0000950134-01-507761.txt : 20011101
0000950134-01-507761.hdr.sgml : 20011101
ACCESSION NUMBER: 0000950134-01-507761
CONFORMED SUBMISSION TYPE: S-4/A
PUBLIC DOCUMENT COUNT: 8
FILED AS OF DATE: 20011030
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: INGERSOLL RAND CO LTD
CENTRAL INDEX KEY: 0001160497
STANDARD INDUSTRIAL CLASSIFICATION: AIR COND & WARM AIR HEATING EQUIP & COMM & INDL REFRIG EQUIP [3585]
FILING VALUES:
FORM TYPE: S-4/A
SEC ACT: 1933 Act
SEC FILE NUMBER: 333-71642
FILM NUMBER: 1770955
BUSINESS ADDRESS:
STREET 1: 200 CHESTNUT RIDGE RD
CITY: WOODCLIFF LAKE
STATE: NJ
ZIP: 07677
BUSINESS PHONE: 2015730123
MAIL ADDRESS:
STREET 1: 200 CHESTNUT RIDGE RD
CITY: WOODCLIFF LAKE
STATE: NJ
ZIP: 07677
S-4/A
1
d91138a1s-4a.txt
AMENDMENT NO. 1 TO FORM S-4
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 30, 2001.
REGISTRATION NO. 333-71642
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
AMENDMENT NO. 1
TO
FORM S-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
---------------------
INGERSOLL-RAND COMPANY LIMITED
(Exact name of Registrant as Specified in its Charter)
BERMUDA 3585 N/A
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification No.)
200 CHESTNUT RIDGE ROAD
WOODCLIFF LAKE, NEW JERSEY 07677
(201) 573-0123
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices)
PATRICIA NACHTIGAL, ESQ.
SENIOR VICE PRESIDENT AND GENERAL COUNSEL
200 CHESTNUT RIDGE ROAD
WOODCLIFF LAKE, NEW JERSEY 07677
(201) 573-0123
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code of
Agent for Service)
---------------------
COPIES TO:
JONATHAN B. NEWTON, ESQ. THOMAS J. EGAN, JR., ESQ.
BAKER & MCKENZIE BAKER & MCKENZIE
2300 TRAMMELL CROW CENTER 815 CONNECTICUT AVENUE, N.W.
2001 ROSS AVENUE WASHINGTON, D.C. 20006
DALLAS, TEXAS 75201 (202) 452-7000
(214) 978-3000
---------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective and all other
conditions to the merger contemplated by the Agreement and Plan of Merger
described in the enclosed proxy statement/ prospectus have been satisfied or
waived.
---------------------
If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, check the following
box and list the Securities Act of 1933 registration statement number of the
earlier effective registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act of 1933, check the following box and list the
Securities Act of 1933 registration statement number of the earlier effective
registration statement for the same offering. [ ]
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
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[LOGO] INGERSOLL-RAND COMPANY 200 Chestnut Ridge Road
Woodcliff Lake, NJ 07677
(201) 573-3139
(201) 573-3406 Fax
herb_henkel@irco.com
HERBERT L. HENKEL
Chairman, President and
Chief Executive Officer
Dear Shareholder: November 2, 2001
We are pleased to present for your approval a proposal for reorganizing
Ingersoll-Rand Company (which we refer to as IR-New Jersey) that will result in
IR-New Jersey changing its domicile from New Jersey to Bermuda. Ingersoll-Rand
Company Limited, a Bermuda company we recently formed (which we refer to as
IR-Limited), will become the parent holding company of IR-New Jersey. The
reorganization will be accomplished through a merger of a newly-formed merger
subsidiary into IR-New Jersey. IR-New Jersey will be the surviving company and
continue to exist as an indirect, wholly-owned subsidiary of IR-Limited. After
completion of the reorganization, IR-Limited and its subsidiaries will continue
to conduct the businesses now conducted by IR-New Jersey and its subsidiaries.
If the merger is completed, the shares of IR-New Jersey common stock that
you own will automatically become IR-Limited Class A common shares. The number
of IR-Limited Class A common shares you will own will be the same as the number
of shares of IR-New Jersey common stock that you own immediately prior to the
completion of the merger, and your proportionate ownership and relative voting
rights will remain unchanged.
We believe that reorganizing as a Bermuda company will enable us to realize
a variety of potential business, financial and strategic benefits. We also
believe the reorganization will allow us to implement our business strategy more
effectively. Specifically, the reorganization should help enhance our business
growth and cash flow and reduce our worldwide effective tax rate. Additionally,
we believe IR-Limited will be a more attractive investment alternative to a
wider range of investors.
Generally, for U.S. federal income tax purposes, shareholders who are U.S.
persons will recognize gain, if any, but not loss, on the receipt of IR-Limited
Class A common shares in the merger. WE URGE YOU TO CONSULT YOUR OWN TAX
ADVISORS REGARDING YOUR PARTICULAR TAX CONSEQUENCES.
Accompanying this letter is a notice of special meeting of shareholders and
a proxy statement/prospectus. We urge all shareholders to carefully read the
proxy statement/prospectus for details about the merger and related
reorganization transactions.
The reorganization cannot be completed unless at least a majority of votes
cast at the special meeting that were entitled to vote as of October 31, 2001
approve the merger. YOUR VOTE IS VERY IMPORTANT. Please vote your proxy via the
Internet, by telephone or by completing, signing and dating the enclosed proxy
card and returning it promptly in the enclosed envelope, whether or not you
expect to attend the special meeting. You may revoke your proxy and vote in
person if you decide to attend the special meeting.
Your board of directors has unanimously approved the Agreement and Plan of
Merger and recommends that you vote "FOR" its adoption.
We urge you to join us in supporting this important opportunity.
Sincerely,
/s/ HERBERT L. HENKEL
HERBERT L. HENKEL
Chairman, President and
Chief Executive Officer
[LOGO] INGERSOLL-RAND COMPANY Corporate Headquarters
200 Chestnut Ridge Road
Woodcliff Lake, NJ 07677
---------------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER 14, 2001
---------------------
A special meeting of the shareholders of Ingersoll-Rand Company will be
held at 200 Chestnut Ridge Road, Woodcliff Lake, New Jersey, on December 14,
2001, at 2:00 p.m., local time, for the following purposes:
1. To adopt the Agreement and Plan of Merger, substantially in the
form attached to the accompanying proxy statement/prospectus as Annex I,
among Ingersoll-Rand Company, IR Merger Corporation and Ingersoll-Rand
Company Limited, a Bermuda company, whereby Ingersoll-Rand Company will
effectively change its domicile from New Jersey to Bermuda by merging IR
Merger Corporation into Ingersoll-Rand Company, which will be the surviving
company and become a wholly-owned, indirect subsidiary of Ingersoll-Rand
Company Limited, and pursuant to which each share of Ingersoll-Rand Company
common stock will automatically become a Class A common share of
Ingersoll-Rand Company Limited and all current shareholders of
Ingersoll-Rand Company will become Class A common shareholders of
Ingersoll-Rand Company Limited.
2. To transact such other business as may properly come before the
special meeting.
The board of directors has fixed the close of business on October 31, 2001,
as the record date for determination of shareholders entitled to notice of, and
to vote at, the special meeting or adjournments thereof.
YOUR VOTE IS VERY IMPORTANT. TO ENSURE THAT YOUR SHARES ARE REPRESENTED,
YOU SHOULD VOTE YOUR PROXY VIA THE INTERNET, BY TELEPHONE OR BY COMPLETING,
SIGNING AND DATING THE ENCLOSED PROXY CARD AND RETURNING IT PROMPTLY IN THE
ENCLOSED ENVELOPE, WHETHER OR NOT YOU EXPECT TO ATTEND THE SPECIAL MEETING. YOU
MAY REVOKE YOUR PROXY AND VOTE IN PERSON IF YOU DECIDE TO ATTEND THE SPECIAL
MEETING.
By Order of the Board of Directors:
R. G. HELLER
Vice President and Secretary
November 2, 2001
INGERSOLL-RAND COMPANY INGERSOLL-RAND COMPANY LIMITED
[LOGO]
---------------------
PROXY STATEMENT FOR SPECIAL MEETING OF SHAREHOLDERS OF
INGERSOLL-RAND COMPANY
PROSPECTUS FOR UP TO 168,374,485 CLASS A COMMON SHARES
OF INGERSOLL-RAND COMPANY LIMITED
---------------------
The board of directors of Ingersoll-Rand Company (which we refer to as
IR-New Jersey) has unanimously approved a corporate reorganization that will
result in IR-New Jersey changing its domicile from New Jersey to Bermuda.
Ingersoll-Rand Company Limited, a Bermuda company that we recently formed (which
we refer to as IR-Limited), will become the parent holding company of IR-New
Jersey. The reorganization will be accomplished through a merger of a
newly-formed merger subsidiary into IR-New Jersey. IR-New Jersey will be the
surviving company and continue to exist as an indirect, wholly-owned subsidiary
of IR-Limited. After completion of the reorganization, IR-Limited and its
subsidiaries will continue to conduct the businesses now conducted by IR-New
Jersey and its subsidiaries.
If the merger is completed, the shares of IR-New Jersey common stock that
you own will automatically become IR-Limited Class A common shares. The number
of IR-Limited Class A common shares you will own will be the same as the number
of shares of IR-New Jersey common stock that you own immediately prior to the
completion of the merger, and your proportionate ownership and relative voting
rights will remain unchanged.
We believe that reorganizing as a Bermuda company will enable us to realize
a variety of potential business, financial and strategic benefits. We also
believe the reorganization will allow us to implement our business strategy more
effectively. Specifically, the reorganization should help enhance our business
growth and cash flow and reduce our worldwide effective tax rate. Additionally,
we believe IR-Limited will be a more attractive investment alternative to a
wider range of investors.
IR-New Jersey common stock is currently traded on the New York Stock
Exchange under the symbol "IR." Immediately following the merger, IR-Limited
Class A common shares will be traded on the New York Stock Exchange under the
same symbol.
Generally, for U.S. federal income tax purposes, shareholders who are U.S.
persons will recognize gain, if any, but not loss, on the receipt of IR-Limited
Class A common shares in the merger. WE URGE YOU TO CONSULT YOUR OWN TAX
ADVISORS REGARDING YOUR PARTICULAR TAX CONSEQUENCES.
This proxy statement/prospectus provides you with detailed information
about the reorganization and the special meeting of shareholders. We encourage
you to carefully read this entire document and the documents incorporated by
reference. YOU SHOULD ALSO CAREFULLY CONSIDER THE RISK FACTORS BEGINNING ON PAGE
14.
The reorganization cannot be completed unless at least a majority of votes
cast by holders of shares present in person or represented by proxy at the
special meeting and entitled to vote as of October 31, 2001 approve the merger.
Your board of directors has unanimously approved the Agreement and Plan of
Merger and recommends that you vote "FOR" its adoption.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROXY STATEMENT/PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THIS PROXY STATEMENT/PROSPECTUS IS DATED NOVEMBER 2, 2001, AND IS FIRST
BEING MAILED TO IR-NEW JERSEY SHAREHOLDERS ON OR ABOUT NOVEMBER 2, 2001.
TABLE OF CONTENTS
PAGE
----------
CAUTIONARY STATEMENT REGARDING
FORWARD-LOOKING STATEMENTS.......... 1
QUESTIONS AND ANSWERS ABOUT THE
REORGANIZATION...................... 2
SUMMARY............................... 6
Risk Factors.......................... 6
Parties to the Merger................. 6
The Reorganization.................... 7
Reasons for the Reorganization........ 8
Conditions to Consummation of the
Merger.............................. 8
Effective Time........................ 8
Income Tax Consequences of the
Reorganization...................... 8
Rights of Shareholders................ 9
Stock Compensation Plans.............. 9
Dividend Reinvestment Plan............ 9
Shareholder Rights Plan............... 9
Stock Exchange Listing................ 10
Market Price.......................... 10
Rights of Dissenting Shareholders..... 10
Accounting Treatment of the
Reorganization...................... 10
Special Meeting....................... 10
Recommendation of the Board of
Directors........................... 10
Required Vote for the Merger.......... 11
Voting Your Shares and Changing Your
Vote................................ 11
SELECTED HISTORICAL CONSOLIDATED
FINANCIAL DATA...................... 12
SUMMARY PRO FORMA FINANCIAL
INFORMATION......................... 13
RECENT DEVELOPMENTS................... 13
RISK FACTORS.......................... 14
THE REORGANIZATION.................... 17
Structure of the Reorganization....... 17
Reasons for the Reorganization........ 17
The Merger Agreement.................. 19
Conditions to Consummation of the
Merger.............................. 19
Effective Time........................ 19
Amendment or Termination.............. 19
PAGE
----------
Automatic Share Conversion............ 20
Management of IR-Limited.............. 20
Required Vote for the Merger.......... 20
Rights of Dissenting Shareholders..... 21
Dividends............................. 21
Stock Compensation Plans.............. 21
Dividend Reinvestment Plan............ 21
Shareholder Rights Plan............... 22
Stock Exchange Listing................ 22
Accounting Treatment of the
Reorganization...................... 22
Recommendation of the Board of
Directors........................... 22
SPECIAL MEETING....................... 23
When and Where the Special Meeting
Will be Held........................ 23
What Will be Voted Upon............... 23
Only IR-New Jersey Shareholders of
Record as of October 31, 2001 Are
Entitled to Vote.................... 23
Majority of Outstanding Shares Must be
Represented for a Vote to be
Taken............................... 23
Required Vote for the Merger.......... 23
Voting Your Shares and Changing Your
Vote................................ 24
How Proxies Are Counted............... 24
Cost of Solicitation.................. 25
DESCRIPTION OF AUTHORIZED SHARES OF
IR-LIMITED.......................... 26
Authorized Share Capital.............. 26
Voting................................ 26
Changes to Rights of a Class or
Series.............................. 27
Quorum for General Meetings........... 27
Dividend Rights....................... 27
Rights Upon Liquidation............... 27
Liability for Further Calls or
Assessments; No Sinking Fund........ 27
Pre-Emptive Rights.................... 27
Redemption, Repurchase and
Conversion.......................... 27
Restrictions on Transfer.............. 28
Stock Exchange Listing................ 28
Other Classes or Series of Shares..... 29
Compulsory Acquisition of Shares Held
by Minority Holders................. 29
Transfer Agent........................ 30
PAGE
----------
Anti-Takeover Provisions.............. 30
Preference Shares..................... 31
Shareholder Rights Plan............... 32
COMPARISON OF RIGHTS OF
SHAREHOLDERS........................ 35
Shareholder Meetings.................. 35
Board of Directors.................... 39
Amendments to Organizational
Documents........................... 41
Issuance of Preference Shares/Stock... 42
Distributions and Dividends........... 42
Repurchases and Redemptions........... 42
Shareholder Approval for Certain
Actions............................. 43
Shareholder Rights Plan............... 46
Other Corporate Governance
Provisions.......................... 46
INCOME TAX CONSEQUENCES OF THE
REORGANIZATION...................... 48
U.S. Federal Income Tax Consequences
of the Reorganization............... 48
PAGE
----------
Bermuda Tax Consequences of the
Reorganization...................... 52
SHAREHOLDER PROPOSALS AND
NOMINATIONS......................... 53
EXPERTS............................... 53
LEGAL MATTERS......................... 53
WHERE YOU CAN FIND MORE INFORMATION... 53
INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE........................... 54
AGREEMENT AND PLAN OF MERGER.......... ANNEX I
MEMORANDUM OF ASSOCIATION OF INGERSOLL-RAND
COMPANY LIMITED..................... ANNEX II
AMENDED AND RESTATED BYE-LAWS OF INGERSOLL-RAND
COMPANY LIMITED..................... ANNEX III
THIS PROXY STATEMENT/PROSPECTUS INCORPORATES IMPORTANT BUSINESS AND
FINANCIAL INFORMATION ABOUT US THAT IS NOT INCLUDED IN OR DELIVERED WITH THIS
DOCUMENT. SUCH INFORMATION IS AVAILABLE WITHOUT CHARGE TO OUR SHAREHOLDERS UPON
WRITTEN OR ORAL REQUEST. SUCH REQUEST SHOULD BE MADE TO INGERSOLL-RAND COMPANY,
200 CHESTNUT RIDGE ROAD, WOODCLIFF LAKE, NEW JERSEY 07677, ATTN: VICE PRESIDENT
AND SECRETARY, TELEPHONE NUMBER (201) 573-0123. TO OBTAIN TIMELY DELIVERY, YOU
MUST REQUEST SUCH INFORMATION NO LATER THAN FIVE BUSINESS DAYS BEFORE THE DATE
THAT YOU MUST MAKE YOUR INVESTMENT DECISION. YOU MUST REQUEST THIS INFORMATION
BY DECEMBER 7, 2001.
ii
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This proxy statement/prospectus contains or incorporates by reference
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995 with respect to the reorganization and our
financial condition, results of operations and business. This Act protects
public companies from liability for forward-looking statements in private
securities litigation if the forward-looking statement is identified and is
accompanied by meaningful cautionary statements identifying important factors
that could cause actual results to differ materially from the forward-looking
statements. Forward-looking statements by their nature involve a degree of risk
and uncertainty, including, but not limited to, the risks and uncertainties
referred to under "Risk Factors" and elsewhere herein or in the documents
incorporated by reference. All statements regarding the expected benefits of the
reorganization are forward-looking statements. The forward-looking statements
may include statements for the period following completion of the
reorganization. You can find many of these statements by looking for words such
as "believes," "expects," "anticipates," "estimates," "continues," "may,"
"intends," "plans" or similar expressions in this proxy statement/prospectus or
in the documents incorporated by reference. You should be aware that any
forward-looking statements in this proxy statement/prospectus only reflect
current expectations and are not guarantees of performance. Actual results may
differ materially from those expressed or implied by forward-looking statements.
As you make your decision how to vote, please take into account that
forward-looking statements speak only as of the date of this proxy
statement/prospectus or, in the case of documents incorporated by reference, the
date of any such document.
We have identified factors that could cause actual plans or results to
differ materially from those included in any forward-looking statements. These
factors include, but are not limited to, the following:
- an inability to realize expected benefits of the reorganization within
the anticipated time frame, or at all;
- changes in tax laws, tax treaties or tax regulations or the
interpretation or enforcement thereof, including taxing authorities not
agreeing with our assessment of the effects of such laws, treaties and
regulations;
- an inability to execute our business strategy;
- costs or difficulties related to the merger and related reorganization
transactions, which could be greater than expected;
- changes in the rate of economic growth in the U.S. or in other major
international economies;
- significant changes in trade, monetary or fiscal policies worldwide,
including changes in interest rates;
- currency fluctuations between the U.S. dollar and other currencies;
- demand for products and services;
- distributor inventory levels;
- performance issues with key suppliers or subcontractors;
- failure to achieve our productivity targets;
- costs and effects of unanticipated legal and administrative proceedings;
and
- competitive actions, such as unanticipated pricing actions or cost
reduction strategies and entry into direct product line competition.
1
QUESTIONS AND ANSWERS ABOUT THE REORGANIZATION
WHAT AM I BEING ASKED TO VOTE ON?
You are being asked to vote in favor of a merger by which IR-New Jersey
will become a wholly-owned, indirect subsidiary of a new holding company,
IR-Limited. Your shares of IR-New Jersey common stock will automatically become
an identical number of IR-Limited Class A common shares.
HOW WILL THE MERGER BE ACCOMPLISHED?
Changing IR-New Jersey's domicile from New Jersey to Bermuda involves the
merger and related reorganization transactions. To effect the merger, a New
Jersey company, which is a newly-formed subsidiary of IR-Limited and which has
been formed specifically for the merger, will merge into IR-New Jersey. IR-New
Jersey will be the surviving company in the merger and become a wholly-owned,
indirect subsidiary of IR-Limited. As a result of the merger, each currently
outstanding share of IR-New Jersey common stock will automatically become an
IR-Limited Class A common share. This procedure will result in you becoming a
shareholder in IR-Limited, the new Bermuda parent company of the entire
Ingersoll-Rand group. After this merger, you will own an interest in a Bermuda
holding company that, together with its subsidiaries, will continue to conduct
the same businesses that IR-New Jersey and its subsidiaries now conduct. Your
proportionate ownership and relative voting rights will not change as a result
of the reorganization. The steps in the reorganization are more fully described
in "The Reorganization -- Structure of the Reorganization" on page 17.
WHAT ARE THE BENEFITS TO IR-NEW JERSEY OF COMPLETING THIS REORGANIZATION?
We believe that reorganizing as a Bermuda company will enable us to realize
a variety of potential business, financial and strategic benefits, including,
but not limited to, some or all of the following:
- enhancement of our business growth;
- creation of a more favorable corporate structure for expansion of our
current business;
- improvement in expected cash flow for use in investing in further
earnings growth, including by developing higher-growth product lines and
acquiring complementary higher-growth businesses;
- improvement in expected cash flow for use in reducing the amount of our
debt;
- reduction in our worldwide effective tax rate;
- implementation of our business strategy more effectively; and
- expansion of our investor base as IR-Limited's shares may become more
attractive to non-U.S. investors.
See "The Reorganization -- Reasons for the Reorganization" on page 17.
WILL THE REORGANIZATION DILUTE MY OWNERSHIP INTEREST?
No. The reorganization will not dilute your ownership interest. Immediately
after the reorganization is completed, you will own the same percentage of
IR-Limited Class A common shares as you own of IR-New Jersey common stock
immediately prior to the completion of the reorganization. In connection with
the reorganization, IR-Limited will issue a special class of non-voting shares,
Class B common shares. Only IR-New Jersey and other wholly-owned subsidiaries of
IR-Limited will own IR-Limited Class B common shares. IR-Limited Class B common
shares that are held by IR-New Jersey or other IR-Limited subsidiaries
immediately following the merger will not dilute your ownership interest because
IR-New Jersey and those subsidiaries will be wholly-owned, indirect subsidiaries
of IR-Limited. See "The Reorganization -- Structure of the Reorganization" on
page 17 and "Comparison of Rights of Shareholders -- Shareholder Meetings --
Voting Rights" on page 35.
2
WHY ARE WE PROPOSING THE REORGANIZATION?
The objective of the reorganization is to enhance shareholder value.
However, we cannot predict what impact, if any, the reorganization will have in
the long-term in light of the fact that the achievement of our objectives
depends on many factors, including our ability to react to any changes in tax
laws, treaties and regulations in the various jurisdictions in which we operate.
WILL IR-NEW JERSEY SHAREHOLDERS BE TAXED AS A RESULT OF THE MERGER OR THE
RELATED REORGANIZATION TRANSACTIONS?
Generally, for U.S. federal income tax purposes, shareholders who are U.S.
persons will recognize gain, if any, but not loss, on the receipt of IR-Limited
Class A common shares in the merger. Such a holder will generally recognize gain
equal to the difference, if any, between the fair market value of IR-Limited
Class A common shares received in exchange for IR-New Jersey common stock in the
merger and the holder's adjusted tax basis in the holder's shares of IR-New
Jersey common stock exchanged therefor. Generally, any such gain will be capital
gain. Shareholders will not be permitted to recognize any loss realized on the
exchange of their shares of IR-New Jersey common stock in the merger, but their
aggregate adjusted tax basis in IR-Limited Class A common shares received would
equal the aggregate adjusted tax basis of their shares of IR-New Jersey common
stock. Thus, any loss would be preserved.
WE URGE YOU TO CONSULT YOUR OWN TAX ADVISORS REGARDING YOUR PARTICULAR TAX
CONSEQUENCES.
WILL IR-NEW JERSEY BE TAXED AS A RESULT OF THE MERGER OR THE RELATED
REORGANIZATION TRANSACTIONS?
Very likely not. We believe that IR-New Jersey will not incur significant
U.S. federal income or withholding tax as a result of the merger or the related
reorganization transactions.
HAS THE INTERNAL REVENUE SERVICE RENDERED AN OPINION ON THE MERGER OR THE
RELATED REORGANIZATION TRANSACTIONS?
No. We are not requesting any ruling from the Internal Revenue Service.
WHEN DO YOU EXPECT TO COMPLETE THE MERGER?
We hope to complete the merger shortly after the special meeting of IR-New
Jersey shareholders, assuming that it is approved by the shareholders at that
meeting.
WILL I BE ABLE TO TRADE MY SHARES DURING THE TIME BETWEEN THE DATE OF THIS PROXY
STATEMENT/PROSPECTUS AND THE EFFECTIVE TIME OF THE MERGER?
Yes. You will be able to trade your shares during the time between the date
of this proxy statement/ prospectus and the effective time of the merger.
WHY WAS BERMUDA SELECTED AS THE DOMICILE OF THE NEW PARENT COMPANY?
We chose Bermuda for its political stability, legal framework and
business-friendly environment. The first international (i.e., not locally-owned)
company was incorporated in Bermuda in the 1930s, and there are currently many
companies, which have chosen Bermuda for their domicile, that are publicly
traded on U.S. and European markets. Bermuda has an established screening policy
to formally check on the ownership of companies that request domicile there.
Under current Bermuda law, a Bermuda company is not required to pay taxes in
Bermuda on either income or capital gains. In addition, despite certain
differences, the corporate legal system, based on English law, is such that your
rights as an IR-Limited shareholder will be substantially the same as your
rights as a shareholder in IR-New Jersey. We encourage you to read the section
entitled "Comparison of Rights of Shareholders" beginning on page 35 for a more
detailed description of the differences between your rights under New Jersey law
and Bermuda law.
3
WILL THE PROPOSAL AFFECT CURRENT OPERATIONS? WHAT ABOUT THE FUTURE?
The reorganization should have no material impact on how we conduct
day-to-day operations. The location of future operations will depend on the
needs of the business, independent of our legal domicile.
WHAT VOTE IS REQUIRED TO APPROVE THE MERGER?
In order to have a quorum, the holders of record of the shares entitled to
cast a majority of the IR-New Jersey votes must be represented in person or by
proxy at the special meeting. The affirmative vote of at least a majority of the
votes cast by holders of shares present in person or represented by proxy at the
special meeting and entitled to vote as of the record date on the merger is
required to approve the merger. Abstentions are counted as "shares present" at
the special meeting for the purposes of determining whether a quorum exists.
However, since abstentions are not votes cast in favor or against the merger,
they will not affect the outcome of the vote. Proxies submitted by brokers that
do not indicate a vote because brokers do not have discretionary voting
authority and have not received instructions as to how to vote (so-called
"broker non-votes") are also considered "shares present," but also will not
affect the outcome of any vote. See "Special Meeting -- Required Vote for the
Merger" on page 23.
HOW DO I VOTE IF MY SHARES ARE REGISTERED IN MY NAME?
You may vote by any one of the following methods:
1. CALL (866) 246-8472 (toll free) to vote by telephone anytime up to
5:00 p.m., New York time, on December 13, 2001;
2. GO TO THE WEBSITE: http://www.proxyvotenow.com/irc to vote over the
Internet anytime up to 5:00 p.m., New York time, on December 13, 2001; or
3. MARK, SIGN, DATE AND MAIL your proxy card in the enclosed
postage-prepaid envelope; if you are voting by telephone or by the
Internet, please do not return your proxy card.
Please vote as soon as possible even if you currently plan to attend the
special meeting in person, so that your shares may be represented and voted at
the special meeting.
HOW DO I VOTE IF MY BROKER HOLDS MY SHARES IN "STREET NAME?"
You should follow the voting instructions provided by your broker or
complete and return the enclosed proxy card.
IF MY BROKER HOLDS MY SHARES IN "STREET NAME," WILL MY BROKER VOTE MY SHARES FOR
ME?
NO. IF YOU FAIL TO INSTRUCT YOUR BROKER ON HOW TO VOTE YOUR "STREET NAME"
SHARES, YOUR BROKER WILL NOT BE PERMITTED TO VOTE YOUR SHARES. You should
instruct your broker on how to vote your shares or complete and return the
enclosed proxy card.
WHAT DO I DO IF I WANT TO CHANGE MY VOTE?
There are three ways in which you may revoke your proxy and change your
vote:
1. you may send a written notice to our proxy solicitor, Georgeson
Shareholder Communications, Inc., stating that you would like to revoke
your proxy; this notice must be received prior to the special meeting;
2. you may complete and submit a new, later-dated proxy by any of the
three methods described above; the latest dated proxy actually received by
IR-New Jersey prior to the special meeting will be the one that is counted,
and all earlier proxies will be revoked; or
3. you may attend the special meeting and vote in person; however,
simply attending the special meeting will not revoke your proxy.
4
If you have instructed a bank, broker or other nominee to vote your shares,
you must follow the directions you receive from that person to change or revoke
your proxy.
DO I HAVE TO EXCHANGE MY STOCK CERTIFICATE(S)?
No. After the merger is completed, your stock certificate(s) will
automatically represent the same number of IR-Limited Class A common shares. For
further information, please see "The Reorganization -- Automatic Share
Conversion" on page 20.
WHOM DO I CONTACT WITH FURTHER QUESTIONS?
You should contact:
IR-New Jersey: Ingersoll-Rand Company
200 Chestnut Ridge Road
Woodcliff Lake, New Jersey 07677
(201) 573-0123
Attn: Vice President and Secretary
the Proxy Solicitor: Georgeson Shareholder Communications, Inc.
17 State Street
New York, New York 10004
(212) 440-9800 (banks and brokers -- call collect)
(800) 223-2064 (all other inquiries)
5
SUMMARY
This summary highlights selected information from this proxy
statement/prospectus. It does not contain all of the information that is
important to you. The proposed reorganization includes the merger and related
reorganization transactions. To understand the reorganization more fully, and
for a more complete legal description of the merger, you should carefully read
the entire proxy statement/prospectus, including the annexes and the other
documents to which we have referred you. See also "Where You Can Find More
Information" on page 53. The Agreement and Plan of Merger is attached as Annex I
to this proxy statement/ prospectus. The memorandum of association and bye-laws
that will govern IR-Limited are attached as Annex II and Annex III,
respectively. In this document, "we," "us," and "our" refer to IR-New Jersey and
its subsidiaries or IR-Limited and its subsidiaries, as the context requires,
and "you" refers to the shareholders of IR-New Jersey or the shareholders of
IR-Limited, as the context requires. In addition, as the context requires,
references to IR-New Jersey common stock and IR-Limited Class A common shares
include the associated IR-New Jersey preference stock purchase rights and
IR-Limited preference share purchase rights, respectively.
RISK FACTORS
SEE PAGE 14 FOR CERTAIN RISKS THAT SHOULD BE CONSIDERED RELATING TO THE
REORGANIZATION.
PARTIES TO THE MERGER
INGERSOLL-RAND COMPANY
IR-New Jersey was organized in 1905 under the laws of the State of New
Jersey as a consolidation of Ingersoll-Sergeant Drill Company and the Rand Drill
Company, whose businesses were established in the early 1870s. Over the years,
additional products that have been developed internally or obtained through
acquisition have supplemented the original businesses.
IR-New Jersey is a leading provider of climate control, industrial
productivity, infrastructure and security and safety products and services. In
each of these markets, IR-New Jersey offers a diverse product portfolio that
includes well-recognized industrial and commercial brands.
Climate Control. Climate Control offers a range of temperature-control
products for protecting food and other perishables. These products include:
Thermo King transport temperature control units for truck trailers, small trucks
and seagoing containers, air conditioning for buses, and Hussmann refrigerated
display cases for supermarkets, delicatessens and other commercial and
institutional refrigeration applications.
Industrial Productivity. Industrial Productivity has a diverse group of
businesses offering products and services to enhance industrial efficiency.
These products and services include: Ingersoll-Rand air compressors and
components for compressed-air systems, tools and material handling equipment,
fluid handling products, Club Car golf cars and utility vehicles and Torrington
bearings, components and motion-control technologies. In addition, this segment
includes the Independent Power business which focuses on identifying, developing
and marketing alternative-power and energy-management solutions and includes
IR-New Jersey's PowerWorks microturbine technologies.
Infrastructure. Infrastructure supplies products and services for all
types of construction projects and industrial and commercial development,
including Bobcat compact equipment and Ingersoll-Rand road pavers, compactors,
portable-power products and drilling equipment.
Security and Safety. Security and Safety markets architectural hardware
and access-control products and services for residential, commercial and
institutional buildings. Led by the familiar Schlage brand, products include
locks and locksets, door closers, exit devices, steel doors and frames,
power-operated doors, architectural columns and biometric and electronic access
control technologies.
INGERSOLL-RAND COMPANY LIMITED
IR-Limited is a newly-formed Bermuda company and is currently wholly-owned
by IR-New Jersey. IR-Limited has no significant assets or capitalization and has
not engaged in any business or other activities
6
other than in connection with its formation and the merger and related
reorganization transactions. As a result of the reorganization, IR-Limited will
become the indirect parent holding company of IR-New Jersey.
IR MERGER CORPORATION
IR Merger Corporation (which we refer to as IR-Merger Sub) is a
newly-formed New Jersey company and a wholly-owned, indirect subsidiary of
IR-Limited. IR-Merger Sub was formed to accomplish the proposed merger. It has
no significant assets or capitalization and has not engaged in any business or
other activities except in connection with its formation and the merger and
related reorganization transactions.
The principal executive offices of IR-New Jersey, IR-Limited and IR-Merger
Sub are located at 200 Chestnut Ridge Road, Woodcliff Lake, New Jersey 07677.
The telephone number of each party at that address is (201) 573-0123. The
principal registered office of IR-Limited is located at Clarendon House, 2
Church Street, Hamilton HM 11, Bermuda.
THE REORGANIZATION (SEE PAGE 17)
IR-New Jersey's board of directors has unanimously approved, and recommends
that you adopt, the Agreement and Plan of Merger that effectively changes our
domicile from New Jersey to Bermuda. The terms of the merger are set forth in
the Agreement and Plan of Merger attached as Annex I to this proxy statement/
prospectus. As a result of the merger, your shares of IR-New Jersey common stock
will automatically become IR-Limited Class A common shares so that you will own
shares in a Bermuda company rather than a New Jersey company. In addition, the
preference stock purchase rights associated with your IR-New Jersey common stock
will expire and you will receive an equal number of equivalent preference share
purchase rights with each IR-Limited Class A common share. For a more detailed
description of the major differences between your rights under New Jersey law
and Bermuda law, please see "Comparison of Rights of Shareholders" on page 35.
After completion of the reorganization, IR-Limited and its subsidiaries will
continue to conduct the same businesses that IR-New Jersey and its subsidiaries
now conduct.
The reorganization will involve the following steps:
1. IR-Merger Sub will merge into IR-New Jersey. IR-New Jersey will be
the surviving company and become a wholly-owned, indirect subsidiary of
IR-Limited.
2. In the merger, the outstanding shares of IR-New Jersey common stock
will automatically become IR-Limited Class A common shares, and the current
shareholders of IR-New Jersey will own exactly the same number of
IR-Limited Class A common shares as they currently own of IR-New Jersey
common stock. For a description of the terms of IR-Limited Class A common
shares, please see "Description of Authorized Shares of IR-Limited" on page
26.
3. As part of the reorganization, IR-New Jersey and certain of its
subsidiaries will transfer shares of certain existing subsidiaries of
IR-New Jersey (the "Transferred Assets") and issue certain debt (the
"Debt") to IR-Limited in exchange for which IR-Limited will issue that
number of IR-Limited Class B common shares that has an aggregate value
equal to the fair market value of the Transferred Assets and the amount of
the Debt. For a description of the terms of IR-Limited Class B common
shares, please see "Description of Authorized Shares of IR-Limited" on page
26.
4. The number of IR-Limited Class B common shares owned by IR-New
Jersey and other IR-Limited subsidiaries will reflect the fair market
values as of the effective time of the merger of the Transferred Assets and
IR-New Jersey, based on the market value of IR-New Jersey common stock at
that time. We currently estimate the aggregate number of IR-Limited Class B
common shares to be issued for the Transferred Assets and for the Debt to
be approximately 140,000,000 shares.
IR-New Jersey shareholders will not be required to exchange their stock
certificate(s) as a result of the merger. Each outstanding stock certificate
representing shares of IR-New Jersey common stock will automatically represent
the same number of IR-Limited Class A common shares. Following the merger,
7
certificates bearing the name of "Ingersoll-Rand Company Limited" will be issued
in the normal course upon surrender of certificates bearing the name of
"Ingersoll-Rand Company" for exchange or transfer.
REASONS FOR THE REORGANIZATION (SEE PAGE 17)
We believe that reorganizing as a Bermuda company will enable us to realize
a variety of potential business, financial and strategic benefits.
1. The reorganization should help enhance our business growth and cash
flow. We also believe the reorganization will allow us to implement our
business strategy more effectively. Growth through acquisitions and
investments in higher-growth product lines are important parts of our
strategy, and we believe significant growth opportunities currently exist
in the marketplace. Any improvement in our cash flow should help us to
develop higher-growth product lines and to acquire higher-growth
businesses. Increased cash flow would also put us in a better position to
reduce the amount of our debt.
2. We anticipate that the reorganization will reduce our worldwide
effective tax rate and may facilitate tax savings through a more flexible
corporate structure. However, we cannot give any assurance as to the amount
of taxes we will pay as a result of or after the reorganization. The amount
of taxes we will pay will depend in part on our treatment by the taxing
authorities in the jurisdictions in which we operate.
3. We also believe that the reorganization may increase IR-Limited's
attractiveness to non-U.S. investors.
THE REORGANIZATION WILL EXPOSE US AND YOU TO SOME RISKS. FOR A DISCUSSION
OF RISK FACTORS ASSOCIATED WITH THE REORGANIZATION, PLEASE SEE THE DISCUSSION
UNDER "RISK FACTORS" ON PAGE 14.
CONDITIONS TO CONSUMMATION OF THE MERGER (SEE PAGE 19)
The consummation of the merger is conditioned on several factors, including
the affirmative vote of at least a majority of the votes cast by holders of
shares present in person or represented by proxy at the special meeting and
entitled to vote as of the record date, and that none of the parties to the
Agreement and Plan of Merger are subject to any governmental or regulatory
authority that prohibits the consummation of the reorganization. For additional
factors, please see "The Reorganization -- Conditions to Consummation of the
Merger" on page 19.
EFFECTIVE TIME (SEE PAGE 19)
If the Agreement and Plan of Merger is adopted by the requisite vote of
IR-New Jersey's shareholders, the merger will become effective pursuant to a
certificate of merger filed with the Treasurer of the State of New Jersey in
accordance with New Jersey law. IR-New Jersey expects to file the certificate of
merger following the special meeting and cause the merger to become effective as
soon as possible thereafter in accordance with the certificate of merger.
In the event the conditions to the merger are not satisfied, the merger may
be abandoned or delayed even after the Agreement and Plan of Merger has been
adopted by our shareholders. In addition, the merger may be abandoned or delayed
for any reason by the board of directors of IR-New Jersey or IR-Limited, in
their sole discretion, at any time prior to its becoming effective, even though
the Agreement and Plan of Merger has been adopted by our shareholders and all
conditions to the merger have been satisfied. For additional details, please see
"The Reorganization -- Amendment or Termination" on page 19.
INCOME TAX CONSEQUENCES OF THE REORGANIZATION (SEE PAGE 48)
Generally, for U.S. federal income tax purposes, shareholders who are U.S.
persons will recognize gain, if any, but not loss, on the receipt of IR-Limited
Class A common shares in the merger. Such a holder will generally recognize gain
equal to the difference, if any, between the fair market value of the IR-Limited
Class A common shares received in exchange for IR-New Jersey common stock in the
merger and the
8
holder's adjusted tax basis in the holder's shares of IR-New Jersey common stock
exchanged therefor. Generally, any such gain will be capital gain. Shareholders
will not be permitted to recognize any loss realized on the exchange of their
shares of IR-New Jersey common stock in the merger, but their aggregate adjusted
tax basis in the IR-Limited Class A common shares received would equal the
aggregate adjusted tax basis of their shares of IR-New Jersey common stock.
Thus, any loss would be preserved.
WE ENCOURAGE YOU TO READ THE SECTION ENTITLED "INCOME TAX CONSEQUENCES OF
THE REORGANIZATION" ON PAGE 48 FOR A MORE DETAILED DESCRIPTION OF THESE TAX
CONSEQUENCES. WE ALSO URGE YOU TO CONSULT YOUR OWN TAX ADVISORS REGARDING YOUR
PARTICULAR TAX CONSEQUENCES.
RIGHTS OF SHAREHOLDERS (SEE PAGES 26 AND 35)
The principal attributes of IR-New Jersey common stock and IR-Limited Class
A common shares will be similar. However, there are differences between your
rights as a shareholder under New Jersey law and Bermuda law, which is modeled
after English law. In addition, there are differences between our current
certificate of incorporation and by-laws and IR-Limited's memorandum of
association and bye-laws. We encourage you to read the sections entitled
"Description of Authorized Shares of IR-Limited" on page 26 for a more detailed
description of IR-Limited Class A common shares and "Comparison of Rights of
Shareholders" on page 35 for a more detailed discussion of these differences.
STOCK COMPENSATION PLANS (SEE PAGE 21)
As part of the reorganization, IR-New Jersey's stock-based compensation and
equity incentive plans will be amended as necessary to give effect to the
reorganization including to provide that IR-Limited Class A common shares will
thereafter be issued, held, available or used to measure benefits, as
appropriate, under the plans in lieu of IR-New Jersey common stock, including
upon the exercise of any options issued under the plans. As part of the
reorganization, certain of IR-New Jersey's stock-based compensation and equity
incentive plans will also be adopted and assumed by IR-Limited. Shareholder
approval of the Agreement and Plan of Merger will also constitute any required
shareholder approval of the plan amendments and the adoption and assumption by
IR-Limited of the plans it assumes as part of the reorganization. For additional
details, please see "The Reorganization -- Stock Compensation Plans" on page 21.
DIVIDEND REINVESTMENT PLAN (SEE PAGE 21)
As part of the reorganization, IR-New Jersey's dividend reinvestment plan
will be amended to provide that IR-Limited will assume all the rights and
obligations of IR-New Jersey under the plan and such plan will be deemed to
provide for the issuance or purchase of, or otherwise relate to, IR-Limited
Class A common shares. Shareholder approval of the Agreement and Plan of Merger
will also constitute any required shareholder approval of the amendments to
IR-New Jersey's dividend reinvestment plan and shall constitute any required
shareholder approval of the adoption and assumption of the dividend reinvestment
plan by IR-Limited.
SHAREHOLDER RIGHTS PLAN (SEE PAGE 22)
IR-New Jersey has adopted a shareholder rights plan under which preference
stock purchase rights have been issued to shareholders of IR-New Jersey at the
rate of one right for each outstanding share of IR-New Jersey common stock. In
connection with the merger, the IR-New Jersey shareholder rights plan will be
amended to provide that the existing rights will expire immediately prior to the
effective time of the merger. This amendment of the IR-New Jersey shareholder
rights plan will not result in the issuance of any preference stock pursuant to
the rights or trigger redemption of the rights and will effectively terminate
the IR-New Jersey shareholder rights plan. Shareholder approval of the Agreement
and Plan of Merger will also constitute any required shareholder approval of the
amendment to the IR-New Jersey shareholder rights plan.
The board of directors of IR-Limited has adopted a plan substantially
similar to the IR-New Jersey shareholder rights plan, which plan provides for
the issuance of new preference share purchase rights that are equivalent to the
IR-New Jersey preference stock purchase rights. The IR-Limited shareholder
rights plan
9
will expire on the original expiration date of the IR-New Jersey shareholder
rights plan. Initially, the new rights will attach to all IR-Limited Class A
common shares issued on or after the effective time of the merger.
For additional details, please see "The Reorganization -- Shareholder
Rights Plan" on page 22 and "Comparison of Rights of Shareholders -- Shareholder
Rights Plan" on page 46.
STOCK EXCHANGE LISTING (SEE PAGE 22)
Immediately following the merger, IR-Limited Class A common shares will be
listed on the New York Stock Exchange under the symbol "IR," the symbol under
which IR-New Jersey common stock is currently listed. Since IR-Limited Class B
common shares will be held only by IR-New Jersey and other wholly-owned
subsidiaries of IR-Limited, they will not be registered with the Securities and
Exchange Commission or pursuant to any foreign securities laws and will not be
publicly traded. IR-New Jersey is currently included in the S&P 500 Index. We
have been advised by Standard & Poor's that the company's status as a member of
the S&P 500 Index will not be affected by the pending change of domicile to
Bermuda.
MARKET PRICE
The closing price per share of IR-New Jersey common stock on the New York
Stock Exchange was US$39.84 on October 15, 2001, the last trading day before the
public announcement of the reorganization. The high and low sales prices of
IR-New Jersey's common stock on the New York Stock Exchange were US$39.95 and
US$39.11 on October 15, 2001. We urge you to check current stock prices before
you make any decision about the merger.
RIGHTS OF DISSENTING SHAREHOLDERS (SEE PAGE 21)
Shareholders voting against the Agreement and Plan of Merger will not be
eligible for dissenters' rights.
ACCOUNTING TREATMENT OF THE REORGANIZATION (SEE PAGE 22)
The reorganization will be accounted for as a reorganization of entities
under common control that will not result in changes in our historical
consolidated carrying amount of assets, liabilities and shareholders' equity.
SPECIAL MEETING (SEE PAGE 23)
TIME, DATE AND PLACE
The special meeting of shareholders will be held at 2:00 p.m., local time,
on December 14, 2001, at 200 Chestnut Ridge Road, Woodcliff Lake, New Jersey.
RECORD DATE
Only IR-New Jersey shareholders of record at the close of business on
October 31, 2001, as shown in our records, will be entitled to vote, or to grant
proxies to vote, at the special meeting.
QUORUM
In order to have a quorum, the holders of record of the shares entitled to
cast a majority of the IR-New Jersey votes must be represented in person or by
proxy at the special meeting.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS OF IR-NEW JERSEY HAS UNANIMOUSLY APPROVED THE
AGREEMENT AND PLAN OF MERGER AND RECOMMENDS THAT YOU VOTE "FOR" ITS ADOPTION.
10
REQUIRED VOTE FOR THE MERGER (SEE PAGE 20)
In order to approve the merger, the Agreement and Plan of Merger must be
adopted by the affirmative vote of at least a majority of the votes cast by the
holders of shares present in person or represented by proxy at the special
meeting and entitled to vote as of the record date. Abstentions will be counted
as "shares present" at the special meeting for the purposes of determining
whether a quorum exists. However, since abstentions are not votes cast in favor
or against the merger, they will not affect the outcome of the vote. Proxies
submitted by brokers that do not indicate a vote because brokers do not have
discretionary voting authority and have not received instructions as to how to
vote (so-called "broker non-votes") are also considered "shares present," but
also will not affect the outcome of any vote. As of October 31, 2001, the record
date, there were 167,986,731 shares of IR-New Jersey common stock outstanding
and entitled to vote. As of the record date, our directors and executive
officers and their affiliates owned and were entitled to vote, in the aggregate,
approximately 73,000 shares of IR-New Jersey common stock, which represents less
than 1% of the outstanding IR-New Jersey common stock. These persons have
informed us that they intend to vote their shares in favor of the proposal to
adopt the Agreement and Plan of Merger.
VOTING YOUR SHARES AND CHANGING YOUR VOTE (SEE PAGE 24)
GENERAL
Shareholders of record may vote by any one of the following methods:
1. CALL (866) 246-8472 (toll free) to vote by telephone anytime up to
5:00 p.m., New York time, on December 13, 2001;
2. GO TO THE WEBSITE: http://www.proxyvotenow.com/irc to vote over the
Internet anytime up to 5:00 p.m., New York time, on December 13, 2001; or
3. MARK, SIGN, DATE AND MAIL your proxy card in the enclosed
postage-prepaid envelope; if you are voting by telephone or by the
Internet, please do not return your proxy card.
If you hold your shares of IR-New Jersey common stock in the name of a
bank, broker or other nominee, you should follow the instructions provided by
your bank, broker or nominee when voting your shares.
You may be receiving these materials because of shares held for you in
certain stock-based compensation plans of IR-New Jersey in which you
participate. In that case, you may use the enclosed proxy card to instruct the
plan trustees of those plans how to vote your shares, or give those instructions
over the telephone or the Internet. They will vote the shares in accordance with
your instructions and the terms of the applicable plan. If you do not provide
voting instructions for shares held for you in any of these plans, the plan
trustees will vote these shares in the same ratio as the shares for which voting
instructions are provided.
To be effective, a form of proxy must be received by us prior to the
beginning of voting at the special meeting.
REVOCATION
There are three ways in which you may revoke your proxy and change your
vote:
1. you may send a written notice to our proxy solicitor, Georgeson
Shareholder Communications, Inc., stating that you would like to revoke
your proxy; this notice must be received prior to the special meeting;
2. you may complete and submit a new later-dated proxy by any of the
three methods described above; the latest dated proxy actually received by
IR-New Jersey prior to the special meeting will be the one that is counted,
and all earlier proxies will be revoked; or
3. you may attend the special meeting and vote in person; however,
simply attending the special meeting will not revoke your proxy.
If you have instructed a bank, broker or other nominee to vote your shares,
you must follow the directions you receive from that person to change or revoke
your proxy.
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SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA
The selected historical consolidated financial data of IR-New Jersey in the
table below was derived from IR-New Jersey's audited consolidated financial
statements as of and for the five years ended December 31, 2000, IR-New Jersey's
unaudited interim consolidated financial statements as of and for the six months
ended June 30, 2001 and 2000 and IR-New Jersey's Current Report on Form 8-K
dated September 30, 2001. In IR-New Jersey management's opinion, the unaudited
interim consolidated financial statements have been prepared on the same basis
as the audited consolidated financial statements and include all adjustments,
consisting of normal recurring adjustments, necessary to present fairly the
results of operations and financial position of IR-New Jersey for the periods
presented. This data should be read in conjunction with the audited and
unaudited interim consolidated financial statements of IR-New Jersey, including
the notes to the financial statements and the Form 8-K referred to above,
incorporated by reference into this proxy statement/ prospectus.
