<PAGE> 1
As filed with the Securities and Exchange Commission on March 12, 1997
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
------------
FORM S-8
REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933
GCR HOLDINGS LIMITED
(Exact Name of Registrant as Specified in Its Charter)
THE CAYMAN ISLANDS
(State or Other Jurisdiction of Incorporation or Organization)
NOT APPLICABLE
(I.R.S. Employer Identification No.)
SOFIA HOUSE, 48 CHURCH STREET, HAMILTON HM 12, BERMUDA
(Address of Principal Executive Offices) (Zip Code)
GCR HOLDINGS LIMITED 1996 SHARE INCENTIVE PLAN
GCR HOLDINGS LIMITED AMENDED AND RESTATED SHARE OPTION PLAN
GCR HOLDINGS LIMITED AMENDED AND RESTATED 1995 SHARE OPTION PLAN
GCR HOLDINGS LIMITED AMENDED AND RESTATED NON-EMPLOYEE DIRECTORS SHARE
OPTION PLAN
AMENDED AND RESTATED CHAIRMAN'S INCENTIVE AGREEMENT
EMPLOYMENT AGREEMENTS, AS AMENDED, BETWEEN GCR HOLDINGS LIMITED AND CERTAIN
OF ITS OFFICERS
(Full Title of Plans)
CT CORPORATION SYSTEM
1633 BROADWAY
NEW YORK, NEW YORK 10019
(Name and Address of Agent For Service)
(212) 246-5070
(Telephone Number, Including Area Code, of Agent For Service)
------------------------
Copy to:
David B. Harms, Esq.
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
(212) 558-4000
------------------------
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
=============================================================================================================
Title of Securities to be Amount to be Proposed Offering Proposed Aggregate Amount of
Registered Registered Price Per Share(1) Offering Price(1) Registration Fee
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Ordinary Shares, par value
$0.10 per share 2,246,925 (1) $46,918,468.70 $14,218
=============================================================================================================
</TABLE>
(1) Estimated pursuant to Rule 457(h)(1) solely for the purpose of
calculating the registration fee, based (i) in the case of up to
996,925 Ordinary Shares that in the future may be issued upon exercise
of options previously granted under the specified plans and incentive
and employment agreements, on the respective exercise prices ranging
from $7.90 per share to $23.25 per share and (ii) in the case of up to
1,250,000 Ordinary Shares that in the future may be issued upon the
exercise of options to be granted, or that otherwise may be issued,
under the GCR Holdings Limited Amended and Restated 1995 Share Option
Plan, the GCR Holdings Limited Amended and Restated Non-Employee
Directors Share Option Plan and the GCR Holdings Limited 1996 Share
Incentive Plan, on the average of the high and low prices of the GCR
Holdings Limited Ordinary Shares on the Nasdaq National Market on March
11, 1997.
<PAGE> 2
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information.
All information required by Part I to be contained in the prospectus to be
delivered to directors, officers and employees is omitted from this Registration
Statement in accordance with Rule 428 under the Securities Act of 1933 (the
"Securities Act") and the Note to Part I of Form S-8.
Item 2. Registrant Information and Employee Plan Annual Information.
All information required by Part I to be contained in the prospectus to be
delivered to directors, officers and employees is omitted from this Registration
Statement in accordance with Rule 428 under the Securities Act and the Note to
Part I of Form S-8.
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<PAGE> 3
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The documents listed in (a) through (c) below are incorporated herein by
reference.
(a) The Registrant's Annual Report on Form 10-K for the fiscal year ended
September 30, 1996, filed with the U.S. Securities and Exchange Commission (the
"Commission") on November 29, 1996.
(b) The Registrant's Quarterly Report on Form 10-Q for the fiscal quarter
ended December 31, 1996, filed with the Commission on January 27, 1997.
(c) The description of the Registrant's Ordinary Shares, which is contained
in the Registrant's Registration Statement on Form 8-A (File No. 0-27220), filed
with the Commission on November 14, 1995, including any amendment or report
filed for the purpose of updating such description.
All documents filed by the Registrant pursuant to Section 13(a), 13(c), 14
and 15(d) of the U.S. Securities Exchange Act of 1934 (the "Exchange Act") prior
to the filing of a post-effective amendment which indicates that all securities
offered have been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference in this Registration
Statement and to be a part hereof from the date of filing of such documents.
Any statement contained in a document incorporated by reference herein shall
be deemed to be modified or superseded for purposes of this Registration
Statement to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Registration Statement.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not Applicable.
Item 6. Indemnification of Officers and Directors.
Cayman Islands law does not specifically limit the extent to which a
company's articles of association may provide for the indemnification of
officers and directors, except to the extent that such provision may be held by
the Cayman Islands courts to be contrary to public policy (e.g., for purporting
to provide indemnification against the consequences of committing a crime). In
addition, an officer or director may not be able to enforce indemnification for
his own dishonesty or willful neglect or default.
Article 107 of the Amended and Restated Articles of Association of the
Registrant, filed as Exhibit 3.2 to this Registration Statement, contains
provisions providing for the indemnity by the Registrant of an officer,
director, or trustee of the Registrant for all actions, proceedings, claims,
costs, charges, losses, damages and expenses which they incur or sustain by
reason of any act done or omitted in or about the execution of their duty in
their respective offices or trusts, except such (if any) as they shall incur or
sustain by or through their own respective willful neglect or default,
respectively.
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<PAGE> 4
Item 7. Exemption from Registration Claim.
Not Applicable.
Item 8. Exhibits.
The following exhibits are filed as part of this Registration Statement:
Exhibit No. Description
- ----------- -----------
3.1 Amended and Restated Memorandum of Association of the Registrant.
3.2 Amended and Restated Articles of Association of the Registrant.
4.1 Form of Share Certificate (incorporated by reference to the
Registrant's Registration Statement on Form S-1 (File No.
33-97736)).
4.2 Employment Agreement, dated as of June 16, 1993, between the
Registrant and Lawrence S. Doyle (the "Doyle Employment Agreement")
(incorporated by reference to Exhibit 10.1 of the Registrant's
Registration Statement on Form S-1 (File No. 33-97736)).
4.3 Amendment to the Doyle Employment Agreement, dated as of December
12, 1995 (incorporated by reference to Exhibit 10.1A of the
Registrant's Registration Statement on Form S-1 (File No.
333-04195)).
4.4 Employment Agreement, dated as of August 16, 1993, between the
Registrant and Frederick W. Deichmann (the "Deichmann Employment
Agreement") (incorporated by reference to Exhibit 10.2 of the
Registrant's Registration Statement on Form S-1 (File No.
33-97736)).
4.5 Amendment to the Deichmann Employment Agreement, dated as of
December 12, 1995 (incorporated by reference to Exhibit 10.2A of the
Registrant's Registration Statement on Form S-1 (File No.
333-04195)).
4.6 Employment Agreement, dated as of January 15, 1994, between the
Registrant and William G. Fanning (the "Fanning Employment
Agreement") (incorporated by reference to Exhibit 10.3 of the
Registrant's Registration Statement on Form S-1 (File No. 33-
97736)).
4.7 Amendment to the Fanning Employment Agreement, dated as of December
12, 1995 (incorporated by reference to Exhibit 10.3A of the
Registrant's Registration Statement on Form S-1 (File No.
333-04195)).
4.8 Employment Agreement, dated as of June 16, 1993, between the
Registrant and Robert L. Nason (the "Nason Employment Agreement")
(incorporated by reference to Exhibit 10.4 of the Registrant's
Registration Statement on Form S-1 (File No. 33-97736)).
4.9 Amendment to the Nason Employment Agreement, dated as of December
12, 1995 (incorporated by reference to Exhibit 10.4A of the
Registrant's Registration Statement on Form S-1 (File No.
333-04195)).
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<PAGE> 5
4.10 Employment Agreement, dated as of June 16, 1993, between the
Registrant and Stephen S. Outerbridge (the "Outerbridge Employment
Agreement") (incorporated by reference to Exhibit 10.5 of the
Registrant's Registration Statement on Form S-1 (File No.
33-97736)).
4.11 Amendment to the Outerbridge Employment Agreement, dated as of
December 12, 1995 (incorporated by reference to Exhibit 10.5A of the
Registrant's Registration Statement on Form S-1 (File No.
333-04195)).
4.12 Employment Agreement, dated as of March 28, 1994, between the
Registrant and John K. Witherspoon, Jr. (the "Witherspoon Employment
Agreement").
4.13 Amendment to the Witherspoon Employment Agreement, dated as of
December 12, 1995.
4.14 Amended and Restated Chairman's Incentive Agreement, dated as of
November 16, 1995, between the Registrant and Steven H. Newman
(incorporated by reference to Exhibit 10.16A of the Registrant's
Registration Statement on Form S-1 (File No. 33-97736)).
4.15 GCR Holdings Limited Amended and Restated Share Option Plan
(incorporated by reference to Exhibit 10.17A of the Registrant's
Registration Statement on Form S-1 (File No. 33-97736)).
4.16 GCR Holdings Limited Amended and Restated 1995 Share Option Plan
(incorporated by reference to Exhibit 10.26 of the Registrant's
Registration Statement on Form S-1 (File No. 333-04195)).
4.17 GCR Holdings Limited Amended and Restated Non-Employee Directors
Share Option Plan (incorporated by reference to Exhibit 10.25 of the
Registrant's Registration Statement on Form S-1 (File No.
333-04195)).
4.18 GCR Holdings Limited 1996 Share Incentive Plan.
5.1 Opinion of Maples and Calder as to the validity of the Ordinary
Shares.
23.1 Consent of Maples and Calder (included in their opinion filed as
Exhibit 5.1).
23.2 Consent of Arthur Andersen & Co.
24.1 Powers of Attorney (included on signature pages).
Item 9. Undertakings.
(a) The Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which,
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<PAGE> 6
individually or in the aggregate, represent a fundamental change in the
information set forth in the Registration Statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement.
Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would
not exceed that which was registered) and any deviation from the low or high
and of the estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than 20 percent
change in the maximum aggregate offering price set forth in the "Calculation
of Registration Fee" table in the effective registration statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if
the Registration Statement is on Form S-8 and the information required to be
included in a post-effective amendment by those paragraphs is contained in
period reports filed by the Registrant pursuant to Section 13 or Section 15(d)
of the Exchange Act that are incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof; and
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in the Registration Statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provision, or otherwise, the Registrant has
been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
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<PAGE> 7
SIGNATURES
Pursuant to the requirements of the U.S. Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the city of Hamilton, Bermuda, on this 12th day of March, 1997.
GCR HOLDINGS LIMITED
By: /s/ Frederick W. Deichmann
-------------------------------------
Frederick W. Deichmann
Chief Financial Officer and Secretary
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<PAGE> 8
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Lawrence S. Doyle and Frederick W. Deichmann, and
each of them, with full power to act without the other, his true and lawful
attorneys-in-fact and agents, with full and several power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign this Registration Statement on Form S-8 of GCR Holdings
Limited and any and all amendments (including pre-effective and post-effective
amendments) thereto under the U.S. Securities Act of 1933 and any and all
documents in connection therewith, and file the same, with all exhibits thereto
and other documents in connection therewith, with the U.S. Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done as fully to all intents and purposes as he might or could
do in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents or any of them may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the U.S. Securities Act of 1933, this
Registration Statement has been signed by the following persons in the indicated
capacities on March 4, 1997.
<TABLE>
<CAPTION>
Signature Title
- --------- -----
<S> <C>
/s/ Lawrence S. Doyle
- --------------------------- President, Chief Executive Officer and Director
Lawrence S. Doyle (Principal Executive Officer)
/s/ Frederick W. Deichmann
- --------------------------- Chief Financial Officer and Secretary (Principal
Frederick W. Deichmann Financial and Accounting Officer)
/s/ Steven H. Newman
- ---------------------------
Steven H. Newman Chairman of the Board of Directors
/s/ Loay Al-Naqib
- ---------------------------
Loay Al-Naqib Director
/s/ J. Markham Green
- ---------------------------
J. Markham Green Director
/s/ John P. McNulty
- -----------------------
John P. McNulty Director
/s/ David A. Olsen
- -----------------------
David A. Olsen Director
/s/ Joseph D. Roxe
- -----------------------
Joseph D. Roxe Director
/s/ Jerry S. Rosenbloom
- -----------------------
Jerry S. Rosenbloom Director
/s/ Michael E. Satz
- -----------------------
Michael E. Satz Director
/s/ Donald J. Zuk
- -----------------------
Donald J. Zuk Director
</TABLE>
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<PAGE> 9
AUTHORIZED REPRESENTATIVE
Pursuant to the requirements of the U.S. Securities Act of 1933, this
Registration Statement has been signed below in Newark, Delaware on March 12,
1997, by the undersigned as the duly authorized representative of the Registrant
in the United States.
/s/ Donald Puglisi
---------------------------------
Puglisi & Associates
By: Donald Puglisi
Title: Managing Director
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<PAGE> 10
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
3.1 Amended and Restated Memorandum of Association of the
Registrant.
3.2 Amended and Restated Articles of Association of the
Registrant.
4.1 Form of Share Certificate (incorporated by reference to
the Registrant's Registration Statement on Form S-1
(File No. 33-97736)).
4.2 Employment Agreement, dated as of June 16, 1993, between
the Registrant and Lawrence S. Doyle (the "Doyle
Employment Agreement") (incorporated by reference to
Exhibit 10.1 of the Registrant's Registration Statement
on Form S-1 (File No. 33-97736)).
4.3 Amendment to the Doyle Employment Agreement, dated as of
December 12, 1995 (incorporated by reference to
Exhibit 10.1A of the Registrant's Registration Statement
on Form S-1 (File No. 333-04195)).
4.4 Employment Agreement, dated as of August 16, 1993, between
the Registrant and Frederick W. Deichmann (the "Deichmann
Employment Agreement") (incorporated by reference to
Exhibit 10.2 of the Registrant's Registration Statement on
Form S-1 (File No. 33-97736)).
4.5 Amendment to the Deichmann Employment Agreement, dated as
of December 12, 1995 (incorporated by reference to
Exhibit 10.2A of the Registrant's Registration Statement on
Form S-1 (File No. 333-04195)).
4.6 Employment Agreement, dated as of January 15, 1994, between
the Registrant and William G. Fanning (the "Fanning
Employment Agreement") (incorporated by reference to
Exhibit 10.3 of the Registrant's Registration Statement on
Form S-1 (File No. 33-97736)).
4.7 Amendment to the Fanning Employment Agreement, dated as of
December 12, 1995 (incorporated by reference to
Exhibit 10.3A of the Registrant's Registration Statement on
Form S-1 (File No. 333-04195)).
4.8 Employment Agreement, dated as of June 16, 1993, between
the Registrant and Robert L. Nason (the "Nason Employment
Agreement") (incorporated by reference to Exhibit 10.4
of the Registrant's Registration Statement on Form S-1
(File No. 33-97736)).
4.9 Amendment to the Nason Employment Agreement, dated as of
December 12, 1995 (incorporated by reference to
Exhibit 10.4A of the Registrant's Registration Statement on
Form S-1 (File No. 333-04195)).
<PAGE> 11
Exhibit No. Description
- ----------- -----------
4.10 Employment Agreement, dated as of June 16, 1993, between
the Registrant and Stephen S. Outerbridge (the "Outerbridge
Employment Agreement") (incorporated by reference to
Exhibit 10.5 of the Registrant's Registration Statement on
Form S-1 (File No. 33-97736)).
4.11 Amendment to the Outerbridge Employment Agreement, dated
as of December 12, 1995 (incorporated by reference to
Exhibit 10.5A of the Registrant's Registration Statement on
Form S-1 (File No. 333-04195)).
4.12 Employment Agreement, dated as of March 28, 1994, between
the Registrant and John K. Witherspoon, Jr. (the
"Witherspoon Employment Agreement").
4.13 Amendment to the Witherspoon Employment Agreement, dated
as of December 12, 1995.
4.14 Amended and Restated Chairman's Incentive Agreement, dated
as of November 16, 1995, between the Registrant and Steven
H. Newman (incorporated by reference to Exhibit 10.16A of
the Registrant's Registration Statement on Form S-1 (File
No. 33-97736)).
4.15 GCR Holdings Limited Amended and Restated Share Option Plan
(incorporated by reference to Exhibit 10.17A of the
Registrant's Registration Statement on Form S-1 (File
No. 33-97736)).
4.16 GCR Holdings Limited Amended and Restated 1995 Share Option
Plan (incorporated by reference to Exhibit 10.26 of the
Registrant's Registration Statement on Form S-1 (File
No. 333-04195)).
4.17 GCR Holdings Limited Amended and Restated Non-Employee
Directors Share Option Plan (incorporated by reference
to Exhibit 10.25 of the Registrant's Registration
Statement on Form S-1 (File No. 333-04195)).
4.18 GCR Holdings Limited 1996 Share Incentive Plan.
5.1 Opinion of Maples and Calder as to the validity of the
Ordinary Shares.
23.1 Consent of Maples and Calder (included in their opinion
filed as Exhibit 5.1).
23.2 Consent of Arthur Andersen & Co.
24.1 Powers of Attorney (included on signature pages).
<PAGE> 1
Exhibit 3.1
THE COMPANIES LAW
-----------------
COMPANY LIMITED BY SHARES
-------------------------
RESTATED MEMORANDUM OF ASSOCIATION
OF
GCR HOLDINGS LIMITED
(As Amended and Restated by Special Resolution adopted on October 30, 1995 and
effective on December 22, 1995)
1. The name of the Company is GCR HOLDINGS LIMITED.
2. The Registered Office of the Company shall be at the offices of Maples and
Calder, P.O. Box 309, Grand Cayman, Cayman Islands, British West Indies or at
such other place as the Directors may from time to time decide.
3. The objects for which the Company is established are unrestricted and shall
include, but without limitation, the following:
(i) (a) To carry on the business of a holding company and to act as promoters
and entrepreneurs and to carry on business as financiers, capitalists,
concessionaires, merchants, brokers, traders, dealers, agents, importers and
exporters and to undertake and carry on and execute all kinds of investment,
financial, commercial, mercantile, trading and other operations.
(b) To carry on whether as principals, agents or otherwise howsoever the
business of realtors, developers, consultants, estate agents or managers,
builders, contractors, engineers, manufacturers, dealers in or vendors of all
types of property including services.
<PAGE> 2
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(ii) To exercise and enforce all rights and powers conferred by or incidental
to the ownership of any shares, stock, obligations or other securities including
without prejudice to the generality of the foregoing all such powers of veto or
control as may be conferred by virtue of the holding by the Company of some
special proportion of the issued or nominal amount thereof, to provide
managerial and other executive, supervisory and consultant services for or in
relation to any company in which the Company is interested upon such terms as
may be thought fit.
(iii) To purchase or otherwise acquire, to sell, exchange, surrender, lease,
mortgage, charge, convert, turn to account, dispose of and deal with real and
personal property and rights of all kinds and, in particular, mortgages,
debentures, produce, concessions, options, contracts, patents, annuities,
licenses, stocks, shares, bonds, policies, book debts, business concerns,
undertakings, claims, privileges and choses in action of all kinds.
(iv) To subscribe for, conditionally or unconditionally, to underwrite, issue
on commission or otherwise, take, hold, deal in and convert stocks, shares and
securities of all kinds and to enter into partnership or into any arrangement
for sharing profits, reciprocal concessions or cooperation with any person or
company and to promote and aid in promoting to constitute, form or organize any
company, syndicate or partnership of any kind, for the purpose of acquiring and
undertaking any property and liabilities of the Company or of advancing,
directly or indirectly, the objects of the Company or for any other purpose
which the Company may think expedient.
