UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 2, 2010
Global Indemnity plc
(Exact name of registrant as specified in its charter)
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Ireland
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98-0664891
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(State or other jurisdiction
of incorporation)
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(Commission File Number)
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(IRS Employer Identification No.)
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Arthur Cox Building
Earlsfort Terrace
Dublin 2
Ireland
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None
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(Address of principal executive offices)
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(Zip Code)
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Registrants telephone number, including area code:
+(353) (0) 1 618 0517
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 1.01.
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Entry into a Material Definitive Agreement.
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Assumption and Amendment of Share Incentive Plan
On July 2, 2010 Global Indemnity plc (GI plc) entered into a deed poll pursuant to which GI plc
assumed UAI Ltd.s existing obligations in connection with awards granted under the UAI Ltd. Share
Incentive Plan and other similar employee awards and UAI Ltd.s existing shareholder agreement (the
Plan). Based on the Transaction (as such term is defined in Item 8.01) and the one-for-two
exchange, proportionate adjustments will be made to the per share exercise price and/or the number
of shares issuable upon the exercise or conversion of all outstanding options to reflect the
exchange ratio pursuant to the terms of such instruments.
A copy of the Plan (or amendments thereto), which have been amended to reflect the Transaction, and
the deed poll of assumption, is filed herewith as Exhibits 10.1 through 10.3 and incorporated into
this Item 1.01 by reference, and the foregoing summary of the amended Plan is qualified in its
entirety by reference to such Exhibits to this Current Report on Form 8-K.
Assumption
and Amendment of Annual Incentive Awards Program
On July 2, 2010 GI plc entered into a deed poll pursuant to which GI plc assumed UAI Ltd.s
existing obligations in connection with share-based awards granted under the UAI Ltd. Annual
Incentive Awards Program (the Program).
A copy of the Program (or amendments thereto), which has been amended to reflect the Transaction,
and the deed poll of assumption are filed herewith as Exhibits 10.4 and 10.5 and incorporated into
this Item 1.01 by reference, and the foregoing summary of the amended Program is qualified in its
entirety by reference to such Exhibits to this Current Report on Form 8-K.
Amendment of Shareholders Agreement
On July 2, 2010, GI plc entered into an amended and restated shareholders agreement and an
assumption agreement with certain affiliates of Fox Paine pursuant to which it assumed the
obligations of UAI Ltd. under the existing shareholders agreement between UAI Ltd. and such
affiliates of Fox Paine. Copies of the amended and restated shareholders agreement and the
assumption agreement are filed herewith as Exhibits 10.6 and 10.7 and incorporated into this Item
1.01 by reference.
Tax Indemnification Agreement
On July 2, 2010, UAI Ltd. entered into an agreement to indemnify the affected indirect owners of
the affiliates of Fox Paine that were shareholders of UAI Ltd. immediately prior to the effective
time of the Transaction for any tax cost to them (including interest on tax and penalties, if any)
of any triggering event and such affected indirect owners will pay us an amount equal to any tax
benefits, if any, realized by them as a result of a triggering event for which they were
indemnified, provided that the indirect owners will not be required to pay any amount of tax
benefits in excess of the tax costs for which we have indemnified them. A sale or other
disposition by these indirect owners of our ordinary shares will not constitute a triggering event
for this purpose. In addition, the indemnification agreement with such affiliates of Fox Paine
provides that, under certain circumstances, in the event the conversion of GI plcs Class B
ordinary shares to Class A ordinary shares or a sale or other disposition of GI plcs Class B
ordinary shares by any of such affiliates of Fox Paine is subject to Irish stamp duty, we will
indemnify such affiliates of Fox Paine and their transferees against such Irish stamp duty. A copy
of the indemnification agreement is filed herewith as Exhibit 10.8 and incorporated into this Item
1.01 by reference.
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Item 3.02
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Unregistered Sales of Equity Securities.
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On July 2, 2010, pursuant to the Transaction, each holder of UAI Ltd. Class A and Class B common
shares immediately before the Transaction received GI plc Class A and Class B ordinary shares on a
one-for-two basis in exchange for their UAI Ltd. Class A and Class B common shares, respectively;
provided that, holders of UAI Ltd. common shares who would otherwise have received fractional
shares in GI plc as a result of the one-for-two exchange received cash in consideration of the
fractional shares which would otherwise have been issued.
On July 2, 2010, GI plc issued approximately 18,254,084 Class A ordinary shares and 12,061,368
Class B ordinary shares to the holders of UAI Ltd. Class A common shares and Class B common shares,
respectively, holding the UAI Ltd. common shares immediately prior to the effective time of the
Transaction. The terms and conditions of the issuance and exchange of the securities were approved
by the Grand Court of the Cayman Islands, after a hearing upon the fairness of such terms and
conditions at which all UAI Ltd. shareholders had a right to appear and of which adequate notice
had been given. The issuance was exempt from the registration requirements of the Securities Act of
1933, as amended (the Securities Act), by virtue of Section 3(a)(10) of the Securities Act.
The description of the Transaction under Item 8.01 is incorporated herein by reference.
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Item 3.03
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Material Modification to Rights of Security Holders.
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The information included under Item 5.03 and 8.01 is incorporated herein by reference.
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Item 5.01
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Changes in Control of Registrant.
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The description of the Transaction under Item 8.01 is incorporated herein by reference.
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Item 5.02
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Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain
Officers; Compensatory Arrangements of Certain Officers.
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As of July 2, 2010, following the completion of the Transaction, the directors and executive
officers of UAI Ltd. immediately prior to the Transaction became the directors and executive
officers of GI plc.
In connection with the completion of the Transaction, UAI Ltd. has entered into indemnification
agreements with each of the directors of GI plc that provide for indemnification and expense
advancement and include related provisions intended to facilitate the indemnitees receipt of such
benefits. A form of the indemnification agreement is filed as Exhibit 10.9 to this Current Report
on Form 8-K and is incorporated herein by reference.
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Item 5.03
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Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
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On July 2, 2010, the Class A and Class B common shareholders of UAI Ltd. became, respectively,
Class A and Class B ordinary shareholders of GI plc and GI plc became the parent company of UAI
Ltd. As a result, on July 2, 2010, the memorandum and articles of association of GI plc as in
effect at that time became the documents governing the parent company of the UAI Ltd. and the
rights of the shareholders of GI plc. The description of GI plcs memorandum and articles of
association under Item 8.01 is incorporated herein by reference. The complete text of the
memorandum and articles of association of GI plc are filed as Exhibit 3.1 to this Current Report on
Form 8-K and are incorporated herein by reference. The summary of GI plcs memorandum and articles
of association is qualified in its entirety by reference to Exhibit 3.1.
On July 2, 2010, the scheme of arrangement under Cayman Islands law (the Scheme of Arrangement)
to effect the transaction (the Transaction) pursuant to which GI plc became the parent company of
UAI Ltd. became effective. The Transaction involved several steps. On March 9, 2010, UAI Ltd.
formed GI plc as a direct subsidiary. On April 20, 2010, UAI Ltd. petitioned the Grand Court of the
Cayman Islands to order the calling of a meeting of UAI Ltd.s shareholders to approve the Scheme
of Arrangement. UAI Ltd. held the special court-ordered meeting to approve the Scheme of
Arrangement on May 27, 2010 and received the requisite shareholder approvals and on June 11, 2010,
the Grand Court of the Cayman Islands approved the Scheme of Arrangement.
At the effective time of the Transaction, the following steps effectively occurred simultaneously:
1. All previously outstanding Class A common shares of UAI Ltd. were repurchased and cancelled;
2. GI plc issued Class A ordinary shares on a one-for-two basis to the holders of UAI Ltd.
Class A common shares that were repurchased and cancelled;
3. holders of UAI Ltd. Class A common shares who would otherwise have received fractional
shares in GI plc as a result of the one-for-two exchange received cash in consideration of the fractional
shares that would otherwise have been issued in an amount based on the average of the high and low trading
prices of UAI Ltd. Class A common shares on NASDAQ on the business day immediately preceding the effective
date of the Scheme of Arrangement;
4. all previously outstanding UAI Ltd. Class B common shares were repurchased and cancelled;
5. GI plc issued Class B ordinary shares on a one-for-two basis to the holders of UAI Ltd.
Class B common shares that were repurchased and cancelled;
6. holders of UAI Ltd. Class B common shares who would otherwise have received fractional
shares in GI plc as a result of the one-for-two exchange received cash in consideration of the fractional
shares that would otherwise have been issued in an amount based on the average of the high and low trading
prices of UAI Ltd. Class A common shares (into which UAI Ltd. Class B common shares were, save in limited
circumstances, convertible upon sale) on NASDAQ on the business day immediately preceding the
effective date of the Scheme of Arrangement;
7. UAI Ltd. issued 100 UAI Ltd. Class A common shares to GI plc (which will constitute all of
UAI Ltd.s issued shares at such time);
8. all previously outstanding ordinary shares of GI plc, which prior to the effective time of
the Transaction were held by UAI Ltd. and its nominees, were reclassified as deferred shares and ceased to carry
any right to a dividend or to receive notice of or to attend, vote or speak at any shareholder
meeting and only confer the right on a return of capital to repayment of the nominal value paid on those
shares and only after repayment of the Class A and Class B ordinary shares in full and may be acquired by
GI plc for no consideration; and
9. UAI Ltd. filed an election to be treated as an entity disregarded from GI plc for U.S.
federal income tax purposes. This election was effective two days after the effective time of the
Transaction.
GI plc Class A and Class B ordinary shares issued pursuant to the Transaction are fully paid and
non-assessable.
As a result of the Transaction, Class A and Class B common shareholders of UAI Ltd. became Class A
and Class B ordinary shareholders of GI plc, respectively, and UAI Ltd. has become a wholly owned
subsidiary of GI plc.
On July 2, 2010, GI plc issued a press release announcing the completion of the Transaction. The
press release is attached as Exhibit 99.1.
Prior to the Transaction, the UAI Ltd. Class A common shares were registered pursuant to Section
12(b) of the Securities Exchange Act of 1934, as amended (the Exchange Act), and listed on the
NASDAQ Global Select Market under the symbol INDM. In connection with the Transaction, UAI Ltd.
requested that NASDAQ file with the Securities and Exchange Commission (Commission) a Form 25 to
remove the UAI Ltd. Class A common shares from listing on NASDAQ. UAI Ltd. has filed a Form 15 with
the Commission to terminate the registration of the UAI Ltd. Class A common shares and suspend its
reporting obligations under Sections 13 and 15(d) of the Exchange Act.
Pursuant to Rule 12g-3(a) promulgated under the Exchange Act, the GI plc Class A ordinary shares
are deemed registered under Section 12(b) of the Exchange Act. The GI plc Class A ordinary shares
were approved for listing on NASDAQ and will begin trading under the symbol GBLI. The CUSIP
number of the Class A ordinary shares of GI plc is G39319 101.
Set forth below is a description of the share capital of GI plc.
DESCRIPTION OF GI PLC SHARE CAPITAL
The following description of GI plcs share capital is a summary. This summary is not complete and
is subject to the complete text of GI plcs memorandum and articles of association attached as
Exhibit 3.1 and to the Irish Companies Acts 1963-2009 (the Irish Companies Acts). We encourage
you to read those laws and documents carefully.
Capital Structure
Authorized Share Capital.
The authorized share capital of GI plc is
40,000 and US$100,000 divided
into 40,000 ordinary shares (which have become 40,000 deferred shares on the consummation of the
Transaction) with a nominal value of
1 per share, 600,000,000 Class A ordinary shares with a
nominal value of US$0.0001 per share, 300,000,000 Class B ordinary shares with a nominal value of
US$0.0001 per share and 100,000,000 preferred shares with a nominal value of US$0.0001 per share.
GI plc may issue shares subject to the maximum prescribed by its authorized share capital contained
in its articles of association.
In connection with the Transaction, GI plc has also assumed UAI Ltd.s existing obligations to
deliver shares under our Share Incentive Plan pursuant to the terms thereof and pursuant to the
terms of the applicable share award agreements. Based on the Transaction and the one-for-two
exchange, proportionate adjustments have been made to the per share exercise price and/or the
number of shares issuable upon the exercise or conversion of all outstanding options to reflect the
exchange ratio pursuant to the terms of such instruments.
As a matter of Irish company law, the directors of a company may issue new ordinary or preferred
shares without shareholder approval once authorized to do so by the articles of association of the
company or by an ordinary resolution adopted by the shareholders at a general meeting. An ordinary
resolution requires a majority of the total number of votes of the shares of GI plc present in
person or by proxy and entitled to vote at the meeting convened to consider the matter. The
authority conferred can be granted for a maximum period of five years, at which point it must be
renewed by the shareholders of the company by an ordinary resolution.
The articles of association of GI plc authorize the board of directors of GI plc to issue new
ordinary or preferred shares without shareholder approval for a period of five years from the date
of GI plcs incorporation.
The authorized share capital may be increased or reduced as provided for in GI plcs articles. The
shares
comprising the authorized share capital of GI plc may be divided into shares of such par value as
the articles prescribes.
The rights and restrictions to which the ordinary shares are subject are prescribed in GI plcs
articles of association. GI plcs articles of association entitle the board of directors, without
shareholder approval, to determine the terms of the preferred shares issued by GI plc. The GI plc
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 that class or series or shares, to
provide from time to time for the issuance of other series of preferred shares and to establish the
characteristics of each 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.
Irish law does not recognize fractional shares held of record; accordingly, the official Irish
register of shareholders of GI plc does not reflect any fractional shares. Whenever as a result of
an alteration or reorganization of the share capital of GI plc any shareholder would become
entitled to fractions of a share the directors may, on behalf of these shareholders sell the shares
representing the fractions for the best price reasonably obtainable to any person and distribute
the proceeds of the sale in due proportion among those shareholders (after deduction of brokerage
commissions or other sale expenses). This ability of the directors of GI plc to dispose of
fractional shares is required in order to comply with the Irish law prohibition on fractional
shares held of record.
Issued Share Capital.
Immediately prior to the Transaction, the issued share capital of GI plc was
40,000, comprised of 40,000 ordinary shares, with par value of
1 per share (the Euro Share
Capital). In connection with the consummation of the Transaction, the Euro Share Capital was
reclassified as deferred shares and has ceased to carry any right to a dividend or to receive
notice of or to attend, vote or speak at any shareholder meeting and shall only confer the right on
a return of capital, on a winding-up or otherwise, to repayment of the nominal value paid on those
shares and only after repayment of the Class A and Class B ordinary shares in full and may be
acquired by GI plc for no consideration. GI plc has simultaneously issued a number of Class A and
Class B ordinary shares with a par value of $0.0001 each that takes into account the one-for-two
exchange of Class A and Class B ordinary shares for the UAI Ltd. Class A and Class B common shares
that have been cancelled as part of the Transaction (including shares of GI plc issued to UAI Ltd.
in respect of any shares of UAI Ltd. held as treasury shares immediately prior to the effective
time of the Transaction). All shares issued on completion of the Transaction have been issued as
fully paid up.
Pre-emption Rights, Share Warrants and Share Options
Certain statutory pre-emption rights apply automatically in favor of GI plcs shareholders where
shares in GI plc have been issued for cash. However, GI plc has opted out of these pre-emption
rights in its articles of association as permitted under Irish company law. This opt-out must be
renewed every five years by a special resolution of the shareholders. A special resolution requires
not less than 75% of the votes of the shares of GI plc present in person or by proxy and entitled
to vote at the meeting convened to consider the matter. If the opt-out is not renewed, shares
issued for cash must be offered to pre-existing shareholders of GI plc pro rata to their existing
shareholding before the shares can be issued to any new shareholders. The statutory preemption
rights do not apply where shares are issued for non-cash consideration and do not apply to the
issue of non-equity shares (that is, shares that have the right to participate only up to a
specified amount in any income or capital distribution).
The articles of association of GI plc provide that, subject to any shareholder approval requirement
under any laws, regulations or the rules of any stock exchange to which GI plc is subject, the
board of directors is authorized, from time to time, in its discretion, to grant such persons, for
such periods and upon such terms as the board of directors deems advisable, options to purchase
such number of shares of any class or classes or of any series of any class as the board of
directors may deem advisable, and to cause warrants or other appropriate instruments evidencing
such options to be issued. The Irish Companies Acts provide that directors may issue share warrants
or options without shareholder approval once authorized to do so by the articles of association or
an ordinary resolution of shareholders. The board of directors may issue shares upon exercise of
warrants or options without shareholder approval or authorization.
Dividends
Under Irish law, dividends and distributions may only be made from distributable reserves.
Distributable reserves, broadly, means the accumulated realized profits of GI plc less accumulated
realized losses of GI plc. In addition, as a public limited company, no distribution or dividend
may be made unless the net assets of GI plc are equal to, or in excess of, the aggregate of GI
plcs called up share capital plus undistributable reserves and the distribution does not reduce GI
plcs net assets below such aggregate amount. Undistributable reserves include the share premium
account, the capital redemption reserve fund and the amount by which GI plcs accumulated
unrealized profits, so far as not previously utilized by any capitalization, exceed GI plcs
accumulated unrealized losses, so far as not previously written off in a reduction or
reorganization of capital.
The determination as to whether or not GI plc has sufficient distributable reserves to fund a
dividend must be made by reference to relevant accounts of GI plc. The relevant accounts will
be the last set of unconsolidated annual audited financial statements (except for any initial set
of unconsolidated audited financial statements produced prior to the end of a companys first
fiscal year and which are not therefore annual audited financial statements) prepared in accordance
with the Irish Companies Acts and any unaudited financial statements as are necessary to enable a
reasonable judgment to be made as to the level of distributable reserves and which give a true and
fair view of GI plcs unconsolidated financial position and accord with accepted accounting
practice. The relevant accounts must be filed in the Companies Registration Office (the official
public registry for companies in Ireland).
Although GI plc does not have any distributable reserves immediately following the effective time
of the Transaction, we are taking steps to create such distributable reserves.
The mechanism as to who declares a dividend and when a dividend shall become payable is governed by
the articles of association of GI plc. GI plcs articles of association authorize the directors to
declare such dividends as appear justified from the profits of GI plc without the approval of the
shareholders at a general meeting. The board of directors may also recommend a dividend to be
approved and declared by the shareholders at a general meeting. Although a payment of dividends may
be made by distribution of assets, shares or cash, no dividend issued may exceed the amount
recommended by the directors. The dividends can be declared and paid in the form of cash or
non-cash assets.
The directors of GI plc may deduct from any dividend payable to any member all sums of money (if
any) immediately payable by such member to GI plc in relation to shares of GI plc.
Share Repurchases, Redemptions and Conversions
Overview
Article 3(h) of GI plcs articles of association provides that any ordinary share which GI plc has
acquired or agreed to acquire shall be deemed to be a redeemable share. Accordingly, for Irish
company law purposes, the repurchase of ordinary shares by GI plc was technically effected as a
redemption of those shares as described below. If the articles of association of GI plc did not
contain Article 3(h), repurchases by GI plc would be subject to many of the same rules that apply
to purchases of GI plc ordinary shares by subsidiaries described below, including the shareholder
approval requirements described below and the requirement that any on-market purchases be effected
on a recognized stock exchange. Except where otherwise noted, when we refer elsewhere herein to
repurchasing or buying back ordinary shares of GI plc, we are referring to the redemption of
ordinary shares by GI plc pursuant to Article 3(h) of the articles of association or the purchase
of ordinary shares of GI plc by a subsidiary of GI plc, in each case in accordance with the GI plc
articles of association and Irish company law as described below.
Repurchases and Redemptions by GI plc
Under Irish law, a company can issue redeemable shares and redeem them out of distributable
reserves or the proceeds of a new issue of shares for that purpose. Although GI plc does not have
any distributable reserves immediately following the effective time of the Transaction, we are
taking steps to create such distributable reserves. The issue of redeemable shares may only be made
by GI plc where the nominal value of the issued share capital that is not redeemable is not less
than 10% of the nominal value of the total issued share capital of GI plc. All redeemable shares
must also be fully paid and the terms of redemption of the shares must provide for payment on
redemption. Redeemable shares may, upon redemption, be cancelled or held in treasury. Shareholder
approval will not be required to redeem GI plc shares.
The board of directors of GI plc is entitled to issue shares which may be redeemed at the option of
either GI plc or the shareholder, depending on the terms of such preferred shares.
Repurchased and redeemed shares may be cancelled or held as treasury shares. The nominal value of
treasury shares held by GI plc at any time must not exceed 10% of the nominal value of the issued
share capital of GI plc. While GI plc holds shares as treasury shares, it cannot exercise any
voting rights in respect of those shares. Treasury shares may be cancelled by GI plc or re-issued
subject to certain conditions.
Purchases by Subsidiaries of GI plc
Under Irish law, it may be permissible for an Irish or non-Irish subsidiary to purchase shares of
GI plc either on-market or off-market. A general authority of the shareholders of GI plc is
required to allow a subsidiary of GI plc to make on-market purchases of GI plc ordinary shares;
however, as long as this general authority has been granted, no specific shareholder authority for
a particular on-market purchase by a subsidiary of GI plc ordinary shares is required. The
authority has already been granted by GI plcs shareholders, such authority to expire no later than
18 months after the date on which granted. We expect that GI plc will renew such general authority
at the first annual general meeting of GI plc in 2010 and at subsequent annual general meetings. In
order for a subsidiary of GI plc to make an on-market purchase of GI plcs shares, such shares must
be purchased on a recognized stock exchange. NASDAQ, on which the shares of GI plc are listed
following the Transaction, is now recognized as a recognized stock exchange for this purpose by
Irish company law. For an off-market purchase by a subsidiary of GI plc, the proposed purchase
contract must be authorized by special resolution of the shareholders of GI plc before the contract
is entered into. The person whose shares are to be bought back cannot vote in favor of the special
resolution and, for at least 21 days prior to the special resolution, the purchase contract must be
on display or must be available for inspection by shareholders at the registered office of GI plc.
The number of shares held by the subsidiaries of GI plc at any time will count as treasury shares
and will be included in any calculation of the permitted treasury share threshold of 10% of the
nominal value of the issued share capital of GI plc. While a subsidiary holds shares of GI plc, it
cannot exercise any voting rights in respect of those shares. The acquisition of the shares of GI
plc by a subsidiary must be funded out of distributable reserves of the subsidiary.
Consolidation and Division; Subdivision
Under its articles of association, GI plc may by ordinary resolution consolidate and divide all or
any of its share capital into shares of larger par value than its existing shares or subdivide its
shares into smaller amounts than is fixed by its memorandum of association.
Reduction of Share Capital
GI plc may, by ordinary resolution, cancel any shares which, at the date of the passing of the
resolution, have not been taken or agreed to be taken by any person and reduce the amount of its
authorized share capital by the amount of shares so cancelled. GI plc also may by special
resolution reduce its issued share capital, any capital redemption reserve fund or any share
premium account in any manner and subject to any incident authorized and consent required, by law,
including that of the Irish High Court. The distributable reserves proposal which GI plc will
shortly be undertaking involves a reduction of share capital, namely the share premium account of
GI plc, for purposes of Irish law.
General Meetings of Shareholders
GI plc will be required to hold an annual general meeting within eighteen months of incorporation
and at intervals of no more than fifteen months thereafter, provided that an annual general meeting
is held in each calendar year following the first annual general meeting, no more than nine months
after GI plcs fiscal yearend. The first annual general meeting of GI plc may be held outside of
Ireland. Thereafter, any annual general meeting may be held outside of Ireland if a resolution so
authorizing has been passed at the preceding annual general meeting. Subject to applicable law, all
general meetings of GI plc may be held outside Ireland.
Extraordinary general meetings of GI plc may be convened by the board of directors, or on
requisition of the shareholders holding not less than 10% of the paid up share capital of GI plc
carrying voting rights. In limited circumstances, GI plcs auditors can require the board of
directors to convene extraordinary general meetings of GI plc. Extraordinary general meetings are
generally held for the purposes of approving shareholder resolutions of GI plc as may be required
from time to time. Unless the consent of all the shareholders entitled to receive notice of that
meeting is obtained at any extraordinary general meeting, only such business shall be conducted as
is set forth in the notice thereof.
Notice of a general meeting must be given to all shareholders of GI plc (with the exception of the
holder of the Euro Share Capital) and to the auditors of GI plc. The minimum notice periods are 21
days notice in writing for an annual general meeting or an extraordinary general meeting to
approve a special resolution and 14 days notice in writing for any other extraordinary general
meeting. Because of the 21-day and 14-day requirements described in this paragraph, GI plcs
articles of association include provisions reflecting these requirements of Irish law.
In the case of an extraordinary general meeting convened by shareholders of GI plc, the proposed
purpose of the meeting must be set out in the requisition notice. The requisition notice can
contain any resolution. Upon receipt of this requisition notice, the board of directors has 21 days
to convene a meeting of GI plcs shareholders to vote on the matters set out in the requisition
notice. This meeting must be held within two months of the receipt of the requisition notice. If
the board of directors does not convene the meeting within such 21-day period, the requisitioning
shareholders, or any of them representing more than one half of the total voting rights of all of
them, may themselves convene a meeting, which meeting must be held within three months of the
receipt of the requisition notice.
The only matters which must, as a matter of Irish company law, be transacted at an annual general
meeting are the presentation of the annual accounts, balance sheet and reports of the directors and
auditors, the appointment of auditors and the fixing of the auditors remuneration (or delegation
of same). If no resolution is made in respect of the reappointment of an auditor at an annual
general meeting, the previous auditor will be deemed to have continued in office.
Directors are elected by the affirmative vote of a majority of the votes cast by shareholders at an
annual general meeting and serve for one year terms. Any nominee for director who does not receive
a majority of the votes cast is not elected to the board of directors. However, because Irish law
requires a minimum of two directors at all times, in the event that an election results in no
director being elected, each of the two nominees receiving the greatest number of votes in favor of
his or her election shall hold office until such time as additional directors have been appointed
to replace them. In the event that an election results in only one director being elected, that
director shall be elected and shall serve for a one year term, and the nominee receiving the next
greatest number of votes in favor of their election shall hold office until one or more additional
directors have been appointed to replace that director.
Pursuant to Irish law, if the directors become aware that the net assets of GI plc are half or less
of the amount of GI plcs called-up share capital, the directors of GI plc must convene an
extraordinary general meeting of GI plcs shareholders not later than 28 days from the date that
they learn of this fact. This meeting must be convened for the purposes of considering whether any,
and if so what, measures should be taken to address the situation.
Voting
All votes at a meeting shall be determined by a poll and every shareholder shall have one vote for
each Class A ordinary share and ten votes for each Class B ordinary share that he or she holds as
of the record date for the meeting (unless statute provides otherwise such as is the case in a
scheme of arrangement). Voting rights on a poll may be exercised by shareholders registered in GI
plcs share register as of the record date for the meeting or by a duly appointed proxy of such a
registered shareholder, which proxy need not be a shareholder. Where interests in shares are held
by a nominee trust company this company may exercise the rights of the beneficial holders on their
behalf as their proxy. All proxies must be appointed in the manner prescribed by GI plcs articles
of association. The articles of association of GI plc permit the appointment of proxies by the
shareholders to be notified to GI plc electronically.
In accordance with the articles of association of GI plc, the directors of GI plc may from time to
time cause GI plc to issue preferred shares. These preferred shares may have such voting rights as
may be specified in the terms of such preferred shares (e.g., they may carry more votes per share
than ordinary shares or may entitle their holders to a class vote on such matters as may be
specified in the terms of the preferred shares).
Treasury shares are not entitled to vote at general meeting of shareholders.
The Euro Share Capital carries no right to receive notice of or to attend, vote or speak at any
shareholder meeting.
Irish company law requires special resolutions of the shareholders at a general meeting to
approve certain matters. A special resolution requires not less than 75% of the votes of the shares
of GI plc present in person or by proxy and entitled to vote at the meeting convened to consider
the matter. This may be contrasted with ordinary resolutions, which require a simple majority of
the votes of GI plcs shareholders cast at a general meeting. Examples of matters requiring special
resolutions include:
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Amending the objects or memorandum of association of GI plc;
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Amending the articles of association of GI plc;
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Approving a change of name of GI plc;
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Authorizing the entering into of a guarantee or provision of security in connection with a
loan, quasiloan or credit transaction to a director or connected person;
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Opting out of pre-emption rights on the issuance of new shares;
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Re-registration of GI plc from a public limited company as a private company;
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Variation of class rights attaching to classes of shares;
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Purchase of own shares off-market;
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The reduction of share capital;
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Resolving that GI plc be wound up by the Irish courts;
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Resolving in favor of a shareholders voluntary winding-up;
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Re-designation of shares into different share classes; and
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Setting the re-issue price of treasury shares.
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A scheme of arrangement with shareholders requires a court order from the Irish High Court and the
approval of: (1) 75% or more in value of the shares of GI plc present and voting in person or by
proxy; and (2) 50% in number of the voting shareholders, at the meeting convened to consider the
scheme.
Variation of Rights Attaching to a Class or Series of Shares
Variation of all or any special rights attached to any class or series of shares of GI plc is
addressed in the articles of association of GI plc as well as the Irish Companies Acts. Any
variation of class rights attaching to the issued shares of GI plc must be approved in writing by
holders of 75% of the issued shares as that class or with the sanction of a special resolution of
the shareholders of the class or series affected.
Quorum for General Meeting
The presence, in person or by proxy, of one or more holders holding at least a majority of the
votes eligible to be cast at a general meeting constitutes a quorum for the conduct of business. No
business may take place at a general meeting of GI plc if a quorum is not present in person or by
proxy. The board of directors has no authority to waive quorum requirements stipulated in the
articles of association of GI plc. Abstentions and broker non-votes will be counted as present for
purposes of determining whether there is a quorum in respect of the proposals.
Inspection of Books and Records
Under Irish law, shareholders have the right to: (1) receive a copy of the memorandum and articles
of association of GI plc and any act of the Irish Government which alters the memorandum of
association of GI plc; (2) inspect and obtain copies of the minutes of general meeting and
resolutions of GI plc; (3) inspect and receive a copy of the register of shareholders, register of
directors and secretaries, register of directors interests and other statutory registers
maintained by GI plc; (4) receive copies of balance sheets and directors and auditors reports
which have previously been sent to shareholders prior to an annual general meeting; and (5) receive
balance sheets of a subsidiary company of GI plc which have previously been sent to shareholders
prior to an annual general meeting for the preceding ten years. The auditors of GI plc will also
have the right to inspect all books, records and vouchers of GI plc. If required by law, the
auditors report must be circulated to the shareholders with copies of the balance sheet and
auditors report 21 days before the annual general meeting and must be read to the shareholders at
GI plcs annual general meeting.
Acquisitions
There are a number of mechanisms for acquiring an Irish public limited company, including:
(a) a court-approved scheme of arrangement under the Irish Companies Acts. A scheme of
arrangement with shareholders requires a court order from the Irish High Court and the
approval of: (1) 75% or more in value of the shares of GI plc present in person or by proxy
and entitled to vote; and (2) 50% in number of the voting shareholders, at the meeting
convened to consider the scheme;
(b) through a tender offer by a third party for all of the shares of GI plc. Where the
holders of 80% or more in value of GI plcs ordinary shares have accepted an offer for their
shares in GI plc, the remaining shareholders may be statutorily required to also transfer
their shares. If the bidder does not exercise its squeeze out right, then the
non-accepting shareholders also have a statutory right to require the bidder to acquire
their shares on the same terms. If shares of GI plc were listed on the Irish Stock Exchange
or another regulated stock exchange in the EU, this threshold would be increased to 90%; and
(c) it is also possible for GI plc to be acquired by way of a merger with an EU-incorporated
public company under the EU Cross Border Merger Directive 2005/56. Such a merger must be
approved by a special resolution. If GI plc is being merged with another EU public company
under the EU Cross Border Merger Directive 2005/56 and the consideration payable to GI plcs
shareholders is not all in the form of cash, GI plcs shareholders may be entitled to
require their shares to be acquired at fair value.
Under Irish law, there is no general requirement for a companys shareholders to approve a sale,
lease or exchange of all or substantially all of a companys assets to a third party.
Appraisal Rights
Generally, under Irish law, shareholders of an Irish company do not have appraisal rights. Under
the EC (Cross-Border Mergers) Regulations 2008 governing the merger of an Irish public limited
company and a company incorporated in the European Economic Area, a shareholder (a) who voted
against the special resolution approving the merger or (b) of a company in which 90% of the shares
is held by the other company the party to the merger of the transferor company has the right to
request that the company acquire its shares for cash.
Disclosure of Interests in Shares
Under the Irish Companies Acts, there is a notification requirement for shareholders who acquire or
cease to be interested in at least 5% of the shares of an Irish public limited company. A
shareholder of GI plc must therefore make such a notification to GI plc if as a result of a
transaction the shareholder will be interested in 5% or more of the shares of GI plc; or if as a
result of a transaction a shareholder who was interested in more than 5% will cease to be
interested in at least 5% of the shares of GI plc. Where a shareholder is interested in more than
5% of the shares of GI plc, any alteration of his or her interest that brings his or her total
holding to the nearest whole percentage number, whether an increase or a reduction, must be
notified to GI plc. The relevant percentage figure is calculated by reference to the aggregate par
value of the shares in which the shareholder is interested as a proportion of the entire par value
of GI plcs share capital. Where the percentage level of the shareholders interest does not amount
to a whole percentage this figure may be rounded down to the next whole number. All such
disclosures should be notified to GI plc within 5 business days of the transaction or alteration of
the shareholders interests that gave rise to the requirement to notify. Where a person fails to
comply with the notification requirements described above, no right or interest of any kind
whatsoever in respect of any shares in GI plc concerned, held by such person, shall be enforceable
by such person, whether directly or indirectly, by action or legal proceeding. However, such person
may apply to the court to have the rights attaching to the shares concerned reinstated.
GI plcs articles of association also give authority to the board of directors to request from any
direct or indirect holder of shares, such information as is required to determine whether that
shareholder may be a U.S. person and controls 9.5% or more of the voting power of GI plc. GI plc
has the power under it articles to adjust the voting power of all shares to the extent necessary so
that there is no 9.5% U.S. shareholder, to avoid potential consequences for the U.S. shareholder
under the United States Internal Revenue Code of 1986, except that, such adjustment shall not apply
to Fox Paine and its affiliates or any group, as that term is used in Section 13(d) of the Exchange
Act, referred to as a 13D Group, in which Fox Paine or an affiliate is a participant, and shall
not apply to any shareholder in the event that one person or 13D Group beneficially owns greater
than 75% of the voting power or value of the issued shares of GI plc.
Further, under GI plcs articles of association any direct or indirect holder of shares that has
actual knowledge that it is the actual or constructive owner of 9.5% or more of the voting power of
all issued and outstanding shares of GI plc shall give notice to GI plc within ten days of
acquiring that knowledge.