We have not included data for IR-Limited or IR-Merger Sub because such
entities did not conduct business during any of the periods discussed below.
SIX MONTHS ENDED
JUNE 30, YEARS ENDED DECEMBER 31,
--------------------- -----------------------------------------------------
2001 2000 2000 1999 1998 1997 1996
--------- --------- --------- -------- -------- -------- --------
(IN MILLIONS, EXCEPT PER SHARE FIGURES)
INCOME STATEMENT DATA:
Revenues................................. $ 4,763.3 $ 4,649.0 $ 9,621.6 $7,842.6 $7,540.2 $6,374.2 $5,973.5
Income from continuing operations...... $ 112.2 $ 309.4 $ 546.2 $ 563.1 $ 481.6 $ 367.6 $ 342.3
Income from discontinued operations,
net of taxes......................... -- 2.0 123.2 28.0 27.5 12.9 15.7
Net income............................. $ 112.2 $ 311.4 $ 669.4 $ 591.1 $ 509.1 $ 380.5 $ 358.0
INCOME PER COMMON SHARE DATA:
Basic:
Income from continuing operations...... $ 0.69 $ 1.92 $ 3.39 $ 3.44 $ 2.94 $ 2.25 $ 2.12
Income from discontinued operations,
net of taxes......................... -- 0.01 0.76 0.17 0.17 0.08 0.10
Net income............................. $ 0.69 $ 1.93 $ 4.15 $ 3.61 $ 3.11 $ 2.33 $ 2.22
Diluted:
Income from continuing operations...... $ 0.69 $ 1.90 $ 3.36 $ 3.40 $ 2.91 $ 2.23 $ 2.11
Income from discontinued operations,
net of taxes......................... -- 0.01 0.76 0.17 0.17 0.08 0.10
Net income............................. $ 0.69 $ 1.91 $ 4.12 $ 3.57 $ 3.08 $ 2.31 $ 2.21
BALANCE SHEET DATA (at period end)
Total assets............................. $10,984.6 $11,596.7 $10,944.4 $8,390.4 $7,918.1 $8,026.7 $5,235.6
Long-term debt, excluding current
maturities............................. 2,992.5 1,676.1 1,540.4 2,113.3 2,166.0 2,528.0 1,163.8
Shareholders' equity..................... 3,841.0 3,221.1 3,481.2 3,073.2 2,721.8 2,357.7 2,098.9
Cash dividends per common share.......... $ 0.34 $ 0.34 $ 0.68 $ 0.64 $ 0.60 $ 0.57 $ 0.52
12
SUMMARY PRO FORMA FINANCIAL INFORMATION
A pro forma condensed consolidated balance sheet for IR-Limited is not
presented in this proxy statement/prospectus because there would be no
significant pro forma adjustments required to be made to the historical
consolidated balance sheet of IR-New Jersey as of December 31, 2000 and June 30,
2001. That balance sheet is included in IR-New Jersey's Quarterly Report on Form
10-Q for the six months ended June 30, 2001 and IR-New Jersey's Current Report
on Form 8-K dated September 30, 2001, which are incorporated by reference
herein.
A pro forma condensed consolidated income statement for IR-Limited is not
presented in this proxy statement/prospectus because there would be no
significant pro forma adjustments required to be made to income from operations
in the historical consolidated income statements of IR-New Jersey for the year
ended December 31, 2000 or the six months ended June 30, 2001. Those income
statements are included in IR-New Jersey's Annual Report on Form 10-K for the
year ended December 31, 2000, IR-New Jersey's Quarterly Report on Form 10-Q for
the six months ended June 30, 2001 and IR-New Jersey's Current Report on Form
8-K dated September 30, 2001, which are incorporated by reference herein.
Costs incurred in connection with the reorganization are not expected to be
material and will be expensed as incurred.
RECENT DEVELOPMENTS
On October 18, 2001, we reported our results for the third quarter and nine
months ended September 30, 2001. All amounts reported include the results of
Dresser-Rand Company on a fully consolidated basis since acquisition.
Revenues from continuing operations in the third quarter were $2,383.1
million, a decrease of 5% compared to the third quarter of 2000. Revenues for
the first nine months of 2001 were $7,146.4 million, a slight decrease from the
$7,160.9 million reported for the comparable period in 2000.
Reported net earnings for the third quarter of 2001 were $33.9 million or
diluted earnings per share ("DEPS") of 20 cents. Net earnings were $76.3
million, excluding charges related to restructuring and productivity
investments, or DEPS of 45 cents. Reported continuing net earnings for the third
quarter of 2000 were $130.7 million or DEPS of 80 cents. Third-quarter 2000 net
earnings from continuing operations were $139.6 million, or DEPS of 86 cents,
excluding one-time gains related to the sale of Ingersoll-Dresser Pump Company
and the compression services business of Dresser-Rand Company, as well as
charges related to restructuring and productivity investments.
Reported net earnings for the nine months ended September 30, 2001 were
$146.1 million or DEPS of 89 cents. For the nine months, net earnings excluding
restructuring and productivity investments, were $249.2 million, or DEPS of
$1.51. Reported continuing net earnings for the nine months ended September 30,
2000 were $440.1 million or DEPS of $2.70. For the first nine months of 2000,
net earnings from continuing operations excluding one-time gains, restructuring
and productivity investments, were $449.0 million, or DEPS of $2.76.
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RISK FACTORS
THE REORGANIZATION AND RELATED TRANSFERS OF ASSETS COULD RESULT IN A TAXABLE
GAIN.
In connection with the reorganization, IR-New Jersey and certain of its
subsidiaries intend to transfer the Transferred Assets and issue the Debt to
IR-Limited in exchange for which IR-Limited will issue IR-Limited Class B common
shares to IR-New Jersey and those subsidiaries. There is a possibility of U.S.
withholding tax if the Internal Revenue Service successfully disputes the value
of the Transferred Assets. Therefore, while we believe that IR-New Jersey (and
IR-Limited) will not incur significant U.S. federal income or withholding taxes
as a result of the transfer of the Transferred Assets, our projections will not
be binding on the Internal Revenue Service. There can be no assurance that our
anticipated tax costs with respect to the Transferred Assets will be borne out,
that the Internal Revenue Service will not contest our determination, or that
the Internal Revenue Service will not succeed in any such contest.
CERTAIN SHAREHOLDERS OF IR-LIMITED MAY BE SUBJECT TO ADDITIONAL TAX IF
IR-LIMITED OR ANY OF ITS NON-U.S. SUBSIDIARIES IS CONSIDERED A "CONTROLLED
FOREIGN CORPORATION" OR "CFC" UNDER CURRENT U.S. TAX LAWS.
A non-U.S. corporation (a "foreign corporation"), such as IR-Limited, will
constitute a "controlled foreign corporation" or "CFC" for U.S. federal income
tax purposes if U.S. shareholders owning (directly, indirectly, or
constructively) 10% or more of the foreign corporation's total combined voting
power collectively own (directly, indirectly, or constructively) more than 50%
of the total combined voting power or total value of the foreign corporation's
stock. Following the merger, IR-New Jersey will be deemed for tax purposes,
through its ownership of the non-voting Class B common shares, to own up to
approximately 45% of the total value of the shares of IR-Limited. As a
consequence, any Class A common shareholder who is considered to own 10% of the
voting power in IR-Limited could cause the foreign subsidiaries of IR-Limited or
(if the Internal Revenue Service successfully takes the position that the Class
B common shares held by IR-New Jersey in IR-Limited are voting stock) IR-Limited
itself to be treated as a CFC.
If IR-Limited or any of its foreign subsidiaries is treated as a CFC, this
status should have no adverse effect on any shareholder of IR-Limited who does
not own (directly, indirectly, or constructively) 10% or more of the total
combined voting power of all classes of stock of IR-Limited or any of its
foreign subsidiaries. See "Comparison of Rights of Shareholders -- Shareholder
Meetings -- Voting Rights" on page 35. If, however, IR-Limited or any of its
foreign subsidiaries is treated as a CFC for an uninterrupted period of 30 days
or more during any taxable year, any U.S. shareholder who owns (directly,
indirectly, or constructively) 10% or more of the total combined voting power of
all classes of stock of IR-Limited or the subsidiary on any day during the
taxable year and who directly or indirectly owns any stock in the corporation on
the last day of such year in which it is a CFC will have to include in its gross
income for U.S. federal income tax purposes its pro rata share of the
corporation's "subpart F income" relating to the period during which the
corporation is a CFC.
In addition, gain on the sale of stock in IR-Limited, if treated as a CFC,
realized by such a shareholder would be treated as ordinary income to the extent
of the shareholder's proportionate share of the undistributed earnings and
profits of IR-Limited and its CFC subsidiaries accumulated during the
shareholder's holding period of the stock while IR-Limited is a CFC.
If the U.S. shareholder is a corporation, however, it may be eligible to
credit against its U.S. tax liability with respect to these potential inclusions
foreign taxes paid on the earnings and profits associated with the included
income. A disposition of shares by a U.S. shareholder may result in termination
of the CFC status of IR-Limited or its foreign subsidiaries. See "Income Tax
Consequences of the Reorganization -- U.S. Federal Income Tax Consequences of
the Reorganization -- Controlled Foreign Corporation Considerations" on page 50.
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THE INTERNAL REVENUE SERVICE AND NON-U.S. TAXING AUTHORITIES MAY NOT AGREE WITH
OUR TAX TREATMENT OF VARIOUS ITEMS.
We believe that the reorganization will help enhance our business growth
and cash flow and reduce our worldwide effective tax rate. However, we cannot
give any assurance as to the amount of taxes we will pay as a result of or after
the reorganization. The amount of taxes we will pay will depend in part on our
treatment by the taxing authorities in the jurisdictions in which we operate.
IR-LIMITED MAY BECOME SUBJECT TO U.S. CORPORATE INCOME TAX, WHICH WOULD REDUCE
IR-LIMITED'S NET INCOME.
IR-New Jersey is currently subject to U.S. corporate income tax on its
worldwide income. After the reorganization, the earnings of IR-New Jersey and
its U.S. subsidiaries will continue to be subject to U.S. corporate income tax.
IR-Limited believes that after the reorganization its non-U.S. operations will
generally not be subject to U.S. tax other than withholding taxes. However, if
the Internal Revenue Service successfully contends that IR-Limited or any of its
non-U.S. affiliates is engaged in a trade or business in the U.S., IR-Limited or
that non-U.S. affiliate would, subject to possible income tax treaty exemptions,
be required to pay U.S. corporate income tax and/or branch profits tax on income
that is effectively connected with such trade or business.
TAX LAW CHANGES COULD ADVERSELY AFFECT IR-LIMITED, ITS SUBSIDIARIES AND ITS
SHAREHOLDERS.
Changes in tax laws, treaties or regulations or the interpretation or
enforcement thereof could adversely affect the tax consequences of the
reorganization to IR-Limited, its subsidiaries and its shareholders. In
addition, if the Internal Revenue Service or other taxing authorities do not
agree with our assessment of the effects of such laws, treaties and regulations,
this could have a material adverse effect on the tax consequences of the
reorganization.
ANTI-TAKEOVER PROVISIONS IN IR-LIMITED'S BYE-LAWS AND ITS SHAREHOLDER RIGHTS
PLAN WILL MIRROR CERTAIN EXISTING ANTI-TAKEOVER PROVISIONS IN EFFECT WITH
RESPECT TO IR-NEW JERSEY.
Provisions in IR-Limited's bye-laws and shareholder rights plan, which
mirror certain provisions in IR-New Jersey's certificate of incorporation,
by-laws and shareholder rights plan and of the New Jersey Business Corporation
Act (the "NJBCA"), could discourage 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 by
another party. These provisions include:
- a classified board of directors;
- the possible dilution of a potential acquiror's interest in IR-Limited as
a result of the operation of the IR-Limited shareholder rights plan; and
- a requirement that 80% of all shareholders approve a business combination
with any interested shareholder (generally, a 10% or greater shareholder)
if a majority of the board of directors has not previously approved the
transaction.
Similar to the authority of IR-New Jersey's board of directors, the board
of directors of IR-Limited also may issue preference shares and determine their
rights and qualifications. The issuance of preference shares may delay, defer or
prevent a merger (referred to under Bermuda law as an "amalgamation"), tender
offer or proxy contest involving IR-Limited. This may cause the market price of
IR-Limited Class A common shares to significantly decrease. See "Description of
Authorized Shares of IR-Limited -- Anti-Takeover Provisions" on page 30,
"-- Shareholder Rights Plan" on page 32 and "Comparison of Rights of
Shareholders -- Issuance of Preference Shares/Stock" on page 42.
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THE ENFORCEMENT OF JUDGMENTS IN SHAREHOLDER SUITS AGAINST IR-LIMITED MAY BE MORE
DIFFICULT.
IR-Limited is a Bermuda company. IR-Limited has been advised by its Bermuda
counsel, Conyers Dill & Pearman, that a judgment for the payment of money
rendered by a court in the U.S. based on civil liability would not be
automatically enforceable in Bermuda. IR-Limited has also been advised by
Conyers Dill & Pearman that with respect to a final and conclusive judgment
obtained in a court of competent jurisdiction in the U.S. under which a sum of
money is payable (other than a sum of money payable in respect of multiple
damages, taxes or other charges of a like nature or in respect of a fine or
other penalty), a Bermuda court would be expected to enforce a judgment based
thereon, provided that (a) such courts had proper jurisdiction over the parties
subject to such judgment, (b) such courts did not contravene the rules of
natural justice of Bermuda, (c) such judgment was not obtained by fraud, (d) the
enforcement of the judgment would not be contrary to the public policy of
Bermuda, (e) no new admissible evidence relevant to the action is submitted
prior to the rendering of the judgment by the courts of Bermuda and (f) there is
due compliance with the correct procedures under the laws of Bermuda.
As a result, it may be difficult for a shareholder to effect service of
process within the U.S. or to enforce judgments obtained against IR-Limited in
U.S. courts. IR-Limited will irrevocably agree that it may be served with
process with respect to actions based on offers and sales of securities made in
the U.S. by having Ingersoll-Rand Company, 200 Chestnut Ridge Road, Woodcliff
Lake, New Jersey 07677, be IR-Limited's U.S. agent appointed for that purpose.
A Bermuda court may impose civil liability on IR-Limited or its directors
or officers in a suit brought in the Supreme Court of Bermuda against IR-Limited
or such persons with respect to a violation of U.S. federal securities laws,
provided that the facts surrounding such violation would constitute or give rise
to a cause of action under Bermuda law.
16
THE REORGANIZATION
STRUCTURE OF THE REORGANIZATION
IR-New Jersey's board of directors has unanimously approved, and recommends
that you adopt, the Agreement and Plan of Merger that effectively changes our
domicile from New Jersey to Bermuda. The terms of the merger are set forth in
the Agreement and Plan of Merger attached as Annex I to this proxy statement/
prospectus. As a result of the merger, your shares of IR-New Jersey common stock
will automatically become the same number of IR-Limited Class A common shares so
that you will own shares in a Bermuda company rather than a New Jersey company.
In addition, the preference stock purchase rights associated with your IR-New
Jersey common stock will expire and you will receive an equal number of
equivalent preference share purchase rights with each IR-Limited Class A common
share. After completion of the reorganization, you will own an interest in a
Bermuda holding company which, through IR-New Jersey and IR-Limited's other
subsidiaries, will continue to conduct the same businesses that IR-New Jersey
and its subsidiaries now conduct.
The reorganization will involve the following steps:
1. IR-Merger Sub will merge into IR-New Jersey. IR-New Jersey will be
the surviving company and become a wholly-owned, indirect subsidiary of
IR-Limited.
2. In the merger, the outstanding shares of IR-New Jersey common stock
will automatically become IR-Limited Class A common shares, and the current
shareholders of IR-New Jersey will own exactly the same number of
IR-Limited Class A common shares as they currently own of IR-New Jersey
common stock. IR-New Jersey shareholders will not be required to exchange
their stock certificate(s) as a result of the merger. Each outstanding
stock certificate representing shares of IR-New Jersey common stock will
automatically represent the same number of IR-Limited Class A common shares
following the merger. For a description of the terms of IR-Limited Class A
common shares, please see "Description of Authorized Shares of IR-Limited."
3. As part of the reorganization, IR-New Jersey and certain of its
subsidiaries will transfer the Transferred Assets and issue the Debt to
IR-Limited in exchange for which IR-Limited will issue that number of
IR-Limited Class B common shares that has an aggregate value equal to the
fair market value of the Transferred Assets and the amount of the Debt. For
a description of the terms of IR-Limited Class B common shares, please see
"Description of Authorized Shares of IR-Limited."
4. The number of IR-Limited Class B common shares owned by IR-New
Jersey and other IR-Limited subsidiaries will reflect the fair market
values as of the effective time of the merger of the Transferred Assets and
IR-New Jersey, based on the market value of IR-New Jersey common stock at
that time. We currently estimate the aggregate number of IR-Limited Class B
common shares to be issued for the Transferred Assets and for the Debt to
be approximately 140,000,000 shares.
REASONS FOR THE REORGANIZATION
GENERAL
We believe that reorganizing as a Bermuda company will allow us to realize
a variety of potential business, financial and strategic benefits. In
particular, the board of directors is recommending the reorganization because it
believes that the reorganization should:
- help enhance business growth;
- result in a more favorable corporate structure for expansion of our
current business;
- improve expected cash flow for use in investing in further earnings
growth, including by developing higher-growth product lines and the
complementary higher-growth businesses;
- improve expected cash flow for use in reducing the amount of our debt;
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- reduce our worldwide effective tax rate;
- enable us to implement our business strategy more effectively; and
- expand our investor base as IR-Limited's shares may become more
attractive to non-U.S. investors.
We discuss some of these expected benefits in more detail below.
EFFECT ON BUSINESS STRATEGY
The reorganization should help enhance our business growth and cash flow.
We also believe that the reorganization will enable us to implement our business
strategy more effectively. Growth through acquisition and investment in
higher-growth product lines are important parts of our strategy and we believe
significant growth opportunities currently exist in the marketplace. Any
improvement in our cash flow should help us to develop higher-growth product
lines and to acquire higher-growth businesses. Increased cash flow would also
put us in a better position to reduce the amount of our debt.
EXPECTED TAX BENEFITS
IR-New Jersey is currently subject to U.S. corporate income tax on its
worldwide income. After the reorganization, the earnings of IR-New Jersey and
its U.S. subsidiaries will continue to be subject to U.S. corporate income tax.
IR-Limited believes that after the reorganization its non-U.S. operations will
generally not be subject to U.S. tax other than withholding taxes. As a result,
we believe the reorganization:
- will reduce our worldwide effective tax rate; and
- may facilitate tax savings through a more flexible corporate structure.
As a result of the reorganization, we expect to realize annual, incremental
net earnings of at least $40 million and expect to realize a one-time benefit to
net earnings in the fourth quarter of 2001 of $50 million to $60 million, net of
costs to effect the reorganization. However, we cannot give any assurance as to
the amount of taxes we will pay as a result of or after the reorganization. The
amount of taxes we will pay will depend in part on our treatment by the taxing
authorities in the jurisdictions in which we operate.
POTENTIAL EXPANSION OF INVESTOR BASE
We believe that the reorganization may increase IR-Limited's attractiveness
to non-U.S. investors. Distributions with respect to stock in a U.S. corporation
to nonresident aliens can be subject to withholding taxes under the Internal
Revenue Code of 1986, as amended (the "Code"). In addition, estate taxes are
payable in some cases in respect of the value of shares in a U.S. corporation
owned by a non-U.S. investor. As we will be a non-U.S. corporation following the
reorganization, these taxes will generally no longer be applicable to non-U.S.
investors. As a result, non-U.S. investors may be more receptive to an
investment in IR-Limited Class A common shares.
POTENTIAL RISKS
The reorganization will expose us and you to some risks. For a discussion
of risk factors associated with the reorganization, please see the discussion
under "Risk Factors." There are also differences between New Jersey law and
Bermuda law and the organizational documents of IR-New Jersey and IR-Limited.
For a discussion of the major differences, please see "Comparison of Rights of
Shareholders." The board of directors of IR-New Jersey has determined that the
potential advantages of the reorganization substantially outweigh these risks
and differences. Accordingly, the board of directors of IR-New Jersey has
unanimously approved the Agreement and Plan of Merger and recommends that
shareholders vote "FOR" its adoption. However, no assurances can be given that
the anticipated benefits of the reorganization will be realized.
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THE MERGER AGREEMENT
IR-New Jersey, IR-Limited and IR-Merger Sub have entered into the Agreement
and Plan of Merger, which is the legal document that governs the merger. We
recommend that you carefully read the complete Agreement and Plan of Merger for
the precise legal terms of the merger and other information that may be
important to you. The Agreement and Plan of Merger is attached to this proxy
statement/prospectus as Annex I.
CONDITIONS TO CONSUMMATION OF THE MERGER
The merger will not be completed unless, among other things, the following
conditions are satisfied or, if allowed by law, waived:
- the Agreement and Plan of Merger is adopted by the affirmative vote of at
least a majority of the votes cast by holders of shares present in person
or represented by proxy at the special meeting and entitled to vote as of
the record date;
- none of the parties to the Agreement and Plan of Merger is subject to any
decree, order or injunction that prohibits the consummation of any of the
steps in the reorganization;
- no stop order is in effect with respect to the registration statement of
which this proxy statement/ prospectus is a part;
- IR-Limited Class A common shares to be issued pursuant to the merger are
authorized for listing on the New York Stock Exchange subject to official
notice of issuance; and
- all material filings required by a governmental or regulatory agency are
made and all consents and approvals required by any court or governmental
or regulatory agency and all other third parties are received.
We are parties to certain agreements that require the consent of third
parties prior to the implementation of the merger. We believe that we will
obtain all material consents required prior to the completion of the merger and
that the failure to obtain any other consents will not have a material impact on
our business or our ability to consummate the reorganization.
EFFECTIVE TIME
If the Agreement and Plan of Merger is adopted by the requisite vote of
IR-New Jersey's shareholders, the merger will become effective pursuant to a
certificate of merger filed with the Treasurer of the State of New Jersey in
accordance with New Jersey law. IR-New Jersey expects to file the certificate of
merger following the special meeting and cause the merger to become effective as
soon as possible thereafter in accordance with the certificate of merger.
AMENDMENT OR TERMINATION
The Agreement and Plan of Merger may be amended, modified or supplemented
at any time before or after its adoption. However, after adoption, no amendment,
modification or supplement may be made or effected without additional
shareholder approval that does any of the following:
- alters or changes the amount or kind of shares to be received by
shareholders in the merger;
- alters or changes any term of the certificate of incorporation of the
surviving company, except for alterations or changes that could otherwise
be adopted by the directors of the surviving company; or
- alters or changes any other terms and conditions of the Agreement and
Plan of Merger if any of the alterations or changes, alone or in the
aggregate, would materially adversely affect the holders of IR-New Jersey
common stock.
In the event the conditions to the merger are not satisfied, the merger may
be abandoned or delayed even after the Agreement and Plan of Merger has been
adopted by our shareholders. In addition, the merger may
19
be abandoned or delayed for any reason by the board of directors of IR-New
Jersey or IR-Limited, in their sole discretion, at any time prior to its
becoming effective, even though the Agreement and Plan of Merger has been
adopted by our shareholders and all conditions to the merger have been
satisfied.
AUTOMATIC SHARE CONVERSION
If you hold IR-New Jersey common stock, you WILL NOT be required to
exchange your stock certificate(s) as a result of the merger. Shares of IR-New
Jersey common stock will automatically become IR-Limited Class A common shares
upon the completion of the merger. AS A RESULT, YOU DO NOT NEED TO TENDER YOUR
SHARES IN ORDER TO EXERCISE YOUR RIGHTS AS A SHAREHOLDER OF IR-LIMITED. Your
stock certificate(s) representing IR-New Jersey common stock will, at the
effective time of the merger, automatically represent the same number of
IR-Limited Class A common shares.
If you desire to sell some or all of your IR-Limited Class A common shares
after the effective time of the merger, delivery of the stock certificate(s)
that previously represented shares of IR-New Jersey common stock will be
sufficient. Your right to sell shares of IR-New Jersey common stock before the
effective time of the merger will also not be affected.
Following the merger, certificates bearing the name of "Ingersoll-Rand
Company Limited" will be issued in the normal course upon surrender of
certificates bearing the name of "Ingersoll-Rand Company" for exchange or
transfer. If you surrender a stock certificate and request the new stock
certificate to be issued in a name other than the one appearing on the
surrendered stock certificate, you must endorse the stock certificate or
otherwise prepare it to be in proper form for transfer.
MANAGEMENT OF IR-LIMITED
When the reorganization is completed, all of the directors and all of the
executive officers of IR-New Jersey will become directors and executive officers
of IR-Limited and the current directors of IR-New Jersey will carry over their
remaining terms of office to IR-Limited.
REQUIRED VOTE FOR THE MERGER
In order to approve the merger, the Agreement and Plan of Merger must be
adopted by the affirmative vote of at least a majority of the votes cast by
holders of shares present in person or represented by proxy at the special
meeting and entitled to vote as of the record date. Each share of IR-New Jersey
common stock is entitled to one vote. Abstentions will be counted as "shares
present" at the special meeting for the purposes of determining whether a quorum
exists. However, since abstentions are not votes cast in favor or against the
merger, they will not affect the outcome of the vote. Proxies submitted by
brokers that do not indicate a vote because brokers do not have discretionary
voting authority and have not received instructions as to how to vote (so-called
"broker non-votes") are also considered "shares present," but also will not
affect the outcome of any vote. Under the rules of the New York Stock Exchange,
brokers who hold shares in street name for customers have the authority to vote
on many "routine" proposals when they have not received instructions from
beneficial owners. Under these rules, brokers are precluded from exercising
their voting discretion with respect to proposals for non-routine matters like
the merger. Thus, absent specific instructions from you, your broker is not
empowered to vote your shares with respect to the adoption of the Agreement and
Plan of Merger.
As of the record date for the special meeting, there were 167,986,731
shares of IR-New Jersey common stock outstanding and entitled to vote. As of the
record date, our directors and executive officers and their affiliates owned and
were entitled to vote, in the aggregate, approximately 73,000 shares of IR-New
Jersey common stock, which represents less than 1% of the outstanding IR-New
Jersey common stock. These persons have informed us that they intend to vote
their shares in favor of the proposal to adopt the Agreement and Plan of Merger.
20
RIGHTS OF DISSENTING SHAREHOLDERS
Under New Jersey law, you will not have "dissenters' rights" in connection
with the merger because, among other reasons, IR-New Jersey common stock is
listed on the New York Stock Exchange.
DIVIDENDS
We have paid consecutive quarterly cash dividends on IR-New Jersey common
stock since 1919 and annual dividends since 1910. We have paid quarterly cash
dividends of US$.17 per share since September 1, 1999. Although IR-Limited
currently plans to pay these quarterly and annual cash dividends following the
merger, any future declaration and payment of dividends by IR-Limited will
continue to be:
- dependent upon its results of operations, financial condition, cash
requirements and other relevant factors;
- subject to the discretion of its board of directors;
- subject to the ability of its subsidiaries to pay dividends; and
- subject to the reasonable belief by its board of directors that after the
payment is made, IR-Limited would be able to pay its liabilities as they
become due or that the realizable value of IR-Limited's assets would not
be less than the aggregate of its liabilities and its issued share
capital and share premium account. The share premium account is made up
of the excess of the consideration paid on the issuance of shares over
the aggregate par value of such shares. Share premium may be distributed
in certain limited circumstances. For example, it may be used to pay-up
unissued shares which may be distributed to shareholders in proportion to
their holdings.
STOCK COMPENSATION PLANS
As part of the reorganization, the Ingersoll-Rand Company Savings and Stock
Investment Plan, the I-R/ Clark Leveraged Employee Stock Ownership Plan, the
Ingersoll-Rand/Thermo King Savings and Stock Investment Plan, the Ingersoll-Rand
Company Incentive Stock Plan of 1998, the Ingersoll-Rand Company Incentive Stock
Plan of 1995, the Ingersoll-Rand Company Incentive Stock Plan of 1990, the
Ingersoll-Rand Company Savings Plan for Bargaining Unit Employees, the
Dresser-Rand Company Retirement Savings Plan, the Dresser-Rand Company
Retirement Savings Plan B, the Thermo King de Puerto Rico Retirement Savings
Plan, the IR Executive Deferred Compensation Plan, the Management Incentive Unit
Plan of Ingersoll-Rand Company, the Ingersoll-Rand Company Employee Stock
Purchase Plan, the Ingersoll-Rand Company Supplemental Savings and Stock
Investment Plan and the IR Director Deferred Compensation and Stock Award Plan
will be amended as necessary to give effect to the reorganization including to
provide that IR-Limited Class A common shares will thereafter be issued, held,
available or used to measure benefits, as appropriate, under the plans in lieu
of IR-New Jersey common stock, including upon the exercise of any options issued
under the plans. As part of the reorganization the Ingersoll-Rand Company
Incentive Stock Plan of 1998, the Ingersoll-Rand Company Incentive Stock Plan of
1995, the Ingersoll-Rand Company Incentive Stock Plan of 1990 and the IR
Director Deferred Compensation and Stock Award Plan, and such other plans as
shall be agreed to by IR-Limited and IR-New Jersey, will be adopted and assumed
by IR-Limited. Shareholder approval of the Agreement and Plan of Merger will
also constitute any required shareholder approval of the plan amendments and the
adoption and assumption by IR-Limited of the plans it assumes as part of the
reorganization. Plans that provide benefits to employees of IR-New Jersey will
continue to provide benefits to such employees subsequent to their assumption by
IR-Limited.
DIVIDEND REINVESTMENT PLAN
As part of the reorganization, IR-New Jersey's dividend reinvestment plan
will be amended to provide that IR-Limited will assume all the rights and
obligations of IR-New Jersey under the plan and such plan will be deemed to
provide for the issuance or purchase of, or otherwise relate to, IR-Limited
Class A common shares. Shareholder approval of the Agreement and Plan of Merger
will also constitute any required shareholder approval of the amendments to
IR-New Jersey's dividend reinvestment plan and will constitute
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any required shareholder approval of the adoption and assumption of the dividend
reinvestment plan by IR-Limited.
SHAREHOLDER RIGHTS PLAN
IR-New Jersey has adopted a shareholder rights plan under which preference
stock purchase rights have been issued to shareholders of IR-New Jersey at the
rate of one right for each outstanding share of IR-New Jersey common stock. In
connection with the merger, the IR-New Jersey shareholder rights plan will be
amended to provide that the existing rights will expire immediately prior to the
effective time of the merger. This amendment of the IR-New Jersey shareholder
rights plan will not result in the issuance of any preference stock pursuant to
the rights or trigger redemption of the rights and will effectively terminate
the IR-New Jersey shareholder rights plan. Shareholder approval of the Agreement
and Plan of Merger will also constitute any required shareholder approval of the
amendment to the IR-New Jersey shareholder rights plan.
The board of directors of IR-Limited has adopted a plan substantially
similar to the IR-New Jersey shareholder rights plan, which plan provides for
the issuance of new preference share purchase rights that are equivalent to the
IR-New Jersey preference stock purchase rights. The IR-Limited shareholder
rights plan will expire on the original expiration date of the IR-New Jersey
shareholder rights plan. Initially, the new rights will attach to all IR-Limited
Class A common shares issued on or after the effective time of the merger.
For additional details, please see "Description of Authorized Shares of
IR-Limited -- Shareholder Rights Plan" and "Comparison of Rights of
Shareholders -- Shareholder Rights Plan."
STOCK EXCHANGE LISTING
IR-New Jersey common stock is currently listed on the New York Stock
Exchange. There is currently no established public trading market for IR-Limited
Class A common shares. Immediately following the merger, IR-Limited Class A
common shares will be listed on the New York Stock Exchange under the symbol
"IR," the same symbol under which IR-New Jersey common stock is currently
listed. IR-New Jersey common stock is also currently listed on the London Stock
Exchange and the Amsterdam Stock Exchange. The Company has determined that the
cost and expense of continued listings on such exchanges outweigh any benefits
of such listings. As a consequence, IR-Limited Class A common shares will not be
listed on such foreign exchanges. Since IR-Limited Class B common shares will be
held only by IR-New Jersey and other wholly-owned subsidiaries of IR-Limited,
they will not be registered with the Securities and Exchange Commission or
pursuant to any foreign securities laws and will not be publicly traded. IR-New
Jersey is currently included in the S&P 500 Index. We have been advised by
Standard & Poor's that the company's status as a member of the S&P 500 Index
will not be affected by the pending change of domicile to Bermuda.
ACCOUNTING TREATMENT OF THE REORGANIZATION
The reorganization will be accounted for as a reorganization of entities
under common control that will not result in changes in our historical
consolidated carrying amount of assets, liabilities and shareholders' equity.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS OF IR-NEW JERSEY HAS UNANIMOUSLY APPROVED THE
AGREEMENT AND PLAN OF MERGER AND RECOMMENDS THAT YOU VOTE "FOR" ITS ADOPTION.
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SPECIAL MEETING
This proxy statement/prospectus is being furnished in connection with the
solicitation of proxies from the holders of IR-New Jersey common stock by the
IR-New Jersey board of directors relating to the merger and other matters to be
voted upon at the special meeting and at any adjournment or postponement of the
special meeting. This proxy statement/prospectus is also a prospectus for
IR-Limited Class A common shares to be issued in the merger. IR-New Jersey
mailed this proxy statement/prospectus to shareholders beginning on or about
November 2, 2001. You should read this proxy statement/prospectus carefully
before voting your shares.
WHEN AND WHERE THE SPECIAL MEETING WILL BE HELD
The special meeting of shareholders will be held at 2:00 p.m., local time,
on December 14, 2001, at 200 Chestnut Ridge Road, Woodcliff Lake, New Jersey.
WHAT WILL BE VOTED UPON
At the special meeting, you will be asked to consider and vote upon the
following items:
- to adopt the Agreement and Plan of Merger, substantially in the form
attached to this proxy statement/prospectus as Annex I, among IR-New
Jersey, IR-Merger Sub and IR-Limited, whereby IR-New Jersey will
effectively change its domicile from New Jersey to Bermuda by merging
IR-Merger Sub into IR-New Jersey, which will be the surviving company and
become a wholly-owned, indirect subsidiary of IR-Limited, and pursuant to
which each share of IR-New Jersey common stock will automatically become
an IR-Limited Class A common share and all current shareholders of IR-New
Jersey will become IR-Limited Class A common shareholders; and
- to transact such other business as may properly come before the special
meeting.
ONLY IR-NEW JERSEY SHAREHOLDERS OF RECORD AS OF OCTOBER 31, 2001 ARE ENTITLED TO
VOTE
Only IR-New Jersey shareholders of record at the close of business on
October 31, 2001, as shown in our records, will be entitled to vote, or to grant
proxies to vote, at the special meeting. On the record date, there were
approximately 167,986,731 shares of IR-New Jersey common stock outstanding and
entitled to vote at the special meeting.
MAJORITY OF OUTSTANDING SHARES MUST BE REPRESENTED FOR A VOTE TO BE TAKEN
In order to have a quorum, the holders of record of the shares entitled to
cast a majority of the IR-New Jersey votes must be represented in person or by
proxy at the special meeting. If a quorum is not present, a majority of shares
that are represented at the special meeting may adjourn or postpone the special
meeting.
REQUIRED VOTE FOR THE MERGER
In order to approve the merger, the Agreement and Plan of Merger must be
adopted by the affirmative vote of at least a majority of the votes cast by
holders of shares present in person or represented by proxy at the special
meeting and entitled to vote as of the record date. Each share of IR-New Jersey
common stock is entitled to one vote. As of the record date, our directors and
executive officers and their affiliates owned and were entitled to vote, in the
aggregate, approximately 73,000 shares of IR-New Jersey common stock, which
represents less than 1% of the outstanding IR-New Jersey common stock. These
persons have informed us that they intend to vote their shares in favor of the
proposal to adopt the Agreement and Plan of Merger.
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VOTING YOUR SHARES AND CHANGING YOUR VOTE
VOTING YOUR SHARES
The IR-New Jersey board of directors is soliciting proxies from the IR-New
Jersey shareholders. This will give you the opportunity to vote at the special
meeting. When you deliver a valid proxy, the shares represented by that proxy
will be voted in accordance with your instructions.
Shareholders of record may vote by any one of the following methods:
1. CALL (866) 246-8472 (toll free) to vote by telephone anytime up to
5:00 p.m., New York time, on December 13, 2001;
2. GO TO THE WEBSITE: http://www.proxyvotenow.com/irc to vote over the
Internet anytime up to 5:00 p.m., New York time, on December 13, 2001; or
3. MARK, SIGN, DATE AND MAIL your proxy card in the enclosed
postage-prepaid envelope; if you are voting by telephone or by the
Internet, please do not return your proxy card.
If you hold your shares of IR-New Jersey common stock in the name of a
bank, broker or other nominee, you should follow the instructions provided by
your bank, broker or nominee when voting your shares.
If you participate in the Ingersoll-Rand Company Savings and Stock
Investment Plan, the I-R/Clark Leveraged Employee Stock Ownership Plan, the
Ingersoll-Rand/Thermo King Savings and Stock Investment Plan, the Ingersoll-Rand
Company Savings Plan for Bargaining Unit Employees, the Dresser-Rand Company
Retirement Savings Plan, the Dresser-Rand Company Retirement Savings Plan B or
the Thermo King de Puerto Rico Retirement Savings Plan then you may be receiving
these materials because of shares held for you in those plans. In that case, you
may use the enclosed proxy card to instruct the plan trustees of those plans how
to vote your shares, or give those instructions over the telephone or the
Internet. They will vote the shares in accordance with your instructions and the
terms of the applicable plan. If you do not provide voting instructions for
shares held for you in any of these plans, the plan trustees will vote these
shares in the same ratio as the shares for which voting instructions are
provided.
To be effective, your form of proxy must be received by us prior to the
beginning of voting at the special meeting.
PLEASE VOTE AS SOON AS POSSIBLE EVEN IF YOU CURRENTLY PLAN TO ATTEND THE
SPECIAL MEETING IN PERSON, SO THAT YOUR SHARES MAY BE REPRESENTED AND VOTED AT
THE SPECIAL MEETING.
CHANGING YOUR VOTE BY REVOKING YOUR PROXY
There are three ways in which you may revoke your proxy and change your
vote:
1. you may send a written notice to our proxy solicitor, Georgeson
Shareholder Communications, Inc., stating that you would like to revoke
your proxy; this notice must be received prior to the special meeting;
2. you may complete and submit a new later-dated proxy by any of the
three methods described above; the latest dated proxy actually received by
IR-New Jersey prior to the special meeting will be the one that is counted,
and all earlier proxies will be revoked; or
3. you may attend the special meeting and vote in person; however,
simply attending the special meeting will not revoke your proxy.
If you have instructed a bank, broker or other nominee to vote your shares,
you must follow the directions you receive from that person to change or revoke
your proxy.
HOW PROXIES ARE COUNTED
If you return a signed and dated proxy card but do not indicate how the
shares are to be voted, those shares represented by your proxy card will be
voted as recommended by the IR-New Jersey board of directors.
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A valid proxy also gives the individuals named as proxies authority to vote in
their discretion when voting the shares on any other matters that are properly
presented for action at the special meeting. A properly executed proxy marked
"ABSTAIN" will not be voted. Abstentions will be counted as "shares present" at
the special meeting for the purposes of determining whether a quorum exists.
However, since abstentions are not votes cast in favor or against the merger,
they will not affect the outcome of the vote. Proxies submitted by brokers that
do not indicate a vote because brokers do not have discretionary voting
authority and have not received instructions as to how to vote (so-called
"broker non-votes") are also considered "shares present," but also will not
affect the outcome of any vote. The New York Stock Exchange rules do not permit
brokers and nominees to vote the shares that they hold beneficially either for
or against the adoption of the Agreement and Plan of Merger without specific
instructions from the person who beneficially owns those shares. Therefore, if
your shares are held by a broker or other nominee and you do not give them
instructions on how to vote your shares, your shares will not be voted, and will
not have an effect on the outcome of the vote.
COST OF SOLICITATION
IR-New Jersey will pay the cost of soliciting proxies. In addition to
solicitation by mail, telephone or other means, IR-New Jersey will make
arrangements with brokerage houses and other custodians, nominees and
fiduciaries to send proxy materials to beneficial owners. IR-New Jersey will,
upon request, reimburse these institutions for their reasonable expenses. IR-New
Jersey has retained Georgeson Shareholder Communications, Inc. to aid in the
solicitation of proxies for a fee of approximately US$15,000, plus certain
additional ancillary charges based on the number of proxies solicited, plus
reasonable costs and expenses.
YOU SHOULD NOT SEND IN YOUR STOCK CERTIFICATE(S) WITH YOUR PROXY CARDS.
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DESCRIPTION OF AUTHORIZED SHARES OF IR-LIMITED
The following discussion is a summary of IR-Limited's share capital and
should be read in conjunction with "Comparison of Rights of Shareholders." This
summary is not complete and is subject to the complete text of IR-Limited's
memorandum of association and bye-laws as they will be in effect on the date of
the merger. IR-Limited is subject to the Companies Act 1981 of Bermuda (the
"Companies Act"). IR-Limited's memorandum of association is attached to this
proxy statement/prospectus as Annex II and its bye-laws are attached as Annex
III. You should read these documents carefully. Under Bermuda law, shareholders
are referred to as members, although we refer to them as shareholders in this
description for ease of reference.
AUTHORIZED SHARE CAPITAL
The authorized share capital of IR-Limited is US$1,175,010,000, consisting
of (1) 1,175,000,000 common shares, par value US$1.00 per share, which common
shares consist of (a) 600,000,000 Class A common shares and (b) 575,000,000
Class B common shares, and (2) 10,000,000 preference shares, par value US$0.001
per share, which preference shares consist of 600,000 Series A preference shares
and such other series of preference shares as may be designated from time to
time with the respective rights and restrictions determined by the board of
directors. Only Class A common shares (and associated preference share purchase
rights) will be issued to holders of IR-New Jersey common stock in the merger.
VOTING
Each holder of IR-Limited Class A common shares will be entitled to one
vote per common share held, subject to any required preference share class
votes, and directors will be elected in accordance with the procedures described
below. Except as otherwise specifically provided in IR-Limited's bye-laws or in
the Companies Act, any action to be taken by the shareholders at any general
meeting at which a quorum is in attendance shall be decided by the affirmative
vote of a majority of the votes cast at the general meeting.
Generally, the holders of IR-Limited Class B common shares will not be
entitled to vote. However, under the Companies Act, each share of IR-Limited
carries the right to vote in respect of an amalgamation or merger, whether or
not it otherwise carries the right to vote. IR-New Jersey and IR-Limited have
entered into a voting agreement which provides that in those limited instances
where IR-Limited Class B common shares have the right to vote, IR-New Jersey or
any other IR-Limited subsidiary holding IR-Limited Class B common shares shall
vote (or abstain from voting) the shares in the same proportion as the holders
of IR-Limited Class A common shares. Therefore, IR-Limited Class B common shares
will not dilute the voting power of IR-Limited Class A common shares.
Subject to the interested shareholder provisions described below in
"-- Anti-Takeover Provisions," shareholders holding a majority of the shares
voting at a general meeting (including IR-Limited Class B common shares voting
as a class with IR-Limited Class A common shares), and each class or series of
shares present and voting at a general meeting, and entitled to vote as a class
or series, is required to approve a merger.
Cumulative voting in the election of directors is permitted under
IR-Limited's bye-laws. As such, at all elections of directors, each holder of
IR-Limited Class A common shares will be entitled to as many votes as shall
equal the number of votes that the holder would be entitled to cast at a general
meeting, multiplied by the number of directors to be elected. A holder may cast
all such votes for a single director, or may distribute them among two or more
of the nominated directors as the holder may see fit.
Directors are divided into three classes, with each class to consist, as
nearly as possible, of 1/3rd of the total number of directors. If the number of
directors is changed, any increase or decrease will be apportioned among the
classes so as to maintain each class as nearly equal as possible. No reduction
shall have the effect of shortening the term of any incumbent director. Except
for two classes of directors that shall initially hold terms expiring at the
annual general meetings in 2002 and 2003, respectively, the term of office of
each class shall be until the third annual general meeting following a
director's election and until the election and qualification of a director's
successor.
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CHANGES TO RIGHTS OF A CLASS OR SERIES
Any rights attached to any class or series of shares of IR-Limited, unless
otherwise provided by the terms of that class or series, may be varied only with
the consent in writing of the holders of 75% of that class or series or by a
resolution passed at a separate general meeting of holders of the shares of that
class or series. Each holder of shares of the class or series present will have
one vote for each share of the class or series held to the extent such class or
series has voting rights. Outstanding shares will not be deemed to be varied by
the creation or issue of shares that rank in any respect prior to or equivalent
with those shares.
QUORUM FOR GENERAL MEETINGS
Holders of shares representing a majority of the shares entitled to vote
shall constitute a quorum at a general meeting of shareholders.
DIVIDEND RIGHTS
Subject to any rights and restrictions of any other class or series of
shares (none of which will be outstanding immediately following the
reorganization), the board of directors may from time to time declare dividends
and other distributions on the issued IR-Limited Class A common shares and
IR-Limited Class B common shares and authorize payment of such dividends and
other distributions. Such dividends or other distributions may be in cash,
shares or property of IR-Limited out of assets or funds legally available
therefor.
If at any time a dividend or other distribution in cash, shares or other
property is declared or paid on IR-Limited Class A common shares, a like
dividend or other distribution in cash, shares or other property shall also be
declared and paid on IR-Limited Class B common shares in an equal amount per
share.
RIGHTS UPON LIQUIDATION
Upon the liquidation of IR-Limited, after full amounts that holders of any
other issued shares ranking senior to the common shares as to distribution on
liquidation or winding up are entitled to receive have been paid or set aside
for payment, the holders of IR-Limited common shares are entitled to receive,
pro rata, any remaining assets of IR-Limited available for distribution to the
holders of common shares. The liquidator may deduct from the amount payable in
respect of those common shares any liabilities the holder has to or with
IR-Limited. The assets received by the holders of IR-Limited common shares in a
liquidation may consist in whole or in part of property. That property is not
required to be of the same kind for all shareholders. For a general description
of rights upon liquidation with respect to the Series A preference shares,
please see "-- Shareholder Rights Plan."
LIABILITY FOR FURTHER CALLS OR ASSESSMENTS; NO SINKING FUND
IR-Limited Class A common shares to be issued in the merger, and IR-Limited
Class B common shares to be issued in conjunction with the reorganization, will
be duly and validly issued, fully paid and nonassessable. IR-Limited shares have
no sinking fund provisions.
PRE-EMPTIVE RIGHTS
Subject to any series of preference shares granting such rights, holders of
shares of IR-Limited will have no pre-emptive or preferential right to purchase
any securities of IR-Limited.
REDEMPTION, REPURCHASE AND CONVERSION
IR-Limited Class A common shares will not be convertible into shares of any
other class or series or be subject to redemption either by IR-Limited or the
holders of IR-Limited Class A common shares, provided, however, that subject to
compliance with Bermuda law, IR-Limited may repurchase shares for cancellation
with the consent of the holder of such shares.
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IR-Limited Class B common shares will be convertible by the holder thereof
into IR-Limited Class A common shares on a one-for-one basis in the following
circumstances:
- to satisfy the obligations of IR-Limited or any of its subsidiaries or
affiliated companies to issue IR-Limited Class A common shares with
regard to the issuance of shares under any stock or deferred compensation
plans of IR-Limited or any of its subsidiaries or affiliated companies;
or
- as consideration for any acquisition of stock or assets of a third party.
See "-- Restrictions on Transfer."
In addition, and subject to the Companies Act, holders of IR-Limited Class
B common shares will have the right at any time following the issuance thereof
upon notice to IR-Limited to require IR-Limited to purchase for cancellation any
or all of the IR-Limited Class B common shares for cash at the per share fair
market value of the IR-Limited Class A common shares as of the date of such
notice. The purchased IR-Limited Class B common shares will then be cancelled by
IR-Limited. The fair market value per share of the IR-Limited Class A common
shares, as of any date, means the average of the high and low sales prices of a
share of the IR-Limited Class A common shares as reported on the New York Stock
Exchange composite tape on the applicable date. If no sales of IR-Limited Class
A common shares were made on the New York Stock Exchange on that date, the
average of the high and low prices as reported on the composite tape for the
most recent preceding day on which sales of the IR-Limited Class A common shares
were made will be the fair market value. Payment will be made within 180
calendar days of the date of the notice and will include interest at the prime
rate of Chase Manhattan Bank or its successor from the date of the notice until
the date of payment.
RESTRICTIONS ON TRANSFER
IR-Limited Class A common shares are not subject to restrictions on
transfer, other than as required to comply with applicable Bermuda law and U.S.
and other securities laws.
It is our intention that IR-Limited Class B common shares will only be held
by IR-New Jersey and other wholly-owned subsidiaries of IR-Limited, and as such,
would not be transferred out of the IR-Bermuda consolidated group prior to being
converted to IR-Limited Class A common shares as described above under
"-- Redemption, Repurchase and Conversion." The IR-Limited bye-laws provide that
in the event IR-Limited Class B common shares are transferred to any person or
entity other than a wholly-owned, direct or indirect, subsidiary of IR-Limited,
the shares so transferred will convert automatically into IR-Limited Class A
common shares on a one-for-one basis. Any transfer of IR-Limited Class A common
shares following conversion from IR-Limited Class B common shares will only be
made in accordance with the applicable securities laws and rules of the New York
Stock Exchange, including those rules relating to required shareholder
approvals.
Subject to the Companies Act, any shareholder may transfer any or all of
the holder's shares by an instrument of transfer in a usual common form or in
another form which the board of directors or IR-Limited's transfer agent may
approve. The board of directors may also decline to register any transfer
unless:
- it is accompanied by a duly executed instrument of transfer and by the
certificate in respect of the shares to which it relates, if a
certificate has been issued by IR-Limited in respect of the shares to be
transferred, and by such other evidence as the board of directors may
reasonably require to show the right of the transferor to make the
transfer; and
- all applicable consents, authorizations and permissions of any
governmental body or agency in Bermuda have been obtained.
