate
value equal to the Current Value, where such aggregate value has been
determined by a majority of the Independent Directors and the Board of
Directors of the Company based upon the advice of a nationally
recognized investment banking firm selected by the Board of Directors
of the Company; provided that, if the Company shall not have made
adequate provision to deliver value pursuant to clause (B) above within
thirty (30) days following the later of (x) the first occurrence of a
Section 11(a)(ii) Event and (y) the date on which the Company's right
of redemption pursuant to Section 23(a) expires, as the same may be
extended pursuant to the terms of this Agreement (the later of (x) and
(y) being referred to herein as the "Section 11(a)(ii) Trigger Date"),
then the Company shall be obligated to deliver, upon the surrender for
exercise of a Right and without requiring payment of the Purchase
Price, Class A Ordinary Shares (to the extent available) and then, if
necessary, cash, which shares and/or cash have an aggregate value equal
to the Spread less an amount equal to the aggregate number of Class A
Ordinary Shares so delivered multiplied by the par value of the Class A
Ordinary Shares. If the Board of Directors of the Company shall
determine in good faith that it is likely that sufficient additional
Class A Ordinary Shares could be authorized for issuance upon exercise
in full of the Rights, the thirty (30) day
16
<PAGE> 20
period set forth above may be extended to the extent necessary, but not
more than ninety (90) days after the Section 11(a)(ii) Trigger Date, in
order that the Company may seek shareholder approval for the
authorization of such additional shares (such period, as it may be
extended, the "Substitution Period"). To the extent that the Company
determines that some action need be taken pursuant to the first and/or
second sentences of this Section 11(a)(iii) the Company (x) shall
provide, subject to Section 7(e) hereof, 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 of distribution to be made pursuant to
such first sentence and to determine the value thereof. In the event of
any such suspension, the Company shall issue a public announcement and
shall give concurrent written notice to the Rights Agent stating that
the exercisability of the Rights has been temporarily suspended, as
well as a public announcement and notice to the Rights Agent at such
time as the suspension is no longer in effect. For purposes of this
Section 11(a)(iii), the value of the Class A Ordinary Shares shall be
the current market price (as determined pursuant to Section 11(d)
hereof) per Class A Ordinary Share on the Section 11(a)(ii) Trigger
Date and the value of any "Ordinary Share Equivalent" shall be deemed
to be the same as the value of the Class A Ordinary Shares on such
date. The Company shall give the Rights Agent notice of the selection
of any "Ordinary Share Equivalent" under this Section 11(a)(iii).
(b) In case the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Ordinary Shares entitling them
(for a period expiring within 45 calendar days after such record date) to
subscribe for or purchase Ordinary Shares (or securities having substantially
the same rights, privileges and preferences as the Ordinary Shares ("Equivalent
Ordinary Shares") or convertible into the Ordinary Shares or Equivalent Ordinary
Shares) at a price per Ordinary Share or Equivalent Ordinary Share (or having a
conversion price per share, if a security convertible into the Ordinary Shares
or Equivalent Ordinary Shares) less than the current market price (as defined in
Section 11(d) per Ordinary Share or Equivalent Ordinary Share, as the case may
be) 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 record date by a fraction, of which the numerator shall be the
number of Ordinary Shares outstanding on such record date plus the number of
Ordinary Shares or Equivalent Ordinary Shares which the aggregate offering price
of the total number of Ordinary Shares or Equivalent Ordinary Shares so to be
offered (and/or the aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such current market price and of
which the denominator shall be the number of Ordinary Shares outstanding on such
record date plus the number of additional Ordinary Shares and/or Equivalent
Ordinary Shares to be offered for subscription or purchase (or into which the
convertible securities so to be offered are initially convertible). In case such
subscription price may be paid by delivery of
17
<PAGE> 21
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. Ordinary Shares owned by or held for the account of
the Company shall not be deemed outstanding for the purpose of any such
computation. Such adjustment shall be made successively whenever such a record
date is fixed; and in the event that 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 Ordinary Shares (including any such distribution
made in connection with a combination, consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of indebtedness
or assets (other than a regular periodic cash dividend or a dividend payable in
Ordinary Shares) or subscription rights 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, of which the numerator shall be the
current market price per Class A Ordinary Share (as defined in Section 11(d)) on
such record date, less the fair market value (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) of the portion of the assets or evidences
of indebtedness so to be distributed or of such subscription rights or warrants
applicable to one Ordinary Share and of which the denominator shall be such
current market price per Class A Ordinary Share. Such adjustments shall be made
successively whenever such a record date is fixed; and in the event that such
distribution is not so made, the Purchase Price shall again be adjusted to be
the Purchase Price which would then be in effect if such record date had not
been fixed.
(d) For the purpose of any computation hereunder, other than
computations made pursuant to Section 11(a)(iii), the "current market price" per
Class A Ordinary Share on any date shall be deemed to be the average of the
daily closing prices per Class A Ordinary Share for the thirty (30) consecutive
Trading Days (as such term is hereinafter defined in this paragraph (d))
immediately prior to such date and, for purposes of computations made pursuant
to Section 11(a)(iii) hereof, the "current market price" per Class A Ordinary
Share on any date shall be deemed to be the average of the daily closing prices
per Class A Ordinary Share for the ten (10) consecutive Trading Days immediately
following such date; provided that in the event that the current market price
per Class A Ordinary Share is determined during the period following the
announcement by the issuer of such Class A Ordinary Share of (A) a dividend or
distribution on such Class A Ordinary Shares payable in Class A Ordinary Shares
or securities convertible into Class A Ordinary Shares (other than the Rights)
or (B) any subdivision, combination or reclassification of such Class A Ordinary
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
18
<PAGE> 22
or distribution or the record date for such subdivision, combination or
reclassification, then, and in each such case, the current market price shall be
appropriately 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 Class A Ordinary Shares are
not listed or admitted to trading on the New York Stock Exchange as reported in
the principal consolidated transaction reporting system with respect to
securities listed on the principal U.S. national securities exchange on which
Class A Ordinary Shares are listed or admitted to trading or, if the Class A
Ordinary Shares are not listed or admitted to trading on any U.S. 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
he National Association of Securities Dealers, Inc Automated Quotation system
("NASDAQ") or such other system then in use, or, if on any such date the Class A
Ordinary Shares are not quoted by such organization, the average of the closing
bid and asked prices as furnished by a professional market maker making a market
in the Class A Ordinary Shares selected by the Board of Directors of the
Company. If on any such date no market maker is making a market in the Class A
Ordinary Shares, the fair value of such shares on such date shall be as
determined in good faith by the Independent Directors if the Independent
Directors constitute a majority of the Board of Directors or, in the event the
Independent Directors do not constitute a majority of the Board of Directors, by
an independent investment banking firm selected by the Board of Directors, whose
determination shall be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes. The term "Trading Day" shall mean a day on
which the principal U.S. national securities exchange on which the Class A
Ordinary Shares are listed or admitted to trading is open for the transaction of
business or, if the Class A Ordinary Shares are not listed or admitted to
trading on any U.S. national securities exchange a Monday, Tuesday, Wednesday,
Thursday or Friday on which banking institutions in the State of New York,
U.S.A., are not authorized or obligated by law or executive order to close. If
the Class A Ordinary Shares are not publicly held or not so listed or traded,
"current market price" per share shall mean the fair value per share as
determined in good faith by the Independent Directors if the Independent
Directors constitute a majority of the Board of Directors or, in the event the
Independent Directors do not constitute a majority of the board of Directors, by
an independent investment banking firm selected by the Board of Directors, whose
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 such 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
19
<PAGE> 23
made to the nearest cent or to the nearest ten-thousandth of an Ordinary Share.
Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i) three
years from the date of the transaction which mandates such adjustment and (ii)
the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section 11(a) or
Section 13(a), the holder of any Right thereafter exercised shall become
entitled to receive any share capital other than Class A Ordinary 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 nearly equivalent as practicable to the provisions
with respect to the shares contained in Section 11(a) through (p), inclusive,
and the provisions of Sections 7, 9, 10, 13 and 14 with respect to the Class A
Ordinary Shares shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of Class A Ordinary Shares
purchasable from time to time hereunder upon exercise of the Rights, all subject
to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided in
Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Section 11(b) and (c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of shares (calculated to
the nearest ten-thousandth) obtained by (i) multiplying (x) the number of shares
covered by a Right 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 substitution for any
adjustment in the number of Class A Ordinary Shares purchasable 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 Class A Ordinary Shares
for which a 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 the adjustment of the Purchase Price. The Company shall make a public
announcement and shall give simultaneous written notice to the Rights Agent of
its election to adjust the number of Rights, indicating the record date for 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
20
<PAGE> 24
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 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 Class A Ordinary Shares issuable upon the exercise of the Rights,
the Right Certificates theretofore and thereafter issued may continue to express
the Purchase Price per Class A Ordinary Share and the number of shares which
were expressed in the initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below the then par value, if any, of the number of Class A
Ordinary Shares 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 such number of fully paid and
nonassessable Class A Ordinary 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
of the Class A Ordinary Shares and other share capital or securities of the
Company, if any, issuable upon such exercise over and above the Class A Ordinary
Shares and other share capital or securities 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 the Board of Directors of the Company shall determine to be
advisable in order that any consolidation or subdivision of Ordinary Shares,
issuance wholly for cash of any Ordinary Shares at less
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<PAGE> 25
than the current market price, issuance wholly for cash of Ordinary Shares or
securities which by their terms are convertible into or exchangeable for
Ordinary Shares, dividends of shares or issuance of rights, options or warrants
referred to hereinabove in this Section 11 hereafter made by the Company to
holders of its Ordinary Shares shall not be taxable to such shareholders.
(n) The Company covenants and agrees that, after the Distribution Date,
it will not, except as permitted by Section 23, 24 and 27 hereof, take (nor will
it permit any of its Subsidiaries to take) any action if at the time such action
is taken it is reasonable foreseeable that such action will diminish
substantially or otherwise eliminate the benefits intended to be afforded by the
Rights.
(o) The Company covenants and agrees that it shall not, at any time
after the Distribution Date, (i) combine or consolidate with any other Person
(other than a Subsidiary of the Company in a transaction which complies with
Section 11(n)), (ii) merge with or into any other Person (other than a
Subsidiary of the Company in a transaction which complies with Section 11(n)),
or (iii) sell or transfer (or permit any of its Subsidiaries to sell or
transfer), in one or more transactions, assets or earning power aggregating more
than 50% of the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to any other Person or Persons (other than the Company and/or
any of its Subsidiaries in one or more transactions each of which complies with
Section 11(n)) if (x) at the time of or immediately after such combination,
consolidation, merger or sale there are any rights, warrants or other
instruments or securities outstanding or agreements 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 combination, consolidation, merger or sale, the shareholders of the Person
who constitutes, or would constitute, the "Principal Party" for purposes of
Section 13(a) hereof shall have received a distribution of Rights previously
owned by such Person or any of its Affiliates and Associates.
(p) Notwithstanding anything in this Agreement to the contrary, prior
to the Distribution Date, the Company may, in lieu of making any adjustment to
the Purchase Price, the number of Class A Ordinary Shares eligible for purchase
on exercise of each Right or the number of Rights outstanding, which adjustment
would otherwise be required by Section 11(a)(i), 11(b) 11(c), 11(h) or 11(i),
make such other equitable adjustment or adjustments thereto as the Board of
Directors (whose determination shall be conclusive) deems appropriate in the
circumstances and not inconsistent with the objectives of the Board of Directors
in adopting this Agreement and such Sections.
SECTION 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 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 and the adjusted
Purchase Price, (b) promptly file
22
<PAGE> 26
with the Rights Agent and with each transfer agent for the Ordinary Shares a
copy of such certificate and (c) mail a brief summary thereof to each holder of
a Right Certificate in accordance with Section 26. The Rights Agent shall be
fully protected in relying on any such certificate and on any adjustment therein
contained.