In addition to the above disclosure requirement, GI plc, under the Irish Companies Acts, may by
notice in writing require a person whom GI plc knows or has reasonable cause to believe to be, or
at any time during the three years immediately preceding the date on which such notice is issued,
to have been interested in shares comprised in GI plcs relevant share capital to: (a) indicate
whether or not it is the case, and (b) where such person holds or has during that time held an
interest in the shares of GI plc, to give such further information as may be required by GI plc
including particulars of such persons own past or present interests in shares of GI plc. Any
information given in response to the notice is required to be given in writing within such
reasonable time as may be specified in the notice.
Where such a notice is served by GI plc on a person who is or was interested in shares of GI plc
and that person fails to give GI plc any information required within the reasonable time specified,
GI plc may apply to court for an order directing that the affected shares be subject to certain
restrictions. Under the Irish Companies Acts, the restrictions that may be placed on the shares by
the court are as follows:
(a) any transfer of those shares, or in the case of unissued shares any transfer of the
right to be issued with shares and any issue of shares, shall be void;
(b) no voting rights shall be exercisable in respect of those shares;
(c) no further shares shall be issued in right of those shares or in pursuance of any offer
made to the holder of those shares; and
(d) no payment shall be made of any sums due from GI plc on those shares, whether in respect
of capital or otherwise.
Where the shares in GI plc are subject to these restrictions, the court may order the shares to be
sold and may also direct that the shares shall cease to be subject to these restrictions.
Anti-Takeover Provisions
Irish Takeover Rules and Substantial Acquisition Rules
A transaction by virtue of which a third party is seeking to acquire 30% or more of the voting
rights of GI plc will be governed by the Irish Takeover Panel Act 1997 and the Irish Takeover Rules
made thereunder and will be regulated by the Irish Takeover Panel. The General Principles of the
Irish Takeover Rules and certain important aspects of the Irish Takeover Rules are described below.
General Principles
The Irish Takeover Rules are built on the following General Principles which will apply to any
transaction regulated by the Irish Takeover Panel:
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in the event of an offer, all classes of shareholders of the target company should be
afforded equivalent
treatment and, if a person acquires control of a company, the other holders of securities must
be protected;
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the holders of securities in the target company must have sufficient time to allow them to
make an informed decision regarding the offer;
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the board of a company must act in the interests of the company as a whole. If the board
of the target company advises the holders of securities as regards the offer it must advise
on the effects of the implementation of the offer on employment, employment conditions and
the locations of the target companys place of business;
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false markets in the securities of the target company or any other company concerned by
the offer must not be created;
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a bidder can only announce an offer after ensuring that he or she can fulfill in full the
consideration offered;
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a target company may not be hindered longer than is reasonable by an offer for its
securities. This is a recognition that an offer will disrupt the day-to-day running of a
target company particularly if the offer is hostile and the board of the target company must
divert its attention to resist the offer; and
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a substantial acquisition of securities (whether such acquisition is to be effected by
one transaction or a series of transactions) will only be allowed to take place at an
acceptable speed and shall be subject to adequate and timely disclosure.
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Mandatory Bid
If an acquisition of shares were to increase the aggregate holding of an acquirer and its concert
parties to shares carrying 30% or more of the voting rights in GI plc, the acquirer and, depending
on the circumstances, its concert parties would be required (except with the consent of the Irish
Takeover Panel) to make a cash offer for the outstanding shares at a price not less than the
highest price paid for the shares by the acquirer or its concert parties during the previous 12
months. This requirement would also be triggered by an acquisition of shares by a person holding
(together with its concert parties) shares carrying between 30% and 50% of the voting rights in GI
plc if the effect of such acquisition were to increase the percentage of the voting rights held by
that person (together with its concert parties) by 0.05% within a twelve-month period. A single
holder (that is, a holder excluding any parties acting in concert with the holder) holding more
than 50% of the voting rights of a company is not subject to this rule. Fox Paine and its
affiliates will be considered by GI plc as a single holder with regard to their holdings in GI plc
for these purposes.
Voluntary Bid; Requirements to Make a Cash Offer and Minimum Price Requirements
A voluntary offer is an offer that is not a mandatory offer. If a bidder or any of its concert
parties acquire ordinary shares of GI plc within the period of three months prior to the
commencement of the offer period, the offer price must be not less than the highest price paid for
GI plc ordinary shares by the bidder or its concert parties during that period. The Irish Takeover
Panel has the power to extend the look back period to 12 months if the Irish Takeover Panel,
having regard to the General Principles, believes it is appropriate to do so.
If the bidder or any of its concert parties has acquired ordinary shares of GI plc (i) during the
period of 12 months prior to the commencement of the offer period which represent more than 10% of
the total ordinary shares of GI plc or (ii) at any time after the commencement of the offer period,
the offer shall be in cash (or accompanied by a full cash alternative) and the price per GI plc
ordinary share shall be not less than the highest price paid by the bidder or its concert parties
during, in the case of (i), the period of 12 months prior to the commencement of the offer period
and, in the case of (ii), the offer period. The Irish Takeover Panel may apply this rule to a
bidder who, together with its concert parties, has acquired less than 10% of the total ordinary
shares of GI plc in the 12 month period prior to the commencement of the offer period if the Panel,
having regard to the General Principles, considers it just and proper to do so.
An offer period will generally commence from the date of the first announcement of the offer or
proposed offer.
Substantial Acquisition Rules
The Irish Takeover Rules also contain rules governing substantial acquisitions of shares which
restrict the speed at which a person may increase his or her holding of shares and rights over
shares to an aggregate of between 15% and 30% of the voting rights of GI plc. Except in certain
circumstances, an acquisition or series of acquisitions of shares or rights over shares
representing 10% or more of the voting rights of GI plc is prohibited, if such acquisition(s), when
aggregated with shares or rights already held, would result in the acquirer holding 15% or more but
less than 30% of the voting rights of GI plc and such acquisitions are made within a period of
seven days. These rules also require accelerated disclosure of acquisitions of shares or rights
over shares relating to such holdings.
Frustrating Action
Under the Irish Takeover Rules, the board of directors of GI plc is not permitted to take any
action which might frustrate an offer for the shares of GI plc once the board of directors has
received an approach which may lead to an offer or has reason to believe an offer is imminent
except as noted below. Potentially frustrating actions such as (i) the issue of shares, options or
convertible securities, (ii) material disposals, (iii) entering into contracts other than in the
ordinary course of business or (iv) any action, other than seeking alternative offers, which may
result in frustration of an offer, are prohibited during the course of an offer or at any time
during which the board of directors has reason to believe an offer is imminent. Exceptions to this
prohibition are available where:
(a) the action is approved by GI plcs shareholders at a general meeting; or
(b) with the consent of the Irish Takeover Panel where:
(i) the Irish Takeover Panel is satisfied the action would not constitute a frustrating
action;
(ii) the holders of 50% of the voting rights state in writing that they approve the
proposed action and would vote in favor of it at a general meeting;
(iii) in accordance with a contract entered into prior to the announcement of the
offer; or
(iv) the decision to take such action was made before the announcement of the offer and
either has been at least partially implemented or is in the ordinary course of business.
Subject to certain exceptions, Fox Paine and its affiliates will be able to prevent or cause a
change of control because of their voting power with respect to GI plc ordinary shares upon completion of the
Transaction. For other provisions that could be considered to have an anti-takeover effect, please see above at
Pre-emption Rights, Share Warrants and Share Options and Disclosure of Interests in Shares, in addition
to Corporate Governance below.
Voting of Subsidiaries Shares
GI plcs articles of association provide that, if GI plc is required or entitled to vote at a
general meeting of any direct subsidiary of GI plc that is organized under the laws of a
jurisdiction outside the United States of America, the directors shall refer the subject matter of
the vote to the shareholders of GI plc at a general meeting (subject to certain exceptions) and
seek authority from the shareholders for the Companys corporate representative or proxy to vote in
favor of the resolution proposed by the subsidiary, unless the subsidiary is or has elected to be
disregarded from its owner for United States federal income tax purposes and does not own, directly
or indirectly, any subsidiary organized under the laws of a jurisdiction outside the United States
of America that is treated as a corporation for United States federal income tax purposes (each
such non-United States subsidiary that is not disregarded, or that is disregarded but owns,
directly or indirectly, a non-United States subsidiary that is treated as a corporation for such
purposes, a Non-U.S. Regarded Subsidiary). The Directors shall cause GI plcs corporate
representative or proxy to vote GI plcs shares in the Non-U.S. Regarded Subsidiary
pro rata
to the
votes received at the general meeting of GI plc, with votes for or against the directing resolution
being taken, respectively, as an instruction for the Companys corporate representative or proxy to
vote the appropriate proportion of its shares for and the appropriate proportion of its shares
against the resolution proposed by the Non-U S. Regarded Subsidiary, provided, however, that the
foregoing shall not apply to any subject matter regarding a U.S. indirect subsidiary of GI plc that
is required to be voted on by a Non-U.S. Regarded Subsidiary of the Company as the shareholder of
such U.S. subsidiary, and shall apply to a vote of GI plc as shareholder of a disregarded
subsidiary that directly or indirectly owns non-United States subsidiaries treated as corporations
for United States federal income tax purposes only if the subject matter of such vote pertains to
such non-United States subsidiaries treated corporations. Notwithstanding, the directors in their
sole and absolute discretion will require that the bylaws or articles of association, or similar
organizational documents, of each Non-U.S. Regarded Subsidiary, whether currently in existence or
subsequently organized, will contain provisions substantially similar to the one in GI plcs
articles of association. GI plc will enter into agreements with each such Non-U.S. Regarded
Subsidiary, as reasonably necessary, to effectuate or implement the provision.
Corporate Governance
The articles of association of GI plc allocate authority over the management of GI plc to the board
of directors. The board of directors may then delegate management of GI plc to committees of the
board, executives or to a management team, but regardless, the directors will remain responsible,
as a matter of Irish law, for the proper management of the affairs of GI plc. It is the intention
of GI plc to replicate the existing committees that are currently in place for UAI Ltd. which
include an Audit Committee, a Compensation Committee, Executive Committee, Investment Committee,
Nominating and Governance Committee and a Section 162(m) Committee. It also is the intention of GI
plc to adopt UAI Ltd.s current corporate governance policies which include the Code of Business
Conduct and Ethics, Corporate Communications Policy, Insider Trading Policy, and other policies
pertaining to the Audit Committee.
Legal Name; Formation; Fiscal Year; Registered Office
The legal and commercial name of the newly formed Irish company is Global Indemnity public limited
company referred to herein as GI plc. GI plc was incorporated in Ireland, as a public limited
company on March 9, 2010 with company registration number 481805. GI plcs fiscal year ends on
December 31 and GI plcs registered address is Arthur Cox Building, Earlsfort Terrace, Dublin 2,
Republic of Ireland.
Duration; Dissolution; Rights upon Liquidation
GI plcs duration is unlimited. GI plc may be dissolved at any time by way of either a
shareholders voluntary winding up or a creditors voluntary winding up. In the case of a
shareholders voluntary winding up, the consent of not less than 75% of the votes of the
shareholders of GI plc cast at a general meeting is required. GI plc may also be dissolved by way
of court order on the application of a creditor, or by the Companies Registration Office as an
enforcement measure where GI plc has failed to file certain returns.
The rights of the shareholders to a return of GI plcs assets on dissolution or winding up,
following the settlement of all claims of creditors, is prescribed in GI plcs articles of
association and may be prescribed in the terms of any preferred shares issued by the directors of
GI plc from time to time. The holders of preferred shares in particular may have the right to
priority in a dissolution or winding up of GI plc. If the articles of association contain no
specific provisions in respect of a dissolution or winding up then, subject to the priorities or
any creditors, the assets will be distributed to shareholders in proportion to the paid-up par
value of the shares held. GI plcs articles provide that the ordinary shareholders of GI plc are
entitled to participate pro rata in a winding up, but their right to do so may be subject to the
rights of any preferred shareholders to participate under the terms of any series or class of
preferred shares, as the directors will fix at the time of issuance.
Uncertificated Shares
Holders of ordinary shares of GI plc will be entitled to a certificate for their shares. The
transfer of ordinary shares in GI plc could be subject to Irish stamp duty.
Stock Exchange Listing
The GI plc Class A ordinary shares are listed on NASDAQ under the new symbol GBLI. We do not plan
to be listed on the Irish Stock Exchange at the present time.
No Sinking Fund
The ordinary shares have no sinking fund provisions.
No Liability for Further Calls or Assessments
All of our issued shares are duly and validly issued and fully paid.
Transfer and Registration of Shares
GI plcs share register will be maintained by its transfer agent. Registration in this share
register will be determinative of membership in GI plc. A shareholder of GI plc who holds shares
beneficially will not be the holder of record of such shares. Instead, the depository (for example,
Cede & Co., as nominee for DTC) or other nominee will be the holder of record of such shares.
Accordingly, a transfer of shares from a person who holds such shares beneficially to a person who
also holds such shares beneficially will not be registered in GI plcs official share register, as
the depositary or other nominee will remain the record holder of such shares.
A written instrument of transfer is required under Irish law in order to register on GI plcs
official share register any transfer of shares from a person who holds such shares directly to any
other person, or from a person who holds such shares beneficially to a person who holds such shares
directly or from a person who holds such shares beneficially to another person who holds such
shares beneficially where the transfer involves a change in the depository or other nominee that is
the record owner of the transferred shares. An instrument of transfer also is required for a
shareholder who directly holds shares to transfer those shares into his or her own broker account
(or vice versa). Such instruments of transfer may give rise to Irish stamp duty, which must be paid
prior to registration of the transfer on GI plcs official Irish share register.
We currently intend to pay (or cause one of our affiliates to pay) the outstanding stamp duty in
respect of a transfer of shares. GI plcs articles of association provide that, in the event of any
such payment, GI plc (i) may seek reimbursement from the transferor or transferee (at our
discretion), (ii) may setoff the amount of the stamp duty against future dividends payable to the
transferor or transferee (at our discretion), and (iii) will have a lien against the GI plc
ordinary shares on which we have paid stamp duty.
GI plcs articles of association delegate to GI plcs secretary the authority to execute an
instrument of transfer on behalf of a transferring party, which the secretary may do if for any
reason such instrument is required and has not already been recorded with GI plc. In order to help
ensure that the official share register is regularly updated to reflect trading of GI plc ordinary
shares occurring through normal electronic systems, we intend to regularly produce any required
instruments of transfer in connection with any transactions for which we pay stamp duty (subject to
the reimbursement and set-off rights described above). In the event that we notify one or both of
the parties to a share transfer that we believe stamp duty is required to be paid in connection
with such transfer and that we will not pay such stamp duty, such parties may either themselves
arrange for the execution of the required instrument of transfer (and may request a form of
instrument of transfer from GI plc for this purpose) or request that GI plc execute an instrument
of transfer on behalf of the transferring party in a form determined by GI plc. In either event, if
the parties to the share transfer have the instrument of transfer duly stamped (to the extent
required) and then provide it to GI plcs transfer agent, the transferee will be registered as the
legal owner of the relevant shares on GI plcs official Irish share register (subject to the
matters described below).
The directors of GI plc have general discretion to decline to register an instrument of transfer
if:
(i) the transfer is not in respect of one class of share only, or
(ii) it appears to the directors, in their sole and absolute discretion, that any non-de
minimis adverse
tax, regulatory or legal consequences to GI plc or any of its subsidiaries, shareholders or
affiliates thereof would result from such transfer (including if such consequence arises as
a result of any U.S. Person owning
Controlled Shares constituting 9.5% or more of the value of the Company or the voting shares
of the
Company (subject to certain exceptions), or
(iii) such share has not been registered under the U.S. Securities Act of 1933, as amended
from time to time, or is not exempt from registration under that Act, or a written opinion
from counsel acceptable to the Company has not been obtained to the effect that registration
of such transfer under the U.S. Securities
Act of 1933, as amended from time to time, is not required.
The directors may request from any shareholder information to determine whether any transfer should
be permitted. If such information is not forwarded, the board of directors may decline to approve
or register such transfer. The board of directors shall decline to approve or to register any
transfer of any share if the transferee shall not have been approved by applicable governmental
authorities, if such approval is required.
The registration of transfers may be suspended by the directors at such times and for such period,
not exceeding in the whole 30 days in each year, as the board of directors may from time to time
determine.
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Item 9.01
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Financial Statements and Exhibits.
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(d) Exhibits.
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Exhibit Number
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Description
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3.1
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Memorandum and Articles of Association of Global Indemnity plc, an Irish public limited
company
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3.2
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Certificate of Incorporation of Global Indemnity plc, an Irish public limited company
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4.1
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Assumption Agreement relating to the 6.22% Guaranteed Senior Notes, dated June 1, 2010
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10.1
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Global Indemnity plc Share Incentive Plan (amended and restated effective July 2, 2010)
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10.2
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Amendment to Global Indemnity plc Share Incentive Plan dated July 2, 2010
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10.3
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Deed Poll of Assumption for United America Indemnity, Ltd. Share Incentive Plan by
Global Indemnity plc, dated July 2, 2010
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10.4
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Global Indemnity plc Annual Incentive Awards Program (amended and restated effective
July 2, 2010)
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10.5
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Deed Poll of Assumption for United America Indemnity, Ltd. Annual Incentive Awards
Program by Global Indemnity plc, dated July 2, 2010
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10.6
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Amended and Restated Shareholders Agreement, dated July 2, 2010, by and among Global
Indemnity plc (as successor to United America Indemnity, Ltd.) and the signatories
thereto
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10.7
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Assignment and Assumption Agreement relating to the Amended and Restated Shareholders
Agreement, dated July 2, 2010
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10.8
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Indemnification Agreement between United America Indemnity, Ltd. and Fox Paine Capital
Fund II International L.P., dated July 2, 2010.
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10.9
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Form of Indemnification Agreement between United America Indemnity, Ltd. and certain
directors and officers of Global Indemnity plc, dated July 2, 2010
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99.1
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Press Release, dated July 2, 2010
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned hereunto duly authorized.
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GLOBAL INDEMNITY PLC
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DATE: July 2, 2010
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By:
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/s/ Thomas M. McGeehan
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Thomas M. McGeehan
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Senior Vice President and Chief Financial Officer
(Authorized Signatory)
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EXHIBIT 3.1
Companies Acts 1963 to 2009
A PUBLIC COMPANY LIMITED BY SHARES
MEMORANDUM and ARTICLES OF ASSOCIATION
of
GLOBAL INDEMNITY PUBLIC LIMITED COMPANY
(Amended and restated by Special Resolution July 2, 2010)
Incorporated the 9
th
day of March 2010
Arthur Cox
Arthur Cox Building
Earlsfort Terrace
Dublin 2
CB 106790.31
Cert. No.: 481805
Companies Acts 1963 to 2009
A PUBLIC COMPANY LIMITED BY SHARES
MEMORANDUM OF ASSOCIATION
-of-
GLOBAL INDEMNITY PUBLIC LIMITED COMPANY
(Amended and restated by Special Resolution dated July 2, 2010)
1.
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The name of the Company is Global Indemnity public limited company.
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2.
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The Company is to be a public limited company.
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3.
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The objects for which the Company is established are:
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(a)
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To carry on the business of a holding company and to co-ordinate the
administration, finances and activities of any subsidiary companies or associated
companies, to do all lawful acts and things whatever that are necessary or
convenient in carrying on the business of such a holding company and in particular
to carry on in all its branches the business of a management services company, to
act as managers and to direct or coordinate the management of other companies or of
the business, property and estates of any company or person and to undertake and
carry out all such services in connection therewith as may be deemed expedient by
the Companys Board and to exercise its powers as a shareholder of other companies.
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(b)
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To acquire the entire issued share capital of United America
Indemnity, Ltd., a Cayman Island registered company.
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(c)
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To carry on the business of consulting services regarding global
insurance brokerage, reinsurance, financial services and risk management and to
do all things usually dealt in by all persons carrying on the above mentioned
businesses of any of them likely to be required in connection with any of the
said businesses.
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(2)
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To acquire shares, stocks, debentures, debenture stock, bonds, obligations and
securities by original subscription, tender, 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
incidental to the ownership thereof.
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(3)
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To facilitate and encourage the creation, issue or conversion of and to offer for
public subscription debentures, debenture stocks, bonds, obligations, shares, stocks,
and securities and to act as trustees in connection with any such securities and to take
part in the conversion of business concerns and undertakings into companies.
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(4)
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To purchase or by any other means acquire any freehold, leasehold or other property
and in particular lands, tenements and hereditaments of any tenure, whether subject or not
to any charges or incumbrances, for any estate or interest whatever, and any rights,
privileges or easements over or in respect of any property, and any buildings, factories,
mills, works, wharves, roads, machinery, engines, plant, live and dead stock, barges,
vessels or things, and any real or personal property or rights whatsoever which may be
necessary for, or may conveniently be used with, or may enhance the value or property of
the Company, and to hold or to sell, let, alienate, mortgage, charge or otherwise deal
with all or any such
freehold, leasehold, or other property, lands, tenements or hereditaments, rights,
privileges or easements.
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(5)
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To sell or otherwise dispose of any of the property or investments of the Company.
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(6)
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To establish and contribute to any scheme for the purchase of shares or subscription
for shares in the Company or its holding company to be held for the benefit of the
employees or former employees of the Company or any subsidiary of the Company including
any person who is or was a director holding salaried employment or office in the Company
or any subsidiary of the Company and to lend or otherwise provide money to the trustees of
such schemes or the employees or former employees of the Company or any subsidiary of the
Company to enable them to purchase shares of the Company or its holding company and to
formulate and carry into effect any scheme for sharing the profits of the Company or its
holding company with its employees and/or the employees of any of its subsidiaries.
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(7)
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To establish and support or aid in the establishment and support of associations,
institutions, funds, trusts and conveniences calculated to benefit and to pay premiums in
respect of any insurance policies for the benefit of, directors and ex-directors,
employees or ex-employees of the Company or the dependants or connections of such persons,
and to grant pensions and allowances and to do any acts or things or make any arrangements
or provisions enabling employees of the Company or other persons aforesaid to become
shareholders in the Company, or otherwise participate in the profits of the Company upon
such terms and in such manner as the Company thinks fit, and to make payments towards
insurance and to subscribe or guarantee money for charitable or benevolent objects or for
any exhibition or for any public, general or useful object, or any other object whatsoever
which the Company may think advisable.
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(8)
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To grant, convey, transfer or otherwise dispose of any property or asset of the
Company of whatever nature or tenure for such price, consideration, sum or other return
whether equal to or less than the market value thereof and whether by way of gift or
otherwise as the Directors shall deem fit and to grant any fee, farm grant or lease or to
enter into any agreement for letting or hire of any such property or asset for a rent or
return equal to or less than the market or rack rent therefor or at no rent and subject
to or free from covenants and restrictions as the Directors shall deem appropriate.
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(9)
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To acquire and undertake the whole or any part of the business, good-will and
assets of any person, firm or company carrying on or proposing to carry on any of the
businesses which this Company is authorised to carry on, and as part of the consideration
for such acquisition to undertake all or any of the liabilities of such person, firm or
company, or to acquire an interest in, amalgamate with, or enter into any arrangement for
sharing profits, or for co-operation, or for limiting competition or for mutual
assistance with any such person, firm or company and to give or accept by way of
consideration for any of the acts or things aforesaid or property acquired, any shares,
debentures, debenture stock or securities that may be agreed upon, and to hold and retain
or sell, mortgage or deal with any shares, debentures, debenture stock or securities so
received.
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(10)
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To apply for, purchase or otherwise acquire any patents, brevets dinvention,
licences, concessions and the like conferring any exclusive or non-exclusive or limited
rights to use or any secret or other information as to any invention which may seem
capable of being used for any of the purposes of the Company or the acquisition of which
may seem calculated directly or indirectly to benefit the Company, and to use, exercise,
develop or grant licences in respect of or otherwise turn to account the property, rights
or information so acquired.
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(11)
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To enter into partnership or into any arrangement for sharing profits, union of
interests, co-operation, joint venture, reciprocal concession or otherwise with any
person or company carrying on or engaged in or about to carry on or engage in any
business or transaction
which the Company is authorised to carry on or engage in or any business or transaction
capable of being conducted so as directly to benefit this Company.
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(12)
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To invest and deal with the moneys of the Company not immediately required upon
such securities and in such manner as may from time to time be determined.
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(13)
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To lend money to and guarantee the performance of the contracts or obligations
of any company, firm or person, and the repayment of the capital and principal of,
and dividends, interest or premiums payable on, any stock, shares and securities of
any company, whether having objects similar to those of this Company or not, and to
give all kinds of indemnities.
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(14)
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To engage in currency exchange and interest rate transactions including, but not
limited to, dealings in foreign currency, spot and forward rate exchange contracts,
futures, options, forward rate agreements, swaps, caps, floors, collars and any other
foreign exchange or interest rate hedging arrangements and such other instruments as are
similar to, or derived from, any of the foregoing whether for the purpose of making a
profit or avoiding a loss or managing a currency or interest rate exposure or any other
exposure or for any other purpose.
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(15)
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To guarantee, support or secure, whether by personal covenant or by mortgaging or
charging all or any part of the undertaking, property and assets (both present and
future) and uncalled capital of the Company, or by both such methods, the performance of
the obligations of, and the repayment or payment of the principal amounts of and
premiums, interest and dividends on any securities of, any person, firm or company
including (without prejudice to the generality of the foregoing) any company which is
for the time being the Companys holding company as defined by section 155 of the
Companies Act, 1963 or a subsidiary as therein defined of any such holding company or
otherwise associated with the Company in business.
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(16)
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To borrow or secure the payment of money in such manner as the Company shall think
fit, and in particular by the issue of debentures, debenture stocks, bonds, obligations
and securities of all kinds, either perpetual or terminable and either redeemable or
otherwise and to secure the repayment of any money borrowed, raised or owing by trust
deed, mortgage, charge, or lien upon the whole or any part of the Companys property or
assets (whether present or future) including its uncalled capital, and also by a similar
trust deed, mortgage, charge or lien to secure and guarantee the performance by the
Company of any obligation or liability it may undertake.
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(17)
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To draw, make, accept, endorse, discount, execute, negotiate and issue
promissory notes, bills of exchange, bills of lading, warrants, debentures and other
negotiable or transferable instruments.
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(18)
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To subscribe for, take, purchase or otherwise acquire and hold shares or other
interests in, or securities of any other company having objects altogether or in part
similar to those of this Company, or carrying on any business capable of being
conducted so as directly or indirectly to benefit this Company.
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(19)
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To hold in trust as trustees or as nominees and to deal with, manage and turn to
account, any real or personal property of any kind, and in particular shares, stocks,
debentures, securities, policies, book debts, claims and choses in actions, lands,
buildings, hereditaments, business concerns and undertakings, mortgages, charges,
annuities, patents, licences, and any interest in real or personal property, and any
claims against such property or against any person or company.
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(20)
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To constitute any trusts with a view to the issue of preferred and deferred or
other special stocks or securities based on or representing any shares, stocks and other
assets specifically appropriated for the purpose of any such trust and to settle and
regulate and if thought fit to
undertake and execute any such trusts and to issue, dispose of or hold any such
preferred, deferred or other special stocks or securities.
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(21)
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To give any guarantee in relation to the payment of any debentures, debenture
stock, bonds, obligations or securities and to guarantee the payment of interest
thereon or of dividends on any stocks or shares of any company.
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(22)
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To construct, erect and maintain buildings, houses, flats, shops and all other
works, erections, and things of any description whatsoever either upon the lands
acquired by the Company or upon other lands and to hold, retain as investments or to
sell, let, alienate, mortgage, charge or deal with all or any of the same and generally
to alter, develop and improve the lands and other property of the Company.
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(23)
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To provide for the welfare of persons in the employment of or holding office under
or formerly in the employment of or holding office under the Company including Directors
and ex-Directors of the Company and the wives, widows and families, dependants or
connections of such persons by grants of money, pensions or other payments and by forming
and contributing to pension, provident or benefit funds or profit sharing or
co-partnership schemes for the benefit of such persons and to form, subscribe to or
otherwise aid charitable, benevolent, religious, scientific, national or other
institutions, exhibitions or objects which shall have any moral or other claims to
support or aid by the Company by reason of the locality of its operation or otherwise.
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(24)
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To remunerate by cash payments or allotment of shares or securities of the Company
credited as fully paid up or otherwise any person or company for services rendered or to
be rendered to the Company whether in the conduct or management of its business, or in
placing or assisting to place or guaranteeing the placing of any of the shares of the
Companys capital, or any debentures or other securities of the Company or in or about
the formation or promotion of the Company.
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(25)
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To enter into and carry into effect any arrangement for joint working in business
or for sharing of profits or for amalgamation with any other company or association or
any partnership or person carrying on any business within the objects of the Company.
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(26)
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To distribute
in specie
or otherwise as may be resolved, any assets of the Company
among its members and in particular the shares, debentures or other securities of any
other company belonging to this Company or of which this Company may have the power of
disposing.
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(27)
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To vest any real or personal property, rights or interest acquired or belonging to
the Company in any person or company on behalf of or for the benefit of the Company, and
with or without any declared trust in favour of the Company.
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(28)
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To transact or carry on any business which may seem to be capable of being
conveniently carried on in connection with any of these objects or calculated directly
or indirectly to enhance the value of or facilitate the realisation of or render
profitable any of the Companys property or rights.
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(29)
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To accept stock or shares in or debentures, mortgages or securities of any other
company in payment or part payment for any services rendered or for any sale made to or
debt owing from any such company, whether such shares shall be wholly or partly paid up.
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(30)
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To pay all costs, charges and expenses incurred or sustained in or about the
promotion and establishment of the Company or which the Company shall consider to be
preliminary thereto and to issue shares as fully or in part paid up, and to pay out of
the funds of the Company all brokerage and charges incidental thereto.
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(31)
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To procure the Company to be registered or recognised in any foreign country or
in any colony or dependency of any such foreign country.
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(32)
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To do all or any of the matters hereby authorised in any part of the world or in
conjunction with or as trustee or agent for any other company or person or by or through
any factors, trustees or agents.
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(33)
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To make gifts or grant bonuses to the Directors or any other persons who are or
have been in the employment of the Company including substitute and alternate
directors.
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(34)
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To do all such other things that the Company may consider incidental or conducive
to the attainment of the above objects or as are usually carried on in connection
therewith.
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(35)
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To carry on any business which the Company may lawfully engage in and to do
all such things incidental or conducive to the business of the Company.
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(36)
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To make or receive gifts by way of capital contribution or otherwise.
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The objects set forth in any sub-clause of this clause shall be regarded as independent
objects and shall not, except, where the context expressly so requires, be in any way limited
or restricted by reference to or inference from the terms of any other sub-clause, or by the
name of the Company. None of such sub-clauses or the objects therein specified or the powers
thereby conferred shall be deemed subsidiary or auxiliary merely to the objects mentioned in
the first sub-clause of this clause, but the Company shall have full power to exercise all or
any of the powers conferred by any part of this clause in any part of the world
notwithstanding that the business, property or acts proposed to be transacted, acquired or
performed do not fall within the objects of the first sub-clause of this clause.
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NOTE:
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It is hereby declared that the word company in this clause, except where used
in reference to this Company shall be deemed to include any partnership or other body
of persons whether incorporated or not incorporated and whether domiciled in Ireland or
elsewhere and the intention is that the objects specified in each paragraph of this
clause shall except where otherwise expressed in such paragraph be in no way limited or
restricted by reference to or inference from the terms of any other paragraph.
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4.
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The liability of the members is limited.
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5.
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The share capital of the Company is 40,000 and US$100,000 divided into 40,000 deferred
shares of 1 each, 600,000,000 A ordinary shares of US$ 0.0001 each, 300,000,000 B ordinary
shares of US$ 0.0001 each and 100,000,000 preferred shares of US$0.0001 each.
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6.
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The shares forming the capital, increased or reduced, may be increased or reduced and be
divided into such classes and issued with any special rights, privileges and conditions or
with such qualifications as regards preference, dividend, capital, voting or other special
incidents, and be held upon such terms as may be attached thereto or as may from time to time
be provided by the original or any substituted or amended articles of association and
regulations of the Company for the time being, but so that where shares are issued with any
preferential or special rights attached thereto such rights shall not be alterable otherwise
than pursuant to the provisions of the Companys articles of association for the time being.
|
We, the several persons whose names and addresses are subscribed, wish to be formed into a
company in pursuance of this memorandum of association and we agree to take the number of
shares in the capital of the company set opposite our respective names.
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Names, addresses and descriptions of subscribers
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Number of shares taken by each subscriber
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For and on behalf of
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Thirty Nine Thousand, Nine Hundred and
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United America Indemnity, Ltd.,
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Ninety Four Ordinary Shares
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Walker House,
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87 Mary Street,
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George Town,
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Grand Cayman,
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KY1-9002,
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Cayman Islands
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For and on behalf of
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Larry Allen Frakes
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One Ordinary Share
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1653 Yardley Court
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West Chester, Pennsylvania
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19380
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United States
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For and on behalf of
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Thomas Michael McGeehan
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One Ordinary Share
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572 Saratoga Road
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King of Prussia
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PA 19406
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For and on behalf of
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Linda Hohn
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One Ordinary Share
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153 Gulph Hills Road
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Radnor
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PA 19087
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For and on behalf of
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Edward M.Rafter
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One Ordinary Share
|
1 Yearling Chase
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Mount Laurel
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NJ 08054
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For and on behalf of
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Troy Santora
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One Ordinary Share
|
Woodbourne Place #7
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28 Woodbourne Avenue
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Pembroke HM08
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Bermuda
|
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For and on behalf of
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Caroline M. Tate
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One Ordinary Share
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813 Judie Lane
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Ambler, PA 19002
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Dated the 25
th
day of February 2010
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Witness to the above signatures:
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Ashley Mayne
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Purvis House
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Victoria Place
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29 Victoria Street
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PO Box HM 716
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Hamilton HMCX
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Bermuda
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|
Companies Acts 1963 to 2009
A PUBLIC COMPANY LIMITED BY SHARES
ARTICLES OF ASSOCIATION
-of-
GLOBAL INDEMNITY PUBLIC LIMITED COMPANY
(Amended and restated by Special Resolution dated July 2, 2010)
PRELIMINARY
1.
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The regulations contained in Table A in the First Schedule to the Companies Act, 1963 shall
not apply to the Company.
|
|
2.
|
|
(a) In these articles:
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Act
|
|
means the Companies Act, 1963 (No. 33 of 1963) as amended by the Companies Acts 1977 to 2005,
Parts 2 and 3 of the Investment Funds, Companies and Miscellaneous Provisions Act 2006 and the
Companies (Amendment) Act 2009 and all statutory instruments which are to be read as one with,
or construed, or to be read together with the Companies Acts and every statutory modification
and re-enactment thereof for the time being in force.