STOCK EXCHANGE LISTING
Immediately following the merger, IR-Limited Class A common shares will be
listed on the New York Stock Exchange under the symbol "IR," the same symbol
under which IR-New Jersey common stock is
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currently listed on such exchange. Because IR-Limited Class B common shares will
be held only by IR-New Jersey and other IR-Limited subsidiaries, they will not
be registered with the Securities and Exchange Commission or pursuant to any
foreign securities laws and will not be publicly traded. IR-New Jersey is
currently included in the S&P 500 Index. We have been advised by Standard &
Poor's that the company's status as a member of the S&P 500 Index will not be
affected by the pending change of domicile to Bermuda.
OTHER CLASSES OR SERIES OF SHARES
The board of directors is authorized, without obtaining any vote or consent
of the holders of any class or series of shares unless expressly provided by the
terms of the issue of that class or series, to provide from time to time for the
issuance of other classes or series of preference shares and to establish the
characteristics of each class or series, including the number of shares,
designations, relative voting rights, dividend rights, liquidation and other
rights, redemption, repurchase or exchange rights and any other preferences and
relative, participating, optional or other rights and limitations not
inconsistent with applicable law. See "-- Preference Shares" and "Comparison of
Rights of Shareholders -- Issuance of Preference Shares/Stock" for specific
provisions with respect to preference shares.
COMPULSORY ACQUISITION OF SHARES HELD BY MINORITY HOLDERS
An acquiring party is generally able to compulsorily acquire the common
shares of minority shareholders in one of the following ways:
- By a procedure under the Companies Act known as a "scheme of
arrangement." A scheme of arrangement is made by obtaining the consent
for the arrangement of the board of directors of IR-Limited and of
holders of the Class A common shares and Class B common shares voting
together as a class by a majority vote of 75% of those shares voting at a
meeting at which a quorum is present in person or by proxy. Any
shareholder who does not vote in favor of the arrangement may, within one
month of the notice to shareholders of the special meeting to consider
such arrangement, apply to the Bermuda court to appraise the fair value
of such shares. If a scheme of arrangement receives all necessary
consents, all holders of Class A common shares and Class B common shares
could be compelled to sell their shares under the terms of the scheme of
arrangement at the fair value of such shares as determined by the Bermuda
court.
- If the acquiring party is a company, by acquiring pursuant to a tender
offer, 90% of the shares or class of shares not already owned by the
acquiring party (the "offeror"). If an offeror has, within four months
after the making of an offer for all the shares or class of shares not
owned by the offeror, obtained the approval of or acquired 90% or more of
all the shares to which the offer relates, the offeror may, at any time
within two months beginning with the date on which such approval is
obtained, require by a "notice of acquisition" any nontendering
shareholder to transfer its shares on the same terms as the original
offer. In those circumstances, nontendering shareholders will be
compelled to sell their shares. Nontendering shareholders have a
one-month period from the date of the notice of acquisition in which to
apply to a Bermuda court to enjoin the acquisition.
- By acquiring, pursuant to a notice given to the remaining shareholders or
class of shareholders, where the acquiring party holds not less than 95%
of the shares or the class of shares of IR-Limited, the shares of such
remaining shareholders or class of shareholders. When such a notice is
given, the purchaser is entitled and bound to acquire the shares of the
remaining shareholders on the terms set out in such notice, unless a
remaining shareholder applies to the Bermuda court for an appraisal of
the value of its shares. This provision only applies where the purchaser
offers the same terms to all holders of shares whose shares are being
acquired.
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TRANSFER AGENT
The transfer agent and registrar for IR-Limited Class A common shares will
be The Bank of New York, Church Street Station, P.O. Box 11258, New York, New
York 10286-1258, telephone number (800) 524-4458.
ANTI-TAKEOVER PROVISIONS
The bye-laws and shareholder rights plan of IR-Limited contain provisions
that may be considered to have certain "anti-takeover" effects such as
discouraging unsolicited takeover bids from third parties or making it more
difficult to remove incumbent management. These provisions are intended to
mirror provisions currently in IR-New Jersey's certificate of incorporation,
by-laws and shareholder rights plan and in the NJBCA. These provisions are
intended to enhance the likelihood of continuity and stability in the
composition of the board of directors and in the policies formulated by the
board of directors and to discourage transactions that may involve an actual or
threatened change of control of IR-Limited that the board of directors does not
believe is in the best interests of IR-Limited.
The bye-laws of IR-Limited provide that the board of directors will consist
of not less than three nor more than twenty persons, with the exact number to be
set from time to time by the board of directors. Accordingly, the board of
directors, and not the shareholders, has the authority to determine the number
of directors within the stated range and could delay any shareholder from
obtaining majority representation on the board of directors by enlarging the
board of directors and filling the new vacancies with its own nominees.
Directors are also divided into three classes each holding three year terms,
with each class to consist, as nearly as possible, of 1/3rd of the total number
of directors. A classified board makes it more difficult to replace a majority
or all of the board.
The bye-laws of IR-Limited provide that IR-Limited may not engage in any
"business combination" with any interested shareholder (generally, a 10% or
greater shareholder) unless the business combination receives the affirmative
vote of the holders of 80% of the shares then in issue of all classes of shares
entitled to vote considered for purposes of this provision as one class,
provided that the above vote requirement does not apply to:
- any business combination with an interested shareholder that has been
approved by the board of directors; or
- any agreement for the amalgamation, merger or consolidation of any
subsidiary of IR-Limited with IR-Limited or with another subsidiary of
IR-Limited if (1) the relevant bye-law provisions will not be changed or
otherwise affected by or by virtue of the amalgamation, merger or
consolidation and (2) the holders of greater than 50% of the voting power
of IR-Limited or the subsidiary, as appropriate, immediately prior to the
amalgamation, merger or consolidation continue to hold greater than 50%
of the voting power of the amalgamated company immediately following the
amalgamation, merger or consolidation.
The bye-laws of IR-Limited provide that "business combination" means:
- any amalgamation, merger or consolidation of IR-Limited or one of its
subsidiaries with an interested shareholder or with any person that is,
or would be after such amalgamation, merger or consolidation, an
affiliate or associate of an interested shareholder;
- any transfer or other disposition to or with an interested shareholder or
any affiliate or associate of an interested shareholder of all or any
material part of the assets of IR-Limited or one of its subsidiaries; and
- any issuance or transfer of shares of IR-Limited upon conversion of or in
exchange for the securities or assets of any interested shareholder, or
with any company that is, or would be after such merger or consolidation,
an affiliate or associate of an interested shareholder.
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The bye-laws of IR-Limited provide that at any annual general meeting, only
such business shall be conducted as shall have been brought before the meeting
by or at the direction of the board of directors, by any shareholder who
complies with certain procedures set forth in the bye-laws or by any shareholder
pursuant to the valid exercise of the power granted under the Companies Act. For
business to be properly brought before an annual general meeting by a
shareholder, the shareholder must have given timely notice thereof in proper
written form to the secretary of IR-Limited and satisfied all requirements under
applicable rules promulgated by the Securities and Exchange Commission and by
the New York Stock Exchange or any other exchange on which IR-Limited's
securities are traded. To be timely for consideration at the annual general
meeting, a shareholder's notice must be received by the secretary at
IR-Limited's principal executive offices not later than the date which is 90
days in advance of the anniversary of the immediately preceding annual general
meeting or, if the date of the annual general meeting occurs more than 30 days
before, or 60 days after, the anniversary of such immediately preceding annual
general meeting, not later than the seventh day after the date on which notice
of such annual general meeting is given. For purposes of determining these dates
in years 2001-2002, the date of IR-New Jersey's last annual meeting will be
considered the date of the immediately preceding annual general meeting of
IR-Limited. See "Shareholder Proposals and Nominations."
Subject to the terms of any other class of shares in issue, any action
required or permitted to be taken by the holders of IR-Limited common shares
must be taken at a duly called annual or special general meeting of shareholders
unless taken by written consent of all holders of common shares required or
permitted to take such action. Under the bye-laws, a special general meeting may
be called by the chairman of the board of directors, the president, a majority
of the board of directors, or upon the request of shareholders holding at least
10% of IR-Limited's shares as provided in the Companies Act. The bye-laws of
IR-Limited provide that any matter to be voted upon at a meeting called by
shareholders requires the affirmative vote of at least 66 2/3% of the shares
entitled to vote.
The board of directors is authorized, without obtaining any vote or consent
of the holders of any class or series of shares unless expressly provided by the
terms of issue of a class or series, to issue from time to time any authorized
and unissued preference shares on such terms and conditions as it may determine.
For example, the board of directors could authorize the issuance of preference
shares with terms and conditions that could discourage a takeover or other
transaction that holders of some or a majority of the IR-Limited Class A common
shares might believe to be in their best interests or in which holders might
receive a premium for their shares over the then-current market price of the
shares.
Immediately following the merger, IR-Limited will have in place the
IR-Limited shareholder rights plan, which is substantially similar to the IR-New
Jersey shareholder rights plan currently in place. The operation of the
IR-Limited shareholder rights plan could result in the possible dilution of a
potential acquiror's interest in IR-Limited. Consequently, the provisions of the
IR-Limited shareholder rights plan could discourage unsolicited takeover bids
for IR-Limited from third parties. See "-- Shareholder Rights Plan."
PREFERENCE SHARES
The board of directors may from time to time authorize the issuance of
preference shares in one or more series of preference shares, and in the
resolution or resolutions providing for the issuance of such shares, the board
of directors is expressly authorized to fix for each such series the number of
shares which shall constitute such series, voting power, full or limited, or no
voting power, and designations, preferences and relative, participating,
optional or other special rights and qualifications, limitations or restrictions
thereof. Such a "blank check" preference share provision could have certain
"anti-takeover" effects. See "-- Anti-Takeover Provisions."
The IR-Limited board of directors in authorizing such series may provide,
among others, that any such series may be (in each case, as set forth in the
resolutions authorizing the series of preference shares):
- subject to redemption at the option of IR-Limited or the holders, or
both, at such time or times and at such price or prices;
31
- entitled to receive dividends (which may be cumulative or non-cumulative)
at such rates, on such conditions, and at such times, and payable in
preference to, or in such relation to, the dividends payable on any other
class or classes or any other series;
- entitled to such rights upon the liquidation, dissolution or winding up
of IR-Limited;
- convertible into, or exchangeable for, shares of any other class or
classes of shares, or of any other series of the same or any other class
or classes of shares, of IR-Limited at such price or prices or at such
rates of exchange and with such adjustments; and
- subject to the preferences, rights and qualifications of any other
series.
SHAREHOLDER RIGHTS PLAN
ISSUANCE OF RIGHTS
The IR-Limited shareholder rights plan provides for the issuance of one
right (a "right") to purchase one one-thousandth of an IR-Limited Series A
preference share for each IR-Limited Class A common share in issue as of the
effective time of the merger (the "record date").
EVIDENCE OF RIGHTS
Under the shareholder rights plan, until the earlier to occur of (i) 10
days following a public announcement that a person or group of affiliated or
associated persons (an "acquiring person") has acquired beneficial ownership of
15% or more of the shares in issue of IR-Limited Class A common shares or (ii)
10 business days (or such later date as may be determined by action of the board
of directors of IR-Limited prior to such time as any person or group of
affiliated persons becomes an acquiring person) following the commencement of,
or announcement of an intention to make, a tender offer or exchange offer the
consummation of which would result in the beneficial ownership by a person or
group of 15% or more of the shares in issue of IR-Limited Class A common shares
(the earlier of such dates being called the "distribution date"), the rights
will be evidenced, with respect to any of the IR-Limited Class A common share
certificates in issue as of the record date, by such IR-Limited Class A common
share certificates together with a summary of the rights.
The shareholder rights plan provides that, until the distribution date (or
earlier redemption or expiration of the rights), the rights will be transferred
with and only with IR-Limited Class A common shares. Until the distribution date
(or earlier redemption or expiration of the rights), new IR-Limited Class A
common share certificates issued after the record date upon transfer or new
issuances of IR-Limited Class A common shares will contain a notation
incorporating the IR-Limited shareholder rights plan by reference. Until the
distribution date (or earlier redemption or expiration of the rights), the
surrender for transfer of any certificates for IR-Limited Class A common shares
in issue as of the record date, even without such notation or a copy of the
summary of rights, will also constitute the transfer of the rights associated
with IR-Limited Class A common shares represented by such certificate. As soon
as practicable following the distribution date, separate certificates evidencing
the rights will be mailed to holders of record of IR-Limited Class A common
shares as of the close of business on the distribution date and such separate
certificates alone will evidence the rights.
DURATION OF RIGHTS
The rights are not exercisable until the distribution date. The rights will
expire on December 22, 2008, unless this date is extended or unless the rights
are earlier redeemed or exchanged by IR-Limited, in each case as described
below.
ADJUSTMENTS
The purchase price payable, and the number of Series A preference shares or
other securities or property issuable, upon exercise of the rights are subject
to adjustment from time to time to prevent dilution (i) in the
32
event of a share dividend on, or a subdivision, combination or reclassification
of, the Series A preference shares, (ii) upon the grant to holders of the Series
A preference shares of certain rights or warrants to subscribe for or purchase
Series A preference shares at a price, or securities convertible into Series A
preference shares, with a conversion price less than the then-current market
price of the Series A preference shares or (iii) upon the distribution to
holders of the Series A preference shares of evidences of indebtedness or assets
(excluding regular periodic cash dividends or dividends payable in Series A
preference shares) or of subscription rights or warrants (other than those
referred to above).
The number of rights in issue is also subject to adjustment in the event of
a share division of IR-Limited Class A common shares or a share dividend on
IR-Limited Class A common shares payable in IR-Limited Class A common shares or
subdivisions, consolidations or combinations of IR-Limited Class A common shares
occurring, in any such case, prior to the distribution date.
SERIES A PREFERENCE SHARES
Series A preference shares purchasable upon exercise of the rights will not
be redeemable. Each Series A preference share will be entitled, when, as and if
declared, to a minimum preferential quarterly dividend payment of US$1.00 per
share but will be entitled to an aggregate dividend of 1000 times the dividend
declared per IR-Limited Class A common share. In the event of liquidation, the
holders of the Series A preference shares will be entitled to a minimum
preferential liquidation payment of US$100 per share (plus any accrued but
unpaid dividends) and will be entitled to an aggregate payment of 1000 times the
payment made per IR-Limited Class A common share. Each Series A preference share
will have 1000 votes, voting together with IR-Limited Class A common shares.
Finally, in the event of any amalgamation, merger, consolidation or other
transaction in which IR-Limited Class A common shares are converted or
exchanged, each Series A preference share will be entitled to receive 1000 times
the amount received per IR-Limited Class A common share. These rights are
protected by customary antidilution provisions.
Because of the nature of the Series A preference shares' dividend,
liquidation and voting rights, the value of the one one-thousandth interest in a
Series A preference share purchasable upon exercise of each right should
approximate the value of one IR-Limited Class A common share.
EXERCISE OF RIGHTS
In the event that any person or group of affiliated or associated persons
becomes an acquiring person, each holder of a right, other than rights
beneficially owned by the acquiring person (which will thereupon become void),
will thereafter have the right to receive upon exercise of a right at the
then-current exercise price of the right, that number of IR-Limited Class A
common shares having a market value of two times the exercise price of the
right.
In the event that, after a person or group has become an acquiring person,
IR-Limited is acquired in an amalgamation, merger or other business combination
transaction or 50% or more of its consolidated assets or earning power are sold,
proper provision will be made so that each holder of a right (other than rights
beneficially owned by an acquiring person which will have become void) will
thereafter have the right to receive, upon the exercise thereof at the
then-current exercise price of the right, that number of common shares of the
person with whom IR-Limited has engaged in the foregoing transaction (or its
parent), which number of shares at the time of such transaction will have a
market value of two times the exercise price of the right.
EXCHANGE OF RIGHTS
At any time after any person or group becomes an acquiring person and prior
to the acquisition by such person or group of 50% or more of the IR-Limited
Class A common shares in issue or the occurrence of an event described in the
prior paragraph, the board of directors of IR-Limited may exchange the rights
(other than rights owned by such person or group which will have become void),
in whole or in part, at an exchange ratio of one IR-Limited Class A common
share, or one one-thousandth of a Series A preference share (or of a
33
share of a class or series of IR-Limited's preference shares having equivalent
rights, preferences and privileges), per right (subject to adjustment).
NO FRACTIONAL SHARES
With certain exceptions, no adjustment in the purchase price will be
required until cumulative adjustments require an adjustment of at least 1% in
such purchase price. No fractional Series A preference shares will be issued
(other than fractions which are integral multiples of one one-thousandth of a
Series A preference share, which may, at the election of IR-Limited, be
evidenced by depositary receipts) and in lieu thereof, an adjustment in cash
will be made based on the market price of the Series A preference shares on the
last trading day prior to the date of exercise.
REDEMPTION
At any time prior to the time an acquiring person becomes such, the board
of directors of IR-Limited may redeem the rights in whole, but not in part, at a
price of US$.01 per right (the "redemption price"). The redemption of the rights
may be made effective at such time, on such basis and with such conditions as
the board of directors in its sole discretion may establish. Immediately upon
any redemption of the rights, the right to exercise the rights will terminate
and the only right of the holders of rights will be to receive the redemption
price.
AMENDMENT OF RIGHTS
The terms of the rights may be amended by the board of directors of
IR-Limited without the consent of the holders of the rights, including an
amendment to lower the 15% threshold for an acquiring person described above to
not less than the greater of (i) the sum of .001% and the largest percentage of
the IR-Limited Class A common shares in issue then known to IR-Limited to be
beneficially owned by any person or group of affiliated or associated persons
and (ii) 10%, except that from and after such time as any person or group of
affiliated or associated persons becomes an acquiring person no such amendment
may adversely affect the interests of the holders of the rights.
NO RIGHTS AS A SHAREHOLDER
Until a right is exercised, the holder thereof, as such, will have no
rights as a shareholder of IR-Limited including, without limitation, the right
to vote or to receive dividends.
CERTAIN ANTI-TAKEOVER EFFECTS
The rights have certain anti-takeover effects. The rights will cause
substantial dilution to a person or group that attempts to acquire IR-Limited on
terms not approved by the board of directors of IR-Limited, except pursuant to
an offer conditioned on a substantial number of rights being acquired. The
rights should not interfere with any amalgamation, merger or other business
combination approved by the board of directors since the rights may be redeemed
by IR-Limited at the redemption price prior to the time that a person or group
has acquired beneficial ownership of 15% or more of the IR-Limited Class A
common shares.
See "The Reorganization -- Shareholder Rights Plan" and "Comparison of
Rights of Shareholders -- Shareholder Rights Plan."
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COMPARISON OF RIGHTS OF SHAREHOLDERS
Your rights as a shareholder of IR-New Jersey are governed by New Jersey
law and IR-New Jersey's certificate of incorporation and by-laws. After the
merger, you will become a holder of IR-Limited Class A common shares, and your
rights will be governed by Bermuda law and IR-Limited's memorandum of
association and bye-laws. Shareholders are referred to as "members" under
Bermuda law, but we use the term "shareholder" in this description for ease of
comparison.
The principal attributes of IR-New Jersey common stock and IR-Limited Class
A common shares will be similar; however, there are certain differences between
your rights as a shareholder under New Jersey law and Bermuda law, which is
modeled after English law. In addition, there are certain differences between
IR-New Jersey's certificate of incorporation and by-laws and IR-Limited's
memorandum of association and bye-laws. It is our intent that your rights as a
shareholder be substantially the same before and after the merger and,
accordingly, the principal differences will arise as a consequence of the
differences between Bermuda law and New Jersey law.
The following table includes a summary of material changes in your rights
as a shareholder resulting from the merger. We encourage you to read this
summary carefully and in conjunction with "Description of Authorized Shares of
IR-Limited." This summary does not purport to be complete or to cover all of the
aspects in which Bermuda law or IR-Limited's constituent documents may differ
from laws generally applicable to New Jersey corporations and their shareholders
or IR-New Jersey's constituent documents. Additionally, while we believe this
summary is materially accurate, it is subject to the complete text of the
relevant provisions of the Companies Act, the NJBCA, IR-New Jersey's certificate
of incorporation and by-laws, and IR-Limited's memorandum of association
(attached as Annex II to this proxy statement/prospectus) and bye-laws (attached
as Annex III to this proxy statement/prospectus).
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PROVISION IR-LIMITED IR-NEW JERSEY
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SHAREHOLDER MEETINGS
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QUORUM REQUIREMENTS Holders of shares representing a The provisions of IR-New Jersey's
majority of the shares entitled organizational documents are
to vote shall constitute a quorum substantially similar.
at a general meeting of
shareholders.
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VOTING RIGHTS Each holder of IR-Limited Class A The provisions of IR-New Jersey's
common shares will be entitled to organizational documents are
one vote per common share held on substantially similar, except
all matters submitted to a vote that IR-New Jersey has only one
of the shareholders, subject to class of common stock and the
any required preference share NJBCA does not provide that every
class votes, and will vote share of a corporation carries
together as one class with the the right to vote in respect of a
holders of IR-Limited Class B merger.
common shares and preference
shares on any matter for which
holders of IR-Limited Class B
common shares are entitled to
vote under the Companies Act and
on any matter which the holders
of preference shares are entitled
to vote under the Companies Act
or the applicable series of
preference shares. Except as
otherwise specifically provided
in the bye-laws or in the
Companies Act, any action to be
taken by the shareholders at any
general meeting at which a quorum
is in attendance shall be decided
by the affirmative
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PROVISION IR-LIMITED IR-NEW JERSEY
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vote of a majority of the votes
cast at a general meeting.
Directors will be elected in
accordance with the procedures
described below.
Generally, the holders of
IR-Limited Class B common shares
will not be entitled to vote.
However, under the Companies Act,
each share of IR-Limited carries
the right to vote in respect of
an amalgamation or merger,
whether or not it otherwise
carries the right to vote. IR-New
Jersey and IR-Limited have
entered into a voting agreement
with respect to IR-Limited Class
B common shares to ensure that,
in the limited instances a vote
is granted to the holders of
IR-Limited Class B common shares,
such vote will not dilute the
voting power of IR-Limited Class
A common shares. See "Description
of Authorized Shares of
IR-Limited -- Voting."
At all elections of directors,
each holder of IR-Limited Class A
common shares will be entitled to
as many votes as shall equal the
number of votes that the holder
would be entitled to cast at a
general meeting, multiplied by
the number of directors to be
elected. A holder may cast all
such votes for a single director,
or may distribute them among two
or more of the nominated
directors as the holder may see
fit.
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VOTING REQUIREMENT FOR Except as otherwise specifically The provisions of IR-New Jersey's
SHAREHOLDER ACTION provided in the bye-laws or in organizational documents are
the Companies Act, any action to substantially similar.
be taken by the shareholders may
be taken by the affirmative vote
of a majority of the votes cast
at a general meeting.
Voting requirements for meetings
(i) called by shareholders or
(ii) with respect to mergers and
other business combinations are
described below under "-- Action
by Written Consent," "-- Calling
a Special Meeting" and
"-- Shareholder Approval for
Certain Actions." See also
"-- Voting Rights" with respect
to voting
36
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PROVISION IR-LIMITED IR-NEW JERSEY
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procedures in the election of
directors.
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ACTION BY WRITTEN CONSENT The Companies Act provides that The NJBCA provides that
shareholders may take action by shareholders may take action by
written consent only with the written consent with the
unanimous written consent of all percentage of shareholder consent
shareholders entitled to vote. that would be necessary to
authorize the action at a
meeting, provided, however, that
in the case of an annual meeting
of shareholders for the election
of directors, the consent must be
unanimous, and further provided
that, in the case of mergers,
consolidations, sales of all or
substantially all the assets of
the corporation and certain other
actions described in the NJBCA,
such actions may be taken without
a meeting only if all
shareholders consent thereto in
writing or if all shareholders
entitled to vote thereon consent
thereto in writing and IR-New
Jersey provides notice prior to
the effectiveness of such action
to all other shareholders.
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ADVANCE NOTICE The Companies Act provides that The provisions of IR-New Jersey's
REQUIREMENTS FOR shareholders may, as set forth organizational documents are
SHAREHOLDER PROPOSALS AND below and at their own expense substantially similar, but there
DIRECTOR NOMINATIONS (unless a company otherwise is no provision in the NJBCA
resolves), require a company to similar to that described under
give notice of any resolution the Companies Act for a
that the shareholders can requisition of a resolution.
properly propose at the next
annual general meeting or to IR-New Jersey is also subject to
circulate a statement prepared by the Exchange Act.
the shareholders in respect of
any matter referred to in a
proposed resolution or any
business to be conducted at a
general meeting. The number of
shareholders necessary for such a
requisition of a resolution is
either that number of
shareholders representing at
least 5% of the total voting
rights of all shareholders having
a right to vote at the meeting to
which the requisition relates or
not less than 100 shareholders.
IR-Limited's bye-laws provide
that all shareholder nominations
for nominees for election to the
board of directors must be made
following written notice to the
secretary of IR-Limited
accompanied by certain background
and other information
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PROVISION IR-LIMITED IR-NEW JERSEY
------------------------------------------------------------------------------------------------
specified in the bye-laws. In
connection with any annual
general meeting, written notice
of a shareholder's intention to
make such nominations must be
given to the secretary of
IR-Limited not later than the
date which is 90 days in advance
of the anniversary of the
immediately preceding annual
general meeting or, if the date
of the annual general meeting
occurs more than 30 days before,
or 60 days after, the anniversary
of such immediately preceding
annual general meeting, not later
than the seventh day after the
date on which notice of such
annual general meeting is given.
In order for a shareholder to
bring other business before a
shareholder meeting, timely
notice must be received by the
secretary of IR-Limited within
the time limits described above.
The notice must include a
description of the proposed item,
the reasons the shareholder
believes support its position
concerning the item, and other
specified matters.
IR-Limited will be subject to the
Securities Exchange Act of 1934,
as amended (the "Exchange Act"),
which provides that a shareholder
who continuously holds at least
US$2,000 in market value or 1% of
a company's voting securities for
at least one year prior to the
submission of a shareholder
proposal and through the
shareholder meeting date may,
provided that certain conditions
are met, present a proposal to be
voted on at a shareholder
meeting.
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ANNUAL MEETING The annual general meeting of The annual meeting of IR-New
IR-Limited shall be held in each Jersey shall be held on the
year other than the year of fourth Thursday of April, in each
organization at such time and year, or such other date as the
place as the board of directors board of directors may determine.
shall appoint.
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CALLING A SPECIAL MEETING A special general meeting of A special meeting of the
shareholders may be called by the shareholders may be called by the
chairman of the board of chairman of the board of
directors, the president, a directors, a vice-chairman of the
majority of the board of board of directors, the
directors or upon the request of president, a majority of the
shareholders holding at least 10% board of directors, or, upon the
of application of the holder
38
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PROVISION IR-LIMITED IR-NEW JERSEY
------------------------------------------------------------------------------------------------
IR-Limited's shares as provided or holders of not less than 10%
in the Companies Act, provided of all the shares entitled to
that any matter to be voted upon vote at a meeting, the New Jersey
at a meeting called by Superior Court, for good cause
shareholders requires the shown, may order a special
affirmative vote of at least meeting of the shareholders to be
66 2/3% of the shares entitled to called and held at such time and
vote. See "-- Voting Requirement place, upon such notice and for
for Shareholder Action," the transaction of such business
"-- Action by Written Consent" as may be designated in such
and "-- Shareholder Approval for order.
Certain Actions."
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BOARD OF DIRECTORS
------------------------------------------------------------------------------------------------
SIZE OF BOARD OF DIRECTORS IR-New Jersey, as sole The board of directors must
shareholder of IR-Limited, contain not less than eight
approved a resolution providing directors, as determined by the
that the board of directors must board of directors pursuant to a
contain not less than three resolution adopted by the
directors and not more than affirmative vote of a majority of
twenty directors, as determined the directors in office.
by the board of directors
pursuant to a resolution adopted
by the affirmative vote of a
majority of the board of
directors then in office.
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CLASSIFIED BOARD OF Directors are divided into three The provisions of IR-New Jersey's
DIRECTORS classes, with each class to organizational documents are
consist, as nearly as possible, substantially similar, except
of 1/3rd of the total number of that no class of directors may
directors. If the number of consist of less than two members.
directors is changed, any
increase or decrease will be
apportioned among the classes so
as to maintain each class as
nearly equal as possible. No
reduction shall have the effect
of shortening the term of any
incumbent director.
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TERM OF OFFICE Except for two classes of The provisions of IR-New Jersey's
directors that shall initially organizational documents are
hold terms expiring at the annual substantially similar.
general meetings in 2002 and
2003, respectively, the term of
office of each class shall be
until the third annual general
meeting following a director's
election and until the election
and qualification of a director's
successor.
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VACANCIES ON THE BOARD OF Any vacancy among directors of The provisions of IR-New Jersey's
DIRECTORS any class, including a vacancy organizational documents are
that results from an increase in substantially similar, except
the number of directors within that newly created directorships
the range stated in the bye-laws, resulting from any increase in
may be filled by a vote of the the number of directors may be
majority of remaining directors, filled by a majority of the
regardless of class, provided directors, though less than a
that a quorum is present. During quorum, or by the sole remaining
any vacancy the remaining director.
directors shall have full power
to act as the board of directors.
39
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PROVISION IR-LIMITED IR-NEW JERSEY
------------------------------------------------------------------------------------------------
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REMOVAL OF DIRECTORS Directors may be removed without The provisions of IR-New Jersey's
cause upon the affirmative vote organizational documents are
of the holders of at least 80% of substantially similar, except
the shares entitled to vote for that removal of directors for
the election of directors. cause by the board of directors
Directors may be removed for requires the affirmative vote of
cause upon the affirmative vote 66 2/3% of the entire board of
of the holders of at least directors.
66 2/3% of the shares entitled to
vote for the election of
directors.
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INDEMNIFICATION OF The bye-laws of IR-Limited With respect to indemnification,
DIRECTORS, OFFICERS AND provide that IR-Limited shall the provisions of IR-New Jersey's
EMPLOYEES; LIMITATION OF indemnify any current or former organizational documents are
LIABILITY director or officer or any person substantially similar.
serving or who has served at the
request of IR-Limited as a The certificate of incorporation
director, officer, partner, of IR-New Jersey provides that a
venturer, proprietor, trustee, director or officer shall not be
employee, agent or similar personally liable to IR-New
functionary of another foreign or Jersey or its shareholders for
domestic corporation, general or damages for breach of any duty
limited partnership, firm, owed to IR-New Jersey or its
association, trust, estate, shareholders, except that such
company (including a limited director or officer shall not be
liability company) or other relieved from liability for any
enterprise to the fullest extent breach of duty based upon an act
permitted under Bermuda law. or omission (1) in breach of such
IR-Limited may also indemnify any person's duty of loyalty to
employee or agent of IR-Limited IR-New Jersey or its
to the fullest extent provided by shareholders, (2) not in good
Bermuda law. faith or involving a knowing
violation of law or (3) resulting
The indemnification provisions in in receipt by such person of an
the bye-laws of IR-Limited are improper personal benefit.
not exclusive of other rights to
which a director or officer may
be entitled.
Under the Companies Act, a
company shall not indemnify any
individual that is adjudged to be
liable for fraud or dishonesty in
the performance of his or her
duties to IR-Limited.
The bye-laws of IR-Limited
provide that each shareholder
agrees to exempt a director or
officer from any claim or right
of action such shareholder may
have, whether individually or by
or in the right of IR-Limited,
against any director or officer
on account of any action taken by
such director or officer, or the
failure of such director or
officer to take any action in the
performance of his or her duties
with or for IR-Limited, provided
that such waiver shall not extend
to any matter
40
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PROVISION IR-LIMITED IR-NEW JERSEY
------------------------------------------------------------------------------------------------
of fraud or dishonesty which may
attach to such director or
officer.
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INTERESTED DIRECTOR Under the Companies Act, without Under the NJBCA, no contract or
TRANSACTIONS the consent of the holders of other transaction between a
shares carrying at least 90% of corporation and one or more of
the total voting rights or in its directors, or between a
certain other limited instances, corporation and another entity in
a company may not make a loan to which one or more of its
or enter into any guarantee or directors are directors or are
provide security in respect of otherwise interested, shall be
any loan made to any person who void or voidable solely by reason
is a director (or certain related of the common directorship or
persons or companies) of interest, or solely because the
IR-Limited (or of its holding director or directors are present
company, if there is one). at the meeting that authorizes or
approves the contract or
In addition, a director who has transaction, or solely because
an interest in any material his or her or their votes are
contract or proposed material counted for that purpose, if:
contract (or in any person that
is a party to the contract) with - the contract or other
IR-Limited or any of its transaction is fair and
subsidiaries and who fails to reasonable as to IR-New Jersey
disclose the interest shall be at the time;
deemed not to be acting honestly
and in good faith. - the fact of the common
directorship or interest is
disclosed or known to the board
and the board authorizes the
transaction by unanimous
written consent, provided at
least one director so
consenting is disinterested, or
by the affirmative vote of a
majority of the disinterested
directors; or
- the fact of common directorship
or interest is disclosed or known
to the shareholders, and they
authorize the transaction.
Common or interested directors
may be counted in determining the
presence of a quorum at a meeting
that authorizes the contract or
the transaction.
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AMENDMENTS TO
ORGANIZATIONAL DOCUMENTS
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AMENDMENT OF THE Under the Companies Act, Under the NJBCA, amendments to
MEMORANDUM OF amendments to the memorandum of the certificate of incorporation
ASSOCIATION/CERTIFICATE OF association must be approved by a require (1) the recommendation of
INCORPORATION majority of the shareholders the board of directors, (2) the
voting on the amendments. affirmative vote of a majority of
the votes cast by the holders of
the shares entitled to vote
thereon and (3) the affirmative
vote of a majority of the votes
cast in each class entitled to
vote thereon.
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AMENDMENT OF THE The bye-laws may only be amended The by-laws may be amended by a
BYE-LAWS/BY-LAWS by both a resolution of the board majority vote of the entire board
of of
41
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PROVISION IR-LIMITED IR-NEW JERSEY
------------------------------------------------------------------------------------------------
directors and the affirmative directors, but any by-law made by
vote of a majority of the the board of directors may be
shareholders voting on the altered or repealed by the
amendment at a general meeting, shareholders at any annual or
or without a meeting, by special meeting.
unanimous written consent.
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ISSUANCE OF PREFERENCE The bye-laws provide that the The provisions of IR-New Jersey's
SHARES/ STOCK board of directors of IR-Limited organizational documents are
may from time to time authorize substantially similar, except
by means of a board resolution that certain preference stock
the issuance of preference shares rights, including certain voting
in one or more series of and amendment rights, that are
preference shares, and in the set forth in IR-New Jersey's
resolution or resolutions certificate of incorporation are
providing for the issue of such not included in IR-Limited's
shares, the board of directors is bye-laws and may be included or
expressly authorized to fix for omitted in a resolution of
each such series the number of IR-Limited establishing a series
shares which shall constitute of preference shares.
such series, voting power, full
or limited, or no voting power,
and designations, preferences and
relative, participating, optional
or other special rights and
qualifications, limitations or
restrictions thereof. Such a
"blank check" preference share
provision could have certain
"anti-takeover" effects. See
"Description of Authorized Shares
of IR-Limited -- Anti-Takeover
Provisions."
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DISTRIBUTIONS AND Subject to the rights, if any, of The provisions of IR-New Jersey's
DIVIDENDS holders of preference shares, organizational documents are
IR-Limited may make distributions substantially similar, except
and pay dividends, to the extent that IR-New Jersey does not have
not prohibited by applicable law, any Class B common stock.
by action of the board of
directors.
If at any time a dividend or
other distribution is declared or
paid on IR-Limited Class A common
shares, a like dividend or other
distribution must also be
declared and paid on IR-Limited
Class B common shares in an equal
amount per share.
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REPURCHASES AND IR-Limited Class A common shares The provisions of IR-New Jersey's
REDEMPTIONS will not be convertible into organizational documents are
shares of any other class or substantially similar, except
series or be subject to that IR-New Jersey does not have
redemption either by IR-Limited any Class B common stock.
or the holder of the IR-Limited
Class A common shares, provided,
however, that subject to
compliance with Bermuda law,
IR-Limited may repurchase its own
shares for cancellation with the
consent of the holder of such
shares.
IR-Limited Class B common shares
will be convertible by the holder
42
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PROVISION IR-LIMITED IR-NEW JERSEY
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thereof into IR-Limited Class A
common shares on a one-for-one
basis in the following
circumstances:
- to satisfy the obligations of
IR-Limited or its subsidiaries
or affiliated companies to
issue IR-Limited Class A common
shares with regard to the
exercise of share options,
grants or purchases of shares
pursuant to share incentive
plans, employee share purchase
plans, dividend reinvestment
plans or other stock-based
compensation, retirement or
deferred compensation plans
sponsored by IR-Limited or its
subsidiaries or affiliated
companies; or
- as consideration for any
acquisition of stock or assets of
a third party.
The bye-laws also provide that in
the event IR-Limited Class B
common shares are transferred to
any person or entity other than a
wholly-owned, direct or indirect,
subsidiary of IR-Limited, the
shares so transferred will
convert automatically into
IR-Limited Class A common shares
on a one-for-one basis. See
"Description of Authorized Shares
of IR-Limited -- Restrictions on
Transfer."
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SHAREHOLDER APPROVAL FOR
CERTAIN ACTIONS
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MERGER/SALE OF ASSETS The Companies Act permits an In general, under the NJBCA, a
amalgamation or merger between plan of merger or consolidation
two or more Bermuda companies, or must be approved by the
between one or more Bermuda affirmative vote of a majority of
"exempted companies" and one or the votes cast by the holders of
more foreign companies. As shares of each such corporation
permitted by Bermuda law, subject entitled to vote thereon, and, in
to the interested shareholder addition, if any class or series
provisions discussed below in is entitled to vote thereon as a
"-- Business Combinations with class, the affirmative vote of a
Interested Shareholders," majority of the votes cast in
shareholders holding a majority each class vote.
of the shares voting at a meeting
(including IR-Limited Class B Similarly, a sale of all or
common shares voting as a class substantially all of such
with IR-Limited Class A common corporation's assets other than
shares), and each class of shares in the ordinary course of
present and voting at a meeting, business, or a voluntary
is required to approve a merger. dissolution of such corporation,
requires the approval of such
corporation's board of directors
and the affirmative vote of a
majority of the votes cast by the
holders of shares of each such
43
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PROVISION IR-LIMITED IR-NEW JERSEY
------------------------------------------------------------------------------------------------
Under Bermuda law, IR-Limited corporation entitled to vote.
will be considered an "exempted
company" since it will be owned See "-- Business Combinations
predominantly by non-Bermudians. with Interested Shareholders."
See "Description of Authorized
Shares of
IR-Limited -- Compulsory
Acquisition of Shares Held by
Minority Holders" and
"-- Business Combinations with
Interested Shareholders."
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BUSINESS COMBINATIONS WITH The bye-laws of IR-Limited Under the NJBCA, no New Jersey
INTERESTED SHAREHOLDERS provide that IR-Limited may not corporation may engage in any
engage in any "business "business combination" with any
combination" with any interested interested shareholder
shareholder (generally, a 10% or (generally, a 10% or greater
greater shareholder) unless the shareholder) for a period of five
business combination receives the years following such interested
affirmative vote of the holders shareholder's stock acquisition,
of 80% of the shares then in unless such business combination
issue of all classes of shares is approved by the board of
entitled to vote considered for directors of such corporation
purposes of this provision as one prior to the stock acquisition.
class, provided that the above
vote requirement does not apply Under the NJBCA, "business
to: combination" includes the
following:
- any business combination with
an interested shareholder that - any merger or consolidation of
has been approved by the board a resident domestic corporation
of directors; or or one of its subsidiaries with
an interested shareholder or
- any agreement for the any other corporation (whether
amalgamation, merger or or not it is an interested
consolidation of any subsidiary shareholder of the resident
of IR-Limited with IR-Limited domestic corporation) that is,
or with another subsidiary of or after a merger or
IR-Limited if (1) the relevant consolidation would be, an
bye-law provisions will not be affiliate or associate of that
changed or otherwise affected interested shareholder;
by or by virtue of the
amalgamation, merger or - any sale, lease, exchange,
consolidation and (2) the mortgage, pledge, transfer or
holders of greater than 50% of other disposition to or with an
the voting power of IR-Limited interested shareholder or any
or the subsidiary, as affiliate or associate of that
appropriate, immediately prior interested shareholder of
to the amalgamation, merger or assets of that resident
consolidation continue to hold domestic corporation or any
greater than 50% of the voting subsidiary of that resident
power of the amalgamated domestic corporation (1) having
company immediately following an aggregate market value equal
the amalgamation, merger or to 10% of more of the aggregate
consolidation. market value of all the assets,
determined on a consolidated
The bye-laws of IR-Limited basis, of such resident
provide that "business domestic corporation, (2)
combination" means: having an aggregate market
value equal to 10% or more of
- any amalgamation, merger or the aggregate market value of
consolidation of IR-Limited or all the outstanding stock of
one of its subsidiaries with an that resident domestic
interested shareholder or with corporation or (3) representing
any person that is, or would be 10% or more of the earnings
after power
44
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PROVISION IR-LIMITED IR-NEW JERSEY
------------------------------------------------------------------------------------------------
such amalgamation, merger or or income, on a consolidated
consolidation, an affiliate or basis, of such resident
associate of an interested domestic corporation; and
shareholder;
- other specified self-dealing
- any transfer or other transactions between such
disposition to or with an resident domestic corporation
interested shareholder or any and an interested shareholder
affiliate or associate of an or any affiliate or associate
interested shareholder of all thereof.
or any material part of the
assets of IR-Limited or one of In addition, no resident domestic
its subsidiaries; and corporation may engage, at any
time, in any business combination
- any issuance or transfer of with any interested shareholder
shares of IR-Limited upon of such corporation other than:
conversion of or in exchange
for the securities or assets of - a business combination approved
any interested shareholder, or by the board of directors of
with any company that is, or such corporation prior to the
would be after such stock acquisition;
amalgamation, merger or
consolidation, an affiliate or - a business combination approved
associate of an interested by the affirmative vote of the
shareholder. holders of 66 2/3% of the
voting stock not beneficially
owned by such interested
shareholder at a meeting called
for such purpose; or
- a business combination in which
the interested shareholder
meets certain fair price
criteria.
Under IR-New Jersey's certificate
of incorporation, the affirmative
vote of the holders of 80% of the
outstanding shares of all classes
of stock entitled to vote, and
voting as one class, is required
to approve:
- the merger or consolidation of
IR-New Jersey or any subsidiary
of IR-New Jersey with or into
any other corporation, person
or entity;
- any sale, lease, exchange or
other disposition of all or any
material part of the assets of
IR-New Jersey or of any
subsidiary of IR-New Jersey to
or with any other corporation,
person or entity; or
- any issuance or transfer of
securities of IR-New Jersey
upon conversion of or in
exchange for securities or
assets of any other
corporation, person or entity;
if such other corporation, person
or entity is the beneficial owner
(as defined in IR-New Jersey's
certificate of incorporation),
directly or indirectly, of more
than 10% of any class of stock of
IR-New Jersey. This
45
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PROVISION IR-LIMITED IR-NEW JERSEY
------------------------------------------------------------------------------------------------
approval requirement does not
apply to the merger of any
subsidiary of IR-New Jersey with
IR-New Jersey or with another
subsidiary of IR-New Jersey where
IR-New Jersey or such other
subsidiary is the surviving
corporation and where the above
provisions are not changed or
otherwise affected by virtue of
the merger.
------------------------------------------------------------------------------------------------
SHAREHOLDER RIGHTS PLAN The board of directors of IR-New Jersey adopted a
IR-Limited has adopted a plan shareholder rights plan, dated
substantially similar to the November 9, 1998. In connection
IR-New Jersey shareholder rights with the merger, the IR-New
plan, which plan has been Jersey shareholder rights plan
approved and adopted by IR-New will be amended to provide that
Jersey as the sole shareholder of the existing rights will expire
IR-Limited and provides for the immediately prior to the
issuance of new preference share effective time of the merger.
purchase rights that are This amendment of the IR-New
equivalent to the IR-New Jersey Jersey shareholder rights plan
preference stock purchase rights. will not result in the issuance
The IR-Limited shareholder rights of any preference stock pursuant
plan will expire on the original to the rights or trigger
expiration date of the IR-New redemption of the rights and will
Jersey shareholder rights plan. effectively terminate the IR-New
Initially, the new rights will Jersey shareholder rights plan.
attach to all IR-Limited Class A Shareholder approval of the
common shares issued on or after Agreement and Plan of Merger will
the effective time of the merger. also constitute any required
See "The shareholder approval of the
Reorganization -- Shareholder amendment to the IR-New Jersey
Rights Plan" and "Description of shareholder rights plan.
Authorized Shares of
IR-Limited -- Shareholder Rights
Plan."
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OTHER CORPORATE GOVERNANCE
PROVISIONS
------------------------------------------------------------------------------------------------
SHAREHOLDER DERIVATIVE Bermuda courts ordinarily follow The NJBCA requires that a
SUITS English law precedent, which shareholder bringing a derivative
permits a shareholder derivative suit in New Jersey have been a
action only: holder of shares or of voting
trust certificates therefor at
- where the act complained of is the time of the disputed
alleged to be beyond the transaction, or its shares or
corporate power of IR-Limited voting trust certificates
or to be illegal; thereafter passed to the
shareholder by operation of law
- where an act requires approval from a person who was a holder at
by a greater percentage of that time.
IR-Limited's shareholders than
actually approved it; or Under the NJBCA, a complaint in a
derivative suit must:
- where such an action is
necessary in order that there not - state the plaintiff was a
be a violation of IR-Limited's shareholder at the time of the
organizational documents. transaction with respect to
which the plaintiff complains
or that the plaintiff's shares
thereafter became the
plaintiff's by operation of
law;
46
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PROVISION IR-LIMITED IR-NEW JERSEY
------------------------------------------------------------------------------------------------
and
- (1) allege with particularity
the efforts plaintiff has made to
obtain the action the plaintiff
desires from the directors of
the corporation or (2) state
the reasons for the plaintiff's
failure to obtain the action or
for not making the effort to
obtain the action.
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DISSENTERS' RIGHTS Under the Companies Act, a Under the NJBCA, a dissenting
dissenting shareholder of a shareholder has the right to
company participating in a merger receive the fair value for its
(other than a merger between a shares if the shareholder objects
company and its wholly-owned to certain (1) mergers or
subsidiary or between two or more consolidations requiring
subsidiaries of the same company) shareholder approval and (2)
may apply to the Bermuda courts dispositions of assets requiring
to appraise the fair value of its shareholder approval.
shares.
No dissenters' rights are
There is no exception under available with respect to shares
Bermuda law for dissenters' that, at the applicable record
rights similar to the exception date, were listed on a national
under the NJBCA for securities exchange or held of
exchange-listed companies. record by not less than 1000
holders.
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INSPECTION OF BOOKS AND Bermuda law provides the general Under the NJBCA, a shareholder
RECORDS public with a right of inspection who has been a shareholder for at
of a Bermuda company's public least six months or who holds, or
documents and provides a Bermuda is authorized in writing by
company's shareholders with a holders of, at least five percent
right of inspection of a Bermuda of the outstanding shares of any
company's bye-laws, minutes of class or series of stock of a
general meetings of shareholders corporation has the right, for
and audited financial statements. any proper purpose and upon at
least five days' written notice,
A Bermuda company's share to inspect the minutes of
register is open to inspection by shareholder meetings and the
its shareholders and, upon record of shareholders.
payment of a small fee, by any
other person. A Bermuda company
is required to keep at its
registered office a register of
its directors and officers that
is open for inspection by members
of the public without charge.
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47
INCOME TAX CONSEQUENCES OF THE REORGANIZATION
U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE REORGANIZATION
The following general discussion summarizes the anticipated principal U.S.
federal income tax consequences of the receipt of IR-Limited Class A common
shares by certain holders of IR-New Jersey common stock pursuant to the merger.
This discussion does not address all of the U.S. federal income tax consequences
that may be relevant to particular IR-New Jersey shareholders in light of their
individual circumstances or to shareholders who, for U.S. federal income tax
purposes, are subject to special rules, such as:
- dealers or traders in securities or currencies;
- tax-exempt entities;
- banks, financial institutions, or insurance companies;
- grantor trusts;
- real estate investment trusts or regulated investment companies;
- holders who hold IR-New Jersey common stock as part of a position in a
straddle or as part of a hedging or conversion transaction for U.S.
federal income tax purposes;
- investors whose functional currency is not the U.S. dollar;
- holders who acquired their IR-New Jersey common stock within 12 months of
the effective time of the merger pursuant to the exercise of employee
stock options or otherwise as compensation;
- holders who, for U.S. federal income tax purposes, are nonresident alien
individuals, foreign corporations, foreign partnerships, foreign trusts,
or foreign estates;
- holders who own, or are deemed to own, 10% or more, determined by voting
power or value, of IR-New Jersey common stock or IR-Limited Class A
common shares; and
- holders subject to taxation of U.S. expatriates.
Further, this discussion does not address any U.S. federal estate, gift or
alternative minimum tax consequences or any state, local or foreign tax
consequences relating to the merger or the ownership and disposition of
IR-Limited Class A common shares.
EACH IR-NEW JERSEY SHAREHOLDER IS STRONGLY URGED TO CONSULT ITS OWN TAX
ADVISOR AS TO THE PARTICULAR TAX CONSEQUENCES TO IT OF THE RECEIPT OF IR-LIMITED
CLASS A COMMON SHARES PURSUANT TO THE MERGER CONTEMPLATED BY THIS PROXY
STATEMENT/PROSPECTUS AND THE OWNERSHIP AND DISPOSITION OF IR-LIMITED CLASS A
COMMON SHARES, INCLUDING THE APPLICABILITY AND EFFECT OF FEDERAL, STATE, LOCAL
AND FOREIGN INCOME AND OTHER TAX LAWS IN ITS PARTICULAR CIRCUMSTANCES.