SECTION 13. Combination, Consolidation, Merger or Sale or Transfer of
Assets or Earning Power. (a) In the event that, following the Shares Acquisition
Date, directly or indirectly, (x) the Company shall combine or consolidate with,
or merge with or into, any other Person (other than a Subsidiary of the Company
in a transaction which complies with Section 11(n) ) and the Company shall not
be the continuing or surviving corporation of such combination, consolidation or
merger, (y) any Person (other than a Subsidiary of the Company in a transaction
which complies with Section 11(n)) shall combine, consolidate or merge with or
into the Company and the Company shall be the continuing or surviving
corporation of such combination, consolidation or merger and, in connection with
such combination, consolidation or merger, all or part of the Ordinary Shares
shall be changed into or exchanged for shares or other securities of any other
Person or cash or any other property, or (z) the Company shall sell or otherwise
transfer (or one or more of its Subsidiaries shall sell or otherwise transfer),
in one or more transactions, assets or earning power aggregating more than 50%
of the assets or earning power of the Company and its Subsidiaries (taken as a
whole) to any other Person or Persons (other than the Company or any of its
Subsidiaries in one or more transactions each of which complies with Section
11(n) hereof), then the Company shall not enter into any agreement, or
facilitate any plan with respect to, such event unless proper provision shall
have been made so that (i) each holder of a Right (except as provided in Section
7(e)) shall thereafter have the right to receive, upon the exercise thereof at
the then current Purchase Price in accordance with the terms of this Agreement,
such number of validly issued, fully paid, nonassessable and freely tradeable
Class A Ordinary Shares or their equivalents of the Principal Party (as
hereinafter defined), not subject to any liens, encumbrances, rights of call or
first refusal, or other adverse claims as shall be equal to the result obtained
by (1) multiplying the then current Purchase Price by the number of Class A
Ordinary Shares for which a Right is then exercisable immediately prior to the
first occurrence of a Section 13 Event (or, if a Section 11(a)(ii) Event has
occurred prior to the first occurrence of a Section 13 Event, multiplying the
number of such shares for which a Right was exercisable immediately prior to the
first occurrence of a Section 11(a)(ii) Event by the Purchase Price in effect
immediately prior to such first occurrence), and dividing that product (which,
following the first occurrence of a Section 13 Event, shall be referred to as
the "Purchase Price" for each Right and for all purposes of this Agreement) by
(2) 50% of the current market price per share of common stock or its equivalent
of such Principal Party (determined in the manner described in Section 11(d)) on
the date of consummation of such combination, consolidation, merger, sale or
transfer; (ii) the Principal Party shall thereafter be liable for, and shall
assume, by virtue of such Section 13 Event, all the obligations and duties of
the Company pursuant to this Agreement; (iii) the term "Company" shall
thereafter be deemed to refer to such Principal Party, it being specifically
23
<PAGE> 27
intended that the provisions of Section 11 shall thereafter apply to such
Principal Party, (iv) such Principal Party shall take such steps (including, but
not limited to, the reservation of a sufficient number of its Class A Ordinary
Shares or their equivalents in accordance with Section 9) in connection with
such consummation as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to its
Class A Ordinary Shares or equivalents thereafter deliverable upon the exercise
of the Rights; and (v) the provisions of Section 11(a)(ii) hereof shall be of no
effect following the first occurrence of any Section 13 Event.
(b) "Principal Party" shall mean
(1) in the case of any transaction described in (x) or (y) of the
first sentence of Section 13(a), the Person that is the issuer of any
securities into which Ordinary Shares of the Company are converted in
such merger, combination or consolidation and, if no securities are so
issued, the Person that is the other party to the merger, combination
or consolidation; and
(2) in the case of any transaction described in (z) of the first
sentence in Section 13(a), 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, that in any such case, (x) if the shares of common stock (or
their equivalent) of such Person are not at such time and have 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
corporation the shares of common stock (or their equivalent) of which are and
have been so registered, "Principal Party" shall refer to such other
corporation; and (y) if such Person is a Subsidiary, directly or indirectly, of
more than one corporation, the shares of common stock (or their equivalent) of
two or more of which are and have been so registered, "Principal Party" shall
refer to whichever of such corporations is the issuer of the shares of common
stock (or their equivalent) having the greatest market value.
(c) The Company shall not consummate any Section 13 Event unless the
Principal Party shall have a sufficient number of authorized shares of common
stock (or their equivalent) which are neither outstanding nor 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 paragraphs (a) and (b) of this Section 13
and further providing that, as soon as practicable after the date of any
combination, consolidation, merger or sale of assets mentioned in paragraph (a)
of this Section 13, the Principal Party
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<PAGE> 28
(i) will prepare and file a registration statement under the Act with
respect to the Rights and the securities purchasable upon exercise of
the Rights on an appropriate form, will use its best efforts to cause
such registration statement to become effective as soon as practicable
after such filing and will use its best efforts to cause such
registration statement to remain effective (with a prospectus at all
times meeting the requirements of the Act) until the Expiration Date;
and
(ii) will 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.
The provisions of this Section 13 shall similarly apply to successive Section 13
Events. In the event that a 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. Fractional Rights and Fractional Shares. (a) The Company
shall not be required to issue fractions of Rights or to distribute Right
Certificates which evidence fractional Rights. In lieu of 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
value of a whole Right. For the purposes of this Section 14(a), the current
market value of a whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such fractional Rights would
have been otherwise issuable. The closing price 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, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal U.S. 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 U.S. 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. If on any such date no such market maker is
making a market in the Rights, the fair value of the Rights on such date as
determined in good faith by the Board of Directors of the Company shall be used.
(b) The Company shall not be required to issue fractions of Class A
Ordinary Shares or "Ordinary Share Equivalents" upon exercise or exchange of the
Rights or to
25
<PAGE> 29
distribute certificates which evidence fractional shares. In lieu of fractional
shares, the Company may pay to the registered holders of Right Certificates at
the time the Rights evidenced thereby are exercised or exchanged as herein
provided an amount in cash equal to the same fraction of the current market
value of Class A Ordinary Shares or "Ordinary Share Equivalents." For purposes
of this Section 14(b), the current market value of Class A Ordinary Shares shall
be the closing price of a Class A Ordinary Share (as determined pursuant to
Section 11(d)) for the Trading Day immediately prior to the date of such
exercise or exchange, as the case may be, and the current market value of any
"Ordinary Share Equivalent" shall be the same as the current market value of the
Class A Ordinary Shares on such date.
(c) The holder of a Right by the acceptance of the Right expressly
waives his right to receive any fractional Rights or any fractional shares upon
exercise or exchange of a Right, except as otherwise permitted by this Section
14.
SECTION 15. Rights of Action. All rights of action in respect of this
Agreement are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of
Ordinary Shares); and any registered holder of any Right Certificate (or, prior
to the Distribution Date, of Ordinary Shares), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of Ordinary 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 hereunder and injunctive relief against actual or threatened
violations of the obligations hereunder of any Person subject to this Agreement.
In order to provide the rights referred to above to the holders of the Rights
(or, prior to the Distribution Date, the Ordinary Shares) the Company has
executed this Agreement as a deed poll in favor of such holders and hereby
agrees that such rights shall, by virtue of this Agreement, which is executed as
a deed poll, be provided to, and acquired by, such holders.
