SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
Arch Capital Group Ltd.
(Exact name of registrant as specified in its charter)
Bermuda Not Applicable
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(State of incorporation or organization) (I.R.S. Employer Identification No.)
20 Horseneck Lane
Greenwich, CT 06830
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(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which each class is
to be so registered to be registered
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Common Shares NASDAQ - National Market System
If this form relates to the registration of a class of securities pursuant
to Section 12(b) of the Exchange Act and is effective pursuant to General
Instruction A.(c), check the following box. [x]
If this form relates to the registration of a class of securities pursuant
to Section 12(g) of the Exchange Act and is effective pursuant to General
Instruction A.(d), check the following box. [ ]
Securities Act registration statement file number to which this form
relates:
333-45418
Securities to be registered pursuant to Section 12(g) of the Act:
None
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(Title of class)
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Item 1. Description of Registrant's Securities to Be Registered.
This registration statement relates to the common shares of Arch Capital
Group Ltd., a Bermuda company ("Arch Bermuda"). On November 7, 2000, a
reorganization was completed whereby Arch Bermuda became the parent holding
company of Arch Capital Group, Ltd., a Delaware corporation (formerly known as
Risk Capital Holdings, Inc.) ("Arch Delaware"), which changed its name to Arch
Capital Group (U.S.) Inc. References in this registration statement to the
"company," "us," "we," or "our" refer to Arch Bermuda.
Share Capital
The authorized share capital of the company consists of 200,000,000 common
shares, par value U.S. $0.01 per share, and 50,000,000 preference shares, par
value U.S.$0.01 per share.
Common Shares
Holders of the common shares have no preemptive, redemption, conversion or
sinking fund rights. Subject to the voting restrictions described below, holders
of common shares are entitled to one vote per share on all matters submitted to
a vote of holders of common shares and do not have any cumulative voting rights.
In the event of a liquidation, dissolution, or winding up of the company, the
holders of common shares are entitled to share equally and ratably in the assets
of the company, if any, remaining after the payment of all debts and liabilities
of the company and the liquidation preference of any outstanding preference
shares. All outstanding common shares are fully paid and non-assessable. The
board is permitted to authorize the issuance of additional common shares.
American Stock Transfer & Trust Company is the transfer agent and registrar
of our common shares.
Preference Shares
Our bye-laws allow the board to authorize the issuance of preference shares
in one or more series, and may fix the rights and preferences of those shares,
including as to dividends, voting (which shall be subject to the limitations
described below under "--Voting Limitation"), redemption, conversion rights and
otherwise.
Issuances of preference shares are subject to the applicable rules of the
Nasdaq National Market or other organizations on whose systems the stock of the
company may then be quoted or listed. Depending upon the terms of preference
shares established by our board of directors, any or all series of preference
shares could have preferences over the common shares with respect to dividends
and other distributions and upon liquidation of the company. Issuance of any
such shares with voting powers, or issuance of additional shares of common
shares, would dilute the voting power of the outstanding common shares.
Shareholders Meetings
Under Bermuda law, an annual shareholders meeting must be convened at least
once in every calendar year. Our bye-laws provide that a special shareholders
meeting of shareholders may be convened by the chairman of the board of
directors, the president or a majority of the directors in
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office at any time. In addition, under Bermuda law, subject to specified
conditions, a special shareholders meeting must be convened upon the request of
shareholders holding at least 10% of the paid-up capital of the company carrying
the right to vote at shareholders' meetings.
Our bye-laws provide that the presence of two or more persons representing,
in person or by proxy, not less than a majority of the voting power represented
by shares issued and entitled to vote shall constitute a quorum at all meetings
of the shareholders for the transaction of business except as otherwise provided
by Bermuda law.
Voting Limitation
Our bye-laws contain a provision limiting the voting rights of any person
who owns (directly, indirectly or constructively under the United States
Internal Revenue Code) shares with more than 9.9% of the total voting power of
all shares entitled to vote generally at an election of directors to 9.9% of
such voting power. This provision does not restrict the ability of any person
holding shares of the company that were either (1) converted from shares of Arch
Delaware owned on September 8, 2000 or (2) issued upon exercise of warrants
owned by such person on September 8, 2000 which were assumed by the company,
from voting such shares except with respect to the election of directors. This
provision is intended to prevent the company from being characterized as a
controlled foreign corporation which could cause U.S. persons owning 10% or more
of our shares to suffer adverse U.S. tax consequences.