This discussion is based on the Code, the U.S. Treasury regulations
promulgated thereunder, and judicial and administrative interpretations thereof,
including IRS Notice 94-93, 1994-2 C.B. 563, in each case as in effect and
available on the date of this proxy statement/prospectus. All of the foregoing
is subject to change, which change could apply with retroactive effect and could
affect the tax consequences described below. Neither IR-New Jersey nor
IR-Limited will request any ruling from the Internal Revenue Service as to the
U.S. federal income tax consequences of the merger and related reorganization
transactions, but IR-New Jersey has obtained an opinion of counsel as to certain
tax consequences with respect to the merger and related reorganization
transactions.
This discussion is also based on certain assumptions regarding the factual
circumstances that will exist at the time of the merger, including certain
representations made or to be made by IR-New Jersey and IR-Limited. Any change
in the truth, accuracy or completeness of any of the facts, assumptions or
representations
48
on which this discussion is based could affect the tax consequences described
below. This discussion assumes that IR-New Jersey shareholders hold their IR-New
Jersey common stock and will hold IR-Limited Class A common shares as capital
assets.
For purposes of this discussion, a "U.S. holder" is a beneficial owner of
IR-New Jersey common stock that, for U.S. federal income tax purposes, is:
- a citizen or resident of the U.S.;
- a corporation or partnership created or organized in or under the laws of
the U.S. or any State thereof, including the District of Columbia;
- an estate, the income of which is subject to U.S. federal income taxation
regardless of its source;
- a trust, if such trust validly has elected to be treated as a U.S. person
for U.S. federal income tax purposes or if (1) a U.S. court can exercise
primary supervision over its administration and (2) one or more U.S.
persons have the authority to control all of the substantial decisions of
such trust; or
- otherwise subject to U.S. federal income taxation on a net income basis
on its shares of IR-New Jersey common stock.
RECEIPT OF IR-LIMITED CLASS A COMMON SHARES
Each U.S. holder will recognize gain, but not loss, on the receipt of
IR-Limited Class A common shares for IR-New Jersey common stock pursuant to the
merger in an amount equal to the difference, if any, between (1) the fair market
value of the IR-Limited Class A common shares received by such U.S. holder and
(2) such U.S. holder's adjusted tax basis in its IR-New Jersey common stock
converted thereto. Any gain recognized will be capital gain and will be
long-term capital gain if the IR-New Jersey common stock has been held for more
than one year at the time of the merger. A U.S. holder that recognizes gain with
respect to the merger will have an aggregate adjusted tax basis in its
IR-Limited Class A common shares equal to the aggregate adjusted tax basis in
the IR-New Jersey common stock exchanged therefor, increased by the amount of
gain recognized. A U.S. holder will not be permitted to recognize any loss
realized on the exchange of its shares of IR-New Jersey common stock in the
merger, but the aggregate adjusted tax basis of the IR-Limited Class A common
shares received by a U.S. holder with a loss on its IR-New Jersey common stock
will be equal to such U.S. holder's aggregate adjusted tax basis in its IR-New
Jersey common stock surrendered in exchange therefor. Thus, any loss would be
preserved. The holding period for any IR-Limited Class A common shares received
by a U.S. holder recognizing gain with respect to the merger will begin at the
effective time of the merger. The holding period for any IR-Limited Class A
common shares received by U.S. holders with a loss on their IR-New Jersey common
stock will include the holding period of the IR-New Jersey common stock
exchanged therefor.
DISTRIBUTIONS
Subject to the discussion below under " -- Passive Foreign Investment
Company Considerations," the gross amount of any distribution by IR-Limited of
cash or property (other than certain distributions, if any, of common shares
distributed pro rata to all shareholders of IR-Limited) with respect to
IR-Limited Class A common shares will be includable in income by a U.S. holder
as dividend income to the extent such distributions are paid out of the current
or accumulated earnings and profits of IR-Limited as determined under U.S.
federal income tax principles. Such dividends will not generally be eligible for
the dividends received deduction generally allowed to U.S. holders that are
corporations. Subject to the discussion below under " -- Passive Foreign
Investment Company Considerations," to the extent, if any, that the amount of
any distribution by IR-Limited exceeds IR-Limited's current and accumulated
earnings and profits as determined under U.S. federal income tax principles, it
will be treated first as a tax-free return of the U.S. holder's adjusted tax
basis in the common shares and amounts in excess of such basis will be treated
as capital gain. IR-Limited will maintain calculations of its earnings and
profits under U.S. federal income tax principles.
49
The amount of any distribution of property other than cash will be the fair
market value of such property on the date of distribution.
It is anticipated that only a portion of the dividends received by a U.S.
holder with respect to IR-Limited Class A common shares will be treated as
foreign source income for purposes of calculating such holder's foreign tax
credit limitation. This is because it is anticipated that (1) U.S. persons will
own a majority of the IR-Limited Class A common shares after the merger and (2)
a portion of the income derived by IR-Limited will be U.S. source income. To the
extent that dividends distributed by IR-Limited are treated as foreign source
income, they generally will constitute passive income, or, in the case of
certain U.S. holders, financial services income.
SALE OR EXCHANGE OF IR-LIMITED CLASS A COMMON SHARES
Subject to the discussion below under " -- Passive Foreign Investment
Company Considerations," a U.S. holder generally will recognize gain or loss on
the sale or exchange of IR-Limited Class A common shares equal to the difference
between the amount realized on such sale or exchange and the U.S. holder's
adjusted tax basis in such IR-Limited Class A common shares. Such gain or loss
will be capital gain or loss. In the case of a noncorporate U.S. holder, the
maximum marginal U.S. federal income tax rate applicable to such gain is
currently lower than the maximum marginal U.S. federal income tax rate
applicable to ordinary income if such U.S. holder's holding period for such
common shares exceeds one year. Gain or loss, if any, recognized by a U.S.
holder generally will be treated as U.S. source income or loss for U.S. foreign
tax credit purposes. The deductibility of capital losses is subject to
limitations.
CONTROLLED FOREIGN CORPORATION CONSIDERATIONS
In certain circumstances the Code directly taxes each "United States
shareholder" who owns stock of a "controlled foreign corporation" or "CFC" on a
portion of the CFC's income. Section 951(b) of the Code defines a United States
shareholder as any U.S. corporation, citizen, resident or other U.S. person who
owns (directly, indirectly, or constructively) 10% or more of the total combined
voting power of all classes of stock of a foreign corporation (a "U.S.
Shareholder"). In general, a foreign corporation is treated as a CFC only if
such U.S. shareholders collectively own more than 50% of the total combined
voting power or total value of the corporation's stock.
If a foreign corporation is treated as a CFC for an uninterrupted period of
30 days or more during any taxable year, a person who is a U.S. Shareholder in
the corporation on any day during the taxable year and who directly or
indirectly owns any stock in the corporation on the last day of such year in
which it is a CFC will have to include in its gross income for U.S. federal
income tax purposes its pro rata share of the CFC's "subpart F income" relating
to the period during which the corporation is a CFC, even if the subpart F
income is not distributed. In addition, gain on the sale of stock in a CFC
realized by a U.S. shareholder of a CFC is treated as ordinary income to the
extent of such shareholder's proportionate share of the CFC's undistributed
earnings and profits (including earnings and profits of CFC subsidiaries of such
CFC) accumulated during such shareholder's holding period of the stock while a
CFC.
IR-Limited does not expect to be a CFC under the rules set forth above.
However, following the merger, IR-New Jersey will be deemed for U.S. tax
purposes, through its ownership of the non-voting Class B common shares, to own
up to approximately 45% of the total value of the shares of IR-Limited. As a
consequence, any Class A common shareholder who is considered to own 10% of the
voting power in IR-Limited could cause the foreign subsidiaries of IR-Limited or
(if the Internal Revenue Service successfully takes the position that the Class
B common shares held by IR-New Jersey in IR-Limited are voting stock) IR-Limited
itself to be treated as CFCs.
If IR-Limited or any of its foreign subsidiaries is treated as a CFC, this
status should have no adverse effect on any shareholder of IR-Limited who does
not own (directly, indirectly, or constructively within the meaning of section
958(a) or 958(b) of the Code) 10% or more of the total combined voting power of
all classes of stock of IR-Limited or any of its foreign subsidiaries. See
"Comparison of Rights of Shareholders -- Shareholder Meetings -- Voting Rights."
If, however, IR-Limited or any of its foreign subsidiaries is treated
50
as a CFC for an uninterrupted period of 30 days or more during any taxable year,
a person who is a U.S. Shareholder of IR-Limited or the subsidiary on any day
during such taxable year and who directly or indirectly owns any stock in the
corporation on the last day of such year in which it is a CFC will have to
include in its gross income for U.S. federal income tax purposes its pro rata
share of the corporation's "subpart F income" relating to the period during
which the corporation is a CFC.
In addition, gain on the sale of stock in IR-Limited, if treated as a CFC,
realized by such a shareholder would be treated as ordinary income to the extent
of the shareholder's proportionate share of the undistributed earnings and
profits of IR-Limited and its CFC subsidiaries accumulated during the
shareholder's holding period of the stock while IR-Limited is a CFC.
If the U.S. Shareholder is a corporation, however, it may be eligible to
credit against its U.S. tax liability, with respect to these potential
inclusions, foreign taxes paid on the earnings and profits associated with the
included income. A disposition of shares by a U.S. Shareholder may result in
termination of the CFC status of IR-Limited or its foreign subsidiaries. See
"Risk Factors."
PASSIVE FOREIGN INVESTMENT COMPANY CONSIDERATIONS
A non-U.S. corporation will be classified as a passive foreign investment
company (a "PFIC") for U.S. federal income tax purposes in any taxable year in
which, after applying certain look-through rules, either (1) at least 75% of its
gross income is passive income or (2) at least 50% of the gross value of its
assets is attributable to assets that produce passive income or are held for the
production of passive income. Passive income for this purpose generally includes
dividends, interest, royalties, rents, and gains from commodities and securities
transactions.
Based on certain estimates of its gross income and gross assets and the
nature of its business, IR-Limited believes that it will not be classified as a
PFIC for its current taxable year. IR-Limited's status in future years will
depend on its assets and activities in those years. IR-Limited has no reason to
believe that its assets or activities will change in a manner that would cause
it to be classified as a PFIC. If IR-Limited was a PFIC, a U.S. holder of
IR-Limited Class A common shares generally would be subject to imputed interest
charges and other disadvantageous tax treatment with respect to any gain from
the sale or exchange of, and certain distributions with respect to, IR-Limited
Class A common shares.
If IR-Limited is treated as a PFIC, a U.S. holder of IR-Limited Class A
common shares could make a variety of elections that may alleviate the tax
consequences referred to above, and one of these elections may be made
retroactively. U.S. holders should consult their own tax advisors regarding the
tax consequences that would arise if IR-Limited was treated as a PFIC.
BACKUP WITHHOLDING TAX AND INFORMATION REPORTING REQUIREMENTS
Currently, distributions with respect to IR-New Jersey common stock and
proceeds from the sale or redemption of IR-New Jersey common stock are subject
to U.S. backup withholding tax and information reporting rules. After the
merger, it is anticipated that the same rules will apply to distributions with
respect to IR-Limited Class A common shares and to proceeds from the sale or
redemption of IR-Limited Class A common shares.
U.S. backup withholding tax and information reporting requirements
generally apply to certain payments to certain noncorporate holders of stock.
Information reporting generally will apply to payments of dividends on, and to
proceeds from the sale or redemption of, IR-Limited Class A common shares made
within the U.S. to a holder of IR-Limited Class A common shares (other than an
"exempt recipient," including a corporation, a payee that is not a U.S. person
that provides an appropriate certification and certain other persons). A payor
will be required to withhold 30.5% until January 1, 2002, 30% on or after
January 1, 2002, 29% on or after January 1, 2004, and 28% on or after January 1,
2006 of any payments of dividends on, or proceeds from the sale or redemption of
IR-Limited Class A common shares within the U.S. to a holder (other than an
"exempt recipient") if such holder fails to furnish its correct taxpayer
identification number or otherwise fails to comply with, or establish an
exemption from, such backup withholding tax requirements. In
51
the case of such payments by a payor or middleman within the U.S. to a foreign
simple trust, a foreign grantor trust, or a foreign partnership (other than
payments to a foreign simple trust, a foreign grantor trust, or a foreign
partnership that qualify as a "withholding foreign trust" or a "withholding
foreign partnership" within the meaning of U.S. Treasury regulations and
payments to a foreign simple trust, a foreign grantor trust, or a foreign
partnership that are effectively connected with the conduct of a trade or
business in the U.S.), the beneficiaries of the foreign simple trust, the
persons treated as the owners of the foreign grantor trust, or the partners of
the foreign partnership, as the case may be, will be required to provide the
certification discussed above in order to establish an exemption from backup
withholding tax and information reporting requirements. Moreover, a payor or
middleman may rely on a certification provided by a payee that is not a U.S.
person only if such payor or middleman does not have actual knowledge or a
reason to know that any information or certification stated in such certificate
is incorrect.
BERMUDA TAX CONSEQUENCES OF THE REORGANIZATION
Under current law, Bermuda will not impose on IR-Limited or any of its
operations or the shares, debentures or other obligations of IR-Limited, any tax
computed on profits or income, or computed on any capital asset, gain or
appreciation, or any tax in the nature of estate, duty or inheritance tax.
IR-Limited has obtained a written assurance from the Minister of Finance of
Bermuda under The Exempted Undertakings Tax Protection Act 1966 of Bermuda to
the effect that in the event of the enactment in Bermuda of any legislation
imposing any such tax, then the imposition of such tax shall not be applicable
to IR-Limited or to any of its operations or the shares, debentures or other
obligations of IR-Limited until March 28, 2016. The assurances are subject to
the proviso that they are not construed so as to prevent the application of any
tax or duty to such persons as are ordinarily resident in Bermuda (IR-Limited is
not currently so designated) or to prevent the application of any tax payable in
accordance with the provisions of The Land Tax Act 1967 of Bermuda or otherwise
payable in relation to the land, if any, leased to IR-Limited. IR-Limited is
required to pay certain annual Bermuda government and business fees. Under
current rates, IR-Limited will pay a maximum fixed annual fee of US$27,825. In
addition, all entities employing individuals in Bermuda are required to pay an
employment tax. Currently there is no Bermuda withholding tax on dividends that
may be paid by IR-Limited.
Under current Bermuda law, there will be no Bermuda income or withholding
tax on dividends paid by IR-Limited to its shareholders. Furthermore, no Bermuda
tax or other levy is payable on the sale or other transfer (including by gift or
on the death of the shareholder) of IR-Limited Class A common shares (other than
by shareholders resident in Bermuda).
52
SHAREHOLDER PROPOSALS AND NOMINATIONS
Pursuant to the merger IR-Limited will become the parent holding company of
IR-New Jersey and successor issuer of IR-New Jersey for purposes of U.S.
securities laws.
Any proposal by a shareholder intended to be presented at the 2002 Annual
Meeting of Shareholders of IR-Limited must be received at IR-Limited's principal
executive offices at 200 Chestnut Ridge Road, Woodcliff Lake, New Jersey 07677,
Attn: Vice President and Secretary, no later than November 19, 2001, for
inclusion in the proxy materials relating to that meeting.
IR-Limited's bye-laws provide that all shareholder nominations for nominees
for election to the board of directors must be made following written notice to
the secretary of IR-Limited accompanied by certain background and other
information specified in the bye-laws. In connection with any annual general
meeting, written notice of a shareholder's intention to make such nominations
must be given to the secretary of IR-Limited not later than the date which is 90
days in advance of the anniversary of the immediately preceding annual general
meeting or, if the date of the annual general meeting occurs more than 30 days
before, or 60 days after, the anniversary of such immediately preceding annual
general meeting, not later than the seventh day after the date on which notice
of such annual general meeting is given. For purposes of determining these dates
in years 2001-2002, the date of IR-New Jersey's last annual meeting will be
considered the date of the immediately preceding annual general meeting of
IR-Limited.
In order for a shareholder to bring other business before a general meeting
of shareholders, timely notice must be received by the secretary of IR-Limited
within the time limits described above. The notice must include a description of
the proposed item, the reasons the shareholder believes support its position
concerning the item, and other specified matters. These requirements are
separate from and in addition to the requirements you must meet to have a
proposal included in IR-Limited's proxy statement. The foregoing time limits
also apply in determining whether notice is timely for purposes of rules adopted
by the Securities and Exchange Commission relating to the exercise of
discretionary voting authority.
EXPERTS
The financial statements incorporated in this proxy statement/prospectus by
reference to the Annual Report on Form 10-K for the year ended December 31,
2000, have been so incorporated in reliance on the report by
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
LEGAL MATTERS
Certain legal matters in connection with IR-Limited Class A common shares
have been passed upon for us by our Bermuda counsel, Conyers Dill & Pearman.
Conyers Dill & Pearman has also rendered an opinion regarding the Bermuda tax
consequences of the reorganization referred to in "Income Tax Consequences of
the Reorganization -- Bermuda Tax Consequences of the Reorganization." Baker &
McKenzie has rendered an opinion regarding the U.S. federal income tax
consequences of the reorganization to shareholders referred to in "Income Tax
Consequences of the Reorganization -- U.S. Federal Income Tax Consequences of
the Reorganization."
WHERE YOU CAN FIND MORE INFORMATION
IR-Limited has filed with the Securities and Exchange Commission a
registration statement on Form S-4 (together with all amendments and exhibits,
we refer to it as the "Registration Statement") under the Securities Act of
1933, as amended. This proxy statement/prospectus, which constitutes a part of
the Registration Statement, does not contain all of the information set forth in
the Registration Statement, certain parts of which are omitted as permitted by
the rules and regulations of the Securities and Exchange Commission. For further
information, reference is hereby made to the Registration Statement. Statements
made in this proxy statement/prospectus as to the contents of any contract,
agreement or other document are
53
not necessarily complete. With respect to each such contract, agreement or other
document filed as an exhibit to the Registration Statement or otherwise filed
with the Securities and Exchange Commission, reference is made to the copy so
filed, and each such statement shall be deemed qualified in its entirety by such
reference.
IR-New Jersey is, and after the merger IR-Limited as successor issuer to
IR-New Jersey will be, subject to the informational requirements of the Exchange
Act, and in accordance therewith IR-New Jersey files and IR-Limited will file
reports, proxy and information statements and other information with the
Securities and Exchange Commission. Such reports, proxy and information
statements and other information filed with the Securities and Exchange
Commission, can be inspected and copied at the public reference facilities
maintained by the Securities and Exchange Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 and at the regional office of the Securities and Exchange
Commission at Citicorp Center, 500 West Madison Street, Chicago, Illinois 60661.
You may obtain information on the operation of the Public Reference Room by
calling the Securities and Exchange Commission at (800) SEC-0330. Copies of
reports, proxy and information statements and other information regarding
registrants that file electronically (including IR-New Jersey) are available on
the Securities and Exchange Commission's web site at http://www.sec.gov.
Upon completion of the reorganization, IR-Limited Class A common shares
will be traded on the New York Stock Exchange, the same exchange on which IR-New
Jersey common stock is currently traded. At the time of commencement of such
trading, IR-New Jersey common stock will be delisted and will no longer be
registered pursuant to Section 12 of the Exchange Act. At such time, your shares
will have become IR-Limited Class A common shares and IR-Limited Class A common
shares will be registered pursuant to Section 12 of the Exchange Act.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by IR-New Jersey with the Securities and
Exchange Commission (File No. 1-985) pursuant to the Exchange Act are hereby
incorporated by reference in this proxy statement/ prospectus:
1. Current Report on Form 8-K, dated February 6, 2001;
2. Current Report on Form 8-K, dated February 9, 2001;
3. Current Report on Form 8-K/A, dated February 9, 2001;
4. Current Report on Form 8-K, dated September 30, 2001;
5. Current Report on Form 8-K, dated October 16, 2001;
6. Proxy Statement filed March 15, 2001;
7. Annual Report on Form 10-K for the fiscal year ended December 31,
2000;
8. Quarterly Report on Form 10-Q for the quarter ended March 31, 2001;
9. Quarterly Report on Form 10-Q for the quarter ended June 30, 2001;
and
10. The description of the IR-New Jersey Series A preference share
purchase rights in the Registration Statement on Form 8-A/A dated
November 13, 1998.
Each document filed by IR-New Jersey pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act subsequent to the date of this proxy
statement/prospectus and prior to the date of the special meeting shall be
deemed to be incorporated by reference in this proxy statement/prospectus and to
be a part of this proxy statement/prospectus from the date of filing of such
document. Any statement contained in this proxy statement/prospectus or in a
document incorporated or deemed to be incorporated by reference in this proxy
statement/prospectus shall be deemed to be modified or superseded for purposes
of the Registration Statement and this proxy statement/prospectus to the extent
that a statement contained in this proxy statement/prospectus or in any
subsequently filed document that also is or is deemed to be incorporated by
reference in this proxy statement/prospectus modifies or supersedes such
statement. Any such statement so
54
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of the Registration Statement or this proxy
statement/prospectus.
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROXY STATEMENT/PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.
THIS PROXY STATEMENT/PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF ANY OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY
JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE SUCH AN OFFER OR SOLICITATION.
IR-LIMITED IS PROHIBITED FROM MAKING ANY INVITATION TO THE PUBLIC IN BERMUDA TO
SUBSCRIBE FOR ANY OF ITS SHARES.
Neither delivery of this proxy statement/prospectus nor any sale made
hereunder shall, under any circumstances, create any implication that there has
been no change in the affairs of IR-New Jersey and IR-Limited since the date of
this proxy statement/prospectus.
55
ANNEX I
AGREEMENT AND PLAN OF MERGER
AMONG
INGERSOLL-RAND COMPANY LIMITED,
INGERSOLL-RAND COMPANY
AND
IR MERGER CORPORATION
DATED AS OF
OCTOBER 31, 2001
TABLE OF CONTENTS
PAGE
----
ARTICLE I MERGER........................................... 1
1.1 MERGER................................................. 1
1.2 EFFECTIVE TIME......................................... 1
1.3 EFFECTS OF THE MERGER.................................. 2
ARTICLE II NAME, CERTIFICATE OF INCORPORATION, DIRECTORS
AND EXECUTIVE OFFICERS.................................... 2
2.1 NAME OF SURVIVING CORPORATION.......................... 2
2.2 CERTIFICATE OF INCORPORATION; BY-LAWS.................. 2
2.3 DIRECTORS.............................................. 2
2.4 OFFICERS............................................... 2
ARTICLE III CONVERSION AND EXCHANGE OF STOCK............... 2
3.1 CONVERSION AND ISSUANCE OF IR-LIMITED SHARES........... 2
3.2 EXCHANGE OF STOCK...................................... 3
3.3 DISSENTERS' RIGHTS..................................... 4
ARTICLE IV BENEFIT AND COMPENSATION PLANS.................. 4
4.1 PLANS.................................................. 4
4.2 NEW CHANGE OF CONTROL AGREEMENTS....................... 4
ARTICLE V CONDITIONS PRECEDENT............................. 5
5.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE
MERGER................................................. 5
ARTICLE VI TERMINATION, AMENDMENT AND WAIVER............... 5
6.1 TERMINATION............................................ 5
6.2 EFFECT OF TERMINATION.................................. 5
6.3 AMENDMENT.............................................. 5
6.4 WAIVER................................................. 6
6.5 PROCEDURE FOR TERMINATION, AMENDMENT, EXTENSION OR
WAIVER................................................. 6
ARTICLE VII GENERAL PROVISIONS............................. 6
7.1 NOTICES................................................ 6
7.2 ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARIES......... 6
7.3 GOVERNING LAW.......................................... 7
7.4 GUARANTY............................................... 7
EXHIBIT A STOCK PLANS SPONSORED BY IR-NEW JERSEY........... A-1
EXHIBIT B STOCK PLANS SPONSORED BY IR-LIMITED.............. B-1
i
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger (this "Agreement") is made as of October
31, 2001, among Ingersoll-Rand Company Limited, a Bermuda company
("IR-Limited"), Ingersoll-Rand Company, a New Jersey corporation ("IR-New
Jersey"), and IR Merger Corporation, a New Jersey corporation ("Merger Sub") and
a newly-formed, indirect wholly-owned subsidiary of IR-Limited.
PRELIMINARY STATEMENTS
A. The respective Boards of Directors of IR-Limited, IR-New Jersey and
Merger Sub deem it advisable and in the best interests of their respective
shareholders to reorganize such that IR-New Jersey will effectively change its
domicile from New Jersey to Bermuda by merging Merger Sub with and into IR-New
Jersey.
B. The respective Boards of Directors of IR-Limited, IR-New Jersey and
Merger Sub have each approved the merger of Merger Sub with and into IR-New
Jersey, pursuant to which IR-New Jersey will be the surviving company in the
merger and become a wholly-owned, indirect subsidiary of IR-Limited, upon the
terms and subject to the conditions set forth in this Agreement (the "Merger"),
and whereby each issued share of common stock, par value $2.00 per share, of
IR-New Jersey ("IR-New Jersey Common Stock"), other than those shares of IR-New
Jersey Common Stock held by IR-New Jersey or any direct or indirect wholly-owned
subsidiary of IR-New Jersey, shall automatically become one Class A common
share, par value $1.00 per share, of IR-Limited ("IR-Limited Class A Common
Share").
C. Pursuant to the Merger, the preference stock purchase rights associated
with IR-New Jersey Common Stock issued pursuant to the Rights Agreement (the
"IR-New Jersey Rights Agreement"), dated as of November 9, 1998, between IR-New
Jersey and The Bank of New York, as Rights Agent (the "IR-New Jersey Rights"),
will expire and a new IR-Limited Right (as defined below) will be issued with
each IR-Limited Class A Common Share issued in the Merger.
D. The consummation of the Merger requires, among other things, the
adoption of this Agreement by the affirmative vote of at least a majority of
votes cast by holders of shares of IR-New Jersey Common Stock present in person
or represented by proxy at IR-New Jersey's special shareholders meeting that are
entitled to vote (the "IR-New Jersey Shareholder Approval").
AGREEMENT
The parties, intending to be legally bound, agree as follows:
ARTICLE I
MERGER
1.1 MERGER
Upon the terms and subject to the conditions set forth in this Agreement,
and in accordance with the New Jersey Business Corporation Act (the "NJBCA"),
Merger Sub shall be merged with and into IR-New Jersey at the Effective Time (as
defined below). Following the Effective Time, the separate corporate existence
of Merger Sub shall cease and IR-New Jersey shall continue as the surviving
corporation (the "Surviving Corporation"), becoming a wholly-owned, indirect
subsidiary of IR-Limited, and shall succeed to and assume all the rights and
obligations of Merger Sub in accordance with the NJBCA.
1.2 EFFECTIVE TIME
Subject to the provisions of this Agreement, as soon as practicable
following the satisfaction or waiver of the conditions set forth in Section 5.1,
the parties shall duly prepare, execute and file a Certificate of Merger (the
"Certificate of Merger") in accordance with Section 14A:10-4.1 of the NJBCA with
the Treasurer of the State of New Jersey. The Merger shall become effective upon
the filing of the Certificate of Merger (or at
such later time reflected in such Certificate of Merger as shall be agreed to by
IR-Limited and IR-New Jersey). The date and time when the Merger shall become
effective is hereinafter referred to as the "Effective Time."
1.3 EFFECTS OF THE MERGER
(a) General Effects. The Merger shall have the effects set forth in
Section 14A:10-6 of the NJBCA.
(b) Assumption of Obligations. The Surviving Corporation specifically
assumes any obligation of Merger Sub which is required to be specifically
assumed by the Surviving Corporation.
ARTICLE II
NAME, CERTIFICATE OF INCORPORATION,
DIRECTORS AND EXECUTIVE OFFICERS
2.1 NAME OF SURVIVING CORPORATION
The name of the Surviving Corporation shall be "Ingersoll-Rand Company."
2.2 CERTIFICATE OF INCORPORATION; BY-LAWS
(a) Certificate of Incorporation. The Certificate of Incorporation of the
Surviving Corporation shall be amended as of the Effective Time to contain the
provisions in the Certificate of Incorporation of Merger Sub in effect
immediately prior to the Effective Time, except that Article FIRST of such
Certificate of Incorporation shall provide that the name of the Surviving
Corporation shall be "Ingersoll-Rand Company."
(b) By-laws. The by-laws of the Merger Sub in effect immediately prior to
the Effective Time shall be the by-laws of the Surviving Corporation until
amended in accordance with applicable law.
2.3 DIRECTORS
The directors of Merger Sub immediately prior to the Effective Time shall
be the directors of the Surviving Corporation, until their respective successors
shall be elected and qualify, subject to prior death, resignation or removal in
accordance with the Certificate of Incorporation and by-laws of the Surviving
Corporation, or as otherwise provided by applicable law.
2.4 OFFICERS
The officers of IR-New Jersey immediately prior to the Effective Time shall
be the officers of the Surviving Corporation, until their respective successors
shall be elected and qualify, subject to prior death, resignation or removal in
accordance with the Certificate of Incorporation and by-laws of the Surviving
Corporation, or as otherwise provided by applicable law.
ARTICLE III
CONVERSION AND EXCHANGE OF STOCK
3.1 CONVERSION AND ISSUANCE OF IR-LIMITED SHARES
At the Effective Time, by virtue of the Merger and without any action on
the part of the holder of any shares:
(a) Conversion of IR-New Jersey Common Stock. Each issued share of IR-New
Jersey Common Stock, other than a share cancelled in accordance with Section
3.1(b), shall be converted into and become one fully paid and nonassessable
IR-Limited Class A Common Share. In furtherance thereof and in partial
consideration for entering into the transactions contemplated by this Agreement,
IR-Limited agrees to issue
2
IR-Limited Class A Common Shares to the current holders of IR-New Jersey Common
Stock as provided hereby.
(b) Cancellation of IR-New Jersey Owned Stock. Each issued share of
IR-New Jersey Common Stock that is owned by IR-New Jersey or by any direct or
indirect wholly-owned subsidiary of IR-New Jersey prior to the Effective Time
shall automatically be cancelled and retired and shall cease to exist, and no
IR-Limited Class A Common Shares or other consideration shall be delivered or
deliverable in exchange for such shares of IR-New Jersey Common Stock.
(c) Effect on IR-Limited Shares In Issue. Each IR-Limited Class A Common
Share held by IR-New Jersey or any of its subsidiaries immediately prior to the
Effective Time shall be repurchased by IR-Limited at the Effective Time in
exchange for one IR-Limited Class B common share, par value $1.00 per share
("IR-Limited Class B Common Share"), and each IR-Limited Class B Common Share
held by IR-New Jersey or any of its subsidiaries immediately prior to the
Effective Time shall remain in issue.
(d) Conversion of Merger Sub Common Stock. Each issued and outstanding
share of common stock, par value $.01 per share, of Merger Sub shall be
converted into and become one share of common stock of the Surviving Corporation
with the same rights, power and privileges as the shares so converted and shall
constitute the only outstanding shares of capital stock of the Surviving
Corporation.
(e) Stock-Based Compensation Plans. The stock-based benefit and deferred
compensation plans and programs and agreements providing for the grant or award
to IR-New Jersey's (and its affiliates') (i) employees of options or other
rights to purchase, receive, acquire, hold or realize the benefits measured by
the value of, as appropriate, IR-New Jersey Common Stock (the "Employee Stock
Plans") and (ii) directors of options or other rights to purchase, receive,
acquire, hold or realize the benefits measured by the value of, as appropriate,
IR-New Jersey Common Stock (the "Director Stock Plans") shall be maintained and
sponsored in accordance with Section 4.1 of this Agreement. The Employee Stock
Plans, together with the Director Stock Plans, are referred to as the "Stock
Plans."
(f) Dividend Reinvestment Plan. IR-Limited shall assume all the rights
and obligations of IR-New Jersey under IR-New Jersey's Dividend Reinvestment
Plan and such plan shall be deemed to provide for the issuance or purchase of,
or otherwise relate to, IR-Limited Class A Common Shares.
(g) Rights. Each IR-New Jersey Right shall automatically expire
immediately prior to the Effective Time in accordance with an amendment to the
IR-New Jersey Rights Agreement to be entered into prior to the Effective Time,
and a new right (each, an "IR-Limited Right") will be issued with each
IR-Limited Class A Common Share issued in the Merger pursuant to an IR-Limited
Rights Agreement, to be entered into prior to the Effective Time between
IR-Limited and The Bank of New York, as Rights Agent, containing terms and
conditions substantially similar to the IR-New Jersey Rights Agreement.
3.2 EXCHANGE OF STOCK
(a) Exchange Procedures. At the Effective Time, each outstanding
certificate theretofore representing shares of IR-New Jersey Common Stock, other
than shares to be cancelled as set forth in Section 3.1(b), shall automatically
represent the same number of IR-Limited Class A Common Shares, and therefore do
not need, and are not required, to be exchanged for certificates representing
IR-Limited Class A Common Shares. Following the Merger, certificates bearing the
name of IR-Limited will be issued in the normal course upon surrender of
certificates bearing the name of IR-New Jersey for exchange or transfer.
(b) No Further Ownership Rights in IR-New Jersey Common Stock. All
IR-Limited Class A Common Shares issued upon the Merger, including any
certificates issued upon the surrender for exchange of certificates in
accordance with the terms of this Article III, shall be deemed to have been
issued and paid in full satisfaction of all rights pertaining to the shares of
IR-New Jersey Common Stock theretofore represented by such certificates,
subject, however, to the Surviving Corporation's obligation (if any) to pay any
dividends or make any other distributions with a record date prior to the
Effective Time which may have been declared or made by IR-New Jersey on such
shares of IR-New Jersey Common Stock in accordance with the terms of this
Agreement or prior to the date of this Agreement and which remain unpaid at the
Effective Time, and
3
there shall be no further registration of transfers on the stock transfer books
of the Surviving Corporation of the shares of IR-New Jersey Common Stock that
were outstanding immediately prior to the Effective Time. If, after the
Effective Time, certificates are presented to the Surviving Corporation they
shall be cancelled and exchanged as provided in this Article III, except as
otherwise provided by law.
3.3 DISSENTERS' RIGHTS
There are no dissenters' rights under the NJBCA in connection with the
Merger.
ARTICLE IV
BENEFIT AND COMPENSATION PLANS
4.1 PLANS
(a) At the Effective Time, (i) IR-New Jersey shall continue to sponsor and
maintain each Stock Plan listed on Exhibit A, and (ii) IR-Limited shall assume
the rights and obligations of IR-New Jersey under each Stock Plan listed on
Exhibit B (the "Assumed Plans").
(b) To the extent any Stock Plan provides for the issuance or purchase of,
or otherwise relates to, IR-New Jersey Common Stock, after the Effective Time,
such Stock Plan shall be deemed to provide for the issuance or purchase of, or
otherwise relate to, IR-Limited Class A Common Shares and all options or awards
issued, or benefits available or based upon the value of IR-New Jersey Common
Stock, under such Stock Plan after the Effective Time shall entitle the holder
thereof to purchase, receive, acquire, hold or realize the benefits measured by
the value of, as appropriate, IR-Limited Class A Common Shares in accordance
with the terms of such Stock Plan. The outstanding options or other awards, or
other benefits available, under the Stock Plans shall be exercisable, issuable
or available upon the same terms and conditions as under such Stock Plans and
the agreements relating thereto immediately prior to the Effective Time, except
that upon the exercise, issuance or availability of such options, awards or
benefits, IR-Limited Class A Common Shares shall be issuable, held or available
in lieu of shares of IR-New Jersey Common Stock. The number of IR-Limited Class
A Common Shares issuable or available upon the exercise, issuance or
availability of such an option, award or benefit, immediately after the
Effective Time and the option, exercise or measurement price of each such
option, award or benefit shall be the number of shares and option, exercise or
measurement price in effect immediately prior to the Effective Time.
(c) Such amendments deemed necessary or appropriate by IR-New Jersey and
IR-Limited to effect the Merger and related reorganization transactions,
including to facilitate the assignment to IR-Limited of the Assumed Plans, shall
be adopted and entered into with respect to the Stock Plans. The IR-New Jersey
Shareholder Approval shall also be deemed any required shareholder approval of
such amendments and the assumption by IR-Limited of the Assumed Plans.
4.2 NEW CHANGE OF CONTROL AGREEMENTS
IR-Limited shall offer to enter into management continuity agreements (the
"New Change of Control Agreements") with each executive officer and key employee
of IR-New Jersey who, immediately prior to the Effective Time, is a party to a
management continuity agreement with IR-New Jersey (each, a "Change of Control
Agreement") and the terms and conditions of the New Change of Control Agreements
shall be substantially similar to those set forth in the Change of Control
Agreements.
4
ARTICLE V
CONDITIONS PRECEDENT
5.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER
The respective obligation of each party to effect the Merger is subject to
the satisfaction or waiver of the following conditions:
(a) Shareholder Approval. The IR-New Jersey Shareholder Approval shall
have been obtained.
(b) Form S-4. The registration statement on Form S-4 filed with the
Securities and Exchange Commission by IR-Limited in connection with the issuance
of the IR-Limited Class A Common Shares in the Merger shall have become
effective under the Securities Act of 1933, as amended, and shall not be the
subject of any stop order or proceedings seeking a stop order.
(c) NYSE Approval. The New York Stock Exchange (the "NYSE") shall have
confirmed that the IR-Limited Class A Common Shares have been approved for
listing on the NYSE, subject to notice of issuance, and may trade on the NYSE
and succeed to the ticker symbol "IR."
(d) Governmental, Regulatory and Other Material Third-Party Consents. All
filings required to be made prior to the Effective Time of the Merger with, and
all material consents, approvals, permits and authorizations required to be
obtained prior to the Effective Time from, any court or governmental or
regulatory authority or agency, domestic or foreign, or other person in
connection with the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby, including from the Bermuda
Monetary Authority, will have been made or obtained (as the case may be).
(e) No Injunctions or Restraints. No temporary restraining order,
preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition preventing the
consummation of the Merger or any of the other transactions contemplated hereby
shall be in effect.
ARTICLE VI
TERMINATION, AMENDMENT AND WAIVER
6.1 TERMINATION
This Agreement may be terminated and the Merger abandoned at any time prior
to the Effective Time, whether before or after the IR-New Jersey Shareholder
Approval, by action of the Board of Directors of IR-Limited, IR-New Jersey or
Merger Sub.
6.2 EFFECT OF TERMINATION
In the event of termination of this Agreement as provided in Section 6.1,
this Agreement shall forthwith become void and have no effect, without any
liability or obligation on the part of IR-New Jersey, Merger Sub or IR-Limited,
other than the provisions of this Article VI and Article VII.
6.3 AMENDMENT
This Agreement may be amended by the parties at any time before or after
the IR-New Jersey Shareholder Approval; provided, however, that after any such
approval, there shall not be made any amendment without additional shareholder
approval that (a) alters or changes the amount or kind of shares to be received
by shareholders in the Merger, (b) alters or changes any term of the Certificate
of Incorporation of the Surviving Corporation, except for alterations or changes
that could otherwise be adopted by the Board of Directors of the Surviving
Corporation, or (c) alters or changes any other terms and conditions of this
Agreement if any of the alterations or changes, alone or in the aggregate, would
materially adversely affect the
5
holders of shares of IR-New Jersey Common Stock. This Agreement may not be
amended except by an instrument in writing signed on behalf of each of the
parties.
6.4 WAIVER
At any time prior to the Effective Time, the parties may waive compliance
by the other parties with any of the agreements or conditions contained in this
Agreement. Any agreement on the part of a party to any such waiver shall be
valid only if set forth in an instrument in writing signed on behalf of such
party. The failure of any party to this Agreement to assert any of its rights
under this Agreement or otherwise shall not constitute a waiver of such rights.
6.5 PROCEDURE FOR TERMINATION, AMENDMENT, EXTENSION OR WAIVER
A termination of this Agreement and abandonment of the Merger pursuant to
Section 6.1, shall, in order to be effective, require action by the Board of
Directors of IR-Limited, IR-New Jersey or Merger Sub. An amendment of this
Agreement pursuant to Section 6.3 shall, in order to be effective, require
action by the Boards of Directors of IR-Limited, IR-New Jersey and Merger Sub
and, if applicable, shareholder approval. A waiver pursuant to Section 6.4
shall, in order to be effective, require action by the Boards of Directors of
the parties waiving compliance by the other parties with this Agreement.
ARTICLE VII
GENERAL PROVISIONS
7.1 NOTICES
All notices, requests, claims, demands and other communications under this
Agreement shall be in writing and shall be deemed given if delivered personally,
by facsimile (which is confirmed) or sent by overnight courier (providing proof
of delivery) to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice):
(a) if to IR-Limited:
Ingersoll-Rand Company Limited
200 Chestnut Ridge Road
Woodcliff Lake, New Jersey 07677
Attention: Secretary
(b) if to IR-New Jersey:
Ingersoll Rand Company
200 Chestnut Ridge Road
Woodcliff Lake, New Jersey 07677
Attention: Vice President and Secretary
(c) if to Merger Sub:
IR Merger Corporation
200 Chestnut Ridge Road
Woodcliff Lake, New Jersey 07677
Attention: Secretary
7.2 ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARIES
This Agreement (including the documents and instruments referred to herein)
(a) constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter of this Agreement and (b) except for the provisions of Article
III, is not intended to confer upon any person other than the parties any rights
or remedies.
6
7.3 GOVERNING LAW
This Agreement shall be governed by, and construed in accordance with, the
laws of the State of New Jersey regardless of the laws that might otherwise
govern under applicable principles of conflicts of laws thereof.
7.4 GUARANTY
At or immediately after the Effective Time, IR-Limited agrees to guaranty
such debt of IR-New Jersey as IR-Limited and IR-New Jersey shall mutually agree.
IN WITNESS WHEREOF, IR-New Jersey, IR-Limited and Merger Sub have caused
this Agreement to be signed by their respective officers thereunto duly
authorized, all as of the date first above written.
INGERSOLL-RAND COMPANY LIMITED
By: /s/ RONALD G. HELLER
------------------------------------
Name: Ronald G. Heller
Title: Secretary
INGERSOLL-RAND COMPANY
By: /s/ PATRICIA NACHTIGAL
------------------------------------
Name: Patricia Nachtigal
Title: Senior Vice President and
General Counsel
IR MERGER CORPORATION
By: /s/ GERALD E. SWIMMER
------------------------------------
Name: Gerald E. Swimmer
Title: President
7
EXHIBIT A
STOCK PLANS SPONSORED
BY IR-NEW JERSEY
1. Ingersoll-Rand Company Employee Stock Purchase Plan
2. I-R/Clark Leveraged Employee Stock Ownership Plan
3. Ingersoll-Rand Company Supplemental Savings and Stock
Investment Plan
4. IR Executive Deferred Compensation Plan
5. Ingersoll-Rand/Thermo King Savings and Stock Investment Plan
6. Ingersoll-Rand Company Savings Plan for Bargaining Unit
Employees
7. Management Incentive Unit Plan of Ingersoll-Rand Company
8. Ingersoll-Rand Company Savings and Stock Investment Plan
9. Dresser-Rand Company Retirement Savings Plan
10. Dresser-Rand Company Retirement Savings Plan B
11. Thermo-King de Puerto Rico Retirement Savings Plan
A-1
EXHIBIT B
STOCK PLANS SPONSORED
BY IR-LIMITED
1. Ingersoll-Rand Company Incentive Stock Plan of 1998
2. Ingersoll-Rand Company Incentive Stock Plan of 1995
3. Ingersoll-Rand Company Incentive Stock Plan of 1990
4. IR Director Deferred Compensation and Stock Award Plan
B-1
FORM NO. 2 ANNEX II
[BERMUDA CREST LOGO]
BERMUDA
THE COMPANIES ACT 1981
MEMORANDUM OF ASSOCIATION OF
COMPANY LIMITED BY SHARES
(Section 7(1) and (2))
MEMORANDUM OF ASSOCIATION
OF
INGERSOLL-RAND COMPANY LIMITED
(hereinafter referred to as "the Company")
1. The liability of the members of the Company is limited to the amount (if any)
for the time being unpaid on the shares respectively held by them.
2. We, the undersigned, namely,
BERMUDIAN NUMBER OF
STATUS SHARES
NAME ADDRESS (YES/NO) NATIONALITY SUBSCRIBED
---- ------- --------- ----------- ----------
James M. MacDonald Clarendon House Yes British One
2 Church Street
Hamilton HM 11
Bermuda
John C.R. Collis Clarendon House Yes British One
2 Church Street
Hamilton HM 11
Bermuda
Anthony D. Whaley Clarendon House Yes British One
2 Church Street
Hamilton HM 11
Bermuda
do hereby respectively agree to take such number of shares of the Company as may
be allotted to us respectively by the provisional directors of the Company, not
exceeding the number of shares for which we have respectively subscribed, and to
satisfy such calls as may be made by the directors, provisional directors or
promoters of the Company in respect of the shares allotted to us respectively.
3. The Company is to be an EXEMPTED Company as defined by the Companies Act
1981.
4. The Company, with the consent of the Minister of Finance, has power to hold
land situate in Bermuda not exceeding in all, including the
following parcels:
N/A
5. The authorised share capital of the Company is US$12,000 divided into shares
of US$1.00 each. The minimum subscribed share capital of the Company is
US$12,000.00.
6. The objects for which the Company is formed and incorporated are --
(a) to carry on business as a holding company and to acquire and hold
shares, stocks, debentures, debenture stock, interests, bonds, mortgages,
obligations and securities of any kind issued or guaranteed by any company,
corporation, partnership or other entity, or undertaking of whatever nature and
wherever constituted or carrying on business, and shares, stock, debentures,
debenture stock, interests, bonds, obligations and other securities issued or
guaranteed by any government, sovereign ruler, commissioners, trust, local
authority or other public body, whether in Bermuda or elsewhere, and to vary,
transpose, dispose of or otherwise deal with from time to time as may be
considered expedient any of the Company's investments for the time being;
(b) to acquire any such shares and other securities as are mentioned in
the preceding paragraph by subscription, syndicate participation, tender,
acquisition, purchase, exchange or otherwise and to subscribe for the same,
either conditionally or otherwise, and to guarantee the subscription thereof and
to exercise and enforce all rights and powers conferred by or incident to the
ownership thereof;
(c) to co-ordinate the administration, policies, management, supervision,
control, research, planning, trading and any and all other activities of any
company or companies now or hereafter incorporated, organised, or acquired which
may be or may become a Group Company (which expression, in this and the next
following paragraphs means a company, corporation, partnership or other entity,
wherever incorporated or formed, which is or becomes a holding company,
corporation, partnership or entity or a subsidiary of, or affiliated with, the
Company or any company, corporation, partnership or other entity now or
hereafter incorporated or formed or acquired which is considered to be within
the same "group" as the Company as such term is referred to in the Investment
Business Act 1998). A company, corporation, partnership or other entity shall be
deemed to be a subsidiary of the Company if it is controlled, directly or
indirectly, by the Company. A company, corporation, partnership or other entity
shall be deemed to be a holding company of the Company if that other company,
corporation, partnership or entity is its subsidiary. A company, corporation,
partnership or other entity shall be deemed to be affiliated with another
company, corporation, partnership or entity only if one of them is the
subsidiary of the other or both are subsidiaries of the same company,
corporation, partnership or entity or each of them is controlled by the same
person;
(d) to provide financing and financial investment, management and advisory
services to any Group Company, which shall include but not be limited to
granting or providing credit and financial accommodation, lending and making
advances with or without interest to any Group Company and lending to or
depositing with any bank funds or other assets to provide security (by way of
mortgage, charge, pledge, lien or otherwise) for loans or other forms of
financing granted to such Group Company by such bank; provided that the Company
shall not be deemed to have the power to act as executor or administrator, or as
trustee, except in connection with the issue of bonds and debentures by the
Company or any Group Company or in connection with a pension scheme for the
benefit of employees or former employees of the Company or a Group Company or
their respective predecessors, or the dependents or connections of such
employees or former employees;
(e) the packaging of goods of all kinds;
(f) the designing and manufacturing of goods and the buying, selling,
offering, providing and dealing in goods and services of all kinds, including
security and safety, climate control, industrial productivity and infrastructure
products and services;
(g) buying, selling and dealing in goods of all kinds;
(h) mining and quarrying and exploration for metals, minerals, fossil fuel
and precious stones of all kinds and their preparation for sale or use;
(i) exploring for, the drilling for, the moving, transporting and refining
petroleum and hydro carbon products including oil and oil products;
(j) scientific research including the improvement discovery and
development of processes, inventions, patents and designs and the construction,
maintenance and operation of laboratories and research centres;
2
(k) land, sea and air undertakings including the land, ship and air
carriage of passengers, mails and goods of all kinds;
(l) ships and aircraft owners, managers, operators, agents, builders and
repairers;
(m) acquiring, owning, selling, chartering, repairing or dealing in ships
and aircraft;
(n) travel agents, freight contractors and forwarding agents;
(o) dock owners, wharfingers, warehousemen;
(p) ship chandlers and dealing in rope, canvas oil and ship stores of all
kinds;
(q) all forms of engineering;
(r) farmers, livestock breeders and keepers, graziers, butchers, tanners
and processors of and dealers in all kinds of live and dead stock, wool, hides,
tallow, grain, vegetables and other produce;
(s) acquiring by purchase or otherwise and holding as an investment
inventions, patents, trade marks, trade names, sales and marketing intangibles,
trade secrets, designs and the like;
17. buying, selling, hiring, letting and dealing in conveyances of any
sort;
18. employing, providing, hiring out and acting as agent for artists,
actors, entertainers of all sorts, authors, composers, producers, directors,
engineers and experts or specialists of any kind;
19. to acquire by purchase or otherwise and hold, sell, dispose of and
deal in real property situated outside Bermuda and in personal property of all
kinds wheresoever situated; and
20. to enter into any guarantee, contract of indemnity or suretyship and
to assure, support or secure with or without consideration or benefit the
performance of any obligations of any person or persons and to guarantee the
fidelity of individuals filling or about to fill situations of trust or
confidence.