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 the Ordinary Shares;
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<PAGE> 30
(b) after the Distribution Date, the Right Certificates will be
transferable only on the registry books of the Rights Agent if surrendered at
the office of the Rights Agent designated for such purpose, duly endorsed or
accompanied by a proper instrument of transfer and with the appropriate forms
and certificates fully executed, along with a signature guarantee and such other
and further documentation as the Rights Agent may reasonably request;
(c) subject to Section 6 and Section 7(f) hereof, the Company and the
Rights Agent may deem and treat the Person in whose name the Right Certificate
(or, prior to the Distribution Date, the associated Ordinary Share certificate)
is registered as the absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the Right Certificates
or the associated Ordinary Share certificate made by anyone other than the
Company or the Rights Agent) for all purposes whatever, and shall not be bound
by or be compelled to recognize any Person as holding any right or any
equitable, contingent, future or partial interest in any Right or any other
rights in respect of any Right, except an absolute right to the entirety thereof
in the registered holder of the Right and neither the Company nor the Rights
Agent shall be required to be affected by any notice to the contrary;
(d) notwithstanding anything in this Agreement to the contrary, neither
the Company nor the Rights Agent shall have any liability to any holder of a
Right or other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority (including, without limitation, Cayman
Islands Companies Law), 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 number of securities of
the Company which may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein or in any Right
Certificate be construed to confer upon the holder of any Right Certificate, as
such, any of the rights of a shareholder of the Company or any right to vote for
the election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting shareholders (except as
provided in Section 25), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by such Right Certificate shall
have been exercised or exchanged in accordance with the provisions hereof.
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<PAGE> 31
SECTION 18. Concerning the Rights Agent. The Company agrees to pay to
the Rights Agent such compensation as shall be agreed in writing between the
Company and the Rights Agent 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 expenses and other disbursements incurred in the administration and
execution 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
gross negligence, bad faith or willful misconduct on the part of the Rights
Agent (including the reasonable fees and expenses of counsel), for anything done
or omitted by the Rights Agent in connection with the acceptance and
administration of this Agreement, including the costs and expenses of defending
against any claim of liability in the premises.
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 its
administration of this Agreement in reliance upon any Right Certificate or
certificate for Ordinary Shares or for other securities of the Company,
instrument of assignment or transfer, power of attorney, endorsement, affidavit,
letter, notice, opinion, direction, consent, instruction, adjustment notice,
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.
In addition to the foregoing, the Rights Agent shall be protected and
shall incur no liability for, or in respect of, any action taken or omitted by
it in connection with its administration of this Agreement in reliance upon (i)
the proper execution of the certification appended to the Form of Assignment and
the Form of Election to Purchase included as part of Exhibit A hereto (the
"Certification"), unless the Rights Agent shall have actual knowledge that, as
executed, the Certification is untrue or (ii) the non-execution or failure to
complete the Certification including, without limitation, any refusal to honor
any otherwise permissible assignment or election by reason of such non-
execution or failure.
The provisions of this Section 18 shall survive the expiration of the
Rights and the termination of this Agreement
SECTION 19. Merger or Consolidation or Change of Name of Rights Agent.
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
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
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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 the
predecessor 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.
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 the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance thereof, shall be bound:
(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 be
proved or established by the Company prior to taking or suffering 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 one of the Chairman of the Board, the
President, any Vice President, the Treasurer or the 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 or suffered 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 gross
negligence, bad faith or willful misconduct, and the issuance or non-issuance of
a Right Certificate or Class A Ordinary Shares or other security issued in lieu
of Class A Ordinary Shares in accordance with instructions given to the Rights
Agent by the Company
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<PAGE> 33
pursuant to Section 20(k) hereof or in accordance with the terms hereof shall
not constitute 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 adjustment required under the provisions of Section 11 or
13 or responsible for the manner, method or amount of any such adjustment 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 notice of any 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 Class A Ordinary Shares or other security to be issued
pursuant to this Agreement or any Right Certificate or as to whether any Class A
Ordinary Shares or other security will, when issued, be validly authorized and
issued, fully paid and nonassessable.
(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
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 and
certificates delivered pursuant to any provision hereof from any one of the
Chairman of the Board, the President, any Vice President, the Secretary or the
Treasurer of the Company, and is authorized to apply to such officers for advice
or instructions in connection with its duties, and it shall not be liable for
any action taken or suffered to be taken by it in good faith in accordance with
instructions of any such officer. An application by the Rights Agent for
instructions may set forth in writing any action proposed to be taken or omitted
by the Rights Agent with respect to its duties and obligations under this
Agreement and the date on and/or after which such action shall be taken, and the
Rights Agent shall not be liable for any action taken or omitted in accordance
with a proposal included in any such application on or after the date specified
therein (which date shall not be less than one Business Day after the Company
receives such application) without the consent of the Company unless, prior
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<PAGE> 34
to taking or omitting such action, the Rights Agent has received written
instructions in response to an application specifying the actions 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 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 legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either by 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 resulting from any such act, default,
neglect or misconduct; provided that reasonable care was exercised in the
selection 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 to purchase, as the case may be, has either not
been completed or indicates an affirmative response, the Rights Agent shall not
take any further action with respect to such requested exercise or transfer
without first consulting the Company. The Company shall give the Rights Agent
prompt written instructions as to the action to be taken regarding the Right
Certificates involved. The Rights Agent shall not be liable for acting in
accordance with such instructions.
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 thirty (30) days' notice in writing mailed to the Company by registered or
certified mail, and, at the Company's expense, to the holders of the Right
Certificates by first class mail. The Company may remove the Rights Agent or any
successor Rights Agent upon thirty (30) days' notice in writing, mailed to the
Rights Agent or successor Rights Agent, as the case may be, and to each transfer
agent of the Ordinary Shares by registered or certified mail, and 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
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<PAGE> 35
appointment within a period of thirty (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 Company shall become the temporary Rights
Agent and the registered holder of any Right Certificate may apply to any court
of competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by such a court,
shall be a corporation organized and doing business under the laws of the United
States or of the State of New York, U.S.A. (or of any other state of the United
States so long as such corporation is authorized to do business as a banking
institution in the State of New York), in good standing, having a principal
office in the State of New York, which is authorized under such laws to exercise
corporate trust powers and is subject to supervision or examination by federal
or state authority or which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least U.S. $25 million. After appointment,
the successor Rights Agent shall be vested with the same powers, rights, duties
and responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and transfer
to the successor Rights Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed necessary for
the purpose. Not later than the effective date of any such appointment the
Company shall file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Ordinary Shares, and 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, however, 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 or other
securities or property purchasable under the Right Certificates made in
accordance with the provisions of this Agreement. In addition, in connection
with the issuance or sale of Class A Ordinary Shares following the Distribution
Date and prior to the redemption or expiration of the Rights, the Company (a)
shall, with respect to Class A Ordinary Shares so issued or sold pursuant to the
exercise of options or under any employee plan or arrangement, or upon the
exercise, conversion or exchange of securities hereinafter issued by the
Company, and (b) 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 issuance or sale; provided
that (i) no such Right Certificate shall be issued if, and to the extent that,
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, and (ii) no such
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Right Certificate shall be issued if, and to the extent that, appropriate
adjustment shall otherwise have been made in lieu of the issuance thereof.