The bye-laws of the company also contain a provision limiting the rights of
any group (within the meaning of the United States Securities Exchange Act of
1934) that owns shares with more than 9.9% of the total voting power of all
shares entitled to vote generally at an election of directors to 9.9% of such
voting power. This provision does not restrict (a) the ability of any such group
holding shares of the company that were converted from shares of Arch Delaware
owned on September 8, 2000 or acquired upon exercise of warrants owned by such
person on September 8, 2000 which were assumed by the company or (b) any person
or group that the board of directors, by the affirmation vote of at least 75% of
the existing board, may exempt from this provision, from voting such shares.
Shareholder Proposals
Our bye-laws establish an advance notice procedure for shareholder
proposals to be brought before an annual shareholders meeting of our
shareholders and for nominations by shareholders of candidates for election as
directors at an annual shareholders meeting or a special shareholders meeting at
which directors are to be elected. Subject to any other applicable requirements,
including rule 14a-8 under the U.S. Securities Exchange Act of 1934, only such
business may be conducted at an annual meeting of shareholders as has been
brought before the meeting by, or at the direction of, our board of directors,
or by a shareholder who has given to the secretary of the company timely written
notice, in proper form, of the shareholder's intention to bring that business
before the meeting. The presiding officer at such meeting has the authority to
make such determinations. Only persons who are nominated by, or at the direction
of, our board of directors, or who are nominated by a shareholder who has given
timely written notice, in proper form, to the secretary prior to a meeting at
which directors are to be elected will be eligible for election as director of
the company. Subject to
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Bermuda law as described below, shareholders will not be entitled to raise
proposals at special shareholders meetings.
To be timely, notice of nominations or other business to be brought before
an annual shareholders meeting must be received by the secretary of the company
at our principal executive office no later than 50 days prior to the date of
such annual shareholders meeting (or if less than 55 days' notice of the meeting
is given, not later than the close of business on the seventh day following the
day notice of the meeting is first given to shareholders). Similarly, notice of
nominations to be brought before a special shareholders meeting at which
directors are to be elected must be delivered to the secretary at our principal
executive office no later than the close of business on the seventh day
following the day on which notice of the date of a special shareholders meeting
of shareholders was given.
The shareholder's notice to nominate a director must set forth the identity
of the nominee, any arrangements or understandings the shareholder has the
nominee and any other information as would be required under the proxy rules of
the Securities and Exchange Commission if that person were in fact to appear as
a nominee in our proxy statement.
Bermuda law provides that shareholders totaling at least 100 shareholders
or holding at least 5% of the total voting rights can, at their own expense,
require the company to, subject to the provisions of Bermuda law:
o give notice of any resolution which those shareholders can properly
propose and intend to propose at the next annual shareholders meeting
of the company; or
o circulate a statement prepared by those shareholders in respect of any
matter referred to in a proposed resolution or any business to be
dealt with at a shareholders meeting.
Board of Directors
Our bye-laws provide that the number of directors will not be less than
three nor more than eighteen and will be determined from time to time by a vote
of a majority of our board of directors then in office. Our bye-laws provide
that the board will be divided into three classes. Each class will consist, as
nearly as may be possible, of one-third of the total number of directors
constituting the entire board. At each annual meeting of shareholders, directors
will be elected to succeed those directors whose terms have expired, and each
newly elected director will serve for a three-year term.
Our bye-laws provide that directors may be removed only for cause, and
cause for removal shall be deemed to exist only if the director whose removal is
proposed has been convicted of a felony or been found by a court to be liable
for gross negligence or misconduct in the performance of his or her duties. Our
bye-laws also provide that our board of directors have the right to fill
vacancies, including vacancies created by expansion of the board of directors.
Dividends
Under Bermuda law and our bye-laws, our board of directors may declare
dividends, or make distributions out of contributed surplus, as long as there
are no reasonable grounds for be-
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lieving that the company is, or after the dividend or distribution would be,
unable to pay its liabilities as they became due or that the realizable value of
the company's assets would thereby be less than the aggregate of its liabilities
and its issued share capital and share premium accounts.
Repurchases of Shares
Under Bermuda law and our bye-laws, the company can repurchase its own
shares so long as it is solvent and certain other conditions are met.