(v) To stand surety for or to guarantee, support or secure the performance of
all or any of the obligations of any person, firm or company whether or not
related or affiliated to the Company in any manner and whether by personal
covenant or by mortgage, charge or lien upon the whole or any part of the
undertaking, property and assets of the Company, both present and
<PAGE> 3
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future, including its uncalled capital or by any such method and whether or not
the Company shall receive valuable consideration therefor.
(vi) To engage in or carry on any other lawful trade, business or enterprise
which may at any time appear to the Directors of the Company capable of being
conveniently carried on in conjunction with any of the aforementioned businesses
or activities or which may appear to the Directors of the Company likely to be
profitable or useful to the Company. In the interpretation of this Memorandum of
Association in general and of this Clause 3 in particular no object, business or
power specified or mentioned shall be limited or restricted by reference to or
inference from any other object, business or power, or the name of the Company,
or by the juxtaposition of two or more objects, businesses or powers and that,
in the event of any ambiguity in this clause or elsewhere in this Memorandum of
Association, the same shall be resolved by such interpretation and construction
as will widen and enlarge and not restrict the objects, businesses and powers of
and exercisable by the Company.
4. Except as prohibited or limited by the Companies Law (Revised), the Company
shall have full power and authority to carry out any object and shall have and
be capable of from time to time and at all times exercising any and all of the
powers at any time or from time to time exercisable by a natural person or body
corporate in doing in any part of the world whether as principal, agent,
contractor or otherwise whatever may be considered by it necessary for the
attainment of its objects and whatever else may be considered by it as
incidental or conducive thereto or consequential thereon, including, but without
in any way restricting the generality of the foregoing, the power to make any
alterations or amendments to this Memorandum of Association and the Articles of
Association of the Company considered
<PAGE> 4
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necessary or convenient in the manner set out in the Articles of Association of
the Company, and the power to do any of the following acts or things, viz: to
pay all expenses of and incidental to the promotion, formation and incorporation
of the Company; to register the Company to do business in any other
jurisdiction; to sell, lease or dispose of any property of the Company; to draw,
make, accept, endorse, discount, execute and issue promissory notes, debentures,
bills of exchange, bills of lading, warrants and other negotiable or
transferable instruments; to lend money or other assets and to act as
guarantors; to borrow or raise money on the security of the undertaking or on
all or any of the assets of the Company including uncalled capital or without
security; to invest monies of the Company in such manner as the Directors
determine; to promote other companies; to sell the undertaking of the Company
for cash or any other consideration; to distribute assets in specie to Members
of the Company; to make charitable or benevolent donations; to pay pensions or
gratuities or provide other benefits in cash or kind to Directors, officers,
employees, past or present and their families; to carry on any trade or business
and generally to do all acts and things which, in the opinion of the Company or
the Directors, may be conveniently or profitably or usefully acquired and dealt
with, carried on, executed or done by the Company in connection with the
business aforesaid; PROVIDED that the Company shall only carry on the businesses
for which a license is required under the laws of the Cayman Islands when so
licensed under the terms of such laws.
5. The liability of each Member is limited to the amount from time to time
unpaid on such Member's shares.
6. The share capital of the Company is US$7,500,000 divided into 50,000,000
ordinary redeemable shares of a nominal or par value of US$0.10 each with the
rights attaching
<PAGE> 5
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thereto as provided in the Articles of Association of the Company and 25,000,000
other shares of a nominal or par value of US$0.10 each, which may be issued in
any number of different classes or series and to which such rights as may be
designated in accordance with the Articles of Association shall attach, with
power for the Company insofar as is permitted by law, to redeem or purchase any
of its shares and to increase or reduce the said capital subject to the
provisions of the Companies Law (Revised) and the Articles of Association and to
issue any part of its capital, whether original, redeemed or increased with or
without any preference, priority or special privilege or subject to any
postponement of rights or to any conditions or restrictions and so that unless
the conditions of issue shall otherwise expressly declare every issue of shares
whether declared to be preference or otherwise shall be subject to the powers
hereinbefore contained.
7. If the Company is registered as exempted, its operations will be carried on
subject to the provisions of Section 192 of the Companies Law (Revised) and,
subject to the provisions of the Companies Law (Revised) and the Articles of
Association, it shall have the power to register by way of continuation as a
body corporate limited by shares under the laws of any jurisdiction outside the
Cayman Islands and to be deregistered in the Cayman Islands.
References herein to the Articles of Association of the Company shall be
deemed to refer to such articles as the same may be altered from time to time.
References herein to the Companies Law (Revised), or any provision thereof,
shall be deemed to refer to such law or provision, as the case may be, as the
same may be amended, or to such statutory modification or re-enactment thereof
as the same may be in force, from time to time.
<PAGE> 1
Exhibit 3.2
THE COMPANIES LAW
COMPANY LIMITED BY SHARES
-------------------------
RESTATED ARTICLES OF ASSOCIATION
OF
GCR HOLDINGS LIMITED
(As Amended and Restated by Special Resolution adopted on December 19, 1996 and
effective on such date)
1. In these Articles Table A in the Schedule to the Statute does
not apply and, unless there be something in the subject or context inconsistent
therewith,
"Affiliate" has the meaning ascribed thereto in Rule 144
promulgated under the Securities Act.
"Articles" means these Articles of Association as originally
framed or as from time to time altered by Special Resolution
and "Article" means any particular Article hereof.
"the Auditors" means the Persons from time to time performing
the duties of auditors of the Company.
"Book Price" of any share, as of any particular date, means
the book value of such share as reflected on the balance sheet
of the Company as of the last day of the last full fiscal
quarter preceding such date, either before or after giving
effect to the exercise, conversion or exchange of all
outstanding warrants, options or other rights to acquire
Ordinary Shares, as the Directors may determine.
"Business Day" means any day, other than a Saturday, a Sunday
or any day on which banks in Hamilton, Bermuda or the City of
New York are authorized or obligated by law or executive order
to close.
"Code" means the United States Internal Revenue Code of 1986,
as amended from time to time, or any federal statute from time
to time in effect that has replaced such statute. Any
reference in these Articles to a provision of the Code or a
rule or regulation promulgated thereunder means such
provision, rule or regulation as amended from time to time or
any provision of a federal law, or any federal rule or
regulation, from time to time in effect that has replaced such
provision, rule or regulation.
<PAGE> 2
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"Commencement" shall mean October 8, 1993.
"the Company" means the above named Company.
"Controlled Shares" in reference to any U.S. Person means
(without duplication):
(i) all voting shares directly or by application
of the constructive ownership rules of
Sections 958(a) and 958(b) of the Code
constructively owned by such U.S. Person,
and
(ii) all voting shares beneficially owned by such
U.S. Person.
For the purpose of these Articles, a Person is deemed to have
"beneficial ownership" of all shares that are owned, directly
or indirectly, by such Person, or by any group of which such
Person is a member, within the meaning of Section 13(d) of the
Exchange Act and the rules and regulations promulgated
thereunder, including any such shares that would otherwise be
excluded by the provisions of Section 13(d)(6) of such statute
or Rule 13d-4 promulgated thereunder. For purposes of clauses
(i) and (ii) and the last sentence of the first paragraph of
each of Articles 4(f), 6(b) and 7(c), in calculating the
percentage of the shares of the Company that a U.S. Person's
total Controlled Shares represent, such percentage shall be
the higher of the percentage determined pursuant to the
constructive ownership rules stated above and the percentage
determined pursuant to Rule 13d-3 promulgated under the
Exchange Act.
"debenture" means debenture stock, mortgages, bonds and any
other such debt securities of the Company whether constituting
a charge on the assets of the Company or not.
"the Directors" means the directors for the time being of the
Company.
"dividend" includes a bonus or capitalization issue of shares.
"Exchange Act" means the United States Securities Exchange Act
of 1934 as amended from time to time or any federal statute
from time to time in effect that has replaced such statute.
Any reference in these Articles to a provision of the Exchange
Act or a rule or regulation promulgated thereunder means such
provision, rule or regulation as amended from time to time or
any provision of a federal law, or any federal rule or
regulation, from time to time in effect that has replaced such
provision, rule or regulation.
"Excluded Controlled Shares" in reference to any U.S.
Person (and in reference to any other U.S. Person,
if Controlled Shares of the first U.S. Person are
<PAGE> 3
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constructively owned by such other U.S. Person pursuant to
clause (i) of the definition of "Controlled Shares") means
Controlled Shares of such first U.S. Person that would not be
Controlled Shares of such first U.S. Person but for clause
(ii) of the definition of such term, provided that (i) such
first U.S. Person is registered under the United States
federal securities laws as a broker, dealer or investment
adviser, (ii) such first U.S. Person is the beneficial owner
of such shares solely because it has discretionary authority
to vote or dispose of such shares in a fiduciary capacity on
behalf of its client who is also a beneficial owner of such
shares and (iii) the voting rights carried by such shares are
not being exercised (and the client is informed that they are
not being exercised) by such broker, dealer or adviser and are
being exercised (if they are exercised at all) by such client,
and provided, further, that the Company shall have received
such assurances as it may request confirming that such shares
are Excluded Controlled Shares and may assume that the
Controlled Shares of each Member who is a U.S. Person do not
include any Excluded Controlled Shares unless such Member
otherwise notifies the Company and provides such assurances.
"Formula" has the meaning ascribed thereto in Article 40(a).
"Goldman Sachs" means Goldman, Sachs & Co. and its Affiliates
and "Goldman Sachs Person" shall mean any one of such Persons.
"Goldman, Sachs & Co." means Goldman, Sachs & Co., a limited
partnership registered in the state of New York, and its
successors.
"Market Price" of any share of a class of shares listed on a
United States securities exchange or quoted in a United States
securities quotation system, as of any particular date, means
the average of the last reported sale prices of such class on
such securities exchange or in such quotation system for any
ten (10) consecutive trading days selected by the Directors
during a period of thirty (30) days preceding such date. In
the event that, on any of such ten (10) consecutive trading
days, (A) there is no such last reported sale price, then, in
lieu thereof, the last reported bid price for such class on
such exchange or in such quotation system on such trading day
shall be used or (B) there is no such last reported sale price
or last reported bid price, then, in lieu thereof, the last
reported sale price or, if none, the last reported bid price
on such securities exchange or in such quotation system on the
latest trading day (whether or not during such thirty (30)-
day period) preceding the trading day in question for which
there is such a sale or bid price shall be used; PROVIDED
that, if the number of consecutive trading days during such
thirty (30)-day period for which there are last reported sale
prices is equal to or greater than five (5) but less than ten
(10), then, in lieu of the Market Price determined as
aforesaid, the Market Price may be, if the Directors in their
discretion so determine, the average of such last sale prices
for any five (5) consecutive trading days during such thirty
(30)-day period.
<PAGE> 4
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"Member" shall bear the meaning ascribed to it in the Statute.
"Memorandum" shall mean the Memorandum of Association of the
Company as amended from time to time.
"month" means calendar month.
"Operating Company" means Global Capital Reinsurance Limited,
a company incorporated under the laws of Bermuda.
"paid-up" means paid-up and/or credited as paid-up.
"Person" means any individual, company, corporation, firm,
partnership, trust or any other business, entity or person,
whether or not recognized as constituting a separate legal
entity.
"the registered office" means the registered office for the
time being of the Company.
"Seal" means the common seal of the Company and includes every
duplicate seal.
"Secretary" includes an Assistant Secretary and any Person
appointed to perform the duties of Secretary of the Company.
"Securities Act" means the United States Securities Act of
1933 as amended from time to time or any federal statute from
time to time in effect which has replaced such statute. Any
reference in these Articles to a provision of the Securities
Act or a rule or regulation promulgated thereunder means such
provision, rule or regulation as amended from time to time or
any provision of a federal law, or any federal rule or
regulation, from time to time in effect that has replaced such
provision, rule or regulation.
"Share" means an ordinary redeemable share of US$0.10 in the
capital of the Company and includes a fraction of a Share.
"share" means a share of any class of shares in the capital of
the Company (including, where the context so admits, Shares)
and includes a fraction of a share.
"Special Resolution" has the meaning ascribed thereto in the
Statute and, where the context so admits, shall include such a
resolution so passed or approved by the holders of a
particular class of share.
<PAGE> 5
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"Statute" means the Companies Law (Revised) of the Cayman
Islands as amended and every statutory modification or
re-enactment thereof for the time being in force.
"subsidiary", with respect to any Person, means a corporation
more than fifty percent (50%) (or, in the case of a wholly
owned subsidiary, one hundred percent (100%)) of the
outstanding Voting Shares of which is owned, directly or
indirectly, by the Person or by one or more other
subsidiaries, or by the Person and one or more other
subsidiaries.
"Unadjusted Basis", when used with respect to the aggregate
voting rights held by any Member, refers to the determination
of such rights without reference to the provisions relating to
the adjustment of voting rights contained in Article 40.
"United States 29% Shareholder" means a U.S. Person who owns,
directly or by application of the constructive ownership rules
of Sections 958(a) and 958(b) of the Code, either (i) issued
shares representing more than twenty-nine percent (29%) of the
total combined voting rights attaching to the issued Shares
and any issued shares of any other class or classes of shares
of the Company or (ii) more than twenty-nine percent (29%) of
the total combined value of the Shares and any other shares of
the Company, in each case determined pursuant to Section 957
of the Code.
"United States 25% Shareholder" means a U.S. Person who owns,
directly or by application of the constructive ownership rules
of Sections 958(a) and 958(b) of the Code, either (i) issued
shares representing more than twenty-five percent (25%) of the
total combined voting rights attaching to the issued Shares
and any issued shares of any other class or classes of shares
of the Company or (ii) more than twenty-five percent (25%) of
the total combined value of the Shares and any other shares of
the Company, in each case determined pursuant to Section 957
of the Code.
"United States 10% Shareholder" means a U.S. Person who owns,
directly or by application of the constructive ownership rules
of Sections 958(a) and 958(b) of the Code, issued shares
representing ten percent (10%) or more of the total combined
voting rights attaching to the issued Shares and any issued
shares of any other class or classes of shares of the Company.
"U.S. Person" means (i) an individual who is a citizen or
resident of the United States, (ii) a corporation or
partnership that is, as to the United States, a domestic
corporation or partnership and (iii) an estate or trust that
is subject to U.S. Federal income tax on its income regardless
of its source.
<PAGE> 6
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"Voting Share" of any Person means any share in such Person
conferring voting rights on the holder thereof (other than
such voting rights as would exist solely in relation to a
proposal to alter or vary the rights attaching to such shares
solely upon the future occurrence of a contingency).
"written" and "in writing" include all modes of representing
or reproducing words in visible form.
Words importing the singular number include the plural number
and vice-versa.
Words importing the masculine gender include the feminine
gender.
Words importing living persons include corporations and other
Persons.
CERTIFICATES FOR SHARES
-----------------------
2. Shares of the Company shall be evidenced by certificates
unless, in the case of shares of any class or any particular shares, otherwise
determined by the Directors. Certificates representing shares of the Company, if
any, shall be in such form and may bear such legends (reflecting the terms of
issue of the shares thereby represented, any restrictions on transfer of such
shares and any other matters not inconsistent with these Articles) as shall be
determined by the Directors. Such certificates shall be under the Seal. All
certificates for shares of any class shall be consecutively numbered or
otherwise identified and shall specify the shares and class thereof to which
they relate. The name and address of the Person to whom shares are issued, with
the number of such shares and date of issue and whether such shares are subject
to any restrictions on transfer not applicable to all shares, whether pursuant
to these Articles or as otherwise determined by the Directors, shall be entered
or noted in the register of Members of the Company. All certificates surrendered
to the Company for transfer shall be cancelled and (except in circumstances
described in the last sentence of Article 13 if a certificate representing such
shares has previously been issued) no new certificate shall be issued until the
former certificate for a like number of shares shall have been surrendered and
cancelled. The Directors may authorize certificates to be issued with the Seal
and authorized signatures affixed by some method or system of mechanical
process.
3. Notwithstanding Article 2, if a share certificate be defaced,
lost, destroyed or otherwise is not surrendered to the Company or any reason, it
may be renewed on payment of such sum and on such terms (if any) as to evidence
and indemnity, and the payment of the expenses incurred by the Company in
investigating evidence, as the Directors may prescribe.
<PAGE> 7
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ISSUE OF SHARES
---------------
4. (a) Save with the sanction of a Special Resolution or the written
consent of the holders of the Shares of each class given in accordance with
Article 8(a), Shares shall only be issued with the rights and restrictions as
provided in these Articles.
(b) Subject to the provisions, if any, in that behalf in the
Memorandum and these Articles, and to any direction that may be given by Special
Resolution and without prejudice to any special rights previously conferred on
the holders of existing shares, the Directors are authorized, without obtaining
any vote or consent of the holders of any shares of the Company unless expressly
provided by the terms of issue of such shares, subject to any limitations
prescribed by law, to provide from time to time for the issuance of other
classes or series of shares, and in accordance with applicable procedures of the
Statute, to establish the characteristics of each class or series including,
without limitation, the following:
(i) the number of shares of that class or series, which may
subsequently be increased or decreased (but not below the
number of shares of that class or series then outstanding) by
resolution of the Directors, and the distinctive designation
thereof;
(ii) the voting powers, full or limited, if any, of the series of
that class or series;
(iii) the rights in respect of dividends on the shares of that class
or series, whether dividends shall be cumulative and, if so,
from which date or dates and the relative rights or priority,
if any, of payment of dividends on shares of that class or
series and any limitations, restrictions or conditions on the
payment of dividends;
(iv) the relative amounts, and the relative rights or priority, if
any, of payment in respect of shares of that class or series,
which the holders of the shares of that class or shares shall
be entitled to receive upon any liquidation, dissolution or
winding up of the Company;
(v) the terms and conditions (including the price or prices, which
may vary under different conditions and at different
redemption dates), if any, upon which all or any part of the
shares of that class or series may be redeemed, and any
limitations, restrictions or conditions on such redemption;
(vi) the terms, if any, of any purchase, retirement or sinking fund
to be provided for the shares of that class or series;
(vii) the terms, if any, upon which the shares of that class or
series shall be convertible into or exchangeable for shares of
any other class, classes or series, or other securities,
whether or not issued by the Company;
<PAGE> 8
-8-
(viii) the restrictions, limitations and conditions, if any, upon
issuance of indebtedness of the Company so long as any shares
of that class or series are outstanding; and
(ix) any other preferences and relative, participating, optional or
other rights and limitations not inconsistent with applicable
law or the provisions of this Article 4.
(c) Subject as aforesaid, the Directors may allot, issue, grant options
over or otherwise dispose of any shares of the Company at such terms and on such
terms as they think proper.
(d) Unless otherwise specified by the Directors, any shares which have
been called, redeemed or otherwise repurchased by the Company shall, upon their
cancellation, unless otherwise specified by the Directors, have the status of
authorized but unissued shares and may be subsequently issued for valid
consideration.
(e) Subject to the provisions, if any, in that behalf in the Memorandum
and these Articles, the Directors shall have the fullest powers permitted by the
Statute to pay all or any redemption or purchase monies in respect of any shares
out of any of the Company's funds including any amounts represented by its share
capital or share premium accounts.