SECTION 23. Redemption and Termination. (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 Shares Acquisition Date (or
such later date as a majority of the Independent 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 U.S. $.01 per Right as appropriately adjusted to
reflect any stock split, 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 Independent Directors in office and
such authorization shall require the concurrence of a majority of the
Independent Directors: (x) such authorization occurs on or after the Shares
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. 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
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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 registry books of the Transfer Agent
for the Ordinary Shares. Any notice which is mailed in the manner herein
provided shall be deemed given, whether or not the holder receives the notice.
Each such notice of redemption will state the method by which the payment of the
Redemption Price will be made. Neither the Company nor any of its Affiliates or
Associates may redeem, acquire or purchase for value any Rights at any time in
any manner other than that specifically set forth in this Section 23, and other
than in connection with the repurchase of Ordinary Shares prior to the
Distribution Date.
SECTION 24. Exchange. (a) The Board of Directors of the Company may, at
its option (provided that there are then Independent Directors in office and a
majority of the Independent Directors concur), at any time and from time to time
on or after a Section 11(a)(ii) Event, exchange all or part of the then
outstanding and exercisable Rights (which shall not include Rights that have
become void pursuant to the provisions of Section 7(e) hereof) for Class A
Ordinary Shares at an exchange ratio of one Class A Ordinary Share per Right,
appropriately adjusted to reflect any stock split, dividend of shares or similar
transaction occurring after the date of this Agreement (such exchange ratio
being hereinafter referred to as the "Exchange Ratio"); provided that with
respect to any such exchange the holders of the Rights to be exchanged shall
have delivered to the Company an aggregate amount of U.S. dollars equal to the
product of the par value of the Class A Ordinary Shares multiplied by the number
of Class A Ordinary Shares to be delivered pursuant to such exchange.
Notwithstanding the foregoing, the Board of Directors shall not be empowered to
effect such exchange at any time after any Person (other than 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), together
with all Affiliates and Associates of such Person, becomes the Beneficial Owner
of 50% or more of the Ordinary Shares then outstanding.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to subsection (a) of this
Section 24 and without any further action and without any notice, the right to
exercise such Rights shall terminate and the only right thereafter of a holder
of such Rights shall be to receive that number of Class A Ordinary Shares equal
to the number of such Rights held by such holder multiplied by the Exchange
Ratio, subject to the proviso to clause (a) above. The Company shall promptly
give public notice of any such exchange; provided that the failure to give, or
any defect in, such notice shall not affect the validity of such exchange. The
Company promptly shall mail a notice of any such exchange to all of the holders
of such Rights at their last addresses as they appear upon the registry books of
the Rights Agent. Any notice which is mailed in the manner provided shall be
deemed given, whether or not the holder receives the notice. Each such notice of
exchange will state the method by
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which the exchange will be effected and, in the event of any partial exchange,
the number of Rights which will be exchanged. Any partial exchange shall be
effected pro rata based on the number of Rights (other than Rights which have
become void pursuant to the provisions of Section 7(e) hereof) held by each
holder of Rights.
(c) In any exchange pursuant to this Section 24, the Company, at its
option, may substitute for any Class A Ordinary Shares exchangeable for a Right
(i) "Ordinary Share Equivalents," (ii) cash, (iii) debt securities of the
Company, (iv) other assets, or (v) any combination of the foregoing, having an
aggregate value which a majority of the Independent Directors and the Board of
Directors of the Company shall have determined in good faith to be equal to the
current market price of one Class A Ordinary Share (determined pursuant to
Section 11(d) hereof) on the Trading Date immediately preceding the date of
exchange pursuant to this Section 24.
SECTION 25. Notice of Certain Events. In case the Company shall propose
at any time following the Distribution Date (a) to pay any dividend payable in
shares of any class to the holders of Ordinary Shares or to make any other
distribution to the holders of Ordinary Shares (other than a regular periodic
cash dividend), or (b) to offer to the holders of Ordinary Shares rights or
warrants to subscribe for or to purchase any additional Ordinary Shares or share
capital of any class or any other securities, rights or options, or (c) to
effect any reclassification of Ordinary Shares (other than a reclassification
involving only the subdivision of outstanding Ordinary Shares), or (d) to effect
any combination, consolidation or merger into or with any other Person (other
than a Subsidiary of the Company in a transaction which complies with Section
11(n) hereof), or to effect any sale or other transfer (or to permit one or more
of its Subsidiaries to effect any sale or other transfer), in one or more
transactions, of more than 50% of the assets or earning power of the Company and
its Subsidiaries (taken as a whole) to, any other Person or Persons (other than
the Company and/or any of its Subsidiaries in one or more transactions each of
which complies with Section 11(n) hereof), or (e) to effect the liquidation,
dissolution or winding up of the Company, then, in each such case, the Company
shall give to the Rights Agent and to each holders of a Right, in accordance
with Section 26, a notice of such proposed action, which shall specify the
record date for the purposes of such dividend of shares, distribution of rights
or Rights, or the date on which such reclassification, combination,
consolidation , merger, sale, transfer, liquidation, dissolution, or winding up
is to take place and the date of participation therein by the holders of
Ordinary 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 (a) or (b) above at least
twenty (20) days prior to the record date for determining holders of Ordinary
Shares for purposes of such action, and in the case of any such other action, at
least twenty (20)) days prior to the date of the taking of such proposed action
or the date of participation therein by the holders of Ordinary Shares,
whichever shall be the earlier. The failure to give notice required by this
Section or any deficit therein shall not affect the legality or validity of the
action taken by the company or the vote upon any such action.
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In case a Section 11(a)(ii) Event shall occur, then, in any such case,
the Company shall as soon as practicable thereafter give to the Rights Agent and
to each holder of a Right, to the extent feasible and in accordance with Section
26, a notice of the occurrence of such event, which shall specify the event and
the consequences of the event to holders of Rights under Section 11(a)(ii).