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|
Affiliate
|
|
shall have the meaning ascribed to such term in Rule 12b-2 of the Exchange Act.
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1983 Act
|
|
the Companies (Amendment) Act, 1983.
|
|
|
|
1990 Act
|
|
means the Companies Act, 1990 (No. 33 of 1990).
|
|
|
|
Acts
|
|
means the Companies Acts 1963 to 2005, Parts 2 and 3 of the Investment Funds, Companies and
Miscellaneous Provisions Act 2006 and the Companies (Amendment) Act 2009 and all statutory
instruments which are to be read as one with, or construed, or to be read together with the
Companies Acts and every statutory modification and re-enactment thereof for the time being in
force.
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|
Address
|
|
includes any number or address used for the purposes of communication by way of electronic mail
or other electronic communication.
|
|
|
|
Appraised Value
|
|
with respect to any ordinary share means, as of any specified date, the value of such ordinary
share as of such date as determined by an independent appraiser retained by the Company and
reasonably acceptable to the shareholder the
ordinary shares of which the Company has elected to purchase,
redeem or assign the right to purchase pursuant to article 8.
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|
Attribution Percentage
|
|
means, with respect to a shareholder and a Tentative 9.5% U.S. Shareholder, the percentage of
the shareholders shares that are treated as Controlled Shares of such Tentative 9.5% U.S.
Shareholder.
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|
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|
these articles
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|
means the articles of association of which this article 2 forms part, as the same may be amended
and may be from time to time and for the time being in force.
|
|
|
|
Business Combination
|
|
|
Transaction
|
|
means any transaction, whether effected by means of a share purchase or other means, following
which any person (other than Fox Paine & Company, LLC and its Affiliates) would have a majority
of the votes represented by issued and outstanding shares and entitled to be cast at any general
meeting of the Company.
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|
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|
Business Day
|
|
means any day except a Saturday, Sunday or other day on which banks in either of Dublin, Ireland
or New York City, United States are closed for business.
|
|
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|
Clear Days
|
|
in relation to the period of notice, that period excluding the day when the notice is given or
deemed to be given and the day for which it is given or on which it is to take effect.
|
|
|
|
Code
|
|
means the United States Internal Revenue Code of 1986, as amended from time to time, or any
United States federal statute then in effect that has replaced such statute, and a reference to
a particular section thereof shall be deemed to include a reference to the comparable section,
if any, of such replacement statute.
|
|
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|
the Company
|
|
means the company whose name appears in the heading to these articles.
|
|
|
|
Confidential Information
|
|
shall have the meaning given to such term in article 5(d).
|
|
|
|
Controlled Shares
|
|
means, in reference to any person, all shares that such person owns or is deemed to own
directly, indirectly (within the meaning of Section 958(a)(2) of the Code) or constructively
(within the meaning of Section 958(b) of the Code and Treasury Regulations promulgated
thereunder and under Section 957 of the Code).
|
|
|
|
the Directors or the Board
|
|
means the directors for the time being of the Company or the directors present at a meeting of
the board of directors and includes any person occupying the position of director by whatever
name called.
|
|
|
|
Dividend Periods
|
|
shall have the meaning given to such term in article 3(e)(ii).
|
|
|
|
Electronic communication
|
|
has the meaning given to those words in the Electronic Commerce Act 2000.
|
|
|
|
Electronic signature
|
|
has the meaning given to those words in the Electronic Commerce Act 2000.
|
|
|
|
Exchange
|
|
shall mean any securities exchange or other system on which any shares of the Company may be
listed or otherwise authorised for trading from time to time, including, as may be applicable,
The New York Stock Exchange and The NASDAQ Global Market.
|
|
|
|
Exchange Act
|
|
means the United States Securities Exchange Act of 1934, as amended from time to time, and the
rules and regulations promulgated thereunder.
|
|
|
|
Fair Value
|
|
with respect to any share means, as of any specified date, (a) if such shares are not traded on
any Exchange, the fair market value per share as determined by the Board without a minority
discount but with an appropriate liquidity discount, such value and liquidity discount, if any,
as determined by the Board, or (b) if such shares are traded on any Exchange, the fair market
value per share as determined by the Board based on the last sales price per share as at the
NASDAQ market close or if there is none, the average of the bid and asked price per share, in
each case for the eight (8) Business Days prior to such date. If a shareholder disagrees with
the price so determined by the Board pursuant to (a), the Fair Value shall be the Appraised
Value. The Fair Value per A ordinary share as of any specified date shall be identical to the
Fair Value per B ordinary share on such date.
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Fox Paine
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means Fox Paine & Company, LLC and any of its Affiliates.
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FPC Shareholder
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has the meaning set forth in article 74.
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the Group
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means the Company and its subsidiaries for the time being.
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the holder
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in relation to any share, the member whose name is entered in the Register as the holder of the
share or, where the context permits, the members whose names are entered in the Register as the
joint holders of shares.
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Indirect
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when referring to a holder of shares, means ownership of shares within the meaning of Section
958(a)(2) of the Code.
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the Office
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means the registered office for the time being of the Company.
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paid up
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means paid up as to the nominal value and any premium payable in respect of the issue of any
shares and includes credited as paid up.
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Purchase Notice
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means a written notice of the Boards determination to either
(i) redeem a shareholders shares, or (ii) require a
shareholder to sell shares, which notice shall specify the
date on which any such shares are to be redeemed or purchased
and the price at which such shares are to be redeemed or
purchased in accordance with article 8(b).
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Redeemable Shares
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means redeemable shares in accordance with Section 206 of the 1990 Act.
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Register
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means the register of members to be kept as required in accordance with Section 116 of the
Act.
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Required Sale
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shall have the meaning set forth in article 8(c).
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Required Seller
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shall have the meaning given such term in article 8(b).
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the seal
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means the common seal of the Company.
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the Secretary
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means any person appointed to perform the duties of the secretary or assistant secretary of
the Company from time to time and for the time being.
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Service
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shall have the meaning given to such term in article 5(d).
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Signed
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includes a signature or representation of a signature affixed by mechanical means.
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Special Resolution
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means a special resolution of the Companys members within the meaning of Section 141 of the
Act.
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Tentative 9.5% U.S.
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Shareholder
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means a U.S. Person other than Fox Paine or a 13D Group in which Fox Paine is a participant,
that, but for adjustments to the voting rights of shares pursuant to article 4, would be a
9.5% U.S. Shareholder.
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U.S. Person
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means a United States person as defined in Section 957(c) of the Code.
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13D Group
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means, with respect to voting securities of the Company, any group of persons formed
for the purpose of acquiring, holding, voting or disposing of such securities which would be
required under Section 13(d) of the Exchange Act and the rules and regulations promulgated
thereunder to file a statement on Schedule 13D with the United States Securities and Exchange
Commission as a person within the meaning of Section 13(d)(3) of the Exchange Act if such
group beneficially owned voting securities representing more than 5% of the total combined
voting power of all such securities then outstanding.
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9.5% U.S. Shareholder
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means a U.S. Person other than Fox Paine or a 13D Group in which Fox
Paine is a participant, the Controlled Shares of which constitute nine and one-half per cent.
(9.5%) or more of
the voting power of all issued and outstanding shares of the
Company and that would be generally required to recognise
income with respect to the Company under Section 951(a)(1)
of the Code, if the Company were a controlled foreign
corporation as defined in Section 957 of the Code and if the
ownership threshold under Section 951(b) of the Code were
9.5%.
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(b)
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Expressions in these articles referring to writing shall be construed, unless the
contrary intention appears, as including references to printing, lithography,
photography and any other modes of representing or reproducing words in a visible form
except as provided in these articles and/or where it constitutes writing in electronic
form sent to the Company, and the Company has agreed to its receipt in such form.
Expressions in these articles referring to execution of any document shall include any
mode of execution whether under seal or under hand or any mode of electronic signature
as shall be approved by the Directors. Expressions in these articles referring to
receipt of any electronic communications shall, unless the contrary intention appears,
be limited to receipt in such manner as the Company has approved.
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(c)
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Unless the contrary intention appears, words or expressions contained in these
articles shall bear the same meaning as in the Acts or in any statutory modification
thereof in force at the date at which these articles become binding on the Company.
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(d)
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References herein to any enactment shall mean such enactment as the same may be
amended and may be from time to time and for the time being in force.
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(e)
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The masculine gender shall include the feminine and neuter, and vice versa, and the
singular number shall include the plural, and vice versa, and words importing persons
shall include firms or companies or body corporates.
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(f)
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Reference to US$, USD or dollars shall mean the currency of the United States of
America and to , euro, EUR or cent shall mean the currency of Ireland.
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SHARE CAPITAL AND VARIATION OF RIGHTS
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(a)
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The share capital of the Company is 40,000 and US$100,000 divided into
40,000 deferred shares of 1 each (the
Euro Share Capital
), 600,000,000 A
ordinary shares of US$0.0001 each, 300,000,000 B ordinary shares of US$0.0001 each and
100,000,000 preferred shares of US$0.0001 each.
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(b)
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The rights and restrictions attaching to the ordinary shares shall be as follows:
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(i)
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subject to the right of the Company to set record dates for the
purposes of determining the identity of members entitled to notice of and/or to
vote at a general meeting and the authority of the Board and chairman of the
meeting to maintain order and security, the right to attend any general meeting
of the Company and, subject to the voting limitations set out in article 4, to
exercise one (1) vote per A ordinary share and ten (10) votes per B ordinary
share held at any general meeting of the Company:
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(ii)
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the right to participate
pro rata
in all dividends declared by
the Company in accordance with the relevant provisions of these articles; and
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(iii)
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the right, in the event of the Companys winding up, to
participate
pro rata
in the total assets of the Company.
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The rights attaching to the ordinary shares may be subject to the terms of
issue of any series or class of preferred shares allotted by the Directors
from time to time in accordance with article 3(e).
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The Euro Share Capital (i) does not convey on the holder the right to be
paid a dividend or to receive notice of or to attend, vote and speak at any
meeting of the members of the Company in respect of those shares, and (ii)
confers the right on a return of capital, on a winding-up or otherwise, only
to repayment of the nominal amount paid up on the Euro Share Capital but
only after repayment of the ordinary shares of the Company in full.
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(c)
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All ordinary shares shall rank
pari
passu
with each other in
all respects. Notwithstanding anything in the memorandum of association of the Company
or these articles to the contrary;
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(i)
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the holders of ordinary shares shall be entitled to receive,
from time to time, when and as declared, such cash dividends as the Board, in
its discretion, or the Company may from time to time determine, out of such
funds as are legally available therefor, in proportion to the number of shares
held by them, respectively, without regard to class.
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(ii)
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the holders of ordinary shares shall be entitled to receive,
from time to time, when and as declared, such dividends of shares or other
securities of the Company or other property as the Board, in its discretion, or
the Company may determine, out of such funds as are legally available therefor.
Such dividends on, or bonus issues or share splits of, any class of ordinary
shares shall not be paid or issued unless paid or issued on all classes of
ordinary shares, in which case such dividends shall be paid or issued only in
shares of that class. Any decrease in the number of shares of any class of
ordinary shares resulting from a combination or consolidation of shares or
other capital reclassification shall not be permitted unless parallel action is
taken with respect to each other class of ordinary shares, so that the number
of shares of each class of ordinary shares outstanding shall be decreased
proportionately.
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(i)
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Each B ordinary share shall be convertible at the option of the
holder thereof into one A ordinary share by means of the Redemption Mechanism
set out in Article 3(d)(ii)) below.
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(ii)
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Subject to section 210(4) of the 1990 Act and unless the Board
determines otherwise, if (i) a holder of B ordinary shares ( the
Converter
)
wishes to effect a conversion of any such shares into A ordinary shares; or
(ii) a person (the
Transferee
) agrees with any holder of B ordinary shares
that it be transferred, whether or not for value, any of the B ordinary shares
in the Company of that holder (the
Redeeming Member
), immediately prior to
any such conversion being effected or the anticipated completion of the
transfer agreement in (ii) above, the shares shall be redeemed in accordance
with the mechanism set out below (the
Redemption Mechanism
), such mechanism
to be effected in accordance with such procedures and as to such type or types of
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transactions as the Board may have resolved and published
(if required) from time to time. Under the Redemption Mechanism, the
Converter or the Redeeming Member shall be deemed to have given the Company
an irrevocable notice of its wish that the shares the subject of the
proposed conversion or the transfer agreement (the
Notified Shares
) be
immediately converted so as to be redeemable, subject to the Converters or
the Redeeming Members right to notify the Company of its unwillingness to
have such shares so converted as provided for under Section 210(2) of the
1990 Act where it wishes to have the shares transferred. The Notified
Shares shall thereafter be redeemed immediately before the completion of any
such conversion or such anticipated transfer for their aggregate nominal
value (the
Redemption Amount
) and cancelled or held in treasury in
accordance with Part XI of the 1990 Act and the Company will pay such amount
to a third party, as nominated by the Board (the
Redemption Agent
), who
will irrevocably be deemed to have been appointed as Redemption Agent and
the Converter or the Redeeming Member shall be deemed to have given its
consent to the Redemption Agent receiving the Redemption Amount and applying
such amount in the manner set out below. Moreover, the Redemption Agent
shall hold the Redemption Amount on trust and apply it in respect of an
allotment and issue of (as applicable):
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(A) A ordinary shares for their nominal value fully paid, in the Company
equal in number to the Notified Shares, to Cede & Co. as nominee of the
Converter or the Redeeming Member or such other nominee of the Converter or
the Redeeming Member as it may advise (in either case, the
New Issue
); or
(B) B ordinary shares for their nominal value fully paid, in the Company
equal in number to the Notified Shares, to the Transferee (1) where the
Transferee is a nominee or Affiliate of a holder of B ordinary shares and
such transfer will not result in a change of beneficial ownership (as
determined under Rule 13d-3 under the Exchange Act), or (2) where the
Transferee is already a holder of B ordinary shares, such allotment and
issue (in each case) to occur immediately after the redemption of the
Notified Shares, or within such other time as the Board may determine. The
Board may in its discretion determine that the New Issue or new issue of B
ordinary shares be effected by way of a re-issue of the treasury shares
created pursuant to the redemption of the Notified Shares.
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(e)
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The Board is empowered to cause the preferred shares to be issued from time to
time as shares of one or more series of preferred 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:
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(i)
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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;
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(ii)
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the dividend rate on shares of such series and preferences with
respect thereto, if any, the dividend payment dates, the periods in respect of
which dividends are payable (
Dividend Periods
), whether such dividends shall
be cumulative and, if cumulative, the date or dates from which dividends shall
accumulate and whether such dividends may be payable in cash or in kind;
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(iii)
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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;
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(iv)
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the terms and amount of any sinking fund provided for the
purchase or redemption of shares of such series;
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(v)
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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;
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(vi)
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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;
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(vii)
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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;
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(viii)
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whether or not the holders of shares of such series, as such, shall have any
pre-emptive 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;
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(ix)
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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
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(x)
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such other rights, preferences and limitations as may be
permitted to be fixed by the Board of the Company under the laws of Ireland as
in effect at the time of the creation of such series.
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Notwithstanding the fixing of the number of preferred shares constituting a
particular series, the Board at any time thereafter may otherwise authorise the
issuance of additional preferred shares of the same series and with the same rights,
subject always to the Acts and the memorandum of association of the Company.
The Board is authorised to change the designations, rights, preferences and
limitations of any series of preferred shares theretofore established, no shares of
which have been issued.
The rights conferred upon the holder of any pre-existing shares in the share capital
of the Company shall be deemed not to be varied by the creation, issue and allotment
of shares with preferred or other rights in accordance with these articles.
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(f)
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No dividend shall be declared and set apart for payment on any series of
preferred shares in respect of any Dividend Period unless all dividends have been paid,
or declared and set apart for payment, in full on all preferred shares of each other
series entitled to cumulative dividends at the time outstanding that rank senior or
equally as to dividends with the series in question (
Senior Preferred Shares
) and
there shall likewise be or have been paid, or declared and set apart for payment, on
all Senior
Preferred Shares, dividends rateably in accordance with the sums that would be
payable on such preferred shares.
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(g)
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If, upon the winding up of the Company, the assets of the Company distributable
among the holders of any one or more series of preferred shares that (a) are entitled
to a preference over the holders of the ordinary shares upon such winding up, and (b)
rank equally in connection with any such distribution, shall be insufficient to pay in
full the preferential amount to which the holders of such preferred shares shall be
entitled, then such assets, or the proceeds thereof, shall be distributed among the
holders of each such series of preferred shares rateably in accordance with the sums
that would otherwise have been payable on such distribution if all sums payable were
discharged in full.
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(h)
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An ordinary share shall be deemed to be a Redeemable Share on, and from the
time of, the existence or creation of an agreement, transaction or trade between the
Company and any third party pursuant to which the Company acquires or will acquire
ordinary shares, or an interest in ordinary shares, from the relevant third party. In
these circumstances, the acquisition of such shares, or an interest in such shares, by
the Company shall constitute the redemption of a Redeemable Share in accordance with
Part XI of the 1990 Act.
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4.
|
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Adjustment of voting power
|
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(a)
|
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The voting power of all shares is hereby adjusted (and shall be automatically
adjusted in the future) to the extent necessary so that there is no 9.5% U.S.
Shareholder. The Board shall implement the foregoing in the manner provided herein;
provided, however, that the foregoing provision and the remainder of this article 4
shall not apply in the event that one person or 13D Group beneficially owns (as used in
Rule 13d-3 promulgated under the Exchange Act) greater than 75% of the voting power or
value of the issued shares of the Company; provided further, that such adjustment shall
not apply to Fox Paine or any 13D Group in which Fox Paine participates.
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(i)
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the Board shall from time to time, including prior to any time
at which a vote of shareholders is taken, take all reasonable steps necessary
to ascertain, including those specified in article 5, through communications
with shareholders or otherwise, whether there exists, or will exist at the time
any vote of shareholders is taken, a Tentative 9.5% U.S. Shareholder;
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(ii)
|
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in the event that a Tentative 9.5% U.S. Shareholder exists, the
aggregate votes conferred by shares held by a shareholder and treated as
Controlled Shares of that Tentative 9.5% U.S. Shareholder shall be reduced to
the extent necessary such that the Controlled Shares of the Tentative 9.5% U.S.
Shareholder will constitute less than 9.5% of the voting power of all issued
shares. In applying the previous sentence where shares held by more than one
shareholder are treated as Controlled Shares of such Tentative 9.5% U.S.
Shareholder, the reduction in votes shall apply to such shareholders in
descending order according to their respective Attribution Percentages;
provided that, in the event of a tie, the reduction shall apply
pro
rata
to the shareholders. The votes of shareholders owning no shares
treated as Controlled Shares of any Tentative 9.5% U.S. Shareholder shall, in
the aggregate, be increased by the same number of votes subject to reduction as
described above. Such increase shall apply to all such shareholders in
proportion to their voting power at that time; provided that such increase
shall be limited to the extent necessary to avoid causing any U.S. Person to be
a 9.5% U.S. Shareholder. The adjustments of voting power described in
this article 4 shall apply repeatedly until there is no 9.5% U.S.
Shareholder. The Board may deviate from any of the principles described in
this article 4 and determine that shares held by a shareholder shall carry
different voting rights as it determines appropriate (A) to avoid the
existence of any 9.5% U.S. Shareholder or (B) to avoid adverse tax, legal or
regulatory consequences to the Company, any subsidiary of the Company, or
any other shareholder or its Affiliates. For the avoidance of doubt, in
applying the provisions of this article 4, a share may carry a fraction of a
vote.
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(b)
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In addition to the provisions of article 4(a), shares shall not carry any right
to vote to the extent that the Board determines, in its sole and absolute discretion,
that it is necessary that such shares should not carry the right to vote in order to
avoid adverse tax, legal or regulatory consequences to the Company, any subsidiary of
the Company, or any other direct or indirect holder of shares or its Affiliates;
provided
that no adjustment pursuant to this sentence shall cause any person to
become a 9.5% U.S. Shareholder.
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(c)
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Prior to any date on which shareholders shall vote on any matter, the Board
shall:
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(i)
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retain the services of an internationally recognised accounting
firm or organization with comparable professional capabilities in order to
assist the Company in applying the principles of this article 4;
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(ii)
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obtain from such firm or organisation a statement describing
the information obtained and procedures followed and setting forth the
determinations made with respect to this article 4; and,
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(iii)
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notify each shareholder of the voting power conferred by its
shares determined in accordance with this article 4.
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(d)
|
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Any determination by the Board as to any adjustments to voting power of any
share made pursuant to this article 4 shall be final and binding.
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5.
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Provision of certain information
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(a)
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The Board shall have the authority to request from any direct or indirect
holder of shares, and such holder shall provide, such information as the Board may
reasonably request for the purpose of determining whether any holders voting rights
are to be adjusted. If such holder fails to respond to such a request, or submits
incomplete or inaccurate information in response to such a request, the Board may in
its sole and absolute discretion determine that such holders shares shall carry no
voting rights, in which case such shares shall not carry any voting rights until
otherwise determined by the Board in its sole and absolute discretion.
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(b)
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Any direct or indirect holder of shares shall give notice to the Company within
ten days (10) following the date that such holder acquires actual knowledge that it is
the owner of Controlled Shares of 9.5% or more of the voting power of all issued and
outstanding shares.
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(c)
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Notwithstanding the foregoing, no shareholder shall be liable to any other
shareholder or the Company for any losses or damages resulting from such holders
failure to respond to, or submission of incomplete or inaccurate information in
response to, a request under paragraph (a) of this article or from such shareholders
failure to give notice under paragraph (b) of this article.
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(d)
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Any information provided by any shareholder to the Company pursuant to this
article 5 or for purposes of making the analysis required by article 4, 8, 17(g) or 25,
shall be deemed confidential information (the
Confidential Information
) and shall
be used by the Company solely for the purposes contemplated by such articles (except as
may be required otherwise by applicable law or regulation). The Company shall hold such
Confidential Information in strict confidence and shall not disclose any Confidential
Information that it receives, except: (i) to the U.S. Internal Revenue Service (the
Service
) if and to the extent the Confidential Information is required by the
Service; (ii) to any outside legal advisers or accounting firm engaged by the Company
to make determinations regarding the relevant articles; or (iii) to officers, employees
or outside advisers of the Company, for the purposes set forth in article 5(e) or (iv)
as otherwise required by applicable law or regulation.
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(e)
|
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The Company shall take all measures practicable to ensure the continued
confidentiality of the Confidential Information and shall grant the persons referred to
in article 5(d)(ii) or (iii) access to the Confidential Information only to the extent
necessary to allow them to assist the Company in any analysis required by article 4, 8,
17(g) or 25 or to determine whether the Company would realise any income that would be
included in the income of any shareholder (or any interest holder, whether direct or
indirect, of any shareholder) by operation of Section 953(c) of the Code. Prior to
granting access to the Confidential Information to such persons or to any officer or
employee as set forth below, the Company shall inform them of its confidential nature
and of the provisions of this article 5 and shall require them to abide by all the
provisions of this article 5. The Company shall not disclose the Confidential
Information to any Director (other than a Director that is also a senior executive
except as required by law or regulation, upon request to the Company).
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(f)
|
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For the avoidance of doubt, the Company shall be permitted to disclose to the
shareholders and others the relative voting percentages of the shareholders after
application of article 4. At the written request of a shareholder, the Confidential
Information of such shareholder shall be destroyed or returned to such shareholder
after the later to occur of:
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(i)
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such shareholder no longer being a shareholder; or
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(ii)
|
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the expiration of the applicable statute of limitations with
respect to any Confidential Information obtained for purposes of engaging in
any tax-related analysis.
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(g)
|
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The Company shall: (i) notify a shareholder immediately of the existence, terms
and circumstances surrounding any request made to the Company to disclose any
Confidential Information provided by or with respect to such shareholder and, prior to
such disclosure, shall permit such shareholder a reasonable period of time to seek a
protective order or other appropriate remedy or waive compliance with the provisions of
this article 5; and (ii) if, in the absence of a protective order or waiver, such
disclosure is required in the opinion of legal advisers to the Company, the Company
shall make such disclosure without liability hereunder; provided that the Company shall
furnish only that portion of the Confidential Information that is legally required,
shall give such shareholder notice of the information to be disclosed as far in advance
of its disclosure as practicable and, upon the request of such shareholder and at its
expense, shall use reasonable efforts to ensure that confidential treatment will be
accorded to all such disclosed information.
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6.
|
|
Subject to the provisions of Part XI of the 1990 Act and the other provisions of this
article, the Company may:
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|
(a)
|
|
pursuant to Section 207 of the 1990 Act, issue any shares of the Company which
are to be redeemed or are liable to be redeemed at the option of the Company or the
member on such terms and in such manner as may be determined by the Company in general
meeting (by Special Resolution) on the recommendation of the Directors;
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(b)
|
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redeem shares of the Company on such terms as may be contained in, or be
determined pursuant to the provisions of, these articles. Subject as aforesaid, the
Company may cancel any shares so redeemed or may hold them as treasury shares and
re-issue such treasury shares as shares of any class or classes or cancel them;
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(c)
|
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subject to and in accordance with the provisions of the Acts and without
prejudice to any relevant special rights attached to any class of shares, pursuant to
Section 211 of the 1990 Act, purchase any of its own shares (including any Redeemable
Shares and without any obligation to purchase on any
pro rata
basis as between members
or members of the same class) and may cancel any shares so purchased or hold them as
treasury shares (as defined in Section 209 of the 1990 Act) and may reissue any such
shares as shares of any class or classes or cancel them; or
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(d)
|
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pursuant to Section 210 of the 1990 Act, convert any of its shares into
Redeemable Shares provided that the total number of shares which shall be redeemable
pursuant to this authority shall not exceed the limit in Section 210(4) of the 1990
Act.
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provided, in each case, that such issuance, repurchase or redemption shall not be made if,
in the Boards sole and absolute discretion it would result in a non-
de minimis
adverse tax,
legal or regulatory consequence to the Company, any of its subsidiaries or any direct or
indirect holder of shares or its Affiliates.
7.
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|
Redemption pursuant to the terms of a Business Combination
|
|
(a)
|
|
Subject to Part XI of the 1990 Act and pursuant to and in accordance with
Section 210 of the 1990 Act, the ordinary shares may be converted into Redeemable
Shares and redeemed by the Company (or as may otherwise be determined by the Company in
a general meeting by ordinary resolution) upon approval by the Board of, and an
ordinary resolution of the shareholders adopting, any agreement entered into by the
Company relating to a Business Combination Transaction involving the Company.
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|
(b)
|
|
The manner and terms of such redemption pursuant to this article 7, including
the consideration to be received by the holders of ordinary shares in such redemption,
which consideration may consist of cash, securities or other property, shall be set
forth in the agreement relating to a Business Combination Transaction approved by the
Board and an ordinary resolution of the shareholders.
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|
(c)
|
|
The consideration to be received by all holders of ordinary shares shall be
identical regardless of the class of ordinary shares held by such holders.
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8.
|
|
Required sale of shares
|
|
(a)
|
|
If the Board reasonably determines that any shareholders ownership of shares
(after giving effect to any voting limitations set forth in article 4) will result in a
non-
de minimis
adverse tax, legal or regulatory consequence to the Company, any of its
subsidiaries or any other direct or indirect holder of shares in the Company or its
Affiliates, the Company shall have the option but not the obligation to:
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|
(i)
|
|
redeem; or
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|
|
(ii)
|
|
repurchase; or
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|
|
(iii)
|
|
assign to a third party the right to purchase;
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the minimum number of shares held by such person that is necessary to eliminate such
non-
de minimis
adverse tax, legal or regulatory consequence at a price equal to the
Fair Value of such shares.
|
(b)
|
|
In the event that the Company determines, pursuant to this article 8, to
redeem, repurchase or assign to a third party the right to purchase shares of a
shareholder (a
Required Seller
), the Company shall provide a Purchase Notice to such
shareholder. The Company may revoke the Purchase Notice at any time prior to the
closing of such sale or redemption.
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|
(c)
|
|
The closing of a sale or redemption of shares pursuant to this article 8 (a
Required Sale
) shall take place at a location and date selected by the Company and
set forth in the Purchase Notice which shall be delivered at least five (5) Business
Days prior to the closing date specified therein; provided, however, that such closing
date shall be no earlier than the later of: (i) five (5) Business Days after a Purchase
Notice is given with respect to a purchase or redemption of shares; and (ii) five (5)
Business Days after the date of determination of Appraised Value in the event that a
shareholder objects to the Boards determination of Fair Value contained in a Purchase
Notice. Payment of the Purchase Price shall be by wire transfer at such closing.
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|
(d)
|
|
The Company shall pay the costs and fees of such appraiser, and the decision of
the appraiser making such determination of Appraised Value shall be final and binding
on the Company and the shareholder. Such Appraised Value shall be determined as a pro
rata portion of the value of the Company taken as a whole, based on the higher of: (a)
the value derived from a hypothetical sale of the Company as a going concern by a
willing seller to a willing buyer (neither acting under any compulsion); and (b) the
liquidation value of the Company. No discount shall be applied on account of: (i) the
purchased shares representing a minority interest; (ii) any lack of liquidity of the
purchased shares; (iii) the fact that the purchased shares may constitute restricted
securities for securities law purposes; (iv) the existence of the Companys right, as
set forth in these articles and any shareholders agreement, to require shareholders to
sell shares to the Company or to one or more third parties designated by the Company;
or (v) the existence of the possibility of a reduction in voting power pursuant to
these articles.
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|
(e)
|
|
Notwithstanding the provisions of this article 8, no shareholder shall be
permitted to sell shares in a Required Sale to the extent that such sale would (after
giving effect to any adjustment to voting power imposed in accordance with article 4)
cause a non-
de minimis
adverse tax, legal or regulatory consequences to the Company,
any of its subsidiaries, any other shareholder or its Affiliates.
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9.
|
|
The Company may make a payment in respect of the redemption or repurchase of its own shares
in any manner permitted by the Acts.
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10.
|
|
The holder of the shares being repurchased shall be bound to deliver up to the Company at its
registered office or such other place as the Board shall specify, the certificate(s) (if any)
thereof for cancellation and thereupon the Company shall pay to such holder the purchase or
redemption monies or consideration in respect thereof.
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11.
|
|
Any share in respect of which a Purchase Notice has been given shall not be entitled to
participate in the profits of the Company or to vote in any Company meeting in respect of the
period after the date specified as the closing date in the Purchase Notice.
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12.
|
|
Except as provided in these articles or the terms of any preferred shares, the redemption or
repurchase of any share shall not be deemed to give rise to the redemption or repurchase of
any other share.
|
13.
|
|
The Board may when making payments in respect of redemption or repurchase of shares, if
authorised by the terms of issue of the shares being redeemed or repurchased or with the
agreement of the holder of such shares, make such payment either in cash or in
specie
.
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14.
|
|
Without prejudice to any special rights previously conferred on the holders of any existing
shares or class of shares or to the authority conferred on the Directors pursuant to article 3
to issue the preferred shares, any share in the Company may be issued with such preferred or
deferred or other special rights or such restrictions, whether in regard to dividend, voting,
return of capital or otherwise, as the Company may from time to time by ordinary resolution
determine.
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|
(a)
|
|
Without prejudice to the authority conferred on the Directors pursuant to
article 17 to issue shares in the capital of the Company, if at any time the share
capital is divided into different classes of shares the rights attached to any class or
series may, whether or not the Company is being wound up, be varied or abrogated with
the consent in writing of the holders of 75% of the shares then in issue of that class,
or with the sanction of a Special Resolution passed at a separate general meeting of
the holders of the shares of that class or series. To every such meeting the provisions
of article 43 shall apply.
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|
(b)
|
|
The redemption or purchase of preferred or ordinary shares or any class or
series of preferred shares or ordinary shares shall not constitute a variation of
rights of the preferred or ordinary holders.
|
|
(c)
|
|
The issue, redemption or purchase of any of the 100,000,000 preferred shares of
US$0.0001 per share shall not constitute a variation of the rights of the holders of
ordinary shares.
|
16.
|
|
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.
|
|
(a)
|
|
Subject to the provisions of these articles relating to new shares, the shares
shall be at the disposal of the Directors, and they may (subject to the provisions of
the Acts) allot, grant options or warrants over or otherwise dispose of them to such
persons, on such terms and conditions and at such times as they may consider to be in
the best interests of the Company and its members.
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|
(b)
|
|
Subject to any requirement to obtain the approval of members under any laws,
regulations or the rules of any stock exchange to which the Company is subject, the
Board is authorised, from time to time, in its discretion, to grant such persons, for
such periods and upon such terms as the Board deems advisable, options or warrants
to purchase or subscribe for such number of shares of any class or classes as the
Board may deem advisable, and to cause warrants or other appropriate instruments
evidencing such options to be issued, provided that no such issuance of options or
warrants may be made if it will cause, in the Boards sole and absolute discretion,
a non-
de-minimis
adverse tax, legal or regulatory consequence to the Company, any of
its subsidiaries or any direct holder of shares or its Affiliates. The Company may
grant or issue options or warrants to bearer.
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|
(c)
|
|
The Directors are, for the purposes of Section 20 of the 1983 Act, generally
and unconditionally authorised to exercise all powers of the Company to allot and issue
relevant securities (as defined by the said Section 20) up to the amount of Companys
authorised share capital as at the date of adoption of these articles and to allot and
issue any shares purchased by the Company pursuant to the provisions of Part XI of the
1990 Act and held as treasury shares and this authority shall expire five years from
the date of adoption of these articles of association.
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|
(d)
|
|
The Directors are hereby empowered pursuant to sections 23 and 24(1) of the
1983 Act to allot equity securities within the meaning of the said section 23 for cash
pursuant to the authority conferred by paragraph (c) of this article as if section
23(1) of the said 1983 Act did not apply to any such allotment. The Company may before
the expiry of such authority make an offer or agreement which would or might require
equity securities to be allotted after such expiry and the Directors may allot equity
securities in pursuance of such an offer or agreement as if the power conferred by this
paragraph (d) had not expired.
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|
(e)
|
|
All shares shall be issued fully paid as to their nominal value and any premium
determined by the Board at the time of issue and shall be non-assessable.
|
|
(f)
|
|
The Company may issue share warrants to bearer pursuant to section 88 of the
Act.
|
|
(g)
|
|
Notwithstanding the foregoing or other provisions of these articles, the
Company shall not issue any shares or grant options or warrants in a manner that the
Board, in its sole and absolute discretion, determines may result by reason of such
issuance or grant in a non-
de minimis
adverse tax, legal or regulatory consequence to
the Company, any of its subsidiaries or any direct or indirect holder of its shares or
its Affiliates.