Interested Shareholder Provisions
Section 203 of the Delaware General Corporation Law
Our bye-laws incorporate the provisions of Section 203 of the Delaware
General Corporation Law (the "Section 203 provisions"). The Section 203
provisions prohibit interested shareholders from engaging in a business
combination with the company for a period of three years from the time of
becoming an interested shareholder. An interested shareholder is defined as a
person that owns 15% or more of the voting power of the company or any person
that owned 15% or more of the voting power of the company at any time within
three years of the date that person's status as an interested shareholder is
determined. Business combinations include:
o mergers, amalgamations or similar transactions,
o the sale of assets of the company having an aggregate market value
equal to 10% or more of either the aggregate market value of all the
assets of the company determined on a consolidated basis or the
aggregate market value of all outstanding shares of the company;
o any transaction that results in the issuance or transfer by the
company of any stock of the company to the interested shareholder,
except if the issuance is part of a proportionate distribution to all
shareholders or due to the conversion of securities exercisable or
exchangeable for shares in the company;
o any transaction involving the company or one of our subsidiaries that
results in the interested shareholder's percentage ownership in the
company increasing; and
o any receipt by the interested shareholder of the benefit of any loan,
guarantee or other financial benefit provided by or through the
company.
The company is not bound by the Section 203 provisions that restrict the
activities of it with respect to an interested shareholder if:
o upon consummation of the transaction that resulted in the interested
shareholder becoming an interested shareholder, that interested
shareholder owned at least 85% of the voting power of the company's
shares outstanding at the time the transaction commenced;
o the board approved the transaction in which the interested shareholder
became an interested shareholder before that transaction was
completed; or
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o the business combination is approved at a meeting by the vote of 66
2/3% of the outstanding voting shares not owned by the interested
shareholder.
The restrictions of the Section 203 provisions do not restrict the
activities of an interested shareholder with respect to business combinations in
the event that any of the following transactions:
o a merger or consolidation of the company;
o a sale of the company's assets having an aggregate market value equal
to 50% or more of the aggregate value of all the company's assets; or
o a tender offer for 50% or more of the voting stock of the company,
is approved or not opposed by a majority of the board of directors of the
company then in office, so long as those directors were in office (or were
nominated or elected by directors who were in office) prior to the time the
interested shareholder became an interested shareholder, and a business
combination is proposed by an interested shareholder before the company
consummates or abandons, and after the company either announces publicly, or
gives notice (which it is required to do in the case of an asset sale or merger)
to all interested shareholders of, one of the specified transactions.
The provisions of the bye-laws restricting business combinations with
interested shareholders can be repealed only with (1) the affirmative vote of
66-2/3% of the outstanding shares and the approval of the Board or (2) the
affirmative vote of a majority of the outstanding shares and the affirmative
vote of 75% of the entire board (and that 75% threshold must be met without the
votes of directors who are affiliates of the interested shareholder).
Additional Voting Restrictions
Our bye-laws provide that the affirmative vote of 80% of the outstanding
shares of the company (including a majority of the outstanding shares held by
shareholders other than holders (and such holders' affiliates) of 10% or more
("10% holders") of the outstanding shares) shall be required (the "extraordinary
vote") for the following corporate actions:
o merger or consolidation of the company into a 10% holder;
o sale or any or all of the assets of the company to a 10% holder;
o the issuance of voting securities of the company to a 10% holder; or
o amendment of these provisions.
The extraordinary vote will not apply to any transaction approved by the
board, so long as a majority of those board members voting in favor of the
transaction were duly elected and acting members of the board prior to the time
the 10% holder became a 10% holder.
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Anti-Takeover Effects
Certain of the provisions described above in our bye-laws could have the
effect of discouraging unsolicited takeover bids from third parties or the
removal of incumbent management. As a result, it may be less likely that you
will receive premium prices for your shares in an unsolicited takeover of our
company by another party. These provisions may encourage companies interested in
acquiring the company to negotiate in advance with our board of directors, since
the board has the authority to overrule the operation of several of the
limitations.
Our bye-laws provide that certain provisions which may have anti-takeover
effects may be repealed or altered only with prior board approval and upon the
affirmative vote of holders of shares representing at least 65% of the total
voting power of the shares of the company entitled generally to vote at an
election of directors (80% in the case of the provisions described under "--
Interested Shareholder Provisions -- Additional Voting Restrictions").
Voting Limitation
The provisions described above under "-- Voting Limitation" may deter any
unsolicited or unnegotiated bids for the company since, subject to the
exceptions described above, no shareholder or (without approval of 75% of the
directors then in office) group will be able to vote shares representing more
than 9.9% of the voting power of the company's voting shares.