7. Powers of the Company
1. The Company shall, pursuant to the Section 42 of the Companies Act
1981, have the power to issue preference shares which are, at the option of the
holder, liable to be redeemed.
2. The Company shall, pursuant to Section 42A of the Companies Act 1981,
have the power to purchase its own shares.
Signed by each subscriber in the presence of at least one witness attesting
the signature thereof
/s/ ANTHONY D. WHALEY /s/ TIFFANIE PILCHER
----------------------------------------------------- -----------------------------------------------------
Anthony D. Whaley Tiffanie Pilcher
/s/ JAMES M. MACDONALD /s/ TIFFANIE PILCHER
----------------------------------------------------- -----------------------------------------------------
James M. MacDonald Tiffanie Pilcher
/s/ JOHN C. R. COLLIS /s/ TIFFANIE PILCHER
----------------------------------------------------- -----------------------------------------------------
John C. R. Collis Tiffanie Pilcher
(Subscribers) (Witnesses)
SUBSCRIBED this 31ST day of July, 2001.
3
ANNEX III
AMENDED AND RESTATED
BYE-LAWS
OF
INGERSOLL-RAND COMPANY LIMITED
TABLE OF CONTENTS
PAGE
----
INTERPRETATION................................................... 1
1. Interpretation.............................................. 1
BOARD OF DIRECTORS............................................... 2
2. Board of Directors.......................................... 2
3. Management of the Company................................... 2
4. Power to Authorise Specific Actions......................... 3
5. Power to Appoint Attorney................................... 3
6. Power to Delegate to a Committee............................ 3
7. Power to Appoint and Dismiss Employees...................... 3
8. Power to Borrow and Charge Property......................... 4
Exercise of Power to Purchase Shares of or Discontinue the
9. Company..................................................... 4
10. Election of Directors....................................... 4
11. Defects in Appointment of Directors......................... 5
12. Removal of Directors........................................ 5
13. Vacancies on the Board...................................... 6
14. Notice of Meetings of the Board............................. 6
15. Quorum at Meetings of the Board............................. 6
16. Meetings of the Board....................................... 6
17. Unanimous Written Resolutions of Directors.................. 7
18. Contracts and Disclosure of Directors' Interests............ 7
19. Remuneration of Directors................................... 7
OFFICERS......................................................... 7
20. Officers of the Company..................................... 7
21. Appointment and Authority of Officers....................... 7
22. Duties of Officers.......................................... 8
23. Chairman of Meetings........................................ 8
24. Register of Directors and Officers.......................... 8
MINUTES.......................................................... 8
25. Obligations of Board to Keep Minutes........................ 8
INDEMNITY........................................................ 8
26. Indemnification of Directors and Officers of the Company.... 8
MEETINGS......................................................... 10
27. Annual General Meeting...................................... 10
28. Special General Meetings.................................... 10
29. Accidental Omission of Notice of General Meeting............ 10
30. Meeting Called on Requisition of Members.................... 10
31. Short Notice................................................ 11
32. Postponement of Meetings.................................... 11
33. Quorum for General Meeting.................................. 11
34. Adjournment of Meetings..................................... 11
35. Attendance at Meetings...................................... 11
36. Unanimous Written Resolutions of Members.................... 12
i
PAGE
----
37. Attendance of Directors..................................... 12
38. Presiding Officer at Meetings............................... 12
39. Voting at Meetings.......................................... 12
40. Seniority of Joint Holders Voting........................... 13
41. Instrument of Proxy......................................... 13
42. Representation of Corporations at Meetings.................. 13
SHARE CAPITAL AND SHARES......................................... 13
43. Authorised Share Capital.................................... 13
44. Power to Issue Shares....................................... 15
Variation of Rights, Alteration of Share Capital and
45. Purchase of Shares of the Company........................... 15
46. Registered Holder of Shares................................. 16
47. Death of a Joint Holder..................................... 16
48. Certificated or Uncertificated Shares....................... 16
REGISTER OF MEMBERS.............................................. 16
49. Contents of Register of Members............................. 16
50. Inspection of Register of Members........................... 17
51. Transactions with Interested Members........................ 17
52. Record Dates................................................ 17
53. Scrutineers................................................. 17
TRANSFER OF SHARES............................................... 18
54. Instrument of Transfer...................................... 18
55. Restriction on Transfer..................................... 18
56. Transfers by Joint Holders.................................. 18
TRANSMISSION OF SHARES........................................... 18
57. Representative of Deceased Member........................... 18
58. Registration on Death or Bankruptcy......................... 18
59. Dividend Entitlement of Transferee.......................... 19
DIVIDENDS AND OTHER DISTRIBUTIONS................................ 19
60. Declaration of Dividends by the Board....................... 19
CAPITALISATION................................................... 19
61. Issue of Bonus Shares....................................... 19
ACCOUNTS AND FINANCIAL STATEMENTS................................ 19
62. Records of Account.......................................... 19
63. Fiscal Year................................................. 19
64. Financial Statements........................................ 19
AUDIT............................................................ 20
65. Appointment of Auditor...................................... 20
66. Remuneration of Auditor..................................... 20
67. Vacation of Office of Auditor............................... 20
68. Access to Books of the Company.............................. 20
69. Report of the Auditor....................................... 20
NOTICES.......................................................... 20
70. Notices to Members of the Company........................... 20
ii
PAGE
----
SEAL OF THE COMPANY.............................................. 21
71. The Seal.................................................... 21
72. Manner in Which Seal is to be Affixed....................... 21
WINDING-UP....................................................... 21
73. Winding-up/Distribution by Liquidator....................... 21
ALTERATION OF BYE-LAWS........................................... 21
74. Alteration of Bye-laws...................................... 21
iii
AMENDED AND RESTATED
BYE-LAWS
OF
INGERSOLL-RAND COMPANY LIMITED
A BERMUDA LIMITED LIABILITY COMPANY
INTERPRETATION
1. INTERPRETATION
(1) In these Bye-laws the following words and expressions shall, where not
inconsistent with the context and not defined in the text, have the following
meanings respectively:
(a) "Act" means the Companies Act 1981, as amended from time to time;
(b) "Auditor" includes any individual, general or limited partnership,
corporation, firm, association or company (including a limited liability
company);
(c) A person is a "beneficial owner" of any shares of the Company:
(i) which it has the right to acquire pursuant to any agreement, or
upon exercise of conversion rights, warrants or options, or otherwise;
and
(ii) which are beneficially owned, directly or indirectly
(including shares deemed owned through application of clause (i) above),
by any other person with which it has any agreement, arrangement or
understanding with respect to the acquisition, holding, voting or
disposition of shares or of any material part of the assets of the
Company or of it, or which is its "affiliate" or "associate" as those
terms are defined in Rule 12b-2 of the General Rules and Regulations
under the United States Securities Exchange Act of 1934 (or any
successor rule or regulation);
(d) "Board" means the Board of Directors appointed or elected pursuant
to these Bye-laws and acting by resolution in accordance with the Act and
these Bye-laws or the Directors present at a meeting of Directors at which
there is a quorum;
(e) "Business Combination" means:
(i) any amalgamation, merger or consolidation of the Company or one
of its subsidiaries with an Interested Member or with any person that
is, or would be after such amalgamation, merger or consolidation, an
affiliate or associate of an Interested Member;
(ii) any transfer or other disposition to or with an Interested
Member or any affiliate or associate of an Interested Member of all or
any material part of the assets of the Company or one of its
subsidiaries; and
(iii) any issuance or transfer of shares of the Company upon
conversion of or in exchange for the securities or assets of any
Interested Member, or with any person that is, or would be after such
amalgamation, merger or consolidation, an affiliate or associate of an
Interested Member;
(f) "Company" means the company for which these Bye-laws are approved
and confirmed;
(g) "Director" means a director of the Company;
(h) "Interested Member" means any Member that:
(i) is the beneficial owner, directly or indirectly, of 10% or more
of the voting power of the voting shares of the Company then in issue;
or
(ii) is an affiliate or associate of the Company and at any time
within the five-year period immediately prior to the date in question
was the beneficial owner, directly or indirectly, of 10% or more of the
voting power of the shares then in issue of the Company. For the purpose
of determining whether a Member is an Interested Member, the number of
voting shares of the Company then in issue shall include shares deemed
to be beneficially owned by such Member, but shall not include
any other unissued voting shares of the Company which may be issuable
pursuant to any agreement, arrangement or understanding, or upon
exercise of conversion rights, warrants or options, or otherwise;
(i) "Member" means the person registered in the Register of Members as
the holder of shares in the Company and, when two or more persons are so
registered as joint holders of shares, means the person whose name stands
first in the Register of Members as one of such joint holders or all of
such persons as the context so requires;
(j) "Notice" means written notice as further defined in these Bye-laws
unless otherwise specifically stated;
(k) "Officer" means any person appointed by the Board to hold an
office in the Company;
(l) "Person" means any individual, general or limited partnership,
corporation, firm, association, trust, estate, company (including a limited
liability company) or any other entity or organisation or bodies of persons
whether corporate or otherwise, including a government, a political
subdivision or agency or instrumentality thereof;
(m) "Register of Directors and Officers" means the Register of
Directors and Officers referred to in these Bye-laws;
(n) "Register of Members" means the Register of Members referred to in
these Bye-laws;
(o) "Resident Representative" means any person appointed to act as
resident representative and includes any deputy or assistant resident
representative; and
(p) "Secretary" means the person appointed to perform any or all of
the duties of secretary of the Company and includes any deputy or assistant
secretary.
(2) In these Bye-laws, where not inconsistent with the context:
(a) words denoting the plural number include the singular number and
vice versa;
(b) words denoting the masculine gender include the feminine gender;
(c) the word:
(i) "may" shall be construed as permissive;
(ii) "shall" shall be construed as imperative; and
(d) unless otherwise provided herein words or expressions defined in
the Act shall bear the same meaning in these Bye-laws.
(3) Expressions referring to writing or written shall, unless the contrary
intention appears, include cable, telex, telecopier, facsimile, printing,
computer generated email, lithography, photography and other modes of
representing words in legible and non-transitory form.
(4) Headings used in these Bye-laws are for convenience only and are not to
be used or relied upon in the construction hereof.
BOARD OF DIRECTORS
2. BOARD OF DIRECTORS
The business of the Company shall be managed by the Board.
3. MANAGEMENT OF THE COMPANY
(1) In managing the business of the Company, the Board may exercise all
such powers of the Company as are not, by statute or by these Bye-laws,
expressly required to be exercised by the Company in general
2
meeting, subject, nevertheless, to these Bye-laws, the provisions of any statute
and to such directions as may be prescribed by the Company in general meeting.
(2) No regulation or alteration to these Bye-laws made by the Company in
general meeting shall invalidate any prior act of the Board which would have
been valid if that regulation or alteration had not been made.
(3) The Board may procure that the Company pay all expenses incurred in
promoting and organising the Company.
4. POWER TO AUTHORISE SPECIFIC ACTIONS
The Board may from time to time and at any time authorise any person or
body of persons to act on behalf of the Company for any specific purpose and in
connection therewith to execute any agreement, document or instrument on behalf
of the Company.
5. POWER TO APPOINT ATTORNEY
The Board, or any duly authorised committee, may from time to time and at
any time by power of attorney appoint any person or body of persons, whether
nominated directly or indirectly by the Board, to be an attorney of the Company
for such purposes and with such powers, authorities and discretions (not
exceeding those vested in or exercisable by the Board) and for such period and
subject to such conditions as it may think fit and any such power of attorney
may contain such provisions for the protection and convenience of persons
dealing with any such attorney as the Board may think fit and may also authorise
any such attorney to sub-delegate all or any of the powers, authorities and
discretions so vested in the attorney. Such attorney may, if so authorised under
the seal of the Company, execute any deed or instrument under such attorney's
personal seal with the same effect as the affixation of the seal of the Company.
6. POWER TO DELEGATE TO A COMMITTEE
(1) The Board may delegate any or all of its powers to a committee or
committees appointed by the Board which may consist partly or entirely of
non-Directors and every such committee shall conform to such directions as the
Board shall impose on them; provided that a committee appointed by the Board
shall not have the power to set its or its members' remuneration. The meetings
and proceedings of any such committee shall be governed by the provisions of
these Bye-laws regulating the meetings and proceedings of the Board, so far as
the same are applicable and are not superseded by directions imposed by the
Board.
(2) The Board, by the affirmative vote of a majority of the entire Board,
may appoint from their number an executive committee of which committee a
majority of committee members shall constitute a quorum; and to such extent as
shall be provided in these Bye-laws and as may be permitted by law, such
committee shall have and may exercise any or all of the powers of the Board.
(3) The Board, by the affirmative vote of a majority of the entire Board,
may appoint any other standing committees and such standing committees shall
have and may exercise such powers as may be conferred and authorised by these
Bye-laws or by the Board and as may be permitted by law.
(4) Each committee of the Board shall keep complete, accurate minutes and
records of all actions taken by such committee, prepare such minutes and records
in a timely fashion and promptly distribute all such minutes and records to each
member of the Board at the meeting of the Board next ensuing.
7. POWER TO APPOINT AND DISMISS EMPLOYEES
The Board may appoint, suspend or remove any Officer, manager, secretary,
clerk, agent or employee of the Company and may fix their remuneration and
determine their duties. Nothing contained in this Bye-law shall be construed to
limit the Officers or any other Company official from being able to exercise
these same powers to the extent they are duly authorised to do so.
3
8. POWER TO BORROW AND CHARGE PROPERTY
The Board may exercise all the powers of the Company to borrow money and to
mortgage or charge its undertaking and property, or any part thereof, and may
issue debentures, debenture shares and other securities whether outright or as
security for any debt, liability or obligation of the Company or any third
party. Nothing contained in this Bye-law shall be construed to limit the
Officers or any other Company official from being able to exercise these same
powers to the extent they are duly authorised to do so.
9. EXERCISE OF POWER TO PURCHASE SHARES OF OR DISCONTINUE THE COMPANY
(1) The Board may exercise all the powers of the Company to purchase all or
any part of its own shares pursuant to Section 42A of the Act.
(2) The Board may exercise all the powers of the Company to discontinue the
Company to a named country or jurisdiction outside Bermuda pursuant to Section
132G of the Act.
10. ELECTION OF DIRECTORS
(1) The Board shall consist of not less than three and not more than twenty
Directors or such number in excess thereof as the Members may from time to time
determine. The initial Directors shall be elected or appointed at the statutory
meeting of the Company and thereafter, except in the case of casual vacancy,
Directors shall be elected or appointed at the annual general meeting or at any
special general meeting called for that purpose. Directors shall hold office for
such term as the Members may determine or, in the absence of such determination,
until the next annual general meeting or until their successors are elected or
appointed or their office is otherwise vacated. Any general meeting may
authorise the Board to fill any vacancy left unfilled at a general meeting. The
number of Directors to be elected at any time within the minimum and maximum
limitations specified herein shall be determined from time to time by the Board
pursuant to a resolution adopted by the affirmative vote of a majority of the
Board then in office. Any vacancy on the Board within the minimum and maximum
limitations specified in this Bye-law may be filled by a majority of the Board
then in office; provided that a quorum is present. During the existence of a
vacancy on the Board the remaining Directors shall have full power to act;
provided that a quorum is present. The holders of Class A Common Shares (as
defined hereinafter) shall be entitled at all meetings of the Members at which
Directors are elected to one vote for each such share held by them as described
in this Bye-Law. The holders of Class B Common Shares (as defined hereinafter)
shall not be entitled to vote for the election of Directors. At all elections of
Directors each holder of Class A Common Shares shall be entitled to as many
votes as shall equal the number of votes which such holder would be entitled to
cast at a general meeting, multiplied by the number of Directors to be elected,
and such holder may cast all such votes for a single Director, or may distribute
them among the number to be voted for or any two or more Directors as such
holder may see fit.
(2) The Board shall be divided as equally as may be possible into three
classes, each of which shall consist of such number as these Bye-laws may from
time to time provide. Initially, the Directors of the first class shall be
elected for a term of one year or until the first annual general meeting, the
Directors of the second class shall be elected for a term of two years or until
the second annual meeting, and the Directors of the third class shall be elected
for a term of three years or until the third annual meeting. At each annual
election thereafter, the successors of the Directors of the class whose term
expires in that year shall be elected to hold office for a term of three years,
so that the term of office of one class of Directors shall expire each year.
(3) If the number of Directors is changed, any newly created directorships
or decrease in directorships shall be so apportioned among the classes as to
make all classes as nearly equal in number as possible. In case of any increase
in the number of Directors of any class or classes within the minimum and
maximum limitations specified in Bye-law 10(1) causing a casual vacancy,
additional Directors may be elected by the Board to fill such casual vacancy,
but any such Director so elected shall hold office only until the next
succeeding annual general meeting of Members and until his or her successor
shall have been elected and qualified. No decrease in the number of Directors
shall shorten the term of any incumbent Director.
4
(4) Directors may be removed without cause only upon the affirmative vote
of the holders of at least 80% of the shares of the Company entitled to vote for
the election of Directors. Directors may be removed for cause only upon the
affirmative vote of the holders of at least 66 2/3% of the shares of the Company
entitled to vote for the election of Directors; provided that any meeting
convened and held to consider the removal of a Director shall be convened and
held in accordance with Bye-law 12.
(5) Notwithstanding subparagraph (1) of this Bye-law, any Member entitled
to vote for the election of Directors at a meeting or to express a consent in
writing without a meeting may nominate a person or persons for election as a
Director only if written notice of such Member's intent to make such nomination
is given to the Secretary of the Company, either by personal delivery, mail or
facsimile not later than (a) with respect to an election to be held at an annual
general meeting of Members, 90 days in advance of the anniversary of the
immediately preceding annual general meeting or if the date of the annual
general meeting of Members occurs more than 30 days before or 60 days after the
anniversary of such immediately preceding annual general meeting, not later than
the close of business on the seventh day following the date on which notice of
such meeting is given to Members and (b) in the case of any Member who wishes to
nominate a person or persons for election as a Director pursuant to consents in
writing by Members without a meeting (to the extent election by such consents is
permitted under applicable law and these Bye-laws), 60 days in advance of the
date on which materials soliciting such consents are first mailed to Members or,
if no such materials are required to be mailed under applicable law, 60 days in
advance of the date on which the first such consent in writing is executed. Each
such notice shall set forth the name and address of the Member who intends to
make the nomination and of the person or persons to be nominated for election as
a Director, a representation that the Member is a holder of record of shares of
the Company entitled to vote at such meeting or to express such consent in
writing and intends to appear in person or by proxy at the meeting to nominate
the person or persons specified in the notice or to execute such a consent in
writing to elect such person or persons as a Director, a description of all
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 for election as a Director are to be made by the
Member, such other information regarding each nominee proposed by such Member as
would have been required to be included in a proxy statement filed pursuant to
the proxy rules of the United States Securities and Exchange Commission if such
nominee had been nominated, or was intended to be nominated, for election as a
Director by the Board, and the consent of each nominee to serve as a Director if
so elected. The Board may refuse to acknowledge the nomination of any person not
made in compliance with the foregoing procedures.
11. DEFECTS IN APPOINTMENT OF DIRECTORS
All bona fide acts taken at any meeting of the Board or by a committee of
the Board or by any person acting as a Director shall, notwithstanding that it
be afterwards discovered that there was some defect in the appointment of any
Director or person acting as aforesaid, 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.
12. REMOVAL OF DIRECTORS
(1) Subject to Bye-law 10(4) and any provision to the contrary in these
Bye-laws, the Members may, at any special general meeting convened and held in
accordance with these Bye-laws, remove a Director; provided that the notice of
any such meeting convened for the purpose of removing a Director shall contain a
statement of the intention so to do and be served on such Director not less than
fourteen days before the meeting and at such meeting such Director shall be
entitled to be heard on the motion for such Director's removal.
(2) A vacancy on the Board created by the removal of a Director under the
provisions of subparagraph (1) of this Bye-law may be filled by the Members at
the meeting at which such Director is removed and, in the absence of such
election or appointment, the Board may fill the vacancy in accordance with
Bye-law 13.
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13. VACANCIES ON THE BOARD
(1) Subject to any requirements of these Bye-laws with respect to the
filling of vacancies among additional Directors elected by a class or classes of
shares, if the office of any Director becomes vacant, the remaining Directors
may, by a majority vote, elect a successor who shall hold office until the next
succeeding annual general meeting of the Members and until his or her successor
shall have been elected and qualified.
(2) The Board may act notwithstanding any vacancy in its number but, if and
so long as its number is reduced below the number fixed by these Bye-laws as the
quorum necessary for the transaction of business at meetings of the Board
pursuant to Bye-law 15, the continuing Directors or Director may act for the
purpose of (i) summoning a general meeting of the Company or (ii) preserving the
assets of the Company.
(3) The office of Director shall be vacated if the Director:
(a) is removed from office pursuant to these Bye-laws or is prohibited
from being a Director by law;
(b) is or becomes bankrupt or makes any arrangement or composition
with his or her creditors generally;
(c) is or becomes of unsound mind or dies; or
(d) resigns his or her office by notice in writing to the Company.
14. NOTICE OF MEETINGS OF THE BOARD
(1) Notice of a regular meeting of the Board shall be deemed to be duly
given to a Director if it is given to such Director verbally in person or by
telephone or otherwise communicated or sent to such Director by mail, courier
service, cable, telex, telecopier, facsimile, printing, computer generated email
or other mode of representing words in a legible and non-transitory form at such
Director's last known address or any other address given by such Director to the
Company for this purpose at least two days before the proposed date of the
meeting, but a failure of the Secretary to send such notice shall not invalidate
any proceedings of the Board at such meeting.
(2) Notice of a special meeting of the Board shall be deemed to be duly
given to a Director if it is sent to such Director by mail at least two days
before the proposed date of the meeting, or given to such Director verbally in
person or by telephone or otherwise communicated or sent to such Director by
mail, courier service, cable, telex, telecopier facsimile, printing, computer
generated email or other mode of representing words in a legible and
non-transitory form, at such Director's last known address or any other address
given by such Director to the Company for this purpose at least one day before
the proposed date of the meeting, but such notice may be waived by any Director.
At any special meeting at which every Director shall be present, even without
notice, any business may be transacted.
15. QUORUM AT MEETINGS OF THE BOARD
The quorum necessary for the transaction of business at all meetings of the
Board shall be a majority of the Directors then in office. If at any meeting of
the Board there be less than a quorum present, a majority of those present or
any Director solely present may adjourn the meeting from time to time without
further notice.
16. MEETINGS OF THE BOARD
(1) Regular meetings of the Board shall be held at such times and intervals
as the Board may from time to time determine.
(2) Special meetings of the Board shall be held on the requisition of the
Chairman, if one is appointed, the Deputy Chairman, if one is appointed, the
President, or by 33 1/3% of the Directors then in office.
(3) Directors may participate in any meeting of the Board by means of such
telephone, electronic or other communication facilities as permit all persons
participating in the meeting to communicate with each
6
other simultaneously and instantaneously, and participation in such a meeting
shall constitute presence in person at such meeting.
(4) Unless a greater number is expressly required by law or these Bye-laws,
the affirmative votes of a majority of the votes cast by the Directors present
at a meeting at which a quorum is in attendance shall be the act of the Board or
a committee thereof, as appropriate. At any time that these Bye-laws provide
that Directors elected by the holders of a class or series of shares shall have
more or less than one vote per Director on any matter, every reference in these
Bye-laws to a majority or other proportion of Directors shall refer to a
majority or other proportion of the votes of such Directors.
17. UNANIMOUS WRITTEN RESOLUTIONS OF DIRECTORS
A resolution in writing signed by all the Directors then in office, which
may be in counterparts, shall be as valid as if it had been passed at a meeting
of the Board duly called and constituted, such resolution to be effective on the
date on which the last Director signs the resolution.
18. CONTRACTS AND DISCLOSURE OF DIRECTORS' INTERESTS
(1) Any Director, or any firm, partner or any company with whom any
Director is associated, may act in a professional capacity for the Company and
such Director or such Director's firm, partner or such company shall be entitled
to remuneration for professional services as if such Director were not a
Director; provided that nothing herein contained shall authorise a Director or
Director's firm, partner or such company to act as Auditor of the Company.
(2) A Director who is directly or indirectly interested in a contract or
proposed contract or arrangement with the Company shall declare the nature of
such interest as required by the Act.
(3) Following a declaration being made pursuant to this Bye-law, and unless
disqualified by the chairman of the relevant Board meeting, a Director may vote
in respect of any contract or proposed contract or arrangement in which such
Director is interested and may be counted in the quorum at such meeting.
19. REMUNERATION OF DIRECTORS
The remuneration (if any) of the Directors shall be determined by the Board
from time to time. The Directors may also be paid all travel, hotel and other
expenses properly incurred by them in attending and returning from meetings of
the Board, any committee appointed by the Board, general meetings of the
Company, or in connection with the business of the Company or their duties as
Directors generally; provided that nothing contained herein shall be construed
to preclude any Director from serving the Company in any other capacity or
receiving compensation therefor.
OFFICERS
20. OFFICERS OF THE COMPANY
The Officers of the Company shall consist of a President and a Vice
President or a Chairman and a Deputy Chairman, such additional Vice Presidents
or Deputy Chairmen as the Board may from time to time determine, a Secretary and
such additional Officers, including a Chief Executive Officer, as the Board may
from time to time determine all of whom shall be deemed to be Officers for the
purposes of these Bye-laws. A person may hold any number of offices
simultaneously; provided that the same person may not hold the offices of
President and Vice President, or Chairman and Deputy Chairman, simultaneously.
21. APPOINTMENT AND AUTHORITY OF OFFICERS
(1) The Board shall, as soon as possible after the statutory meeting of
Members and after each annual general meeting, appoint a President and a Vice
President or a Chairman and a Deputy Chairman who shall be Directors. Any
vacancy arising in the position of President or Chairman shall be filled by the
Board at such
7
time and in such manner as the Board shall determine. Such Vice President or
Deputy Chairman shall have such duties and responsibilities as provided in these
Bye-laws or as may be determined by the Board from time to time.
(2) The Secretary and additional Officers, if any, shall be appointed by
the Board from time to time. The Chief Executive Officer shall have the
authority to appoint and remove assistant officers (who shall not be deemed to
be Officers for the purposes of these Bye-laws) with such authority as the Chief
Executive Officer shall deem appropriate.
22. DUTIES OF OFFICERS
The Officers shall have such powers and perform such duties in the
management, business and affairs of the Company as may be delegated to them by
the Board from time to time.
23. CHAIRMAN OF MEETINGS
Unless otherwise agreed by a majority of those attending and entitled to
attend and vote thereat, the Chairman, if one is appointed, or, in the absence
of a Chairman, the Deputy Chairman, if one is appointed, or, in the absence of
the Deputy Chairman, the President, shall act as chairman at any general
meeting, or in the absence of any of the foregoing Officers, a chairman shall be
appointed or elected by those present at the meeting and entitled to vote.
24. REGISTER OF DIRECTORS AND OFFICERS
The Board shall cause to be kept in one or more books at the registered
office of the Company a Register of Directors and Officers and shall enter
therein the particulars required by the Act.
MINUTES
25. OBLIGATIONS OF BOARD TO KEEP MINUTES
(1) The Board shall cause minutes to be duly entered in books provided for
the purpose:
(a) of all elections and appointments of Officers;
(b) of the names of the Directors present at each meeting of the Board
and of any committee appointed by the Board; and
(c) of all resolutions and proceedings of general meetings of the
Members, meetings of the Board and meetings of committees appointed by the
Board.
(2) Minutes prepared in accordance with the Act and these Bye-laws shall be
kept by the Secretary at the registered office of the Company.
INDEMNITY
26. INDEMNIFICATION OF DIRECTORS AND OFFICERS OF THE COMPANY
(1) The Company shall indemnify any person who was, is or is threatened to
be made a party to a Proceeding (as hereinafter defined) by reason of the fact
that he or she (a) is or was a Director or Officer of the Company or (b) while a
Director or Officer of the Company, is or was serving at the request of the
Company as a director, officer, partner, venturer, proprietor, trustee,
employee, agent or similar functionary of another foreign or domestic
corporation, general or limited partnership, firm, association, trust, estate,
company (including a limited liability company) or any other entity or
organisation or employee benefit plan or other enterprise, to the fullest extent
permitted under Bermuda law, as the same exists or may hereafter be amended.
Such right shall be a contract right and as such shall run to the benefit of any
Director or Officer who is elected and accepts the position of Director or
Officer of the Company or elects to continue to serve as
8
a Director or Officer of the Company while this Bye-law is in effect. Any repeal
or amendment of this Bye-law shall be prospective only and shall not limit the
rights of any such Director or Officer or the obligations of the Company with
respect to any claim arising from or related to the services of such Director or
Officer in any of the foregoing capacities prior to any such repeal or amendment
to this Bye-law. Such right shall include the right to be paid by the Company
expenses incurred in defending any such Proceeding in advance of its final
disposition to the maximum extent permitted under Bermuda law, as the same
exists or may hereafter be amended; provided that to the extent required by law,
such payment of expenses in advance of the final disposition of the Proceeding
shall be made only upon receipt of an undertaking by the person to repay all
amounts advanced if it should be ultimately determined that the Director or
Officer is not entitled to be indemnified under this Bye-law or otherwise. If a
claim for indemnification or advancement of expenses hereunder is not paid in
full by the Company within 60 days after a written claim has been received by
the Company, the claimant may at any time thereafter bring suit against the
Company to recover the unpaid amount of the claim, and if successful in whole or
in part, the claimant shall also be entitled to be paid the expenses of
prosecuting such claim. It shall be a defense to any such action that such
indemnification or advancement of costs of defense are not permitted under
Bermuda law, but the burden of proving such defense shall be on the Company.
Neither the failure of the Company (including the Board or any committee
thereof, independent legal counsel or Members) to have made its determination
prior to the commencement of such action that indemnification of, or advancement
of costs of defense to, the claimant is permissible in the circumstances nor an
actual determination by the Company (including the Board or any committee
thereof, independent legal counsel or Members) that such indemnification or
advancement is not permissible shall be a defense to the action or create a
presumption that such indemnification or advancement is not permissible. In the
event of the death of any person having a right of indemnification under the
foregoing provisions, such right shall inure to the benefit of his or her heirs,
executors, administrators and personal representatives.
Except as otherwise provided in this subparagraph (1), the Company shall be
required to indemnify a Director or Officer in connection with a Proceeding (or
part thereof) commenced by such person only if the commencement of such
Proceeding (or part thereof) by the person was authorised by the Board.
(2) The Company may additionally indemnify any employee or agent of the
Company to the fullest extent permitted by law.
(3) The rights conferred on any person indemnified by this Bye-law shall
not be exclusive of any other rights which such person may have or hereafter
acquire under any statute, provision of the Memorandum of Association of the
Company, these Bye-laws, agreement, vote of the Members or disinterested
Directors or otherwise.
(4) The Company's obligation, if any, to indemnify or to advance expenses
to any person indemnified who was or is serving at its request as a Director or
Officer or otherwise of another person described in subparagraph (1) shall be
reduced by any amount such person may collect as indemnification or advancement
of expenses from such other person.
(5) This Bye-law shall not limit the right of the Company, to the extent
and in the manner permitted by law, to indemnify and to advance expenses to
persons other than persons authorised for indemnification under this Bye-law
when and as authorised by appropriate corporate action.
(6) The indemnity provided by this Bye-law 26 shall not extend to any
matter in respect of any fraud or dishonesty which may attach to any of said
persons.
(7) "Proceeding," for purposes of this Bye-law 26, means any threatened,
pending or completed action, suit, claim or proceeding, whether civil, criminal,
administrative, arbitrative or investigative, any appeal in such an action,
suit, claim or proceeding, and any inquiry or investigation that could lead to
such an action, suit, claim or proceeding.
(8) Each Member agrees to exempt a Director or Officer from any claim or
right of action such Member might have, whether individually or by or in the
right of the Company, against any Director or Officer on account of any action
taken by such Director or Officer, or the failure of such Director or Officer to
take any
9
action in the performance of his or her duties with or for the Company; provided
that such waiver shall not extend to any matter in respect of any fraud or
dishonesty which may attach to such Director or Officer.
MEETINGS
27. ANNUAL GENERAL MEETING
(1) The annual general meeting of the Company shall be held in each year
other than the year of organisation at such time and place as the Board shall
appoint. At least five days notice of such meeting shall be given to each Member
stating the date, place and time at which the meeting is to be held, that the
election of Directors will take place thereat, and as far as practicable, the
other business to be conducted at the meeting.
(2) At any annual general meeting only such business shall be conducted as
shall have been brought before the meeting (a) by or at the direction of the
Board or (b) by any Member entitled to vote at such meeting who complies with
the procedures set forth in this Bye-law. Any Member entitled to vote at such
meeting may propose business to be included in the agenda of such meeting only
if written notice of such Member's intent is given to the Secretary of the
Company, either by personal delivery or mail or by facsimile, not later than 90
days in advance of the anniversary of the immediately preceding annual general
meeting or if the date of the annual general meeting of Members occurs more than
30 days before or 60 days after the anniversary of such immediately preceding
annual meeting, not later than the close of business on the seventh day
following the date on which notice of such meeting is given to Members. A
Member's notice to the Secretary shall set forth in writing as to each matter
such Member proposes to bring before the annual general meeting (a) a brief
description of the business desired to be brought before the annual general
meeting and the reasons for conducting such business at the annual general
meeting, (b) the name and address, as they appear on the Company's books, of the
Members proposing such business, (c) the class and number of shares of the
Company which are beneficially owned by the Member and (d) any material interest
of the Member in such business. Notwithstanding anything in these Bye-laws to
the contrary, no business shall be conducted at an annual general meeting except
in accordance with the procedures set forth in this subparagraph. The Officer of
the Company or other person presiding at the annual general meeting shall, if
the facts so warrant, determine and declare to the meeting that business was not
properly brought before the meeting in accordance with the provisions of this
subparagraph, and, if such Officer or other person should so determine, he or
she shall so declare to the meeting and any such business not properly brought
before the meeting shall not be transacted.
28. SPECIAL GENERAL MEETINGS
The Chairman, if one is appointed, the President or the Board by vote of a
majority of the Board may convene a special general meeting of the Company
whenever in its judgement such a meeting is necessary, upon not less than five
days' notice which shall state the date, time, place and the nature of the
business to be considered at the meeting. Special general meetings may be held
at such place as may from time to time be designated by the Board and stated in
the notice of the meeting. In any special general meeting of the Company only
such business shall be conducted as is set forth in the notice thereof.
29. ACCIDENTAL OMISSION OF NOTICE OF GENERAL MEETING
The accidental omission to give notice of a general meeting to, or the
non-receipt of notice of a general meeting by, any person entitled to receive
notice shall not invalidate the proceedings at that meeting.
30. MEETING CALLED ON REQUISITION OF MEMBERS
Notwithstanding anything herein, the Board shall, on the requisition of
Members holding at the date of the deposit of the requisition not less than
one-tenth of such of the paid-up capital of the Company as at the date of the
deposit carries the right to vote in general meetings of the Company, forthwith
proceed to convene a special general meeting of the Company and the provisions
of Section 74 of the Act shall apply; provided
10
that for any question proposed for consideration at any such special general
meeting to be approved shall require the affirmative vote of the holders of not
less than 66 2/3% of the shares entitled to vote thereon.
31. SHORT NOTICE
A general meeting of the Company shall, notwithstanding that it is called
by shorter notice than that specified in these Bye-laws, be deemed to have been
properly called if it is so agreed by (i) all the Members entitled to attend and
vote thereat in the case of an annual general meeting and (ii) a majority in
number of the Members having the right to attend and vote at the meeting, being
a majority together holding not less than 95% in nominal value of the shares
giving a right to attend and vote thereat in the case of a special general
meeting.
32. POSTPONEMENT OF MEETINGS
The Secretary may postpone any general meeting called in accordance with
the provisions of these Bye-laws (other than a meeting requisitioned under
Bye-law 30 of these Bye-laws); provided that notice of postponement is given to
each Member before the time for such meeting. Fresh notice of the date, time and
place for the postponed meeting shall be given to each Member in accordance with
the provisions of these Bye-laws.
33. QUORUM FOR GENERAL MEETING
(1) In any general meeting of the Company, except as otherwise expressly
required by the Act or by these Bye-laws, two or more persons present in person
and representing in person or by proxy a majority of the shares then in issue
entitled to vote at any meeting shall form a quorum for the transaction of
business; provided that if the Company shall at any time have only one Member,
one Member present in person or by proxy shall form a quorum for the transaction
of business in any general meeting of the Company held during such time. If the
holders of the number of shares necessary to constitute a quorum shall fail to
attend in person or by proxy at the time and place fixed by these Bye-laws for
an annual general meeting, a majority in interest of the Members present, in
person or by proxy, may adjourn from time to time without notice other than
announcement at the meeting until the holders of the amount of shares requisite
to constitute a quorum shall attend. At any such adjourned meeting at which a
quorum shall be present, any business may be transacted which might have been
transacted at the meeting as originally notified.
(2) Whenever the holders of any class or series of shares are entitled to
vote separately on a specified item of business, the presence in person or by
proxy of the holders of record of the shares of such class or series entitled to
cast a majority of the votes thereon shall constitute a quorum for the
transaction of such specified item of business.
34. ADJOURNMENT OF MEETINGS
The chairman of a general meeting may, with the consent of a majority of
the Members, in any general meeting at which a quorum is present (and shall if
so directed), adjourn the meeting. Unless the meeting is adjourned to a specific
date and time, fresh notice of the date, time and place for the resumption of
the adjourned meeting shall be given to each Member in accordance with the
provisions of these Bye-laws.
35. ATTENDANCE AT MEETINGS
Members may participate in any general meeting by means of such telephone,
electronic or other communication facilities as permit all persons participating
in the meeting to communicate with each other simultaneously and
instantaneously, and participation in such a meeting shall constitute presence
in person at such meeting.
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36. UNANIMOUS WRITTEN RESOLUTIONS OF MEMBERS
(1) Subject to subparagraph (6), any action which may be done by resolution
of the Company in general meeting or by resolution of a meeting of any class of
the Members of the Company, may, without a meeting and without any previous
notice being required, be done by resolution in writing signed by, or, in the
case of a Member that is a corporation whether or not a company within the
meaning of the Act, on behalf of, all the Members who at the date of the
resolution would be entitled to attend the meeting and vote on the resolution.
(2) A resolution in writing may be signed by, or, in the case of a Member
that is a corporation whether or not a company within the meaning of the Act, on
behalf of, all the Members, or any class thereof, in as many counterparts as may
be necessary.
(3) For the purposes of this Bye-law, the date of the resolution is the
date when the resolution is signed by, or, in the case of a Member that is a
corporation whether or not a company within the meaning of the Act, on behalf
of, the last Member to sign and any reference in any Bye-law to the date of
passing of a resolution is, in relation to a resolution made in accordance with
this Bye-law, a reference to such date.
(4) A resolution in writing made in accordance with this Bye-law is as
valid as if it had been passed by the Company in a general or special meeting or
by a meeting of the relevant class of Members, as the case may be, and any
reference in any Bye-law to a meeting at which a resolution is passed or to
Members voting in favour of a resolution shall be construed accordingly.
(5) A resolution in writing made in accordance with this Bye-law shall
constitute minutes for the purposes of Sections 81 and 82 of the Act.
(6) This Bye-law shall not apply to:
(a) a resolution passed pursuant to Section 89(5) of the Act; or
(b) a resolution passed for the purpose of removing a Director before
the expiration of his or her term of office under these Bye-laws.
37. ATTENDANCE OF DIRECTORS
The Directors of the Company shall be entitled to receive notice of, and to
attend and be heard in any general meeting.
38. PRESIDING OFFICER AT MEETINGS
At all meetings of Members, unless otherwise determined by the Board, the
Chairman, if one is appointed, or, in the absence of a Chairman, the Deputy
Chairman, if one is appointed, or, in the absence of the Deputy Chairman, the
President, shall preside and the Secretary shall act as secretary of the
meeting.
39. VOTING AT MEETINGS
Except as otherwise expressly required by the Act or these Bye-laws, any
question proposed for the consideration of the Members at any general meeting at
which a quorum is in attendance shall be decided by the affirmative vote of a
majority of the votes cast by ballot by the Members in person or by proxy
appointed by instrument in writing subscribed by such Member or by his or her
duly authorised attorney and delivered to the chairman of the meeting. Without
limiting the generality of the foregoing, any matter which relates to the
amalgamation, merger or consolidation of the Company with another entity or the
sale, lease or exchange of all or substantially all of the assets of the Company
shall, except as otherwise expressly provided in these Bye-laws, require the
affirmative vote of a majority of the votes cast in order to be approved. In the
case of an equality of votes the resolution shall fail. Directors shall be
elected as set forth in Bye-law 10.
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40. SENIORITY OF JOINT HOLDERS VOTING
In the case of joint holders 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.
41. INSTRUMENT OF PROXY
The instrument appointing a proxy shall be in writing in the form as may be
prescribed by the Board from time to time, under the hand of the appointor or of
the appointor's attorney duly authorised in writing, or if the appointor is a
corporation, either under its seal, or under the hand of a duly authorised
officer or attorney. The decision of the chairman of any general meeting as to
the validity of any instrument of proxy shall be final.
42. REPRESENTATION OF CORPORATIONS AT MEETINGS
A corporation which is a Member may, by written instrument, authorise such
person as it thinks fit to act as its representative at any meeting of the
Members and the person so authorised shall be entitled to exercise the same
powers on behalf of the corporation which such person represents as that
corporation could exercise if it were an individual Member. Notwithstanding the
foregoing, the chairman of the meeting may accept such assurances as he or she
thinks fit as to the right of any person to attend and vote in general meetings
on behalf of a corporation that is a Member.
SHARE CAPITAL AND SHARES
43. AUTHORISED SHARE CAPITAL
(1) The authorised share capital of the Company is US$1,175,010,000,
consisting of (1) 1,175,000,000 common shares of the par value of US$1.00 per
share, which common shares consist of (a) 600,000,000 Class A common shares
("Class A Common Shares") and 575,000,000 Class B common shares ("Class B Common
Shares"), and (2) 10,000,000 preference shares of the par value of US$0.001 per
share ("Preference Shares"), with any series of Preference Shares being
designated from time to time pursuant to subparagraph (4) of this Bye-law.
(2) Subject to these Bye-laws, the holders of Class A Common Shares shall:
(a) subject to Bye-law 43(3)(b), be entitled to such dividends as the
Board may, in its discretion, from time to time declare and pay out of
funds legally available for the payment of dividends;
(b) in the event of a liquidation, dissolution or winding-up of the
Company, whether voluntary or involuntary or for the purpose of a
reorganisation or otherwise or upon any distribution of capital, after
payment in full has been made to the holders of the Preference Shares of
the amounts to which they are respectively entitled or sufficient sums have
been set apart for the payment thereof, be entitled to receive ratably any
and all surplus assets remaining to be paid or distributed;
(c) subject to any required Preference Share class votes, be entitled
to one vote per Class A Common Share held by them and shall vote together
as a single class on all matters submitted to a vote of the Members with
the holders of (i) Preference Shares (but only to the extent the holders of
Preference Shares shall be entitled to vote with respect to the applicable
series of Preference Shares or under the Act) and (ii) Class B Common
Shares (but only to the extent the holders of Class B Common Shares shall
be entitled to vote under the Act);
(d) generally be entitled to enjoy all of the rights attaching to
Class A Common Shares; and
(e) not be entitled to any preemptive or preferential rights to
subscribe for or purchase any shares of any class or series of shares of
the Company, now or hereafter authorised, or any series convertible into,
or warrants or other evidences of optional rights to purchase or subscribe
for, shares of any class or series of the Company, now or hereafter
authorised.
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(3) Subject to these Bye-laws, the holders of Class B Common Shares shall
have all of the rights of the holders of Class A Common Shares, except that:
(a) the holders of Class B Common Shares shall not be entitled to
vote, except as to matters for which the Act specifically requires voting
rights for otherwise nonvoting shares;
(b) if a dividend or other distribution in cash, shares or other
property is declared or paid on Class A Common Shares, a like dividend or
other distribution in kind and amount shall also be declared and paid on
Class B Common Shares;
(c) the holders of Class B Common Shares shall have the right to
convert their shares into Class A Common Shares on a one-for-one basis in
the following circumstances:
(i) to satisfy the obligations of the Company or its subsidiaries
or affiliated companies to issue Class A Common Shares with regard to
the exercise of share options, grants or purchases of shares pursuant to
share incentive plans, employee share purchase plans, dividend
reinvestment plans or other stock-based compensation, retirement or
deferred compensation plans sponsored by the Company or its subsidiaries
or affiliated companies; or
(ii) as consideration for any acquisition of stock or assets of a
third party;
(d) in the event of the transfer of Class B Common Shares to any
person other than a wholly-owned, direct or indirect, subsidiary of the
Company, Class B Common Shares so transferred shall automatically be
converted into Class A Common Shares on a one-for-one basis, subject to
adjustment for share divisions or other recapitalization events; and
(e) the holders of Class B Common Shares shall have the right upon
written notice to require the Company, subject to Section 42A of the Act,
to purchase for cash the number of Class B Common Shares stated in such
notice at the fair market value per Class A Common Share on the date of
such notice. Any such purchase shall be settled within 180 calendar days of
the day such notice is given and shall include simple interest from the
date of the notice to but not including the payment date at a rate equal to
the prime rate charged by the Chase Manhattan Bank or its successor. For
purposes of this paragraph, the fair market value per Class A Common Share,
as of any date, means the average of the high and low sales prices of a
Class A Common Share as reported on the New York Stock Exchange composite
tape on the applicable date, or if no sales of Class A Common Shares were
made on the New York Stock Exchange on that date, the average of the high
and low prices as reported on the composite tape for the most recent
preceding day on which sales of Class A Common Shares were made. No
dividends shall be declared on any Class B Common Shares for which notice
has been given under this paragraph.
(4) The Board is empowered to cause the Preference Shares to be issued from
time to time as shares of one or more series of Preference Shares, and in the
resolution or resolutions providing for the issue of shares of each particular
series, before issuance, the Board is expressly authorised to fix:
(a) the distinctive designation of such series and the number of
shares which shall constitute such series, which number may be increased
(except as otherwise provided by the Board in creating such series) or
decreased (but not below the number of shares thereof then in issue) from
time to time by resolution of the Board;
(b) the rate of dividends payable on shares of such series, whether or
not and upon what conditions dividends on shares of such series shall be
cumulative and, if cumulative, the date or dates from which dividends shall
accumulate;
(c) the terms, if any, on which shares of such series may be redeemed,
including without limitation, the redemption price or prices for such
series, which may consist of a redemption price or scale of redemption
prices applicable only to redemption in connection with a sinking fund
(which term as used herein shall include any fund or requirement for the
periodic purchase or redemption of shares), and the same or a different
redemption price or scale of redemption prices applicable to any other
redemption;
14
(d) the terms and amount of any sinking fund provided for the purchase
or redemption of shares of such series;
(e) the amount or amounts which shall be paid to the holders of shares
of such series in case of liquidation, dissolution or winding up of the
Company, whether voluntary or involuntary;
(f) the terms, if any, upon which the holders of shares of such series
may convert shares thereof into shares of any other class or classes or of
any one or more series of the same class or of another class or classes;
(g) the voting rights, full or limited, if any, of the shares of such
series; and whether or not and under what conditions the shares of such
series (alone or together with the shares of one or more other series
having similar provisions) shall be entitled to vote separately as a single
class, for the election of one or more additional Directors of the Company
in case of dividend arrearages or other specified events, or upon other
matters;
(h) whether or not the holders of shares of such series, as such,
shall have any preemptive or preferential rights to subscribe for or
purchase shares of any class or series of shares of the Company, now or
hereafter authorised, or any securities convertible into, or warrants or
other evidences of optional rights to purchase or subscribe for, shares of
any class or series of the Company, now or hereafter authorised;
(i) whether or not the issuance of additional shares of such series,
or of any shares of any other series, shall be subject to restrictions as
to issuance, or as to the preferences, rights and qualifications of any
such other series; and
(j) such other rights, preferences and limitations as may be permitted
to be fixed by the Board of the Company under the laws of Bermuda as in
effect at the time of the creation of such series.
(5) Subject to these Bye-laws and except to the extent otherwise provided
for in a series of Preference Shares in its designation, the Preference Shares
shall be of equal rank and be identical in all respects. The Board is authorised
to change the designations, rights, preferences and limitations of any series of
Preference Shares theretofore established, no shares of which have been issued.
44. POWER TO ISSUE SHARES
(1) Subject to these Bye-laws and without prejudice to any special rights
previously conferred on the holders of any existing shares or class of shares,
the Board shall have the power to issue any unissued shares of the Company on
such terms and conditions as it may determine and any shares or class of shares
may be issued with such preferred, deferred or other special rights or such
restrictions, whether in regard to dividend, voting, return of capital or
otherwise as the Board may from time to time prescribe.
(2) The Board shall, in connection with the issue of any share, have the
power to pay such commission and brokerage as may be permitted by law.
(3) Unless otherwise permitted by law, the Company shall not give, whether
directly or indirectly, whether by means of loan, guarantee, provision of
security or otherwise, any financial assistance for the purpose of a purchase or
subscription made or to be made by any person of or for any shares in the
Company, but nothing in this Bye-law shall prohibit transactions mentioned in
Sections 39A, 39B and 39C of the Act.