(f) Notwithstanding the foregoing provisions of this Article 4, if the
Company issues shares, it shall only do so in a manner that it believes would
not cause, by reason of such issuance, (i) the total Controlled Shares of a U.S.
Person other than a Goldman Sachs Person to equal or exceed ten percent (10%) of
the shares of the Company, (ii) the total Controlled Shares of a Goldman Sachs
Person to equal or exceed ten percent (10%) of the shares of the Company except
with the prior written consent of Goldman, Sachs & Co. or (iii) a Goldman Sachs
Person to become or continue to be a United States 25% Shareholder, in each case
(i), (ii) and (iii) on an Unadjusted Basis. If at any time no Goldman Sachs
Person holds total Controlled Shares equal to ten percent (10%) or any higher
percentage of the shares of the Company, then the provisions of this
Article 4(f) shall automatically, with no further action by any Person,
terminate and have no further effect, regardless of any subsequent change in
the percentage of shares owned by a Goldman Sachs Person.
Notwithstanding the foregoing provisions of this Article 4(f), the
Company may issue shares that would result in a Goldman Sachs Person becoming or
continuing to be a United States 25% Shareholder PROVIDED that (i) no Goldman
Sachs Person would be a United States 25% Shareholder after giving effect to
such issuance but for market-making activities engaged in by a Goldman Sachs
Person in the ordinary course of its business, (ii) after giving effect to such
issuance, no Goldman Sachs Person would be a United States 29% Shareholder and
(iii) Goldman, Sachs & Co. provides in writing to the Company such assurances as
the Company may require that no Goldman Sachs Person will be a United States 25%
Shareholder (A) for a period of 29 consecutive days or more at any time or (B)
for a period of 29 days or more during any single calendar quarter and no
Goldman Sachs Person will be a United States 29% Shareholder. In addition, the
foregoing provisions of this Article 4(f) shall not apply to any
<PAGE> 9
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issuance of shares to a person acting as an underwriter in the ordinary course
of its business, purchasing such shares pursuant to a purchase agreement to
which the Company is a party, for resale.
5. The Company shall maintain a register of its Members, and,
subject to the provisions of Articles 2 and 3, every Person whose name is
entered as a Member in the register of Members shall, if the Directors shall
have determined to issue certificates for shares pursuant to Article 2, be
entitled without payment to receive within two months after allotment or
lodgement of transfer (or within such other period as the conditions of issue
may provide) one certificate for all his shares or several certificates each for
one or more of his shares; PROVIDED that in respect of a share or shares held
jointly by several Persons the Company shall not be bound to issue more than one
certificate and delivery of a certificate for a share to one of the several
joint holders shall be sufficient delivery to all such holders.
TRANSFER OF SHARES
------------------
6. (a) The instrument of transfer of any share shall be in writing and
shall be executed by or on behalf of the transferor and the transferor shall be
deemed to remain the holder of a share until the name of the transferee is
entered in the register in respect thereof
(b) The Directors shall decline to register a transfer of shares if
the Directors have reason to believe that the effect of such transfer would be
(i) to increase the number of total Controlled Shares of any U.S. Person other
than a Goldman Sachs Person to ten percent (10%) or any higher percentage of the
shares of the Company, (ii) to increase the number of total Controlled Shares of
any Goldman Sachs Person to ten percent (10%) or any higher percentage of the
shares of the Company without the prior written consent of Goldman, Sachs & Co.
or (iii) that a Goldman Sachs Person would become or continue to be a United
States 25% Shareholder, in each case (i), (ii) and (iii) on an Unadjusted Basis.
If at any time no Goldman Sachs Person holds total Controlled Shares equal to
ten percent (10%) or any higher percentage of the shares of the Company, then
the provisions of this Article 6(b) shall automatically, with no further
action by any Person, terminate and have no further effect, regardless of
any subsequent change in the percentage of shares owned by a Goldman
Sachs Person.
Notwithstanding the foregoing provisions of this Article 6(b), the
Directors shall not decline to register a transfer of shares that would result
in a Goldman Sachs Person becoming or continuing to be a United States 25%
Shareholder if (i) no Goldman Sachs Person would be a United States 25%
Shareholder after giving effect to such transfer but for market-making
activities engaged in by a Goldman Sachs Person in the ordinary course of its
business, (ii) after giving effect to such transfer no Goldman Sachs Person
would be a United States 29% Shareholder and (iii) Goldman, Sachs & Co. provides
in writing to the Company such assurances as the Company may require that no
Goldman Sachs Person will be a United States 25% Shareholder (A) for a period of
29 consecutive days or more at any time or (B) for a period of
<PAGE> 10
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29 days or more during any single calendar quarter and no Goldman Sachs Person
will be a United States 29% Shareholder. In addition, the foregoing provisions
of this Article 6(b) shall not apply to any transfer of shares to a person
acting as an underwriter in the ordinary course of its business, purchasing such
shares pursuant to a purchase agreement to which the Company is a party, for
resale.
(c) The Directors may, in their absolute discretion, decline to
register the transfer of any shares if the Directors have reason to believe (i)
that such transfer may expose the Company, any subsidiary thereof, any Member or
any Person ceding insurance to the Company or any such subsidiary to adverse tax
or regulatory treatment in any jurisdiction or (ii) that registration of such
transfer under the Securities Act or under any blue sky or other state
securities laws or under the laws of any other jurisdiction is required and such
registration has not been duly effected (PROVIDED, however, that in this case
(ii) the Directors shall be entitled to request and rely on an opinion of
counsel to the transferor or the transferee, in form and substance satisfactory
to the Directors, that no such approval or consent is required and no such
violation would occur, and the Directors shall not be obligated to register any
transfer absent the receipt of such an opinion).
(d) Subject to Articles 6(b), 6(c) and 6(f), and except, in the case
of any shares other than the Shares, as may otherwise be provided by the terms
of issuance thereof, any Member may sell, assign, transfer or otherwise dispose
of shares at the time owned by it and, upon receipt of a duly executed form of
transfer in writing, the Directors shall procure the timely registration of the
same. If the Directors refuse to register a transfer for any reason they shall
notify the proposed transferor and transferee within thirty days of such
refusal.
(e) The registration of transfers may be suspended at such time and for
such periods as the Directors may from time to time determine; PROVIDED that
such registration shall not be suspended for more than forty-five days in any
period of three hundred sixty-five (365) consecutive days.
(f) The Directors may require any Member, or any Person proposing to
acquire shares of the Company, to certify or otherwise provide information in
writing as to such matters as the Directors may request for the purpose of
giving effect to Articles 4(f), 6(b) and (c) and 7(c), including as to such
Person's status as a U.S. Person, its Controlled Shares and other matters of the
kind contemplated by Article 40(b). Such request shall be made by written notice
and the certification or other information requested shall be provided to such
place and within such period (not less than ten (10) Business Days after such
notice is given unless the Directors and such Member or proposed acquiror
otherwise agree) as the Directors may designate in such request. If any Member
or proposed acquiror does not respond to any such request by the Directors as
requested, or if the Directors have reason to believe that any certification or
other information provided pursuant to any such request is inaccurate or
incomplete, the Directors may decline to register any transfer or to effect any
issuance or purchase of shares to which such request relates.
<PAGE> 11
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REDEMPTION AND PURCHASE OF SHARES
---------------------------------
7. (a) Subject to the provisions of the Statute and the Memorandum,
shares may be issued on the terms that they are, or at the option of the Company
or the holder are, to be redeemed on such terms and in such manner as the
Company, before the issue of the shares, may by Special Resolution determine,
and thereafter such shares may be redeemed pursuant to their terms.
(b) Subject to the provisions of the Statute and the Memorandum, the
Company may purchase its own shares, including any redeemable shares, and may
make payment therefor in any manner authorized by the Statute, including out of
capital, on the following conditions and in the following manners:
(i) if such shares are of a class listed on a United States
securities exchange or approved for quotation in a United States securities
quotation system, (A) pursuant to open market transactions conducted in
accordance with the requirements of Rule 10b-18 under the Exchange Act; (B)
pursuant to a tender offer conducted in accordance with the requirements of Rule
13e-4 under the Exchange Act and at a price which is (x) no less than 90% of the
lower of the Market Price or the Book Price of such shares as of the date that
such tender offer is first publicly announced, and (y) no more than 120% of the
greater of the Market Price or the Book Price of such shares as of the date that
such tender offer is first publicly announced; or (C) pursuant to a privately
negotiated purchase transaction with one or more shareholders of the Company and
at a price which is no less than 90% of the lower of the Market Price or the
Book Price of such shares as of the date of purchase (or, if the Board so
determines, any earlier date on which the transaction is first publicly
announced) and no more than 120% of the greater of the Market Price or the Book
Price of such shares as of such date, PROVIDED that, before the Company may
accept any offer to sell or make any offer to purchase its shares pursuant to
this clause (C), the purchase price or a formula by which the price can be
determined must be approved by the Directors, a properly constituted committee
thereof or the Chief Executive Officer of the Company acting under the authority
of the Directors or a properly constituted committee thereof, and any such offer
to sell must be accepted by the Company, and any such offer to purchase must be
made by the Company, if at all, not more than ninety (90) days following such
approval and, if such offer to sell or such offer to purchase is accepted, the
transaction must be settled not more than ninety (90) days after such
acceptance; or
(ii) in satisfaction or in lieu of any dividend or distribution
payable by the Company with respect to any shares in accordance with these
Articles, PROVIDED that (A) such purchases are made at a price which is (x) no
less than 95% of the lower of the Market Price or the Book Price of such shares
as of the date of such purchase (or, if the Board so determines, any earlier
date on which the transaction is first publicly announced) and (y) no higher
than 105% of the greater of the Market Price or Book Price of such shares as of
such date, (B) such purchases are made from Members pro rata to their holdings
of such shares (or if the relevant dividend or distribution contemplates such
purchases as an alternative or option
<PAGE> 12
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to a cash payment, pro rata to the holdings of such shares of the Members from
whom such shares are being purchased), (C) at least ten (10) days' written
notice of the shares to be purchased and the applicable price thereof (or a
formula by which such price is to be determined) is provided to each relevant
Member and (D) the payment of the proceeds of any such purchase of shares is
settled on the date and otherwise in the manner that the relevant distribution
or dividend would have been paid.
(iii) as regards any shares held by any Director, officer or
employee of the Company or any subsidiary thereof, on any such terms and
conditions as may be provided for or contemplated by any employment agreement
between the Company or any subsidiary thereof and such shareholder; or
(iv) on any other terms and conditions; PROVIDED that the same
shall have been authorized by ordinary resolution.
A purchase of shares in any manner provided for in this Article 7(b) shall not
preclude a purchase of shares in any other manner provided for in this Article
7(b), whether concurrently, in connection therewith or otherwise.
(c) If the Company redeems or purchases shares pursuant to this
Article 7, it shall do so only in a manner it believes would not result, upon
consummation of such redemption or purchase, in (i) the number of total
Controlled Shares of any U.S. Person other than a Goldman Sachs Person, as a
percentage of the shares of the Company, increasing to ten percent (10%) or any
higher percentage, (ii) the number of total Controlled Shares of any Goldman
Sachs Person, as a percentage of the shares of the Company, increasing to ten
percent (10%) or any higher percentage without the prior written consent of
Goldman, Sachs & Co. or (iii) a Goldman Sachs Person becoming or continuing to
be a United States 25% Shareholder, in each case (i), (ii) and (iii) on an
Unadjusted Basis. If at any time no Goldman Sachs Person holds total Controlled
Shares equal to ten percent (10%) or any higher percentage of the shares of the
Company, then the provisions of this Article 7(c) shall automatically, with no
further action by any Person, terminate and have no further effect, regardless
of any subsequent change in the percentage of shares owned by a Goldman Sachs
Person.
Notwithstanding the foregoing provisions of this Article 7(c), the
Company may effect a redemption or purchase of shares that would result in a
Goldman Sachs Person becoming or continuing to be a United States 25%
Shareholder PROVIDED that (i) no Goldman Sachs Person would be a United States
25% Shareholder after giving effect to such redemption or purchase but for
market-making activities engaged in by a Goldman Sachs Person in the ordinary
course of its business, (ii) after giving effect to such redemption or purchase
no Goldman Sachs Person would be a United States 29% Shareholder and (iii)
Goldman, Sachs & Co. provides in writing to the Company such assurances as the
Company may require that no Goldman Sachs Person will be a United States 25%
Shareholder (A) for a period of 29 consecutive days or more at any time or (B)
for a period of 29 days or more during any single calendar quarter and no
Goldman Sachs Person will be a United States 29% Shareholder.
<PAGE> 13
-13-
VARIATION OF RIGHTS OF SHARES
-----------------------------
8. (a) If at any time the share capital of the Company is divided into
different classes of shares, the rights attached to any class (unless otherwise
provided by the terms of issue of the shares of that class) shall only, whether
or not the Company is being wound-up, be varied with the consent in writing of
the holders of three-fourths of the shares of the issued shares of that class,
or with the sanction of a Special Resolution passed at a general meeting of the
holders of the shares of that class.
(b) The provisions of these Articles relating to general meetings
shall apply to every general meeting of the holders of a particular class of
shares called by the Directors to meet as a separate class, and the necessary
quorum for such class meeting shall be two (2) or more Members present in person
or by proxy being the registered holders of an aggregate of at least fifty
percent (50%) of the shares of such class carrying the right to receive notice
of, attend and vote at such class meeting; PROVIDED that (i) if there is only
one (1) Member of record holding shares of such class, one (1) Member present in
person or by proxy shall constitute a quorum, and (ii) any holder of shares of
such class present in person or by proxy may demand a poll.
(c) Class meetings and class votes may be called only at the direction
of the Directors. Nothing in these Articles shall give any Member or group of
Members the right to call a class meeting or class vote.
9. The rights conferred upon the holders of the shares of any class
shall not, unless otherwise expressly provided by the terms of issue of the
shares of that class, be deemed to be varied by the creation or issue of further
shares ranking in any respect prior thereto or pari passu therewith or having
rights to act at any general meeting as a separate class.
COMMISSION ON SALE OF SHARES
----------------------------
10. The Company may insofar as the Statute permits pay a commission to
any Person in consideration of his subscribing or agreeing to subscribe whether
absolutely or conditionally for any shares of the Company. Such commissions may
be satisfied by the payment of cash or the allotment of fully or partly paid-up
shares or partly in one way and partly in the other. The Company may also on any
issue of shares pay such brokerage as may be lawful.
<PAGE> 14
-14-
NON-RECOGNITION OF TRUSTS
-------------------------
11. No Person shall be recognized by the Company as holding any share
upon any trust and the Company shall not be bound by or be compelled in any way
to recognize (even when having notice thereof) any equitable, contingent, future
or partial interest in any share, or any interest in any fractional part of a
share, or (except only as is otherwise provided by these Articles or the
Statute) any other rights in respect of any share except an absolute right to
the entirety thereof in the registered holder.
LIEN ON SHARES
--------------
12. The Company shall have a first and paramount lien and charge on
all shares (whether fully paid-up or not) registered in the name of a Member
(whether solely or jointly with others) for all debts, liabilities or
engagements to or with the Company (whether presently payable or not) by such
Member or his estate, either alone or jointly with any other Person, whether a
Member or not, but the Directors may at any time declare any share to be wholly
or in part exempt from the provisions of this Article. The registration of a
transfer of any such share shall operate as a waiver of the Company's lien (if
any) thereon. The Company's lien (if any) on a share shall extend to all
dividends or other monies payable in respect thereof.
13. The Company may sell, in such manner as the Directors think fit,
any shares on which the Company has a lien, but no sale shall be made unless a
sum in respect of which the lien exists is then presently payable, nor until the
expiration of fourteen days after a notice in writing stating and demanding
payment of such part of the amount in respect of which the lien exists as is
presently payable, has been given to the registered holder or holders for the
time being of the share, or the Person, of which the Company has notice,
entitled thereto by reason of his death or bankruptcy. Effective upon such sale,
any certificate representing such shares prior to such sale shall become null
and void, whether or not it was actually delivered to the Company.
14. To give effect to any such sale the Directors may authorize some
Person to transfer the shares sold to the purchaser thereof. The purchaser shall
be registered as the holder of the shares comprised in any such transfer, and he
shall not be bound to see to the application of the purchase money, nor shall
his title to the shares be affected by any irregularity or invalidity in the
proceedings in reference to the sale.
15. The proceeds of such sale shall be received by the Company and
applied in payment of such part of the amount in respect of which the lien
exists as is presently payable and the residue, if any, shall (subject to a like
lien for sums not presently payable as existed upon the shares before the sale)
be paid to the Person entitled to the shares at the date of the sale.
<PAGE> 15
-15-
TRANSMISSION OF SHARES
----------------------
16. In case of the death of a Member, the survivor or survivors where
the deceased was a joint holder, and the legal personal representatives of the
deceased where he was a sole holder, shall be the only Persons recognized by the
Company as having any title to his interest in the shares, but nothing herein
contained shall release the estate of any such deceased holder from any
liability in respect of any shares which had been held by him solely or jointly
with other Persons.
17. (a) Any Person becoming entitled to a share in consequence of the
death or bankruptcy or liquidation or dissolution of a Member (or in any other
way than by transfer) may, upon such evidence being produced as may from time to
time be required by the Directors and subject as hereinafter provided, elect
either to be registered himself as holder of the share or to make such transfer
of the shares to such other Person nominated by him as the deceased or bankrupt
Person could have made and to have such Person registered as the transferee
thereof, but the Directors shall, in either case, have the same right to decline
or suspend registration as they would have had in the case of a transfer of the
share by that Member before his death or bankruptcy, as the case may be.
(b) If the Person so becoming entitled shall elect to be registered
himself as holder he shall deliver or send to the Company a notice in writing
signed by him stating that he so elects.
18. A Person becoming entitled to a share by reason of the death or
bankruptcy, liquidation or dissolution of the holder (or in any other case than
by transfer) shall be entitled to the same dividends and other advantages to
which he would be entitled if he were the registered holder of the share, except
that he shall not, before being registered as a Member in respect of the share,
be entitled in respect of it to exercise any right conferred by membership in
relation to meetings of the Company; PROVIDED, however, that the Directors may
at any time give notice requiring any such Person to elect either to be
registered himself or to transfer the share and if the notice is not complied
with within ninety days the Directors may thereafter withhold payment of all
dividends, bonuses or other monies payable in respect of the share until the
requirements of the notice have been complied with.
AMENDMENT OF MEMORANDUM, CHANGE OF
LOCATION OF REGISTERED OFFICE & ALTERATION OF CAPITAL
-----------------------------------------------------
19. (a) Subject to and insofar as permitted by the provisions of the
Statute, the Company may from time to time by Special Resolution alter or amend
its Memorandum and may, without restricting the generality of the foregoing:
<PAGE> 16
-16-
(i) increase the share capital by such sum to be divided into
shares of such amount of, or without, nominal or par value and
with such rights, priorities and privileges annexed thereto as
the resolution shall prescribe.
(ii) consolidate and divide all or any of its share capital into
shares of larger amount than its existing shares;
(iii) by subdivision of its existing shares or any of them divide
the whole or any part of its share capital into shares of
smaller amount than is fixed by the Memorandum of Association
or into shares without nominal or par value;
(iv) cancel any shares which at the date of the passing of the
resolution have not been taken or agreed to be taken by any
Person;
(v) change its name or alter its objects.
(b) All new shares created hereunder shall be subject to the same
provisions with reference to liens, transfer, transmission and otherwise as the
shares in the original share capital.