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|
(h)
|
|
Nothing in these articles shall preclude the Directors from recognising a
renunciation of the allotment of any shares by any allottee in favour of some other
person.
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18.
|
|
Subject to the Acts, the Company may pay commission to any person in consideration of a
person subscribing or agreeing to subscribe, whether absolutely or conditionally, for any
shares in the Company or procuring or agreeing to procure subscriptions, whether absolute or
conditional, for any shares in the Company on such terms and subject to such conditions as the
Directors may determine, including, without limitation, by paying cash or allotting and
issuing fully or partly paid shares or any combination of the two. The Company may also, on
any issue of shares, pay such brokerage as may be lawful.
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19.
|
|
Except as required by law, no person shall be recognised by the Company as holding any share
upon any trust, and the Company shall not be bound by or be compelled in any way to recognise
(even when having notice thereof) any equitable, contingent, future or partial interest in any
share or any interest in any fractional part of a share or (except only as by these articles
or by law otherwise provided) any other rights in respect of any share except an absolute
right to the entirety thereof in the holder.
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20.
|
|
Every person the name of which is entered as a shareholder in the Register of Members shall,
without payment, be entitled to a certificate in the form determined by the Board. Such
certificate may be under the seal. All certificates shall specify the share or shares held by
that person and the amount paid up thereon; provided that in respect of a share or shares held
jointly by several persons the Company shall not be bound to issue more than one certificate,
and delivery of a certificate for a share to one of several joint holders shall be sufficient
delivery to all.
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21.
|
|
If a share certificate is defaced, lost or destroyed it may be renewed on such terms, if any,
as to evidence and indemnity as the Board may think fit.
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22.
|
|
The Company shall not give, whether directly or indirectly and whether by means of a loan,
guarantee, the provision of security or otherwise, any financial assistance for the purpose of
or in connection with a purchase or subscription made or to be made by any person of or for
any shares in the Company or in its holding company, except as permitted by section 60 of the
Act.
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TRANSFER OF SHARES
|
(a)
|
|
The instrument of transfer of any share may be executed for and on behalf of
the transferor by the Secretary, and the Secretary shall be and, if so required by the
Board, the transferee deemed to have been irrevocably appointed agent for the
transferor and/or transferee of such share or shares with full power to execute,
complete and deliver in the name of and on behalf of the transferor of such share or
shares all such transfers of shares held by the members in the share capital of the
Company. The instrument of transfer shall be accompanied by the certificate, if any, of
the shares to which it relates and such other evidence as the Board may reasonably
require to show the right of the transferor to make the transfer. Any document which
records the name of the transferor, the name of the transferee, the class and number of
shares agreed to be transferred and the date of the agreement to transfer shares,
shall, once executed by the transferor or the Secretary as agent for the transferor, be
deemed to be a proper instrument of transfer for the purposes of Section 81 of the Act.
The transferor shall be deemed to remain the holder of the share until the name of the
transferee is entered on the Register in respect thereof, and neither the title of the
transferee nor the title of the transferor shall be affected by any irregularity or
invalidity in the proceedings in reference to the sale should the Directors so
determine.
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|
(b)
|
|
The Company, at its absolute discretion, may, or may procure that a subsidiary
of the Company shall, pay Irish stamp duty arising on a transfer of shares on behalf of
the transferee of such shares of the Company. If stamp duty resulting from the transfer
of shares in the Company which would otherwise be payable by the transferee is paid by
the Company or any subsidiary of the Company on behalf of the transferee, then in those
circumstances, the Company shall, on its behalf or on behalf of its subsidiary (as the
case may be), be entitled to:
|
|
(i)
|
|
seek reimbursement of the stamp duty from the transferor or
transferee (at its discretion);
|
|
(ii)
|
|
set-off the stamp duty against any dividends payable to the
transferor or transferee (at its discretion); and,
|
|
(iii)
|
|
claim a first and permanent lien on the shares on which stamp
duty has been paid by the Company or its subsidiary for the amount of stamp
duty paid. The Companys lien shall extend to all dividends paid on those
shares.
|
|
(c)
|
|
Notwithstanding the provisions of these articles and subject to any regulations
made under Section 239 of the 1990 Act, title to any shares in the Company may also be
evidenced and transferred without a written instrument in accordance with Section 239
of the 1990 Act or any regulations made thereunder. The Directors shall have power to
permit any class of shares to be held in uncertificated form and to implement any
arrangements they think fit for such evidencing and transfer which accord with such
regulations and in particular shall, where appropriate, be entitled to disapply or
modify all or part of the provisions in these articles with respect to the requirement
for written instruments of transfer and share certificates (if any), in order to give
effect to such regulations.
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24.
|
|
Subject to such of the restrictions of these articles and to such of the conditions of issue
of any share warrants as may be applicable, the shares of any member and any share warrant may
be transferred by instrument in writing in any usual or common form or any other form which
the Directors, in their sole and absolute discretion, may approve.
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25.
|
|
The Directors may decline to approve or register any transfer of shares if it appears to the
Directors, in their sole and absolute discretion, after taking into account, among other
things, the limitation on voting rights contained in article 4, that any non-
de minimis
adverse tax, regulatory or legal consequences to the Company, any subsidiary of the Company,
or any other direct or indirect holder of shares or its Affiliates would result from such
transfer (including if such consequence arises as a result of any U.S. Person owning
Controlled Shares constituting 9.5% or more of the value of the Company or the voting shares
of the Company (but subject to the provisions of article 4) or pursuant to article
136(d)(iv)). The Directors shall have the authority to request from any direct or indirect
holder of shares, and such holder shall provide, such information as the Directors may
reasonably request for the purpose of determining whether any transfer should be permitted.
If such information is not provided, the Directors may decline to approve or register such
transfer.
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26.
|
|
Subject to any applicable requirements of any Exchange on which the shares are listed or
traded, the Directors:
|
|
(a)
|
|
may decline to approve or to register any transfer of any share unless: (i)
such share has been registered under the U.S. Securities Act of 1933, as amended from
time to time; or, (ii) a written opinion from counsel acceptable to the Company shall
not have been obtained to the effect that registration of such transfer under the U.S.
Securities Act of 1933, as amended from time to time, is not required; and,
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|
(b)
|
|
shall decline to approve or to register any transfer of any share if the
transferee shall not have been approved by applicable governmental authorities if such
approval is required.
|
27.
|
|
The Directors may decline to recognise any instrument of transfer unless the instrument of
transfer is in respect of one class of share only.
|
28.
|
|
If the Directors refuse to register a transfer they shall, within ten (10) business days
after the date on which the transfer was lodged with the Company, send to the transferor and
transferee notice of the refusal.
|
29.
|
|
All instruments of transfer shall upon their being lodged with the Company remain the
property of the Company and the Company shall be entitled to retain them, but any
instruments of transfer that the Board declines to register shall (except in any case of
fraud) be returned to the person depositing the same.
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TRANSMISSION OF SHARES
30.
|
|
In the case of the death of a member, the survivor or survivors or the legal personal
representative of the deceased survivor where the deceased was a joint holder, and the legal
personal representatives of the deceased where he was a sole holder, shall be the only persons
recognised by the Company as having any title to his interest in the shares: but nothing
herein contained shall release the estate of a deceased joint holder from any liability in
respect of any share which had been jointly held by him with other persons.
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31.
|
|
Any person becoming entitled to a share in consequence of the death or bankruptcy of a member
shall, upon such evidence being produced as may from time to time properly be required by the
Directors and subject as herein provided, elect either to be registered himself as holder of
the share or to have some person nominated by him registered as the transferee thereof, but
the Directors shall, in either case, have the same right to decline or suspend registration as
they would have had in the case of a transfer of the shares by that member before his death or
bankruptcy, as the case may be.
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32.
|
|
If the person so becoming entitled elects to be registered himself, he shall deliver or send
to the Company a notice in writing signed by him stating that he so elects. If he elects to
have another person registered, he shall testify his election by executing to that person a
transfer of the share. All the limitations, restrictions and provisions of these regulations
relating to the right to transfer and the registration of transfers of shares shall be
applicable to any such notice or transfer as aforesaid as if the death or bankruptcy of the
member had not occurred and the notice of transfer were a transfer signed by that member.
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33.
|
|
A person becoming entitled to a share by reason of the death or bankruptcy of the holder
shall be entitled to the same dividends and other advantages to which he would be entitled if
he were the registered holder of the share, except that he shall not, before being registered
as a member in respect of the share, be entitled in respect of it to exercise any right
conferred by membership in relation to the meetings of the Company, including voting.
|
ALTERATION OF CAPITAL
34.
|
|
The Company may from time to time by ordinary resolution increase the authorised share
capital by such sum, to be divided into shares of such amount, as the resolution shall
prescribe.
|
35.
|
|
The Company may by ordinary resolution:
|
|
(a)
|
|
consolidate and divide all or any of its share capital into shares of larger
amount than its existing shares:
|
|
(b)
|
|
convert all or any of its paid up shares into stock and reconvert that stock
into paid up shares in any denomination;
|
|
(c)
|
|
subdivide its existing shares, or any of them, into shares of smaller amount
than is fixed by the memorandum of association subject, nevertheless, to section
68(1)(d) of the Act: or
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|
(d)
|
|
cancel any shares which, at the date of the passing of the resolution, have not
been taken or agreed to be taken by any person and reduce the amount of its authorised
share capital by the amount of the shares so cancelled.
|
36.
|
|
Subject to article 37, the Company may by Special Resolution reduce its share capital, any
capital redemption reserve fund or any share premium account in any manner and with and
subject to any incident authorised, and consent required, by law.
|
37.
|
|
The Company shall not increase, reduce or alter its share capital, if such action, in the
Boards sole and absolute discretion, would cause a non-
de minimis
adverse tax, legal or
regulatory consequence to the Company, any of its subsidiaries or any direct or indirect
shareholder or its Affiliates.
|
38.
|
|
Whenever as a result of an alteration or reorganisation of the share capital of the Company
any members would become entitled to fractions of a share, the Directors may, on behalf of
those members, sell the shares representing the fractions for the best price reasonably
obtainable to any person and distribute the net proceeds of sale (after deduction of, without
limitation, brokerage commissions and other sale expenses)in due proportion among those
members, and the Directors may authorise any person to execute an instrument of transfer of
the shares to, or in accordance with the directions of, the purchaser. The transferee shall
not be bound to see to the application of the purchase money nor shall his title to the shares
be affected by any irregularity in or invalidity of the proceedings in reference to the sale.
|
CLOSING REGISTER OF MEMBERS OR FIXING RECORD DATE
39.
|
|
For the purpose of determining those members that are entitled to receive notice of, attend
or vote at any general meeting or any adjournment thereof, or those members that are entitled
to receive payment of any dividend, or in order to make a determination as to who is a member
for any other purpose, the Board may provide that the Register shall be closed for transfers
for a stated period, which period shall not exceed in any case thirty (30) days in each year.
If the Register shall be so closed for the purpose of determining those members that are
entitled to receive notice of, attend or vote at any general meeting the Register shall be so
closed for at least ten (10) days immediately preceding such meeting and the record date for
such determination shall be the date of the closure of the Register.
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40.
|
|
In lieu of or apart from closing the Register, (a) the Board may fix in advance a date as the
record date for any such determination of those members that are entitled to receive notice
of, attend or vote at a meeting of the members and (b) for the purpose of determining those
members that are entitled to receive payment of any dividend the Board may, at or within
ninety (90) days prior to the date of declaration of such dividend fix a subsequent date as
the record date for such determination.
|
41.
|
|
If the Register is not so closed and no record date is fixed for the determination of those
members entitled to receive notice of, attend or vote at a general meeting or those members
that are entitled to receive payment of a dividend, the tenth (10
th
) day following
the date on which notice of the meeting is posted or the date on which the resolution of the
Board declaring such dividend is adopted, as the case may be, shall be the record date for
such determination of members. When a determination of those members that are entitled to
receive notice of, attend or vote at a general meeting has been made as provided in these
articles, such determination shall apply to any adjournment thereof.
|
GENERAL MEETINGS
42.
|
|
All general meetings other than annual general meetings shall be called extraordinary general
meetings.
|
|
(a)
|
|
The Company shall in each year hold a general meeting as its annual general
meeting in addition to any other meeting in that year, and shall specify the meeting as
such in
notices calling it. Not more than fifteen months shall elapse between the date of
one annual general meeting of the Company and that of the next. Subject to section
140 of the Act, all general meetings of the Company may be held outside Ireland.
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|
(b)
|
|
The Board may whenever it thinks fit convene an extraordinary general meeting.
|
|
(c)
|
|
Extraordinary general meetings shall also be convened on such requisition, or
in default by such requisitionists, as provided in section 132 of the Act.
|
43.
|
|
All provisions of these articles relating to general meetings of the Company shall,
mutatis
mutandis
, apply to every separate general meeting of the holders of any class of shares in the
capital of the Company, except that the necessary quorum shall be at least one person holding
or representing at least one-third of the voting power of the issued shares of that class.
|
44.
|
|
A Director and the auditor shall be entitled, notwithstanding that he is not a member, to
attend and speak at any general meeting and at any separate meeting of the holders of any
class of shares in the Company.
|
45.
|
|
The Board may, in its absolute discretion, authorise the Secretary to postpone any general
meeting called in accordance with the provisions of these articles (other than a meeting
requisitioned under article 42(b) of these articles or the postponement of which would be
contrary to the Acts, law or a court order pursuant to the Acts) if the Board considers that,
for any reason, it is impractical or unreasonable to hold the general meeting, 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 articles.
|
NOTICE OF GENERAL MEETINGS
46.
|
(a)
|
|
Subject to the provisions of the Acts allowing a general meeting to be called
by shorter notice, an annual general meeting, and an extraordinary general meeting
called for the passing of a special resolution, shall be called by not less than
twenty-one Clear Days notice and all other extraordinary general meetings shall be
called by not less than fourteen Clear Days notice.
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|
(b)
|
|
The accidental omission to give notice of a meeting to, or the non-receipt of
notice of a meeting by, any person entitled to receive notice shall not invalidate the
proceedings at the meeting.
|
|
(c)
|
|
There shall appear with reasonable prominence in every notice of general
meetings of the Company a statement that a shareholder entitled to attend and vote is
entitled to appoint one or more proxies to attend and vote instead of him and that
proxy need not be a shareholder.
|
|
(d)
|
|
In cases where instruments of proxy are sent out in notices, the accidental
omission to send such instrument of proxy to, or non-receipt of such instrument of
proxy by, any person entitled to receive notice shall not invalidate any resolution
passed or any proceeding at that meeting.
|
PROCEEDINGS AT GENERAL MEETINGS
47.
|
|
All business shall be deemed special that is transacted at an extraordinary general meeting,
and also all that is transacted at an annual general meeting, with the exception of declaring
a dividend, the consideration of the accounts, balance sheets and the reports of the Directors
and auditors, the election of Directors, the re-appointment of the retiring auditors and the
fixing of the remuneration of the auditors. No special business shall be transacted at a
general meeting without the consent of all the shareholders entitled to received notice of
that meeting unless notice of such special business has been given in the notice convening
that meeting.
|
48.
|
|
No business shall be transacted at any general meeting unless a quorum of shareholders is
present at the time when the meeting proceeds to business. Save as otherwise provided by
these articles, one or more shareholders holding shares having at least a majority of the
votes eligible to be cast at such general meeting, present in person or by proxy, shall be a
quorum. Any meeting duly called at which a quorum is not present shall be adjourned and the
Company shall provide notice pursuant to article 46 in the event that such meeting is to be
reconvened.
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49.
|
|
If the Board wishes to make this facility available to shareholders for a specific or all
general meetings of these Company, a shareholder may participate in any general meeting of the
Company, by means of a telephone, video, electronic or similar communication equipment by way
of which all persons participating in such meeting can communicate with each other
simultaneously and instantaneously and such participation shall be deemed to constitute
presence in person at the meeting.
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50.
|
|
The chairman, if any, of the Board, and, if the chairman is not present, the vice chairman or
such other officer or person as the Board shall designate, shall preside as chairman at every
general meeting of the Company.
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51.
|
|
The chairman may, with the consent of a majority of the members, adjourn a general meeting
from time to time (and shall if so directed) and from place to place, but no business shall be
transacted at any adjourned meeting other than the business left unfinished at the meeting
from which the adjournment took place. When a meeting is adjourned for fourteen (14) days or
more, notice of the adjourned meeting shall be given as in the case of an original meeting.
Save as aforesaid it shall not be necessary to give any notice of an adjournment or of the
business to be transacted at an adjourned meeting.
|
52.
|
|
At any general meeting a resolution put to the vote of the meeting shall be decided on a poll
which shall be taken in such manner as the chairman directs.
|
53.
|
|
In the case of an equality of votes, the chairman of the meeting shall be entitled to a
second or casting vote.
|
54.
|
|
If authorised by the Board, any vote taken by written ballot may be satisfied by a ballot
submitted by electronic transmission; provided that any such electronic transmission must
either set forth or be submitted with information from which it can be determined that the
electronic transmission was authorised by the shareholder or proxy.
|
55.
|
|
The Board may, and at any general meeting, the chairman of such meeting may make any
arrangement and impose any requirement or restriction it or he considers appropriate to ensure
the security of a general meeting including, without limitation, requirements for evidence of
identity to be produced by those attending the meeting, the searching of their personal
property and the restriction of items that may be taken into the meeting place. The Board
and, at any general meeting, the chairman of such meeting are entitled to refuse entry to a
person who refuses to comply with such arrangements, requirements or restrictions.
|
VOTES OF MEMBERS
56.
|
|
Subject to any rights and restrictions for the time being attached to any class or classes of
shares and the provisions of article 4, every member present in person and every person
representing a member by proxy at any general meeting shall have such number of votes with
respect to such shares that such holder or the person represented by proxy holds is entitled
by the terms of issue of such shares.
|
57.
|
|
In the case of joint holders of shares, the vote of the senior holder that tenders a vote
whether in person or by proxy shall be accepted to the exclusion of the votes of the joint
holders and for this purpose seniority shall be determined by the order in which the names
stand in the Register.
|
58.
|
|
A member of unsound mind, or in respect of whom an order has been made by any court having
jurisdiction (whether in Ireland or elsewhere) in matters concerning mental disorder, may
vote, by his committee, receiver, guardian or other person appointed by that court, and any
such committee, receiver or guardian or other person may vote by proxy on a poll. Evidence to
the satisfaction of the Directors of the authority of the person claiming to exercise the
right to vote shall be received at the Office or at such other address as is specified in
accordance with these articles for the receipt of appointments of proxy, not less than
forty-eight hours before the time appointed for holding the meeting or adjourned meeting at
which the right to vote is to be exercised and in default the right to vote shall not be
exercisable.
|
59.
|
|
No objection shall be raised to the qualification of any voter except at the meeting or
adjourned meeting at which the vote objected to is given or tendered, and every vote not
disallowed at such meeting shall be valid for all purposes. Any such objection made in due
time shall be referred to the chairman of the meeting, whose decision shall be final and
conclusive.
|
60.
|
|
Votes may be given either personally or by proxy.
|
|
(a)
|
|
Every member entitled to attend and vote at a general meeting may appoint a
proxy to attend, speak and vote on his behalf and may appoint more than one proxy to
attend, speak and vote at the same meeting. The appointment of a proxy shall be in any
form which the Directors may approve and, if required by the Company, shall be signed
by or on behalf of the appointer. In relation to written proxies, a body corporate may
sign a form of proxy under its common seal or under the hand of a duly authorised
officer thereof or in such other manner as the Directors may approve. A proxy need not
be a member of the Company. The appointment of a proxy in electronic or other form
shall only be effective in such manner as the Directors may approve.
|
|
(b)
|
|
Without limiting the foregoing, the Directors may from time to time permit
appointments of a proxy to be made by means of a telephonic, electronic or internet
communication or facility and may in a similar manner permit supplements to, or
amendments or revocations of, any such telephonic, electronic or internet communication
or facility to be made. The Directors may in addition prescribe the method of
determining the time at which any such telephonic, electronic or Internet communication
or facility is to be treated as received by the Company and in accordance with
procedures approved by the Directors that are reasonably designed to verify that such
instructions have been authorised by such shareholder. The Directors may treat any such
telephonic, electronic or Internet communication or facility which purports to be or is
expressed to be sent on behalf of a holder of a share as sufficient evidence of the
authority of the person sending that instruction to send it on behalf of that holder.
|
61.
|
|
Any body corporate or other entity which is a member of the Company may by resolution of its
directors or other governing body authorise such person as it thinks fit to act as its
representative at any meeting of the Company or of any class of members of the Company and the
person so authorised shall be entitled to exercise the same powers on behalf of the
body corporate which he represents as that body corporate could exercise if it were an
individual member of the Company. The Company may require evidence from the body corporate
of the due authorisation of such person to act as the representative of the relevant body
corporate.
|
62.
|
|
Receipt by the Company of an appointment of proxy in respect of a meeting shall not preclude
a member from attending and voting at the meeting or at any adjournment thereof. An
appointment proxy shall be valid, unless the contrary is stated therein, as well for any
adjournment of the meeting as for the meeting to which it relates.
|
63.
|
(a)
|
|
A vote given in accordance with the terms of an appointment of proxy or a
resolution authorising a representative to act on behalf of a body corporate shall be
valid notwithstanding the death or insanity of the principal, or the revocation of the
appointment of proxy or of the authority under which the proxy was appointed or of the
resolution authorising the representative to act or transfer of the share in respect of
which the proxy was appointed or the authorisation of the representative to act was
given, provided that no intimation in writing (whether in electronic form or otherwise)
of such death, insanity, revocation or transfer shall have been received by the Company
at the Office or administrative headquarters of the Company, at least one hour before
the commencement of the meeting or adjourned meeting at which the appointment of proxy
is used or at which the representative acts provided however, that where such
intimation is given in electronic form it shall have been received by the Company at
least 24 hours (or such lesser time as the Directors may specify) before the
commencement of the meeting.
|
|
(b)
|
|
The Directors may send, at the expense of the Company, by post, electronic mail
or otherwise, to the members forms for the appointment of a proxy (with or without
stamped envelopes for their return) for use at any general meeting or at any class
meeting, either in blank or nominating any one or more of the Directors or any other
persons in the alternative.
|
64.
|
|
Subject to Section 141 of the Act, a resolution in writing signed by all the members for the
time being entitled to attend and vote on such resolution at a general meeting (or being body
corporates by their duly authorised representatives) shall be as valid and effective for all
purposes as if the resolution has been passed at a general meeting of the Company duly
convened and held, and may consist of several documents in like form signed by one or more
persons, and if described as a special resolution, shall be deemed to be special resolution
within the meaning of the Act. Any such resolution shall be served on the Company.
|
APPOINTMENT, ROTATION AND REMOVAL OF DIRECTORS
65.
|
|
At every annual general meeting of the Company, all of the Directors shall retire from office
unless re-elected by ordinary resolution at the annual general meeting. A Director retiring at
a meeting shall retain office until the close or adjournment of the meeting.
|
66.
|
|
Every Director nominated for re-election by the Board shall be eligible to stand for
re-election at an annual general meeting.
|
67.
|
|
The Board may from time to time fix the maximum and minimum number of Directors to be
appointed. Unless such number is fixed as aforesaid, the number of Directors shall be seven.
|
68.
|
|
If at every annual general meeting of the Company, the number of Directors is reduced below
the minimum prescribed by the Act due to the failure of any Directors to be re-elected, then
in those circumstances, the two Directors or nominees who receive the highest number of votes
in favour of election shall be elected and shall remain Directors until such time as
additional Directors have been appointed to replace them as Directors. If, at any annual
general meeting of the Company, the number of Directors is reduced below the minimum
prescribed by the Act in any circumstances where one Director is elected, then that Director
shall hold office until the next annual general meeting and the Director or nominee which
(excluding the re-elected Director) receives the highest number of votes in favour of
election shall be elected and shall remain a Director until such time as one or more
additional Directors have been appointed to replace him or her.
|
69.
|
|
The remuneration of the Directors shall be determined by the Board.
|
70.
|
|
There shall be no shareholding qualification for Directors.
|
71.
|
|
The Company may, by ordinary resolution, of which extended notice has been given in
accordance with section 142 of the Act, remove any Director before the expiration of his
period of office notwithstanding anything in these regulations or in any agreement between the
Company and such Director. Such removal shall be without prejudice to any claim such Director
may have for damages for breach of any contract of service between him and the Company.
|
72.
|
|
The Company may, by ordinary resolution, appoint another person in place of a Director
removed from office under article 71 and without prejudice to the powers of the Directors
under article 99 the Company in general meeting by ordinary resolution may appoint any person
to be a Director either to fill a casual vacancy or as an additional Director, subject to the
maximum number of Directors set out in article 67.
|
73.
|
|
The Directors may appoint a person who is willing to act to be a Director, either to fill a
vacancy or as an additional Director, provided that the appointment does not cause the number
of Directors to exceed any number fixed by or in accordance with these articles as the maximum
number of Directors. A Director so appointed shall hold office only until the next following
annual general meeting. If not re-appointed at such annual general meeting, such Director
shall vacate office at the conclusion thereof.
|
74.
|
|
For so long as Fox Paine (and any of their successors) beneficially hold in aggregate, shares
representing twenty five percent (25%) or more of the voting power of the then issued shares,
the FPC Shareholders (as defined below) shall be entitled to:
|
|
74.1
|
|
appoint a number of Directors to the Board (
FPC Directors
) equal in aggregate
to the pro rata percentage of the voting shares beneficially held by Fox Paine (and any
of their successors) (for example, where Fox Paine (and any of their successors)
beneficially hold in aggregate shares representing forty percent (40%) of the voting
power of the then issued shares, the FPC shareholders shall be entitled to appoint
forty percent (40%) of the number of Directors), and where applicable, rounded up to
nearest whole number of Directors represented by the pro-rata percentage of voting
shares (for example, if holding 40% of the voting power of the then issued shares and
the number of Directors on the Board is seven (7), the FPC Shareholders shall be
entitled to appoint three (3) FPC Directors), provided however the Board shall contain
a sufficient number of independent directors (within the meaning of Rule 5602(a)(2)
of the Nasdaq Rules) such that the Board complies with Rule 5605(b) of the Nasdaq
Rules; and
|
|
74.2
|
|
remove any of the FPC Directors by delivery of a written notice to the Company
at its registered office.
|
Such appointment(s) and/or removal(s) shall take effect as of the date of the notice or as
of such later date, or upon occurrence of such event, as may be specified in such notice.
The Board shall take, and cause the Company to take, any and all necessary actions to
effectuate such appointment(s) and/or removal(s), including for the avoidance of doubt,
providing all notices to shareholders as may be required pursuant to any obligations of the
Company under applicable law. The Board shall not conduct any business until any FPC
Director removed in accordance with article 74.2 has been replaced with a new FPC Director
pursuant to article 75.
For the purposes of this article 74, a FPC Shareholder shall be defined as any of U.N.
Holdings (Cayman), Ltd., U.N. Holdings (Cayman) II, Ltd. and any transferee of any such
persons, provided that such transferee is Fox Paine (or any of their successors) and is not
a U.S. Person, together the FPC Shareholders.
75.
|
|
Where a FPC Director is removed pursuant to article 74.2, the FPC Shareholders may, within
such notice or in subsequent written notice, and provided that Fox Paine (and any of their
successors) beneficially hold in aggregate the necessary percentage of voting power in respect
of the then issued shares at that time to be permitted to appoint another FPC Director in
accordance with article 74.1, appoint a new FPC Director to fill such vacancy for the
remainder of the removed FPC Directors term and the Board shall take, and cause the company
to take any and all necessary actions to effectuate such appointment, including for the
avoidance of doubt, providing all notices to shareholders as may be required pursuant to any
obligations of the Company under applicable law.
|
BORROWING POWERS
76.
|
|
The Directors may exercise all the powers of the Company to borrow or raise money, and to
mortgage or charge its undertaking, property, assets and uncalled capital or any part thereof
and to issue debentures, debenture stock, notes and other securities whether outright or as
collateral security for any debt, liability or obligation of the Company or of any third
party, without any limitation as to amount.
|
POWERS AND DUTIES OF THE DIRECTORS
77.
|
|
The business of the Company shall be managed by the Directors, who may pay all expenses
incurred in promoting and registering the Company and may exercise all such powers of the
Company as are not, by the Acts or by these articles, required to be exercised by the Company
in general meeting, subject, nevertheless, to any of these articles and to the provisions of
the Acts. No resolution made by the Company in general meeting shall invalidate any prior act
of the Directors that would have been valid if that resolution had not been made.
|
78.
|
|
The Directors may from time to time and at any time by power of attorney appoint any company,
firm or person or body of persons, whether nominated directly or indirectly by the Directors,
to be the attorney or attorneys of the Company for such purposes and with such powers,
authorities and discretions (not exceeding those vested in or exercisable by the Directors
under these articles) and for such period and subject to such conditions as they may think
fit, and any such power of attorney may contain such provisions for the protection of persons
dealing with any such attorney as the Directors may think fit, and may also authorise any such
attorney to delegate all or any of the powers, authorities and discretions vested in him.
|
79.
|
|
The Board shall have the power to appoint and remove executives in such terms as the Board
sees fit and to give such titles and responsibilities to those executives as it sees fit.
|
80.
|
|
The Company may exercise the powers conferred by Section 41 of the Act with regard to having
an official seal for use abroad and such powers shall be vested in the Directors.
|
81.
|
|
Subject as otherwise provided with these articles and, in particular, articles 131 and 132,
the Directors may exercise the voting powers conferred by shares of any other company held or
owned by the Company in such manner in all respects as they think fit and in particular they
may exercise their voting powers in favour of any resolution appointing the Directors or any
of them as Directors or officers of such other company or providing for the payment of
remuneration or pensions to the Directors or officers of such other company.
|
82.
|
|
All cheques, promissory notes, drafts, bills of exchange and other negotiable instruments and
all receipts for money paid to the Company shall be signed, drawn, accepted, endorsed or
otherwise executed, as the case may be, by such person or persons and in such manner as the
Directors shall from time to time by resolution determine.
|
83.
|
|
The Directors may from time to time authorise such person or persons as they see fit to
perform all acts, including without prejudice to the foregoing, to effect a transfer of any
shares, bonds, or other evidences of indebtedness or obligations, subscription rights,
warrants, and other securities in another body corporate in which the Company holds an
interest and to issue the necessary powers of attorney for the same; and each such person is
authorised on behalf of the Company to vote such securities, to appoint proxies with respect
thereto, and to execute consents, waivers and releases with respect thereto, or to cause any
such action to be taken.
|
84.
|
|
The Directors may procure the establishment and maintenance of or participate in, or
contribute to any non-contributory or contributory pension or superannuation fund, scheme or
arrangement or life assurance scheme or arrangement for the benefit of, and pay, provide for
or procure the grant of donations, gratuities, pensions, allowances, benefits or emoluments to
any persons (including Directors or other officers) who are or shall have been at any time in
the employment or service of the Company or of any company which is or was a subsidiary of the
Company or of the predecessor in business of the Company or any such subsidiary or holding
Company and the wives, widows, families, relatives or dependants of any such persons. The
Directors may also procure the establishment and subsidy of or subscription to and support of
any institutions, associations, clubs, funds or trusts calculated to be for the benefit of any
such persons as aforesaid or otherwise to advance the interests and well being of the Company
or of any such other Company as aforesaid or its members, and payments for or towards the
issuance of any such persons as aforesaid and subscriptions or guarantees of money for
charitable or benevolent objects or for any exhibition or for any public, general or useful
object. Provided that any Director shall be entitled to retain any benefit received by him
under this article, subject only, where the Acts require, to disclosure to the members and the
approval of the Company in general meeting.
|
85.
|
|
The Board may from time to time provide for the management of the affairs of the Company in
such manner as it shall think fit and the specific delegation provisions contained in the
articles shall not limit the general powers conferred by these articles.
|
DISQUALIFICATION OF DIRECTORS
86.
|
|
The office of a Director shall be vacated
ipso facto
if the Director:
|
|
(i)
|
|
is restricted or disqualified to act as a Director under the
provisions of Part VII of the 1990 Act: or
|
|
(ii)
|
|
resigns his office by notice in writing to the Company or in
writing offers to resign and the Directors resolve to accept such offer; or
|
|
(iii)
|
|
is or becomes bankrupt or makes any arrangement or composition
with his or her creditors generally; or
|
|
(iv)
|
|
is or becomes of unsound mind or dies; or
|
|
(v)
|
|
is removed from office under article 71 or article 74.2.
|
PROCEEDINGS OF DIRECTORS
87.
|
|
The Directors may meet together for the despatch of business, adjourn and otherwise regulate
their meetings and proceedings as they shall think fit. Unless a greater number is expressly
required by law or these articles, questions arising at any meeting shall be decided by a
majority of votes cast thereat. In case of an equality of votes the chairman shall have a
second or casting vote. The chairman may, and a Secretary on the requisition of a majority of
the Directors shall, at any time summon a meeting of the Board by reasonable notice in writing
to every Director, which notice shall set forth the place, date and hour and the general
nature of the business to be considered unless notice is waived by all the Directors either
at, before or after the meeting is held. No additional notice of a regularly scheduled
meeting of the Board shall be required. Notice of any special meeting of the Board shall be
given by the Secretary of the Company at least one day prior to such meeting. Such notice
requirements shall be waived by any Director actually attending such meeting.
|
88.
|
|
Without prejudice to the powers conferred by these articles, the Board may delegate any of
its powers to committees consisting of such Director or Directors as it thinks fit. Any
committee so formed shall, in the exercise of the powers so delegated, conform to any
regulations or charter that may be imposed on it by the Board.
|
89.
|
|
The meetings and proceedings of any such committee consisting of two or more Directors shall
be governed by the provisions of these Articles regulating the meetings and proceedings of the
Board so far as the same are applicable and are not superseded by any regulations or charter
made by the Board under article 88.
|
90.
|
|
All acts done by any meeting of the Board, or of a committee of the Board or by any person
acting as a Director, shall, notwithstanding it be afterwards discovered that there was some
defect in the appointment of any such Director or person acting as aforesaid, or that they or
any of them were disqualified, or had vacated office, or were not entitled to vote, be as
valid as if every such person had been duly appointed, and was qualified and had continued to
be a Director and had been entitled to vote.
|
91.
|
|
A Director or Directors may participate in any meeting of the Board, or of any committee
appointed by the Board of which such Director or Directors are members, by means of telephone,
video conferencing or similar communication equipment by way of which all persons
participating in such meeting can hear each other and such participation shall be deemed to
constitute presence in person at the meeting.
|
92.
|
|
The quorum necessary for the transaction of the business of the Board may be fixed by the
Board, and unless so fixed, shall be a majority of the Directors.