45. VARIATION OF RIGHTS, ALTERATION OF SHARE CAPITAL AND PURCHASE OF SHARES OF
THE COMPANY
(1) Subject to the provisions of Sections 42 and 43 of the Act and except
as otherwise expressly set forth in these Bye-laws, any Preference Shares may be
issued or converted into shares that, at a determinable date or at the option of
the Company, are liable to be redeemed on such terms and in such manner as the
Company before the issue or conversion may by resolution of the Members
determine.
(2) If at any time the share capital 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) may, whether or not the Company is being
wound-up, be varied with the consent in writing of the holders of 75% of the
shares then in
15
issue of that class or with the sanction of a resolution passed by a majority of
the votes cast in a separate general meeting of the holders of the shares of the
class in accordance with Section 47(7) of the Act. The rights conferred upon the
holders of the shares of any class issued with preferred or other rights 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 pari passu therewith.
(3) The Company may from time to time by resolution of the Members change
the currency denomination of, increase, alter or reduce its share capital in
accordance with the provisions of Sections 45 and 46 of the Act. Where, on any
alteration of share capital, fractions of shares or some other difficulty would
arise, the Board may deal with or resolve the same in such manner as it thinks
fit including, without limiting the generality of the foregoing, the issue to
Members, as appropriate, of fractions of shares and/or arranging for the sale or
transfer of the fractions of shares of Members.
(4) The Company may from time to time purchase its own shares in accordance
with the provisions of Section 42A of the Act.
46. REGISTERED HOLDER OF SHARES
(1) The Company shall be entitled to treat the registered holder of any
share as the absolute owner thereof and accordingly shall not be bound to
recognise any equitable or other claim to, or interest in, such share on the
part of any other person.
(2) Any dividend, interest or other moneys payable in cash in respect of
shares may be paid by direct deposit to the bank account designated by the
Member for such purpose and cheque or draft sent through the post directed to
the Member at such Member's address in the Register of Members or, in the case
of joint holders, to such address of the holder first named in the Register of
Members, or to such person and to such address as the holder or joint holders
may in writing direct. If two or more persons are registered as joint holders of
any shares any one can give an effectual receipt for any dividend paid in
respect of such shares.
47. DEATH OF A JOINT HOLDER
Where two or more persons are registered as joint holders of a share or
shares then in the event of the death of any joint holder or holders the
remaining joint holder or holders shall be absolutely entitled to the said share
or shares and the Company shall, subject to Bye-law 58, recognise no claim in
respect of the estate of any joint holder except in the case of the last
survivor of such joint holders.
48. CERTIFICATED OR UNCERTIFICATED SHARES
(1) The shares of the Company may be issued in certificated or
uncertificated form. The Board shall have power and authority to make such rules
and regulations as it may deem expedient concerning the issue, transfer and
registration of such certificated or uncertificated shares of the Company.
(2) Promptly after uncertificated shares have been registered as issued,
the Company or its transfer agent shall send to the registered owner thereof a
written statement containing a description of the issue of which such shares are
a part, the number of shares registered, the date of registration and such other
information as may be required or appropriate.
REGISTER OF MEMBERS
49. CONTENTS OF REGISTER OF MEMBERS
(1) The Board shall cause to be kept in one or more books a Register of its
Members and shall enter therein the particulars required by the Act which are as
follows:
(a) the name and address of each Member, the number and, where
appropriate, the class or series of shares held by such Member and the
amount paid on such shares;
16
(b) the date on which each person was entered in the Register as a
Member; and
(c) the date on which any person ceased to be a Member.
(2) Subject to the Act, the Company may keep an overseas or local or other
branch register of Members resident in any place, and the Board may make and
vary such regulations as it determines in respect of the keeping of any such
register and maintaining a registration office in connection therewith.
50. INSPECTION OF REGISTER OF MEMBERS
The Register of Members and, if applicable, any branch register of Members
shall be open to inspection at the registered office of the Company and, if
applicable, any registration office, on every business day, subject to such
reasonable restrictions as the Board may impose, so that not less than two hours
in each business day be allowed for inspection. The Register of Members and, if
applicable, any branch register of Members may, after notice has been given by
advertisement in an appointed newspaper to that effect, be closed for any time
or times not exceeding in the whole thirty days in each year.
51. TRANSACTIONS WITH INTERESTED MEMBERS
(1) The Company may not engage, at any time, in any Business Combination
with any Interested Member unless the Business Combination receives the
affirmative vote of the holders of 80% of the shares then in issue of all
classes of shares of the Company entitled to vote, considered for the purposes
of this provision as one class.
(2) Interested Member status of a Member is determined as of the date of
any action taken by the Board with respect to such transaction or as of any
record date for the determination of Members entitled to notice and to vote with
respect thereto or immediately prior to the consummation of such transaction.
Any determination made in good faith by the Board, on the basis of information
at the time available to it, as to whether any person is an Interested Member,
shall be conclusive and binding for all purposes of these Bye-laws.
(3) The provisions of subparagraph (1) of this Bye-law shall not apply to
(a) any Business Combination with an Interested Member that has been approved by
the Board or (b) any agreement for the amalgamation, merger or consolidation of
any subsidiary of the Company with the Company or with another subsidiary of the
Company if (i) the provisions of this subparagraph shall not be changed or
otherwise affected by or by virtue of the amalgamation, merger or consolidation
and (ii) the holders of greater than 50% of the voting power of the Company or
the subsidiary, as appropriate, immediately prior to the amalgamation, merger or
consolidation continue to hold greater than 50% of the voting power of the
amalgamated company immediately following the amalgamation, merger or
consolidation.
52. RECORD DATES
Notwithstanding any other provision of these Bye-laws, the Board may fix
any date as the record date for:
(a) determining the Members entitled to receive any dividend; and
(b) determining the Members entitled to receive notice of and to vote
in any general meeting of the Company.
53. SCRUTINEERS
(1) One or more scrutineers may be appointed by the Board to act at any
meeting of Members, or, if the Board fails to act, the chairman of the meeting
may appoint a scrutineer or scrutineers. A scrutineer may or may not be a
Member, but shall not be a candidate for the office of Director.
(2) The scrutineer or scrutineers shall determine the number of shares then
in issue and the voting power of each, the shares represented at the meeting,
the existence of a quorum, the validity and effect of proxies, and shall receive
votes, ballots or consents, hear and determine all challenges and questions
arising in
17
connection with the right to vote, count and tabulate all votes, ballots or
consents, determine the result, and do such acts as are proper to conduct the
election or vote with fairness to all Members.
(3) Each scrutineer, before entering upon the discharge of the duties
described in Bye-law 53(2), shall be sworn faithfully to execute the duties of a
scrutineer at such meeting with strict impartiality, and according to the best
of such person's ability.
TRANSFER OF SHARES
54. INSTRUMENT OF TRANSFER
An instrument of transfer shall be in the form as may be prescribed by the
Board from time to time. The Board may accept the instrument signed by or on
behalf of the transferor alone. The transferor shall be deemed to remain the
holder of such share until the same has been transferred to the transferee in
the Register of Members.
55. RESTRICTION ON TRANSFER
(1) The Board shall refuse to register the transfer of a share unless such
transfer is in accordance with the Bye-laws and all applicable consents,
authorisations and permissions of any governmental body or agency in Bermuda
have been obtained.
(2) If the Board refuses to register a transfer of any share, the Secretary
shall, within three months after the date on which the transfer was lodged with
the Company, send to the transferor and transferee notice of the refusal.
56. TRANSFERS BY JOINT HOLDERS
The joint holders of any share or shares may transfer such share or shares
to one or more of such joint holders, and the surviving holder or holders of any
share or shares previously held by them jointly with a deceased Member may
transfer any such share to the executors or administrators of such deceased
Member.
TRANSMISSION OF SHARES
57. REPRESENTATIVE OF DECEASED MEMBER
In the case of the death of a Member, the survivor or survivors where the
deceased Member was a joint holder, and the legal personal representatives of
the deceased Member where the deceased Member was a sole holder (as set forth in
Bye-law 58), shall be the only persons recognised by the Company as having any
title to the deceased Member's interest in the shares. Subject to the provisions
of Section 52 of the Act, for the purpose of this Bye-law, legal personal
representative means the executor or administrator of a deceased Member or such
other person as the Board may in its absolute discretion decide as being
properly authorized to deal with the shares of a deceased Member.
58. REGISTRATION ON DEATH OR BANKRUPTCY
Any person becoming entitled to a share in consequence of the death or
bankruptcy of any Member may be registered as a Member upon such evidence as the
Company may deem sufficient or may elect to nominate some person to be
registered as a transferee of such share, and in such case the person becoming
entitled shall execute in favour of such nominee an instrument of transfer in
the form as may be prescribed by the Board. On the presentation thereof to the
Company, accompanied by such evidence as the Company may require to prove the
title of the transferor, the transferee shall be registered as a Member but the
Company shall, in either case, have the same right to decline or suspend
registration as it would have had in the case of a transfer of the share by that
Member before such Member's death or bankruptcy, as the case may be.
18
59. DIVIDEND ENTITLEMENT OF TRANSFEREE
A person becoming entitled to a share by reason of the death or bankruptcy
or winding-up of a Member shall be entitled to the same dividends and other
advantages to which he or she would be entitled if he or she were the registered
holder of the share. However, the Company may determine to withhold the payment
of any dividend payable or other advantages in respect of such share until such
person shall become the registered holder of the share or shall have effectually
transferred such share, but, subject to the requirements of these Bye-laws being
met, such a person may vote at meetings.
DIVIDENDS AND OTHER DISTRIBUTIONS
60. DECLARATION OF DIVIDENDS BY THE BOARD
The Board may, subject to these Bye-laws and in accordance with Section 54
of the Act, declare a dividend to be paid to the Members, in proportion to the
number of shares held by them or the class or series of shares held by them, and
such dividend may be paid in cash or wholly or partly in specie in which case
the Board may fix the value for distribution in specie of any assets.
CAPITALISATION
61. ISSUE OF BONUS SHARES
The Board may resolve to capitalise any part of the amount for the time
being standing to the credit of any of the Company's share premium or other
reserve accounts or to the credit of the profit and loss account or otherwise
available for distribution by applying such sum in paying up unissued shares to
be allotted as fully paid bonus shares pro rata to the Members.
ACCOUNTS AND FINANCIAL STATEMENTS
62. RECORDS OF ACCOUNT
The Board shall cause to be kept proper records of account with respect to
all transactions of the Company and in particular with respect to:
(a) all sums of money received and expended by the Company and the
matters in respect of which the receipt and expenditure relates;
(b) all sales and purchases of goods by the Company; and
(c) the assets and liabilities of the Company.
Such records of account shall be kept at the registered office of the
Company or, subject to Section 83(2) of the Act, at such other place as the
Board thinks fit and shall be available for inspection by the Directors during
normal business hours.
63. FISCAL YEAR
The financial year end of the Company may be determined by resolution of
the Board and failing such resolution shall be 31st December in each year.
64. FINANCIAL STATEMENTS
Subject to any rights to waive laying of accounts pursuant to Section 88 of
the Act, financial statements as required by the Act shall be laid before the
Members in general meeting.
19
AUDIT
65. APPOINTMENT OF AUDITOR
Subject to Section 88 of the Act, in the annual general meeting or in a
subsequent special general meeting in each year, an independent representative
of the Members shall be appointed by them as Auditor of the accounts of the
Company. Such Auditor may be a Member but no Director, Officer or employee of
the Company shall, during his or her continuance in office, be eligible to act
as an Auditor of the Company.
66. REMUNERATION OF AUDITOR
The remuneration of the Auditor shall be fixed by the Company in general
meeting or in such manner as the Members may determine.
67. VACATION OF OFFICE OF AUDITOR
If the office of Auditor becomes vacant by the resignation or death of the
Auditor, or by the Auditor becoming incapable of acting by reason of illness or
other disability at a time when the Auditor's services are required, the Board
shall, as soon as practicable, convene a special general meeting to fill the
vacancy thereby created.
68. ACCESS TO BOOKS OF THE COMPANY
The Auditor shall at all reasonable times have access to all books kept by
the Company and to all accounts and vouchers relating thereto, and the Auditor
may call on the Directors or Officers of the Company for any information in
their possession relating to the books or affairs of the Company.
69. REPORT OF THE AUDITOR
(1) Subject to any rights to waive laying of accounts or appointment of an
Auditor pursuant to Section 88 of the Act, the accounts of the Company shall be
audited at least once in every year.
(2) The financial statements provided for by these Bye-laws shall be
audited by the Auditor in accordance with generally accepted auditing standards.
The Auditor shall make a written report thereon in accordance with generally
accepted auditing standards and the report of the Auditor shall be submitted to
the Members in general meeting pursuant to Bye-law 64.
(3) The generally accepted auditing standards referred to in subparagraph
(2) of this Bye-law may be those of a country or jurisdiction other than
Bermuda. If so, the financial statements and the report of the Auditor must
disclose this fact and name such country or jurisdiction.
NOTICES
70. NOTICES TO MEMBERS OF THE COMPANY
A notice may be given by the Company to any Member either by delivering it
to such Member in person or by sending it to such Member's address in the
Register of Members or to such other address given for the purpose. For the
purposes of this Bye-law, a notice may be sent by mail, courier service, cable,
telex, telecopier, facsimile, printing, computer generated email or other mode
of representing words in a legible and non-transitory form.
20
SEAL OF THE COMPANY
71. THE SEAL
The seal of the Company shall be in such form as the Board may from time to
time determine. The Board may adopt one or more duplicate seals for use outside
Bermuda.
72. MANNER IN WHICH SEAL IS TO BE AFFIXED
The seal of the Company shall not be affixed to any instrument except
attested by the signature of a Director and the Secretary or any two Directors,
or any person appointed by the Board for the purpose; provided that any
Director, Officer or Resident Representative, may affix the seal of the Company
attested by such Director, Officer or Resident Representative's signature to any
authenticated copies of these Bye-laws, the organisation documents of the
Company, the minutes of any meetings or any other documents required to be
authenticated by such Director, Officer or Resident Representative.
WINDING-UP
73. WINDING-UP/DISTRIBUTION BY LIQUIDATOR
If the Company shall be wound up, the liquidator may, with the sanction of
a resolution of the Members, divide amongst the Members in specie or in 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 or she 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 Members as the liquidator shall think fit, but so that no Member
shall be compelled to accept any shares or other securities or assets whereon
there is any liability.
ALTERATION OF BYE-LAWS
74. ALTERATION OF BYE-LAWS
No Bye-law shall be rescinded, altered or amended and no new Bye-law shall
be made until the same has been approved by a resolution of the Board and by a
resolution of the Members.
* * * * * *
21
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
INGERSOLL-RAND COMPANY
Article Seventh of the restated certificate of incorporation, as amended,
of Ingersoll-Rand Company ("IR-New Jersey") provides that, to the fullest extent
permitted by the laws of the State of New Jersey, directors and officers of
IR-New Jersey shall not be personally liable to IR-New Jersey or its
shareholders for damages for breach of any duty owed to IR-New Jersey or its
shareholders, except that no such director or officer shall be relieved from
liability for any breach of duty based upon an act or omission (i) in breach of
such person's duty of loyalty to IR-New Jersey or its shareholders, (ii) not in
good faith or involving a knowing violation of law or (iii) resulting in receipt
by such person of an improper personal benefit.
Article Seventh also provides that each person who was or is made a party
or is threatened to be made a party to or is involved in any pending, threatened
or completed civil, criminal, administrative or arbitrative action, suit or
proceeding, by reason of his or her being or having been a director or officer
of IR-New Jersey, or by reason of his or her being or having been a director,
officer, trustee, employee or agent of any other corporation or of any
partnership, joint venture, employee benefit plan or other entity or enterprise,
serving as such at the request of IR-New Jersey, shall be indemnified and held
harmless by IR-New Jersey to the fullest extent permitted by the New Jersey
Business Corporation Act (the "NJBCA"), from and against all reasonable costs,
disbursements and attorney's fees, and all amounts paid or incurred in
satisfaction of settlements, judgments, fines and penalties, incurred or
suffered in connection with any such proceeding, and such indemnification shall
continue as to a person who has ceased to be a director, officer, trustee,
employee or agent and shall inure to the benefit of his or her heirs, executors,
administrators and assigns; provided, however, that there shall be no
indemnification with respect to any settlement of any proceeding unless IR-New
Jersey has given its prior consent to such settlement or disposition. This right
to indemnification includes the right to be paid by IR-New Jersey the expenses
incurred in connection with any proceeding in advance of the final disposition
of such proceeding as authorized by the Board of Directors; provided, however,
that, if the NJBCA so requires, the payment of such expenses shall be made only
upon receipt by IR-New Jersey of an undertaking to repay all amounts so advanced
unless it shall ultimately be determined that such director or officer is
entitled to be indemnified.
Article Seventh also provides that the right to indemnification thereunder
is a contract right and gives claimants certain rights with respect to claims
for indemnification not paid by IR-New Jersey after 30 days following a written
request. Finally, Article Seventh provides that the right to indemnification and
advancement of expenses provided thereby shall not exclude or be exclusive of
any other rights to which any person may be entitled under a certificate of
incorporation, by-law, agreement, vote of shareholders or otherwise.
Sections 1 and 2 of Article IX of IR-New Jersey's by-laws also provide
directors and officers with certain rights to indemnity that are substantially
similar to the foregoing provisions of Article Seventh.
Section 14A: 3-5 of the NJBCA provides that no indemnification shall be
made if such person shall have been adjudged liable for negligence or misconduct
unless the court in which such proceeding was brought determines upon
application that the defendant, officers or directors are fairly and reasonably
entitled to indemnity for such expenses despite such adjudication of liability.
In any case, a corporation must indemnify an officer or director against
expenses (including attorneys' fees) to the extent that he or she has been
successful on the merits or otherwise or in defense of any claim or issue.
IR-New Jersey has a liability insurance policy in effect that covers
certain claims against any officer or director of IR-New Jersey by reason of
certain breaches of duty, neglect, errors or omissions committed by such person
in his or her capacity as an officer or director.
II-1
INGERSOLL-RAND COMPANY LIMITED
Section 98 of the Companies Act 1981 of Bermuda (the "Companies Act")
provides generally that a Bermuda company may indemnify its directors and
officers against any liability that by virtue of Bermuda law otherwise would be
imposed on them, except in cases where such liability arises from fraud or
dishonesty of which such director or officer may be guilty in relation to the
company. Section 98 further provides that a Bermuda company may indemnify its
directors and officers against any liability incurred by them in defending any
proceedings, whether civil or criminal, in which a judgment is awarded in their
favor or they are acquitted or in which they are acquitted or granted relief by
the Supreme Court of Bermuda in certain proceedings arising under Section 281 of
the Companies Act.
Ingersoll-Rand Company Limited ("IR-Limited") has adopted provisions in its
Amended and Restated Bye-laws, similar to those of IR-New Jersey described
above, which provide that IR-Limited shall indemnify its officers and directors
to the maximum extent permitted under Bermuda law.
IR-Limited will also obtain liability insurance similar to that of IR-New
Jersey described above.
ITEM 21. EXHIBITS
EXHIBIT
NO. DESCRIPTION
------- -----------
2 -- Agreement and Plan of Merger among Ingersoll-Rand Company
Limited, Ingersoll-Rand Company and IR Merger Corporation
(incorporated by reference to Annex I to the proxy
statement/ prospectus included as part of this Registration
Statement)
3.1 -- Memorandum of Association of Ingersoll-Rand Company Limited
(incorporated by reference to Annex II to the proxy
statement/prospectus included as part of this Registration
Statement)
3.2 -- Amended and Restated Bye-Laws of Ingersoll-Rand Company
Limited (incorporated by reference to Annex III to the proxy
statement/prospectus included as part of this Registration
Statement)
4.1+ -- Certificate of Designation, Preferences and Rights of Series
A Preference Shares of Ingersoll-Rand Company Limited
4.2+ -- Rights Agreement between Ingersoll-Rand Company Limited and
The Bank of New York, as Rights Agent
4.3+ -- Voting Agreement between Ingersoll-Rand Company Limited and
Ingersoll-Rand Company
4.4* -- Specimen Class A common share certificate, par value $1.00
per share, of Ingersoll-Rand Company Limited
5.1+ -- Form of Opinion of Conyers Dill & Pearman as to the legality
of the securities being issued
8.1+ -- Form of Opinion of Baker & McKenzie as to certain tax
matters
8.2+ -- Form of Opinion of Conyers Dill & Pearman as to certain tax
matters (included in Exhibit 5.1)
23.1+ -- Consent of Conyers Dill & Pearman (included in Exhibit 5.1)
23.2+ -- Consent of PricewaterhouseCoopers LLP
23.3+ -- Consent of Baker & McKenzie (included in Exhibit 8.1)
24* -- Powers of Attorney
99.1+ -- Form of proxy card
---------------
*previously filed
+filed herewith
ITEM 22. UNDERTAKINGS
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in
II-2
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.
The undersigned registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is sent or
given, the latest annual report, to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Regulation S-X is not set forth in the prospectus, to deliver, or
cause to be delivered to each person to whom the prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
of 1933 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 of 1933 and will be governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes as follows: that prior to any
public reoffering of the securities registered hereunder through use of a
prospectus which is a part of this Registration Statement, by any person or
party who is deemed to be an underwriter within the meaning of Rule 145(c), the
issuer undertakes that such reoffering prospectus will contain the information
called for by the applicable registration form with respect to reofferings by
persons who may be deemed underwriters, in addition to the information called
for by the other items of the applicable form.
The registrant undertakes that every prospectus: (i) that is filed pursuant
to the paragraph immediately preceding, or (ii) that purports to meet the
requirements of Section 10(a)(3) of the Securities Act of 1933 and is used in
connection with an offering of securities subject to Rule 415, will be filed as
a part of an amendment to the registration statement and will not be used until
such amendment is effective, and that, for purposes 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.
The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Item 4, 10(b), 11, or 13 of this form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through the
date of responding to the request.
The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
II-3
SIGNATURE
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this Amendment No. 1 to the Registration Statement on Form S-4
to be signed on its behalf by the undersigned, thereunto duly authorized in the
City of Woodcliff Lake, State of New Jersey, on October 30, 2001.
INGERSOLL-RAND COMPANY LIMITED
By: /s/ RONALD G. HELLER
------------------------------------
Name: Ronald G. Heller
Title: Secretary
In accordance with the requirements of the Securities Act of 1933, this
Amendment No. 1 to the Registration Statement on Form S-4 has been signed by the
following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
* President and Director October 30, 2001
------------------------------------------------ (Principal Executive Officer)
Gerald E. Swimmer
* Vice President and Director October 30, 2001
------------------------------------------------
Patricia Nachtigal
/s/ RONALD G. HELLER Secretary and Director October 30, 2001
------------------------------------------------
Ronald G. Heller
* Treasurer (Principal Financial October 30, 2001
------------------------------------------------ and Accounting Officer)
Peter Hong
*By: /s/ RONALD G. HELLER
-----------------------------------------
Ronald G. Heller
Attorney-in-fact
II-4
EXHIBIT INDEX
EXHIBIT
NO. DESCRIPTION
------- -----------
2 Agreement and Plan of Merger among Ingersoll-Rand Company
Limited, Ingersoll-Rand Company and IR Merger Corporation
(incorporated by reference to Annex I to the proxy
statement/prospectus included as part of this Registration
Statement)
3.1 Memorandum of Association of Ingersoll-Rand Company Limited
(incorporated by reference to Annex II to the proxy
statement/prospectus included as part of this Registration
Statement)
3.2 Amended and Restated Bye-Laws of Ingersoll-Rand Company
Limited (incorporated by reference to Annex III to the proxy
statement/prospectus included as part of this Registration
Statement)
4.1+ Certificate of Designation, Preferences and Rights of Series
A Preference Shares of Ingersoll-Rand Company Limited
4.2+ Rights Agreement between Ingersoll-Rand Company Limited and
The Bank of New York, as Rights Agent
4.3+ Voting Agreement between Ingersoll-Rand Company Limited and
Ingersoll-Rand Company
4.4* Specimen Class A common share certificate, par value $1.00
per share, of Ingersoll-Rand Company Limited
5.1+ Form of Opinion of Conyers Dill & Pearman as to the legality
of the securities being issued
8.1+ Form of Opinion of Baker & McKenzie as to certain tax
matters
8.2+ Form of Opinion of Conyers Dill & Pearman as to certain tax
matters (included in Exhibit 5.1)
23.1+ Consent of Conyers Dill & Pearman (included in Exhibit 5.1)
23.2+ Consent of PricewaterhouseCoopers LLP
23.3+ Consent of Baker & McKenzie (included in Exhibit 8.1)
24* Powers of Attorney
99.1+ Form of proxy card
---------------
*previously filed
+filed herewith
EX-4.1
3
d91138a1ex4-1.txt
CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS
EXHIBIT 4.1
CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS
OF
SERIES A PREFERENCE SHARES
OF
INGERSOLL-RAND COMPANY LIMITED
Under Section 43(4) of the Bye-laws of Ingersoll-Rand Company Limited,
a Bermuda company (the "Company")
Pursuant to the authority conferred upon the Board of Directors by
Section 43(4) of the Bye-laws of the Company, the Board of Directors of the
Company on October 15, 2001, adopted the following resolution creating a series
of 600,000 Preference Shares designated as "Series A Preference Shares":
RESOLVED, that pursuant to the authority vested in the Board of
Directors of the Company in accordance with the provisions of its Bye-laws and
Memorandum of Association, a series of Preference Shares of the Company be and
hereby is created, and that the designation and amount thereof and the voting
powers, designations, preferences and relative, participating, optional and
other special rights of the shares of such series, and the qualifications,
limitations or restrictions thereof are as follows:
1. Dividend Rights. Subject to the rights of the holders of any shares
of any series of Preference Shares (or any similar shares) ranking prior and
superior to the Series A Preference Shares with respect to dividends, the
holders of Series A Preference Shares, in preference to the holders of Class A
Common Shares and Class B Common Shares of the Company and of any other shares
of the Company ranking junior to the Series A Preference Shares, the holders of
Series A Preference Shares shall be entitled to receive, when, as and if
declared by the Board of Directors out of funds legally available for the
purpose, quarterly dividends payable in cash on the fifteenth day of January,
April, July, and October in each year (each such date being referred to herein
as a "Dividend Payment Date"), commencing on the first Dividend Payment Date
after the first issuance of a Series A Preference Share (or a fraction of a
share), in an amount per share (rounded to the nearest cent) equal to the
greater of (a) US$1.00 or (b) subject to the provision for adjustment
hereinafter set forth, 1000 times the aggregate per share amount of all cash
dividends, and 1000 times the aggregate per share amount (payable in kind) of
all non-cash dividends or other distributions other than a dividend payable in
Class A Common Shares, declared on Class A Common Shares since the immediately
preceding Dividend Payment Date or, with respect to the first Dividend Payment
Date, since the first issuance of any Series A Preference Share (or a fraction
of a share). In the event the Company shall, at any time after the effective
time of the merger of Ingersoll-Rand Company, a New Jersey corporation, with and
into IR Merger Corporation, a New Jersey corporation (the "Effective Time"),
declare or pay any dividend on Class A Common Shares payable in Class A Common
Shares, or effect a subdivision or combination or consolidation of the Class A
Common Shares then in issue (by reclassification or otherwise than by payment of
a dividend in Class A Common Shares) into a greater or lesser number of Class A
Common Shares, then in each such case the amount to which the holders of Series
A Preference Shares were entitled immediately prior to such event under
clause (b) of the preceding sentence shall be adjusted by multiplying such
amount by a fraction, the numerator of which is the number of Class A Common
Shares then in issue immediately after such event and the denominator of which
is the number of Class A Common Shares that were then in issue immediately prior
to such event.
(a) The Company shall declare a dividend or distribution on
the Series A Preference Shares as provided in Section 1 of this Certificate
immediately after it declares a dividend or distribution on Class A Common
Shares (other than a dividend payable in Class A Common Shares); provided that,
in the event no dividend or distribution shall have been declared on Class A
Common Shares during the period between any Dividend Payment Date and the next
subsequent Dividend Payment Date, a dividend of US$1.00 per share on the Series
A Preference Shares shall nevertheless be payable, when, as and if declared, on
such subsequent Dividend Payment Date.
(b) Dividends shall begin to accrue and be cumulative, whether
or not earned or declared, on Series A Preference Shares then in issue from the
Dividend Payment Date next preceding the date of issue of such shares, unless
the date of issue of such shares is prior to the record date for the first
Dividend Payment Date, in which case dividends on such shares shall begin to
accrue from the date of issue of such shares, or unless the date of issue is a
Dividend Payment Date or is a date after the record date for the determination
of the holders of Series A Preference Shares entitled to receive a quarterly
dividend and before such Dividend Payment Date, in either of which events such
dividends shall begin to accrue and be cumulative from such Dividend Payment
Date. Accrued but unpaid dividends shall not bear interest. Dividends paid on
the Series A Preference Shares in an amount less than the total amount of such
dividends at the time accrued and payable on such shares shall be allocated pro
rata on a share-by-share basis among all such shares at the time then in issue.
The Board of Directors may fix a record date for the determination of the
holders of Series A Preference Shares entitled to receive payment of a dividend
or distribution declared thereon, which record date shall be not more than 60
days prior to the date fixed for the payment thereof.
2. No Redemption. The Series A Preference Shares shall not be
redeemable from any holder.
3. Liquidation, Dissolution or Winding Up. Upon any liquidation,
dissolution or winding up of the Company, no distribution shall be made (a) to
the holders of Class A Common Shares or Class B Common Shares or of shares of
any other shares of the Company ranking junior, upon liquidation, dissolution or
winding up, to the Series A Preference Shares unless, prior thereto, the holders
of Series A Preference Shares shall have received US$100 per share, plus an
amount equal to accrued and unpaid dividends and distributions thereon, whether
or not earned or declared, to the date of such payment; provided that the
holders of Series A Preference Shares shall be entitled to receive an aggregate
amount per share, subject to the provision for adjustment hereinafter set forth,
equal to 1000 times the aggregate amount to be distributed per share to the
holders of Class A Common Shares, or (b) to the holders of shares ranking on a
parity upon liquidation, dissolution or winding up with the Series A Preference
Shares, except distributions made ratably on the Series A Preference Shares and
all such parity shares in proportion to the total amounts to which the holders
of all such shares are entitled upon such
2
liquidation, dissolution or winding up. In the event the Company shall at any
time after the Effective Time declare or pay any dividend on Class A Common
Shares payable in Class A Common Shares, or effect a subdivision or combination
or consolidation of the Class A Common Shares then in issue (by reclassification
or otherwise than by payment of a dividend in Class A Common Shares) into a
greater or lesser number of Class A Common Shares, then in each such case the
aggregate amount to which the holders of Series A Preference Shares were
entitled immediately prior to such event under the proviso in clause (a) of the
preceding sentence shall be adjusted by multiplying such amount by a fraction
the numerator of which is the number of Class A Common Shares then in issue
immediately after such event and the denominator of which is the number of Class
A Common Shares that were then in issue immediately prior to such event.
4. Voting Rights. The holders of the Series A Preference Shares shall
have the following voting rights:
(a) Subject to the provision for adjustment hereinafter set
forth and except as otherwise provided in the Bye-laws of the Company or
required by law, each Series A Preference Share shall entitle the holder thereof
to 1000 votes on all matters upon which the holders of Class A Common Shares of
the Company are entitled to vote. In the event the Company shall at any time
after the Effective Time declare or pay any dividend on Class A Common Shares
payable in Class A Common Shares, or effect a subdivision or combination or
consolidation of the Class A Common Shares then in issue (by reclassification or
otherwise than by payment of a dividend in Class A Common Shares) into a greater
or lesser number of Class A Common Shares, then in each such case the number of
votes per share to which the holders of Series A Preference Shares were entitled
immediately prior to such event shall be adjusted by multiplying such number by
a fraction, the numerator of which is the number of Class A Common Shares then
in issue immediately after such event and the denominator of which is the number
of Class A Common Shares that were then in issue immediately prior to such
event.
(b) Except as otherwise provided in the Bye-laws of the
Company and except as otherwise required by law, the holders of Series A
Preference Shares, the holders of Class A Common Shares and any other capital
shares of the Company having general voting rights and the holders of Class B
Common Shares (only to the extent under Bermuda law they have a vote with
respect to the proposal in question) shall vote together as one class on all
matters submitted to a vote of the Members.
(c) Except as set forth herein, or as otherwise provided by
law, the holders of Series A Preference Shares shall have no special voting
rights and their consent shall not be required (except to the extent they are
entitled to vote with the holders of Class A Common Shares or Class B Common
Shares as set forth herein) for taking any corporate action.
5. Certain Restrictions. Certain restrictions relating to the Series A
Preference Shares:
(a) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preference Shares as provided in Section 1
are in arrears, thereafter and until all
3
accrued and unpaid dividends and distributions, whether or not earned or
declared, on Series A Preference Shares then in issue shall have been paid in
full, the Company shall not:
(i) declare or pay dividends, or make any other
distributions, on any shares ranking junior (as to dividends) to the Series A
Preference Shares;
(ii) declare or pay dividends, or make any other
distributions, on any shares ranking on a parity (as to dividends) with the
Series A Preference Shares, except dividends paid ratably on the Series A
Preference Shares and all such parity shares on which dividends are payable or
in arrears in proportion to the total amounts to which the holders of all such
shares are then entitled;
(iii) except as otherwise expressly provided in the
Bye-laws or except as otherwise required by law, redeem or purchase or otherwise
acquire for consideration shares ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preference Shares;
provided that the Company may at any time redeem, purchase or otherwise acquire
any such junior shares in exchange for shares of the Company ranking junior (as
to dividends and upon dissolution, liquidation or winding up) to the Series A
Preference Shares or rights, warrants or options to acquire such junior shares;
(iv) redeem or purchase or otherwise acquire for
consideration any Series A Preference Shares, or any shares ranking on a parity
(either as to dividends or upon liquidation, dissolution or winding up) with the
Series A Preference Shares, except in accordance with a purchase offer made in
writing or by publication (as determined by the Board of Directors) to all
holders of such shares upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates and other relative rights
and preferences of the respective series and classes, shall determine in good
faith will result in fair and equitable treatment among the respective series or
classes.
(b) The Company shall not permit any subsidiary of the Company
to purchase or otherwise acquire for consideration any shares of the Company
unless the Company could, under subparagraph 5(a) of this Certificate, purchase
or otherwise acquire such shares at such time and in such manner.
6. Cancellation of Reacquired Shares. Any Series A Preference Shares
purchased or otherwise acquired by the Company in any manner whatsoever shall be
retired and cancelled promptly after the acquisition thereof.
7. Effect of Amalgamations. In case the Company shall enter into any
amalgamation, consolidation, merger, combination or other transaction in which
the Class A Common Shares are converted into, exchanged for or changed into
other shares or securities, cash and/or any other property, then in any such
case each Series A Preference Share shall at the same time be similarly
converted into, exchanged for or changed into an amount per share (subject to
the provision for adjustment hereinafter set forth) equal to 1000 times the
aggregate amount of shares, securities, cash and/or any other property (payable
in kind), as the case may be, into which or for which each Class A Common Share
is converted, exchanged or converted.
4
In the event the Company shall at any time after the Effective Time declare or
pay any dividend on Class A Common Shares payable in Class A Common Shares, or
effect a subdivision or combination or consolidation of the Class A Common
Shares then in issue (by reclassification or otherwise than by payment of a
dividend in Class A Common Shares) into a greater or lesser number of Class A
Common Shares, then in each such case the amount set forth in the preceding
sentence with respect to the conversion, exchange or change of Series A
Preference Shares shall be adjusted by multiplying such amount by a fraction,
the numerator of which is the number of Class A Common Shares then in issue
immediately after such event and the denominator of which is the number of Class
A Common Shares that were then in issue immediately prior to such event.
8. Rank. The Series A Preference Shares shall rank, with respect to the
payment of dividends and the distribution of assets upon liquidation,
dissolution or winding up of the Company, junior to all other series of
Preference Shares and senior to Class A Common Shares and Class B Common Shares.
9. Amendment. If any proposed amendment to this Certificate would
alter, change or repeal any of the preferences, powers or special rights given
to the Series A Preference Shares so as to affect the Series A Preference Shares
adversely, then the holders of the Series A Preference Shares shall be entitled
to vote separately as a class upon such amendment, and the affirmative vote of
66-2/3% of the shares of the Series A Preference Shares then in issue, voting
separately as a class, shall be necessary for the adoption thereof, in addition
to such other vote as may be required by the Act.
10. Headings. The headings in this Certificate are for reference only
and are not intended to affect the substance of any particular Section or expand
or limit its scope.
5
IN WITNESS WHEREOF, the undersigned has executed and subscribed this
Certificate and do affirm the foregoing as true this 26th day of October,
2001.
By: /s/ RONALD G. HELLER
------------------------------
Name: Ronald G. Heller
----------------------------
Title: Secretary
---------------------------
6
EX-4.2
4
d91138a1ex4-2.txt
RIGHTS AGREEMENT
EXHIBIT 4.2
--------------------------------------------------------------------------------
INGERSOLL-RAND COMPANY LIMITED
and
THE BANK OF NEW YORK,
as Rights Agent
Rights Agreement
Dated as of October 31, 2001
--------------------------------------------------------------------------------
TABLE OF CONTENTS
PAGE
SECTION 1. CERTAIN DEFINITIONS.............................................1
SECTION 2. APPOINTMENT OF RIGHTS AGENT.....................................4
SECTION 3. ISSUE OF RIGHT CERTIFICATES.....................................4
SECTION 4. FORM OF RIGHT CERTIFICATES......................................6
SECTION 5. COUNTERSIGNATURE AND REGISTRATION...............................6
SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF
RIGHT CERTIFICATES; MUTILATED, DESTROYED, LOST OR
STOLEN RIGHT CERTIFICATES.......................................7
SECTION 7. EXERCISE OF RIGHTS, PURCHASE PRICE; EXPIRATION DATE
OF RIGHTS.......................................................7
SECTION 8. CANCELLATION OF RIGHT CERTIFICATES..............................9
SECTION 9. AVAILABILITY OF PREFERENCE SHARES...............................9
SECTION 10. RECORD DATE FOR PREFERENCE SHARES..............................10
SECTION 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES
AND NUMBER OF RIGHTS...........................................10
SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER
OF SHARES......................................................17
SECTION 13. CONSOLIDATION, MERGER, AMALGAMATION OR SALE OR
TRANSFER OF ASSETS OR EARNINGS POWER...........................18
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES........................21
SECTION 15. RIGHTS OF ACTION...............................................22
SECTION 16. AGREEMENT OF RIGHT HOLDERS.....................................22
SECTION 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER..............23
SECTION 18. CONCERNING THE RIGHTS AGENT....................................23
SECTION 19. MERGER, AMALGAMATION OR CONSOLIDATION OR CHANGE
OF NAME OF RIGHTS AGENT........................................24
SECTION 20. DUTIES OF RIGHTS AGENT.........................................24
SECTION 21. CHANGE OF RIGHTS AGENT.........................................26
SECTION 22. ISSUANCE OF NEW RIGHT CERTIFICATES.............................27
SECTION 23. REDEMPTION.....................................................27
SECTION 24. EXCHANGE.......................................................28
-i-
TABLE OF CONTENTS
(CONTINUED)
SECTION 25. NOTICE OF CERTAIN EVENTS.......................................29
SECTION 26. NOTICES........................................................30
SECTION 27. SUPPLEMENTS AND AMENDMENTS.....................................30
SECTION 28. SUCCESSORS.....................................................31
SECTION 29. BENEFITS OF THIS AGREEMENT.....................................31
SECTION 30. SEVERABILITY...................................................31
SECTION 31. GOVERNING LAW..................................................31
SECTION 32. COUNTERPARTS...................................................31
SECTION 33. DESCRIPTIVE HEADINGS...........................................32
-ii-
RIGHTS AGREEMENT
Agreement, dated as of October 31, 2001, between Ingersoll-Rand
Company Limited, a Bermuda limited liability company (the "Company"), and The
Bank of New York, a New York banking corporation (the "Rights Agent").
The Board of Directors of the Company has authorized and directed the
issuance of one Preference Share (as hereinafter defined) purchase right (a
"Right") with each Common Share (as hereinafter defined) of the Company issued
pursuant to the Agreement and Plan of Merger, dated as of October 31, 2001,
among the Company, Ingersoll-Rand Company, a New Jersey corporation ("IR-New
Jersey"), and IR Merger Corporation, a New Jersey corporation ("Merger Corp."),
each Right representing the right to purchase one one-thousandth (subject to
adjustment) of a Preference Share, upon the terms and subject to the conditions
herein set forth, and has further authorized and directed the issuance of one
Right (subject to adjustment as provided herein) with respect to each Common
Share that shall become in issue between the Record Date and the earliest of the
Distribution Date, the Redemption Date and the Final Expiration Date (as such
terms are hereinafter defined); provided, however, that Rights may be issued
with respect to Common Shares that shall become in issue after the Distribution
Date and prior to the Redemption Date and the Final Expiration Date in
accordance with Section 22.
Accordingly, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
SECTION 1. CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms have the meaning indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which shall be the Beneficial Owner (as
such term is hereinafter defined) of 15% or more of the Common Shares
then in issue, but shall not include an Exempt Person (as such term is
hereinafter defined); provided, however, that if the Board of Directors
of the Company determines in good faith that a Person who would
otherwise be an "Acquiring Person" has become such inadvertently
(including, without limitation, because (i) such Person was unaware
that it beneficially owned a percentage of Common Shares that would
otherwise cause such Person to be a "Acquiring Person" or (ii) such
Person was aware of the extent of its Beneficial Ownership of Common
Shares but had no actual knowledge of the consequences of such
Beneficial Ownership under this Agreement) and without any intention of
changing or influencing control of the Company, and such Person, as
promptly as practicable divested or divests himself or itself of
Beneficial Ownership of a sufficient number of Common Shares so that
such Person would no longer be an Acquiring Person, then such Person
shall not be deemed to be or to have become an "Acquiring Person" for
any purposes of this Agreement. Notwithstanding the foregoing, no
Person shall become an "Acquiring Person" as the result of an
acquisition of Common Shares by the Company which, by reducing the
number of shares in issue, increases the proportionate number of shares
beneficially owned by such Person to 15% or more of the Common Shares
then in issue; provided, however, that if a Person shall become the
Beneficial Owner of 15% or more of the
Common Shares then in issue by reason of such share acquisitions by the
Company and thereafter become the Beneficial Owner of any additional
Common Shares, then such Person shall be deemed to be an "Acquiring
Person" unless upon the consummation of the acquisition of such
additional Common Shares such Person does not own 15% or more of the
Common Shares then in issue. The phrase "then in issue", when used with
reference to a Person's Beneficial Ownership of securities of the
Company, shall mean the number of such securities then in issue
together with the number of such securities not then actually in issue
which such Person would be deemed to own beneficially hereunder.
(b) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the U.S. Securities Exchange Act of 1934, as amended
(the "Exchange Act"), as in effect on the date of this Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of, shall
be deemed to have "Beneficial Ownership" of and shall be deemed to
"beneficially own" any securities:
(i) which such Person or any of such Person's
Affiliates or Associates is deemed to beneficially own,
directly or indirectly within the meaning of Rule 13d-3 of the
General Rules and Regulations under the Exchange Act as in
effect on the date of this Agreement;
(ii) which such Person or any of such Person's
Affiliates or Associates has (A) the right to acquire (whether
such right is exercisable immediately or only after the
passage of time) pursuant to any agreement, arrangement or
understanding (other than customary agreements with and
between underwriters and selling group members with respect to
a bona fide public offering of securities), or upon the
exercise of conversion rights, exchange rights, rights,
warrants or options, or otherwise; provided, however, that a
Person shall not be deemed the Beneficial Owner of, or to
beneficially own, (x) securities tendered pursuant to a tender
or exchange offer made by or on behalf of such Person or any
of such Person's Affiliates or Associates until such tendered
securities are accepted for purchase, (y) securities which
such Person has a right to acquire on the exercise of Rights
at any time prior to the time a Person becomes an Acquiring
Person or (z) securities issuable upon exercise of Rights from
and after the time a Person becomes an Acquiring Person if
such Rights were acquired by such Person or any of such
Person's Affiliates or Associates prior to the Distribution
Date or pursuant to Section 3(a) or Section 22 hereof
("original Rights") or pursuant to Section 11(i) or Section
11(n) with respect to an adjustment to original Rights; or (B)
the right to vote pursuant to any agreement, arrangement or
understanding; provided, however, that a Person shall not be
deemed the Beneficial Owner of, or to beneficially own, any
security by reason of such agreement, arrangement or
understanding if the agreement, arrangement or understanding
to vote such security (1) arises solely from a revocable proxy
or consent given to such Person in response to a public proxy
or consent solicitation made pursuant to, and in accordance
with, the applicable rules and regulations
2
promulgated under the Exchange Act and (2) is not also then
reportable on Schedule 13D under the Exchange Act (or any
comparable or successor report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person with which such Person or any
of such Person's Affiliates or Associates has any agreement,
arrangement or understanding (whether or not in writing)
(other than customary agreements with and between underwriters
and selling group members with respect to a bona fide public
offering of securities) for the purpose of acquiring, holding,
voting (except to the extent contemplated by the proviso to
Section 1(c)(ii)(B)) or disposing of any securities of the
Company.
(d) "Business Day" shall mean any day other than a Saturday, a
Sunday, or a day on which banking institutions in the State of New
York, or the State in which the principal office of the Rights Agent is
located, are authorized or obligated by law or executive order to
close.
(e) "Class B Common Shares" shall mean the Class B Common
Shares, presently par value $1.00 per share, of the Company.
(f) "close of business" on any given date shall mean 5:00
P.M., New York City time, on such date; provided, however, that if such
date is not a Business Day it shall mean 5:00 P.M., New York City time,
on the next succeeding Business Day.
(g) "Common Shares" when used with reference to the Company
shall mean the Class A Common Shares, presently par value $1.00 per
share, of the Company. "Common Shares" when used with reference to any
Person other than the Company shall mean the shares of share capital
(or, in the case of an unincorporated entity, the equivalent equity
interest) with the greatest voting power of such other Person or, if
such other Person is a subsidiary of another Person, the Person or
Persons which ultimately control such first-mentioned Person.
(h) "Distribution Date" shall have the meaning set forth in
Section 3 hereof.
(i) "Effective Time" shall mean the effective time of the
Merger (as such term is hereinafter defined) determined pursuant to the
Certificate of Merger filed and declared effective by the Treasurer of
the State of New Jersey.
(j) "Exempt Person" shall mean (i) the Company, (ii) any
Subsidiary (as such term is hereinafter defined) of the Company, (iii)
any employee benefit plan of the Company or of any Subsidiary of the
Company, or (iv) any entity or trustee holding Common Shares for or
pursuant to the terms of any such plan or for the purpose of funding
any such plan or funding other employee benefits for employees of the
Company or of any Subsidiary of the Company.
(k) "Final Expiration Date" shall have the meaning set forth
in Section 7 hereof.
3
(l) "Merger" shall mean the merger of Merger Corp. with and
into IR-New Jersey, pursuant to which IR- New Jersey will become an
indirect, wholly-owned subsidiary of the Company.
(m) "New York Stock Exchange" shall mean the New York Stock
Exchange, Inc.
(n) "Person" shall mean any individual, firm, corporation,
company or other entity, and shall include any successor (by merger,
amalgamation or otherwise) of such entity.
(o) "Preference Shares" shall mean the Series A Preference
Shares, par value $.001 per share, of the Company having the rights and
preferences set forth in the Amended and Restated Bye-laws of the
Company attached to this Agreement as Exhibit A.
(p) "Record Date" shall mean the Effective Time.
(q) "Redemption Date" shall have the meaning set forth in
Section 7 hereof.
(r) "Securities Act" shall mean the U.S. Securities Act of
1933, as amended.
(s) "Share Acquisition Date" shall mean the first date of
public announcement (which for purposes of this definition, shall
include, without limitation, a report filed pursuant to Section 13(d)
of the Exchange Act) by the Company or an Acquiring Person that an
Acquiring Person has become such or such earlier date as a majority of
the Board of Directors shall become aware of the existence of an
Acquiring Person.
(t) "Subsidiary" of any Person shall mean any corporation,
company or other entity of which securities or other ownership
interests having ordinary voting power sufficient to elect a majority
of the board of directors or other Persons performing similar functions
are beneficially owned, directly or indirectly, by such Person, and any
corporation, company or other entity that is otherwise controlled by
such Person.
SECTION 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints the
Rights Agent to act as agent for the Company in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such co-Rights Agents as it may deem
necessary or desirable upon ten (10) days' prior written notice to the Rights
Agent. The Rights Agent shall have no duty to supervise, and shall in no event
be liable for, the acts or omissions of any such co-Rights Agent.
SECTION 3. ISSUE OF RIGHT CERTIFICATES. (a) Until the earlier of (i)
the tenth day after the Share Acquisition Date or (ii) the tenth business day
(or such later date as may be determined by action of the Board of Directors
prior to such time as any Person becomes an Acquiring Person) after the date of
the commencement by any Person (other than an Exempt Person) of, or of the first
public announcement of the intention of such Person (other than an Exempt
Person) to commence, a tender or exchange offer the consummation of which would
result in any Person becoming the Beneficial Owner of Common Shares aggregating
15% or more of the Common
4
Shares then in issue (including any such date which is after the date of this
Agreement and prior to the issuance of the Rights; the earlier of such dates
being herein referred to as the "Distribution Date"), (x) the Rights will be
evidenced (subject to the provisions of Section 3(b) hereof) by the certificates
for Common Shares registered in the names of the holders thereof and not by
separate Right Certificates (as such term is hereinafter defined) and (y) the
Rights will be transferable only in connection with the transfer of Common
Shares. The Company shall give the Rights Agent prompt written notice of the
Distribution Date. As soon as practicable after the Distribution Date, the
Company will prepare and execute, the Rights Agent (after receipt of written
notice of the Distribution Date from the Company) will countersign and the
Company will send or cause to be sent (and the Rights Agent will, if requested,
send, at the expense of the Company, by first-class, postage-prepaid mail) to
each record holder of Common Shares as of the close of business on the
Distribution Date (other than any Acquiring Person or any Associate or Affiliate
of an Acquiring Person), at the address of such holder shown on the records of
the Company, a Right Certificate, in substantially the form of Exhibit B hereto
(a "Right Certificate"), evidencing one Right (subject to adjustment as provided
herein) for each Common Share so held. As of the Distribution Date, the Rights
will be evidenced solely by such Right Certificates.