(c) Without prejudice to Article 7 and subject to the provisions of the
Statute the Company may by Special Resolution reduce its share capital, any
capital redemption reserve fund or any share premium account.
(d) Subject to the provisions of the Statute the Company may by
resolution of the Directors change the location of its registered office.
CLOSING REGISTER OF MEMBERS OR FIXING RECORD DATE
-------------------------------------------------
20. For the purpose of determining Members entitled to notice of or to
vote at any meeting of Members or any adjournment thereof, or Members entitled
to receive payment of any dividend, or in order to make a determination of
Members for any other proper purpose, the Directors of the Company may provide
that the register of Members shall be closed for transfers for a stated period
but not to exceed in any case forty-five (45) days. If the register of Members
shall be so closed for the purpose of determining Members entitled to notice of
or to vote at a meeting of Members such register shall be so closed for at least
ten (10) days immediately preceding such meeting and the record date for such
determination shall be the date of the closure of the register of Members.
21. In lieu of or apart from closing the register of Members, the
Directors may fix in advance a date as the record date for any such
determination of Members entitled to notice of or to vote at a meeting of the
Members, and, for the purpose of determining the Members entitled to receive
payment of any dividend the Directors may, at or within 90 days prior to the
<PAGE> 17
-17-
date of declaration of such dividend, fix any date (other than a prior date) as
the record date for such determination.
22. If the register of Members is not so closed and no record date is
fixed for the determination of Members entitled to notice of or to vote at a
meeting of Members or Members entitled to receive payment of a dividend, the
date on which notice of the meeting is mailed or the date on which the
resolution of the Directors declaring such dividend is adopted, as the case may
be, shall be the record date for such determination of Members. When a
determination of Members entitled to vote at any meeting of Members has been
made as provided in this section, such determination shall apply to any
adjournment thereof.
GENERAL MEETING
---------------
23. (a) The Company shall hold an annual general meeting not later than
the 123rd day after the end of each financial year of the Company (with the
first such meeting after 1996 to be held not later than January 31, 1998 and
PROVIDED that, if the financial year is changed at any time, the first such
meeting held after the end of the first changed financial year may be held at
any time up to one year and 180 days after the last preceding annual general
meeting) and may at any time hold an extraordinary general meeting, and in each
case shall specify the meeting as such in the notices calling it. Each annual or
extraordinary general meeting shall be held at such time and place as the
Directors shall appoint.
(b) At these annual general meetings the report of the Directors (if
any) shall be presented, and the Directors to be elected at that meeting shall
be elected.
24. Members shall not be entitled to call an annual or extraordinary
general meeting of the Company or to call any vote of Members. Members may not
act by written consent unless the Directors request them to do so.
NOTICE OF GENERAL MEETINGS
--------------------------
25. At least ten Business Days' notice shall be given of an annual
general meeting or any other general meeting. Every notice shall be exclusive of
the day on which it is given or deemed to be given and of the day for which it
is given and shall specify the place, the day and the hour of the meeting and
the general nature of the business and shall be given in manner hereinafter
mentioned or in such other manner, if any, as may be prescribed by the Company;
PROVIDED that a general meeting of the Company shall, whether or not the notice
specified in this regulation has been given, be deemed to have been duly
convened if it is so agreed:
(a) in the case of a general meeting called as an annual general
meeting by all the Members entitled to attend and vote thereat or
their proxies; and
<PAGE> 18
-18-
(b) in the case of any other general meeting by a majority in
number of the Members having a right to attend and vote at the
meeting, being a majority together holding not less than a
majority of the combined voting power of the shares carrying
such a right, or their proxies.
26. The accidental omission to give notice of a general meeting to, or
the non-receipt of notice of a meeting by any Person entitled to receive notice
shall not, per se, invalidate the proceedings of that meeting.
PROCEEDINGS AT GENERAL MEETINGS
-------------------------------
27. No business shall be transacted at any general meeting unless a
quorum of Members is present at the time when the meeting proceeds to business.
Two (2) or more Members present in person or by proxy, being the registered
holders of an aggregate of at least fifty percent (50%) of the combined voting
power of the shares carrying the right to receive notice of, attend and vote at
such meeting, shall be a quorum; PROVIDED, that if there is only one (1) Member
of record, one (1) Member present in person or by proxy shall constitute a
quorum.
28. Adoption of an ordinary resolution shall require the affirmative
vote of a majority of the combined voting power of such shares as, carrying the
right to do so, are voted in person or by proxy at any general meeting at which
the required quorum is present in person or by proxy, voting together as a
single class.
29. A Member may nominate persons for election as Directors only at a
general meeting of Members duly called by the Directors for the election of
Directors. In any such case, written notice of such Member's intent to make such
a nomination must be given and received by the Secretary of the Company at the
principal executive offices of the Company in Bermuda or at such other place as
the Directors may from time to time designate as the principal executive offices
of the Company not later than (i) with respect to such an annual general
meeting, the close of business on the 120th day prior to the anniversary of the
day on which notice of the immediately preceding annual general meeting was
first sent or given to Members, and (ii) with respect to such an extraordinary
general meeting, the close of business on the tenth (10th) day following the
date on which notice of such meeting is first sent or given to Members (or, in
either case (i) or (ii), not later than such day and time as the Directors may
authorize in order to comply with applicable law). Each such notice by a Member
shall describe the nomination in sufficient detail for a nomination to be
summarized on the agenda for the meeting and shall set forth (i) the name and
address, as it appears on the books of the Company, of the Member who intends to
make the nomination; (ii) a representation that the Member is a holder of record
of shares of the Company entitled to vote at such meeting and intends to appear
in person or by proxy at the meeting to present such nomination; and (iii) the
class and number of shares of the Company which are beneficially owned by the
Member. In addition, the notice shall set forth: (i) the name and address of any
person to be nominated; (ii) a description of all
<PAGE> 19
-19-
arrangements or understandings between the Member and each nominee and any other
person or persons (naming such person or persons) pursuant to which the
nomination or nominations are to be made by the Member; (iii) such other
information regarding such nominee proposed by such Member as would be required
to be included in a proxy statement filed pursuant to Regulation 14A under the
Exchange Act, whether or not the Company is then subject to such regulation; and
(iv) the consent of each nominee to serve as a Director of the Company, if so
elected. The Chairman of the annual or extraordinary general meeting shall, if
the facts warrant, refuse to acknowledge a nomination not made in compliance
with the foregoing procedure, and any such nomination not properly brought
before the meeting shall not be considered.
30. If within one hour after the time appointed for the meeting a
quorum is not present, the meeting shall stand adjourned to the same day in the
next week at the same time and place or, if the Directors determine that such
day, time or place for a meeting is impractical, to such other day and time (not
more than three weeks after the appointed date for the meeting) or such other
place as the Directors may determine and if at the adjourned meeting a quorum is
not present within one hour from the time appointed for the meeting the Members
present shall be a quorum.
31. The Chairman, if any, of the Board of Directors shall preside as
Chairman at every general meeting of the Company, or if there is no such
Chairman, or if he shall not be present within thirty (30) minutes after the
time appointed for the holding of the meeting, or is unwilling to act, the
Directors present shall elect one of their number to be Chairman of the meeting.
32. If at any general meeting no Director is willing to act as
Chairman or if no Director is present within thirty (30) minutes after the time
appointed for holding the meeting, the Members present shall choose one of their
number to be Chairman of the meeting.
33. The Chairman may, with the consent of any general meeting duly
constituted hereunder, and shall if so directed by the meeting, adjourn the
meeting from time to time and from place to place, but no business shall be
transacted at any adjourned meeting other than the business left unfinished at
the meeting from which the adjournment took place. When a general meeting is
adjourned for thirty (30) days or more, notice of the adjourned meeting shall be
given as in the case of an original meeting; save as aforesaid it shall not be
necessary to give any notice of an adjournment or of the business to be
transacted at an adjourned general meeting.
34. At any general meeting a resolution put to the vote of the meeting
shall be decided on a show of hands unless a poll is, before or on the
declaration of the result of the show of hands, demanded by the Chairman or any
other Member present in person or by proxy.
35. Unless a poll be so demanded a declaration by the Chairman that a
resolution has on a show of hands been carried, or carried unanimously, or by a
particular majority, or lost, and an entry to that effect in the Company's
minute book containing the minutes of the
<PAGE> 20
-20-
proceedings of the meeting shall be conclusive evidence of that fact without
proof of the number or proportion of the votes recorded in favor of or against
such resolution.
36. The demand for a poll may be withdrawn.
37. Except as provided in Article 39, if a poll is duly demanded it
shall be taken in such manner as the Chairman directs and the result of the poll
shall be deemed to be the resolution of the general meeting at which the poll
was demanded.
38. In the case of an equality of votes, whether on a show of hands or
on a poll, the Chairman of the general meeting at which the show of hands takes
place or at which the poll is demanded, shall be entitled to a second or casting
vote.
39. A poll demanded on the election of a Chairman or on a question of
adjournment shall be taken forthwith. A poll demanded on any other question
shall be taken at such time as the Chairman of the general meeting directs and
any business other than that upon which a poll has been demanded or is
contingent thereon may be proceeded with pending the taking of the poll.
VOTES OF MEMBERS
----------------
40. (a) Subject to any rights or restrictions for the time being attached
to any class or classes of shares, on a show of hands every Member of record
present in person or by proxy at a general meeting shall have one vote and on a
poll every Member of record present in person or by proxy shall have one vote
for each voting share registered in his name in the register; PROVIDED that,
subject to the following provisions of this Article 40, if and for so long as
the number of issued Controlled Shares (other than any Excluded Controlled
Shares) of any U.S. Person would constitute ten percent (10%) or more of the
total combined voting rights attaching to the issued shares of the Company
(calculated after giving effect to any prior reduction in voting rights
attaching to shares of other U.S. Persons as provided in this Article 40), each
such issued Controlled Share (other than any such Excluded Controlled Share),
regardless of the identity of the registered holder thereof, shall confer only a
fraction of a vote as determined by the following formula (the "Formula"):
(T - C) / (9.1 x C)
Where: "T" is the aggregate number of votes conferred by all the issued
voting shares immediately prior to that application of the
Formula with respect to such issued Controlled Shares, adjusted
to take into account each reduction in such aggregate number of
votes that results from a prior reduction in the exercisable
votes conferred by any issued Controlled Shares pursuant to
Article 40(d) as at the same date;
<PAGE> 21
-21-
"C" is the number of issued Controlled Shares (other than any
Excluded Controlled Shares) attributable to such U.S. Person.
(b) The Directors may, by notice in writing, require any Member to
provide within not less than ten Business Days, complete and accurate
information to the registered office or such other place as the Directors may
designate in respect of any or all of the following matters:
(i) the number of voting shares in which such Member is legally or
beneficially interested;
(ii) the Persons who are beneficially interested in voting shares
in respect of which such Member is the registered holder;
(iii) the relationship, association or affiliation with such Member
with any other Member or Person whether by means of common
control or ownership or otherwise; or
(iv) any other facts or matters which the Directors may consider
relevant to the determination of the number of Controlled
Shares attributable to any Person.
(c) If any Member does not respond to any notice given pursuant to
Article 40(b) above within the time specified therein or the Directors shall
have reason to believe that any information provided in relation thereto is
incomplete or inaccurate, the Directors may determine that the votes attaching
to any voting shares registered in the name of such Member shall be disregarded
for all purposes until such time as a response (or additional response) to such
notice reasonably satisfactory to the Directors has been received as specified
therein.
(d) The Formula shall be applied successively as many times as may be
necessary to ensure that no Person shall be a United States 10% Shareholder at
any time. For the purposes of determining the votes exercisable by Members as at
any date, the Formula shall be applied first to the votes of issued Controlled
Shares (other than any Excluded Controlled Shares) attributable to the U.S.
Person to whom the greatest number of total Controlled Shares (other than any
Excluded Controlled Shares) are attributed and successively to the issued
Controlled Shares (other than any Excluded Controlled Shares) of other U.S.
Persons in declining order of the number of total Controlled Shares (other than
any Excluded Controlled Shares) attributable to them, in each case calculations
being made on the basis of the aggregate number of votes conferred by the issued
voting shares (PROVIDED that the order in which the Formula is applied
successively with respect to different Members shall be determined on the basis
of total Controlled Shares (other than any Excluded Controlled Shares) as
aforesaid) as at such date as reduced by the prior application of the Formula to
any larger number of issued Controlled Shares (other than any Excluded
Controlled Shares) as at such date.
(e) Notwithstanding the provisions of Articles 40(a) and 40(b) above,
having applied the provisions thereof as best as they consider reasonably
practicable, the Directors may make
<PAGE> 22
-22-
such final adjustments to the aggregate number of votes attaching to the voting
shares of any Member that they consider fair and reasonable in all the
circumstances to ensure that no Person shall be a United States 10% Shareholder
at any time.
41. In the case of joint holders of record the vote of the senior who
tenders a vote, whether in person or by proxy, shall be accepted to the
exclusion of the votes of the other joint holders, and for this purpose
seniority shall be determined by the order in which the names stand in the
register of Members.
42. A Member of unsound mind, or in respect of whom an order has been
made by any court, having jurisdiction in lunacy, may vote, whether on a show of
hands or on a poll, by his committee, receiver, curator bonis, or other Person
in the nature of a committee, receiver or curator bonis appointed by that court,
and any such committee, receiver, curator bonis or other Persons may vote by
proxy.
43. No Member shall be entitled to vote at any general meeting unless
he is registered as a shareholder of the Company on the record date for such
meeting nor unless all calls or other sums presently payable by him in respect
of shares in the Company have been paid.
44. No objection shall be raised to the qualification of any voter
except at the general meeting or adjourned general meeting at which the vote
objected to is given or tendered and every vote not disallowed at such general
meeting shall be valid for all purposes. Any such objection made in due time
shall be referred to the Chairman of the general meeting whose decision shall be
final and conclusive.
45. On a poll or on a show of hands votes may be given either
personally or by proxy.
PROXIES
-------
46. The instrument appointing a proxy shall be in writing and shall be
executed under the hand of the appointor or of his attorney duly authorized in
writing, or, if the appointor is a corporation under the hand of an officer or
attorney duly authorized in that behalf. A proxy need not be a Member of the
Company.
47. The instrument appointing a proxy shall be deposited at the
registered office of the Company or at such other place as is specified for that
purpose in the notice convening the meeting no later than the time for holding
the meeting, or adjourned meeting; provided that the Chairman of the Meeting may
at his discretion direct that an instrument of proxy shall be deemed to have
been duly deposited upon receipt of telex, cable or facsimile confirmation from
the appointer that the instrument of proxy duly signed is in the course of
transmission to the Company.
<PAGE> 23
-23-
48. The instrument appointing a proxy may be in any usual or common
form and may be expressed to be for a particular meeting or any adjournment
thereof, generally until revoked or irrevocable. An instrument appointing a
proxy shall be deemed to include the power to demand or join or concur in
demanding a poll.
49. A vote given in accordance with the terms of an instrument of
proxy shall be valid notwithstanding the previous death or insanity of the
principal or revocation of the proxy or of the authority under which the proxy
was executed, or the transfer of the share in respect of which the proxy is
given; PROVIDED that no intimation in writing of such death, insanity,
revocation or transfer as aforesaid shall have been received by the Company at
the registered office before the commencement of the general meeting, or
adjourned meeting at which it is sought to use the proxy.
50. Any corporation which is a Member of record of the Company may in
accordance with its articles of association or other analogous governing
instruments or in the absence of such provision by resolution of its Directors
or other governing body authorize such Person as it thinks fit to act as its
representative at any meeting of the Company or of any class of Members of the
Company, and the Person so authorized shall be entitled to exercise the same
powers on behalf of the corporation which he represents as the corporation could
exercise if it were an individual Member of record of the Company.
51. Shares in its own capital belonging to the Company or held by it
in a fiduciary capacity shall not be voted, directly or indirectly, at any
meeting and shall not be counted in determining the total number of outstanding
shares at any given time.
DIRECTORS
---------
52. (a) There shall be a Board of Directors consisting of not less than
three (3) or more than twenty (20) persons; PROVIDED, however, that the Company
may from time to time by ordinary resolution increase or decrease the limits in
the number of Directors. The Directors shall have the exclusive power and right
to set the exact number of Directors within such limits from time to time by
resolution adopted by the vote of a majority of the Directors present at a
meeting at which a quorum is present, or by unanimous written consent of the
Directors. The Directors (including Directors elected or appointed to fill new
directorships or other vacancies pursuant to Article 52(b) or (c)) shall be
subject to election at each annual general meeting of the shareholders, and the
term of each Director shall last until the conclusion of the next annual general
meeting of shareholders held after his or her election or appointment (subject
to the first sentence of Article 52(b)). If the number of Directors is decreased
by resolution of the Directors pursuant to this Article 52, in no case shall
that decrease shorten the term of any incumbent Director.
(b) A Director (including a Director elected or appointed to fill a
new directorship or other vacancy pursuant to Article 52(b) or (c)) shall hold
office until the conclusion of the
<PAGE> 24
-24-
annual general meeting at which his or her term expires and until his or her
successor shall be elected or appointed and shall qualify, subject, however, to
prior death, resignation, retirement or removal from office. Any newly created
directorship resulting from an increase in the number of Directors and any other
vacancy on the Board of Directors, however caused, may be filled by a majority
of the Directors then in office, although less than a quorum, or by a sole
remaining Director (unless the vacancy is filled by the Members pursuant to
Article 52(c)).
(c) One or more or all of the Directors of the Company may be removed
only by ordinary resolution of the Members, but only for wilful neglect or
default. The Members shall have the power to appoint another person in place of
such a removed Director, and in default of such appointment the vacancy arising
upon the removal of a Director from office may be filled as a casual vacancy. In
the case of any other vacant directorship, the Members may elect a Director to
fill such vacancy, but only if the Directors first convene a general meeting for
such purpose.
(d) Advance notice of nominations for the election of Directors, other
than nominations by the Directors or a committee thereof, shall be given to the
Company in the manner provided in Article 29.
(e) Notwithstanding the foregoing, whenever the holders of any one or
more classes of shares of the Company shall have the right, voting separately by
class, to elect Directors at any annual or extraordinary general meeting of
Members, the election, term of office, filling of vacancies and other features
of such directorships shall be governed by the provisions of these Articles,
including and subject to any applicable resolutions of the Directors adopted
pursuant to Article 4 hereof.
(f) A resolution for the appointment of two or more persons as
Directors by a single resolution shall not be moved at any general meeting
unless a resolution that it shall be so moved has first been agreed to by the
meeting without any vote being given against it; and any resolution moved in
contravention of this provision shall be void.
53. The remuneration to be paid to the Directors shall be such
remuneration as the Directors shall determine. Such remuneration shall be deemed
to accrue from day to day. The Directors shall also be entitled to be paid their
travelling, hotel and other expenses properly incurred by them in going to,
attending and returning from meetings of the Directors, or any committee of the
Directors, or general meetings of the Company, or otherwise in connection with
the business of the Company, or to receive a fixed allowance in respect thereof
as may be determined by the Directors from time to time, or a combination partly
of one such method and partly the other.
54. The Directors may by resolution award special remuneration to any
Director of the Company undertaking any special work or services for, or
undertaking any special mission on behalf of, the Company other than his
ordinary routine work as a Director. Any fees paid
<PAGE> 25
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to a Director who is also counsel or solicitor to the Company, or otherwise
serves it in a professional capacity shall be in addition to his remuneration as
a Director.