|
93.
|
|
A Director who is in any way, whether directly or indirectly, interested in a contract,
transaction, appointment or arrangement or proposed contract, transaction, appointment or
arrangement with the Company shall declare the nature of his interest at a meeting of the
Board in accordance with Section 194 of the Act. A general notice given to the Board by any
Director to the effect that he is a shareholder of any specified company or firm and is to be
regarded as interested in any contract that may thereafter be made with that company or firm
shall be deemed a sufficient declaration of interest in regard to any contract so made. A
Director may vote in respect of any contract or proposed contract or arrangement
notwithstanding that he may be interested therein and if he does so his vote shall be
counted and he may be counted in the quorum at any meeting of the Board at which any such
contract or proposed contract or arrangement shall come before the meeting for
consideration.
|
94.
|
|
A Director may hold and be remunerated in respect of any other office or place of profit
under the Company or any other Company in which the Company may be interested (other than the
office of auditor of the Company or any subsidiary thereof) in conjunction with his office of
Director for such period and on such terms as to the remuneration and otherwise as the
Directors may determine, and no Director or intending Director shall be disqualified from his
office from contracting or being interested, directly or indirectly, in any contract or
arrangement with the Company or any other Company with regard to his tenure of any such other
office or place of profit or as a vendor, purchaser or otherwise nor shall any Director so
contracting or being so interested be liable to account to the Company for any profits and
advantages accruing to him from any such contract or arrangement by reason of such Director
holding that office or of the fiduciary relationship thereby established.
|
95.
|
|
A Director may hold any other office or place of profit under the Company (other than the
office of auditor) in conjunction with his office of Director for such period and on such
terms (as to remuneration and otherwise) as the Board may determine and no Director or
proposed Director shall be disqualified by his office from contracting with the Company either
with regard to his tenure of any such other office or place of profit or as vendor, purchaser
or otherwise, nor shall any such contract or arrangement entered into by or on behalf of the
Company in which any Director is in any way interested, be liable to be avoided, nor shall any
Director so contracting or being so interested be liable to account to the Company for any
profit realised by any such contract or arrangement by reason of such Director holding that
office or of the fiduciary relation thereby established. A Director, notwithstanding his
interest, may be counted in the quorum present at any meeting of the Board whereat he or any
other Director is appointed to hold any such office or place of profit under the Company or
whereat the terms of any such appointment are arranged and he may vote on any such appointment
or arrangement.
|
96.
|
|
Any Director may act by himself or his firm in a professional capacity for the Company, and
he or his firm shall be entitled to remuneration for professional services as if he were not a
Director; provided that nothing herein contained shall authorise a Director or his firm to act
as auditor to the Company.
|
97.
|
|
The Board shall cause minutes to be made in books or loose-leaf folders provided for the
purpose of recording:
|
|
(a)
|
|
all appointments of officers made by the Board;
|
|
(b)
|
|
the names of the Directors present at each meeting of the Board and of any
committee of the Board; and
|
|
(c)
|
|
all resolutions and proceedings at all meetings of the Company, and of the
Board and of committees of Directors.
|
98.
|
|
When the chairman of a meeting of the Board signs the minutes of such meeting those minutes
shall be deemed to have been duly held notwithstanding that all the Directors have not
actually come together or that there may have been a technical defect in the proceedings.
|
99.
|
|
A resolution signed (whether by electronic signature or otherwise as approved by the
Directors) by all the Directors shall be as valid and effectual as if it had been passed at a
meeting of the Board or, as appropriate, a committee duly called and constituted. When
signed a resolution may consist of several documents each signed by one or more of the
Directors.
|
100.
|
|
The continuing Directors may act notwithstanding any vacancy in their body but if and so long
as their number is reduced below the number fixed by or pursuant to these Articles as the
necessary quorum of Directors, the continuing Directors shall appoint forthwith an additional
Director or additional Directors to make up such number or shall convene a general meeting of
the Company for the purpose of making such appointment, but for no other purpose.
|
101.
|
|
The Board may elect a chairman and one or more vice chairmen of their meetings and determine
the period for which he is to hold office but if no such chairman or vice chairman are
elected, or if at any meeting the chairman or any vice chairman is not present within fifteen
minutes after the time appointed for holding the meeting, the Directors present may choose one
of their number to be chairman of the meeting.
|
102.
|
|
A committee appointed by the Board may elect a chairman of its meetings. If no such chairman
is elected, or if at any meeting the chairman is not present within five minutes after the
time appointed for holding the meeting, the Directors present may choose one of their number
to be chairman of the meeting.
|
103.
|
|
A committee appointed by the Board may meet and adjourn as it thinks proper. A quorum for any
meeting of a committee shall consist of at least 50% of the members in office at the time and
questions arising at any meeting shall be determined by a majority of votes of the committee
members present. In the case of an equality of votes, the chairman of the committee meeting
shall be entitled to a second or casting vote.
|
SERVICE PROVIDERS
104.
|
|
The Board may appoint any one or more persons to act as service providers to the Company
(including, without limitation, to act as manager, administrator, registrar and transfer
agent, custodian, investment manager, investment adviser, underwriter, placement agent and/or
sponsor to the Company) and the Board may entrust to and confer upon such persons such powers
upon such terms and conditions, including the right to remuneration payable by, and
indemnification from, the Company and with such restrictions and with such powers of
delegation as they may determine.
|
THE SEAL
105.
|
(a)
|
|
The Directors shall ensure that the Seal (including any official securities
seal kept pursuant to the Acts) shall be used only by the authority of the Directors or
of a committee authorised by the Directors and every instrument to which the Seal shall
be affixed shall be signed by a Director or the Secretary or any assistant Secretary or
some other person authorised by the Board, either generally or specifically, for that
purpose.
|
|
(b)
|
|
The Company may exercise the powers conferred by the Acts with regard to having
an official seal for use abroad and such powers shall be vested in the Directors.
|
DIVIDENDS AND RESERVES
106.
|
|
The Company in general meeting may declare dividends, but no dividends shall exceed the
amount recommended by the Directors.
|
107.
|
|
The Directors may from time to time declare and pay to the members such interim dividends as
appear to the Directors to be justified by the profits of the Company.
|
108.
|
|
No dividend or interim dividend shall be declared and paid otherwise than in accordance with
the provisions of Part IV of the 1983 Act.
|
109.
|
|
The Directors may, before recommending any dividend, set aside out of the profits of the
Company or funds legally available for distribution such sums as they think proper as a
reserve or reserves which shall, at the discretion of the Directors, be applicable for any
purpose to which the profits of the Company may be properly applied and pending such
application may at the like discretion either be employed in the business of the Company or be
invested in such investments as the Directors may in their sole and absolute discretion
lawfully determine. The Directors may also, without placing the same to reserve, carry forward
any profits which they may in their sole and absolute discretion think it prudent not to
divide.
|
110.
|
|
Subject to the rights of persons, if any, entitled to shares with special rights as to
dividend, all dividends shall be declared and paid according to the amounts paid or credited
as paid on the shares in respect whereof the dividend is paid. All dividends shall be
apportioned and paid proportionately to the amounts paid or credited as paid on the shares
during any portion or portions of the period in respect of which the dividend is paid; but if
any share is issued on terms providing that it shall rank for dividend as from a particular
date, such share shall rank for dividend accordingly.
|
111.
|
|
The Directors may deduct from any dividend payable to any member all sums of money (if any)
immediately payable by him to the Company in relation to the shares of the Company.
|
112.
|
|
The Directors when paying dividends to shareholders in accordance with the provisions of
these articles may make such payment either in cash or
in specie
.
|
113.
|
|
Any dividend or other monies payable in respect of any share may be paid by cheque or warrant
sent by post (or sent by any electronic or other means), at the risk of the person or persons
entitled thereto, to the registered address of the holder or, where there are joint holders,
to the registered address of that one of the joint holders who is first named on the Register
or to such person and to such address as the holder or joint holders may in writing direct.
Every such cheque or warrant shall be made payable to the order of the person to whom it is
sent and payment of the cheque or warrant shall be a good discharge to the Company. Any joint
holder or other person jointly entitled to a share as aforesaid may give receipts for any
dividend or other moneys payable in respect of the share. Any such dividend or other
distribution may also be paid by any other method (including payment in a currency other than
US$, electronic funds transfer, direct debit, bank transfer or by means of a relevant system)
which the Directors consider appropriate and any member who elects for such method of payment
shall be deemed to have accepted all of the risks inherent therein. The debiting of the
Companys account in respect of the relevant amount shall be evidence of good discharge of the
Companys obligations in respect of any payment made by any such methods.
|
114. No dividend shall bear interest against the Company.
115.
|
|
If the Directors so resolve, any dividend which has remained unclaimed for twelve years from
the date of its declaration shall be forfeited and cease to remain owing by the Company. The
payment by the Directors of any unclaimed dividend or other moneys payable in respect of a
share into a separate account shall not constitute the Company a trustee in respect thereof.
|
ACCOUNTS
116.
|
(a)
|
|
The Directors shall cause to be kept proper books of account, whether in the
form of documents, electronic form or otherwise, that:
|
|
(i)
|
|
correctly record and explain the transactions of the Company;
|
|
(ii)
|
|
will at any time enable the financial position of the Company
to be determined with reasonable accuracy;
|
|
(iii)
|
|
will enable the Directors to ensure that any balance sheet,
profit and loss account or income and expenditure account of the Company
complies with the requirements of the Acts; and
|
|
(iv)
|
|
will enable the accounts of the Company to be readily and properly audited.
|
Books of account shall be kept on a continuous and consistent basis and entries
therein shall be made in a timely manner and be consistent from year to year. Proper
books of account shall not be deemed to be kept if there are not kept such books of
account as are necessary to give a true and fair view of the state of the Companys
affairs and to explain its transactions.
The Company may send by post, electronic mail or any other means of electronic
communication a summary financial statement to its members or persons nominated by
any member. The Company may meet, but shall be under no obligation to meet, any
request from any of its members to be sent additional copies of its full report
and accounts or summary financial statement or other communications with its
members.
|
(b)
|
|
The books of account shall be kept at the Office or, subject to the provisions of
the Acts, at such other place as the Directors think fit and shall be open at all
reasonable times to the inspection of the Directors.
|
|
(c)
|
|
In accordance with the provisions of the Acts, the Directors shall cause to be
prepared and to be laid before the annual general meeting of the Company from time to
time such profit and loss accounts, balance sheets, group accounts and reports as are
required by the Acts to be prepared and laid before such meeting.
|
|
(d)
|
|
If required, a copy of every balance sheet (including every document required by
law to be annexed thereto) which is to be laid before the annual general meeting of the
Company together with a copy of the Directors report and Auditors report shall be sent
by post, electronic mail or any other means of communication (electronic or otherwise),
not less than twenty-one Clear Days before the date of the annual general meeting, to
every person entitled under the provisions of the Acts to receive them; provided that in
the case of those documents sent by electronic mail or any other means of electronic
communication, such documents shall be sent with the consent of the recipient, to the
address of the recipient notified to the Company by the recipient for such purposes.
|
CAPITALISATION OF PROFITS
117.
|
|
Without prejudice to any powers conferred on the Directors as aforesaid, and subject to the
Directors authority to issue and allot shares under articles 17(c) and 17(d), the Directors
may:
|
|
(a)
|
|
resolve to capitalise an amount standing to the credit of reserves (including
a share premium account, capital redemption reserve and profit and loss account),
whether or not available for distribution;
|
|
(b)
|
|
appropriate the sum resolved to be capitalised to the shareholders in
proportion to the nominal amount of shares held by them respectively and apply that
sum on their behalf in or towards paying up in full unissued shares or debentures of a
nominal amount equal to that sum, and allot the shares or debentures, credited as
fully paid, to the shareholders (or as the Board of may direct) in those proportions,
or partly in one way and partly in the other, but the share premium account, the
capital redemption reserve and profits that are not available for distribution may,
for the purposes of this article 116, only be applied in paying up unissued shares to
be allotted to shareholders credited as fully paid;
|
|
(c)
|
|
make any arrangements it thinks fit to resolve a difficulty arising in the
distribution of a capitalised reserve and in particular, without limitation, where
shares or debentures become distributable in fractions the Board may deal with the
fractions as it thinks fit;
|
|
(d)
|
|
authorise a person to enter (on behalf of all the shareholders concerned)
into an agreement with the Company providing for the allotment to the shareholders
respectively, credited as fully paid, of shares or debentures to which they may be
entitled on the capitalisation and any such agreement made under this authority being
effective and binding on all those shareholders; and
|
|
(e)
|
|
generally do all acts and things required to give effect to the resolution.
|
AUDIT
118.
|
|
Auditors shall be appointed and their duties regulated in accordance with sections 160 to 163
of the Act or any statutory amendment thereof.
|
NOTICES
119.
|
|
Any notice to be given, served, sent or delivered pursuant to these articles shall be in
writing (whether in electronic form or otherwise but only if the use of such electronic or
other communication conforms with relevant legislation and provided further that the
electronic means or electronic form has been approved by the Directors).
|
120.
|
|
Any notice or document may be served by the Company or by the person entitled to give notice
to any shareholder either personally, by facsimile, email or other electronic means or by
sending it through the post in a prepaid letter or via a recognised courier service, fees
prepaid, addressed to the shareholder at his address as appearing in the Register, or by
sending with the consent of the holder to the extent required by law, the same by means of
electronic mail or other means of electronic communication approved by the Directors, to the
address of the holder notified to the Company by the holder for that purpose (or if not so
notified, then to the address of the member last known to the Company). In the case of joint
holders of a share, all notices shall be given to that one of the joint holders whose name
stands first in the Register in respect of the joint holding, and notice so given shall be
sufficient notice to all the joint holders.
|
121.
|
|
Any shareholder present, either personally or by proxy, at any meeting of the Company shall
for all purposes be deemed to have received due notice of such meeting and, where requisite,
of the purposes for which such meeting was convened.
|
122.
|
|
Any notice or other document, if served by (a) post, shall be deemed to have been served five
(5) days after the time when the letter containing the same is posted, or, (b) facsimile,
email or other electronic means shall be deemed to have been served upon production of a
report confirming transmission to the recipient or (c) recognised courier service, shall be
deemed to have been served 48 hours after the time when the letter containing the same is
delivered to
the courier service. In proving service by post or courier service it shall be sufficient
to prove that the letter containing the notice or documents was properly addressed and duly
posted or delivered to the courier service.
|
123.
|
|
Any notice or document delivered or sent by post to or left at the registered address of any
shareholder in accordance with the terms of these articles shall notwithstanding that such
shareholder be then dead or bankrupt, and whether or not the Company has notice of his death
or bankruptcy, be deemed to have been duly served in respect of any share registered in the
name of such shareholder as sole or joint holder, unless his name shall at the time of the
service of the notice or document, have been removed from the Register as the holder of the
share, and such service shall for all purposes be deemed a sufficient service of such notice
or document on all persons interested (whether jointly with or as claiming through or under
him) in the share.
|
124.
|
|
Notice of every general meeting of the Company shall be given to:
|
|
(a)
|
|
all shareholders holding shares with the right to receive notice and who have
supplied to the Company an address for the giving of notices to them; and
|
|
(b)
|
|
every person entitled to a share in consequence of the death or bankruptcy of a
shareholder, who but for his death or bankruptcy would be entitled to receive notice of
the meeting.
|
125.
|
|
Subject to applicable law, no other person shall be entitled to receive notices of general
meetings.
|
126.
|
|
Notwithstanding anything contained in the articles, the Company shall not be obliged to take
account of or make any investigations as to the existence of any suspension or curtailment of
postal services within or in relation to all or any part of any jurisdiction or other area
other than Ireland.
|
127.
|
|
Any requirement in these articles for the consent of a member in regard to the receipt by
such member of electronic mail or other means of electronic communications approved by the
Directors, including the receipt of the Companys audited accounts and the Directors and
auditors reports thereon, shall be deemed to have been satisfied where the Company has
written to the member informing him/her of its intention to use electronic communications for
such purposes and the member has not, within four weeks of the issue of such notice, served an
objection in writing on the Company to such proposal. Where a member has given, or is deemed
to have given, his/her consent to the receipt by such member of electronic mail or other means
of electronic communications approved by the Directors, he/she may revoke such consent at any
time by requesting the Company to communicate with him/her in documented form provided however
that such revocation shall not take effect until five days after written notice of the
revocation is received by the Company.
|
128.
|
|
If at any time by reason of the suspension or curtailment of postal services in any
territory, the Company is unable effectively to convene a general meeting by notices sent
through the post, a general meeting may be convened by a public announcement and such notice
shall be deemed to have been duly served on all members entitled thereto at noon on the day on
which the said public announcement is made. In any such case the Company shall put a full copy
of the notice of the general meeting on its website. For purposes of this sub-paragraph (i),
public announcement shall mean disclosure in a press release reported by a national news
service or in a document publicly filed by the Company with the U.S. Securities and Exchange
Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act and the rules and
regulations promulgated thereunder.
|
129.
|
|
Every person who becomes entitled to a share shall before his name is entered in the Register
in respect of the share, be bound by any notice in respect of that share which has been duly
given to a person from whom he derives his title.
|
130.
|
|
The signature (whether electronic signature, an advanced electronic signature or otherwise)
to any notice to be given by the Company may be written (in electronic form or otherwise) or
printed.
|
CERTAIN SUBSIDIARIES
131.
|
|
Notwithstanding any other provision of these articles to the contrary, if the Company is
required or entitled to vote at a general meeting of any direct subsidiary of the Company that
is organised under the laws of a jurisdiction outside the United States of America, the
Directors shall refer the subject matter of the vote to the shareholders of the Company at a
general meeting (subject to article 4) and seek authority from the shareholders for the
Companys corporate representative or proxy to vote in favour of the resolution proposed by
the subsidiary, unless the subsidiary is or has elected to be disregarded from its owner for
United States federal income tax purposes and does not own, directly or indirectly, any
subsidiary organised under the laws of a jurisdiction outside the United States of America
that is treated as a corporation for United States federal income tax purposes (each such
non-United States subsidiary that is not disregarded, or that is disregarded but owns,
directly or indirectly, a non-United States subsidiary that is treated as a corporation for
such purposes, a
Non-U.S. Regarded Subsidiary
). The Directors shall cause the Companys
corporate representative or proxy to vote the Companys shares in the Non-U.S. Regarded
Subsidiary
pro rata
to the votes received at the general meeting of the Company, with votes
for or against the directing resolution being taken, respectively, as an instruction for the
Companys corporate representative or proxy to vote the appropriate proportion of its shares
for and the appropriate proportion of its shares against the resolution proposed by the Non-U
S. Regarded Subsidiary, provided, however, that the foregoing shall not apply to any subject
matter regarding a U.S. indirect subsidiary of the Company that is required to be voted on by
a Non-U.S. Regarded Subsidiary of the Company as the shareholder of such U.S. subsidiary, and
shall apply to a vote of the Company as shareholder of a disregarded subsidiary that directly
or indirectly owns non-United States subsidiaries treated as corporations for United States
federal income tax purposes only if the subject matter of such vote pertains to such
non-United States subsidiaries treated as corporations.
|
132.
|
|
Notwithstanding article 131, the Directors in their sole and absolute discretion shall
require that the bye-laws or articles of association, or similar organisational documents, of
each Non-U.S. Regarded Subsidiary, whether currently in existence or organised following the
date hereof, shall contain provisions substantially similar to articles 131 and 132. The
Company shall enter into agreements with each such Non-U.S. Regarded Subsidiary, as reasonably
necessary, to effectuate or implement this article 132.
|
WINDING UP
133.
|
|
If the Company shall be wound up and the assets available for distribution among the members
as such shall be insufficient to repay the whole of the paid up or credited as paid up share
capital, such assets shall be distributed so that, as nearly as may be, the losses shall be
borne by the members in proportion to the capital paid up or credited as paid up at the
commencement of the winding up on the shares held by them respectively. And if in a winding up
the assets available for distribution among the members shall be more than sufficient to repay
the whole of the share capital paid up or credited as paid up at the commencement of the
winding up, the excess shall be distributed among the members in proportion to the capital at
the commencement of the winding up paid up or credited as paid
up on the said shares held by them respectively. Notwithstanding the foregoing, this article
shall not affect the rights of the holders of shares issued upon special terms and
conditions.
|
134.
|
(a)
|
|
In case of a sale by the liquidator under Section 260 of the Act, the
liquidator may by the contract of sale agree so as to bind all the members for the
allotment to the members directly of the proceeds of sale in proportion to their
respective interests in the Company and may further by the contract limit a time at
the expiration of which obligations or shares not accepted or required to be sold
shall be deemed to have been irrevocably refused and be at the disposal of the
Company, but so that nothing herein contained shall be taken to diminish, prejudice or
affect the rights of dissenting members conferred by the said Section.
|
|
(b)
|
|
The power of sale of the liquidator shall include a power to sell wholly or
partially for debentures, debenture stock, or other obligations of another company,
either then already constituted or about to be constituted for the purpose of carrying
out the sale.
|
135.
|
|
If the Company is wound up, the liquidator, with the sanction of a Special Resolution and any
other sanction required by the Acts, may divide among the members
in specie
or kind the whole
or any part of the assets of the Company (whether they shall consist of property of the same
kind or not), and, for such purpose, may value any assets and determine how the division shall
be carried out as between the members or different classes of members. The liquidator may,
with the like sanction, vest the whole or any part of such assets in trustees upon such trusts
for the benefit of the contributories as, with the like sanction, he determines, but so that
no member shall be compelled to accept any assets upon which there is a liability.
|
INDEMNITY
136.
|
(a)
|
|
Subject to the provisions of and so far as may be admitted by the Acts, every
Director and the Secretary of the Company (including his heirs, executors and
administrators) shall be entitled to be indemnified by the Company against all costs,
charges, losses, expenses and liabilities incurred by him in the execution and
discharge of his duties or in relation thereto including any liability incurred by him
in defending any proceedings, civil or criminal, which relate to anything done or
omitted or alleged to have been done or omitted by him as an officer or employee of the
Company and in which judgement is given in his favour (or the proceedings are otherwise
disposed of without any finding or admission of any material breach of duty on his
part) or in which he is acquitted or in connection with any application under any
statute for relief from liability in respect of any such act or omission in which
relief is granted to him by the Court.
|
|
(b)
|
|
The Company shall indemnify, except in respect of wilful default or fraud, to
the full extent now or hereafter permitted by law, any person (including his heirs,
executors and administrators) who is or was a current or former executive of the
Company (other than any Directors or Secretary), any person, (including his heirs,
executors and administrators) who is or was a current or former executive of a wholly
owned subsidiary of the Company, or any person who is serving or has served for, on
behalf of, or at the request of the Company, as a director, officer, employee or agent
of another company, partnership, joint venture, trust or other enterprise, in each
case, other than a wholly owned subsidiary of the Company, or in a fiduciary or other
capacity with respect to any employee benefit plan maintained by the Company, who was or is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (including, without limitation, an action by or in the right of the
Company), against any expense (including attorneys fees), judgements, fines and
amounts paid in settlement actually and reasonably incurred by such person (or his
heirs, executors and administrators) in respect thereof. The Company shall advance
the expenses of defending any such action, suit or proceeding (including appeals) in
accordance with and to the full extent now or hereafter permitted by law. Without
limiting the generality or the effect of the foregoing to the full extent now or
hereafter permitted by law, the Company may enter into one or more agreements with
any person that provide for indemnification greater or different than that provided
in this article 136. Any amendment or repeal of this article 136 shall not adversely
affect any right or protection existing hereunder immediately prior to such
amendment or repeal. The indemnity in this paragraph (b) shall not extend to any
matter which would render it void pursuant to the Acts.
|
|
(c)
|
|
The provisions of these articles shall be applicable to all actions, claims,
suits or proceedings made or commenced after the adoption of these articles, whether
arising from acts or omissions to act occurring before or after such adoption. The
provisions of these articles shall be deemed to be a contract between the Company and
each person described in this article 136 who serves in such capacity at any time while
these articles and the relevant provisions of the law, if any, are in effect, and any
repeal or modification thereof shall not affect any rights or obligations then existing
with respect to any state of facts or any action, suit or proceeding then or
theretofore existing, or any action, suit or proceeding thereafter brought or
threatened based in whole or in part on any such state of facts.
|
|
(d)
|
|
If any provision of these articles shall be found to be invalid or limited in
application by reason of any law or regulation, it shall not affect any other
application of such provision or the validity of the remaining provisions of these
articles. The rights of indemnification and advancement of expenses provided in these
articles shall neither be exclusive of, nor be deemed in limitation of, any rights to
which any such person described in this article 136 may otherwise be entitled or
permitted by contract, approved by the Company in general meeting by way of ordinary
resolution action of the Board or otherwise, or as a matter of law, both as to actions
in his official capacity and actions in any other capacity while holding such office,
it being the policy of the Company that indemnification of the specified individuals,
except in respect of wilful default or fraud, shall be made to the fullest extent
permitted by law.
|
|
(e)
|
|
The Directors shall have power to purchase and maintain for any Director, the
Secretary or other employees of the Company or any director, officer, employee or agent
of any of its subsidiaries insurance against any such liability as referred to in
Section 200 of the Act or otherwise.
|
|
(f)
|
|
The Company may additionally indemnify any employee or agent of the Company or
any director, officer, employee or agent of any of its subsidiaries to the fullest
extent permitted by law.
|
INDEMNITY FROM TAX LIABILITY RESULTING FROM ACTS OF SHAREHOLDERS
137.
|
|
Whenever any law for the time being of any country, state, administrative area or place
imposes or purports to impose any immediate or future or possible liability upon the Company
to make any payment or empowers any government or taxing authority or government official to
require the Company to make any payment in respect of any shares registered in the Register as
held either jointly or solely by any shareholder or in respect of
any dividends, bonuses or other monies due or payable or accruing due or that may become due
or payable to such shareholder by the Company on or in respect of any shares registered as
aforesaid or for or on account of in respect of any shareholder and whether in consequence
of:
|
|
(a)
|
|
the death of such shareholder,
|
|
|
(b)
|
|
the non-payment of any income tax or other tax by such shareholder,
|
|
|
(c)
|
|
the non-payment of any estate, probate, succession, death, stamp, or other duty
by the executor or administrator of such shareholder or by or out of his estate, or
|
|
(d)
|
|
any other act or thing, in every such case (except to the extent that the
rights conferred upon holders of any class of shares render the Company liable to make
additional payments in respect of sums withheld on account of the foregoing):
|
|
(i)
|
|
the Company shall be fully indemnified by such shareholder or
his executor or administrator from all liability;
|
|
(ii)
|
|
the Company shall have a lien upon all dividends and other
monies payable in respect of the shares registered in the Register as held
either jointly or solely by such shareholder for all monies paid or payable by
the Company in respect of such shares or in respect of any dividends or other
monies as aforesaid thereon or for or on account or in respect of such
shareholder under or in consequence of any such law together with interest
thereon (at a rate not exceeding that permissible under applicable law) from
the date of payment to the date of repayment and may deduct or set off against
such dividends or other monies payable as aforesaid any monies paid or payable
by the Company as aforesaid together with interest as aforesaid;
|
|
(iii)
|
|
the Company may recover as a debt due from such shareholder,
or his executor or administrator wherever constituted, any monies paid by the
Company under or in consequence of any such law and interest thereon at the
rate and for the period aforesaid in excess of any dividends or other monies as
aforesaid then due or payable by the Company; and
|
|
(iv)
|
|
the Company may, if any such money is paid or payable by it
under any such law as aforesaid, refuse to register a transfer of any shares by
any such shareholder or his executor or administrator until such money and
interest as aforesaid is set off or deducted as aforesaid, or in case the same
exceeds the amount of any such dividends or other monies as aforesaid then due
or payable by the Company, until such excess is paid to the Company.
|
Subject to the rights conferred upon the holders of any class of shares, nothing
herein contained shall prejudice or affect any right or remedy that any law may
confer or purport to confer on the Company and as between the Company and every such
shareholder as aforesaid, his personal representative, executor, administrator and
estate wheresoever constituted or situate, any right or remedy that such law shall
confer or purport to confer on the Company shall be enforceable by the Company.
UNTRACED HOLDERS
138.
|
(a)
|
|
The Company shall be entitled to sell at the best price reasonably obtainable any
share or stock of a member or any share or stock to which a person is entitled by
transmission if and provided that:
|
|
|
(i)
|
|
for a period of twelve years (not less than three dividends
having been declared and paid) no cheque or warrant sent by the Company
through the post in a prepaid letter addressed to the member or to the person
entitled by transmission to the share or stock at his address on the Register
or otherwise the last known address given by the member or the person
entitled by transmission to which cheques and warrants are to be sent has
been cashed and no communication has been received by the Company from the
member or the person entitled by transmission;
|
|
(ii)
|
|
at the expiration of the said period of twelve years the
Company has given notice by advertisement in a leading Dublin newspaper and a
newspaper circulating in the area in which the address referred to in
paragraph (a) of this article is located of its intention to sell such share
or stock; and
|
|
(iii)
|
|
the Company has not during the further period of three
months after the date of the advertisement and prior to the exercise of the
power of sale received any communication from the member or person entitled
by transmission.
|
139.
|
|
To give effect to any such sale the Company may appoint any person to execute as transferor
an instrument of transfer of such share or stock and such instrument of transfer shall be as
effective as if it had been executed by the registered holder of or person entitled by
transmission to such share or stock. The Company shall account to the member or other person
entitled to such share or stock for the net proceeds of such sale by carrying all monies in
respect thereof to a separate account which shall be a permanent debt of the Company and the
Company shall be deemed to be a debtor and not a trustee in respect thereof for such member or
other person. Monies carried to such separate account may either be employed in the business
of the Company or invested in such investments (other than shares of the Company or its
holding company if any) as the Directors may from time to time think fit.
|
AMENDMENT OF ARTICLES OF ASSOCIATION
140.
|
|
Subject to the rights attaching to the various classes of shares, the Company may at any time
and from time to time by Special Resolution alter or amend these articles in whole or in part.
|
|
|
|
Names, addresses and descriptions of subscribers
|
|
Number of shares taken by each subscriber
|
|
|
|
For and on behalf of
|
|
Thirty Nine Thousand, Nine Hundred and
|
United America Indemnity, Ltd.,
|
|
Ninety Four Ordinary Shares
|
Walker House,
|
|
|
87 Mary Street,
|
|
|
George Town,
|
|
|
Grand Cayman,
|
|
|
KY1-9002,
|
|
|
Cayman Islands
|
|
|
|
|
|
For and on behalf of
|
|
|
Larry Allen Frakes
|
|
One Ordinary Share
|
1653 Yardley Court
|
|
|
West Chester, Pennsylvania
|
|
|
19380
|
|
|
United States
|
|
|
|
|
|
For and on behalf of
|
|
|
Thomas Michael McGeehan
|
|
One Ordinary Share
|
572 Saratoga Road
|
|
|
King of Prussia
|
|
|
PA 19406
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For and on behalf of
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Linda Hohn
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One Ordinary Share
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153 Gulph Hills Road
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Radnor
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PA 19087
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For and on behalf of
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Edward M.Rafter
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One Ordinary Share
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1 Yearling Chase
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Mount Laurel
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NJ 08054
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For and on behalf of
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Troy Santora
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One Ordinary Share
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Woodbourne Place #7
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28 Woodbourne Avenue
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Pembroke HM08
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Bermuda
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For and on behalf of
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Caroline M. Tate
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One Ordinary Share
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813 Judie Lane
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Ambler, PA 19002
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Dated the 25
th
day of February 2010
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Witness to the above signatures:
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Ashley Mayne
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Purvis House
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Victoria Place
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29 Victoria Street
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PO Box HM 716
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Hamilton HMCX
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Bermuda
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EXHIBIT 10.1
GLOBAL INDEMNITY PLC
SHARE INCENTIVE PLAN
(As Amended and Restated July 2, 2010)
Section 1. Purpose; Definitions
The purpose of the Plan is to give Global Indemnity plc, a public limited company established
in Ireland with registered number 481805 having its registered office at Arthur Cox Building,
Earlsfort Terrance, Dublin 2 (the
Company
), and its Affiliates (as defined below) a
competitive advantage in attracting, retaining and motivating officers, employees, consultants and
non-employee directors, and to provide the Company and its Affiliates with a share plan providing
incentives linked to the financial results of the Companys businesses and increases in shareholder
value.
On July 2, 2010, the scheme of arrangement between United America Indemnity Ltd. (UAI
Ltd.) and the holders of UAI Ltd. common shares became effective (the Transaction) pursuant to
which holders of UAI Ltd. Class A and Class B common shares outstanding immediately before the
Transaction became effective received one Class A ordinary share and one Class B ordinary share of
the Company for every two UAI Ltd. Class A common shares and every two UAI Ltd. Class B common
shares; respectively, and UAI Ltd. became a wholly-owned subsidiary of the Company. In connection
with the completion of the Transaction, the Company assumed UAI Ltd.s existing obligations in
connection with awards granted under UAI Ltd.s Share Incentive Plan as of completion of the
Transaction.
For purposes of the Plan, the following terms are defined as set forth below:
Affiliate
of a Person means a Person, directly or indirectly, controlled by, controlling or
under common control with such Person and with respect to the Company, includes without limitation
its Subsidiaries and its Parent.
Award
means any award under this Plan of any Stock Option, Restricted Share, or Other
Share-Based Award.
Award Agreement
means a Restricted Share Agreement or an Option Agreement. An Award
Agreement may include provisions included in an employment or consulting agreement of the Company
or any of its Affiliates.
Board
means the Board of Directors of the Company.
California Participant
means, in the case of individuals, any Participant residing in
California or working primarily in the California offices of the Company or an Affiliate of the
Company, or, in the case of an entity, any Participant having its principal place of business in
California.
Cause
means, unless otherwise provided in the Participants employment or consulting
agreement with the Company or any of its Affiliates, that (i) the Participant is charged with or
has committed a felony or other crime involving moral turpitude or conduct adverse to the
interests of the Company, (ii) the Participant commits fraud, embezzlement or other conduct adverse
to the interests of the Company or its Affiliates, (iii) the Participant substantially fails to
perform his duties or obligations to the Company or its Affiliates, provided that he has been given
notice and an opportunity to cure not to exceed thirty (30) days under circumstances in which the
Board determines, in its sole discretion, that such failure to perform is in fact curable, or (iv)
the Participant violates Company policies or policies of its Affiliates or materially breaches any
representation made to the Company or its Affiliates.
Code
means the Internal Revenue Code of 1986, as amended from time to time, and any
successor thereto.