(b) With respect to certificates for Common Shares in issue as of the
Record Date, until the Distribution Date, the Rights will be evidenced by such
certificates registered in the names of the holders thereof together with the
summary of the Rights included in the Registration Statement on Form S-4 filed
with the United States Securities and Exchange Commission in connection with the
Merger (the "Summary of Rights"). Until the Distribution Date (or the earlier of
the Redemption Date or the Final Expiration Date), the surrender for transfer of
any certificate for Common Shares in issue on the Record Date, with or without a
copy of the Summary of Rights, shall also constitute the transfer of the Rights
associated with the Common Shares represented thereby.
(c) Certificates issued for Common Shares (including, without
limitation, upon transfer of Common Shares in issue or issuance or reissuance of
Common Shares out of authorized but unissued shares) after the Record Date but
prior to the earliest of the Distribution Date, the Redemption Date or the Final
Expiration Date shall have impressed on, printed on, written on or otherwise
affixed to them the following legend:
This certificate also evidences and entitles the holder hereof
to certain rights as set forth in a Rights Agreement between
Ingersoll-Rand Company Limited and The Bank of New York, dated
as of October 31, 2001, as the same may be amended from
time to time (the "Rights Agreement"), the terms of which are
hereby incorporated herein by reference and a copy of which is
on file at the principal executive offices of Ingersoll-Rand
Company Limited. Under certain circumstances, as set forth in
the Rights Agreement, such Rights will be evidenced by
separate certificates and will no longer be evidenced by this
certificate. Ingersoll-Rand Company Limited will mail to the
holder of this certificate a copy of the Rights Agreement
without charge after receipt of a written request therefor.
Under certain circumstances, as set forth in the Rights
Agreement, Rights owned by or transferred to any Person
5
who becomes an Acquiring Person (as defined in the Rights
Agreement) and certain transferees thereof will become null
and void and will no longer be transferable.
With respect to such certificates containing the foregoing legend,
until the Distribution Date, the Rights associated with the Common Shares
represented by such certificates shall be evidenced by such certificates alone,
and the surrender for transfer of any such certificate, except as otherwise
provided herein, shall also constitute the transfer of the Rights associated
with the Common Shares represented thereby. In the event that the Company
purchases or otherwise acquires any Common Shares after the Record Date but
prior to the Distribution Date, any Rights associated with such Common Shares
shall be deemed canceled and retired so that the Company shall not be entitled
to exercise any Rights associated with the Common Shares which are no longer in
issue; provided, however, that any Common Shares issued by the Company as a
result of the conversion of Class B Common Shares after the Record Date but
prior to the Distribution Date shall have Rights associated with them pursuant
to this Agreement even if for a period of time after their conversion from Class
B Common Shares but prior to their acquisition by a third party they are held by
the Company, but in no event shall such Rights be effective during any time that
the Common Shares are held by the Company.
Notwithstanding this paragraph (c), the omission of a legend shall not
affect the enforceability of any part of this Agreement or the rights of any
holder of the Rights.
SECTION 4. FORM OF RIGHT CERTIFICATES. The Right Certificates (and the
forms of election to purchase shares and of assignment to be printed on the
reverse thereof) shall be substantially in the form set forth in Exhibit B
hereto and may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Agreement,
or as may be required to comply with any applicable law or with any rule or
regulation made pursuant thereto or with any rule or regulation of the New York
Stock Exchange or of any other stock exchange or automated quotation system on
which the Rights may from time to time be listed, or to conform to usage. The
Right Certificates shall be in a machine printable format and in a form
reasonably satisfactory to the Rights Agent. The Right Certificates shall show
the date of countersignature and, subject to the provisions of Sections 11, 13
and 22 hereof, the Right Certificates shall entitle the holders thereof to
purchase such number of one one-thousandths of a Preference Share as shall be
set forth therein at the price per one one-thousandth of a Preference Share set
forth therein (the "Purchase Price"), but the number of such one one-thousandths
of a Preference Share and the Purchase Price shall be subject to adjustment as
provided herein.
SECTION 5. COUNTERSIGNATURE AND REGISTRATION. (a) The Right
Certificates shall be executed on behalf of the Company by any one of the
Chairman or Deputy Chairman of the Board of Directors, the President, any of the
Vice Presidents, the Treasurer or the Controller of the Company, either manually
or by facsimile signature, shall have affixed thereto the Company's seal or a
facsimile thereof, and shall be attested by the Secretary or an Assistant
Secretary of the Company, either manually or by facsimile signature. The Right
Certificates shall be manually countersigned by the Rights Agent and shall not
be valid for any purpose unless countersigned. In case any officer of the
Company who shall have signed any of the Right Certificates shall cease to be
such officer of the Company before countersignature by the
6
Rights Agent and issuance and delivery by the Company, such Right Certificates,
nevertheless, may be countersigned by the Rights Agent and issued and delivered
by the Company with the same force and effect as though the Person who signed
such Right Certificates had not ceased to be such officer of the Company; and
any Right Certificate may be signed on behalf of the Company by any Person who,
at the actual date of the execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate, although at the date of
the execution of this Agreement any such Person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at an office or agency designated for such purpose, books for
registration and transfer of the Right Certificates issued hereunder. Such books
shall show the names and addresses of the respective holders of the Right
Certificates, the number of Rights evidenced on its face by each of the Right
Certificates and the date of each of the Right Certificates.
SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES. (a)
Subject to the provisions of Sections 7(e), 11(a)(ii) and 14 hereof, at any time
after the close of business on the Distribution Date, and prior to the close of
business on the earlier of the Redemption Date or the Final Expiration Date, any
Right Certificate or Right Certificates may be transferred, split up, combined
or exchanged for another Right Certificate or Right Certificates, entitling the
registered holder to purchase a like number of one one-thousandths of a
Preference Share as the Right Certificate or Right Certificates surrendered then
entitled such holder to purchase. Any registered holder desiring to transfer,
split up, combine or exchange any Right Certificate or Right Certificates shall
make such request in writing delivered to the Rights Agent, and shall surrender
the Right Certificate or Right Certificates to be transferred, split up,
combined or exchanged at the office or agency of the Rights Agent designated for
such purpose. Thereupon the Rights Agent shall countersign and deliver to the
Person entitled thereto a Right Certificate or Right Certificates, as the case
may be, as so requested. The Company may require payment by the holders of
Rights of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer, split up, combination or exchange of
Right Certificates.
(b) Subject to the provisions of Section 11(a)(ii) hereof, at any time
after the Distribution Date and prior to the close of business on the earlier of
the Redemption Date or the Final Expiration Date, upon receipt by the Company
and the Rights Agent of evidence reasonably satisfactory to them of the loss,
theft, destruction or mutilation of a Right Certificate, and, in case of loss,
theft or destruction, of indemnity or security reasonably satisfactory to them,
and, at the Company's request, reimbursement to the Company and the Rights Agent
of all reasonable expenses incidental thereto, and upon surrender to the Rights
Agent and cancellation of the Right Certificate if mutilated, the Company will
make and deliver a new Right Certificate of like tenor to the Rights Agent for
delivery to the registered holder in lieu of the Right Certificate so lost,
stolen, destroyed or mutilated.
SECTION 7. EXERCISE OF RIGHTS, PURCHASE PRICE; EXPIRATION DATE OF
RIGHTS. (a) Except as otherwise provided herein, the Rights shall become
exercisable on the Distribution Date, and thereafter the registered holder of
any Right Certificate may, subject to Section 11(a)(ii) hereof and except as
otherwise provided herein, exercise the Rights evidenced thereby in whole or in
part upon surrender of the Right Certificate, with the form of election to
purchase on the reverse
7
side thereof duly executed, to the Rights Agent at the office or agency of the
Rights Agent designated for such purpose, together with payment of the Purchase
Price for each one one-thousandth of a Preference Share as to which the Rights
are exercised, at any time which is both after the Distribution Date and prior
to the earliest of (i) the close of business on December 22, 2008 (the "Final
Expiration Date"), (ii) the time at which the Rights are redeemed as provided in
Section 23 hereof (the "Redemption Date") or (iii) the time at which such Rights
are exchanged as provided in Section 24 hereof.
(b) The Purchase Price shall be initially $200 for each one
one-thousandth of a Preference Share purchasable upon the exercise of a Right.
The Purchase Price and the number of one one-thousandths of a Preference Share
or other securities or property to be acquired upon exercise of a Right shall be
subject to adjustment from time to time as provided in Sections 11 and 13 hereof
and shall be payable in lawful money of the United States of America in
accordance with paragraph (c) of this Section 7.
(c) Except as otherwise provided herein, upon receipt of a Right
Certificate representing exercisable Rights, with the form of election to
purchase duly executed, accompanied by payment of the aggregate Purchase Price
for the Preference Shares to be purchased and an amount equal to any applicable
transfer tax required to be paid by the holder of such Right Certificate in
accordance with Section 9 hereof, in cash or by certified check, cashier's check
or money order payable to the order of the Company, the Rights Agent shall
thereupon promptly (i) (A) requisition from any transfer agent of the Preference
Share certificates for the number of Preference Shares to be purchased (and the
Company hereby irrevocably authorizes its transfer agent to comply with all such
requests), or (B) requisition from the depositary agent depositary receipts
representing interests in such number of one one-thousandths of a Preference
Share as are to be purchased (in which case certificates for the Preference
Shares represented by such receipts shall be deposited by the transfer agent
with the depositary agent) (and the Company hereby directs the depositary agent
to comply with such request), (ii) when appropriate, requisition from the
Company the amount of cash to be paid in lieu of issuance of fractional shares
in accordance with Section 14 hereof, (iii) promptly after receipt of such
certificates or depositary receipts, cause the same to be delivered to or upon
the order of the registered holder of such Right Certificate, registered in such
name or names as may be designated by such holder and (iv) when appropriate,
after receipt, promptly deliver such cash to or upon the order of the registered
holder of such Right Certificate.
(d) Except as otherwise provided herein, in case the registered holder
of any Right Certificate shall exercise less than all the Rights evidenced
thereby, a new Right Certificate evidencing Rights equivalent to the exercisable
Rights remaining unexercised shall be issued by the Rights Agent to the
registered holder of such Right Certificate or to his duly authorized assigns,
subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary, neither
the Rights Agent nor the Company shall be obligated to undertake any action with
respect to a registered holder of Rights upon the occurrence of any purported
transfer or exercise of Rights pursuant to Section 6 hereof or this Section 7
unless such registered holder shall have (i) completed and signed the
certificate contained in the form of assignment or election to purchase set
forth on the reverse side of the Right Certificate surrendered for such transfer
or exercise and (ii) provided
8
such additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) thereof as the Company shall reasonably request. The Rights
Agent will endeavor to comply with the provisions hereof to the extent it has
received instructions from the Company concerning such matters.
SECTION 8. CANCELLATION OF RIGHT CERTIFICATES. All Right Certificates
surrendered for the purpose of exercise, transfer, split up, combination or
exchange shall, if surrendered to the Company or to any of its agents, be
delivered to the Rights Agent for cancellation or in canceled form, or, if
surrendered to the Rights Agent, shall be canceled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Agreement. The Company shall deliver to the Rights
Agent for cancellation and retirement, and the Rights Agent shall so cancel and
retire, any other Right Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
canceled Right Certificates to the Company.
SECTION 9. AVAILABILITY OF PREFERENCE SHARES. (a) The Company covenants
and agrees that it will cause to be reserved and kept available out of its
authorized and unissued Preference Shares, the number of Preference Shares that
will be sufficient to permit the exercise in full of all Rights in issue.
(b) So long as the Preference Shares (and, following the time that a
Person becomes an Acquiring Person, Common Shares and other securities) issuable
upon the exercise of Rights may be listed or admitted to trading on the New York
Stock Exchange or listed on any other national securities exchange or quotation
system, the Company shall use its best efforts to cause, from and after such
time as the Rights become exercisable, all shares reserved for such issuance to
be listed or admitted to trading on the New York Stock Exchange or listed on any
other exchange or quotation system upon official notice of issuance upon such
exercise.
(c) From and after such time as the Rights become exercisable, the
Company shall use its best efforts, if then necessary to permit the issuance of
Preference Shares (and following the time that a Person first becomes an
Acquiring Person, Common Shares and other securities) upon the exercise of
Rights, to register and qualify such Preference Shares (and following the time
that a Person first becomes an Acquiring Person, Common Shares and other
securities) under the Securities Act and any applicable state securities or
"Blue Sky" laws (to the extent exemptions therefrom are not available), cause
such registration statement and qualifications to become effective as soon as
possible after such filing and keep such registration and qualifications
effective until the earlier of the date as of which the Rights are no longer
exercisable for such securities and the Final Expiration Date. The Company may
temporarily suspend, for a period of time not to exceed 90 days, the
exercisability of the Rights in order to prepare and file a registration
statement under the Securities Act and permit it to become effective. Upon any
such suspension, the Company shall issue a public announcement, in each case
with simultaneous written notice to the Rights Agent, stating that the
exercisability of the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect.
Notwithstanding any provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction unless the requisite qualification
in such jurisdiction shall have been obtained and until a registration statement
under the Securities Act (if required) shall have been declared effective. The
Rights Agent may assume that any Right exercised is permitted to be exercised
under applicable law and shall have no liability for acting in reliance upon
such assumption.
9
(d) The Company covenants and agrees that it will take all such action
as may be necessary to ensure that all Preference Shares (and, following the
time that a Person becomes an Acquiring Person, Common Shares and other
securities) delivered upon exercise of Rights shall, at the time of delivery of
the certificates therefor (subject to payment of the Purchase Price), be duly
and validly authorized and issued and fully paid and nonassessable shares.
(e) The Company further covenants and agrees that it will pay when due
and payable any and all federal and state transfer taxes and charges which may
be payable in respect of the issuance or delivery of the Right Certificates or
of any Preference Shares (or Common Shares or other securities) upon the
exercise of Rights. The Company shall not, however, be required to pay any
transfer tax which may be payable in respect of any transfer or delivery of
Right Certificates to a Person other than, or the issuance or delivery of
certificates or depositary receipts for the Preference Shares (or Common Shares
or other securities) in a name other than that of, the registered holder of the
Right Certificate evidencing Rights surrendered for exercise or to issue or
deliver any certificates or depositary receipts for Preference Shares (or Common
Shares or other securities) upon the exercise of any Rights until any such tax
shall have been paid (any such tax being payable by that holder of such Right
Certificate at the time of surrender) or until it has been established to the
Company's reasonable satisfaction that no such tax is due.
SECTION 10. RECORD DATE FOR PREFERENCE SHARES. Each Person in whose
name any certificate for Preference Shares is issued upon the exercise of Rights
shall for all purposes be deemed to have become the holder of record of the
Preference Shares represented thereby on, and such certificate shall be dated,
the date upon which the Right Certificate evidencing such Rights was duly
surrendered and payment of the Purchase Price (and any applicable transfer
taxes) was made; provided, however, that if the date of such surrender and
payment is a date upon which the Preference Share transfer books of the Company
are closed, such Person shall be deemed to have become the record holder of such
shares on, and such certificate shall be dated, the next succeeding Business Day
on which the Preference Share transfer books of the Company are open. Prior to
the exercise of the Rights evidenced thereby, the holder of a Right Certificate
shall not be entitled to any rights of a holder of Preference Shares for which
the Rights shall be exercisable, including, without limitation, the right to
vote or to receive dividends or other distributions, and shall not be entitled
to receive any notice of any proceedings of the Company, except as provided
herein.
SECTION 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES AND NUMBER
OF RIGHTS. The Purchase Price, the number of Preference Shares or other
securities or property purchasable upon exercise of each Right and the number of
Rights in issue are subject to adjustment from time to time as provided in this
Section 11.
(a) (i) In the event the Company shall at any time after the date of
this Agreement (A) declare a dividend on the Preference Shares payable
in Preference Shares, (B) subdivide the Preference Shares in issue, (C)
combine the Preference Shares in issue into a smaller number of
Preference Shares or (D) issue any shares of its authorized share
capital in a reclassification of the Preference Shares (including any
such reclassification in connection with a consolidation, merger or
amalgamation in which the Company is the continuing or "surviving"
corporation), except as otherwise provided in this Section 11(a), the
Purchase Price in effect at the time of the record date for such
dividend or of
10
the effective date of such subdivision, combination or
reclassification, and the number and kind of shares of share capital
issuable on such date, shall be proportionately adjusted so that the
holder of any Right exercised after such time shall be entitled to
receive the aggregate number and kind of shares of share capital which,
if such Right had been exercised immediately prior to such date and at
a time when the Preference Shares transfer books of the Company were
open, the holder would have owned upon such exercise and been entitled
to receive by virtue of such dividend, subdivision, combination or
reclassification; provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less than
the aggregate par value of the shares of share capital of the Company
issuable upon exercise of one Right.
(ii) Subject to Section 24 of this Agreement and except as
otherwise provided in this Section 11(a)(ii), in the event any Person
becomes an Acquiring Person, each holder of a Right shall thereafter
have the right to receive, upon exercise thereof at a price equal to
the then current Purchase Price multiplied by the number of one
one-thousandths of a Preference Share for which a Right is then
exercisable, in accordance with the terms of this Agreement and in lieu
of Preference Shares, such number of Common Shares (or at the option of
the Company, such number of one one-thousandths of Preference Shares)
as shall equal the result obtained by (x) multiplying the then current
Purchase Price by the number of one one-thousandths of a Preference
Share for which a Right is then exercisable and dividing that product
by (y) 50% of the then current per share market price of the Common
Shares (determined pursuant to Section 11(d) hereof) on the date of the
occurrence of such event; provided, however, that the Purchase Price
and the number of Common Shares so receivable upon exercise of a Right
shall thereafter be subject to further adjustment as appropriate in
accordance with Section 11(f) hereof. Notwithstanding anything in this
Agreement to the contrary, however, from and after the time (the
"invalidation time") when any Person first becomes an Acquiring Person,
any Rights that are beneficially owned by (x) any Acquiring Person (or
any Affiliate or Associate of any Acquiring Person), (y) a transferee
of any Acquiring Person (or any such Affiliate or Associate) who
becomes a transferee after the invalidation time or (z) a transferee of
any Acquiring Person (or any such Affiliate or Associate) who became a
transferee prior to or concurrently with the invalidation time pursuant
to either (I) a transfer from the Acquiring Person to holders of its
equity securities or to any Person with whom it has any continuing
agreement, arrangement or understanding regarding the transferred
Rights or (II) a transfer which the Board of Directors has determined
is part of a plan, arrangement or understanding which has the purpose
or effect of avoiding the provisions of this paragraph, and subsequent
transferees of such Persons, shall be void without any further action
and any holder of such Rights shall thereafter have no rights
whatsoever with respect to such Rights under any provision of this
Agreement. The Company shall use all reasonable efforts to ensure that
the provisions of this Section 11(a)(ii) are complied with, but shall
have no liability to any holder of Right Certificates or other Person
as a result of its determination or its failure to make any
determinations with respect to an Acquiring Person or its Affiliates,
Associates or transferees hereunder. From and after the invalidation
time, no Right Certificate shall be issued pursuant to Section 3 or
Section 6 hereof that represents Rights that are or have become void
pursuant to the provisions of this paragraph, and any Right Certificate
delivered to the Rights Agent that represents Rights that are or have
become void pursuant to the
11
provisions of this paragraph shall be canceled. From and after the
occurrence of an event specified in Section 13(a) hereof, any Rights
that theretofore have not been exercised pursuant to this
Section 11(a)(ii) shall thereafter be exercisable only in accordance
with Section 13 and not pursuant to this Section 11(a)(ii).
(iii) The Company may at its option substitute for a Common
Share issuable upon the exercise of Rights in accordance with the
foregoing subparagraph (ii) such number or fractions of Preference
Shares having an aggregate current market value equal to the current
per share market price of a Common Share. In the event that there shall
not be sufficient Common Shares issued but not in issue or authorized
but unissued to permit the exercise in full of the Rights in accordance
with the foregoing subparagraph (ii), the Board of Directors shall, to
the extent permitted by applicable law and any material agreements then
in effect to which the Company is a party (A) determine the excess of
(1) the value of the Common Shares issuable upon the exercise of a
Right in accordance with the foregoing subparagraph (ii) (the "Current
Value") over (2) the then current Purchase Price multiplied by the
number of one one-thousandths of a Preference Share for which a Right
was exercisable immediately prior to the time that the Acquiring Person
became such (such excess, the "Spread"), and (B) with respect to each
Right (other than Rights which have become void pursuant to Section
11(a)(ii)), make adequate provision to substitute for the Common Shares
issuable in accordance with subparagraph (ii) upon exercise of the
Right and payment of the applicable Purchase Price, (1) cash, (2) a
reduction in the Purchase Price, (3) Preference Shares or other equity
securities of the Company (including, without limitation, shares or
fractions of Preference Shares which, by virtue of having dividend,
voting and liquidation rights substantially comparable to those of the
Common Shares, are deemed in good faith by the Board of Directors to
have substantially the same value as the Common Shares (such Preference
Shares and shares or fractions of Preference Shares are hereinafter
referred to as "Common Share equivalents")), (4) debt securities of the
Company, (5) other assets or (6) any combination of the foregoing,
having a value which, when added to the value of the Common Shares
actually issued upon exercise of such Right, shall have an aggregate
value equal to the Current Value (less the amount of any reduction in
the Purchase Price), where such aggregate value has been determined by
the Board of Directors upon the advice of a nationally recognized
investment banking firm selected in good faith by the Board of
Directors; provided, however, if the Company shall not make adequate
provision to deliver value pursuant to clause (B) above within thirty
(30) days following the date that the Acquiring Person became such (the
"Section 11(a)(ii) Trigger Date"), then the Company shall be obligated
to deliver, to the extent permitted by applicable law and any material
agreements then in effect to which the Company is a party, upon the
surrender for exercise of a Right and without requiring payment of the
Purchase Price, Common Shares (to the extent available), and then, if
necessary, such number or fractions of Preference Shares (to the extent
available) and then, if necessary, cash, which shares and/or cash have
an aggregate value equal to the Spread. If, upon the date any Person
becomes an Acquiring Person, the Board of Directors shall determine in
good faith that it is likely that sufficient additional Common Shares
could be authorized for issuance upon exercise in full of the Rights,
then, if the Board of Directors so elects, the thirty (30) day period
set forth above may be extended to the extent necessary, but not more
than ninety (90) days after the Section 11(a)(ii) Trigger Date, in
order that the Company may seek
12
shareholder approval for the authorization of such additional shares
(such thirty (30) day period, as it may be extended, is herein called
the "Substitution Period"). To the extent that the Company determines
that some action need be taken pursuant to the second and/or third
sentence of this Section 11(a)(iii), the Company (x) shall provide,
subject to Section 11(a)(ii) hereof and the last sentence of this
Section 11(a)(iii) hereof, that such action shall apply uniformly to
all Rights in issue and (y) may suspend the exercisability of the
Rights until the expiration of the Substitution Period in order to seek
any authorization of additional shares and/or to decide the appropriate
form of distribution to be made pursuant to such second sentence and to
determine the value thereof. In the event of any such suspension, the
Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as
a public announcement at such time as the suspension is no longer in
effect. For purposes of this Section 11(a)(iii), the value of the
Common Shares shall be the current per share market price (as
determined pursuant to Section 11(d)(i)) on the Section 11(a)(ii)
Trigger Date and the per share or fractional value of any "Common Share
equivalent" shall be deemed to equal the current per share market price
of the Common Shares. The Board of Directors of the Company may, but
shall not be required to, establish procedures to allocate the right to
receive Common Shares upon the exercise of the Rights among holders of
Rights pursuant to this Section 11(a)(iii).
(b) In case the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preference Shares entitling them
(for a period expiring within 45 calendar days after such record date) to
subscribe for or purchase Preference Shares (or shares having the same rights,
privileges and preferences as the Preference Shares ("equivalent Preference
Shares")) or securities convertible into Preference Shares or equivalent
Preference Shares at a price per Preference Share or equivalent Preference
Shares (or having a conversion price per share, if a security convertible into
Preference Shares or equivalent Preference Shares) less than the then current
per share market price of the Preference Shares (determined pursuant to Section
11(d) hereof) on such record date, the Purchase Price to be in effect after such
record date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the number of Preference Shares and equivalent Preference Shares in
issue on such record date plus the number of Preference Shares and equivalent
Preference Shares which the aggregate offering price of the total number of
Preference Shares and/or equivalent Preference Shares so to be offered (and/or
the aggregate initial conversion price of the convertible securities so to be
offered) would purchase at such current market price, and the denominator of
which shall be the number of Preference Shares and equivalent Preference Shares
in issue on such record date plus the number of additional Preference Shares
and/or equivalent Preference Shares to be offered for subscription or purchase
(or into which the convertible securities so to be offered are initially
convertible); provided, however, that in no event shall the consideration to be
paid upon the exercise of one Right be less than the aggregate par value of the
shares of share capital of the Company issuable upon exercise of one Right. In
case such subscription price may be paid in a consideration part or all of which
shall be in a form other than cash, the value of such consideration shall be as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent.
Preference Shares and equivalent Preference Shares owned by or held for the
account of the Company shall not be deemed in issue for the purpose of any such
computation. Such adjustment shall be made successively whenever
13
such a record date is fixed; and in the event that such rights, options or
warrants are not so issued, the Purchase Price shall be adjusted to be the
Purchase Price which would then be in effect if such record date had not been
fixed.
(c) In case the Company shall fix a record date for the making of a
distribution to all holders of the Preference Shares (including any such
distribution made in connection with a consolidation, merger or amalgamation in
which the Company is the continuing or "surviving" corporation) of evidences of
indebtedness or assets (other than a regular quarterly cash dividend or a
dividend payable in Preference Shares) or subscription rights or warrants
(excluding those referred to in Section 11(b) hereof), the Purchase Price to be
in effect after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the then current per share market price of the
Preference Shares (determined pursuant to Section 11(d) hereof) on such record
date, less the fair market value (as determined in good faith by the Board of
Directors of the Company whose determination shall be described in a statement
filed with the Rights Agent) of the portion of the assets or evidences of
indebtedness so to be distributed or of such subscription rights or warrants
applicable to one Preference Share, and the denominator of which shall be such
current per share market price (determined pursuant to Section 11(d) hereof) of
the Preference Shares; provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of share capital of the Company to be issued
upon exercise of one Right. Such adjustments shall be made successively whenever
such a record date is fixed; and in the event that such distribution is not so
made, the Purchase Price shall again be adjusted to be the Purchase Price which
would then be in effect if such record date had not been fixed.
(d) (i) Except as otherwise provided herein, for the purpose of any
computation hereunder, the "current per share market price" of any
security (a "Security" for the purpose of this Section 11(d)(i)) on any
date shall be deemed to be the average of the daily closing prices per
share of such Security for the 30 consecutive Trading Days (as such
term is hereinafter defined) immediately prior to such date; provided,
however, that in the event that the current per share market price of
the Security is determined during a period following the announcement
by the issuer of such Security of (A) a dividend or distribution on
such Security payable in shares of such Security or securities
convertible into such shares, or (B) any subdivision, combination or
reclassification of such Security, and prior to the expiration of 30
Trading Days after the ex-dividend date for such dividend or
distribution, or the record date for such subdivision, combination or
reclassification, then, and in each such case, the current per share
market price shall be appropriately adjusted to reflect the current
market price per share equivalent of such Security. The closing price
for each day shall be the last sale price, regular way, or, in case no
such sale takes place on such day, the average of the closing bid and
asked prices, regular way, in either case as reported by the principal
consolidated transaction reporting system with respect to securities
listed or admitted to trading on the New York Stock Exchange or, if the
Security is not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal
national securities exchange on which the Security is listed or
admitted to trading or, if the Security is not listed or admitted to
trading on any national securities exchange, the last quoted price or,
if not so quoted, the
14
average of the high bid and low asked prices in the over-the-counter
market, as reported by NASDAQ or such other system then in use, or, if
on any such date the Security is not quoted by any such organization,
the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Security selected by
the Board of Directors of the Company. The term "Trading Day" shall
mean a day on which the principal national securities exchange on which
the Security is listed or admitted to trading is open for the
transaction of business or, if the Security is not listed or admitted
to trading on any national securities exchange, a Business Day.
(ii) For the purpose of any computation hereunder, if the
Preference Shares are publicly traded, the "current per share market
price" of the Preference Shares shall be determined in accordance with
the method set forth in Section 11(d)(i). If the Preference Shares are
not publicly traded but the Common Shares are publicly traded, the
"current per share market price" of the Preference Shares shall be
conclusively deemed to be the current per share market price of the
Common Shares as determined pursuant to Section 11(d)(i) multiplied by
one thousand (appropriately adjusted to reflect any share division,
share dividend or similar transaction occurring after the date hereof).
If neither the Common Shares nor the Preference Shares are publicly
traded, "current per share market price" shall mean the fair value per
share as determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement filed
with the Rights Agent.
(e) No adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in the Purchase
Price; provided, however, that any adjustments which by reason of this Section
11(e) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Section 11
shall be made to the nearest cent or to the nearest one ten-thousandth of a
Preference Share or Common Share or other share or security as the case may be.
Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i) three
years from the date of the transaction which requires such adjustment or (ii)
the date of the expiration of the right to exercise any Rights.
(f) If as a result of an adjustment made pursuant to Section 11(a)
hereof, the holder of any Right thereafter exercised shall become entitled to
receive any shares of share capital of the Company other than the Preference
Shares, thereafter the Purchase Price and the number of such other shares so
receivable upon exercise of a Right shall be subject to adjustment from time to
time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Preference Shares contained in Sections 11(a),
11(b), 11(c), 11(e), 11(h), 11(i) and 11(m), and the provisions of Sections 7,
9, 10, 13 and 14 hereof with respect to the Preference Shares shall apply on
like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-thousandths of a
Preference Share purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.
15
(h) Unless the Company shall have exercised its election as provided in
Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Sections 11(b) and (c), each Right in issue immediately
prior to the making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of one one-thousandths of
a Preference Share (calculated to the nearest one ten-thousandth of a Preference
Share) obtained by (i) multiplying (x) the number of one one-thousandths of a
share covered by a Right immediately prior to such adjustment by (y) the
Purchase Price in effect immediately prior to such adjustment of the Purchase
Price and (ii) dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of one one-thousandths of a Preference Share
purchasable upon the exercise of a Right. Each of the Rights in issue after such
adjustment of the number of Rights shall be exercisable for the number of one
one-thousandths of a Preference Share for which a Right was exercisable
immediately prior to such adjustment. Each Right held of record prior to such
adjustment of the number of Rights shall become that number of Rights
(calculated to the nearest one ten-thousandth) obtained by dividing the Purchase
Price in effect immediately prior to adjustment of the Purchase Price by the
Purchase Price in effect immediately after adjustment of the Purchase Price. The
Company shall make a public announcement of its election to adjust the number of
Rights, indicating the record date for the adjustment, and, if known at the
time, the amount of the adjustment to be made. This record date may be the date
on which the Purchase Price is adjusted or any day thereafter, but, if the Right
Certificates have been issued, shall be at least 10 days later than the date of
the public announcement. If Right Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section 11(i), the Company
may, as promptly as practicable, cause to be distributed to holders of record of
Right Certificates on such record date Right Certificates evidencing, subject to
Section 14 hereof, the additional Rights to which such holders shall be entitled
as a result of such adjustment, or, at the option of the Company, shall cause to
be distributed to such holders of record in substitution and replacement for the
Right Certificates held by such holders prior to the date of adjustment, and
upon surrender thereof, if required by the Company, new Right Certificates
evidencing all the Rights to which such holders shall be entitled after such
adjustment. Right Certificates so distributed shall be issued, executed and
countersigned in the manner provided for herein and shall be registered in the
names of the holders of record of Right Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or
the number of one one-thousandths of a Preference Share issuable upon the
exercise of the Rights, the Right Certificates theretofore and thereafter issued
may continue to express the Purchase Price and the number of one one-thousandths
of a Preference Share which were expressed in the initial Right Certificates
issued hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below the then par value of the Preference Shares or other
shares of the authorized share capital issuable upon exercise of the Rights, the
Company shall take any corporate action which may, in the opinion of its
counsel, be necessary in order that the Company may validly and legally issue
fully paid and nonassessable Preference Shares or other such shares at such
adjusted Purchase Price.
16
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuing to the holder of any Right exercised after such record date of
the Preference Shares and other share capital or securities of the Company, if
any, issuable upon such exercise over and above the Preference Shares and other
share capital or securities of the Company, if any, issuable upon such exercise
on the basis of the Purchase Price in effect prior to such adjustment; provided,
however, that the Company shall deliver to such holder a due bill or other
appropriate instrument evidencing such holder's right to receive such additional
shares upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that it in its sole discretion shall determine to be advisable in
order that any consolidation or subdivision of the Preference Shares, issuance
wholly for cash of any Preference Shares at less than the current market price,
issuance wholly for cash or Preference Shares or securities which by their terms
are convertible into or exchangeable for Preference Shares, dividends on
Preference Shares payable in Preference Shares or issuance of rights, options or
warrants referred to herein above in Section 11(b), hereafter made by the
Company to holders of its Preference Shares shall not be taxable to such
shareholders.
(n) Anything in this Agreement to the contrary notwithstanding, in the
event that at any time after the date of this Agreement and prior to the
Distribution Date, the Company shall (i) declare or pay any dividend on the
Common Shares payable in Common Shares or (ii) effect a subdivision, combination
or consolidation of the Common Shares (by reclassification or otherwise than by
payment of a dividend payable in Common Shares) into a greater or lesser number
of Common Shares, then in any such case, the number of Rights associated with
each Common Share then in issue, or issued or delivered thereafter, shall be
proportionately adjusted so that the number of Rights thereafter associated with
each Common Share following any such event shall equal the result obtained by
multiplying the number of Rights associated with each Common Share immediately
prior to such event by a fraction the numerator of which shall be the total
number of Common Shares in issue immediately prior to the occurrence of the
event and the denominator of which shall be the total number of Common Shares in
issue immediately following the occurrence of such event.
(o) The Company agrees that, after the earlier of the Distribution Date
or the Share Acquisition Date, it will not, except as permitted by Sections 23,
24 or 27 hereof, take (or permit any Subsidiary to take) any action if at the
time such action is taken it is reasonably foreseeable that such action will
diminish substantially or eliminate the benefits intended to be afforded by the
Rights.
SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES.
Whenever an adjustment is made as provided in Section 11 or 13 hereof, the
Company shall promptly (a) prepare a certificate setting forth such adjustment,
and a brief statement of the facts accounting for such adjustment, (b) file with
the Rights Agent and with each transfer agent for the Common Shares or the
Preference Shares a copy of such certificate and (c) mail a brief summary
thereof to each holder of a Right Certificate in accordance with Section 25
hereof (if so required under
17
Section 25 hereof). The Rights Agent shall be fully protected in relying on any
such certificate and on any adjustment therein contained and shall not be deemed
to have knowledge of any such adjustment unless and until it shall have received
such certificate.
SECTION 13. CONSOLIDATION, MERGER, AMALGAMATION OR SALE OR TRANSFER OF
ASSETS OR EARNINGS POWER. (a) In the event, directly or indirectly, at any time
after any Person has become an Acquiring Person, (i) the Company shall merge or
amalgamate with and into any other Person, (ii) any Person shall consolidate
with the Company, or any Person shall merge or amalgamate with and into the
Company and the Company shall be the continuing or "surviving" corporation of
such merger or amalgamation and, in connection with such merger or amalgamation,
all or part of the Common Shares shall be changed into or exchanged for stock or
other securities of any other Person (or of the Company) or cash or any other
property, or (iii) the Company shall sell or otherwise transfer (or one or more
of its Subsidiaries shall sell or otherwise transfer), in one or more
transactions, assets or earning power aggregating 50% or more of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to any
other Person (other than the Company or one or more of its wholly-owned
Subsidiaries), then upon the first occurrence of such event, proper provision
shall be made so that: (A) each holder of record of a Right (other than Rights
which have become void pursuant to Section 11(a)(ii)) shall thereafter have the
right to receive, upon the exercise thereof at a price equal to the then current
Purchase Price multiplied by the number of one one-thousandths of a Preference
Share for which a Right was exercisable (whether or not such Right was then
exercisable) immediately prior to the time that any Person first became an
Acquiring Person (each as subsequently adjusted thereafter pursuant to Sections
11(a)(i), 11(b), 11(c), 11(h), 11(i) and 11(m)), in accordance with the terms of
this Agreement and in lieu of Preference Shares, such number of validly issued,
fully paid and non-assessable and freely tradeable Common Shares of the
Principal Party (as defined herein) not subject to any liens, encumbrances,
rights of first refusal or other adverse claims, as shall be equal to the result
obtained by (1) multiplying the then current Purchase Price by the number of one
one-thousandths of a Preference Share for which a Right was exercisable
immediately prior to the time that any Person first became an Acquiring Person
(as subsequently adjusted thereafter pursuant to Sections 11(a)(i), 11(b),
11(c), 11(h), 11(i) and 11(m)) and (2) dividing that product by 50% of the then
current per share market price of the Common Shares of such Principal Party
(determined pursuant to Section 11(d)(i) hereof) on the date of consummation of
such consolidation, merger, amalgamation, sale or transfer; provided, that the
Purchase Price and the number of Common Shares of such Principal Party issuable
upon exercise of each Right shall be further adjusted as provided in Section
11(f) of this Agreement to reflect any events occurring in respect of such
Principal Party after the date of such consolidation, merger, amalgamation, sale
or transfer; (B) such Principal Party shall thereafter be liable for, and shall
assume, by virtue of such consolidation, merger, amalgamation, sale or transfer,
all the obligations and duties of the Company pursuant to this Agreement; (C)
the term "Company" shall thereafter be deemed to refer to such Principal Party;
and (D) such Principal Party shall take such steps (including, but not limited
to, the reservation of a sufficient number of its Common Shares in accordance
with Section 9 hereof) in connection with such consummation of any such
transaction as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to its
Common Shares thereafter deliverable upon the exercise of the Rights; provided,
that, upon the subsequent occurrence of any consolidation, merger, amalgamation,
sale or transfer of assets or other extraordinary transaction in respect of such
Principal Party, each holder of a Right shall
18
thereupon be entitled to receive, upon exercise of a Right and payment of the
Purchase Price as provided in this Section 13(a), such cash, shares, rights,
warrants and other property which such holder would have been entitled to
receive had such holder, at the time of such transaction, owned the Common
Shares of the Principal Party receivable upon the exercise of a Right pursuant
to this Section 13(a), and such Principal Party shall take such steps
(including, but not limited to, reservation of shares of stock) as may be
necessary to permit the subsequent exercise of the Rights in accordance with the
terms hereof for such cash, shares, rights, warrants and other property.
(b) "Principal Party" shall mean:
(i) in the case of any transaction described in clause (i) or
(ii) of the first sentence of Section 13(a) hereof: (A) the Person that
is the issuer of the securities into which the Common Shares are
converted in such merger, amalgamation or consolidation, or, if there
is more than one such issuer, the issuer the Common Shares of which
have the greatest aggregate market value of shares in issue, or (B) if
no securities are so issued, (x) the Person that is the other party to
the merger or amalgamation, if such Person survives said merger or
amalgamation, or, if there is more than one such Person, the Person the
Common Shares of which have the greatest aggregate market value of
shares in issue or (y) if the Person that is the other party to the
merger or amalgamation does not survive the merger or amalgamation, the
Person that does survive the merger or amalgamation (including the
Company if it survives) or (z) the Person resulting from the
consolidation; and
(ii) in the case of any transaction described in clause (iii)
of the first sentence in Section 13(a) hereof, the Person that is the
party receiving the greatest portion of the assets or earning power
transferred pursuant to such transaction or transactions, or, if each
Person that is a party to such transaction or transactions receives the
same portion of the assets or earning power so transferred or if the
Person receiving the greatest portion of the assets or earning power
cannot be determined, whichever of such Persons as is the issuer of
Common Shares having the greatest aggregate market value of shares in
issue;
provided, however, that in any such case described in the foregoing clause
(b)(i) or (b)(ii), (1) if the Common Shares of such Person is not at such time
or has not been continuously over the preceding 12-month period registered under
Section 12 of the Exchange Act, and if such Person is a direct or indirect
Subsidiary of another Person the Common Shares of which is and has been so
registered, the term "Principal Party" shall refer to such other Person, or (2)
if such Person is a Subsidiary, directly or indirectly, of more than one Person,
the Common Shares of all of which is and has been so registered, the term
"Principal Party" shall refer to whichever of such Persons is the issuer of
Common Shares having the greatest aggregate market value of shares in issue, or
(3) if such Person is owned, directly or indirectly, by a joint venture formed
by two or more Persons that are not owned, directly or indirectly, by the same
Person, the rules set forth in clauses (1) and (2) above shall apply to each of
the owners having an interest in the venture as if the Person owned by the joint
venture was a Subsidiary of both or all of such joint venturers, and the
Principal Party in each such case shall bear the obligations set forth in this
Section 13 in the same ratio as its interest in such Person bears to the total
of such interests.
19
(c) The Company shall not consummate any consolidation, merger,
amalgamation, sale or transfer referred to in Section 13(a) hereof unless prior
thereto the Company and the Principal Party involved therein shall have executed
and delivered to the Rights Agent an agreement confirming that the requirements
of Sections 13(a) and (b) hereof shall promptly be performed in accordance with
their terms and that such consolidation, merger, amalgamation, sale or transfer
of assets shall not result in a default by the Principal Party under this
Agreement as the same shall have been assumed by the Principal Party pursuant to
Sections 13(a) and (b) hereof and providing that, as soon as practicable after
executing such agreement pursuant to this Section 13, the Principal Party will:
(i) prepare and file a registration statement under the
Securities Act, if necessary, with respect to the Rights and the
securities purchasable upon exercise of the Rights on an appropriate
form, use its best efforts to cause such registration statement to
become effective as soon as practicable after such filing and use its
best efforts to cause such registration statement to remain effective
(with a prospectus at all times meeting the requirements of the
Securities Act) until the earlier of the close of business on the
Redemption Date or the Final Expiration Date, and similarly comply with
applicable state securities laws;
(ii) use its best efforts, if the Common Shares of the
Principal Party shall be listed or admitted to trading on the New York
Stock Exchange or on another national securities exchange, to list or
admit to trading (or continue the listing of) the Rights and the
securities purchasable upon exercise of the Rights on the New York
Stock Exchange or such securities exchange, or, if the Common Shares of
the Principal Party shall not be listed or admitted to trading on the
New York Stock Exchange or a national securities exchange, to cause the
Rights and the securities receivable upon exercise of the Rights to be
reported by such other system then in use;
(iii) deliver to holders of the Rights historical financial
statements for the Principal Party which comply in all respects with
the requirements for registration on Form 10 (or any successor form)
under the Exchange Act; and
(iv) obtain waivers of any rights of first refusal or
preemptive rights in respect of the Common Shares of the Principal
Party subject to purchase upon exercise of Rights in issue.
(d) In case the Principal Party which is to be a party to a transaction
referred to in this Section 13 has provision in any of its authorized securities
or in its certificate of incorporation or by-laws or other instrument governing
its corporate affairs, which provision would have the effect of (i) causing such
Principal Party to issue (other than to holders of Rights pursuant to this
Section 13), in connection with, or as a consequence of, the consummation of a
transaction referred to in this Section 13, Common Shares of such Principal
Party at less than the then current market price per share thereof (determined
pursuant to Section 11(d) hereof) or securities exercisable for, or convertible
into, Common Shares of such Principal Party at less than such then current
market price, or (ii) providing for any special payment, tax or similar
provision in connection with the issuance of the Common Shares of such Principal
Party pursuant to the provisions of Section 13, then, in such event, the Company
hereby agrees with each holder of
20
Rights that it shall not consummate any such transaction unless prior thereto
the Company and such Principal Party shall have executed and delivered to the
Rights Agent a supplemental agreement providing that the provision in question
of such Principal Party shall have been canceled, waived or amended, or that the
authorized securities shall be redeemed, so that the applicable provision will
have no effect in connection with, or as a consequence of, the consummation of
the proposed transaction.
(e) The Company covenants and agrees that it shall not, at any time
after a Person first becomes an Acquiring Person, enter into any transaction of
the type contemplated by clauses (i), (ii) or (iii) of Section 13(a) hereof if
(x) at the time of or immediately after such consolidation, merger,
amalgamation, sale, transfer or other transaction there are any rights, warrants
or other instruments or securities in issue or agreements in effect which would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights, (y) prior to, simultaneously with or immediately after
such consolidation, merger, amalgamation, sale, transfer of other son who
constitutes, or would constitute, the Principal Party for purposes of Section
13(a) hereof shall have received a distribution of Rights previously owned by
such Person or any of its Affiliates or Associates or (z) the form or nature of
organization of the Principal Party would preclude or limit the exercisability
of the Rights.
(f) In no event shall the Rights Agent have any liability in respect of
any such Principal Party transactions, including, without limitation, the
property thereof. The Rights Agent may rely and be fully protected in relying
upon a certificate of the Company stating that the provisions of this Section 13
have been fulfilled. Notwithstanding anything in this Agreement to the contrary,
the prior written consent of the Rights Agent must be obtained in connection
with any supplemental agreement which alters the rights or duties of the Rights
Agent.
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES. (a) The Company
shall not be required to issue fractions of Rights or to distribute Right
Certificates which evidence fractional Rights. In lieu of such fractional
Rights, there shall be paid to the registered holders of the Right Certificates
with regard to which such fractional Rights would otherwise be issuable, an
amount in cash equal to the same fraction of the current market value of a whole
Right. For the purposes of this Section 14(a), the current market value of a
whole Right shall be the closing price of the Rights for the Trading Day
immediately prior to the date on which such fractional Rights would have been
otherwise issuable. The closing price for any day shall be the last sale price,
regular way, or, in case no such sale takes place on such day, the average of
the closing bid and asked prices, regular way, in either case as reported in the
principal consolidated transaction reporting system with respect to securities
listed or admitted to trading on the New York Stock Exchange or, if the Rights
are not listed or admitted to trading on the New York Stock Exchange, as
reported in the principal consolidated transaction reporting system with respect
to securities listed on the principal national securities exchange on which the
Rights are listed or admitted to trading or, if the Rights are not listed or
admitted to trading on any national securities exchange, the last quoted price
or, if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by NASDAQ or such other system then in use
or, if on any such date the Rights are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Rights selected by the Board of Directors of
the Company. If on any such date no such market maker is making
21
a market in the Rights, the fair value of the Rights on such date as determined
in good faith by the Board of Directors of the Company shall be used.
(b) The Company shall not be required to issue fractions of Preference
Shares (other than fractions which are integral multiples of one one-thousandth
of a Preference Share) upon exercise of the Rights or to distribute certificates
which evidence fractional Preference Shares (other than fractions which are
integral multiples of one one-thousandth of a Preference Share). Interests in
fractions of Preference Shares in integral multiples of one one-thousandth of a
Preference Share may, at the election of the Company, be evidenced by depositary
receipts, pursuant to an appropriate agreement between the Company and a
depositary selected by it; provided, that such agreement shall provide that the
holders of such depositary receipts shall have all the rights, privileges and
preferences to which they are entitled as beneficial owners of the Preference
Shares represented by such depositary receipts. In lieu of fractional Preference
Shares that are not integral multiples of one one-thousandth of a Preference
Share, the Company shall pay to the registered holders of Right Certificates at
the time such Rights are exercised as herein provided an amount in cash equal to
the same fraction of the current market value of one Preference Share. For the
purposes of this Section 14(b), the current market value of a Preference Share
shall be the closing price of a Preference Share (as determined pursuant to
Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of
such exercise.
(c) The holder of a Right by the acceptance of the Right expressly
waives his right to receive any fractional Rights or any fractional shares upon
exercise of a Right (except as provided above).
SECTION 15. RIGHTS OF ACTION. All rights of action in respect of this
Agreement, excepting the rights of action given to the Rights Agent under
Section 18 hereof, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Shares); and the Company hereby unilaterally and irrevocably covenants in
favor of such holders to perform all obligations of the Company under this
Agreement (including the right to refrain from taking any actions as permitted
by this Agreement); and any registered holder of any Right Certificate (or,
prior to the Distribution Date, of the Common Shares), without the consent of
the Rights Agent or of the holder of any other Right Certificate (or, prior to
the Distribution Date, of the Common Shares), on his own behalf and for his own
benefit, may enforce, and may institute and maintain any suit, action or
proceeding against the Company to enforce, or otherwise act in respect of, his
right to exercise the Rights evidenced by such Right Certificate (or, prior to
the Distribution Date, such Common Shares) in the manner provided in such Right
Certificate and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and will be entitled to specific performance of the
obligations under, and injunctive relief against actual or threatened violations
of, the obligations of any Person subject to this Agreement.
SECTION 16. AGREEMENT OF RIGHT HOLDERS. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
22
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of the Common Shares;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the office or agency of the Rights Agent designated for such purpose, duly
endorsed or accompanied by a proper instrument of transfer;
(c) the Company and the Rights Agent may deem and treat the Person in
whose name the Right Certificate (or, prior to the Distribution Date, the Common
Shares certificate) is registered as the absolute owner thereof and of the
Rights evidenced thereby (notwithstanding any notations of ownership or writing
on the Right Certificates or the Common Shares certificate made by anyone other
than the Company or the Rights Agent) for all purposes whatsoever, and neither
the Company nor the Rights Agent shall be affected by any notice to the
contrary; and
(d) notwithstanding anything in this Agreement to the contrary, neither
the Company nor the Rights Agent shall have any liability to any holder of a
Right or other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority prohibiting or otherwise restraining
performance of such obligation; provided that the Company must use its
reasonable best efforts to have any such order, decree or ruling lifted or
otherwise overturned as soon as possible.