55. A Director or alternate Director may hold any other office or place of
profit under the Company (other than the office of Auditor) in conjunction with
his office of Director for such period and on such terms as to remuneration and
otherwise as the Directors may determine.
56. A Director or alternate Director may act by himself or his firm in a
professional capacity for the Company and he or his firm shall be entitled to
remuneration for professional services as if he were not a Director or alternate
Director.
57. A shareholding qualification for Directors may be fixed by the Company
in general meeting, but unless and until so fixed no qualification shall be
required.
58. A Director or alternate Director of the Company may be or become a
Director or other Officer of or otherwise interested in any company promoted by
the Company or in which the Company may be interested as shareholder or
otherwise and no such Director or alternate Director shall be accountable to the
Company for any remuneration or other benefits received by him as a Director or
Officer of, or from his interest in, such other company.
59. No Person shall be disqualified from the office of Director or alternate
Director or prevented by such office from contracting with the Company, either
as vendor, purchaser or otherwise, nor shall any such contract or any contract
or transaction entered into by or on behalf of the Company in which any Director
or alternate Director shall be in any way interested be or be liable to be
avoided, nor shall any Director or alternate Director so contracting or being so
interested be liable to account to the Company for any profit reprised by any
such contract or transaction by reason of such Director holding office or of the
fiduciary relation thereby established. A Director (or his alternate Director in
his absence) shall be at liberty to vote in respect of any contract or
transaction in which he is so interested as aforesaid; PROVIDED, however, that
the nature of the interest of any Director or alternate Director in any such
contract or transaction shall be disclosed by him or the alternate Director
appointed by him at or prior to its consideration and any vote thereon.
60. A general notice that a Director or alternate Director is a shareholder
of any specified firm or company and is to be regarded as interested in any
transaction with such firm or company shall be sufficient disclosure under
Article 59 and after such general notice it shall not be necessary to give
special notice relating to any particular transaction.
<PAGE> 26
-26-
ALTERNATE DIRECTORS
-------------------
61. Subject to the exception contained in Article 69, a Director who
expects to be unable to attend Directors' meetings because of absence, illness
or otherwise may appoint any Person to be an alternate Director to act in his
stead and such appointee whilst he holds office as an alternate Director shall,
in the event of absence therefrom of his appointor, be entitled to attend
meetings of the Directors and to vote thereat and to do, in the place and stead
of his appointor, any other act or thing which his appointor is permitted or
required to do by virtue of his being a Director as if the alternate Director
were the appointor, other than appointment of an alternate to himself, and he
shall ipso facto vacate office if and when his appointor ceases to be a Director
or removes the appointee from office. Any appointment or removal under this
Article shall be effected by notice in writing under the hand of the Director
making the same. An alternate Director shall be considered a Director for
purposes of Article 107 hereof, and any rights an alternate Director may have
under Article 107 in respect of any act or omission occurring during his
appointment shall survive any termination of his appointment.
POWERS AND DUTIES OF DIRECTORS
------------------------------
62. The business of the Company shall be managed by the Directors who
may pay all expenses incurred in promoting, registering and setting up the
Company, and may exercise all such powers of the Company as are not, from time
to time by the Statute, or by these Articles, or such regulations, being not
inconsistent with the aforesaid, as may be prescribed by the Company in general
meeting, required to be exercised by the Company in general meeting; PROVIDED,
however, that no regulations made by the Company in general meeting shall
invalidate any prior act of the Directors which would have been valid if that
regulation had not been made.
63. The Directors may from time to time and at any time by powers of
attorney appoint any company, firm, Person or body of Persons, whether nominated
directly or indirectly by the Directors, to be the attorney or attorneys of the
Company for such purpose and with such powers, authorities and discretions (not
exceeding those vested in or exercisable by the Directors under these Articles)
and for such period and subject to such conditions as they may think fit, and
any such powers of attorney may contain such provisions for the protection and
convenience of Persons dealing with any such attorneys as the Directors may
think fit and may also authorize any such attorney to delegate all or any of the
powers, authorities and discretions vested in him.
64. All cheques, promissory notes, drafts, bills of exchange and other
negotiable instruments and all receipts for monies paid to the Company shall be
signed, drawn, accepted, endorsed or otherwise executed as the case may be in
such manner as the Directors shall from time to time by resolution determine.
65. The Directors shall cause minutes to be made in books provided for
the purpose:
<PAGE> 27
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(a) of all appointments of officers made by the Directors;
(b) of the names of the Directors (including those represented
thereat by an alternate or by proxy) present at each meeting
of the Directors and of any committee of the Directors; and
(c) of all resolutions and proceedings at all meetings of the
Company and of the Directors and of committees of Directors.
66. The Directors on behalf of the Company may pay a gratuity or pension or
allowance on retirement to any Director who has held any other salaried office
or place of profit with the Company or to his widow or dependents and may make
contributions to any fund and pay premiums for the purchase or provision of any
such gratuity, pension or allowance.
67. The Directors may exercise all the powers of the Company to borrow
money and to mortgage or charge its undertaking, property and uncalled capital
or any part thereof and to issue debentures, debenture stock and other
securities whether outright or as security for any debt, liability or obligation
of the Company or of any third party.
MANAGEMENT
----------
68. (a) The Directors may from time to time provide for the management of the
affairs of the Company in such manner as they shall think fit and the provisions
contained in the three next following paragraphs shall be without prejudice to
the general powers conferred by this paragraph.
(b) The Directors from time to time and at any time may establish any
committees, local boards or agencies for managing any of the affairs of the
Company and may appoint any Persons to be members of such committees or local
boards or any managers or agents and may fix their remuneration.
(c) The Directors from time to time and at any time may delegate to any
such committee, local board, manager or agent any of the powers, authorities and
discretions for the time being vested in the Directors and may authorize the
members for the time being of any such local board, or any of them to fill up
any vacancies therein and to act notwithstanding vacancies and any such
appointment or delegation may be made on such terms and subject to such
conditions as the Directors may think fit and the Directors may at any time
remove any Person so appointed and may annul or vary any such delegation, but no
Person dealing in good faith and without notice of any such annulment or
variation shall be affected thereby.
(d) Any such delegates as aforesaid may be authorized by the Directors to
subdelegate all or any of the powers, authorities, and discretions for the time
being vested in them.
<PAGE> 28
-28-
CHIEF EXECUTIVE OFFICER
-----------------------
69. The Directors may, from time to time, appoint a Chief Executive Officer
for such term and at such remuneration (whether by way of salary, or commission,
or participation in profits, or partly in one way and partly in another) as they
may think fit. The Directors may entrust to and confer upon any Chief Executive
Officer who is also a Director (other than an alternate Director) any of the
powers exercisable by them upon such terms and conditions and with such
restrictions as they may think fit, either collaterally with or to the exclusion
of their own powers, and may from time to time revoke, withdraw, alter or vary
all or any of such powers; provided that any such power of the Directors so
entrusted and conferred shall automatically terminate, with no further action by
any Person, when such officer ceases to be a Director.
PROCEEDINGS OF DIRECTORS
------------------------
70. Except as otherwise provided by these Articles, the Directors shall
meet together for the despatch of business, convening, adjourning and otherwise
regulating their meetings as they think fit. Questions arising at any meeting
shall be decided by a majority of votes of the Directors and alternate Directors
present at a meeting at which there is a quorum, the vote of an alternate
Director not being counted if his appointor be present at such meeting. In case
of an equality of votes, the Chairman shall have a second or casting vote.
71. A Director or alternate Director may, and the Secretary on the
requisition of a Director or alternate Director shall, at any time summon a
meeting of the Directors by at least two days' notice in writing to every
Director and alternate Director which notice shall set forth the general nature
of the business to be considered unless notice is waived by all the Directors
(or their alternates) either at, before or after the meeting is held; PROVIDED
that if notice is given in person, by cable, telex or telecopy the same shall be
deemed to have been given on the day it is delivered to the Directors or
transmitting organization as the case may be. The provisions of Article 26 shall
apply mutatis mutandis with respect to notices of meetings of Directors.
72. The quorum necessary for the transaction of the business of the
Directors shall be a majority of the Directors then in office, present in person
or represented by proxy, but not less than two.
73. The continuing Directors may act notwithstanding any vacancy in their
body, but if and so long as their number is reduced below the number fixed by or
pursuant to these Articles as the necessary quorum of Directors the continuing
Directors or Director may act for the purpose of increasing the number of
Directors to that number to the extent that they are empowered so to do, or of
summoning a general meeting of the Company, but for no other purpose.
<PAGE> 29
-29-
74. The Directors may elect a Chairman of their Board and determine the
period for which he is to hold office; but if no such Chairman is elected, or if
at any meeting the Chairman is not present within five minutes after the time
appointed for holding the same, the Directors present may choose one of their
number to be Chairman of the meeting.
75. The Directors may delegate any of their powers to committees consisting
of such member or members of the Board of Directors (including alternate
Directors in the absence of their appointors) as they think fit; any committee
so formed shall in the exercise of the powers so delegated conform to any
regulations that may be imposed on it by the Directors.
76. A committee may meet and adjourn as it thinks proper. Questions arising
at any meeting shall be determined by a majority of votes of the members
present, and in the case of an equality of votes the Chairman shall have a
second or casting vote.
77. All acts done by any meeting of the Directors or of a committee of
Directors (including any Person acting as an alternate Director) shall,
notwithstanding that it be afterwards discovered that there was some defect in
the appointment of any Director or alternate Director, or that they or any of
them were disqualified, be as valid as if every such Person had been duly
appointed and qualified to be a Director or alternate Director as the case may
be.
78. Members of the Board of Directors or of any committee thereof may
participate in a meeting of the Board or of such committee by means of
conference telephone or similar communications equipment by means of which all
Persons participating in the meeting can hear each other and participation in a
meeting pursuant to this provision shall constitute presence in Person at such
meeting. A resolution in writing (in one or more counterparts), signed by all
the Directors for the time being or all the members of a committee of Directors
(an alternate Director being entitled to sign such resolution on behalf of his
appointor), shall be as valid and effectual as if it had been passed at a
meeting of the Directors or committee as the case may be duly convened and held.
79. (a) A Director may be represented at any meetings of the Board of Directors
by a proxy appointed by him in which event the presence or vote of the proxy
shall for all purposes be deemed to be that of the Director.
(b) The provisions of Articles 46-49 shall mutatis mutandis apply to the
appointment of proxies by Directors.
VACATION OF OFFICE OF DIRECTOR
------------------------------
80. The office of a Director shall be vacated:
(a) if he gives notice in writing to the Company that he resigns the office
of Director;
<PAGE> 30
-30-
(b) if he absents himself (without being represented by proxy or an
alternate Director appointed by him) from three consecutive meetings of
the Board of Directors without special leave of absence from the
Directors, and they pass a resolution that he has by reason of such
absence vacated office;
(c) if he dies, becomes bankrupt or makes any arrangement or composition
with his creditors generally;
(d) if he is found a lunatic or becomes of unsound mind;
(e) if he is removed or retires in accordance with the provisions of
Article 52.
PRESUMPTION OF ASSENT
---------------------
81. A Director of the Company who is present at a meeting of the Board of
Directors at which action on any Company matter is taken shall be presumed to
have assented to the action taken unless his dissent shall be entered in the
Minutes of the meeting or unless he shall file his written dissent from such
action with the Person acting as the Secretary of the meeting before the
adjournment thereof or shall forward such dissent by registered mail to such
Person immediately after the adjournment of the meeting. Such right to dissent
shall not apply to a Director who voted in favor of such action.
SEAL
----
82. The Seal shall only be used by the authority of the Directors or of a
committee of the Directors authorized by the Directors in that behalf and every
instrument to which the Seal has been affixed shall be signed by one Person who
shall be either a Director or the Secretary or Secretary-Treasurer or some
Person appointed by the Directors for the purpose; PROVIDED that the Company may
have for use in any place or places outside the Cayman Islands, a duplicate seal
or seals each of which shall be a facsimile of the Common Seal of the Company
and, if the Directors so determine, with the addition on its face of the name of
every place where it is to be used; and PROVIDED further that a Director,
Secretary or other officer or representative or attorney may without further
authority of the Directors affix the Seal of the Company over his signature
alone to any document of the Company required to be authenticated by him under
Seal or to be filed with the Registrar of Companies in the Cayman Islands or
elsewhere wheresoever.
OFFICERS
--------
83. The Company may have a President and shall have a Secretary or
Secretary-Treasurer, appointed by the Directors who may also from time to time
appoint such other
<PAGE> 31
-31-
officers as they consider necessary, all for such terms, at such remuneration
and to perform such duties, and subject to such provisions as to
disqualification and removal, as the Directors from time to time prescribe.
DIVIDENDS, DISTRIBUTION AND RESERVE
-----------------------------------
84. Subject to the Statute, the Directors may from time to time declare
dividends (including interim dividends) and distributions on shares of the
Company outstanding and authorize payment of the same out of the funds of the
Company lawfully available therefor.
85. The Directors may, before declaring any dividends or distributions, set
aside such sums as they think proper as a reserve or reserves which shall at the
discretion of the Directors, be applicable for any purpose of the Company and
pending such application may, at the like discretion, be employed in the
business of the Company.
86. No dividend or distribution shall be payable except out of the profits
of the Company, realized or unrealized or out of the share premium account or as
otherwise permitted by the Statute.
87. Subject to the rights of Persons, if any, entitled to shares with
special rights as to dividends or distributions, if dividends or distributions
are to be declared on a class of shares they shall be declared and paid
according to the amounts paid or credited as paid on the shares of such class
outstanding on the record date for such dividend or distribution as determined
in accordance with these Articles but no amount paid or credited as paid on a
share in advance of calls shall be treated for the purpose of this Article as
paid on the share.
88. The Directors may deduct from any dividend or distribution payable to
any Member all sums of money (if any) presently payable by him to the Company on
account of calls or otherwise.
89. The Directors may declare that any dividend or distribution be paid
wholly or partly by the distribution of specific assets and in particular of
paid up shares, debentures, or debenture stock of any other company or in any
one or more of such ways and where any difficulty arises in regard to such
distribution, the Directors may settle the same as they think expedient and in
particular may issue fractional certificates and fix the value for distribution
of such specific assets or any part thereof and may determine that cash payments
shall be made to any Members upon the footing of the value so fixed in order to
adjust the rights of all Members and may vest any such specific assets in
trustees as may seem expedient to the Directors.
90. Any dividend, interest or other monies payable in cash in respect of
shares may be paid by cheque or warrant sent through the post directed to the
registered address of the holder or, in the case of joint holders, to the holder
who is first named on the register of Members or to such Person and to such
address as such holder or joint holders may in writing
<PAGE> 32
-32-
direct. Every such cheque or warrant shall be made payable to the order of the
Person to whom it is sent. At the discretion of the Directors, dividends may
also be paid by wire transfer or by any other means requested by a Member. Any
one of two or more joint holders may give effectual receipts for any dividends,
bonuses, or other monies payable in respect of the share held by them as joint
holders.
91. No dividend shall bear interest against the Company.
CAPITALIZATION
--------------
92. The Company may upon the recommendation of the Directors by ordinary
resolution authorize the Directors to capitalize any sum standing to the credit
of any of the Company's reserve accounts (including share premium account and
capital redemption reserve fund) or any sum standing to the credit of profit and
loss account or otherwise available for distribution and to appropriate such sum
to Members in the proportions in which such sum would have been divisible
amongst them had the same been a distribution of profits by way of dividend and
to apply such sum on their behalf in paying up in full unissued shares (not
being redeemable shares) for allotment and distribution credited as fully paid
up to and amongst them in the proportion aforesaid. In such event the Directors
shall do all acts and things required to give effect to such capitalization,
with full power to the Directors to make such provisions as they think fit for
the case of shares becoming distributable in fractions (including provisions
whereby the benefit of fractional entitlements accrue to the Company rather than
to the Members concerned). The Directors may authorize any Person to enter on
behalf of all of the Members interested into an agreement with the Company
providing for such capitalization and matters incidental thereto and any
agreement made under such authority shall be effective and binding on all
concerned.
BOOKS OF ACCOUNT
----------------
93. The Directors shall cause proper books of account to be kept with
respect to:
(a) all sums of money received and expended by the Company and the matters
in respect of which the receipt or expenditure takes place;
(b) all sales and purchases of goods by the Company;
(c) the assets and liabilities of the Company.
Proper books shall not be deemed to be kept if there are not kept such books of
account as are necessary to give a true and fair view of the state of the
Company's affairs and to explain its transactions.
<PAGE> 33
-33-
94. The Directors shall from time to time determine whether and to what
extent and at what times and places and under what conditions or regulations the
accounts and books of the Company or any of them shall be open to the inspection
of Members not being Directors and no Member (not being a Director) shall have
any right of inspecting any account or book or document of the Company except as
conferred by Statute or authorized by the Directors or by the Company in general
meeting.
95. The Directors may from time to time cause to be prepared and to be laid
before the Company in general meeting profit and loss accounts, balance sheets,
group accounts (if any) and such other reports and accounts as may be required
by law.
AUDIT
-----
96. The Company may at any annual general meeting appoint an Auditor or
Auditors of the Company who shall hold office until the next annual general
meeting and may fix his or their remuneration.
97. The Directors may fill any casual vacancy in the office of Auditor but
while any such vacancy continues the surviving or continuing Auditor or
Auditors, if any, may act. The remuneration of any Auditor appointed by the
Directors under this Article may be fixed by the Directors.
98. Every Auditor of the Company shall have a right of access at all times
to the books and accounts and vouchers of the Company and shall be entitled to
require from the Directors and Officers of the Company such information and
explanation as may be necessary for the performance of the duties of the
auditors.
99. Auditors shall at the next annual general meeting following their
appointment and at any other time during their term of office, upon request of
the Directors or any general meeting of the Members, make a report on the
accounts of the Company in general meeting during their tenure of office.
NOTICES
-------
100. Notices shall be in writing and may be given (a) if by the Company to
any Member either personally or by sending it by post, cable, telex, telecopy or
by established commercial courier service to him or to his address as shown in
the register of Members, such notice, if mailed, to be forwarded airmail if the
address be outside the Cayman Islands and (b) if to the Company at the
registered office or such other address as the Company may have furnished to the
Members in writing.
<PAGE> 34
-34-
101. (a) Where a notice is sent by post or established commercial courier
service, service of the notice shall be deemed to be effected by properly
addressing, pre-paying and posting or delivering to such service a letter
containing the notice, and to have been effected at the expiration of sixty
hours after the letter containing the same is posted or delivered to such
service as aforesaid.
(b) Where a notice is sent by cable, telex, or telecopy, service of the
notice shall be deemed to be effected by properly addressing, and sending such
notice through a transmitting organization and to have been effected on the day
the same is sent as aforesaid.
102. A notice may be given by the Company to the joint holders of record of
a share by giving the notice to the joint holder first named on the register of
Members in respect of the share.
103. A notice may be given by the Company to the Person or Persons which the
Company has been advised are entitled to a share or shares in consequence of the
death or bankruptcy of a Member by sending it through the post as aforesaid in a
pre-paid letter addressed to them by name, or by the title of representatives of
the deceased, or trustee of the bankrupt, or by any like description at the
address supplied for that purpose by the Persons claiming to be so entitled, or
at the option of the Company by giving the notice in any manner in which the
same might have been given if the death or bankruptcy had not occurred.
104. Notice of every general meeting shall be given in any manner
hereinbefore authorized to:
(a) every Person shown as a Member in the register of Members as of the
record date for such meeting except that in the case of joint holders
the notice shall be sufficient if given to the joint holder first named
in the register of Members.