SECTION 26. Notices. Notices or demands authorized by this Agreement to
be given or made by the Rights Agent or by the holder of any Right Certificate
to or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:
Mid Ocean Limited
Richmond House
12 Par-la-Ville Road
Hamilton HM 08
Bermuda
Attention: President
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
Certificate to or on the Rights Agent shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another address is
filed in writing with the Company) as follows:
The Bank of New York
101 Barclay Street - 12W
New York, New York 10286
Attention: Stock Transfer Administrator
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 shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
SECTION 27. Supplements and Amendments. Prior to the earlier of the
Distribution Date or the Shares Acquisition Date and subject to the penultimate
sentence of this Section 27, the Company may from time to time supplement or
amend this Agreement in any respect (including, without limitation, the
threshold for a Substantial Block, Purchase Price, expiry date of the Rights and
number of Class A Ordinary Shares each Right is entitled to purchase) even if
such supplement or amendment adversely affects the rights of any holder of the
Rights without the approval of any holders of Right Certificates. From and after
the earlier of the Distribution Date or the Shares Acquisition Date, and subject
to the penultimate sentence of this Section 27, the Company may from
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time to time supplement or amend this Agreement without the approval of any
holders of Right Certificates in order (i) to cure any ambiguity, (ii) to
correct or supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein or (iii) to change or supplement
the provisions hereunder in any manner which the Company may deem necessary or
desirable and which shall not adversely affect the interests of the holders of
Right Certificates (other than an Acquiring Person or an Affiliate or Associate
of an Acquiring Person). Upon the delivery of a certificate from an appropriate
officer of the Company which states that the proposed supplement or amendment is
in compliance with the terms of this Section 27, the Rights Agent shall execute
such supplement or amendment unless the Rights Agent shall have determined in
good faith that such supplement or amendment would adversely affect its
interests under this Agreement. Notwithstanding anything in this Agreement to
the contrary, no supplement or amendment shall be made on or after the
Distribution Date which changes the Redemption Price, the Final Expiration Date,
the Purchase Price or the number of Class A Ordinary Shares for which a Right is
then exercisable. Prior to the earlier of the Shares Acquisition Date and the
Distribution Date, the interests of the holders of Rights shall be deemed
coincident with the interests of the holders of Ordinary Shares.
SECTION 28. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
SECTION 29. Determinations and Actions by the Board of Directors, etc..
For all purposes of this Agreement, any calculation of the number of Ordinary
Shares outstanding at any particular time, including for purposes of determining
the particular percentage of such outstanding Ordinary Shares of which any
Person is the Beneficial Owner, shall be made in accordance with the provisions
of Rule 13d-3(d)(1)(i) of the General Rules and Regulations under the Exchange
Act. The Board of Directors of the Company (and, where specifically provided for
herein, the Independent 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 the Company (or, as expressly provided, the Independent
Directors), or as may be necessary or advisable in the administration of this
Agreement, including, without limitation, 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 redeem the Rights or to amend the Agreement). All
such actions, calculations, interpretations and determinations (including, for
the purpose of clause (ii) below, all omissions with respect to the foregoing)
which are done, or made by the Board (or, as provided for, by the Independent
Directors) in good faith, shall (i) be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Right Certificates and all other
parties, and (ii) not subject the Board or the Independent Directors to any
liability to the holders of the Right Certificates.
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SECTION 30. Benefits of this Agreement. Nothing in this Agreement shall
be construed to give to any Person other than the Company, the Rights Agent and
the registered holders of the Right Certificates (and, prior to the Distribution
Date, Ordinary 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, registered holders of Ordinary Shares).
SECTION 31. Severability. If any term, provision, covenant, or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated;
provided, that notwithstanding anything in this Agreement to the contrary, if
any such term, provision, covenant or restriction is held by such court or
authority to be invalid, void or unenforceable and the Board of Directors of the
Company (or on or after a Section 11(a)(ii) Event, a majority of the Independent
Directors) determines in its good faith judgment that severing the invalid
language from this Agreement would adversely affect the purpose or effect of
this Agreement, the right of redemption set forth in Section 23 hereof shall be
reinstated and shall not expire until the close of business on the tenth day
following the date of such determination by the Board of Directors.
SECTION 32. Governing Law. This Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
Cayman Islands and for all purposes shall be governed by and construed in
accordance with such laws, except that the rights, duties and obligations of the
Rights Agent shall be governed by and construed in accordance with the laws of
the State of New York, U.S.A.
SECTION 33. Counterparts. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
SECTION 34. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as a deed, all as of the day and year first above
written.
Executed and delivered )
as a deed by Mid ) /s/ Robert J. Newhouse Jr.
Ocean Limited in the ) --------------------------
presence of: ) Title: Chairman
/s/ Michael A. Butt
- -----------------------
Name of Witness
Address:
Executed and delivered )
as a deed by ) /s/ John Sivertsen
The Bank of New York ) ------------------
in the presence of: ) Title: Vice President
/s/ Camille Nunnari
- -----------------------
Name of Witness
Address:
<PAGE> 43
Exhibit A
[Form of Right Certificate]
Certificate No. R- __________ Rights
NOT EXERCISABLE AFTER OCTOBER 1, 2006 OR EARLIER IF
NOTICE OF REDEMPTION OR EXCHANGE IS GIVEN. THE
RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF
THE COMPANY, AT U.S. $.01 PER RIGHT AND TO EXCHANGE ON
THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER
CERTAIN CIRCUMSTANCES RIGHTS MAY NOT BE
EXERCISABLE.
MID OCEAN LIMITED
Right Certificate
This certifies that ______________, or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the Rights
Agreement dated as of September 12, 1996 (the "Rights Agreement") between Mid
Ocean Limited, a company incorporated with limited liability under the Cayman
Islands Companies Law (the "Company), and The Bank of New York, a New York
banking corporation (the "Rights Agent"), to purchase from the Company (or
subscribe) at any time after the Distribution Date (as such term is defined in
the Rights Agreement) and prior to 5:00 P.M. (New York City time) on October 1,
2006 at the designated office of the Rights Agent, or its successors as Rights
Agent, in New York, New York, one fully paid, nonassessable Class A Ordinary
Share, U.S. $0.20 par value (the "Class A Ordinary Shares"), of the Company, at
a purchase price of $140 per Class A Ordinary Share (the "Purchase Price"), upon
presentation and surrender of this Right Certificate with the Form of Election
to Purchase and related certificate duly executed, along with a signature
guarantee and such other and further documentation as the Rights Agent may
reasonably request. The number of Rights evidenced by this Right Certificate
(and the number of shares which may be purchased upon exercise thereof) set
forth above, and the Purchase Price per share set forth above, are the number
and Purchase Price per share set forth above, are the number and Purchase Price
as of September 12, 1996, based on the Class A Ordinary Shares of the Company as
constituted at such date.
Upon the occurrence of a Section 11(a)(ii) Event (as such term is
defined in the Rights Agreement), if the Rights evidenced by this Right
Certificate are beneficially owned
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by (i) an Acquiring Person or an Affiliate or Associate of any such Acquiring
Person (as such terms are defined in the Rights Agreement), (ii) a transferee of
any such Acquiring Person, Associate of Affiliate, or (iii) under certain
circumstances specified in the Rights Agreement, a transferee of a person who
after such transfer, became an Acquiring Person, 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.