SECTION 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the Preference Shares or
any other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained herein
or in any Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a shareholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in this Agreement), or to receive dividends or
subscription rights, or otherwise, until the Rights evidenced by such Right
Certificate shall have been exercised in accordance with the provisions hereof.
SECTION 18. CONCERNING THE RIGHTS AGENT. (a) The Company agrees to pay
to the Rights Agent such compensation as shall be agreed to in writing between
the Company and the Rights Agent for all services rendered by it hereunder and,
from time to time, on demand of the Rights Agent, its reasonable expenses and
counsel fees and other disbursements incurred in the administration and
execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability or expense, incurred without gross
negligence, bad faith or willful misconduct on the part of the Rights Agent, for
anything done or omitted by the Rights Agent in connection with the acceptance
and administration of this Agreement (whether asserted by the Company, a holder
of a Right or any other Person) including the costs and expenses of defending
23
against any claim of liability arising therefrom, directly or indirectly. The
provisions of this Section 18(a) shall survive the expiration of the Rights and
the termination of this Agreement.
(b) The Rights Agent shall be protected and shall incur no liability
for, or in respect of any action taken, suffered or omitted by it in connection
with, its administration of this Agreement in reliance upon any Right
Certificate or certificate for the Preference Shares or Common Shares or for
other securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, instruction, direction,
consent, certificate, statement, or other paper or document believed by it to be
genuine and to be signed and executed by the proper Person or Persons, or
otherwise upon the advice of counsel as set forth in Section 20 hereof.
Notwithstanding anything in this Agreement to the contrary, in no event shall
the Rights Agent be liable for special, indirect, punitive or consequential loss
or damage of any kind whatsoever (including but not limited to lost profits),
even if the Rights Agent has been advised of the likelihood of the loss or
damage and regardless of the form of the action.
SECTION 19. MERGER, AMALGAMATION OR CONSOLIDATION OR CHANGE OF NAME OF
RIGHTS AGENT. (a) Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or amalgamated or with which it may be consolidated,
or any corporation resulting from any merger, amalgamation or consolidation to
which the Rights Agent or any successor Rights Agent shall be a party, or any
corporation succeeding to all or substantially all the share transfer or
corporate trust powers of the Rights Agent or any successor Rights Agent, shall
be the successor to the Rights Agent under this Agreement without the execution
or filing of any paper or any further act on the part of any of the parties
hereto; provided, that such corporation would be eligible for appointment as a
successor Rights Agent under the provisions of Section 21 hereof. In case at the
time such successor Rights Agent shall succeed to the agency created by this
Agreement, any of the Right Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the countersignature of the
predecessor Rights Agent and deliver such Right Certificates so countersigned;
and in case at that time any of the Right Certificates shall not have been
countersigned, any successor Rights Agent may countersign such Right
Certificates either in the name of the predecessor Rights Agent or in the name
of the successor Rights Agent; and in all such cases such Right Certificates
shall have the full force provided in the Right Certificates and in this
Agreement.
(b) In case at any time the name of the Rights Agent shall be changed
and at such time any of the Right Certificates shall have been countersigned but
not delivered the Rights Agent may adopt the countersignature under its prior
name and deliver Right Certificates so countersigned; and in case at that time
any of the Right Certificates shall not have been countersigned, the Rights
Agent may countersign such Right Certificates either in its prior name or in its
changed name and in all such cases such Right Certificates shall have the full
force provided in the Right Certificates and in this Agreement.
SECTION 20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the
duties and obligations expressly imposed by this Agreement, and no implied
duties or obligations shall be read into this Agreement against the Rights
Agent, upon the following terms and conditions, by all of which the Company and
the holders of Right Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel of its selection
(who may be legal counsel for the Company), and the opinion of such counsel
shall be full and complete
24
authorization and protection to the Rights Agent as to any action taken or
omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter be
proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman of the Board of
Directors, the President, any Vice President, the Treasurer, the Controller or
the Secretary of the Company and delivered to the Rights Agent; and such
certificate shall be full authorization to the Rights Agent for any action taken
or suffered in good faith by it under the provisions of this Agreement in
reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company and any
other Person only for its own gross negligence or willful misconduct; provided,
however, that the Rights Agent shall not be liable for any indirect, special,
consequential or punitive damages.
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Right
Certificates (except its countersignature thereof) or be required to verify the
same, but all such statements and recitals are and shall be deemed to have been
made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect
of the validity of this Agreement or the execution and delivery hereof (except
the due execution hereof by the Rights Agent) or in respect of the validity or
execution of any Right Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Right Certificate; nor shall it
be responsible for any change in the exercisability of the Rights (including the
Rights becoming void pursuant to Section 11(a)(ii) hereof) or any adjustment in
the terms of the Rights (including the manner, method or amount thereof)
provided for in Sections 3, 11, 13, 23 and 24, or the ascertaining of the
existence of facts that would require any such change or adjustment (except with
respect to the exercise of Rights evidenced by Right Certificates after the
Rights Agent's actual receipt of a certificate furnished pursuant to Section 12,
describing such change or adjustment); nor shall it by any act hereunder be
deemed to make any representation or warranty as to the authorization or
reservation of any Preference Shares or other securities to be issued pursuant
to this Agreement or any Right Certificate or as to whether any Preference
Shares or other securities will, when issued, be validly authorized and issued,
fully paid and nonassessable, nor shall the Rights Agent be responsible for the
legality of the terms hereof in its capacity as an administrative agent.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
person reasonably believed by the Rights Agent to be one of the Chairman of the
Board of Directors, the President, the Chief Financial
25
Officer or the Secretary of the Company, and to apply to such officers for
advice or instructions in connection with its duties, and it shall not be liable
for any action taken or suffered by it in good faith in accordance with
instructions of any such officer or for any delay in acting while waiting for
those instructions. Any application by the Rights Agent for written instructions
from the Company may, at the option of the Rights Agent, set forth in writing
any action proposed to be taken or omitted by the Rights Agent under this
Agreement and the date on and/or after which such action shall be taken or such
omission shall be effective. The Rights Agent shall not be liable for any action
taken by, or omission of, the Rights Agent in accordance with a proposal
included in any such application on or after the date specified in such
application (which date shall not be less than five Business Days after the date
any officer of the Company actually receives such application, unless any such
officer shall have consented in writing to an earlier date) unless, prior to
taking any such action (or the effective date in the case of an omission), the
Rights Agent shall have received written instructions in response to such
application specifying the action to be taken or omitted.
(h) The Rights Agent and any shareholder, director, officer or employee
of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct, provided reasonable care was exercised in the selection
thereof.
(j) If, with respect to any Right Certificate surrendered to the Rights
Agent for exercise or transfer, the certificate contained in the form of
assignment or the form of election to purchase set forth on the reverse thereof,
as the case may be, has not been completed to certify the holder is not an
Acquiring Person (or an Affiliate or Associate thereof), a Rights Agent shall
not take any further action with respect to such requested exercise or transfer
without first consulting with the Company.
(k) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights if
there shall be reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not reasonable
assured to it.
(l) The Company agrees to give the Rights Agent prompt written notice,
as soon as reasonably practicable, of any event or ownership which would
prohibit the exercise or transfer of the Right Certificates.
SECTION 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in
26
writing mailed to the Company. The Company may remove the Rights Agent or any
successor Rights Agent upon 30 days' notice in writing, mailed to the Rights
Agent or successor Rights Agent, as the case may be. If the Rights Agent shall
resign or be removed or shall otherwise become incapable of acting, the Company
shall appoint a successor to the Rights Agent. If the Company shall fail to make
such appointment within a period of 30 days after giving notice of such removal
or after it has been notified in writing of such resignation or incapacity by
the resigning or incapacitated Rights Agent or by the holder of a Right
Certificate (who shall, with such notice, submit his Right Certificate for
inspection by the Company), then the Rights Agent or registered holder of any
Right Certificate may, at the reasonable expense of the Company, apply to any
court of competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by such a court,
shall be a corporation organized and doing business under the laws of the United
States or any State thereof, which is authorized under such laws to exercise
corporate trust or stock transfer powers and is subject to supervision or
examination by federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at least $50
million. After appointment, the successor Rights Agent shall be vested with the
same powers, rights, duties and responsibilities as if it had been originally
named as Rights Agent without further act or deed; but the predecessor Rights
Agent shall deliver and transfer to the successor Rights Agent any property at
the time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the effective
date of any such appointment the Company shall file notice thereof in writing
with the predecessor Rights Agent and each transfer agent of the Common Shares
or Preference Shares, and, following the Distribution Date, mail a notice
thereof in writing to the registered holders of the Right Certificates. Failure
to give any notice provided for in this Section 21, however, or any defect
therein, shall not affect the legality or validity of the resignation or removal
of the Rights Agent or the appointment of the successor Rights Agent, as the
case may be.
SECTION 22. ISSUANCE OF NEW RIGHT CERTIFICATES. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Right Certificates evidencing Rights in such forms
as may be approved by its Board of Directors to reflect any adjustment or change
in the Purchase Price and the number or kind or class of shares or other
securities or property purchasable under the Right Certificates made in
accordance with the provisions of this Agreement. In addition, in connection
with the issuance or sale of Common Shares following the Distribution Date and
prior to the earlier of the Redemption Date and the Final Expiration Date, the
Company may with respect to Common Shares so issued or sold (i) pursuant to the
exercise of stock options, (ii) under any employee plan or arrangement, (iii)
upon the exercise, conversion or exchange of securities, notes or debentures
issued by the Company, including, without limitation, the conversion of Class B
Common Shares into Common Shares or (iv) pursuant to a contractual obligation of
the Company, in each case existing prior to the Distribution Date, issue Right
Certificates representing the appropriate number of Rights in connection with
such issuance or sale.
SECTION 23. REDEMPTION. (a) The Board of Directors of the Company may,
at any time prior to such time as any Person first becomes an Acquiring Person,
redeem all but not less than all the then in issue Rights at a redemption price
of $.01 per Right, appropriately adjusted to
27
reflect any share division, share dividend or similar transaction occurring
after the date hereof (the redemption price being hereinafter referred to as the
"Redemption Price"). The redemption of the Rights may be made effective at such
time, on such basis and with such conditions as the Board of Directors in its
sole discretion may establish. The Company may, at its option, pay the
Redemption Price in cash, Common Shares (based on the current market price of
the Common Shares at the time of redemption) or any other form of consideration
deemed appropriate by the Board of Directors.
(b) Immediately upon the action of the Board of Directors ordering the
redemption of the Rights pursuant to paragraph (a) of this Section 23 (or at
such later time as the Board of Directors may establish for the effectiveness of
such redemption), and without any further action and without any notice, the
right to exercise the Rights will terminate and the only right thereafter of the
holders of Rights shall be to receive the Redemption Price. The Company shall
promptly give public notice (with simultaneous written notice to the Rights
Agent) of any such redemption; provided, however, that the failure to give, or
any defect in, any such notice shall not affect the validity of such redemption.
Within 10 days after such action of the Board of Directors ordering the
redemption of the Rights (or such later time as the Board of Directors may
establish for the effectiveness of such redemption), the Company shall mail a
notice of redemption to all the holders of the then in issue Rights at their
last addresses as they appear upon the registry books of the Rights Agent or,
prior to the Distribution Date, on the registry books of the transfer agent for
the Common Shares. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the notice. Each such
notice of redemption shall state the method by which the payment of the
Redemption Price will be made.
SECTION 24. EXCHANGE. (a) The Board of Directors of the Company may, at
its option, at any time after any Person first becomes an Acquiring Person,
exchange all or part of the Rights then in issue and exercisable (which shall
not include Rights that have become void pursuant to the provisions of Section
11(a)(ii) hereof) for Common Shares at an exchange ratio of one Common Share per
Right, appropriately adjusted to reflect any share division, share dividend or
similar transaction occurring after the date hereof and subject to adjustment as
set forth in clause (c) below (such exchange ratio being hereinafter referred to
as the "Exchange Ratio"). Notwithstanding the foregoing, the Board of Directors
shall not be empowered to effect such exchange at any time after (1) any Person
(other than an Exempt Person), together with all Affiliates and Associates of
such Person, becomes the Beneficial Owner of Common Shares aggregating 50% or
more of the Common Shares then in issue or (2) the occurrence of an event
specified in Section 13(a) hereof.
(a) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to paragraph (a) of this
Section 24 and without any further action and without any notice, the right to
exercise such Rights shall terminate and the only right thereafter of a holder
of such Rights shall be to receive that number of Common Shares equal to the
number of such Rights held by such holder multiplied by the Exchange Ratio. The
Company shall promptly give public notice (with simultaneous written notice to
the Rights Agent) of any such exchange; provided, however, that the failure to
give, or any defect in, such notice shall not affect the validity of such
exchange. The Company shall promptly mail a notice of any such exchange to all
of the holders of the Rights so exchanged at their last addresses as they appear
28
upon the registry books of the Rights Agent. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not the holder receives
the notice. Each such notice of exchange will state the method by which the
exchange of the Common Shares for Rights will be effected and, in the event of
any partial exchange, the number of Rights which will be exchanged. Any partial
exchange shall be effected pro rata based on the number of Rights (other than
Rights which have become void pursuant to the provisions of Section 11(a)(ii)
hereof) held by each holder of Rights.
(c) In the event that there shall not be sufficient Common Shares
authorized but not in issue to permit any exchange of Rights as contemplated in
accordance with this Section 24, the Company may, in its discretion, take such
action as may be necessary to authorize additional Common Shares for issuance
upon exchange of the Rights. In the event that the Company shall determine not
to take such action or shall, after good faith effort, be unable to take such
action as may be necessary to authorize such additional Common Shares, the
Company shall substitute, to the extent of such insufficiency, for each Common
Share that would otherwise be issuable upon exchange of a Right, a number of
Preference Shares or fractions thereof (or equivalent Preference Shares as such
term is defined in Section 11(b)) having an aggregate current per share market
price (determined pursuant to Section 11(d) hereof) equal to the current per
share market price of one Common Share (determined pursuant to Section 11(d)
hereof) as of the date of issuance of such Preference Shares or fractions
thereof (or equivalent Preference Shares).
(d) The Company shall not, in connection with any exchange pursuant to
this Section 24, be required to issue fractions of Common Shares or to
distribute certificates which evidence fractional Common Shares. In lieu of such
fractional Common Shares, the Company shall pay to the registered holders of the
Right Certificates with regard to which such fractional Common Shares would
otherwise be issuable an amount in cash equal to the same fraction of the
current market value of a whole Common Share. For the purposes of this paragraph
(d), the current market value of a whole Common Share shall be the closing price
of a Common Share (as determined pursuant to the second sentence of Section
11(d)(i) hereof) for the Trading Day immediately prior to the date of exchange
pursuant to this Section 24.
SECTION 25. NOTICE OF CERTAIN EVENTS. (a) In case the Company shall at
any time after the earlier of the Distribution Date or the Share Acquisition
Date propose (i) to pay any dividend payable in shares of any class to the
holders of its Preference Shares or to make any other distribution to the
holders of its Preference Shares (other than a regular quarterly cash dividend),
(ii) to offer to the holders of its Preference Shares rights or warrants to
subscribe for or to purchase any additional Preference Shares or shares of any
class or any other securities, rights or options, (iii) to effect any
reclassification of its Preference Shares (other than a reclassification
involving only the subdivision of Preference Shares in issue), (iv) to effect
the liquidation, dissolution or winding up of the Company, or (v) to declare or
pay any dividend on the Common Shares payable in Common Shares or to effect a
subdivision, combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends in Common Shares),
then, in each such case, the Company shall give to each holder of a Right
Certificate and to the Rights Agent, in accordance with Section 26 hereof, a
notice of such proposed action, which shall specify the record date for the
purposes of such stock dividend, or distribution of rights or warrants, or the
date on which such liquidation, dissolution or winding up is to take place and
the date of participation therein by the holders of the Common Shares and/or
29
Preference Shares, if any such date is to be fixed, and such notice shall be so
given in the case of any action covered by clause (i) or (ii) above at least 10
days prior to the record date for determining holders of the Preference Shares
for purposes of such action, and in the case of any such other action, at least
10 days prior to the date of the taking of such proposed action or the date of
participation therein by the holders of the Common Shares and/or Preference
Shares, whichever shall be the earlier.
(b) In case any event described in Section 11(a)(ii) or Section 13
shall occur then the Company shall as soon as practicable thereafter give to
each holder of a Right Certificate and to the Rights Agent (or if occurring
prior to the Distribution Date, the holders of the Common Shares) in accordance
with Section 26 hereof, a notice of the occurrence of such event, which notice
shall describe such event and the consequences of such event to holders of
Rights under Section 11(a)(ii) and Section 13 hereof.
SECTION 26. NOTICES. Notices or demands authorized by this Agreement to
be given or made by the Rights Agent or by the holder of any Right Certificate
to or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:
Ingersoll-Rand Company Limited
200 Chestnut Ridge Road
Woodcliff Lake, New Jersey 07677
Attention: Secretary
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Right Certificate to or on the Rights Agent shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Company) as follows:
The Bank of New York
101 Barclay, Floor 12 West
New York, New York 10286
Attention: Stock Transfer Administration
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
SECTION 27. SUPPLEMENTS AND AMENDMENTS. Except as otherwise provided in
this Section 27, for so long as the Rights are then redeemable, the Company may
in its sole and absolute discretion, and the Rights Agent shall if the Company
so directs, supplement or amend any provision of this Agreement in any respect
without the approval of any holders of the Rights. At any time when the Rights
are no longer redeemable, except as otherwise provided in this Section 27, the
Company may, and the Rights Agent shall, if the Company so directs, supplement
or amend this Agreement without the approval of any holders of Right
Certificates in
30
order to (i) cure any ambiguity, (ii) correct or supplement any provision
contained herein which may be defective or inconsistent with any other
provisions herein, (iii) shorten or lengthen any time period hereunder or (iv)
change or supplement the provisions hereunder in any manner which the Company
may deem necessary or desirable; provided, that no such supplement or amendment
shall adversely affect the interests of the holders of Rights as such (other
than an Acquiring Person or an Affiliate or Associate of an Acquiring Person),
and no such amendment may cause the Rights again to become redeemable or cause
the Agreement again to become amendable other than in accordance with this
sentence. Notwithstanding anything contained in this Agreement to the contrary,
no supplement or amendment shall be made which changes the Redemption Price.
Without limiting the foregoing, the Company may at any time prior to such time
as any Person becomes an Acquiring Person amend this Agreement to lower the 15%
thresholds set forth in Sections 1(a) and 3(a) to not less than the greater of
(i) the sum of .001% and the largest percentage of the Common Shares in issue
then known by the Company to be beneficially owned by any Person (other than any
Exempt Person) and (ii) 10%. Upon the delivery of a certificate from an
appropriate officer of the Company which states that the proposed supplement or
amendment is in compliance with the terms of this Section, the Rights Agent
shall execute such supplement or amendment. Notwithstanding any other provision
hereof, the Rights Agent's consent must be obtained regarding any amendment or
supplement pursuant to this Section 27 which alters the Rights Agent's rights or
duties.
SECTION 28. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
SECTION 29. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall
be construed to give to any Person other than the Company, the Rights Agent and
the registered holders of the Right Certificates (and, prior to the Distribution
Date, the Common Shares) any legal or equitable right, remedy or claim under
this Agreement; but this Agreement shall be for the sole and exclusive benefit
of the Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the Common Shares).
SECTION 30. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement or applicable to this Agreement is held by a court
of competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated.
SECTION 31. GOVERNING LAW. This Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of New York and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts to be made and
performed entirely within such State (without regard to any principles of
conflicts of law of such State).
SECTION 32. COUNTERPARTS. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
31
SECTION 33. DESCRIPTIVE HEADINGS. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
[The remainder of this page intentionally left blank.]
32
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, all as of the day and year first above written.
The common seal of INGERSOLL-RAND
COMPANY LIMITED was affixed hereto in the
presence of:
(SEAL)
/s/ PATRICIA NACHTIGAL
--------------------------------------------
Name: Patricia Nachtigal
Title: Vice President
THE BANK OF NEW YORK,
as Rights Agent
By /s/ JEFFREY GROSSE
-----------------------------------------
Name: Jeffrey Grosse
Title: Vice President
EXHIBIT A
Amended and Restated Bye-laws of Ingersoll-Rand Company Limited
[SEE ANNEX III]
A-1
EXHIBIT B
Form of Right Certificate
Certificate No. R- _____ _____ Rights
NOT EXERCISABLE AFTER DECEMBER 22, 2008 OR EARLIER IF
REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE
SUBJECT TO REDEMPTION AT $.01 PER RIGHT AND TO
EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, AS SET
FORTH IN THE RIGHTS AGREEMENT, RIGHTS OWNED BY OR
TRANSFERRED TO ANY PERSON WHO BECOMES AN ACQUIRING
PERSON (AS DEFINED IN THE RIGHTS AGREEMENT) AND
CERTAIN TRANSFEREES THEREOF WILL BECOME NULL AND
VOID AND WILL NO LONGER BE TRANSFERABLE.
Right Certificate
INGERSOLL-RAND COMPANY LIMITED
This certifies that ___________ or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the Rights
Agreement, dated as of October 31, 2001, as the same may be amended from time to
time (the "Rights Agreement"), between Ingersoll-Rand Company Limited, a Bermuda
limited liability company (the "Company"), and The Bank of New York, a New York
banking corporation (the "Rights Agent"), to purchase from the Company at any
time after the Distribution Date (as such term is defined in the Rights
Agreement) and prior to 5:00 P.M., New York City time, on December 22, 2008 at
the office or agency of the Rights Agent designated for such purpose, or of its
successor as Rights Agent, one one-thousandth of a fully paid non-assessable
Series A Preference Share, par value of $.001 per share (a "Preference Share"),
of the Company, at a purchase price of $200 per one one-thousandth of a
Preference Share (the "Purchase Price"), upon presentation and surrender of this
Right Certificate with the Form of Election to Purchase duly executed. The
number of Rights evidenced by this Right Certificate (and the number of one
one-thousandths of a Preference Share which may be purchased upon exercise
hereof) set forth above, and the Purchase Price set forth above, are the number
and Purchase Price as of the Effective Time (as such term is defined in the
Rights Agreement), based on the Preference Shares as constituted at such date.
As provided in the Rights Agreement, the Purchase Price, the number of one
one-thousandths of a Preference Share (or other securities or property) which
may be purchased upon the exercise of the Rights and the number of Rights
evidenced by this Right Certificate are subject to modification and adjustment
upon the happening of certain events.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder
B-1
of the Rights Agent, the Company and the holders of the Right Certificates.
Copies of the Rights Agreement are on file at the principal executive offices of
the Company and the above-mentioned office or agency of the Rights Agent. The
Company will mail to the holder of this Right Certificate a copy of the Rights
Agreement without charge after receipt of a written request therefor.
This Right Certificate, with or without other Right Certificates, upon
surrender at the office or agency of the Rights Agent designated for such
purpose, may be exchanged for another Right Certificate or Right Certificates of
like tenor and date evidencing Rights entitling the holder to purchase a like
aggregate number of Preference Shares as the Rights evidenced by the Right
Certificate or Right Certificates surrendered shall have entitled such holder to
purchase. If this Right Certificate shall be exercised in part, the holder shall
be entitled to receive upon surrender hereof another Right Certificate or Right
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate (i) may be redeemed by the Company at a redemption price of
$.01 per Right, (ii) may be exchanged in whole or in part for Preference Shares,
par value $.001 per share, or Common Shares, par value $1.00 per share, of the
Company, or (iii) any other form of consideration deemed appropriate by the
Board of Directors.
No fractional Preference Shares will be issued upon the exercise of any
Right or Rights evidenced hereby (other than fractions which are integral
multiples of one one-thousandth of a Preference Share, which may, at the
election of the Company, be evidenced by depositary receipts), but in lieu
thereof a cash payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate, as such, shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of the Preference
Shares or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a shareholder of the Company or any right to vote for the
election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting shareholders (except as
provided in the Rights Agreement) or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by an authorized signatory of the Rights
Agent.
B-2
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal. Dated as of _____________.
ATTEST: INGERSOLL-RAND COMPANY LIMITED
By ______________________ By ________________________________
Countersigned:
THE BANK OF NEW YORK,
as Rights Agent
By ___________________________ Date of Countersignature:
Authorized Signatory
B-3
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to transfer the
Right Certificate)
FOR VALUE RECEIVED _________________________ hereby sells, assigns and
transfers unto ___________________________
--------------------------------------------------------------------------------
(Please print name and address of transferee)
________________________________________________________________________________
Rights represented by this Right Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and appoint
___________________ Attorney, to transfer said Rights on the books of the
within-named Company, with full power of substitution.
Dated:
-----------------
----------------------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed.
---------------------------------------------------
(To be completed)
The undersigned hereby certifies that the Rights evidenced by this
Right Certificate are not beneficially owned by, were not acquired by the
undersigned from, and are not being assigned to, an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).
----------------------------------
Signature
B-4
Form of Reverse Side of Right Certificate - continued
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise Rights represented by the Right
Certificate)
To INGERSOLL-RAND COMPANY LIMITED:
The undersigned hereby irrevocably elects to exercise _______________
Rights represented by this Right Certificate to purchase the Preference Shares
(or other securities or property) issuable upon the exercise of such Rights and
requests that certificates for such Preferred Shares (or such other securities)
be issued in the name of:
--------------------------------------------------------------------------------
(Please print name and address)
--------------------------------------------------------------------------------
If such number of Rights shall not be all the Rights evidenced by this
Right Certificate, a new Right Certificate for the balance remaining of such
Rights shall be registered in the name of and delivery to:
Please insert social security
or other identifying number
--------------------------------------------------------------------------------
(Please print name and address)
--------------------------------------------------------------------------------
Dated:
--------------------
----------------------------------
Signature
(Signature must conform to holder specified on Right Certificate)
Signature Guaranteed:
Signature must be guaranteed.
B-5
Form of Reverse Side of Right Certificate -- continued
--------------------------------------------------------------------------------
(To be completed)
The undersigned certifies that the Rights evidenced by this Right
Certificate are not beneficially owned by, and were not acquired by the
undersigned from, an Acquiring Person or an Affiliate or Associate thereof (as
defined in the Rights Agreement).
----------------------------------
Signature
--------------------------------------------------------------------------------
NOTICE
The signature in the Form of Assignment or Form of Election to
Purchase, as the case may be, must conform to the name as written upon the face
of this Right Certificate in every particular, without alteration or enlargement
or any change whatsoever.
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, such Assignment or Election to Purchase will not be honored.
B-6
EX-4.3
5
d91138a1ex4-3.txt
VOTING AGREEMENT
EXHIBIT 4.3
VOTING AGREEMENT
This Voting Agreement (this "Agreement") is made and entered into as of
October 31, 2001 by and between Ingersoll-Rand Company Limited, a Bermuda
company ("IR-Limited"), and Ingersoll-Rand Company, a New Jersey corporation
("IR-New Jersey").
PRELIMINARY STATEMENTS
A. IR-Limited and IR-New Jersey will enter into a series of transactions whereby
(i) IR-New Jersey and certain of its direct or indirect subsidiaries (the
"Subsidiaries") will transfer certain assets and issue certain debt to
IR-Limited in exchange for Class B common shares of IR-Limited, and (ii) IR-New
Jersey will become a wholly-owned, indirect subsidiary of IR-Limited and the
Subsidiaries will become direct or indirect subsidiaries of IR-Limited
(collectively, the "Reorganization").
B. While Class B common shares are denominated in IR-Limited's Bye-laws as
non-voting, such shares may be required to have voting rights in certain limited
circumstances under Bermuda law.
C. IR-New Jersey and IR-Limited desire to ensure that (i) the voting rights of
IR-New Jersey shareholders that become members of IR-Limited in the
Reorganization will not be adversely affected as a result of IR-New Jersey's and
the Subsidiaries' ownership of IR-Limited Class B common shares and (ii) if the
Class B common shares are granted a vote under Bermuda law, such vote is
effectively nullified with respect to shares held by IR-New Jersey and the
Subsidiaries (whether such Subsidiaries are now existing or hereafter
organized).
AGREEMENT
The parties, intending to be legally bound, agree as follows:
ARTICLE 1
REPRESENTATIONS
Each of IR-New Jersey and IR-Limited represent and warrant to the other
that:
(a) it has the requisite power and authority to enter into and perform
this Agreement;
(b) the execution, delivery and performance of this Agreement have been
duly authorized by all necessary corporate action;
(c) this Agreement has been duly executed by an authorized officer of
such party; and
(d) the performance of this Agreement by it will not require it to
obtain the consent, waiver or approval of any person and will not violate,
result in a breach of or constitute a default under any statute, regulation,
agreement, judgment, consent, or decree by which it is bound.
ARTICLE 2
QUORUM
IR-New Jersey agrees that, at any time IR-New Jersey owns any Class B
common shares of IR-Limited ("Shares") and such Shares have rights to vote at
any annual, special or other general meeting of IR-Limited members, and at any
adjournment or adjournments thereof, IR-New Jersey shall be present in person or
by proxy with respect to such Shares at such meeting for purposes of determining
whether a quorum is present at any such meeting.
ARTICLE 3
VOTING
IR-New Jersey agrees that, at any time IR-New Jersey owns any Shares
and such Shares have rights to vote at any annual, special or other general
meeting or pursuant to a written resolution of IR-Limited members, IR-New Jersey
will vote such Shares for and against and abstain from voting with respect to
any proposal in the same proportion that the holders of the outstanding
IR-Limited Class A common shares (other than holders that are companies or
entities, including IR-New Jersey, controlled by IR-Limited) have voted for and
against and abstained from voting with respect to such proposal.
ARTICLE 4
SUBSIDIARIES
IR-Limited shall cause all the Subsidiaries (including IR-New Jersey)
that hold Shares to comply with the provisions of Articles 2, 3 and 5 of this
Agreement and, if necessary, shall cause any of the Subsidiaries to enter into a
voting agreement substantially similar to this Agreement.
ARTICLE 5
TRANSFER RESTRICTIONS
(a) IR-New Jersey hereby agrees that all transfers of Shares shall be
made in accordance with applicable rules of the New York Stock Exchange and/or
any exchange on which Shares are listed and in accordance with IR-Limited's
Bye-laws.
(b) IR-New Jersey agrees that any transfer of Shares by it to companies
or entities controlled by IR-Limited will be subject to this Agreement and such
transferee will agree in writing to be bound by the terms and provisions of this
Agreement in order for such transfer to be effective.
2
ARTICLE 6
MISCELLANEOUS PROVISIONS
6.1 BINDING EFFECT
This Agreement and all of the provisions hereof shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and permitted assigns. Neither this Agreement nor any of the rights, interests
or obligations hereunder shall be assigned by any of the parties hereto without
the prior written consent of the other party.
6.2 AMENDMENTS
This Agreement may not be modified, amended, altered or supplemented
except upon the execution and delivery of a written agreement executed by each
of the parties hereto. However, any party may waive any condition to the
obligations of any other party hereunder.
6.3 NOTICES
All notices, requests, demands and other communications required or
permitted hereunder shall be in writing and shall be deemed to have been duly
given if delivered by hand or mail, certified or registered mail (return receipt
requested) with postage prepaid:
If to IR-Limited:
Ingersoll-Rand Company Limited
200 Chestnut Ridge Road
Woodcliff Lake, New Jersey 07677
Attention: Secretary
If to IR-New Jersey:
Ingersoll-Rand Company
200 Chestnut Ridge Road
Woodcliff Lake, New Jersey 07677
Attention: Vice President and Secretary
or to such other address as any party may have furnished to the other
in writing in accordance herewith.
6.4 APPLICABLE LAW
This Agreement and the legal relations among the parties hereto arising
from this Agreement shall be governed by and construed in accordance with the
laws of Bermuda.
3
6.5 COUNTERPARTS
This Agreement may be executed simultaneously in one or more
counterparts, each of which shall be deemed original but all of which shall
constitute one and the same instrument.
6.6 ENTIRE AGREEMENT
This Agreement constitutes the entire agreement and understanding of
the parties hereto in respect of the subject matter contained herein. There are
no restrictions, promises, warranties, covenants or undertakings, other than
those expressly set forth or referred to herein. This Agreement supersedes all
prior agreements and understandings among the parties with respect to such
subject matter.
(Remainder of page intentionally left blank)
4
The parties have executed and delivered this Agreement as of the date
indicated in the first sentence of this Agreement.
INGERSOLL-RAND COMPANY LIMITED
By: /s/ RONALD G. HELLER
----------------------------------------
Name: Ronald G. Heller
--------------------------------------
Title: Secretary
-------------------------------------
INGERSOLL-RAND COMPANY
By: /s/ PATRICIA NACHTIGAL
----------------------------------------
Name: Patricia Nachtigal
--------------------------------------
Title: Senior Vice President
and General Counsel
-------------------------------------
5
EX-5.1
6
d91138a1ex5-1.txt
OPINION/CONSENT OF CONYERS DILL & PEARMAN
EXHIBIT 5.1
Form of Bermuda Legal Opinion
, 2001
--- -------------
Ingersoll-Rand Company Limited
200 Chestnut Ridge Road
Woodcliff Lake, New Jersey
USA 07677
Dear Ladies and Gentlemen:
INGERSOLL-RAND COMPANY LIMITED - Registration Statement under the U.S.
Securities Act of 1933
We have acted as special legal counsel in Bermuda to Ingersoll-Rand Company
Limited, a Bermuda company ("IR-Limited"), in connection with the transactions
described in the Registration Statement on Form S-4 of IR-Limited (Registration
No. 333-71642), filed on October 30, 2001 with the Securities and Exchange
Commission under the United States Securities Act of 1933, as amended (the
"Registration Statement"), relating to a reorganization (the "Reorganization")
involving, among other matters, the proposed issue by IR-Limited of its Class A
common shares, par value US$1.00 per share (the "IR-Limited Common Shares"),
under an Agreement and Plan of Merger in the form attached to the Registration
Statement as Annex I (the "Merger Agreement") and made among IR-Limited,
Ingersoll-Rand Company, a New Jersey corporation ("IR-New Jersey"), and IR
Merger Corporation, a New Jersey corporation ("Merger Sub"). Pursuant to the
Merger Agreement, Merger Sub will be merged with and into IR-New Jersey (the
"Merger") and IR-Limited will issue the IR-Limited Common Shares in exchange for
IR-New Jersey's issued and outstanding shares of common stock, par value US$2.00
per share (the "IR-New Jersey Shares") being cancelled as part of the
Reorganization. The Registration Statement includes a proxy statement/prospectus
(the "Proxy Statement/Prospectus") to be furnished to the shareholders of IR-New
Jersey in connection with seeking their approval of the Merger Agreement.
For the purposes of giving this opinion, we have examined the following
documents:
(i) the Registration Statement (including the Proxy
Statement/Prospectus and its annexes but excluding the
exhibits and schedules thereto unless specifically referred to
herein); and
(ii) the form of Merger Agreement (which term does not include any
other instrument or agreement whether or not specifically
referred to therein or attached as an exhibit or schedule
thereto).
Ingersoll-Rand Company Ltd.
, 2001
--- ----------------
Page 2
The documents listed in items (i) through (ii) above are herein sometimes
collectively referred to as the "Documents".
We have also reviewed and have relied upon the memorandum of association and the
amended and restated bye-laws of IR-Limited, unanimous written resolutions of
IR-Limited's board of directors effective October 15, 2001 and [date], 2001
respectively (referred to herein as the "Minutes"), correspondence on behalf of
IR-Limited with the Bermuda Monetary Authority whereby the Bermuda Monetary
Authority has granted certain permissions, inter alia, for the issue (and
subsequent transfer) of up to 600,000,000 IR-Limited Common Shares (subject to
conditions expressed in such correspondence) and such other documents and made
such enquiries as to questions of Bermuda law as we have deemed necessary in
order to render the opinions set forth below.
We have assumed:
(a) the genuineness and authenticity of all signatures and the
conformity to the originals of all copies (whether or not
certified) of all documents examined by us and the
authenticity and completeness of the originals from which such
copies were taken;
(b) the capacity, power and authority of each of the parties to
the Merger Agreement, other than IR-Limited, to enter into and
perform its respective obligations under the Merger Agreement
and that the Merger Agreement will be duly executed and
delivered by each of the parties thereto;
(c) the accuracy and completeness of all factual representations
made in the Documents and other documents reviewed by us;
(d) that the resolutions contained in the Minutes remain in full
force and effect and have not been rescinded or amended;
(e) that, by the Merger, IR-New Jersey will be merged into Merger
Sub under New Jersey Law (as defined below) and the laws of
other jurisdictions applicable to IR-New Jersey and Merger
Sub;
(f) that, by consequence of the Reorganization, IR-Limited will
receive money or money's worth at least equal to the value of
the IR-Limited Common Shares being issued and none of the
IR-Limited Common Shares will be issued for less than par
value;
Ingersoll-Rand Company Ltd.
, 2001
--- ----------------
Page 3
(g) that there is no provision of the law of any jurisdiction,
other than Bermuda, which would have any implication in
relation to the opinions expressed herein;
(h) that the Merger Agreement, being expressed to be or is
otherwise, governed by the laws of the State of New Jersey,
United States of America ("New Jersey Law"), is valid, binding
and enforceable under New Jersey Law in accordance with its
terms;
(i) that the issue and transfer of the IR-Limited Common Shares or
options or warrants for any IR-Limited Common Shares comply at
all times with the permissions already obtained from the
Bermuda Monetary Authority and that the IR-Limited Common
Shares will be listed on the New York Stock Exchange; and
(j) that the Registration Statement will be filed in compliance
with section 26 of the Companies Act 1981 (Bermuda).
In rendering the opinion expressed in paragraph 1 below, we have assumed that
the members of IR-New Jersey will approve the Merger and the Merger Agreement
prior to the Effective Time of the Merger (as defined in the Merger Agreement).
The obligations of IR-Limited under the Merger Agreement:
(1) will be subject to the laws from time to time in effect
relating to bankruptcy, insolvency, liquidation, possessory
liens, rights of set off, reorganisation, amalgamation,
moratorium or any other laws or legal procedures, whether of a
similar nature or otherwise, generally affecting the rights of
creditors;
(2) will be subject to statutory limitation of the time within
which proceedings may be brought;
(3) will be subject to general principles of equity and, as such,
specific performance and injunctive relief, being equitable
remedies, may not be available; and
(4) may not be given effect to by a Bermuda court, whether or not
it was applying New Jersey Law, if and to the extent they
constitute the payment of an amount which is in the nature of
a penalty and not in the nature of liquidated damages.
"Non-assessability" is not a legal concept under Bermuda law, but when we
describe the IR-Limited Common Shares as being "non-assessable" herein we mean,
subject to any contrary provision in any agreement between IR-Limited and any
one of its members holding any of the IR-Limited Common Shares (but only with
respect to such member), that no further sums are
Ingersoll-Rand Company Ltd.
, 2001
--- ----------------
Page 4
payable with respect to the holding of such IR-Limited Common Shares and the
member shall not be bound by an alteration in the memorandum of association or
the amended and restated bye-laws of IR-Limited after the date upon which it
became a member if and so far as the alteration requires such member to take or
subscribe for additional IR-Limited Common Shares or in any way increases its
liability to contribute to the share capital of, or otherwise pay money to,
IR-Limited.
We have made no investigation of and express no opinion in relation to the laws
of any jurisdiction other than Bermuda. This opinion is to be governed by and
construed in accordance with the laws of Bermuda and is limited to and is given
on the basis of the current law and practice in Bermuda. This opinion is not to
be relied upon in respect of any matter other than the Registration Statement
and the Merger Agreement.
On the basis of, and subject to, the foregoing, we are of the opinion that:
1. Upon consummation of the transactions contemplated by the Merger
Agreement and registration of the IR-Limited Common Shares (issued in the
Merger) in IR-Limited's Register of Members, such IR-Limited Common Shares will
be validly issued and fully paid and non-assessable; and
2. The discussions set forth under the headings "Income Tax
Consequences of the Reorganization - Bermuda Tax Consequences of the
Reorganization" accurately reflect our opinion with respect to the matters set
forth therein.
We hereby consent to the use of this opinion as an exhibit to the Registration
Statement and to the reference to our firm under the headings entitled "Income
Tax Consequences of the Reorganization - Bermuda Tax Consequences of the
Reorganization" and "Legal Matters" in the Registration Statement. In giving
such consent, we do not hereby admit that we are in the category of persons
whose consent is required under Section 7 of the Securities Act of 1933, as
amended.
Yours faithfully,
CONYERS DILL & PEARMAN
EX-8.1
7
d91138a1ex8-1.txt
OPINION/CONSENT OF BAKER & MCKENZIE - TAX MATTERS
EXHIBIT 8.1
Form of United States Tax Opinion
, 2001
Ingersoll-Rand Company Limited
200 Chestnut Ridge Road
Woodcliff Lake, New Jersey 07677
Ingersoll-Rand Company
200 Chestnut Ridge Road
Woodcliff Lake, New Jersey 07677
Re: Ingersoll-Rand Company Limited Filing of
Securities Registration Statement - U.S. Tax Opinion
Dear Sirs:
We have acted as special United States federal income tax counsel to
Ingersoll-Rand Company (the "Company") and Ingersoll-Rand Company Limited
("IR-Limited") in connection with the determination of the material United
States federal income tax consequences to the Company's current United States
shareholders of the proposed reorganization of the Company (the
"Reorganization") and the receipt, ownership and disposition of IR-Limited Class
A common shares (the "Shares"), as more completely described in the Proxy
Statement/Prospectus dated November 2, 2001 that forms part of the Form S-4
Registration Statement (Registration No. 333-71642) prepared by IR-Limited
(the "Registration Statement").
As special United States federal income tax counsel to the Company and
IR-Limited, we have examined the Registration Statement and such other documents
and records as we deemed necessary and relevant for purposes of rendering our
opinion as to the material United States federal income tax consequences of the
Reorganization to the Company's current United States shareholders and of the
receipt, ownership and disposition of the Shares, including:
(1) The Registration Statement filed with the Securities and Exchange
Commission on October 30, 2001;
(2) The Agreement and Plan of Merger among IR-Limited, the Company
and IR Merger Corporation dated October 31, 2001;
(3) The Memorandum of Association of IR-Limited;
(4) The Amended and Restated Bye-laws of IR-Limited;
Ingersoll-Rand Company
October __, 2001
Page 2
(5) The Voting Agreement between IR-Limited and the Company to which
Class B common shares are subject dated October 31, 2001;
(6) The Certificate of Designation creating IR-Limited Series A
Preference Shares; and
(7) The Rights Agreement between IR-Limited and The Bank of New York,
as Rights Agent, dated October 31, 2001.
We assume, for purposes of this opinion, that all documents, and the
information contained therein, provided to us by or on behalf of the Company and
IR-Limited are accurate and correct. Unless otherwise defined herein, all
capitalized terms shall have the meanings assigned to them in the Registration
Statement.
Based upon and subject to the foregoing, assuming that all relevant
documents have been, or will be, validly authorized, executed, delivered and
performed by all of the relevant parties, and having regard for such legal
considerations as we have deemed relevant, we are of the opinion that, as of the
date hereof, the statements in the Registration Statement with respect to the
matters of tax laws of the United States contained under the caption "Income Tax
Consequences of the Reorganization - U.S. Federal Income Tax Consequences of the
Reorganization" fairly and accurately summarize the material United States
federal income tax consequences to the Company's current United States
shareholders of the Reorganization and receipt, ownership and disposition of the
Shares.
The foregoing is based on the United States Internal Revenue Code of
1986, as amended, the regulations, rulings and administrative pronouncements
thereunder and judicial decisions as of the date hereof. Subsequent developments
in these areas could have a material effect on this opinion.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to this firm under the caption
"Legal Matters" in the Proxy Statement/Prospectus that forms part of the
Registration Statement without admitting that we are "experts" under the
Securities Act of 1933 or the rules and regulations of the Securities and
Exchange Commission issued thereunder with respect to any part of the
Registration Statement, including this exhibit.
Very truly yours,
BAKER & MCKENZIE
EX-23.2
8
d91138a1ex23-2.txt
CONSENT OF PRICEWATERHOUSECOOPERS LLP
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-4 of Ingersoll-Rand Company Limited of our report dated
February 6, 2001 relating to the financial statements, which appears in the
Ingersoll-Rand Company's 2000 Annual Report to Shareholders, which is
incorporated by reference in its Annual Report on Form 10-K for the year ended
December 31, 2000. We also consent to the incorporation by reference of our
report dated February 6, 2001 relating to the financial statement schedule,
which appears in such Annual Report on Form 10-K. We also consent to the
reference to us under the heading "Experts" in such Registration Statement.
/s/ PricewaterhouseCoopers LLP
Florham Park, NJ
October 29, 2001
EX-99.1
9
d91138a1ex99-1.txt
FORM OF PROXY CARD
EXHIBIT 99.1
[INGERSOLL-RAND COMPANY LOGO]
INGERSOLL-RAND COMPANY
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS
DECEMBER 14, 2001
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder of Ingersoll-Rand Company ("IR-New Jersey") hereby
(a) acknowledges receipt of the Notice of Special Meeting of Shareholders of
IR-New Jersey contained on the cover page of the Proxy Statement/Prospectus for
the Special Meeting of Shareholders of IR-New Jersey to be held on December 14,
2001 and the Proxy Statement/Prospectus in connection therewith, each dated
November 2, 2001, (b) appoints Herbert L. Henkel, David W. Devonshire and
Patricia Nachtigal, or any one of them, as proxies, with full power of
substitution, to vote all shares of common stock of IR-New Jersey held of record
in the name of the undersigned at the Special Meeting of Shareholders to be held
at the principal executive offices of IR-New Jersey at 200 Chestnut Ridge Road,
Woodcliff Lake, New Jersey, at 2:00 p.m. on December 14, 2001, and any
adjournment or postponement thereof, with all powers the shareholder would
possess if present and (c) revokes any proxies previously given with respect to
such meeting.
THIS PROXY WILL BE VOTED AS SPECIFIED ON THE REVERSE SIDE, BUT IF NO
SPECIFICATION IS MADE, IT WILL BE VOTED TO APPROVE THE PROPOSAL LISTED ON THE
REVERSE SIDE, AND IN THE DISCRETION OF THE PROXIES ON ANY OTHER MATTERS AS MAY
COME BEFORE THE MEETING AND ANY ADJOURNMENT OR POSTPONEMENT THEREOF.
This card also constitutes voting instructions with respect to shares held in
accounts under IR-New Jersey's Savings and Stock Investment Plan and similar
plans of IR-New Jersey and its subsidiaries.
To change your address, please mark this box. [ ]
PLEASE MARK, SIGN AND DATE ON THE REVERSE SIDE AND RETURN IN THE ACCOMPANYING
ENVELOPE.
Ingersoll-Rand Company
P.O. Box 11266
New York, N.Y. 10203-0266
[X] VOTES MUST BE INDICATED (X) IN BLACK
OR BLUE INK.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEM 1
----------
ITEM 1. To adopt the Agreement and Plan of Merger, substantially in the form
attached as Annex I to the November 2, 2001 Proxy Statement/Prospectus, among
Ingersoll-Rand Company, IR Merger Corporation and Ingersoll-Rand Company
Limited, a Bermuda company, whereby Ingersoll-Rand Company will effectively
change its domicile from New Jersey to Bermuda by merging IR Merger Corporation
into Ingersoll-Rand Company, which will be the surviving company and become a
wholly-owned, indirect subsidiary of Ingersoll-Rand Company Limited, and
pursuant to which each share of Ingersoll-Rand Company common stock will
automatically become a Class A common share of Ingersoll-Rand Company Limited
and all current shareholders of Ingersoll-Rand Company will become Class A
common shareholders of Ingersoll-Rand Company Limited.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
Please date this proxy and sign exactly as
your name or names appear hereon. Joint
owners should each sign. When signing as
attorney, executor, administrator, trustee
or guardian, please give full title as such.
-------------------------------------------
Shareholder sign here
Date
-------------------------------------
-------------------------------------------
Co-owner sign here
o PLEASE DETACH HERE o
YOU MUST DETACH THIS PORTION
OF THE PROXY CARD BEFORE
RETURNING IT IN THE
ENCLOSED ENVELOPE
[INGERSOLL-RAND COMPANY LOGO]
TWO OTHER WAYS TO VOTE
VOTE BY TELEPHONE OR INTERNET
24 HOURS A DAY - 7 DAYS A WEEK
SAVE YOUR COMPANY MONEY - IT'S FAST AND CONVENIENT
TELEPHONE
1-866-246-8472
- Use any touch-tone telephone.
- Have your proxy card ready.
- Enter the Control Number located in the box below.
- Follow the simple recorded instructions.
OR
INTERNET
http://www.proxyvotenow.com/irc
- Go to the website address listed above.
- Have your proxy card ready.
- Enter the Control Number located in the box below.
- Follow the simple instructions on the website.
OR
MAIL
- Mark, sign and date your proxy card.
- Detach card from proxy card.
- Return the card in the postage-paid envelope provided.
YOUR TELEPHONE OR INTERNET VOTE AUTHORIZES THE NAMED PROXIES TO VOTE YOUR SHARES
IN THE SAME MANNER AS IF YOU MARKED, SIGNED AND RETURNED THE PROXY CARD. IF YOU
HAVE SUBMITTED YOUR PROXY BY THE INTERNET OR TELEPHONE, THERE IS NO NEED FOR YOU
TO MAIL BACK YOUR PROXY.
------------------
1-866-246-8472 CONTROL NUMBER
CALL TOLL-FREE TO VOTE FOR TELEPHONE OR INTERNET VOTING
o DETACH PROXY CARD HERE IF YOU ARE NOT VOTING BY TELEPHONE OR INTERNET o