(b) every Person upon whom the ownership of a share devolves by reason of
his being a legal personal representative or a trustee in bankruptcy of
a Member of record where the Member of record but for his death or
bankruptcy would be entitled to receive notice of the meeting; and
No other Person shall be entitled to receive notices of general meetings.
<PAGE> 35
-35-
WINDING UP
----------
105. If the Company shall be wound up the liquidator may, with the
sanction of a Special Resolution of the Company and any other sanction required
by the Statute, divide amongst the Members in specie or kind the whole or any
part of the assets of the Company (whether they shall consist of property of the
same kind or not) and may for such purpose set such value as he deems fair upon
any property to be divided as aforesaid and may determine how such division
shall be carried out as between the Members or different classes of Members. The
liquidator may with the like sanction, vest the whole or any part of such assets
in trustees upon such trusts for the benefit of the contributories as the
liquidator, with the like sanction, shall think fit, but so that no Member shall
be compelled to accept any shares or other securities whereon there is any
liability.
106. If the Company shall be wound up, and the assets available for
distribution amongst the Members as such shall be insufficient to repay the
whole of the paid-up capital, such assets shall be distributed so that, as
nearly as may be, the losses shall be borne by the Members in proportion to the
nominal capital paid up, or which ought to have been paid up, at the
commencement of the winding up on the shares held by them respectively. And if
in a winding up the assets available for distribution amongst the Members shall
be more than sufficient to repay the whole of the nominal capital paid up at the
commencement of the winding up, the excess shall be distributed amongst the
Members in proportion to the nominal capital paid up at the commencement of the
winding up on the shares held by them respectively. This Article is to be
without prejudice to the rights of the holders of shares issued upon special
terms and conditions.
INDEMNITY
---------
107. The Directors and officers for the time being of the Company and
any trustee for the time being acting in relation to any of the affairs of the
Company and their heirs, executors, administrators and personal representatives
respectively shall be indemnified out of the assets of the Company from and
against all actions, proceedings, claims, costs, charges, losses, damages and
expenses which they or any of them shall or may incur or sustain by reason of
any act done or omitted in or about the execution of their duty in their
respective offices or trusts, except such (if any) as they shall incur or
sustain by or through their own wilful neglect or default respectively and no
such Director, officer or trustee shall be answerable for the acts, receipts,
neglects or defaults of any other Director, officer or trustee or for joining in
any receipt for the sake of conformity or for the solvency or honesty of any
banker or other Persons with whom any monies or effects belonging to the Company
may be lodged or deposited for safe custody or for any insufficiency of any
security upon which any monies of the Company may be invested or for any other
loss or damage due to any such cause as aforesaid or which may happen in or
about the execution his office or trust unless the same shall happen through the
wilful neglect or default of such Director, officer or trustee.
<PAGE> 36
-36-
FINANCIAL YEAR
--------------
108. Unless the Directors otherwise prescribe, the financial year of
the Company shall end on 30th September in each year.
AMENDMENTS OF ARTICLES
----------------------
109. Subject to the Statute, the Company may at any time and from
time to time by Special Resolution alter or amend these Articles in whole or in
part.
TRANSFER BY WAY OF CONTINUATION
-------------------------------
110. If the Company is exempted as defined in the Statute, it shall,
subject to the provisions of the Statute and with the approval of a Special
Resolution, have the power to register by way of continuation as a body
corporate under the laws of any jurisdiction outside the Cayman Islands and to
be deregistered in the Cayman Islands.
<PAGE> 1
EXHIBIT 4.12
EMPLOYMENT AGREEMENT
THIS AGREEMENT, dated as of March 28, 1994, by and between GCR Holdings
Limited, a Cayman Islands exempt limited liability company (the "Company"),
Global Capital Reinsurance Limited, a subsidiary of the Company organized under
the laws of Bermuda to engage in worldwide reinsurance (the "Operating Company")
and JOHN K. WITHERSPOON, JR. (hereinafter called the "Employee").
W I T N E S S E T H
WHEREAS, the Company and the Operating Company desire to have the Employee
serve as Director of Marine Underwriting of the Operating Company and Employee
is willing to serve in such capacity;
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
and other good and valuable consideration, the parties hereto agree as follows:
Section 1. Employment.
Effective as of June 1, 1994, the Operating Company will employ the
Employee and the Employee will perform services for the Operating Company on the
terms and conditions set forth in this Agreement and for the period ("Term of
Employment") specified in Section 3 hereof.
Section 2. Duties.
The Employee, during the Term of Employment, shall serve as Director of
Marine Underwriting of the Operating Company. The Employee shall be based at the
Operating Company's headquarters in Bermuda. The Employee shall have such duties
and responsibilities as are assigned to him by the Board of Directors of the
Company and the Operating Company commensurate with his position as Director of
Marine Underwriting of the Operating Company.
<PAGE> 2
2
The Employee shall perform his duties hereunder faithfully and to the
best of his abilities and in furtherance of the business of the Operating
Company, and shall devote his full business time, energy, attention and skill
to the business of the Operating Company and to the promotion of its interests
except as otherwise agreed by the Operating Company.
The Employee warrants and represents that he is free to enter into this
Agreement and is not restricted by any prior or existing agreement and the
Company and the Operating Company may rely on such representation in entering
into this Agreement.
Section 3. Term of Employment
The initial Term of Employment of this Agreement shall be the period of
three (3) years commencing on June 1, 1994. At the end of the initial Term of
Employment, and on each anniversary thereof, the Term of Employment shall
automatically be extended for one additional year, unless the Operating Company
or the Employee shall have given written notice to the other that it does not
wish to extend this Agreement at least six months in advance.
Section 4. Salary
The employee shall receive, as compensation for his duties and
obligations to the Operating Company, a salary at the annual rate of $140,000,
payable in substantially equal installments in accordance with the Operating
Company's payroll practice. It is agreed between the parties that the Operating
Company shall review the base annual salary annually and in light of such
review may, in the discretion of the Board of Directors of the Operating
Company (but shall not be obligated to), increase such base annual salary
taking into account any change in Employee's then responsibilities, increased
in the cost of living, performance by the Employee, and other pertinent
factors.
Section 5. Bonus
During the Term of Employment, the Employee will participate in the
Incentive Compensation Plan, a summary of which is attached hereto as Exhibit
A, and
<PAGE> 3
3
will be eligible for an annual bonus of up to fifty (50%) percent of salary
based on performance targets as determined in accordance with the terms of the
Plan.
Section 6. Investment Options
The Employee will invest $100,000 of his own funds upon
commencement of his employment with the Company to purchase 1,000 of the
Company's ordinary redeemable shares, $0.10 par value, at a purchase price of
$100 per share. Contingent upon the Employee having made such investment, the
Company grants to the Employee, effective as of the commencement of the term
of employment, options to purchase 1,000 of the Company's ordinary redeemable
shares, par value $0.10 per share, at a purchase price of $100 per share.
Twenty percent (20%) of the Investment Options shall be exercisable as of the
date of grant, 20% of the Investment Options shall become exercisable on the
second anniversary of the date of grant, and an additional 20% of the Investment
Options shall become exercisable as of each of the next three anniversaries
thereof; provided, however, that no Investment Options shall become exercisable
after the termination of the Employee's employment under this Agreement. In
addition, no Investment Option may be exercised after the earlier of: (A) the
date (i) ninety (90) days following the termination of the Employee's
employment for any reason other than death or Disability (as defined in Section
14), or (ii) six (6) months after the termination of the Employee's employment
be reason of death or Disability; or (B) the tenth anniversary of the
commencement of the date of grant.
At the time of exercise of Investment Options and prior to the issue
of the Ordinary Shares, (i) the Employee shall pay in cash to the Company the
aggregate purchase price of all Ordinary Shares purchased pursuant to such
exercise. The Employee shall not have any of the rights and privileges of a
shareholder of the Company with respect to the shares issuable upon any exercise
of Investment Options unless and until his name is entered in the register of
members of the Company in respect of such Ordinary Shares.
<PAGE> 4
4
Section 7. Employee Benefits.
During the Term of Employment, the Employee shall be entitled to
participate in all employee benefit programs of the Operating Company, as such
programs may be in effect from time to time, including without limitation,
pension and other retirement plans, profit sharing plans, group life
insurance, accidental death and dismemberment insurance, hospitalization,
surgical and major medical coverage, sick leave (including salary continuation
arrangements), long-term disability, holidays and vacations.
Section 8. Business Expenses.
All reasonable travel and other expenses incidental to the rendering
of services by the Employee hereunder shall be paid by the Operating Company.
If expenses are paid in the first instance by the Employee, the Operating
Company will reimburse him therefor upon presentation of proper invoices.
Section 9. Relocation and Travel Expenses
(a) Relocation Expenditures. The operating Company shall reimburse
the Employee in amounts which, after provision for the net amount of all income
taxes payable by Employee with respect to the receipt of such amounts (taking
into account any moving expense or other deductions available to Employee and
assuming the applicable rate of tax is the highest state and federal rate
applicable to the Employee for the year in which the relocation expenditures
are incurred), shall be equal to the sum of (i) all reasonable expenses of
moving Employee (and his family and) their personal effects from Ridgewood, New
Jersey to Bermuda, including, without limitation, (A) reasonable travel
expenses and (B) duties on goods moved to Bermuda.
(b) Travel Expenses. The Employee shall be reimbursed for reasonable
travel costs incurred for semi-annual visits to the United States for the
Employee and spouse and annual visits for his children.
<PAGE> 5
5
Section 10 Vacations and Sick Leave.
The Employee shall be entitled to reasonable vacation and reasonable sick
leave each year, in accordance with policies of, and as determined by the Board
of Directors, provided, however, that the Employee shall be entitled to a
minimum of 4 weeks vacation per year.
Section 11 Termination.
(a) In the event of Serious Cause, as defined below, the Operating Company
may terminate the Employee's employment and the Term of Employment upon written
notice of such termination stating the Serious Cause upon which the Operating
Company relies for its termination. The Employee's employment and the Term of
Employment shall be terminated effective as of the date specified in such
notice, which shall in no event be earlier than the effective date of such
notice as provided in Section 19.
"Serious Cause" shall mean (i) the willful and continued failure by the
Employee to perform substantially his duties hereunder, other than by reasons of
health, after written demand for substantial performance is delivered by the
Operating Company that specifically identifies the manner in which the Operating
Company believes the Employee has not substantially performed his duties and
thirty (30) days thereafter, Employee continues to fail to perform; (ii) the
Employee shall have been convicted by any federal, state or local authority in
any jurisdiction for, or shall have pleaded guilty or nolo contendere to an act
constituting a felony, (iii) the Employee shall have habitually abused any
substance (such as narcotics or alcohol), (iv) the Employee shall have engaged
in (A) acts of fraud, material dishonesty or gross misconduct in connection with
the business of the Operating Company or (B) material breach by the Employee of
this Agreement.
(b) The Employee may terminate his employment and the Term of Employment
in the event of Good Reason, as defined below, upon 30 days' prior written
notice of such termination stating the Good Reason upon which the Employee
relies for his termination. The Employee's employment and the Term of Employment
shall be
<PAGE> 6
6
terminated effective as of the date specified in such notice, which in no event
shall be earlier than the effective date of such notice as provided in Section
19.
"Good Reason" shall mean (i) a substantial reduction in the Employee's
salary, (ii) the demotion of the Employee, (iii) a material demotion of the
Employee's duties hereunder, or (iv) a material breach of this Agreement by the
Company or the Operating Company.
(c) In the event of termination of Employee's employment and the Term of
Employment by the Operating Company for Serious Cause or by the Employee without
Good Reason, the Employee will forfeit all bonus amounts except as provided in
the next sentence below, and the Operating Company shall be liable to Employee
only for (i) any accrued but unpaid salary, (ii) any earned but unpaid bonus
from a prior fiscal year, (iii) reimbursement of business expenses incurred
prior to the date of termination.
In addition, in such event the Company shall have a call to purchase any or
all Ordinary Shares of the Company owned by the Employee within three (3) months
after termination, for an amount equal to (i) with respect to Ordinary Shares
acquired by Employee pursuant to the exercise of Investment Options the lesser
of the Adjusted Issue Price or the Appraised Value of such Ordinary Shares, and
(ii) with respect to Ordinary Shares acquired by Employee with his own funds
pursuant to the first sentence of Section 6, an amount equal to the Appraised
Value of such Ordinary Shares. For purposes hereof (A) "Adjusted Issue Price"
shall mean the price paid by the Employee for such Share, plus interest at the
rate of 7% per annum from the purchase date of the Shares, and (B) "Appraised
Value" shall mean at any date the shareholders' equity attributable to the
Company's Ordinary Shares on a fully diluted basis, as determined by the audited
consolidated financial statement of the Company for the fiscal year ended prior
to the date of termination of the Employee's employment and the Term of
Employment, or, if the Ordinary Shares are listed on a stock exchange or
securities quotation system, the average of the closing bid price for
Ordinary Shares for the ten trading days immediately preceding the date of the
call to purchase.
(d) In the event of the death, Retirement or Disability of the Employee,
the Employee's employment and the Term of Employment shall be terminated as of
the date
<PAGE> 7
7
of such death, Retirement or Disability and the Operating Company shall pay the
Employee, or the Employee's estate or legal representative, as appropriate, (i)
any accrued but unpaid salary, (ii) any earned but unpaid bonus from a prior
fiscal year, (iii) business expenses incurred prior to the date of termination,
and (iv) relocation expenses which shall be equal to the sum of all reasonable
expenses of moving Employee and his family and their personal effects from
Bermuda to the United States, including without limitation, (A) reasonable
travel expenses and (B) duties on goods moved to the United States. The date of
Employee's Disability shall be deemed to be the last day of the sixth month
during which the Employee has been unable to carry out his position as provided
below.
"Disability" shall mean the Employee's inability, for reasons of
health, to carry out the functions of his position for a total of 6 months
during any 12 month period of this Agreement. "Retirement" shall mean
retirement from employment upon attaining age 65 or such earlier age agreed to
by the Operating Company.
In addition, in such event, the Company shall have the right to call
any or all of the Ordinary Shares of the Company owned by Employee within six
months of death, Retirement or Disability, and the Employee, the Employee's
estate or legal representative, whichever is appropriate, shall have the right
to put any or all of the Employee's Ordinary Shares to the Company within six
(6) months after Retirement or Disability. The price at which such put or call
is exercisable shall be equal to the Appraised Value.
(e) If the Operating Company should (i) terminate the Term of
Employment and the Employee's employment herein without Serious Cause therefor,
or (ii) if the Employee should terminate the Term of Employment and his
employment hereunder for Good Reason, the Operating Company shall continue to
pay the Employee his base salary for a period of one year from such
termination. In addition, the Employee shall be entitled to (A) any accrued but
unpaid salary, (B) any earned but unpaid bonus from a prior fiscal year, (C)
unreimbursed business expenses incurred prior to the date of termination and
(D) relocation expenses as described in (d)(iv) above from Bermuda to the
States.
<PAGE> 8
8
In addition, in such event the Company shall have the right to call any
or all of the Ordinary Shares of the Company owned by the Employee within three
(3) months of termination, and the Employee shall have a put to sell some or
all of the Employee's Ordinary Shares to the Company within six (6) months of
termination. The price at which such put or call is exercisable shall be equal
to the Appraised Value.
(f) In the event of the liquidation of the Company or in the event
that the Board of Directors elects to discontinue permanently operating the
Company, the Term of Employment and Employee's employment herein shall be
terminated as of the date of such liquidation or discontinuance and the
Operating Company shall pay the Employee (i) any accrued but unpaid salary,
(ii) any earned but unpaid bonus from a prior fiscal year, (iii) unreimbursed
business expenses incurred prior to the date of termination and (iv) relocation
expenses as described in (d) (iv) above from Bermuda to the United States. In
addition, the Employee shall be entitled to receive one (1) year's salary from
the date on which the Employee's employment is terminated, but only if Employee
performs such consulting services during the one year period as the Company's
founding shareholders, Goldman, Sachs & Co. and Johnson & Higgins (hereinafter
referred to collectively as the "Sponsors"), shall require (including but not
limited to winding up the affairs of the Company or the Operating Company or
helping to start other similar enterprises).
In such event, there shall be no call or put rights with respect to the
Ordinary Shares of the Company owned by the employee. the Employee will receive
payment for such Ordinary Shares at the same time, and on the same basis, as
the other holders of the Ordinary Shares.
Section 12. Agreement Not to Compete
(a) The Employee hereby covenant and agrees that at no time during the
Term of Employment nor for a period of eighteen (18) months following the
termination of Employee's employment for any reason other than by the Operating
Company without Serious Cause or by the Employee for good Reason, will he for
himself or on behalf of any other person, partnership, company or corporation,
directly or indirectly, acquire any financial or beneficial interest in (except
as provided in the next sentence), provide
<PAGE> 9
9
consulting services to, be employed by, or own, manage, operate or control any
business engaged in by the Company or the Operating Company at the time of such
termination of employment. Notwithstanding the preceding sentence, the
Employee shall not be prohibited from owning less than one (1%) percent of any
publicly traded corporation, whether or not such corporation is in competition
with the Company or the Operating Company.
(b) The Employee hereby covenants and agrees that, at all times during
the Term of Employment and for a period of three years immediately following
the termination thereof, the Employee shall not directly or indirectly employ
or seek to employ any person or entity employed at the time by the Company or
any of its subsidiaries, or otherwise encourage or entice such person or entity
to leave such employment.
(c) This Section 12 shall be null and void if the Board of Directors
elects to discontinue permanently Company operations or in the event the
company becomes insolvent due to catastrophic losses.
Section 13 Confidential Information
(a) The Employee agrees to keep secret and retain in the strictest
confidence all confidential matters which relate to the Company or any
affiliate of the Company, including, without limitation, customer lists, client
lists, trade secrets, pricing policies and other business affairs of the
Company and any affiliate of the Company learned by him from the Company or any
such affiliate or otherwise before or after the date of this Agreement, and not
to disclose any such confidential matter to anyone outside the Company or any
of its affiliates, whether during or after his period of service with the
Operating Company, except as may be required in the course of a legal or
governmental proceeding or, in the event that the Board of Directors elects to
discontinue permanently company operations, with the consent of the Sponsors.
Upon request by the Company, the Employee agrees to deliver promptly to the
Operating Company upon termination of his services for the Operating Company,
or at any time thereafter as the Operating company may request, all company or
affiliate memoranda, notes, records, reports,
<PAGE> 10
10
manuals, drawings, designs, computer files in any media and other documents
(and all copies thereof) relating to the Company's or any affiliate's business
and all property of the Company or any affiliate associated therewith, which he
may then possess or have under his control.
(b) Subject to the consent of the Sponsors, this Section 13 shall be
null and void if the Board of Directors elects to discontinue permanently
Company operations or in the event the Company become insolvent due to
catastrophic losses.
Section 14 Remedy.
Should the Employee engage in or perform, either directly or
indirectly, any of the acts prohibited by Sections 12 and 13 hereof, it is
agreed that the Company or the Operating company, as applicable, shall be
entitled to full injunctive relief, to be issued by any competent court of
equity, enjoining and restraining the employee and each and every other person,
firm, organization, association, or corporation concerned therein, from the
continuance of such violative acts. The foregoing remedy available to the
Company or the Operating Company, as applicable, shall not be deemed to limit
or prevent the exercise by the Company or the Operating Company of any or all
further rights and remedies which may be available to the company or the
Operating Company hereunder or at law or in equity.