Limitation on Shareholder Proposals and Calling of Special Shareholders
meetings
The provisions limiting shareholders' right to call special shareholders
meetings and to raise proposals or nominate directors at shareholders meetings
may have anti-takeover effects, although under Bermuda law, subject to specified
conditions, any 10% shareholder can call a special shareholders meeting and any
5% shareholder can raise a proposal at a shareholders meeting.
Action by Written Consent
Under Bermuda law, shareholders may act by written consent only if such
consent is unanimous among all shareholders entitled to vote. This limitation,
together with the limitation on shareholder proposals and calling of special
shareholders meetings, could make an unsolicited or unnegotiated bid more
difficult.
Classified Board of Directors
The classified board provision could increase the likelihood that, in the
event of a takeover of the company, incumbent directors will retain their
positions. In conjunction with the provision of the bye-laws authorizing our
board of directors to fill vacant directorships, the classified board provision
could prevent shareholders from removing incumbent directors without cause (as
defined in our bye-laws) and filling the resulting vacancies with their own
nominees. We believe that the provision will help assure that the board, if
confronted with an unsolicited proposal from a third party that has acquired a
block of our voting shares, will have sufficient time to review the proposal and
appropriate alternatives and to seek the best available result for all
shareholders. We also believe that a classified board helps assure the
continuity and stability of the board and our business strategy and policies.
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Power to Issue Shares
Authorized preference shares, as well as authorized but unissued common
shares, will be available for issuance by the board, without further action by
our shareholders, unless shareholder action is required by applicable law or the
rules of any stock exchange on which any series of the company's capital stock
may then be listed. The company is authorized to have issued and outstanding
200,000,000 common shares and 50,000,000 preference shares. We believe that the
availability of preference shares and additional common shares could facilitate
certain financings and acquisitions and provide a means for meeting other
corporate needs which might arise. These provisions give our board of directors
the power to approve the issuance of preference shares or common shares that
could, depending on its terms, either impede or facilitate the completion of a
merger, tender offer or other takeover attempt. For example, the issuance of
preference shares might impede a business combination if the terms of those
shares include voting rights which would enable a holder to block business
combinations.
Interested Shareholder Provisions
Any interested shareholder or 10% holder, each as defined above under
"--Interested Shareholder Provisions," cannot effect certain transactions with
the company unless it complies with the provisions described in that section or
the board of directors by requisite vote (or in the case of the Section 203
provisions, the shareholders by requisite vote) approve the transaction. These
provisions may encourage potential acquirers to negotiate with the board and
deter any bids not approved by the board.
Shareholder Approval of Business Combinations
Bermuda law permits an amalgamation between two or more Bermuda companies,
or between one or more Bermuda exempted companies and one or more foreign
corporations, subject, unless the bye-laws otherwise provide, to obtaining a
majority vote of three-fourths of the shareholders of each of the companies and
each class of shares present and voting in person or by proxy at a meeting
called for that purpose. Unless the bye-laws otherwise provide, Bermuda law also
requires that the quorum at the meeting be more than one-third of the issued
shares of the company or the class. Each share carries the right to vote in
respect of an amalgamation, whether or not it otherwise carries the right to
vote.
Except as set forth in the next paragraph, our bye-laws provide that any
amalgamation approved by two-thirds of the board of directors of the company
shall require approval only by a majority of the voting power held by
shareholders, if the holders of a majority of the shares issued and entitled to
vote are present.
Bermuda law also provides that where an offer is made for shares in a
company by another company and, within four months of the offer, the holders of
at least 90% in value of the shares which are the subject of the offer (other
than shares already held by or on behalf of the offeror) accept, the offeror may
by notice, given within two months after the expiration of the said four months,
require any dissenting shareholders to transfer their shares on the terms of the
offer. Dissenting shareholders may apply to a court within one month of notice
objecting to the transfer and the court may make any order it thinks fit.
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Appraisal Rights
Under Bermuda law, a dissenting shareholder of a company participating in
an amalgamation, other than an amalgamation between a company and its wholly
owned subsidiary or between two or more wholly owned subsidiaries of the same
holding company, may apply to Bermuda's Supreme Court to appraise the fair value
of his or her shares.
Inspection of Books and Records
Bermuda law provides the general public with a right of inspection of a
Bermuda company's public documents at the office of the Registrar of Companies
in Bermuda, and provides a Bermuda company's shareholders with a right of
inspection of the company's bye-laws, minutes of general shareholders' meetings
and audited financial statements. The register of shareholders is also open to
inspection by shareholders free of charge and, upon payment of a small fee, by
any other person.