Committee
means (a) (i) before an IPO or date any class of common equity securities of the
Company are required to be registered under Section 12 of the Exchange Act (a Registration
Event), a committee (or subcommittee) of the Board that the Board may designate to administer or
make decisions required to be made under the Plan, and (ii) after a Registration Event, such
committee (or subcommittee) of the Board that the Board may designate to administer or make
decisions required to be made under the Plan, whose membership shall be composed of not less than
two Non-Employee Directors and, to the extent required by Section 162(m) of the Code and any
regulations thereunder, an outside director as defined under Section 162(m) of the Code, each of
whom shall be appointed by and serve at the pleasure of the Board or (b) if at any time no such
committee of the Board is so designated by the Board, the Board.
Company
has the meaning set forth in the preamble hereto and any successors by operation of
law.
Disability
means permanent and total disability as defined in Section 22(e)(3) of the Code.
A Disability shall only be deemed to occur at the time of the determination by the Committee of the
Disability.
Employment
means, unless otherwise defined in an applicable Award Agreement or employment or
consulting agreement, employment with, or service as a director or officer of, or as a consultant
to, the Company or any of its Affiliates.
Exchange Act
means the Securities Exchange Act of 1934, as amended from time to time, and
any successor thereto.
Exercise Price
has the meaning set forth in Section 5(a).
Fair Market Value
of the Ordinary Shares means (unless otherwise provided in the applicable
Award Agreement), as of any given date, the closing price on the applicable date of the Ordinary
Shares on the Nasdaq National Market or, if not listed on such market, on any other national
securities exchange on which the Ordinary Shares are listed or, if not so listed, on The Nasdaq
Stock Market, Inc. and, if not so quoted, the average of the closing bid and ask prices for the
Ordinary Shares in the over-the-counter market on which the Ordinary Shares are actively traded. If
such sales prices are not so available or the Ordinary Shares are not actively traded, as
determined by the Committee in its sole discretion, the Fair Market Value of the Ordinary Shares
shall mean the fair value as determined by the Committee in light of all circumstances,
including comparable recent bona fide sales of applicable or similar securities. For purposes of
the grant of any Stock Option, the applicable date shall be the date on which the Stock Option is
granted.
2
Family Member
means, solely to the extent provided for in Rule 701 under the Securities Act
or, following the filing of a Securities Act Form S-8 with respect to the Plan, solely to the
extent provided for in Securities Act Form S-8, any child, stepchild, grandchild, parent,
stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law,
father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive
relationships, any person sharing the employees household (other than a tenant or employee), a
trust in which these persons have more than fifty percent (50%) of the beneficial interest, a
foundation in which these persons (or the employee) control the management of assets, and any other
entity in which these persons (or the employee) own more than fifty percent (50%) of the voting
interests or as otherwise defined in Rule 701 under the Securities Act or Securities Act Form S-8,
as applicable.
FPC
means Fox Paine & Company, LLC, its subsidiaries and related entities (including without
limitation Fox Paine Capital, LLC, Fox Paine Capital Fund, L.P., Fox Paine Capital Fund II GP, LLC,
Fox Paine Capital Fund II L.P., Fox Paine Capital Fund II International, L.P., Fox Paine Capital
Fund II Co-Investors International, L.P.), and all Persons that are partners or shareholders or
members in any such related entities) and all partners, members, directors, employees, shareholders
and agents of any of the foregoing.
Incentive Stock Option
means a Stock Option intended to qualify as an incentive stock option
within the meaning of Section 422 of the Code.
IPO
means the consummation of a registered underwritten public offering or offerings of
Ordinary Shares or other equity security of the Company after the date hereof with gross proceeds
to the Company in the aggregate of at least $60 million.
Management Shareholders Agreement
means the Management Shareholders Agreement, dated as of
September 5, 2003, among the Company, the FPC Stockholder, and the Management Investors, as defined
therein, as amended from time to time.
Non-Employee Director
means a member of the Board who qualifies as a Non-Employee Director
(as defined in Rule 16b-3(b)(3) as promulgated by the SEC under the Exchange Act, or any successor
definition adopted by the SEC).
Nonstatutory Stock Option
means a Stock Option not intended to qualify as an Incentive Stock
Option. Option Agreement means an agreement setting forth the terms and conditions of a Stock
Option Award. Other Share-Based Award means any Award granted under Section 7.
Ordinary Shares
means the Class A Ordinary shares, par value $0.0001 per share, of the
Company having the rights, preferences and privileges set out in the Companys Articles of
Association, as amended from time to time.
3
Parent
means any parent corporation of the Company within the meaning of Section 424(e) of
the Code.
Participant
has the meaning set forth in Section 4.
Performance Criteria
has the meaning set forth in Exhibit A.
Performance Goal
means the objective performance goals established by the Committee and, if
desirable for purposes of Section 162(m) of the Code, based on one or more Performance Criteria.
Performance Period
means three consecutive fiscal years of the Company, or such shorter
period as determined by the Committee in its discretion.
Person
means an individual, corporation, partnership, limited liability company, joint
venture, trust, unincorporated organization, government (or any department or agency thereof) or
other entity.
Plan
means the Global Indemnity plc Share Incentive Plan, as set forth herein and as
hereinafter amended from time to time.
Plan Shares
has the meaning set forth in Section 10(a).
Restricted Shares
means an Award of Ordinary Shares granted under Section 6.
Restricted Share Purchase Agreement
means an agreement setting forth the terms and
conditions of an Award of Restricted Shares.
Retirement
means a Participants Termination of Employment without Cause at or after age
fifty-five (55).
SEC
means the Securities and Exchange Commission or any successor agency.
Securities Act
means the Securities Act of 1933, as amended from time to time, and any
successor thereto.
Share Award
means an Award consisting of either shares of Ordinary Shares or a right to
receive Ordinary Shares in the future, each pursuant to Section 6 of the Plan.
Stock Option
means any Nonstatutory Stock Option or Incentive Stock Option.
Subsidiary
means any subsidiary corporation of the Company within the meaning of Section
424(f) of the Code.
Termination of Employment
means (i) a termination of service (for reasons other than a
military or personal leave of absence granted by the Company) of a Participant from the Company or
an Affiliate, unless the Participant thereupon becomes employed by the Company or another
affiliate.
4
In addition, certain other terms used herein have definitions otherwise ascribed to them
herein.
Section 2. Administration
This Plan shall be administered by the Committee.
Among other things, the Committee shall have the authority, subject to the terms of the Plan,
to:
(a) select the Participants to whom Awards may from time to time be granted and designate the
Affiliates of the Company for purposes of the Plan;
(b) determine whether and to what extent Awards are to be granted hereunder;
(c) determine the number of shares of Ordinary Shares to be covered by each Award granted
hereunder;
(d) determine the terms and conditions of any Award granted hereunder (including, but not
limited to, the Exercise Price (subject to Section 5(a)), any vesting conditions, restrictions or
limitations (which may be related to the performance of the Participant, the Company or any of its
Affiliates)) and any acceleration of vesting or waiver or cancellation regarding any Award and the
shares of Ordinary Shares relating thereto, based on such factors as the Committee shall determine;
(e) subject to Section 8 hereof, modify, amend or adjust the terms and conditions of any
Award, at any time or from time to time, including, but not limited to, the authority to either (1)
reduce the Exercise Price of an outstanding Stock Option or Other Share Based Award or (2)
simultaneously cancel Stock Options for which the Exercise Price exceeds the then current Fair
Market Value of the underlying Ordinary Shares and grant a new Award with an Exercise Price equal
to or greater than the then current Fair Market Value of the underlying Ordinary Shares.
(f) determine to what extent and under what circumstances Ordinary Shares and other amounts
payable with respect to an Award shall be deferred;
(g) adopt, alter and repeal such administrative rules, guidelines and practices governing the
Plan as it shall from time to time deem advisable;
(h) interpret the terms and provisions of the Plan and any Award issued under the Plan (and
any agreement, including, but not limited to, an Award Agreement relating thereto);
(i) adopt any sub-plans applicable to residents of any specified jurisdiction as it deems
necessary or appropriate in order to comply with or take advantage of any tax laws or other laws
applicable to the Company, its Affiliates, or to Participants or to otherwise facilitate the
administration of the Plan, which sub-plans may include additional restrictions or conditions
applicable to Awards or Plan Shares acquired upon exercise of Awards; and
(j) otherwise supervise and administer of the Plan.
5
The Committee may act only by a majority of its members then serving thereon, except that, if
permissible under applicable law, the Committee may designate or allocate all or any portion of its
responsibilities and powers to any one or more of their number or any officer of the Company. Any
such designation or allocation may be revoked by the Committee at any time.
Any dispute or disagreement which may arise under, or as a result of, or in any way relate to,
the interpretation, construction or application of the Plan or an Award (or related Award
Agreement) granted hereunder shall be determined and resolved by the Committee. Any determination
or resolution made by the Committee pursuant to the provisions of the Plan with respect to the
Plan, any Award or Award Agreement shall be made in the sole discretion of the Committee and, with
respect to an Award, at the time of the grant of the Award or, unless in contravention of any
express term of the Plan or the Award Agreement, at any time thereafter. Except as otherwise set
forth herein or in any Award Agreement, all decisions made by the Committee in accordance with the
terms of this Plan or the Award Agreements shall be final, conclusive and binding on all Persons,
including the Company, its Affiliates and the Participants.
To the maximum extent permitted by applicable law and the Articles of Association of the
Company and to the extent not covered by insurance directly insuring such person, each officer and
member or former member of the Committee or the Board shall be indemnified and held harmless by the
Company against any cost or expense (including reasonable fees and expenses of counsel reasonably
acceptable to the Committee) or liability (including any sum paid in settlement of a claim with the
approval of the Committee), and advanced amounts necessary to pay the foregoing at the earliest
time and to the fullest extent permitted, arising out of any act or omission to act in connection
with the administration of this Plan, except to the extent arising out of such officers, members
or former members own fraud or bad faith. Such indemnification shall be in addition to any rights
of indemnification the employees, officers, directors or members or former officers, directors or
members may have under applicable law or under the Articles of Association of the Company or any
Affiliate. Notwithstanding anything else herein, this indemnification will not apply to the actions
or determinations made by an individual with regard to Awards granted to him or her under this
Plan.
Section 3. Ordinary Shares Subject to Plan
The total number of Ordinary Shares reserved and available for grant under the Plan shall be
5,000,000 (subject to any increase or decrease pursuant to this Section 3 and pursuant to the
Transaction). Shares subject to an Award under the Plan may be authorized and unissued shares of
Ordinary Shares or Ordinary Shares held in or acquired for the treasury of the Company or both.
If any Restricted Shares or Other Share-Based Awards are forfeited to the Company or if any
Stock Option terminates without being exercised, the shares subject to such Awards shall again be
available for distribution in connection with Awards under the Plan. In addition, in determining
the number of Ordinary Shares available for Awards other than Incentive Stock Options, if Ordinary
Shares have been delivered or exchanged by a Participant as full or partial payment to the Company
for payment of the exercise price, or for payment of withholding taxes, or if the number of
Ordinary Shares otherwise deliverable has been reduced for payment of the exercise price or for
payment of withholding taxes, the number of Ordinary Shares exchanged or
reduced as payment in connection with the exercise or for withholding shall again be available
for purposes of Awards other than Incentive Stock Options under this Plan.
6
The total number of Ordinary Shares subject to any Stock Option which may be granted under
this Plan to each Participant on and after a Registration Event shall not exceed 800,000 shares
(subject to any increase or decrease pursuant to this Section 3 and pursuant to the Transaction)
during each fiscal year of the Company. The individual Participant limitations set forth in this
Section 3 shall be cumulative; that is, to the extent that Ordinary Shares for which Options are
permitted to be granted to a Participant pursuant to this Section during a fiscal year of the
Company are not covered by a grant of an Option in the Companys fiscal year, such Ordinary Shares
available for grants to such Participant automatically increase in the subsequent fiscal years
during the term of the Plan until used. For the avoidance of doubt, in each fiscal year of the
Company subsequent to the Transaction, the total number of Ordinary Shares subject to any Stock
Option which may be granted under this Plan to each Participant in any such fiscal year is 400,000
(and for the fiscal year during which the Transaction occurs, the limitation shall be based on an
800,000 share limit with respect to the portion of the fiscal year ending immediately prior to the
date of the Transaction, and the limitation shall be based on a 400,000 share limit (in the
aggregate with grants made prior to the Transaction on a split-adjusted basis) with respect to the
portion of the fiscal year commencing on the date of the Transaction).
No individual may be granted in any fiscal year of the Company Other Share-Based Awards that
are contingent upon the attainment of Performance Goals covering more than 400,000 Shares (as such
number may be adjusted from time to time and pursuant to the Transaction). For the avoidance of
doubt, in each fiscal year of the Company subsequent to the Transaction, no individual may be
granted Other Share-Based Awards that are contingent upon the attainment of Performance Goals
covering more than 200,000 Shares (and for the fiscal year during which the Transaction occurs, the
limitation shall be based on an 400,000 share limit with respect to the portion of the fiscal year
ending immediately prior to the date of the Transaction, and the limitation shall be based on a
200,000 share limit (in the aggregate with grants made prior to the Transaction on a split-adjusted
basis) with respect to the portion of the fiscal year commencing on the date of the Transaction).
In the event any merger, reorganization, consolidation, recapitalization, spin-off, stock
dividend, share split, reverse share split, extraordinary distribution with respect to the Ordinary
Shares, any sale or transfer of all or part of the Companys assets or business or other change in
corporate structure affecting the Ordinary Shares occurs or is proposed (such an event, an Equity
Restructuring), the Committee or the Board shall, effective as of the time of the Equity
Restructuring, make such substitution or adjustment in the aggregate number and kind of shares or
other property reserved for issuance under the Plan or any limitations under the Plan, in the
number, kind and Exercise Price (as defined herein) of shares or other property subject to
outstanding Stock Options, in the number and kind of shares or other property subject to Restricted
Share Awards or other Awards, and/or such other substitution or adjustments, in each case as the
Committee or the Board shall determine in its discretion to be appropriate, such that the value of
the adjusted shares or other property immediately prior to the Equity Restructuring is the same as
the value of such adjusted shares or other property immediately following the Equity Restructuring,
provided that, in no case shall such determination adversely affect in any material respect the
rights of a Participant hereunder or under any Award Agreement. In
connection with any event described in this paragraph, the Committee may provide, in its sole
discretion, for the cancellation of any outstanding Stock Option and payment in cash or other
property in exchange therefor.
7
In the event of a merger or consolidation in which the Company is not the surviving entity or
in the event of any transaction that results in the acquisition of substantially all of the
Companys outstanding Ordinary Shares by a single person or entity or by a group of persons and/or
entities acting in concert, or in the event of the sale or transfer of all or substantially all of
the Companys assets (all of the foregoing being referred to as Acquisition Events), then the
Committee may, in its sole discretion, terminate all outstanding Stock Options, effective as of the
date of the Acquisition Event, by delivering notice of termination to each Participant at least 20
days prior to the date of consummation of the Acquisition Event, in which case during the period
from the date on which such notice of termination is delivered to the consummation of the
Acquisition Event, each such Participant shall have the right to exercise in full all of his or her
Stock Options that are then outstanding (without regard to any limitations on exercisability
otherwise contained in the Stock Option agreements), but any such exercise shall be contingent upon
and subject to the occurrence of the Acquisition Event, and, provided that, if the Acquisition
Event does not take place within a specified period after giving such notice for any reason
whatsoever, the notice and exercise pursuant thereto shall be null and void.
Section 4. Participants
The following persons shall be Participants eligible to be granted Awards under the Plan:
(i) Persons who are officers, directors, employees or consultants of the Company and/or any of its
Affiliates; (ii) Persons who at the time of grant may be performing (or subject to being required
to perform) services for the Company or any of its Affiliates (including, without limitation,
officers, directors, employees, Affiliates and consultants of FPC); and (iii) Non-Employee
Directors of the Company and its Affiliates who are responsible for or contribute to the
management, growth and profitability of the business of the Company and its Affiliates. However,
Incentive Stock Options may be granted only to employees of the Company its Subsidiaries or its
Parent.
Section 5. Stock Options
The Board or the Committee as its duly authorized delegate shall have the authority to grant
to Participants Stock Options. Stock Options shall be evidenced by Option Agreements, which shall
include such terms and provisions as the Committee may determine from time to time. The grant of a
Stock Option shall occur on the date the Committee by resolution selects an individual to receive a
grant of a Stock Option, determines the number of Ordinary Shares to be subject to such Stock
Option to be granted to such individual and specifies the terms and provisions of the Stock Option,
or on such other date as the Committee may determine. The Company shall notify a Participant of any
grant of a Stock Option, and a written Option Agreement shall be duly executed and delivered by the
Company to the Participant. Such Option Agreement shall become effective upon execution and
delivery by the Participant to the Company.
8
Stock Options shall be subject to the following terms and conditions, and shall contain such
additional terms and conditions as the Committee shall deem desirable:
(a)
Exercise Price
. The price per Ordinary Share purchasable under a Stock Option
shall be such price as determined by the Committee and set forth in the Option Agreement (the
Exercise Price); provided that the Exercise Price shall not be less than the nominal or par value
of the Ordinary Shares, and:
(i) in the case of an Incentive Stock Option
(A) granted to an employee of the Company, its Subsidiaries or its Parent who,
at the time of the grant of such Incentive Stock Option, owns shares representing
more than ten percent (10%) of the voting power of all share classes of the Company
or its Subsidiaries or its Parent (a Ten Percent Shareholder), the per share
Exercise Price shall be no less than one hundred ten percent (110%) of the Fair
Market Value per share on the date of grant; and
(B) granted to any employee of the Company, its Subsidiaries or its Parent
other than a Ten Percent Shareholder, the per share Exercise Price shall be no less
than one hundred percent (100%) of the Fair Market Value per share on the date of
grant.
(ii) in the case of a Nonstatutory Stock Option, granted to a California Participant
(A) who is a Ten Percent Shareholder, the per share Exercise Price shall be no
less than one hundred ten percent (110%) of the Fair Market Value per share on the
date of the grant; and
(B) who is not a Ten Percent Shareholder, the per share Exercise Price shall be
no less than eighty-five percent (85%) of the Fair Market Value per share on the
date of grant.
(iii) in the case of any other Stock Option granted, the per share Exercise Price as
determined by the Committee.
(b)
Option Term
. The term of each Stock Option shall be fixed by the Committee
provided, however, that no Stock Option shall be exercisable more than ten (10) years after the
date such Stock Option is granted. Absent any such term being fixed by the Committee, pursuant to
an Option Agreement or otherwise, such term shall be ten (10) years; provided, however, that the
term of an Incentive Stock Option granted to a Ten Percent Shareholder shall not exceed five (5)
years.
(c)
Exercisability
. Except as otherwise provided herein, Stock Options shall be
exercisable at such time or times and subject to such terms and conditions as shall be determined
by the Committee; provided that Stock Options granted to California Participants (other than an
officer, director, manager or consultant) shall become exercisable at a rate of no less than twenty
percent (20%) per year over five (5) years from the date the Stock Options are granted. If the
Committee provides that any Stock Option is exercisable only in installments, the Committee
may at any time waive such installment exercise provisions, in whole or in part, based on such
factors as the Committee may determine. In addition, the Committee may at any time accelerate the
exercisability of any Stock Option.
9
(d)
Method of Exercise
. Subject to the provisions of this Section 5, vested Stock
Options may be exercised, in whole or in part, at any time during the option term by giving written
notice of exercise to the Company specifying the number of Ordinary Shares subject to the Stock
Option to be purchased.
Such notice shall be accompanied by payment in full of the Exercise Price per share by
certified or bank check or such other instrument or method of payment as the Committee may accept.
Unless determined otherwise by the Committee at the time of grant and set forth in the Option
Agreement, payment, in full or in part, may also be made in the form of fully vested Ordinary
Shares (other than Restricted Shares) already owned by the Participant (for at least six months or
such other period necessary to avoid a charge, for accounting purposes, against the Companys
earnings as reported in the Companys financial statements if acquired upon exercise of a Stock
Option or received upon the lapse of restrictions on an Award of Restricted Shares) of the same
class as the Ordinary Shares subject to the Stock Option (based on the Fair Market Value of the
Ordinary Shares on the date the Stock Option is exercised) or, if the Ordinary Shares are traded on
a national securities exchange, The Nasdaq Stock Market, Inc. or quoted on a national quotation
system sponsored by the National Association of Securities Dealers, and the Committee authorizes,
to the extent permitted by law, through a procedure whereby the Participant delivers irrevocable
instructions to a broker reasonably acceptable to the Committee to deliver promptly to the Company
an amount equal to the purchase price.
No Ordinary Shares shall be issued until full payment therefore has been made. Except as
otherwise provided in the Management Shareholders Agreement, if the Participant is a party to the
Management Shareholders Agreement, and subject to Sections 10(b), 10(e) and 10(h) hereof and the
applicable Option Agreement, a Participant shall have all of the rights of a shareholder of the
Company holding the class or series of Ordinary Shares that is subject to such Stock Option
(including, if applicable, the right to vote the shares and the right to receive dividends and
distributions), when the Participant has given written notice of exercise, has paid in full for
such shares and, if requested, has given the representations referred to in Section 10(b) or as may
otherwise be required in accordance with Sections 10(e) and 10(h).
(e)
Nontransferability of Stock Options
. No Stock Option shall be transferable by the
Participant other than (i) by will or by the laws of descent and distribution, or (ii) as otherwise
expressly permitted under the applicable Option Agreement, to a Family Member, subject to the
restrictions in the Management Shareholders Agreement. All Stock Options granted to California
Participants shall not be transferable by such Participants except as permitted by the California
Code of Regulations Section 260.140.41(d). All Stock Options granted to an individual shall be
exercisable, subject to the terms of the Plan, during the Participants lifetime, only by the
Participant or any Person to whom such Stock Option is transferred pursuant to the preceding
sentence, including such Participants guardian, legal representative and other transferee. The
term Participant includes the estate of the Participant or the legal representative of the
Participant named in the Option Agreement and any Person to whom an Option is
otherwise transferred in accordance with this Section 5(e), by will or the laws of descent and
distribution; provided, however, that references herein to Employment of a Participant or
termination of Employment of a Participant shall continue to refer to the Employment or termination
of Employment of the applicable grantee of an Award hereunder.
10
(f)
Termination of Employment
.
(i)
Termination for Any Reason (other than Cause)
. Except as otherwise determined by
the Committee and expressly provided in the applicable Option Agreement or applicable
employment or consulting agreement, upon the termination of the Participants Employment for
any reason (other than Cause), including death or Disability, vesting ceases, the term of
unvested stock options lapses and vested and unvested options will become unexercisable,
except that such Participant shall have ninety (90) days to exercise the portion of the
Participants Stock Option that is vested on the date of the Participants termination of
Employment. In no event shall the Committee grant a Stock Option to a California Participant
that provides the California Participant with less than thirty (30) days after the date of
such California Participants termination of Employment if such termination was caused by
other than death, Disability or Cause to exercise the Stock Option with respect to any
vested shares. Furthermore, in no event shall the Committee grant a Stock Option to a
California Participant that provides the California Participant with less than six months
after the California Participants termination due to death or Disability to exercise the
Stock Option with respect to any vested shares. Notwithstanding anything contained herein to
the contrary, the Participant shall not be permitted to exercise any Stock Option at a time
beyond the initial option term.
(ii)
Termination for Cause
. All outstanding and unexercised Stock Options, whether
vested or unvested, as of the time the Participant is notified that his or her Employment is
terminated for Cause or at the time the Participant voluntarily terminates employment within
ninety (90) days after the occurrence of an event that would be grounds for a termination
for Cause, will be cancelled immediately.
Section 6. Restricted Shares
The Committee shall determine the Participants to whom and the time or times at which grants
of Restricted Shares will be awarded, the number of shares to be awarded to any Participant, the
purchase price, the conditions for vesting, the time or times within which such Awards may be
subject to cancellation, repurchase and restrictions on transfer and any other terms and conditions
of the Awards (including provisions (i) relating to placing legends on certificates representing
Restricted Shares, (ii) permitting the Company to require that Restricted Shares be held in custody
by the Company with a share transfer certificate from the owner thereof until restrictions lapse
and (iii) relating to any rights to repurchase Restricted Shares on the part of the Company), in
addition to those contained in the Management Shareholders Agreement, if the Participant is a
party to the Management Shareholders Agreement. Each Participant receiving Restricted Shares shall
be issued a share certificate in respect of such Restricted Shares, unless the Committee elects to
use another system, such as book entries by the transfer agent, as evidencing ownership of shares
of Restricted Shares. Unless otherwise
specified in the Restricted Share Agreement, upon a Participants termination for any reason
during the relevant restriction period, all unvested Restricted Shares will be forfeited to the
Company, without compensation.
11
Any right of the Company to repurchase Restricted Shares from a California Participant upon
termination of Employment shall be at a repurchase price that is at least equal to the lesser of
(x) the Fair Market Value of such shares on the date of termination of Employment (provided that
such repurchase right shall terminate as of the Registration Event) or (y) the original purchase
price, provided that in the case of (y) such repurchase right lapses at a rate of no less than
twenty percent (20%) of the shares per year over five years from the date the Restricted Shares are
granted; and provided that in the case of both (x) and (y) such repurchase right is exercised
within ninety (90) days of termination of Employment. Furthermore, in addition to the foregoing
restrictions, Restricted Shares held by an officer, director or consultant of the Company or one of
its Affiliate may be subject to additional or greater restrictions and any restrictions set forth
in the Companys Articles of Association. The terms and conditions of Restricted Share Awards shall
be set forth in a Restricted Share Agreement, which shall include such terms and provisions as the
Committee may determine from time to time, and which shall be duly executed and delivered by the
Company to the Participant and become effective upon execution and delivery by the Participant to
the Company. Except as provided in this Section 6, the Restricted Share Agreement, the Management
Shareholders Agreement and any other relevant agreements, the Participant shall have, with respect
to the Restricted Shares, all of the rights of a shareholder of the Company holding the class or
series of Ordinary Shares that is the subject of the Restricted Share Award, including, if
applicable, the right to vote the shares and, subject to the following sentence, the right to
receive any cash dividends or distributions (but, subject to the third paragraph of Section 3, not
the right to receive non-cash dividends or distributions). If so determined by the Committee in the
applicable Restricted Share Agreement, cash dividends and distributions on the class or series of
Ordinary Shares that is the subject of the Restricted Share Award shall be automatically deferred
and reinvested in additional Restricted Shares, held subject to the vesting of the underlying
Restricted Shares, or held subject to meeting conditions applicable only to dividends and
distributions.
Section 7. Other Share-Based Awards
The Committee is authorized to grant to Participants Other Share-Based Awards that are payable
in, valued in whole or in part by reference to, or otherwise based on or related to Ordinary
Shares, including but not limited to, Ordinary Shares awarded purely as a bonus and not subject to
any restrictions or conditions, Ordinary Shares in payment of the amounts due under an incentive or
performance plan sponsored or maintained by the Company or a Subsidiary, share appreciation rights
(either separately or in tandem with Options), share equivalent units, and Awards valued by
reference to book value of Ordinary Shares.
12
Subject to the provisions of this Plan, the Committee shall have authority to determine the
persons to whom and the time or times at which such Awards shall be made, the number of Ordinary
Shares to be awarded pursuant to or referenced by such Awards, and all other conditions of the
Awards. Grants of Other Share-Based Awards may be subject to such conditions, restrictions and
contingencies as the Committee may determine which may include, but are not limited to, continuous
service with the Company or an Affiliate and/or the
achievement of Performance Goals. Except as provided in the last sentence of this paragraph,
the criteria that may be used by the Committee in granting Other Share-Based Awards contingent on
Performance Goals shall consist of the attainment of one or more of the Performance Goals. The
Committee may select one or more Performance Goals for measuring performance and the measuring may
be stated in absolute terms or relative to comparable companies. The measurements used in
Performance Goals set under the Plan shall be determined in accordance with Generally Accepted
Accounting Principles (GAAP), except, to the extent that any objective Performance Goals are
used, if any measurements require deviation from GAAP, such deviation shall be at the discretion of
the Committee at the time the Performance Goals are set or at such later time to the extent
permitted under Section 162(m) of the Code. Other Performance Goals may be used to the extent such
goals satisfy Section 162(m) of the Code or the Other-Share Based Award is not intended to satisfy
the requirements of Section 162(m) of the Code.
Other Share-Based Awards made pursuant to this Section 7 are subject to the following terms
and conditions:
(a)
Dividends
. Unless otherwise determined by the Committee at the time of Award,
subject to the provisions of the Award agreement and this Plan, the recipient of an Award under
this Section 7 shall be entitled to receive, currently or on a deferred basis, dividends or
dividend equivalents with respect to the number of Ordinary Shares covered by the Award, as
determined at the time of the Award by the Committee, in its sole discretion.
(b)
Vesting
. Any Award under this Section 7 and any Ordinary Shares covered by any
such Award shall vest or be forfeited to the extent so provided in the Award agreement, as
determined by the Committee, in its sole discretion.
(c)
Waiver of Limitation
. In the event of the Participants Retirement, Disability or
death, or in cases of special circumstances, the Committee may, in its sole discretion, waive in
whole or in part any or all of the limitations imposed hereunder (if any) with respect to any or
all of an Award under this Article.
(d)
Purchase Price
. Ordinary Shares issued on a bonus basis under this Section 7 may
be issued for no cash consideration; Ordinary Shares purchased pursuant to a purchase right awarded
under this Section 7 shall be priced as determined by the Committee.
(e)
Committee Certification
. At the expiration of the Performance Period, the
Committee shall determine and certify in writing the extent to which the Performance Goals have
been achieved.
Section 8. Term, Amendment and Termination
This Plan will expire on September 5, 2013, ten years from its adoption by the Board of
Directors of UAI Ltd. Awards outstanding as of such date shall not be affected or impaired by the
expiration of the Plan and shall be subject to the terms of the Plan.
13
The Board or the Committee may at any time amend, suspend, or terminate the Plan,
prospectively or retroactively; provided, however, that, unless otherwise required by law or
specifically provided herein, no amendment, suspension or termination shall be made that is
adverse to the rights of a Participant under an Award theretofore granted without such
Participants consent; provided, further, without the approval of the shareholders of the Company
in accordance with applicable law, to the extent required by the applicable provisions of Rule
16b-3 or Section 162(m) of the Code or the rules of any exchange or system on which the Ordinary
Shares are listed or traded, or, with regard to Incentive Stock Options, Section 422 of the Code,
no amendment may be made which would (i) increase the aggregate number of Ordinary Shares that may
be issued under this Plan or the maximum individual Participant limitations under Section 3; (ii)
change the classification of Participants eligible to receive Awards under this Plan; (iii) extend
the maximum Stock Option period or (iv) require shareholder approval in order for the Plan to
continue to comply with the applicable provisions of Rule 16b-3 or Section 162(m) of the Code, or,
with regard to Incentive Stock Options, Section 422 of the Code.
The Committee may amend the terms of any Award theretofore granted, prospectively or
retroactively, but no such amendment shall be made that is adverse to the rights of the Participant
thereunder without the Participants consent.
Section 9. Unfunded Status of Plan
It is presently intended that the Plan constitute an unfunded plan for incentive and
deferred compensation. The Committee may authorize the creation of trusts or other arrangements to
meet the obligations created under the Plan to deliver Ordinary Shares or make payments;
provided
,
however
, that unless the Committee otherwise determines, the existence of such trusts or other
arrangements is consistent with the unfunded status of the Plan.
Section 10. General Provisions
(a)
Awards and Certificates
. Shares of Restricted Shares and Ordinary Shares issuable
upon the exercise of a Stock Option (together, Plan Shares) shall be evidenced in such manner as
the Committee may deem appropriate, including book entry registration or issuance of one or more
share certificates. Any certificate issued in respect of Plan Shares shall be registered in the
name of such Participant and shall bear appropriate legends referring to the terms, conditions, and
restrictions applicable to such Award. Such Plan Shares may bear other legends to the extent the
Committee or the Board determines it to be necessary or appropriate, including any required by the
Management Shareholders Agreement. If and when all restrictions expire without a prior
cancellation of the Plan Shares theretofore subject to such restrictions, upon surrender of
legended certificates representing such shares new certificates for such shares shall be delivered
to the Participant without the second legend listed above.
(b)
Representations and Warranties
. The Committee may require each Person purchasing
or receiving Plan Shares to (i) represent to and agree with the Company in writing that such Person
is acquiring the shares without a view to the distribution thereof and (ii) make any other
representations and warranties that the Committee deems appropriate.
(c)
Additional Compensation
. Nothing contained in the Plan shall prevent the Company
or any of its Affiliates from adopting other or additional compensation arrangements for its
employees.
14
(d)
No Right of Employment
. Adoption of the Plan or grant of any Award shall not
confer upon any employee or any other individual any right to continued Employment, nor shall it
interfere in any way with the right of the Company or any of its Affiliates to terminate the
Employment of any eligible Participant at any time.
(e)
Withholding Taxes
. No later than the date as of which an amount first becomes
includible in the gross income of a Participant for income tax purposes or subject to Federal
Insurance Contributions Act withholdings with respect to any Award, including, without limitation,
upon exercise of any Stock Option, under the Plan, such Participant shall pay to the Company or, if
appropriate, one of its Affiliates, or make arrangements satisfactory to the Committee regarding
the payment of, any United States federal, state or local or foreign taxes of any kind required by
law to be withheld with respect to such amount. If approved by the Committee, minimum required
statutory withholding obligations may be settled with Ordinary Shares, including Ordinary Shares
that are part of the Award that gives rise to the withholding requirement. The obligations of the
Company under the Plan shall be conditional on such payment or arrangements, and the Company and
its Affiliates shall, to the extent permitted by law, have the right to deduct any such taxes from
any payment otherwise due to the Participant. The Committee may establish such procedures as it
deems appropriate, including making irrevocable elections, for the settlement of withholding
obligations with Ordinary Shares.
(f)
Beneficiaries
. The Committee shall establish such procedures as it deems
appropriate for a Participant to designate a beneficiary to whom any amounts payable in the event
of the Participants death are to be paid or by whom any rights of the Participant, after the
Participants death, may be exercised.
(g)
Governing Law
. The Plan and all Awards made and actions taken thereunder shall be
governed by and construed and enforced in accordance with the laws of the State of Delaware without
regard to the principles of conflicts of law thereof.