Section 15 Successors and Assigns.
This Agreement shall be binding upon and inure to the benefit of the
Employee, his heirs, executors, administrators and beneficiaries, the Company,
the Operating Company, their successors and assigns.
Section 16 Governing Law.
This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of New York, without reference to rules
relating to conflicts of law.
<PAGE> 11
11
Section 17 Entire Agreement.
This Agreement constitutes the full and complete understanding and
agreement of the parties and supersedes all prior understandings and agreements
as to employment of the Employee. This Agreement cannot be amended, changed,
modified or terminated without the written consent of the parties hereto.
Section 18 Waiver of Breach.
The waiver by either party of a breach of any term of this Agreement
shall not operate nor be construed as a waiver of any subsequent breach
thereof.
Section 19 Notices.
Any notice, report, request or other communication given under this
Agreement shall be written and shall be effective upon delivery personally, by
Federal Express or by fax.
Unless otherwise notified by any of the parties, notices shall be sent
to the parties as follows:
To Employee: John K. Witherspoon, Jr.
c/o Global Capital Reinsurance Limited
Cast House
48 Church Street
Hamilton, HM 12 Bermuda
Fax: (809) 295 4584
To the
Company: GCR Holdings Limited
c/o Maples and Calder
P.O. Box 309
Grand Cayman
Cayman Islands
British West Indies
Fax: (809) 949 8080
<PAGE> 12
12
To the
Operating
Company: Global Capital Reinsurance Limited
Cast House
48 Church Street
Hamilton, HM 12 Bermuda
Fax: (809) 295 4584
Section 20 Severability.
If anyone or more of the provisions contained in this Agreement shall
be invalid, illegal or unenforceable in any respect under any applicable law,
the validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.
Section 21 Counterparts.
This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this agreement as
of the day and year first above written.
/s/ John K. Witherspoon Jr.
-------------------------------
John K. Witherspoon, Jr.
GCR Holdings Limited
By: /s/ Lawrence S. Doyle
-------------------------------
Global Capital Reinsurance
Limited
By: /s/ Lawrence S. Doyle
-------------------------------
<PAGE> 13
March 23rd, 1994
Exhibit A
---------
INCENTIVE COMPENSATION PLAN
DIRECTOR OF MARINE UNDERWRITING
Bonus Plan
----------
MEASURES 75% weight to Combined Ratio
25% weight on Production
BUSINESS PLAN 1st year Premium $10m
2nd year Premium $15m
3rd year Premium $20m
Award each year will be up to 50 percent of base salary which will be divided
equal between cash and an option grant the cash award will be within 90 days of
completing the underwriting year. The option award will vest one-third per year.
Payout Combined Ratio Production (1st year)
------ -------------- ----------
50% 65% $10.0m
40% 75% $ 9.0m
30% 85% $ 8.0m
20% 90% $ 7.0m
10% 95% $ 6.0m
<PAGE> 1
Exhibit 4.13
AMENDMENT TO
EMPLOYMENT AGREEMENT
THIS AGREEMENT, dated as of December 12, 1995, is made by and between
GCR Holdings Limited, a Cayman Islands exempt limited liability company (the
"Company"), Global Capital Reinsurance Limited, a subsidiary of the Company
organized under the laws of Bermuda to engage in worldwide property catastrophe
reinsurance (the "Operating Company"), and JOHN WITHERSPOON, (hereinafter called
the "Employee").
W I T N E S S E T H :
WHEREAS, the Company, the Operating Company and the Employee entered
into an Employment Agreement dated as of March 28, 1994 (the "Prior Agreement"),
setting forth the terms and conditions of the Employee's employment with the
Operating Company; and
WHEREAS, the Company, the Operating Company and the
Employee desire to amend the Prior Agreement in certain
respects; and
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and other good and valuable consideration, the parties hereto agree to
amend the Prior Agreement, effective as of October 1, 1995, as follows (unless
the context otherwise requires, section references are to sections of the Prior
Agreement):
Section 6. Investment Options.
The paragraph below shall be inserted following the first paragraph of
Section 6 and shall apply retroactively, as of March 28, 1994, to all Investment
Options outstanding as of the date hereof. Without limiting the foregoing, the
adjustment provided for in the third sentence of the following paragraph shall
be made with respect to the cash distribution made by the Company to the
shareholders in August 1995.
"Notwithstanding the immediately preceding paragraph, the
number of Ordinary Shares subject to and the exercise price for each
outstanding Investment Option shall be adjusted as follows. If there is
any change in the number or nature of outstanding shares of the
Company's capital stock by reason of a share
<PAGE> 2
dividend, recapitalization, merger, consolidation, scheme of
arrangement, share split, combination or exchange, share repurchase or
otherwise, or if there is any non-cash distribution in respect of any
such shares, which in any such case has a dilutive or anti-dilutive
effect on the Ordinary Shares, the number of Ordinary Shares subject to
each outstanding Investment Option, the exercise price thereof and/or
other terms thereof shall be appropriately adjusted by the Board of
Directors of the Company (or any committee thereof), whose
determination shall be conclusive, so as to restore the Option holder
to his rights thereunder. In addition (but without duplication of any
adjustment made pursuant to the preceding sentence), the exercise price
for each outstanding Investment Option shall be reduced by the amount
of all cash dividends that are declared by the Company and are paid or
payable to shareholders of record as of a time before the exercise of
the Investment Option that would have been paid or payable to the
Employee had the Ordinary Shares which are the subject of the
Investment Option (as adjusted, if applicable, in accordance with the
preceding sentence) been held by the Employee as of such time;
provided, however, that in no event shall the exercise price of the
Investment Options be reduced below the nominal value of the Ordinary
Shares. Without limiting the foregoing, the adjustment provided for in
the preceding sentence shall apply with respect to the cash
distribution made by the Company to its shareholders in August 1995."
The following paragraph shall be inserted at the end of Section 6:
"The Employee shall become a party to the Company's Amended
and Restated Shareholders' Agreement, which is to become effective
immediately prior to the closing for the Company's proposed initial
public offering, by executing and delivering to the Company such
documentation as the Company reasonably may request (which may subject
the Investment Options and other options obtained pursuant to the
Company's share option plans and securities acquired pursuant thereto
to the transfer restrictions set forth in such agreement) promptly
after such request is made.
Section 11. Termination.
Each of (i) the second paragraph of Section 14(c), (ii) the third
paragraph of Section 14(d) and (iii) the second
-2-
<PAGE> 3
paragraph of Section 14(e), shall be deleted in its entirety.
The second sentence of the first paragraph of Section 11(f) shall be
deleted and replaced in its entirety with the following sentence:
"In addition, the Employee shall be entitled to receive one (1) year's
salary from the date on which the Employee's employment is terminated,
but only if the Employee performs such consulting services during such
one year period as the Company shall require (including but not limited
to winding up the affairs of the Company or helping to start other
similar enterprises)."
The second paragraph of Section 11(f) shall be deleted and replaced in
its entirety with the following paragraph:
"In such event, the Employee will receive payment for such Ordinary
Shares at the same time, and on the same basis, as the other holders of
the Ordinary Shares."
Section 13. Confidential Information.
The term "Sponsors" in Section 13 shall be replaced with "Board of
Directors of the Company."
Section 19. Notices.
The address of the Employee, the Company and the Operating Company as
set forth in Section 19 shall be replaced with the following addresses:
To Employee: John Witherspoon
c/o Global Capital Reinsurance Limited
Sofia House
48 Church Street
Hamilton, HM12 Bermuda
fax: 809-292-4338
-3-
<PAGE> 4
To the
Company: GCR Holdings Limited
Sofia House
48 Church Street
Hamilton, HM12 Bermuda
fax: 809-292-4338
To the
Operating
Company: Global Capital Reinsurance Limited
Sofia House
48 Church Street
Hamilton, HM12 Bermuda
fax: 809-292-4338
Section 22. Change of Control.
The following provisions shall be inserted as Section 22:
"(a) If the Employee is employed by the Operating Company (or
successor thereto) sixty (60) days following the date on which a Change
of Control (as defined in Section 22(d)) occurs, then the Operating
Company (or successor thereto) shall make a lump sum cash payment to
the Employee on such date in an amount equal to the Employee's annual
base salary as of the date on which the Change of Control occurs.
(b) Notwithstanding any other provision contained herein, the
Employee's Investment Options and other options issued under the
Company's share option plans that are not then exercisable shall become
exercisable (and be deemed to be vested) on the date on which the
Change of Control occurs. In addition, restricted Ordinary Shares
granted under any of the Company's share option plans shall immediately
vest upon a Change of Control.
(c) If (i) the Employee is terminated by the Operating Company
(or successor thereto) without Serious Cause or (ii) the Employee
terminates employment with the Operating Company (or successor thereto)
for Good Reason, within the period commencing on the date that a Change
of Control is proposed and ending on the first anniversary of the date
in which
-4-
<PAGE> 5
such Change of Control occurs, then the Employee shall be entitled to
receive (in lieu of the benefits described in Section 11(e)): (1) any
accrued but unpaid salary, (2) a lump sum payment equal to two times
such Employee's annual base salary as of the date of termination, (3)
any earned but unpaid bonus from a prior fiscal year, (4) unreimbursed
expenses incurred prior to the date of termination, (5) automobile and
housing allowances for one year following the date of termination and
(6) relocation expenses as described in Section 9(a) from Bermuda to
the United States.
The Employee shall not be entitled to any benefits or other
entitlements under this Section 22 unless a Change of Control actually
occurs.
(d) A "Change of Control" of the Operating Company shall be
deemed to have occurred if (i) any "person" (as such term is defined in
Section 3(a)(9) and as used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934 (the "Exchange Act")), excluding the
Company or any of its subsidiaries, a trustee or any fiduciary holding
securities under an employee benefit plan of the Company or any of its
subsidiaries, an underwriter temporarily holding securities pursuant to
an offering of such securities or a corporation owned, directly or
indirectly, by shareholders of the Company in substantially the same
proportion as their ownership of the Company, is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company representing 50%
or more of the combined voting power of the Company's then outstanding
securities ("Voting Securities"); (ii) during any period of not more
than two years, individuals who constitute the Board of Directors of
the Company (the "Board") as of the beginning of the period and any new
director (other than a director designated by a person who has entered
into an agreement with the Company to effect a transaction described in
clause (i) or (iii) of this sentence) whose election by the Board or
nomination for election by the Company's shareholders was approved by a
vote of at least two-thirds (2/3) of the directors then still in office
who either were directors at such time or whose election or nomination
for election was previously so approved, cease for any reason to
constitute a majority thereof; (iii) the shareholders of the Company
approve a merger, consolidation or reorganization or a court of
competent jurisdiction approves a scheme of arrangement of the Company,
other than a merger, consolidation,
-5-
<PAGE> 6
reorganization or scheme of arrangement which would result in the
Voting Securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being
converted into Voting Securities of the surviving entity) at least 50%
of the combined voting power of the Voting Securities of the Company or
such surviving entity outstanding immediately after such merger,
consolidation, reorganization or scheme of arrangement; or (iv) the
shareholders of the Company approve a plan of complete liquidation of
the Company or any agreement for the sale or disposition by the Company
of all or substantially all of the Company's assets.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first written above.
/s/ John Witherspoon
-----------------------------------
John Witherspoon
GCR Holdings Limited
By: /s/ Jerry S. Rosenbloom
-----------------------------------
Global Capital
Reinsurance Limited
By: /s/ Frederick W. Deichmann
-----------------------------------
-6-
<PAGE> 1
Exhibit 4.18
GCR HOLDINGS LIMITED
1996 SHARE INCENTIVE PLAN
SECTION 1. GENERAL PURPOSE OF PLAN; DEFINITIONS.
The name of this plan is the GCR Holdings Limited 1996 Share Incentive
Plan (the "Plan"). The Plan was adopted by the Board on October 31, 1996,
subject to approval of the shareholders of the Company. The purpose of the Plan
is to enable the Company to attract and retain highly qualified personnel who
will contribute to the Company's success by their ability, ingenuity and
industry and to provide incentives to the participating officers, employees,
consultants and advisors that are linked directly to increases in shareholders
value and will therefore inure to the benefit of all shareholders of the
Company.
For purposes of the Plan, the following terms shall be defined as set
forth below:
(1) "Administrator" means the Board, or, if and to the extent the Board
delegates its administrative duties with respect to the Plan pursuant to Section
2, the Committee.
(2) "Board" means the Board of Directors of the Company.
(3) "Code" means the Internal Revenue Code of 1986, as amended from
time to time, or any successor thereto.
(4) "Committee" means the Compensation Committee of the Board, or any
other Committee the Board may subsequently appoint to administer the Plan.
(5) "Company" means GCR Holdings Limited, a Cayman Islands corporation,
or any successor to the business thereof.
(6) "Deferred Shares" means an award made pursuant to Section 7 below
of the right to receive Shares at the end of a specified deferral period.
(7) "Disability" means the inability of a Participant, for reasons of
health, to carry out the
<PAGE> 2
functions of his duties for the Company or its Subsidiaries for a total of six
months during any twelve-month period.
(8) "Effective Date" shall mean the date provided pursuant to Section
11.
(9) "Eligible Employee" means an officer, employee, consultant or
advisor of the Company or any Subsidiary.
(10) "Fair Market Value" means, as of any given date, with respect to
any Shares subject to an award hereunder, (1) the closing price of a Share on
the principal securities exchange on which the Shares are listed or, if not so
listed, as traded in the NASDAQ National Market, if traded therein, on the date
of determination, or (2) if the Shares are not so listed or traded, the average
of the bid and asked prices of a Share as otherwise quoted on the NASDAQ system
or any successor system in use on the most recent date prior to the date of
determination on which such quoted prices exist.
(11) "Incentive Share Option" means any Share Option intended to be
designated as an "incentive stock option" within the meaning of Section 422 of
the Code.
(12) "Limited Share Appreciation Right" means a Share Appreciation
Right that can be exercised only in the event of a "Change of Control" (as
defined in the award evidencing such Limited Share Appreciation Right).
(13) "Non-Qualified Share Option" means any Share Option that is not an
Incentive Share Option, including any Share Option that provides (as of the time
such option is granted) that it will not be treated as an Incentive Share
Option.
(14) "Parent Corporation" means any corporation (other than the
Company) in an unbroken chain of corporations ending with the Company, if each
of the corporations in the chain (other than the Company) owns stock possessing
50% or more of the combined voting power of all classes of stock in one of the
other corporations in the chain.
(15) "Participant" means any Eligible Employee, consultant or advisor
to the Company selected by the Administrator, pursuant to the Administrator's
authority in Section 2 below, to receive grants of Share Options, Share
Appreciation Rights, Limited Share Appreciation Rights, Restricted Share awards,
Deferred Share awards, Performance Shares or any combination of the foregoing.
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<PAGE> 3
(16) "Performance Share" means an award of Shares pursuant to Section 7
that is subject to restrictions based upon the attainment of specified
performance objectives.
(17) "Restricted Shares" means an award pursuant to Section 7 of Shares
subject to certain restrictions.
(18) "Shares" means the Company's ordinary redeemable shares of U.S.
$0.10 per share.
(19) "Share Appreciation Right" means the right pursuant to an award
granted under Section 6 to receive an amount, payable in cash, Shares or as the
Administrator otherwise determines, equal to or based on (A) the difference
between (1) the Fair Market Value, as of the date such Share Appreciation Right
or portion thereof is surrendered, of the Shares covered by such right or such
portion thereof, and (2) the aggregate exercise price of such right or such
portion thereof, (B) the amount of dividends paid with respect to a Share over a
specified time period or (C) any other factor reasonably selected by the
Administrator.
(20) "Share Option" means any option to purchase Shares granted
pursuant to Section 5.
(21) "Subsidiary" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company, if each of the
corporations (other than the last corporation) in the unbroken chain owns shares
possessing 50% or more of the total combined voting power of all classes of
shares in one of the other corporations in the chain.
SECTION 2. ADMINISTRATION
The Plan shall be administered by the Board or by the Committee which
shall be appointed by the Board and which shall serve at the pleasure of the
Board.
Pursuant to the terms of the Plan, the Administrator shall have the
power and authority to grant to Eligible Employees, consultants and advisors to
the Company, pursuant to the terms of the Plan: (a) Share Options, (b) Share
Appreciation Rights or Limited Share Appreciation Rights, (c) Restricted Shares,
(d)Performance Shares, (e) Deferred Shares or (f) any combination of the
foregoing.
In particular, the Administrator shall have the authority:
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(a) to select those employees of the Company who shall be
Participants;
(b) to determine whether and to what extent Share Options,
Share Appreciation Rights, Limited Share Appreciation Rights, Restricted Shares,
Deferred Shares, Performance Shares or a combination of the foregoing, are to be
granted hereunder to Participants;
(c) to determine the number of Shares to be covered by each
such award granted hereunder;
(d) to determine the terms and conditions, not inconsistent
with the terms of the Plan, of any award granted hereunder (including, but not
limited to, (x) the restrictions applicable to Restricted or Deferred Share
awards and the conditions under which restrictions applicable to such Restricted
or Deferred Shares shall lapse, and (y) the performance goals and periods
applicable to the award of Performance Shares); and
(e) to determine the terms and conditions, not inconsistent
with the terms of the Plan, which shall govern all written instruments
evidencing the Share Options, Share Appreciation Rights, Limited Share
Appreciation Rights, Restricted Shares, Deferred Shares, Performance Shares or
any combination of the foregoing.
The Administrator shall have the authority, in its discretion, to
adopt, alter and repeal such administrative rules, guidelines and practices
governing the Plan as it shall from time to time deem advisable; to interpret
the terms and provisions of the Plan and any award issued under the Plan (and
any agreements relating thereto); and to otherwise supervise the administration
of the Plan.
All decisions made by the Administrator pursuant to the provisions of
the Plan shall be final and binding on all persons, including the Company and
the Participants.
SECTION 3. SHARES SUBJECT TO PLAN.
The total number of Shares reserved and available for issuance under
the Plan shall be 500,000.
In the event of any merger, reorganization, consolidation,
recapitalization, scheme of arrangement, share dividend or other change in
corporate structure affecting the nature or amount of outstanding Shares, a
substitution or adjustment shall be made in (i) the aggregate number of Shares
reserved for issuance under the Plan, (ii) the kind, number and option price of
Shares
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subject to outstanding Stock Options granted under the Plan, and (iii) the kind,
number and purchase price of Shares issuable pursuant to awards of Restricted
Shares, Deferred Shares and Performance Shares, as may be determined by the
Administrator, in its sole discretion. Such other substitutions or adjustments
shall be made as may be determined by the Administrator, in its sole discretion.
An adjusted option price shall also be used to determine the amount payable by
the Company upon the exercise of any Share Appreciation Right or Limited Share
Appreciation Right associated with any Share Option. In connection with any
event described in this paragraph, the Administrator may provide, in its
discretion, for the cancellation of any outstanding awards and payment in cash
or other property therefor.
SECTION 4. ELIGIBILITY.
Officers (including officers who are directors of the Company),
employees of the Company, and consultants and advisors to the Company who are
responsible for or are in a position to contribute to the management, growth
and/or profitability of the business of the Company shall be eligible to be
granted Share Options, Share Appreciation Rights, Limited Share Appreciation
Rights, Restricted Share awards, Deferred Share awards or Performance Shares
hereunder. The Participants under the Plan shall be selected from time to time
by the Administrator, in its sole discretion, from among the Eligible Employees,
consultants and advisors to the Company recommended by the senior management of
the Company, and the Administrator shall determine, in its sole discretion, the
number of shares covered by each award.