As provided in the Rights Agreement, the Purchase Price and the number
and kind of Class A Ordinary Shares (or, in certain circumstances, other
securities) which may be purchased upon the exercise of the rights evidenced by
this right Certificate are subject to modification and adjustment upon the
happening of certain events, including Triggering Events (as such term is
defined in the Rights Agreement).
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. Copies of
the Rights Agreement are on file at the above-mentioned office of the Rights
Agent, and at the executive offices of the Company.
This Right Certificate, with or without other Right Certificates, upon
surrender at the designated office of the Rights Agent, along with a signature
guarantee and such other and further documentation as the Rights Agent may
reasonably request, may be exchanged for another Right Certificate or Right
Certificates of like tenor and date evidencing Rights entitling the holder to
purchase a like aggregate number of Class A Ordinary Shares as the Rights
evidenced by the Right Certificate or Right Certificates surrendered shall have
entitled such holder to purchase. If this Right Certificate shall be exercised
in part, the holder shall be entitled to receive upon surrender hereof, along
with a signature guarantee and such other and further documentation as the
Rights Agent may reasonably request, another Right Certificate or Right
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate (a) may be redeemed by the Company at its option at a
redemption price of U.S. $.01 per Right prior to the earlier of the close of
business on (i) the tenth day following the Shares Acquisition Date and (ii) the
Final Expiration Date or (b) may be exchanged in whole or in part for Class A
Ordinary Shares, and/or other securities, cash or other assets of the Company
deemed to have the same value as Class A Ordinary Shares subject to receipt by
the Company of an amount of U.S. dollars equal to the aggregate number of Class
A Ordinary Shares so delivered multiplied by the par value of the Class A
Ordinary Shares, at any time after a Section 11(a)(ii) Event.
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<PAGE> 45
No fractional Class A Ordinary Shares (or other securities) will be
issued upon the exercise or exchange of any Right or Rights evidenced hereby,
but in lieu thereof a cash payment will be made, as provided in the Rights
Agreement.
No holder of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of other securities of
the Company 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 or exchanged for
Class A Ordinary Shares as provided in the Rights Agreement.
This Right Certificate, which shall be governed by and construed in
accordance with the laws of the Cayman Islands, shall not be valid or obligatory
for any purpose until it shall have been countersigned by the Rights Agent.
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<PAGE> 46
IN WITNESS WHEREOF, this Rights Certificate has been executed and
delivered as a deed by the Company under the facsimile signature of a duly
authorized officer of the Company. Dated as of
Executed and delivered )
as a deed by Mid ) _________________
Ocean Limited in the ) Name:
presence of: ) Title:
- -------------------
Name of Witness
Address:
Executed and delivered )
as a deed by ) ________________
The Bank of New York ) Name:
in the presence of: ) Title:
- ------------------
Name of Witness
Address:
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<PAGE> 47
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder
desires to transfer the Right Certificates.)
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: ___________________, _____
____________________________________
Signature
Signature Guaranteed:
(Signatures must be guaranteed.)
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<PAGE> 48
CERTIFICATE
The undersigned hereby certifies by checking the appropriate box that:
Exercising this Right Certificate will / / will not / / enable the
undersigned, its Affiliates, its Associates and/or any other Person with which
the undersigned or any of the undersigned's Affiliates or Associates has any
agreement, arrangement or understanding (whether or not in writing) for the
purpose of acquiring, holding, voting or disposing of securities of the Company
to obtain individually or in the aggregate in excess of ____ Ordinary Shares or
____ votes entitled to be cast at any general meeting of the Company.
Dated:______________, ____ _______________________________________
Signature
Signature Guaranteed:
(Signatures must be guaranteed.)
NOTICE
The signature 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.
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<PAGE> 49
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise Rights
evidenced by the Right Certificate.)
To Mid Ocean Limited:
The undersigned hereby irrevocably elects to exercise
____________________ Rights represented by this Right Certificate to purchase
(or subscribe for) the Class A Ordinary Shares issuable upon the exercise of
such Rights (or such other securities of the Company or of any other Person
which may be issuable upon the exercise of the Rights) and requests that
certificates for such shares be issued in the name of:
Please insert social security or other identifying number.
- -------------------------------------------------------------------------------
(Please print name and address)
- -------------------------------------------------------------------------------
If such number of Rights shall not be all the Rights evidenced by this
Right Certificate, a new Right Certificate for the balance remaining of such
Rights shall be registered in the name of and delivered to:
Please insert social security or other taxpayer identifying number.
- -------------------------------------------------------------------------------
(Please print name and address)
- -------------------------------------------------------------------------------
Dated: ,
--------- ---- -----------------------------------
Signature
Signature Guaranteed:
[Signatures must be guaranteed.)
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<PAGE> 50
CERTIFICATE
The undersigned hereby certifies by checking the appropriate box that:
Exercising the Rights evidenced by this Right Certificate will / / will
not / / enable the undersigned, its Affiliates, its Associates and/or any other
Person with which the undersigned or any of the undersigned's Affiliates or
Associates has any agreement, arrangement or understanding (whether or not in
writing) for the purpose of acquiring, holding, voting or disposing of
securities of the Company to obtain individually or in the aggregate in excess
of ____ Ordinary Shares or ____ votes entitled to be cast at any general meeting
of the Company.
Dated:__________, ____ _____________________________________
Signature
NOTICE
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.
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<PAGE> 51
EXHIBIT B
SUMMARY OF RIGHTS TO PURCHASE
CLASS A ORDINARY SHARES
On September 12, 1996 the Board of Directors of Mid Ocean Limited (the
"Company") declared a distribution of one Right for each outstanding Ordinary
Share, U.S. $0.20 par value (the "Ordinary Shares"), of the Company. The
distribution is payable on October 1, 1996 (the "Record Date") to the
shareholders of record on the Record Date. Each Right entitles the registered
holder to purchase from the Company one Class A Ordinary Share, U.S. $0.20 par
value, at a price of $140 per share (the "Purchase Price"), subject to
adjustment. The description and terms of the Rights are set forth in a Rights
Agreement (the "Rights Agreement") between the Company and The Bank of New York,
as Rights Agent (the "Rights Agent").