(h)
Compliance with Laws
. If any law or any regulation of any governmental body,
commission or agency having jurisdiction shall require the Company or a Participant seeking to
exercise Stock Options to take any action with respect to the Plan Shares to be issued upon the
exercise of Stock Options then the date upon which the Company shall issue or cause to be issued
the Plan Shares or the rights associated therewith shall be postponed until full compliance (as
determined by the Committee in its sole discretion) has been made with all such requirements of law
or regulation; provided, that the Company shall use its reasonable efforts to take all necessary
action to comply with such requirements of law or regulation. Moreover, in the event that the
Company shall determine that, in compliance with the Securities Act or other applicable statutes or
regulations (including state Blue Sky or other securities laws), it is necessary to register any
of the Plan Shares with respect to which an exercise of a Stock Option has been made, or to qualify
any such Plan Shares (or the Company) for exemption from any of the requirements of the Securities
Act or any other applicable statute or regulation, no Stock Options may be exercised and no Plan
Shares shall be issued to the exercising Participant until the required action has been completed;
provided, that the Company shall use its reasonable efforts to take all necessary action to comply
with such requirements of law or regulation. Notwithstanding anything to the contrary contained
herein, neither the Board nor the members of the Committee owes a fiduciary duty to any Participant
in his or her capacity as such.
15
(i)
Fractional Shares
. No fractional shares shall be issued under the Plan and no cash
settlements shall be made with respect to fractional shares eliminated by rounding.
(j)
Shareholder Approval
. The Plan shall be subject to approval by the shareholders of
the Company within twelve (12) months before or after the date the Plan is adopted. Such
shareholder approval shall be obtained in the degree and manner required under applicable state and
federal or foreign law and the rules of any stock exchange upon which the Companys Ordinary Shares
are listed, quoted or actively traded.
(k)
Information to Participants
. The Company shall provide to each California
Participant, not less frequently than annually, copies of annual financial statements. The Company
shall also provide such statements to each individual who acquires Ordinary Shares pursuant to the
Plan while such individual owns such Ordinary Shares. The Company shall not be required to provide
such statements to key employees whose duties in connection with the Company assure their access to
equivalent information.
(l)
Agreement
. As a condition to the grant of any Award, if requested by the Company
and the lead underwriter of any IPO (the Lead Underwriter), a Participant shall irrevocably agree
not to sell, contract to sell, grant any option to purchase, transfer the economic risk of
ownership in, make any short sale of, pledge or otherwise transfer or dispose of, any interest in
any Ordinary Shares or any securities convertible into, derivative of, or exchangeable or
exercisable for, or any other rights to purchase or acquire Ordinary Shares (except Ordinary Shares
included in such IPO or acquired on the public market after such offering) during such period of
time following the effective date of a registration statement of the Company filed under the
Securities Act that the Lead Underwriter shall specify (the Lock-up Period). The Participant
shall further agree to sign such documents as may be requested by the Lead Underwriter to effect
the foregoing and agree that the Company may impose stop-transfer instructions with respect to
Ordinary Shares acquired pursuant to an Award until the end of such Lock-up Period.
(m)
Management Shareholders Agreement and Other Requirements
. Notwithstanding
anything herein to the contrary, as a condition to the receipt of Plan Shares, to the extent
required by the Committee, the Participant shall execute and deliver a shareholders agreement or
such other documentation which shall set forth certain restrictions on transferability of the Plan
Shares, a right of first refusal of the Company with respect to Plan Shares, the right of the
Company to purchase Plan Shares and such other terms as the Board or Committee shall from time to
time establish. Such shareholders agreement shall apply to all Plan Shares acquired under the
Plan. The Company may require, as a condition of grant or exercise of any Award, the Participant to
become a party to any other existing shareholders agreement.
(n)
California Provisions
. Notwithstanding anything herein to the contrary, the
provisions in the Plan applicable to Awards granted to California Participants shall apply only to
the extent necessary to comply with Title 10 of the California Code of Regulations at the time an
Award is granted and shall not apply if the Ordinary Shares are an exempt security under Section
25100 of the California Corporations Code.
16
APPENDIX A
PERFORMANCE CRITERIA
Performance Goals established for purposes of an Award of Performance-Based Awards intended to
comply with Section 162(m) of the Code shall be based on one or more of the following performance
criteria (Performance Criteria): (i) the attainment of certain target levels of, or a specified
percentage increase in, revenues, income before taxes and extraordinary items, net income,
operating income, earnings before income tax, earnings before interest, taxes, depreciation and
amortization or a combination of any or all of the foregoing; (ii) the attainment of certain target
levels of, or a percentage increase in, after-tax or pre-tax profits including, without limitation,
that attributable to continuing and/or other operations; (iii) the attainment of certain target
levels of, or a specified increase in, operational cash flow; (iv) the achievement of a certain
level of, reduction of, or other specified objectives with regard to limiting the level of increase
in, all or a portion of, the Companys bank debt or other long-term or short-term public or private
debt or other similar financial obligations of the Company, which may be calculated net of such
cash balances and/or other offsets and adjustments as may be established by the Committee; (v)
earnings per share or the attainment of a specified percentage increase in earnings per share or
earnings per share from continuing operations; (vi) the attainment of certain target levels of, or
a specified increase in return on capital employed or return on invested capital; (vii) the
attainment of certain target levels of, or a percentage increase in, after-tax or pre-tax return on
shareholders equity; (viii) the attainment of certain target levels of, or a specified increase
in, economic value added targets based on a cash flow return on investment formula; (ix) the
attainment of certain target levels in the fair market value of the shares of the Companys
Ordinary Shares; (x) the growth in the value of an investment in the Companys Ordinary Shares
assuming the reinvestment of dividends; (xi) the attainment of a certain level of, reduction of, or
other specified objectives with regard to limiting the level in or increase in, all or a portion of
controllable expenses or costs or other expenses or costs; or (xii) achievement of certain targets
with respect to the Companys book value, assets or liabilities. For purposes of item (i) above,
extraordinary items shall mean all items of gain, loss or expense for the fiscal year determined
to be extraordinary or unusual in nature or infrequent in occurrence or related to a corporate
transaction (including, without limitation, a disposition or acquisition) or related to a change in
accounting principle, all as determined in accordance with standards established by Opinion No. 30
of the Accounting Principles Board.
In addition, such Performance Criteria may be based upon the attainment of specified levels of
Company (or subsidiary, division or other operational unit of the Company) performance under one or
more of the measures described above relative to the performance of other corporations.
Furthermore, such Performance Criteria may be supplemented by reference to per share
determinations. To the extent permitted under Section 162(m) of the Code, but only to the extent
permitted under Section 162(m) of the Code (including, without limitation, compliance with any
requirements for shareholder approval), the Committee may: (i) designate additional business
criteria on which the Performance Criteria may be based or (ii) adjust, modify or amend the
aforementioned business criteria.
EXHIBIT 10.4
GLOBAL INDEMNITY PLC
ANNUAL INCENTIVE AWARDS PROGRAM
(As Amended and Restated July 2, 2010)
I.
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Purpose
: The purposes of this Annual Incentive Awards Program (the Program) are:
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1.
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To encourage increased efficiency and profitability of Global Indemnity plc
(the Company or GI plc).
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2.
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To reward Participants contributions to corporate success.
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II.
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Compensation Philosophy.
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GI plc wishes to provide a comprehensive, competitive compensation program for its officers
and certain other employees. The Program is intended to be an integral part of the total
compensation opportunity offered by the organization to such employees. This incentive program is
an adjunct to other forms of compensation provided by GI plc and its subsidiaries.
III.
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Definition of Terms.
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For purposes of the Program, terms have meanings as follows:
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A.
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Award means the amount earned by a Participant pursuant to
the provisions of the Program.
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B.
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Base Salary means a Participants W-2 wages for a calendar
year excluding any extraordinary compensation such as bonuses, stock options,
deferred compensation or benefits which are taxable for federal income tax
purposes. For purposes of the Program, Base Salary shall also include, however,
any salary deferrals which represent the employees portion of contributions to
a qualified benefit plan or deferred compensation plan offered by GI plc and
subsidiaries.
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C.
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Beneficiary or Beneficiaries means the person or persons
designated by the Participant to receive any payments due from the Program in
the event of the Participants death. Such a designation may, without notice to
the Beneficiary, be changed or revoked by the Participant at any time and from
time to time. The designation of the Beneficiary, and any change or revocation
thereof, shall be made in writing and shall not be effective unless and until
filed with and acknowledged by the Committee.
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If a Participant fails to designate a Beneficiary, or if no designated Beneficiary
survives the Participant, the amount payable from the Program shall be paid to the
Participants estate.
If a person designated as a Beneficiary shall be a minor or a person who has been
judged legally incompetent, GI plc shall make payment on behalf of such Beneficiary
to the Beneficiarys guardian or conservator, but only if such guardian or
conservator has provided to the Committee documentary evidence satisfactory to it as
to the legal, valid and continuing authority of such guardian or conservator to act
on behalf of such Beneficiary. Upon payment to such guardian or conservator, neither
the Board of Directors (the Board), GI plc, the Committee or any other agent,
employee or officer of any of them shall have any further liability for such
payment.
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D.
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Code means the Internal Revenue Code of 1986, as amended, and
any successor thereto.
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E.
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Code Section 162(m) means the exception for performance-based
compensation under Section 162(m) of the Code or any successor section and the
Treasury regulations promulgated thereunder.
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F.
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Committee means the Compensation Committee of GI plc, as
designated from time to time by the Board, or its designee. When pertaining to
Covered Participants and as otherwise necessary to comply with Code Section
162(m), Committee shall mean a subcommittee thereof consisting solely of
outside directors, as such term is defined by Code Section 162(m).
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G.
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Covered Participant means a Participant who, on the last day
of GI plcs taxable year, is the chief executive officer of GI plc or is among
the four highest compensated officers (other than the chief executive officer)
of GI plc as determined under Code Section 162(m).
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H.
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Disability means (i) disability as defined by long-term
disability plan maintained by GI plc or by the subsidiary or division thereof
by which the Participant is employed and under which the Participant is covered
or (ii) as determined by the Committee in its reasonable judgment.
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I.
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Participant means any employee of GI plc or subsidiary who
has been designated by the Committee as eligible to participate in the Program.
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J.
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Performance Goals means the objective performance goals
established by the Committee, and if desirable for purposes of Code Section
162(m), based on one or more Performance Criteria (as defined in Annex A).
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K.
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Program Year means a twelve-month consecutive period
commencing on each January 1 and ending on each December 31.
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L.
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Retirement means the Participants voluntary resignation in
circumstances acceptable to the Committee.
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2
IV.
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Designation of Participants.
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A. The Participants shall be those employees (or class of employees) of GI plc and
subsidiaries who are designated by the Committee as being eligible to participate in the Program.
The Committee shall create different sets of Award opportunities (Tiers) and shall assign
Participants to such Tiers. With respect to non-Covered Participants, the Committee may designate,
should it so choose, certain employees who would determine eligibility, Award opportunities and/or
Award amounts from a bonus pool designated by the Committee for such non-Covered Participants (or
Tiers thereof).
B. In order to be eligible to be a Participant for any Program Year, an individual must meet
the criteria set forth in the Program both at the beginning and the end of the Program Year, except
in those cases where a Participants employment with GI plc and its subsidiaries has terminated due
to Retirement, death or Disability, as provided in Section VI. Any deviation from this clause
requires the prior written approval of the Committee.
V.
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Awards for Participants:
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A.
Basis for Earning Awards
: Unless otherwise provided herein, Participants will earn an Award
on the basis of achievement of the Performance Goals, as such goals are selected and determined by
the Committee. If the Committee so elects, certain Participants who are not Covered Participants
may be eligible for discretionary bonuses based on their individual performance.
B.
Award Opportunities
:
A Participants Award opportunity shall be determined by the Committee, or its designate, as
provided in Section IV, and may provide for different levels of Awards depending on varying
achievement of the Performance Goals.
Award opportunities under the Program may be expressed as a percentage of the Base Salary, and
may range from 5% to 200%, or may be expressed as specific dollar amounts; provided that in no
event shall an Award under the Program exceed $1,000,000.
C.
Determination of Awards Earned
:
The Committee will establish the specific Performance Goals which must be attained in order to
receive Awards hereunder. With respect to Covered Participants, such goals shall be established in
writing prior to the beginning of a Program Year or at such later date as permitted under Code
Section 162(m) and while the outcome of the Performance Goals is substantially uncertain.
Upon receipt of the audited financials for the Company, the Committee (or with respect to
Committee-designated non-Covered Participants, such Participants supervisors) shall determine
whether and to what extent the Performance Goals for the Program Year were achieved. The Committee
may, in its sole discretion, disregard (or adjust for) changes in accounting methods, corporate
transactions (including, without limitation, dispositions and acquisitions) and other similar type
events or circumstances; provided however that, to the extent
such discretion would be impermissible under Code Section 162(m) or otherwise violate Code
Section 162(m), the Committee shall not exercise such discretion with respect to any Covered
Participants Award.
3
Notwithstanding the foregoing, the Committee may, in its sole discretion, elect to pay a
Participant an amount that is less than or more than what the Participants Award would otherwise
be hereunder; provided that in no instance shall the Committee increase the amounts otherwise
payable to a Covered Participant.
A Participant shall be entitled to receive payment in an amount equal to his/her Award no
later than March 15 of the year following the Program Year to which payment relates.
Notwithstanding the foregoing, in order to be eligible for payment of an Award for any Program
Year, a Participant must be continuously employed by GI plc or its subsidiaries through the close
of the Program Year, except in the case of a Participant whose employment terminates on account of
Retirement, death, or Disability. In the case of a Participant whose employment has terminated
during the Program Year due to Retirement, death or Disability, that Participant or his/her
Beneficiary will qualify for a pro-rated portion of the Participants Award, based on (i) the
number of complete calendar months of service which the Participant completed during that Program
Year and (ii) the actual achievement of the Performance Goals for such Program Year, to be paid on
or about the same time Awards are paid to active Participants under the Program. Any deviation from
this clause requires the prior authorization of the Committee.
Any payments due to Beneficiaries under the Program will be paid at the time payment would
otherwise have been made to the Participant, provided the identity and validity of such Beneficiary
has been legally established.
Notwithstanding any other provision herein, (A) if an individuals employment with GI plc and
subsidiaries is terminated on account of conduct detrimental to GI plcs best interests, then the
Committee, in its sole discretion (and not subject to challenge by the Participant in any way), may
cancel payment of any Award that has been earned under the Program but has not yet been paid and
(B) if a Participant resigns for any reason prior to the payment of an Award, the Participant shall
not be entitled to any payment under the Program.
No Award shall be paid to any Covered Participant before the Committee certifies in writing
that the relevant Performance Goals (except to the extent permitted under Code Section 162(m) and
provided above with regard to Retirement, death or Disability) were in fact satisfied.
VII.
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Program Administration.
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The Program shall be administered by the Committee. The Committee shall have the authority to
(i) interpret the Program in its sole and absolute discretion based upon the Programs provisions,
(ii) certify attainment of Performance Goals, and (iii) make all other determinations necessary or
desirable for the Programs administration; and such decisions of the Committee shall be final,
conclusive and binding on all parties. The Program is intended to comply with Code Section 162(m)
with respect to Covered Participants, and all provisions contained herein shall be limited,
construed and interpreted in a manner to so comply.
4
The designation of an individual as a Participant for a particular Program Year shall not
confer upon such individual the right to be designated as a Participant in a subsequent Program
Year.
An individual who has been designated by the Committee as a Participant for a Program Year
shall be notified in writing no later than April 30 of the Program Year of such designation,
provided that Covered Participants shall be notified in writing prior to the beginning of such
Program Year or at such later date as permitted under Code Section 162(m).
GI plc shall deduct from any distributions made to Participants or Beneficiaries under the
Program any applicable federal, state or local taxes which GI plc may be required to deduct under
the law and all amounts distributed under the Program are stated herein before any such deductions.
No Participant or other person shall have an interest in any fund or any specific assets of GI
plc and subsidiaries by reason of being a Participant in the Program or any right to receive any
distribution under the Program except and to the extent expressly provided in the Program.
The designation of an individual as a Participant under the Program shall not be construed as
conferring upon such individual any right to remain in the employ of GI plc and subsidiaries. With
respect to any Participant, GI plc and subsidiaries right to discipline, promote, demote, reassign
or terminate for any reason they deem fit shall not be affected in any manner by reason of such
individuals designation as a Participant in the Program.
All questions or controversies arising in any manner between the parties or persons in
connection with the Program or its operation, whether as to any claim for benefits, or as to the
construction of language or meaning of the Program, or rules and regulations adopted by the
Committee, or as to any writing, decision, instrument or account in connection with the operation
of the Program or otherwise, shall be submitted to the Committee for decision.
VIII.
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No Assignment or Alienation.
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Except as otherwise required by law, no right or interest (which right shall simply be a
contractual right) of any Participant hereunder shall be assigned, transferred or pledged
voluntarily or involuntarily and any attempt to do so shall be void, nor shall such rights or
interests be subject to attachment or other claims of creditors.
All actions taken or determinations made by the Committee shall be final and binding and all
concerned and nothing in the Program shall be deemed to give any Participant, Beneficiary, legal
representatives or assigns any right to participate in the Program except as determined by the
Committee pursuant to the provisions in the Program.
5
X.
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Program Amendment and Termination.
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The Company reserves the right in the Board (or a duly authorized committee thereof) to amend,
suspend or terminate the Program or to adopt a new plan in place of the Program at any
time; provided, that no such amendment shall, without the prior approval of the Companys
shareholders in accordance with applicable law to the extent required for the Program to continue
to comply with the requirements of Code Section 162(m): (i) materially alter the Performance
Criteria (as defined in Annex A) set forth in Annex A; (ii) change the class of eligible employees
set forth in Article IV; (iii) increase the maximum amount set forth in Article V; or (iv)
implement any other change to a provision of the Program. Furthermore, no amendment, suspension or
termination shall, without the consent of the Participant, alter or impair a Participants right to
receive payment of an Award for a Program Year otherwise payable hereunder.
The Program and any amendments thereto shall be construed, administered, and governing in all
respects in accordance with the laws of the Commonwealth of Pennsylvania (regardless of the law
that might otherwise govern under applicable principles of conflict of laws).
6
ANNEX A
UNITED AMERICA INDEMNITY, LTD.
PERFORMANCE CRITERIA
Performance Goals intended to comply with Code Section 162(m) shall be based on one or more of
the following performance criteria (Performance Criteria): (i) the attainment of certain target
levels of, or a specified percentage increase in, revenues, income before taxes and extraordinary
items, net income, operating income, earnings before income tax, earnings before interest, taxes,
depreciation and amortization or a combination of any or all of the foregoing; (ii) the attainment
of certain target levels of, or a percentage increase in, after-tax or pre-tax profits including,
without limitation, that attributable to continuing and/or other operations; (iii) the attainment
of certain target levels of, or a specified increase in, operational cash flow; (iv) the
achievement of a certain level of, reduction of, or other specified objectives with regard to
limiting the level of increase in, all or a portion of, the Companys bank debt or other long-term
or short-term public or private debt or other similar financial obligations of the Company, which
may be calculated net of such cash balances and/or other offsets and adjustments as may be
established by the Committee; (v) earnings per share or the attainment of a specified percentage
increase in earnings per share or earnings per share from continuing operations; (vi) the
attainment of certain target levels of, or a specified increase in return on capital employed or
return on invested capital; (vii) the attainment of certain target levels of, or a percentage
increase in, after-tax or pre-tax return on stockholders equity; (viii) the attainment of certain
target levels of, or a specified increase in, economic value added targets based on a cash flow
return on investment formula; (ix) the attainment of certain target levels in the fair market value
of the shares of the Companys common stock; (x) the growth in the value of an investment in the
Companys common stock assuming the reinvestment of dividends; (xi) the attainment of certain GAAP
insurance operating ratios; (xii) the attainment of a certain level of, reduction of, or other
specified objectives with regard to limiting the level in or increase in, all or a portion of
controllable expenses or costs or other expenses or costs; or (xiii) achievement of certain targets
with respect to the Companys book value, assets or liabilities. For purposes of item (i) above,
extraordinary items shall mean all items of gain, loss or expense for the fiscal year determined
to be extraordinary or unusual in nature or infrequent in occurrence or related to a corporate
transaction (including, without limitation, a disposition or acquisition) or related to a change in
accounting principle, all as determined in accordance with standards established by Opinion No. 30
of the Accounting Principles Board.
In addition, such Performance Criteria may be based upon the attainment of specified levels of
Company (or subsidiary, division or other operational unit of the Company) performance under one or
more of the measures described above relative to the performance of other corporations. To the
extent permitted under Section 162(m) of the Code, but only to the extent permitted under Section
162(m) of the Code (including, without limitation, compliance with any requirements for stockholder
approval), the Committee may: (i) designate additional business criteria on which the Performance
Criteria may be based or (ii) adjust, modify or amend the aforementioned business criteria.
7
EXHIBIT 10.6
AMENDED AND RESTATED SHAREHOLDERS AGREEMENT
dated as of
July 2, 2010
among
GLOBAL INDEMNITY PLC
(AS SUCCESSOR TO UNITED AMERICA INDEMNITY, LTD.)
and
THE SHAREHOLDERS LISTED ON THE
SIGNATURE PAGES
TABLE OF CONTENTS
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Page
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ARTICLE I DEFINITIONS
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2
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Section 1.1
Certain Definitions
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2
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Section 1.2
Other Definitions
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4
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Section 1.3
Interpretation
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4
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ARTICLE II REPRESENTATIONS AND WARRANTIES
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4
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Section 2.1
Representations and Warranties of the Company
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4
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Section 2.2
Representations and Warranties of Holdings
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5
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Section 2.3
Representations and Warranties of Holdings II
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5
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Section 2.4
Representations and Warranties of the Co-investment Funds
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5
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ARTICLE III RESTRICTIONS ON TRANSFERS OF SHARES
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6
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Section 3.1
General Limitations on Transfers
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6
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Section 3.2
Compliance with Securities Laws
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7
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Section 3.3
Permitted Transfers
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7
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Section 3.4
Additional Provisions Relating to Restrictions on Transfers
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7
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ARTICLE IV REGISTRATION RIGHTS
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9
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Section 4.1
Piggyback Registrations
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9
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Section 4.2
Registration Procedures
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10
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Section 4.3
Indemnification
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13
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Section 4.4
Rule 144 Reporting
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16
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Section 4.5
Lock-Up Agreement
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16
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ARTICLE V COVENANTS
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16
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Section 5.1
No Voting or Conflicting Agreements
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16
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Section 5.2
Further Assurances
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17
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Section 5.3
Certain Transactions
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17
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Section 5.4
Confidentiality
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17
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ARTICLE VI EFFECTIVENESS; TERMINATION
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17
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Section 6.1
Effectiveness; Term
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17
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ARTICLE VII MISCELLANEOUS
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18
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Section 7.1
Notices
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18
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Section 7.2
Amendment; Waivers
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19
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Section 7.3
Successors and Assigns
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19
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Section 7.4
Recapitalizations and Exchanges Affecting Shares
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19
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Section 7.5
Governing Law
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20
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Section 7.6
Jurisdiction
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20
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Section 7.7
WAIVER OF JURY TRIAL
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20
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Section 7.8
Counterparts; Third Party Beneficiaries
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20
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Section 7.9
Entire Agreement
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20
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Section 7.10
Captions
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20
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Section 7.11
Specific Performance
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20
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Section 7.12
Severability
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21
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Section 7.13
Uncertificated Shares
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21
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i
AMENDED AND RESTATED SHAREHOLDERS AGREEMENT, dated as of July 2, 2010, by and among GLOBAL
INDEMNITY PLC (as successor to United America Indemnity, Ltd.), a public limited company
incorporated under the laws of Ireland (the
Company
), U.N. HOLDINGS (CAYMAN), LTD., an exempted
company incorporated with limited liability under the laws of the Cayman Islands (
Holdings
), U.N.
HOLDINGS (CAYMAN) II, LTD., an exempted company incorporated with limited liability under the laws
of the Cayman Islands (
Holdings II
) and those co-investment funds listed on the signature pages
of this Agreement (the
Co-investment Funds
, and together with Holdings and Holdings II, the
Shareholders
).
W I T N E S S E T H
WHEREAS, United America Indemnity, Ltd., an exempted company incorporated with limited
liability under the laws of the Cayman Islands (
UAI-Cayman
), the Shareholders and the trusts
listed on the signature page thereto (the
Trusts
) entered into an Amended and Restated
Shareholders Agreement, dated as of December 15, 2003, as amended on April 10, 2006 (the
Original
Agreement
);
WHEREAS, contemporaneously with the execution of this Agreement, UAI-Cayman and the Company
have implemented a scheme of arrangement under Cayman Island law constituting a transaction (the
Transaction
) pursuant to which the Class A common shares and Class B common shares of UAI-Cayman
have been cancelled and the holders of such Class A common shares and Class B common shares have
received, on a two-for-one basis, new Class A ordinary shares and new Class B ordinary shares,
respectively (or in the case of any fractional interests in the ordinary shares, cash) of the
Company;
WHEREAS, pursuant to the Transaction, the Company will become the parent company of
UAI-Cayman;
WHEREAS, Section 8.4 of the Original Agreement provides that the provisions of the Original
Agreement shall apply to any and all other share capital of UAI-Cayman or any successor or assign
of UAI-Cayman (whether by merger, consolidation, sale of assets or otherwise) that may be issued in
respect of, in exchange for, or in substitution of, UAI-Cayman common shares, or that may be issued
by reason of any reorganization or otherwise;
WHEREAS, pursuant to that certain Assignment and Assumption Agreement between the Company and
UAI-Cayman dated as of July 2, 2010, UAI-Cayman assigned to the Company all of its rights and
obligations under the Original Agreement, and the Company has agreed to accept such assignment and
to assume and become liable for all of the liabilities and obligations of UAI-Cayman under the
Original Agreement;
WHEREAS, Section 8.2.1 of the Original Agreement provides that the Agreement may not be
amended or supplemented, except by an instrument in writing signed by the Company, by the
Shareholders and by the Trusts holding a majority of the then outstanding Shares held by the
Trusts;
WHEREAS, the Trusts no longer hold any Shares of the Company; and
WHEREAS, the Company and the Shareholders desire to amend the Agreement.
1
NOW, THEREFORE, the parties agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1
Certain Definitions
. As used in this Agreement, the following terms shall have
the meanings ascribed to them below:
Affiliate
means, with respect to any Person, any other Person directly or indirectly
controlling, controlled by or under common control with such Person.
Agreement
means this Amended and Restated Shareholders Agreement.
Claims
means losses, claims, damages, expenses, judgments or liabilities, joint or several,
actions or proceedings (whether commenced or threatened).
Class A Ordinary Shares
means the A Ordinary Shares, par value $0.0001 per share, of the
Company.
Class B Ordinary Shares
means the B Ordinary Shares, par value $0.0001 per share, of the
Company.
Competitor
means any Person that competes in a significant way with a substantial business
of the Company or any of its subsidiaries or a Person that has a substantial investment in any such
competing Person; provided, that an institutional investor and its Affiliates shall not be
considered Persons who are Competitors by virtue of holding as a passive portfolio investment
nonvoting debt or less than 5% of the publicly traded equity securities of any such Competitor. For
purposes of this provision, the good faith determination of the Board that a proposed Transferee is
a Competitor, made within 30 days of written notice to the Board of the proposed Transfer, shall in
all respects be conclusive.
Exchange Act
means the United States Securities Exchange Act of 1934, as amended, or any
successor United States federal statute thereto, and the rules and regulations of the SEC
promulgated thereunder.
FINRA
means the Financial Industry Regulatory Authority.
FPC
means Fox Paine & Company, LLC, a Delaware limited liability company.
Nasdaq
means The Nasdaq Global Select Market.
Ordinary Shares
means the Class A Ordinary Shares and the Class B Ordinary Shares.
Person
means an individual, corporation, partnership, limited liability company,
association, trust or other entity or organization, including any governmental authority.
2
Registrable Securities
means Ordinary Shares, and any ordinary shares or other securities
issued in respect of Shares or into which Shares shall be converted in connection with share
splits, reverse share splits, share dividends or distributions, bonus issues or capitalization of
reserves, combinations or similar recapitalizations, or a merger, consolidation, takeover or
reorganization or otherwise; provided, however, as to any particular Ordinary Shares, such Ordinary
Shares shall cease to be Registrable Securities when (a) a registration statement with respect to
the sale of such Ordinary Shares shall have become effective under the Securities Act and such
Ordinary Shares shall have been disposed of in accordance with such registration statement, (b)
such Ordinary Shares shall have been sold pursuant to Rule 144, (c) such Ordinary Shares shall have
been otherwise transferred and new certificates for such Ordinary Shares not bearing a legend
restricting further transfer shall have been delivered by the Company, or (d) such Ordinary Shares
shall have ceased to be outstanding.
Registration Expenses
means any and all expenses incident to performance of or compliance
with Article IV, including (a) all SEC and stock exchange or the FINRA registration and filing
fees, (b) all fees and expenses of complying with United States federal and state securities laws
and applicable foreign securities laws (including reasonable fees and disbursements of counsel for
the underwriters in connection with United States blue sky qualifications of the Registrable
Securities), (c) all printing, messenger and delivery expenses, (d) the fees and disbursements of
counsel for the Company and of the Companys independent public accountants, including the expenses
of any special audits and/or cold comfort letters required by or incident to such performance and
compliance, (e) the reasonable fees and disbursements of one counsel retained by the Shareholders
(such counsel to be chosen by the Shareholders by vote of a plurality of the Registrable Securities
of such Shareholders being registered) as a group in connection with each such registration, (f)
any fees and disbursements of underwriters customarily paid by issuers or sellers of securities and
the reasonable fees and expenses of any special experts retained in connection with the requested
registration, including any fee payable to a qualified independent underwriter within the meaning
of the rules of the FINRA, (g) internal expenses of the Company (including all salaries and
expenses of its officers and employees performing legal or accounting duties) and (h) securities
acts liability insurance (if the Company elects to obtain such insurance) but, in all cases,
excluding underwriting discounts and commissions and transfer taxes, if any.
Rule 144
means Rule 144 under the Securities Act.
SEC
means the United States Securities and Exchange Commission.
Securities Act
means the United States Securities Act of 1933, as amended, or any successor
United States federal statute thereto, and the rules and regulations of the SEC promulgated
thereunder.
Shares
means the Ordinary Shares and the preferred shares of the Company.
Transfer
means any sale, assignment, mortgage, pledge (other than pledges to the Company and
its Affiliates), encumbrance, redemption or other transfer, directly or indirectly, whether or not
for consideration.
Transferee
means any Person to whom a Transfer is made, regardless of the method of
Transfer.
Transferor
means any Person by whom a Transfer is made, regardless of the method of
Transfer.
3
Section 1.2
Other Definitions
. Each of the following terms is defined in the Section set
forth opposite such term:
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Term
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Section
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Action
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7.6
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Book Entry Shares
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7.13
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Co-investment Funds
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Preamble
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Company
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Preamble
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FPC Affiliate Transferee
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3.3.1(a)
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Holdings
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Preamble
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Holdings II
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Preamble
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Maximum Sale Number
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4.1.3
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Joinder Agreement
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3.1.3
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Original Agreement
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Recitals
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Piggyback Notice
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4.1.1
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Piggyback Registration
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4.1.1
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Shareholders
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Preamble
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Violation
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4.3(a)
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Section 1.3
Interpretation
. Except as otherwise provided or if the context requires
otherwise, whenever used in the Agreement, (a) any noun or pronoun shall be deemed to include the
singular and the plural, (b) the terms include and including shall be deemed to be followed by
the phrase without limitation and (c) the word or shall be inclusive and not exclusive.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1
Representations and Warranties of the Company
. The Company represents and
warrants to each Shareholder as follows:
(a) The Company was duly organized as a public limited company organized under the laws of
Ireland and is validly existing and in good standing under the laws of Ireland, and has all
necessary power and authority to enter into this Agreement and to perform its obligations under
this Agreement.
(b) The execution, delivery and performance of this Agreement by the Company has been duly and
validly authorized by all necessary action, and no other proceedings on the part of the Company are
necessary to authorize this Agreement or the performance of the Companys obligations under this
Agreement.
(c) This Agreement has been duly executed and delivered by the Company, and, assuming due
authorization, execution and delivery by each other party, constitutes a legal, valid and binding
obligation of the Company, enforceable against the Company in accordance with its terms, subject to
(i) bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting or relating
to creditors rights generally, and (ii) limitations on the availability of specific performance or
injunctive relief or other equitable remedies.
4
Section 2.2
Representations and Warranties of Holdings
. Holdings represents and warrants to
the Company, Holdings II and each of the Co-investment Funds:
(a) Holdings was duly organized as an exempted company formed with limited liability under the
laws of the Cayman Islands and is validly existing and in good standing under the laws of the
Cayman Islands, and has all necessary power and authority to enter into this Agreement and to
perform its obligations under this Agreement.
(b) The execution, delivery and performance of this Agreement by Holdings has been duly and
validly authorized by all necessary action, and no other proceedings on the part of Holdings are
necessary to authorize this Agreement or the performance of Holdings obligations under this
Agreement.
(c) This Agreement has been duly executed and delivered by Holdings, and, assuming due
authorization, execution and delivery by each other party, constitutes a legal, valid and binding
obligation of Holdings, enforceable against Holdings in accordance with its terms, subject to (i)
bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting or relating to
creditors rights generally, and (ii) limitations on the availability of specific performance or
injunctive relief or other equitable remedies.
Section 2.3
Representations and Warranties of Holdings II
. Holdings II represents and
warrants to the Company, Holdings and each of the Co-investment Funds:
(a) Holdings II was duly organized as an exempted company formed with limited liability under
the laws of the Cayman Islands and is validly existing and in good standing under the laws of the
Cayman Islands, and has all necessary power and authority to enter into this Agreement and to
perform its obligations under this Agreement.
(b) The execution, delivery and performance of this Agreement by Holdings II has been duly
and validly authorized by all necessary action, and no other proceedings on the part of Holdings
II are necessary to authorize this Agreement or the performance of Holdings II obligations under
this Agreement.
(c) This Agreement has been duly executed and delivered by Holdings II, and, assuming due
authorization, execution and delivery by each other party, constitutes a legal, valid and binding
obligation of Holdings II, enforceable against Holdings II in accordance with its terms, subject
to (i) bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting or
relating to creditors rights generally, and (ii) limitations on the availability of specific
performance or injunctive relief or other equitable remedies.
Section 2.4
Representations and Warranties of the Co-investment Funds
. Each Co-investment
Fund, severally and not jointly, represents and warrants to the Company, Holdings and Holdings II:
(a) Such Co-investment Fund was duly organized as a limited partnership under the laws of the
Cayman Islands and is validly existing and in good standing under the laws of the Cayman Islands,
and has all necessary power and authority to enter into this Agreement and to perform its
obligations under this Agreement.
5
(b) The execution, delivery and performance of this Agreement by such Co-investment Fund has
been duly and validly authorized by all necessary action, and no other proceedings on the part of
such Co-investment Fund are necessary to authorize this Agreement or the performance of such
Co-investment Funds obligations under this Agreement.