SECTION 5. SHARE OPTIONS.
Share Options may be granted alone or in addition to other awards
granted under the Plan. Any Share Option granted under the Plan shall be in such
form as the Administrator may from time to time approve, and the provisions of
Share Option awards need not be the same with respect to each optionee.
Recipients of Share Options shall enter into a subscription and/or award
agreement with the Company, in such form as the Administrator shall determine,
which agreement shall set forth, among other things, the exercise price of the
option, the term of the option and provisions regarding exercisability of the
option granted thereunder.
The Share Options granted under the Plan may be of two types: (i)
Incentive Share Options and (ii) Non-Qualified Share Options.
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The Administrator shall have the authority to grant any Eligible
Employee Incentive Share Options, Non-Qualified Share Options, or both types of
Share Options (in each case with or without Share Appreciation Rights or Limited
Share Appreciation Rights). Consultants and advisors may only be granted
Non-Qualified Share Options (with or without Share Appreciation Rights or
Limited Share Appreciation Rights). To the extent that any Share Option does not
qualify as an Incentive Share Option, it shall constitute a separate
Non-Qualified Share Option. More than one option may be granted to the same
optionee and be outstanding concurrently hereunder.
Share Options granted under the Plan shall be subject to the following
terms and conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Administrator shall deem
desirable:
(1) Option Price. The option price per share of Share purchasable under
a Stock Option shall be determined by the Administrator in its sole discretion
at the time of grant but shall not, in the case of Incentive Share Options, be
less than 100% of the Fair Market Value of the Share on such date and shall not,
in any event, be less than the par value (if any) of the Share.
(2) Option Term. The term of each Share Option shall be fixed by the
Administrator, but no Share Option shall be exercisable more than ten years
after the date such Share Option is granted.
(3) Exercisability. Share Options shall be exercisable at such time or
times and subject to such terms and conditions as shall be determined by the
Administrator at or after grant. The Administrator may provide, in its
discretion, that any Share Option shall be exercisable only in installments, and
the Administrator may waive such installment exercise provisions at any time in
whole or in part based on such factors as the Administrator may determine, in
its sole discretion.
(4) Method of Exercise. Subject to Section 5(3) above, Share Options
may be exercised in whole or in part at any time during the option period, by
giving written notice of exercise to the Company specifying the number of Shares
to be purchased, accompanied by payment in full of the purchase price in cash or
its equivalent as determined by the Administrator. As determined by the
Administrator, in its sole discretion, payment in whole or in part may also be
made (i) by means of any cashless exercise procedure approved by the
Administrator, (ii) in the form of
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<PAGE> 7
unrestricted Shares already owned by the optionee, or (iii) in the case of the
exercise of a Non-Qualified Share Option, Restricted Shares or Performance
Shares subject to an award hereunder (based, in each case, on the Fair Market
Value of the Share on the date the option is exercised); provided, however, that
in the case of an Incentive Share Option, the right to make payment in the form
of already owned Shares may be authorized only at the time of grant. If payment
of the option exercise price of a Non-Qualified Share Option is made in whole or
in part in the form of Restricted Shares or Performance Shares, the shares
received upon the exercise of such Share Option (to the extent of the number of
shares of Restricted Shares or Performance Shares surrendered upon exercise of
such Share Option) shall be restricted in accordance with the original terms of
the Restricted Share or Performance Share award in question, except that the
Administrator may direct that such restrictions shall apply only to that number
of shares equal to the number of shares surrendered upon the exercise of such
option. An optionee shall generally have the rights to dividends and any other
rights of a shareholder with respect to the Share subject to the option only
after the optionee has given written notice of exercise, has paid in full for
such Shares, and, if requested, has given the representation described in
paragraph (1) of Section 10.
(5) Loans. The Company may make loans available to Share Option holders
in connection with the exercise of outstanding options granted under the Plan,
as the Administrator, in its discretion, may determine. Such loans shall (i) be
evidenced by promissory notes entered into by the Share Option holders in favor
of the Company, (ii) be subject to the terms and conditions set forth in this
Section 5(5) and such other terms and conditions, not inconsistent with the
Plan, as the Administrator shall determine, (iii) bear interest, if any, at such
rate as the Administrator shall determine, and (iv) be subject to Board approval
(or to approval by the Administrator to the extent the Board may delegate such
authority). In no event may the principal amount of any such loan exceed the sum
of (x) the exercise price less the par value (if any) of the Shares covered by
the option, or portion thereof, exercised by the holder, and (y) any income tax
attributable to such exercise. The initial term of the loan, the schedule of
payments of principal and interest under the loan, the extent to which the loan
is to be with or without recourse against the holder with respect to principal
or interest and the conditions upon which the loan will become payable in the
event of the holder's termination of employment shall be determined by the
Administrator. Unless the Administrator determines otherwise, when a loan is
made, Shares having a Fair Market Value at least equal to the principal amount
of
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<PAGE> 8
the loan shall be pledged by the holder to the Company as security for payment
of the unpaid balance of the loan, and such pledge shall be evidenced by a
pledge agreement, the terms of which shall be determined by the Administrator,
in its discretion; provided, however, that each loan shall comply with all
applicable laws, regulations and rules of the Board of Governors of the Federal
Reserve System and any other governmental agency having jurisdiction.
(6) Non-Transferability of Options. Unless otherwise determined by the
Administrator, no Share Option shall be transferable by the optionee, and all
Share Options shall be exercisable, during the optionee's lifetime, only by the
optionee.
(7) Termination of Employment or Service. If an optionee's employment
with or service as a consultant or advisor to the Company terminates by reason
of death, Disability or for any other reason, the Share Option may thereafter be
exercised to the extent provided in the applicable subscription or award
agreement, or as otherwise determined by the Administrator.
SECTION 6. SHARE APPRECIATION RIGHTS AND LIMITED SHARE APPRECIATION RIGHTS.
(1) Grant and Exercise. Share Appreciation Rights and Limited Share
Appreciation Rights may be granted either alone ("Free Standing Rights") or in
conjunction with all or part of any Share Option granted under the Plan
("Related Rights"). Share Appreciation Rights and Limited Share Appreciation
Rights shall be evidenced by a Share Appreciation Right Agreement or, in the
case of a Related Right, the agreement evidencing the grant the related Share
Option. In the case of a Non-Qualified Share Option, Related Rights may be
granted either at or after the time of the grant of such Share Option. In the
case of an Incentive Share Option, Related Rights may be granted only at the
time of the grant of the Incentive Share Option.
A Related Right or applicable portion thereof granted in conjunction
with a given Share Option shall terminate and no longer be exercisable upon the
termination or exercise of the related Share Option, except that, unless
otherwise provided by the Administrator at the time of grant, a Related Right
granted with respect to less than the full number of shares covered by a related
Share Option shall only be reduced if and to the extent that the number of
Shares covered by the exercise or termination of the related Share Option
exceeds the number of Shares not covered by the Related Right.
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<PAGE> 9
A Related Right may be exercised by an optionee, in accordance with
paragraph (2) Of this Section 6, by surrendering the applicable portion of the
related Share Option. Upon such exercise and surrender, the optionee shall be
entitled to receive an amount determined in the manner prescribed in the Share
Appreciation Right Agreement or agreement evidencing the related Share Option.
Share Options which have been so surrendered, in whole or in part, shall no
longer be exercisable to the extent the Related Rights have been so exercised.
(2) Terms and Conditions. Share Appreciation Rights shall be subject to
such terms and conditions, not inconsistent with the provisions of the Plan, as
shall be determined from time to time by the Administrator, including the
following:
(a) Related Rights shall be exercisable only at such time or times and
to the extent that the Share Options to which they relate shall be exercisable
in accordance with the provisions of Section 5 and this Section 6 of the Plan;
(b) Related Rights shall be transferable only when and to the extent
that the underlying Share Option would be transferable under paragraph (6) of
Section 5 of the Plan;
(c) Upon the exercise of a Related Right, the Share Option or part
thereof to which such Related Right is related shall be deemed to have been
exercised for the purpose of the limitation set forth in Section 3 of the Plan
on the number of Shares to be issued under the Plan, but only to the extent of
the number of Shares issued under the Related Right;
(d) A Related Right in connection with an Incentive Share Option may be
exercised only if and when the Fair Market Value of the Share subject to the
Incentive Share Option exceeds the exercise price of such Share Option;
(e) Free Standing Rights shall be exercisable at such time or times and
subject to such terms and conditions as shall be determined by the Administrator
at or after grant;
(f) The term of each Free Standing Right shall be fixed by the
Administrator, but no Free Standing Right shall be exercisable more than ten
years after the date such right is granted;
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(g) Free Standing Rights shall be transferable only when and to the
extent that a Share Option would be transferable under paragraph (6) of Section
5 of the Plan;
(h) In the event of the termination of employment or service of a
Participant who has been granted one or more Free Standing Rights, such rights
shall be exercisable at such time or times and subject to such terms and
conditions as shall be determined by the Administrator at or after grant; and
(i) Limited Share Appreciation Rights may only be exercised within the
30-day period following a "Change of Control" (as defined by the Administrator
in the agreement evidencing such Limited Share Appreciation Right).
SECTION 7. RESTRICTED SHARES, DEFERRED SHARES AND PERFORMANCE SHARES.
(1) General. Restricted Share, Deferred Share or Performance Share
awards may be issued either alone or in addition to other awards granted under
the Plan. The Administrator shall determine the Eligible Employees, consultants
and advisors to whom, and the time or times at which, grants of Restricted
Share, Deferred Share or Performance Share awards shall be made; the number of
Shares to be awarded; the price, if any, to be paid by the recipient of
Restricted Share, Deferred Share or Performance Share awards; the Restricted
Period (as defined in paragraph (3) hereof) applicable to Restricted Share or
Deferred Share awards; the performance objectives applicable to Performance
Share or Deferred Share awards; the date or dates on which restrictions
applicable to such Restricted Share or Deferred Share awards shall lapse during
such Restricted Period; and all other conditions of the Restricted Share,
Deferred Share and Performance Share awards. The Administrator may also
condition the grant of Restricted Share, Deferred Share awards or Performance
Shares upon the exercise of Share Options, or upon such other criteria as the
Administrator may determine, in its sole discretion. The provisions of
Restricted Share, Deferred Share or Performance Share awards need not be the
same with respect to each recipient. In the discretion of the Administrator,
loans may be made to Participants in connection with the purchase of Restricted
Shares under substantially the same terms and conditions as provided in Section
5(5) with respect to the exercise of Share Options.
(2) Awards and Certificates. The prospective recipient of a Restricted
Share, Deferred Share or Performance Share award shall not have any rights with
respect to such award, unless and until such recipient has
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<PAGE> 11
executed an agreement evidencing the award (a "Restricted Share Award
Agreement," "Deferred Share Award Agreement," or "Performance Share Award
Agreement," as appropriate) and delivered a fully executed copy thereof to the
Company. Except as otherwise provided below in this Section 7(2), (i) each
Participant who is awarded Restricted Shares or Performance Shares shall be
issued a share certificate in respect of Restricted Shares or Performance
Shares; and (ii) such certificate shall be registered in the name of the
Participant, and shall bear an appropriate legend referring to the terms,
conditions, and restrictions applicable to such award.
The Company may require that the share certificates evidencing
Restricted Share or Performance Share awards hereunder be held in the custody of
the Company until the restrictions thereon shall have lapsed, and that, as a
condition of any Restricted Share award or Performance Share award, the
Participant shall have delivered such documents as are necessary to provide the
Company the authority to exercise the rights applicable to any Share covered by
such award.
With respect to Deferred Share awards, at the expiration of the
Restricted Period, share certificates in respect of such Deferred Shares shall
be delivered to the participant, or his legal representative, in a number equal
to the number of Shares covered by the Deferred Share award.
(3) Restrictions and Conditions. The Restricted Share, Deferred Share
and Performance Share awards granted pursuant to this Section 7 shall be subject
to the following restrictions and conditions:
(a) Subject to the provisions of the Plan and the Restricted Share
Award Agreement, Deferred Share Award Agreement or Performance Share Award
Agreement, as appropriate, governing such award, during such period as may be
set by the Administrator commencing on the grant date (the "Restricted Period"),
the Participant shall not be permitted to sell, transfer, pledge or assign
Restricted Shares, Performance Shares or Deferred Shares awarded under the Plan;
provided, however, that the Administrator may, in its sole discretion, provide
for the lapse of such restrictions and may accelerate or waive such restrictions
in whole or in part based on such factors and such circumstances as the
Administrator may determine, in its sole discretion, including, but not limited
to, the attainment of certain performance related goals, the Participant's
termination of employment or service, death or Disability or the occurrence of a
"Change of Control" as defined in the agreement evidencing such award;
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(b) Except as provided in paragraph (3)(a) of this Section 7 or as
otherwise determined by the Administrator, the Participant shall generally have,
with respect to the Restricted Shares or Performance Shares, all of the rights
of a shareholder with respect to such Shares during the Restricted Period,
including the right to receive distributions on such Restricted Shares or
Performance Shares and the right to exercise the voting rights applicable to
such Restricted Shares or Performance Shares. Further, unless otherwise
determined by the Administrator, the Restricted Shares and Performance Shares
granted under this Plan shall be outstanding for all purposes. The Participant
shall generally not have the rights of a shareholder with respect to Shares
subject to Deferred Share awards during the Restricted Period; provided,
however, that dividends declared during the Restricted Period with respect to
the number of Shares covered by a Deferred Share award shall be paid to the
Participant. Certificates for unrestricted Shares shall be delivered to the
Participant promptly after, and only after, the Restricted Period shall expire
without forfeiture in respect of such Restricted Shares, Performance Shares or
Deferred Shares, except as the Administrator, in its sole discretion, shall
otherwise determine; and
(c) The rights of holders of Restricted Share, Deferred Share and
Performance Share awards upon termination of employment or service for any
reason during the Restricted Period shall be set forth in the Restricted Share
Award Agreement, Deferred Share Award Agreement or Performance Share Award
Agreement, as appropriate, governing such awards.
SECTION 8. AMENDMENT AND TERMINATION.
The Board may amend, alter or discontinue the Plan, but no amendment,
alteration, or discontinuation shall be made that would impair the rights of a
Participant under any award theretofore granted without such Participant's
consent.
The Administrator may amend the terms of any award theretofore granted,
prospectively or retroactively, but, subject to Section 3 above, no such
amendment shall impair the rights of any holder without his or her consent.
SECTION 9. GENERAL PROVISIONS.
(1) The Administrator may require each person purchasing shares
pursuant to a Share Option to represent to and agree with the Company in writing
that such person is acquiring the Shares without a view to distribution thereof.
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The certificates for such Shares may include any legend which the Administrator
deems appropriate to reflect any restrictions on transfer.
All certificates for Shares delivered under the Plan shall be subject
to such share-transfer orders and other restrictions as the Administrator may
deem advisable under the rules, regulations, and other requirements of the
Commission, any share exchange upon which the Share is then listed, and any
applicable securities law, and the Administrator may cause a legend or legends
to be placed on any such certificates to make appropriate reference to such
restrictions.
(2) The adoption of the Plan shall not confer upon any employee,
consultant or advisor of the Company any right to continued employment or
service with the Company, as the case may be, nor shall it interfere in any way
with the right of the Company to terminate the employment or service of any of
its employees, consultants or advisors at any time.
(3) Each Participant shall, no later than the date as of which the
value of an award first becomes includible in the gross income of the
Participant for income tax purposes, pay to the Company, or make arrangements
satisfactory to the Administrator regarding payment of, any taxes of any kind
required by law to be withheld with respect to the award. The obligations of the
Company under the Plan shall be conditional on the making of such payments or
arrangements, and the Company shall, to the extent permitted by law, have the
right to deduct any such taxes from any payment of any kind otherwise due to the
Participant.
(4) No member of the Board or the Administrator, nor any officer or
employee of the Company acting on behalf of the Board or the Administrator,
shall be personally liable for any action, determination, or interpretation
taken or made in good faith with respect to the Plan, and all members of the
Board or the Administrator and each and any officer or employee of the Company
acting on their behalf shall, to the extent permitted by law, be fully
indemnified and protected by the Company in respect of any such action,
determination or interpretation.
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SECTION 10. EFFECTIVE DATE OF PLAN.
The Plan became effective (the "Effective Date") on October 31, 1996
subject to approval by the Company's shareholders.
SECTION 11. TERM OF PLAN.
No Share Option, Share Appreciation Right, Limited Share Appreciation
Right, Restricted Share, Deferred Share or Performance Share award shall be
granted pursuant to the Plan on or after the tenth anniversary of the Effective
Date, but awards theretofore granted may extend beyond that date.
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<PAGE> 1
Exhibit 5.1
[MAPLES AND CALDER LETTERHEAD]
12th March, 1997
The Board of Directors of GCR Holdings Limited
Sofia House
48 Church Street
Hamilton HM 12
Bermuda
Dear Sirs,
GCR Holdings Limited (the "Company")
- ------------------------------------
1. This opinion is given in connection with the Registration Statement on
Form S-8 (the "Registration Statement") dated today's date filed under
the United States Securities Act of 1933, relating to 2,246,925
unissued Ordinary Shares, par value $0.10 per share, of the Company
(the "Ordinary Shares").
2. This opinion is limited to (i) Cayman Islands law as currently applied
by the Cayman Islands courts and (ii) factual matters known to us as at
the date hereof and is given on the basis that it will be governed by
and be construed in accordance with Cayman Islands law. We have not
made any investigation of, and do not express any opinion on, the law
of any jurisdiction other than the Cayman Islands. We have assumed that
none of the opinions expressed below would be affected by the laws
(including public policy) of any jurisdiction outside the Cayman
Islands.
3. We have examined and relied on copies of such corporate records and
other documents, including, but not limited to, the Registration
Statement, and reviewed such matters of law as we have deemed necessary
or appropriate for the purpose of this opinion.
4. Upon the basis of and subject to the foregoing, but subject to any
matters not disclosed to us, it is our opinion that the Company is
a limited company incorporated under the laws of the Cayman Islands
under the Companies Law (1995 Revision) of the Cayman Islands and that,
upon allotment of the Ordinary Shares by the Board of Directors of the
Company or a duly authorised committee thereof and due registration of
the issue of such Ordinary Shares in the register of members of the
Company and subject to receipt by the Company in full of the
subscription price or other consideration therefor, such Ordinary
Shares (i) will have been duly authorised in accordance with the
Company's Amended and Restated Memorandum of Association and Amended
and Restated Articles of
<PAGE> 2
MAPLES and CALDER 2
Association as currently filed and (ii) will be validly issued, fully
paid and non-assessable and no further contributions in respect thereof
will be required to be made to the Company by the holders thereof, by
reason solely of their being such holders.
5. This opinion is given to you solely for use in connection with the
filing of the Registration Statement. This opinion is strictly limited
to matters dealt with herein and does not extend to and is not to be
read as extending by implication to any other matter.
6. We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Yours faithfully,
/s/ Maples and Calder
Maples and Calder
<PAGE> 1
Exhibit 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement on Form S-8 of our reports dated
October 21, 1996, included in GCR Holdings Limited's Form 10-K for the year
ended September 30, 1996.
/s/ Arthur Andersen & Co.
Hamilton, Bermuda
March 12, 1997