Distribution Date; Transfer of Rights
Until the earlier to occur of (i) ten days following the date (the
"Shares Acquisition Date") of the public announcement that a person or group of
affiliated or associated persons (an "Acquiring Person") has acquired, or
obtained the right to acquire, beneficial ownership of a number of Ordinary
Shares equal to 20% or more of the outstanding Ordinary Shares or voting
securities having the right to vote 20% or more of the total votes or (ii) ten
days following the commencement or announcement of an intention to make a tender
offer or exchange or any other offer if, upon consummation thereof, such person
would be an Acquiring Person (the earlier of such dates being called the
"Distribution Date"), the Rights will be evidenced, with respect to any of the
Company's Ordinary Share certificates outstanding as of the Record Date, by such
Ordinary Share certificate. An Acquiring Person does not include any Person who
would otherwise be an Acquiring Person as of the date of the Rights Agreement,
as long as that person does not subsequently acquire any additional securities
of the Company, (except in the limited circumstances permitted in the Rights
Agreement) and certain other Persons as set forth in the Rights Agreement. The
Rights Agreement provides that, until the Distribution Date, the Rights will be
transferred with and only with the Company's Ordinary Shares. Until the
Distribution Date (or earlier redemption or expiration of the Rights), new
Ordinary Share certificates issued after the Record Date upon transfer or new
issuance of the Company's Ordinary Shares will contain a notation incorporating
the Rights Agreement by reference. Until the Distribution Date (or earlier
redemption or expiration of the Rights), the surrender for transfer of any of
the Company's Ordinary Share certificates outstanding as of the Record Date will
also constitute the transfer of the Rights associated with the Ordinary Shares
represented by such certificate. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights ("Right
Certificates") will be mailed to holders of record of the Company's Ordinary
Shares as of the close of
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business on the Distribution Date and such separate Right Certificates alone
will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The Rights
will expire at the close of business on October 1, 2006, unless earlier redeemed
or exchanged by the Company as described below.
Exercise of Rights for Class A Ordinary Shares of the Company
In the event that a Person becomes an Acquiring Person, each holder of
a Right will thereafter have the right to receive, upon exercise, Class A
Ordinary Shares (or, in certain circumstances, cash, property or other
securities of the Company) having a value equal to two times the Purchase Price
of the Right then in effect. Notwithstanding any of the foregoing, following the
occurrence of the event set forth in this paragraph, all Rights that are, or
(under certain circumstances specified in the Rights Agreement) were,
beneficially owned by any Acquiring Person will be null and void.
Under certain circumstances as described in the Rights Agreement, the
holder of a Right will have the right to receive Class C Ordinary Shares of the
Company in lieu of Class A Ordinary Shares upon exercise or exchange of the
Rights.
Exercise of Rights for Shares of the Acquiring Company
In the event that, at any time following the Shares Acquisition Date,
(i) the Company is acquired in a merger or other business combination
transaction, or (ii) 50% or more of the Company's assets or earning power is
sold or transferred, then the Company shall not enter into any agreement, or
facilitate any plan, with respect to any such event unless proper provision
shall have been made to provide that each holder of a Right (except Rights which
previously have been voided as set forth above) shall thereafter have the right
to receive, upon exercise, Class A Ordinary Shares or their equivalents of the
acquiring company having a value equal to two times the Purchase Price of the
Right then in effect. The events set forth in this paragraph and in the first
paragraph under the heading "Exercise of Rights for Class A Ordinary Shares of
the Company" above are referred to as the "Triggering Events."
Adjustments to Purchase Price
The Purchase Price payable, and the number of Class A Ordinary Shares
(or other securities, as the case may be) issuable upon exercise of the Rights
are subject to adjustment from time to time to prevent dilution (i) in the event
of a dividend of shares on, or a subdivision, combination or reclassification of
, the Ordinary Shares, (ii) upon the grant to holders of the Ordinary Shares of
certain rights or warrants to subscribe for Ordinary Shares or convertible
securities at less than the current market price of the
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<PAGE> 53
Ordinary Shares or (iii) upon the distribution to holders of Ordinary Shares of
evidences of indebtedness or assets (excluding regular periodic cash dividends
or dividends payable in Ordinary Shares) or of subscription rights or warrants
(other than those referred to above). Prior to the Distribution Date, the Board
of Directors of the Company may make such equitable adjustments as it deems
appropriate in the circumstances in lieu of any adjustment otherwise required by
the foregoing.
With certain exceptions, no adjustment in the Purchase Price will be
required until the earlier of (i) three years from the date of the event giving
rise to such adjustment and (ii) the time at which cumulative adjustments
require an adjustment of at least 1% in such Purchase Price. No fractional
shares will be issued and, in lieu thereof, an adjustment in cash will be made
based on the market price of the Class A Ordinary Shares on the last trading
date prior to the date of exercise.
Redemption and Exchange of Rights
At any time prior to 5:00 P.M. New York City time on the tenth day
following the Shares Acquisition Date (or such later date as a majority of the
Independent Directors may designate), the Company may redeem the Rights in
whole, but not in part, at a price of U.S. $.01 per Right (the "Redemption
Price"). Under certain circumstances set forth in the Rights Agreement, the
decision to redeem shall require the concurrence of a majority of the
Independent Directors. Immediately upon the action of the Board of Directors of
the Company electing to redeem the Rights with, if required, the concurrence of
the Independent Directors, the Company shall make announcement thereof, and upon
such action, the right to exercise the Rights will terminate and the only right
of the holders of Rights will be to receive the Redemption Price.
At any time after the occurrence of the event set forth under the
heading "Exercise of Rights for Class A Ordinary Shares of the Company" above,
the Board of Directors may exchange the Rights (other than Rights owned by an
Acquiring Person which have become void), in whole or in part, at an exchange
ratio of one Class A Ordinary Share, and/or other securities, cash or other
assets deemed to have the same value as one Class A Ordinary Share, per Right,
subject to adjustment and, if any Class A Ordinary Shares are so delivered, the
receipt by the Company of an amount in U.S. dollars equal to the par value of
each Class A Ordinary Share so delivered.
Until the Rights are exercised or exchanged for Class A Ordinary
Shares, the holders thereof, as such, will have no rights as shareholders of the
Company, including, without limitation, the right to vote or to receive
dividends.
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<PAGE> 54
Amendments to Terms of the Rights
Any of the provisions of the Rights Agreement may be amended by the
Board of Directors of the Company prior to the Distribution Date. After the
Distribution Date, the provisions of the Rights Agreement may be amended by the
Board in order to cure any ambiguity, defect or inconsistency, or to make
changes which do not adversely affect the interests of holders of Rights
(excluding the interest of any Acquiring Person); provided that no supplement or
amendment may be made on or after the Distribution Date which changes those
provisions relating to the principal economic terms of the Rights.
The term "Independent Directors" means any member of the Board of
Directors of the Company who was a member of the Board prior to the time that
any person becomes an Acquiring Person, and any person who is subsequently
elected to the Board if such person is recommended or elected by a majority of
the Independent Directors, but shall not include an Acquiring Person or any
representative thereof.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A dated
September 23, 1996. A copy of the Rights Agreement is available free of charge
from the Company. This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights Agreement,
which is hereby incorporated herein by reference.
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