SUPPLEMENT NO. 1
TO
PROSPECTUS DATED MAY 11, 1998
COMMODORE HOLDINGS LIMITED
The section of the Prospectus entitled "Description of Securities -
`Anti-Takeover' Provisions - Stockholder Rights Plan" is amended to include the
following information:
On September 29, 1998, the Company's Board of Directors adopted a
Stockholder Rights Plan pursuant to which it entered into a Rights
Agreement with American Stock Transfer and Trust Company, as Rights
Agent (the "Rights Plan"). In accordance with the Rights Plan, the
Company issued a dividend to all stockholders of record as of November
2, 1998 (the "Record Date") of one Right. Each Right entitles the
holder to purchase one share of Common Stock for $28.34 (the "Exercise
Price"). The Rights are not evidenced by separate certificates but
rather by the stock certificates representing the Common Stock. In
addition, one Right will attach to each share of Common Stock issued
between the Record Date and the earlier of the Distribution Date (as
hereafter defined), the date the Company redeems all the Rights or
November 2, 2008 (the "Final Expiration Date"). The Rights are
transferable only upon transfer or surrender of the certificate
evidencing the Common Stock.
The Rights become exercisable upon the earliest of (the "Distribution
Date") (i) the tenth day after the announcement that a person or group
of affiliated or associated persons, except as noted in the Rights
Plan, acquires beneficial ownership of 15% or more of the Company's
voting stock (an "Acquiring Person"), or (ii) the tenth business day
(or such later date as may be determined by the Board of Directors and
the Continuing Directors, as defined in the Rights Plan, prior to such
time as any person or group of affiliated persons becomes an Acquiring
Person) after the commencement or announcement to commence a tender or
exchange offer the consummation of which would result in the ownership
of 30% or more of the Company's voting stock. Once the Rights become
exercisable, they will detach from the Common Stock and become freely
tradable. Pursuant to the Rights Plan, certain persons are exempt from
the definition of "Acquiring Person." The Rights are redeemable by the
Company at any time prior to the tenth day after a person becomes an
Acquiring Person (or at a later date in certain instances) at a price
of $.01 per Right.
In the event that the Rights are not redeemed, become exercisable, and
any person, group of affiliated or associated persons becomes an
Acquiring Person, the holder of a Right (other than an Acquiring Person
whose Rights will be void) will have the right to receive, upon payment
of the Exercise Price, that number of
<PAGE>
shares of Common Stock having a market value at the time of the
transaction equal to two times the Exercise Price. If the Company were
to be acquired in a merger or other business combination (in which the
Common Stock of the Company is changed into or exchanged for securities
or assets of another company), or the Company were to sell more than
50% of the assets or earning power of the Company and its subsidiaries,
the holder of a Right will have the right to receive, upon payment of
the Exercise Price, that number of shares of common stock of the
acquiring company having a fair market value at the time of the
transaction equal to two times the Exercise Price.
The number of shares of Common Stock issuable upon exercise of the
Rights and the Exercise Price are subject to certain adjustments as set
forth in the Rights Plan. Until the Rights are exercised, the holders
will have no right to vote or to receive dividends.
The section "Description of Securities - Public Warrants" is amended to
include the following information:
Each two Public Warrants entitle the holder to purchase one share of
Common Stock at an exercise price of $5.67 per share. The Public
Warrants may be exercised only in pairs. The Public Warrants may be
redeemed by the Company at any time, at a redemption price of $.05 per
Public Warrant upon 25 days prior written notice, provided the average
closing bid price of the Common Stock for 20 consecutive trading days
ending not more than 15 days prior to the date of any redemption is in
excess of $8.51. The exercise price and redemption threshold for the
Public Warrants have been reduced as a result of adjustments for
certain events that triggered the anti-dilution provisions in the
Public Warrants.
The Section caption "Risk Factors - Authorization of Preference Shares"
is amended to be "Risk Factors - Authorization of Preference Shares; Stockholder
Rights Plan." In addition, it is amended to include the following:
The Company has adopted a Stockholder Rights Plan (the "Rights Plan")
pursuant to which each share of Common Stock outstanding as of November
2, 1998 (the "Record Date") or issued between November 2, 1998 and
November 2, 2008, will have attached to it one Right to purchase one
share of Common Stock for $28.34. The Rights becomes exercisable upon
the occurrence of certain events, such as an unsolicited takeover
attempt of the Company. The Rights Plan is intended to impede certain
transactions that the Company's Board of Directors determines are
unfair to the Company's stockholders. Generally speaking, if the Rights
become exercisable and a person acquires more than 15% of the Common
Stock, each Right will entitle the holder to purchase a number of
shares of Common Stock having a market value of two times the exercise
price. Such purchases would result in a substantial dilution of an
acquirer's interest in the Common Stock and could discourage, delay or
prevent a change of control of the Company. See "Description of
Securities - 'Anti-Takeover' Provisions - Stockholder Rights Plan".
2