A Bermuda company is required to maintain its share register in Bermuda but
may establish a branch register outside of Bermuda if its shares are traded on
an appointed stock exchange or its shares have been offered to the public
pursuant to a prospectus filed in accordance with Bermuda law. A Bermuda company
is required to keep at its registered office a register of its directors and
officers which is open for inspection by members of the public without charge.
Indemnification of Officers and Directors
Under Bermuda law, a company is permitted to indemnify any officer or
director, out of the funds of the company, against:
o any liability he or she incurs in defending any proceedings, whether
civil or criminal, in which (1) judgment is given in his or her favor,
or (2) he or she is acquitted, or (3) he or she is granted relief from
liability by the court in connection with any application under
relevant Bermuda legislation; and
o any loss or liability resulting from negligence, default, breach of
duty or breach of trust, except for his or her fraud or dishonesty.
Pursuant to our bye-laws, the company will indemnify its officers and
directors as well as their heirs, executors and administrators to the fullest
extent permitted by law. Bermuda law does not permit indemnification of a person
who is or may be found guilty of fraud or dishonesty.
The company will advance all reasonable expenses incurred by or on behalf
of the indemnitee in connection with any related proceeding.
Limited Liability of Directors
Under Bermuda law, a director must observe the statutory duty of care which
requires a director to act honestly and in good faith with a view to the best
interests of the company and exercise the care, diligence and skill that a
reasonably prudent person would exercise in comparable circumstances.
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Bermuda law renders void any provision in the bye-laws or any contract
between a company and any director exempting him or her from, or indemnifying
him or her against, any liability in respect of any fraud or dishonesty of which
he or she may be guilty in relation to the company.
Our bye-laws provide that no officer or director of the company will be
personally liable to the company or its shareholders for monetary damages for
any breach of fiduciary duty, except where the person is or may be found to be
guilty of fraud or dishonesty. A director who has an interest in any material
contract or proposed material contract or in any person that is a party to such
a contract with the company or any of its subsidiaries and fails to disclose the
interest at the first opportunity at a meeting of the directors or by writing to
the directors is deemed not to be acting honestly or in good faith.
Interested Director Transactions
Under Bermuda law, without the consent of the holders of shares carrying at
least nine-tenths of the total voting rights or in other limited instances, a
company may not make a loan to or enter into any guarantee or provide security
in respect of any loan made to any person who is a director of that company or
of its holding company. Exceptions to this provision are:
o loans or guarantees by the company in the ordinary course of its
business, if the business includes lending money or giving guarantees;
or
o loans for the purposes of the company or to enable its directors to
perform their duties, given with prior approval at a shareholders
meeting where the purposes of the loan are disclosed; or if not given
at that meeting, the loan is repaid or discharged within six months
from the conclusion of the next following annual shareholders meeting.
This provision does not preclude the reimbursement of expenses or loans to
directors who are or were employees of the company to enable them to acquire
shares or stock options.
Shareholders' Suits
The Bermuda courts ordinarily would be expected to follow English
precedent, which would permit a shareholder to commence a derivative action in
the name of the company to remedy a wrong done to the company only:
o where the act complained of is alleged to be beyond the corporate
power of the company or illegal;
o where the act complained of is alleged to constitute a fraud against
the minority shareholders by those controlling the company; provided
that the majority shareholders have used their controlling position to
prevent the company from taking action against the wrongdoers;
o where an act requires approval by a greater percentage of the
company's shareholders than actually approved it; or
o where a derivative action is necessary to avoid a violation of the
company's memorandum of association or bye-laws
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Item 2. Exhibits
See Exhibit Index immediately preceding the Exhibits.
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, the registrant has duly caused this registration statement to be signed
on its behalf by the undersigned, thereunto duly authorized.
ARCH CAPITAL Group Ltd.
Date: November 7, 2000 By: /s/ Peter A. Appel
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Name: Peter A. Appel
Title: President and Chief Executive Officer
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EXHIBIT INDEX
Number Description
1 Memorandum of Association of Arch Capital Group Ltd. (incorporated herein
by reference to Exhibit 3.1 to Arch Capital Group Ltd.'s Registration
Statement on Form S-4 (File No. 333-45418)).
2 Bye-Laws of Arch Capital Group Ltd. (incorporated herein by reference to
Exhibit 3.2 to Arch Capital Group Ltd.'s Registration Statement on Form S-4
(File No. 333-45418)).