(c) This Agreement has been duly executed and delivered by such Co-investment Fund, and,
assuming due authorization, execution and delivery by each other party, constitutes a legal, valid
and binding obligation of such Co-investment Fund, enforceable against such Co-investment Fund in
accordance with its terms, subject to (i) bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting or relating to creditors rights generally, and (ii) limitations on
the availability of specific performance or injunctive relief or other equitable remedies.
ARTICLE III
RESTRICTIONS ON TRANSFERS OF SHARES
Section 3.1
General Limitations on Transfers
.
3.1.1
Transfers Generally
. No Shareholder shall Transfer any Shares (whether owned as
of the date of this Agreement or subsequently acquired), unless such Transfer is made in
accordance with the requirements of this Article III, as may be applicable, or as
contemplated by Section 4.1.
3.1.2
Recordation on Register of Members
. The Shareholders shall ensure that the Board
shall not record on the Companys Register of Members any attempted Transfer of Shares held
or owned by any Shareholder to any other Person, except for Transfers in accordance with
this Agreement for which the Shareholders shall take all necessary steps to ensure that the
Board updates the Companys Register of Members.
3.1.3
Obligations of Transferees
. No Transfer of Shares that would be otherwise
permitted pursuant to this Agreement shall be effective unless (a) the Transferee shall have
executed an appropriate document (a Joinder Agreement) in form and substance reasonably
satisfactory to the Company confirming that (i) the Transferee takes such Shares subject to
all the terms and conditions of this Agreement to the same extent as its Transferor was
bound by and entitled to the benefits of such provisions and (ii) the certificates in
respect of the Shares shall bear legends, substantially in the forms required by Section
3.4, and (b) such Joinder Agreement shall have been delivered to and approved by the Company
prior to such Transferees acquisition of Shares, which approval shall not be unreasonably
withheld, conditioned or delayed. Notwithstanding the foregoing, the provisions of this
Section 3.1.3 shall not apply to a Transfer of Shares validly made pursuant to a Piggyback
Registration, pursuant to an effective registration statement under the Securities Act.
6
3.1.4
Prohibited Transfers; Transfers to Competitors
. Notwithstanding anything to the
contrary in this Agreement, without the consent of the Board, no Shareholder shall, at any
time, directly or indirectly, complete any Transfer of Shares that
(a) would result in the assets of the Company constituting Plan Assets as such term
is defined in the Department of Labor regulations promulgated under the United States
Employee Retirement Income Security Act of 1974, as amended, (b) would cause the Company to
be controlled by or be under common control with an investment company for purposes of the
United States Investment Company Act of 1940, as amended, (c) would require the Shares to be
registered under the Exchange Act or (d) is made to any Person who is a Competitor of the
Company or any of its subsidiaries or to any Affiliate of such a Competitor (other than
Transfers to the Company and its Affiliates).
Section 3.2
Compliance with Securities Laws
. Notwithstanding any other provision of this
Agreement, no Shareholder shall Transfer any Shares unless the Transfer is made in accordance with
the terms of this Agreement and (a) the Transfer is effected pursuant to an effective registration
statement under the Securities Act and in compliance with any other applicable United States
federal and state securities laws and applicable foreign securities laws or (b) the Transferor
shall have furnished the Company with (i) an opinion of counsel, if reasonably requested by the
Company, which opinion of counsel shall be in form and substance reasonably satisfactory to the
Company, to the effect that no such registration is required because of the availability of an
exemption from registration under the Securities Act and under any applicable securities laws of
any state of the United States and applicable foreign securities laws and that the Transfer
otherwise complies with any other applicable United States federal and state securities laws and
applicable foreign securities laws and (ii) such representations and covenants of the Transferor as
are reasonably requested by the Company to ensure compliance with any applicable United States
federal and state securities laws and applicable foreign securities laws.
Section 3.3
Permitted Transfers
.
3.3.1 Shareholders Transfers.
(a) Subject to Sections 3.1.3, 3.1.4 and 3.2, the Shareholders may Transfer any Shares to any
Affiliate of FPC (other than the Company) or any Person that is an investment fund managed or
controlled by FPC or any Affiliate of FPC (each, an FPC Affiliate Transferee).
(b) Subject to Sections 3.1.3, 3.1.4 and 3.2, as may be applicable, the Shareholders and any
FPC Affiliated Transferee shall be free to Transfer Shares to any Person, in whole at any time or
in part from time to time. Notwithstanding the foregoing, any Transfer of Shares by the
Shareholders or any FPC Affiliated Transferee to all of its respective limited partners or other
investors on a pro rata basis for consideration other than cash, shall not be subject to Section
3.4.
Section 3.4
Additional Provisions Relating to Restrictions on Transfers.
3.4.1
Legends
. Each outstanding certificate representing Shares held by the
Shareholders, if any, shall bear legends reading substantially as follows:
(a) THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A TRANSACTION THAT WAS NOT
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, UNDER THE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES OR UNDER ANY FOREIGN SECURITIES LAWS AND MAY NOT BE
TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SAID ACT AND APPLICABLE STATE AND FOREIGN
SECURITIES LAWS.
7
(b) THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND CONDITIONS
SET FORTH IN A SHAREHOLDERS AGREEMENT, DATED AS OF
JULY 2, 2010, AS AMENDED FROM TIME TO TIME,
COPIES OF WHICH MAY BE OBTAINED FROM THE ISSUER OR FROM THE HOLDER OF THIS CERTIFICATE. NO TRANSFER
OF SUCH SECURITIES WILL BE MADE ON THE BOOKS OF THE ISSUER UNLESS ACCOMPANIED BY EVIDENCE OF
COMPLIANCE WITH THE TERMS OF SUCH AGREEMENT.
3.4.2
Copy of Agreement
. A copy of this Agreement shall be filed with the secretary of
the Company, and kept with the records of the Company, and shall be made available for
inspection by any holder of Shares at the principal executive offices of the Company.
3.4.3
Termination of Restrictions
. The restriction referred to in the legend required
pursuant to Section 3.4.1(a) shall cease and terminate as to any particular Shares when, in
the reasonable opinion of counsel for the Company, such restriction is no longer required in
order to assure compliance with the Securities Act, the securities laws of any state of the
United States or applicable foreign securities laws. The Company or the Companys counsel,
at their election, may request from any holder of Shares a certificate or an opinion of such
holders counsel with respect to any relevant matters in connection with the removal of the
legend set forth in Section 3.4.1(a) from such holders share certificates, any such
certificate or opinion of counsel to be reasonably satisfactory to the Company and its
counsel. The restrictions referred to in the legend required by Section 3.4.1(b) shall cease
and terminate as to any particular Shares when, in the reasonable opinion of counsel for the
Company, the provisions of this Agreement are no longer applicable to such Shares or this
Agreement shall have terminated in accordance with its terms. Whenever such restrictions
shall cease and terminate as to any Shares, the holder thereof shall be entitled to receive
from the Company, without expense (other than applicable transfer taxes, if any, if such
unlegended Shares are being delivered and transferred to any Person other than the
registered holder thereof), new certificates for a like number of Shares not bearing the
relevant legend(s) set forth in Section 3.4.1.
8
ARTICLE IV
REGISTRATION RIGHTS
Section 4.1
Piggyback Registrations
.
4.1.1
Piggyback Registrations
. If at any time the Company proposes to register for
sale by the Company under the Securities Act any Ordinary Shares (other than a registration
on Form S-4 or Form S-8, or any successor or similar forms) in a manner that
would permit registration of Registrable Securities for sale to the public under the
Securities Act, the Company shall promptly give written notice to the Shareholders that
beneficially own any Registrable Securities of its intention to do so, of the registration
form of the SEC that has been selected by the Company and of such holders rights under this
Section 4.1 (the
Piggyback Notice
). Subject to Section 4.1.4, the Company shall use its
reasonable best efforts to include, and to cause the underwriter or underwriters, if
applicable, to include, in the proposed offering, on the same terms and conditions as the
Ordinary Shares proposed to be sold by the Company, the Shareholders or FPC Affiliate
Transferees and any other shareholder in such offering, all Registrable Securities that the
Company has been requested in writing, within 15 calendar days after the Piggyback Notice is
given, to register by the holders thereof (each such registration pursuant to this Section
4.1.1, a
Piggyback Registration
); provided, however, that (a) if, at any time after giving
a Piggyback Notice and prior to the effective date of the registration statement filed in
connection with such registration, the Company shall determine for any reason not to
register such Ordinary Shares, the Company may, at its election, give written notice of such
determination to all Shareholders who beneficially own any Registrable Securities and,
thereupon, shall be relieved of its obligation to register any Registrable Securities in
connection with such abandoned registration, and (b) in case of a determination by the
Company to delay registration of its Ordinary Shares the Company shall be permitted to delay
the registration of such Registrable Securities for the same period as the delay in
registering such other Ordinary Shares. In the case of any registration of Registrable
Securities in an underwritten offering pursuant to this Section 4.1.1, all Shareholders
proposing to distribute their securities pursuant to this Section 4.1.1 shall, at the
request of the Company, enter into an agreement in customary form with the underwriter or
underwriters selected by the Company.
4.1.2
Expenses
. The Company shall pay or shall cause its Affiliates to pay all
Registration Expenses in connection with each registration of Registrable Securities
requested pursuant to this Section 4.1.
4.1.3
Priority in Piggyback Registrations
. If the managing underwriter for a
registration pursuant to this Section 4.1 shall advise the Company in writing that, in its
opinion, the number of Registrable Securities requested to be included in such registration
exceeds the number (the
Maximum Sale Number
) that can be sold in an orderly manner in such
offering within a price range acceptable to the Company or the shareholder for which such
registration was initially proposed to be effected, the Company shall include in such
offering the following Ordinary Shares: (a) first, all the Ordinary Shares, if any, the
Company proposes to register for its own sale, and (b) second, all Registrable Securities
requested to be included by all Shareholders (or if the number of such Registrable
Securities exceeds the Maximum Sale Number less the number of Ordinary Shares included
pursuant to clause (a) above, then the number of such Registrable Securities included in
such registration pursuant to this clause (b) shall be equal to the excess of the Maximum
Sale Number over the number of Ordinary Shares included pursuant to clause (a) above and
shall be allocated pro rata among all requesting Shareholders, on the basis of the relative
number of Registrable Securities each such Shareholder had requested to have included in
such registration).
9
4.1.4
Underwriting Requirements
. In connection with any offering involving any
underwriting of securities in a Piggyback Registration, the Company shall not be required to
include any Shareholders Registrable Securities in such underwriting unless such
Shareholder accepts the terms of the underwriting as agreed upon between the Company and the
underwriters in such quantities and on such terms as set forth in Section 4.1.1, and such
Shareholder agrees to sell such Shareholders Registrable Securities on the basis provided
therein and completes and/or executes all questionnaires, indemnities, lock-ups,
underwriting agreements and other documents (including powers of attorney and custody
arrangements) required generally of all selling Shareholders, in each case, in customary
form and substance, which are requested to be executed in connection therewith.
Section 4.2
Registration Procedures
. If and whenever the Company is required to use its
reasonable best efforts to effect or cause the registration of any Registrable Securities under the
Securities Act as provided in this Article IV, the Company will, as soon as practicable:
(a) prepare and file with the SEC the requisite registration statement with respect to such
Registrable Securities and use its reasonable best efforts to cause such registration statement to
become and remain effective in order to permit the sale of the Registrable Securities by the
Shareholders in accordance with the intended method or methods of distribution thereof described in
such registration statement;
(b) prepare and file with the SEC such amendments and supplements to such registration
statement and the prospectus used in connection therewith as may be necessary to keep such
registration statement effective during such period;
(c) comply with the provisions of the Securities Act with respect to the sale or other
disposition of all securities covered by such registration statement during such period;
(d) furnish to each Shareholder of such Registrable Securities and each underwriter such
number of copies of such registration statement and of each amendment and supplement thereto (in
each case including all exhibits), such number of copies of the prospectus included in such
registration statement (including each preliminary prospectus and summary prospectus), in
conformity with the requirements of the Securities Act, and such other documents as such
Shareholder may reasonably request;
(e) (i) promptly notify in writing each Shareholder that holds Registrable Securities covered
by such registration statement, (A) when such registration statement or any post-effective
amendment or supplement thereto becomes effective, (B) of the issuance by the SEC or any state
securities authority of any stop order, injunction or other order or requirement suspending the
effectiveness of such registration statement (and take all reasonable action to prevent the entry
of such stop order or to remove it if entered, or the initiation of any proceedings for that
purpose), or (C) of the happening of any event as a result of which the registration statement, as
then in effect, the prospectus related thereto or any document included therein by reference
includes an untrue statement of a material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in the light of the
circumstances under which they were made and (ii) in the case of an event under clause (e)(i)(B)
or (C), promptly file such amendments and supplements which may be required on account of such
event and use its reasonable best efforts to cause each such amendment and supplement to become
effective;
10
(f) promptly furnish counsel for each underwriter, if any, and for the selling Shareholders of
Registrable Securities copies of any written request by the SEC or any state securities authority
for amendments or supplements to a registration statement and prospectus or for additional
information;
(g) use reasonable best efforts to obtain the withdrawal of any order suspending the
effectiveness of a registration statement at the earliest possible time;
(h) use its best efforts to cause all such Registrable Securities covered by such registration
statement to be listed on the principal securities exchange or authorized for quotation on Nasdaq,
if any, on which similar equity securities issued by the Company are then listed or authorized for
quotation, or eligible for listing or quotation, if the listing or authorization for quotation of
such securities is then permitted under the rules of such exchange or the FINRA;
(i) enter into an underwriting agreement with the underwriter of such offering in the form
customary for such underwriter for similar offerings, including such representations and warranties
by the Company, provisions regarding the delivery of opinions of counsel for the Company and
accountants letters, provisions regarding indemnification and contribution, and such other terms
and conditions as are at the time customarily contained in such underwriters underwriting
agreements for similar offerings (the sellers of Registrable Securities that are to be distributed
by such underwriter(s) may, at their option, require that any or all of the representations and
warranties by, and the other agreements on the part of, the Company to and for the benefit of such
underwriter(s) shall also be made to and for the benefit of such sellers of Registrable
Securities);
(j) make available for inspection by representatives of the selling Shareholders who hold
Registrable Securities and any underwriters participating in any disposition pursuant hereto and
any counsel or accountant retained by such Shareholders or underwriters, all relevant financial and
other records, pertinent documents and properties of the Company and cause the respective officers,
directors and employees of the Company to supply all information reasonably requested by any such
representative, underwriter, counsel or accountant in connection with a registration pursuant
hereto; provided, however, that, with respect to records, documents or information which the
Company determines, in good faith, to be confidential and as to which the Company notifies such
representatives, underwriters, counsel or accountants in writing of such confidentiality, such
representatives, underwriters, counsel or accountants shall not disclose such records, documents or
information unless (i) the release of such records, documents or information is ordered pursuant to
a subpoena or other order from a court of competent jurisdiction, or (ii) such records, documents
or information have previously been generally made available to the public. Each selling
Shareholder of such Registrable Securities agrees that information obtained by it as a result of
such inspections shall be deemed confidential and shall not be used by it as the basis for any
market transactions in the securities of the Company or its Affiliates (or for such Shareholders
business purposes or for any reason other than in connection with a registration hereunder) unless
and until such information is made
generally available (other than by such Shareholder or where such Shareholder knows that such
information became publicly available as a result of a breach of any confidentiality arrangement)
to the public. Each selling Shareholder of such Registrable Securities further agrees that it will,
upon learning that disclosure of such records is sought, give notice to the Company and allow the
Company, at its expense, to undertake appropriate action to prevent disclosure of the records
deemed confidential;
11
(k) permit any beneficial owner of Registrable Securities that, in the sole judgment,
exercised in good faith, of such holder, might be deemed to be a controlling Person of the Company,
to participate in the preparation of such registration or comparable statement and to require the
insertion therein of material, furnished to the Company in writing, that in the judgment of such
holder, as aforesaid, should be included; and
(l) make reasonably available its employees and personnel and otherwise provide reasonable
assistance to the underwriters (taking into account the needs of the Companys businesses and the
requirements of the marketing process) in the marketing of the Registrable Securities in any
underwritten offering.
The Company may require each Shareholder who is selling Registrable Securities pursuant to
which any registration is being effected to furnish the Company such information regarding such
Shareholder and the distribution of such Registrable Securities as the Company may from time to
time reasonably request in writing. The Company shall not be required to register or qualify any
Registrable Securities covered by such registration statement under any state securities or blue
sky laws of such jurisdictions other than as it deems necessary in connection with the chosen
method of distribution or to take any other actions or do any other things other than those it
reasonably deems necessary or advisable to consummate such distribution, and the Company shall not
for any such purpose be required to qualify generally to do business as a foreign entity in any
jurisdiction wherein it would not otherwise be obligated to be so qualified, to subject itself to
taxation in any such jurisdiction or to consent to general service of process in any such
jurisdiction.
Each beneficial owner of Registrable Securities agrees that upon receipt of any notice from
the Company of the happening of any event of the kind described in clauses (e)(i)(B) and (e)(i)(C)
above, such beneficial owner will forthwith discontinue disposition of Registrable Securities
pursuant to the registration statement covering such Registrable Securities until such beneficial
owners receipt of the copies of the supplemented or amended prospectus contemplated by clause
(e)(ii) above, and, if so directed by the Company, such beneficial owner will deliver to the
Company (at the Companys expense) all copies, other than permanent file copies then in such
beneficial owners possession, of the prospectus covering such Registrable Securities that was in
effect prior to such amendment or supplement.
12
Section 4.3
Indemnification
. (a) In the event of any registration of any Registrable
Securities pursuant to this Article IV, the Company shall indemnify and hold harmless, to the
fullest extent permitted by law, the seller of any Registrable Securities covered by such
registration statement, its Affiliates, directors, officers, fiduciaries, employees, agents and
stockholders or members or general and limited partners (and the directors, officers, fiduciaries,
employees, agents and stockholders or members or general and limited partners thereof), each
other Person who participates as an underwriter or a qualified independent underwriter, if
any, in the offering or sale of such securities, each director, officer, fiduciary, employee, agent
and stockholder or general and limited partner of such underwriter or qualified independent
underwriter, and each other Person (including any such Persons directors, officers, fiduciaries,
employees, agents and stockholders or members or general and limited partners), if any, who
controls such seller or any such underwriter or qualified independent underwriter, within the
meaning of the Securities Act, against any and all Claims in respect thereof and expenses
(including reasonable fees and expenses of counsel and any amounts paid in any settlement effected
with the Companys consent, which consent shall not be unreasonably withheld, conditioned or
delayed) to which each such indemnified party may become subject under the Securities Act, the
Exchange Act or otherwise, insofar as such Claims or expenses arise out of or are based upon any of
the following actual or alleged statements, omissions or violations (each, a Violation): (i) any
untrue statement or alleged untrue statement of a material fact contained in any registration
statement under which such Registrable Securities were registered pursuant to this Agreement under
the Securities Act or the omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, (ii) any untrue statement or alleged untrue statement of a
material fact contained in any preliminary, final or summary prospectus or any amendment or
supplement thereto (unless corrected in the final prospectus), together with the documents
incorporated by reference therein, or the omission or alleged omission to state therein a material
fact required to be stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading, or (iii) any violation by the
Company of any federal, state, common law or applicable foreign rule or regulation applicable to
the Company and relating to action required of or inaction by the Company in connection with any
such registration, and the Company will reimburse any such indemnified party for any legal or other
expenses reasonably incurred by such indemnified party in connection with investigating or
defending any such Claim as such expenses are incurred; provided, however, that the Company shall
not be liable to any such indemnified party in any such case to the extent such Claim or expense
arises out of or is based upon any Violation that occurs in reliance upon and in conformity with
written information furnished to the Company or its representatives by or on behalf of such
indemnified party expressly stating that such information is for use therein.
(b) Each holder of Registrable Securities that are included in the securities as to which any
Piggyback Registration is being effected (and, if the Company requires as a condition to including
any Registrable Securities in any registration statement filed in connection with any Piggyback
Registration, any underwriter and qualified independent underwriter, if any) shall, severally and
not jointly, indemnify and hold harmless (in the same manner and to the same extent as set forth in
Section 4.3(a)), to the fullest extent permitted by law, the Company, its directors, officers,
fiduciaries, employees, agents and shareholders (and the directors, officers, fiduciaries,
employees, agents and shareholders or members or general and limited partners thereof) and each
Person (including any such Persons directors, officers, fiduciaries, employees, agents and
stockholders or members or general and limited partners), if any, controlling the Company within
the meaning of the Securities Act and all other prospective sellers and their directors, officers,
fiduciaries, employees, agents and shareholders or general and limited partners and respective
controlling Persons (including any such Persons directors, officers, fiduciaries, employees,
agents and shareholders or members
13
or general and limited partners) against any and all Claims and expenses (including reasonable fees and expenses of counsel and
any amounts paid in any settlement effected with the consent of the indemnifying party, which
consent shall not be unreasonably withheld, conditioned or delayed) to which each such indemnified
party may become subject under the Securities Act, the Exchange Act or otherwise, insofar as such
Claims or expenses arise out of or are based upon any Violation that occurs in reliance upon and in
conformity with written information furnished to the Company or its representatives by or on behalf
of such holder of Registrable Securities, expressly stating that such information is for use in
connection with any registration statement, preliminary, final or summary prospectus or amendment
or supplement or document incorporated by reference into any of the foregoing. Notwithstanding
anything in this Section 4.3(b) to the contrary, no indemnifying party shall be required pursuant
to this Section 4.3(b) to contribute any amount in excess of the gross proceeds received by such
indemnifying party from the sale of Registrable Securities in the offering to which the Claims of
the indemnified parties relate.
(c) Indemnification similar to that specified in Sections 4.3(a) and 4.3(b) (with appropriate
modifications) shall be given by the Company and each seller of Registrable Securities (and, if the
Company requires as a condition to including any Registrable Securities in any registration
statement filed in connection with any Piggyback Registration, any underwriter and qualified
independent underwriter, if any) with respect to any required registration or other qualification
of securities under any securities or blue sky laws of any state of the United States or
applicable foreign laws.
(d) Any Person entitled to indemnification under this Agreement shall notify promptly the
indemnifying party in writing of the commencement of any action or proceeding with respect to which
a claim for indemnification may be made pursuant to this Section 4.3, but the failure of any
indemnified party to provide such notice shall not relieve the indemnifying party of its
obligations under the preceding paragraphs of this Section 4.3, except to the extent the
indemnifying party is prejudiced thereby and shall not relieve the indemnifying party from any
liability that it may have to any indemnified party otherwise than under this Section 4.3. In case
any action or proceeding is brought against an indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be entitled to
participate therein and, unless in the reasonable opinion of outside counsel to the indemnified
party a conflict of interest between such indemnified and indemnifying parties may exist in respect
of such claim, to assume the defense thereof jointly with any other indemnifying party similarly
notified, to the extent that it chooses, with counsel reasonably satisfactory to such indemnified
party, and after notice from the indemnifying party to such indemnified party that it so chooses,
the indemnifying party shall not be liable to such indemnified party for any legal or other
expenses subsequently incurred by such indemnified party in connection with the defense thereof
other than reasonable costs of investigation; provided, however, that (i) if the indemnifying party
fails to take reasonable steps necessary to defend diligently the action or proceeding within 20
calendar days after receiving notice from such indemnified party that the indemnified party
believes it has failed to do so; or (ii) if such indemnified party who is a defendant in any action
or proceeding that is also brought against the indemnifying party reasonably shall have concluded
that there may be one or more legal defenses available to such indemnified party which are not
available to the indemnifying party; or (iii) if representation of both parties by the same counsel
is otherwise inappropriate under applicable standards of professional conduct, then, in any such
case, the
14
indemnified party shall have the right to assume or continue its own defense as set forth above (but with no more than one firm of counsel for
all indemnified parties in each jurisdiction, except to the extent any indemnified party or parties
reasonably shall have concluded that there may be legal defenses available to such party or parties
that are not available to the other indemnified parties or to the extent representation of all
indemnified parties by the same counsel is otherwise inappropriate under applicable standards of
professional conduct) and the indemnifying party shall be liable for any expenses therefor. No
indemnifying party shall, without the written consent of the indemnified party, which consent shall
not be unreasonably withheld, conditioned or delayed, effect the settlement or compromise of, or
consent to the entry of any judgment with respect to, any Claim in respect of which indemnification
or contribution may be sought hereunder (whether or nor the indemnified party is an actual or
potential party to such Claim) unless such settlement, compromise or judgment (A) includes an
unconditional release of the indemnified party from all liability arising out of such Claim and (B)
does not include a statement as to or an admission of fault, culpability or a failure to act, by or
on behalf of any indemnified party.
(e) If for any reason the foregoing indemnity is unavailable or is insufficient to hold
harmless an indemnified party under Sections 4.3(a), 4.3(b) or 4.3(c), then each indemnifying party
shall contribute to the amount paid or payable by such indemnified party as a result of any Claim
in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the
one hand and the indemnified party and any other indemnifying party on the other hand from the
relevant offering of securities. If, however, the allocation provided in the immediately preceding
sentence is not permitted by applicable law, or if the indemnified party failed to give the notice
required by Section 4.3(d) above and the indemnifying party is prejudiced thereby, then each
indemnifying party shall contribute to the amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative fault of but also the relative
benefits received by the indemnifying party, on the one hand, and the indemnified party, on the
other hand, as well as any other relevant equitable considerations, including the extent of such
prejudice. The relative fault shall be determined by a court of law by reference to, among other
things, whether the Violation relates to information supplied by the indemnifying party or the
indemnified party and the parties relative intent knowledge, access to information and opportunity
to correct or prevent such Violation. The parties hereto agree that it would not be just and
equitable if contributions pursuant to this Section 4.3(e) were to be determined by pro rata
allocation or by any other method of allocation does not take account of the equitable
considerations referred to in the preceding sentences of this Section 4.3(e). The amount paid or
payable in respect of any Claim shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending any such Claim. No
Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation. Notwithstanding anything in this Section 4.3(e) to the contrary, no
indemnifying party (other than the Company) shall be required pursuant to this Section 4.3(e) to
contribute any amount in excess of the gross proceeds received by such indemnifying party from the
sale of Registrable Securities in the offering to which the Claims of the indemnified parties
relate.
(f) The indemnity agreements contained in this Agreement shall be in addition to any other
rights to indemnification or contribution that any indemnified party may have pursuant to law or
contract and shall remain operative and in full force and effect regardless of any
investigation made or omitted by or on behalf of any indemnified party and shall survive the
transfer of the Registrable Securities by any such party and the termination of this Agreement.
15
(g) The indemnification and contribution required by this Section 4.3 shall be made by
periodic payments of the amount thereof during the course of the investigation or defense, as and
when bills are received or expense, loss, damage or liability is incurred.
(h) In connection with underwritten offerings, the Company will use reasonable best efforts to
negotiate terms of indemnification that are reasonably favorable to the various sellers pursuant
thereto, as appropriate under the circumstances.
Section 4.4
Rule 144 Reporting
. With a view to making available to the Shareholders the
benefits of certain rules and regulations of the SEC, which may permit the sale of the Registrable
Securities to the public without registration, at all times after 90 days after any registration
statement covering a public offering of Ordinary Shares under the Securities Act shall have become
effective, or at all times after the Ordinary Shares shall initially be registered pursuant to the
requirements of Section 12 of the Exchange Act, the Company shall at its cost and expense use its
reasonable best efforts to comply with the filing requirements described in Rule 144(c)(1).
Section 4.5
Lock-Up Agreement
. If requested in writing by the Company or the underwriter of
any underwritten offering, each Shareholder agrees not to effect any public sale or distribution,
including any sale pursuant to Rule 144, of any Registrable Securities or any other Equity Security
(in each case, other than as part of such underwritten public offering) within 14 calendar days
before or 180 calendar days after the effective date of a registration statement or for such
shorter period as the sole or lead managing underwriter or the Company shall request, in any such
case, unless consented to by such underwriter or the Company, as applicable.
ARTICLE V
COVENANTS
Section 5.1
No Voting or Conflicting Agreements
. No Shareholder shall enter into or agree to
be bound by any voting trust with respect to any Shares, nor shall any Shareholder enter into any
shareholder arrangements of any kind with any Person with respect to any Shares inconsistent with
the provisions of this Agreement. The foregoing prohibition includes, but is not limited to,
agreements or arrangements with respect to the acquisition, disposition or voting of Shares
inconsistent with the provisions of this Agreements. No Shareholder shall act, at any time, for any
reason, as a member of a group or in concert with any other Persons in connection with the
acquisition, disposition or voting of Shares in any manner that is inconsistent with the provisions
of this Agreement.
16
Section 5.2
Further Assurances
. The parties shall from time to time execute and deliver all
such further documents and do all acts and things as the other parties may reasonably require to
effectively carry out or better evidence or perfect the full intent and meaning of this Agreement,
including, to the extent necessary or appropriate, using all reasonable efforts to cause the
amendment of the memorandum and articles of association of the Company in order to
provide for the enforcement of this Agreement in accordance with its terms. In furtherance and
not in limitation of the foregoing, in the event of any amendment, modification or termination of
this Agreement in accordance with its terms, the Shareholders shall cause the Board to meet within
30 days following such amendment, modification or termination or as soon thereafter as is
practicable for the purpose of amending the memorandum and articles of association of the Company,
as may be required as a result of such amendment, modification or termination, and, to the extent
required by law, proposing such amendments to the shareholders of the Company entitled to vote
thereon, and such action shall be the first action to be taken at such meeting. Immediately
following the Transactions (as defined in the Original Agreement), the Shareholders shall take all
necessary steps to ensure that the Board updates the Companys Register of Members to reflect the
Shares issued in the Transactions if not previously done.
Section 5.3
Certain Transactions
. FPC shall have the right to perform all consulting,
financing, investment banking and similar services for the Company and its subsidiaries, for
customary compensation (as determined by the Board of Directors of the Company in its sole
discretion) and on other terms that are customary for similar engagements with unaffiliated third
parties.
Section 5.4
Confidentiality
. The terms of this Agreement shall be confidential and neither
the Company nor any Shareholder nor any Affiliate thereof shall disclose to any Person not a party
to this Agreement any of the terms of this Agreement, except as may be required by applicable law,
this Agreement, or to negotiate and effect a Transfer permitted under this Agreement.
ARTICLE VI
EFFECTIVENESS; TERMINATION
Section 6.1
Effectiveness; Term
.
6.1.1 This Agreement shall become effective as of the date of this Agreement. The
rights and obligations of, and restrictions on, the Shareholders under Article III shall
terminate upon the date that the Shareholders and FPC Affiliated Transferees no longer hold
in the aggregate at least 25% of the fully-diluted Shares then outstanding (subject,
however, to all obligations of the parties that must be fulfilled prior to such event).
Notwithstanding the foregoing, in the event the Company enters into any agreement to merge
or consolidate with or into any other Person or adopts any other plan of recapitalization,
consolidation, reorganization, takeover or other restructuring transaction as a result of
which the Shareholders and their respective Affiliate Transferees shall own, in the
aggregate, less than a majority of the outstanding voting power of the entity surviving such
transaction, this Agreement shall terminate, except with respect to Section 3.4 and as
contemplated by Section 6.1.2.
6.1.2 Notwithstanding anything in Section 6.1.1 to the contrary, the provisions
contained in Article IV shall continue to remain in full force and effect until the earlier
to occur of the 20th anniversary of the date of the Original Agreement and the date on which
there are no longer any Registrable Securities outstanding; provided, however, that
the provisions of Section 4.3 shall survive termination pursuant to Section 6.1.1 or
this Section 6.1.2 indefinitely.
17
ARTICLE VII
MISCELLANEOUS
Section 7.1
Notices
. All notices, requests and other communications to any party in
connection with this Agreement shall be in writing and delivered personally, sent by documented
overnight delivery service shall be given,
if to any Shareholder, to:
U.N. Holdings (Cayman), Ltd.
c/o Fox Paine & Company, LLC
3500 Alameda de las Pulgas, Suite 150
Menlo Park, California 94025
Attention: Saul A Fox
with a copy to:
Wilson Sonsini Goodrich & Rosati
650 Page Mill Rd
Palo Alto, CA 94304
Attention: Katharine A. Martin
Bradley L. Finkelstein
if to the Company, to:
Global Indemnity plc
Arthur Cox Building
Earlsfort Terrace
Dublin 2
Attention: Chief Executive Officer
with a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Attention: Gary I. Horowitz
with a copy to:
United America Indemnity, Ltd.
Three Bala Plaza East
Suite 300
Bala Cynwyd, PA 19004
Attention: Linda Hohn
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All such notices, requests and other communications shall be deemed received on the date of receipt
by the recipient if received prior to 5 p.m. in the place of receipt and such day is a business day
in the place of receipt. Otherwise, any such notice, request or communication shall be deemed not
to have been received until the next succeeding business day in the place of receipt.
Section 7.2
Amendment; Waivers
.
7.2.1 This Agreement may not be amended or supplemented, except by an instrument in
writing signed by the Company and by the Shareholders for so long as they hold Shares. The
foregoing notwithstanding, the Company, without the consent of any other party, may enter
into Joinder Agreements in order to add any Person that becomes a holder of Shares and to
reflect Transfers permitted under this Agreement.
7.2.2 No failure or delay by any party in exercising any right, power or privilege
under this Agreement shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise of any other
right, power or privilege under this Agreement. The rights and remedies provided in this
Agreement shall be cumulative and not exclusive of any rights or remedies provided by law.
Section 7.3
Successors and Assigns
. The provisions of this Agreement shall be binding upon
and inure to the benefit of the parties and their respective successors and assigns. If any
Shareholder or any Transferee of any Shareholder shall acquire any Shares in any manner, whether by
operation of law or otherwise, such Shares shall be held subject to all of the terms of this
Agreement, and, by taking and holding such Shares, such Transferee shall be conclusively deemed to
have agreed to be bound by and to perform all of the terms and provisions of this Agreement.
Section 7.4
Recapitalizations and Exchanges Affecting Shares
. Except as contemplated by
Section 6.1.1, the provisions of this Agreement shall apply, to the full extent set forth herein
with respect to Shares held by the Shareholders, to any and all other share capital of the Company
or any successor or assign of the Company (whether by merger, consolidation, sale of assets or
otherwise) that may be issued in respect of, in exchange for, or in substitution of, Shares held by
the Shareholders, or that may be issued by reason of any share dividend, share split, reverse share
split, bonus issue, capitalization of reserves, combination, recapitalization, reclassification,
merger, takeover, consolidation, reorganization or otherwise. Upon the occurrence of any of such
events, numbers of Shares held by the Shareholders and amounts under this Agreement and any other
appropriate terms shall be appropriately adjusted, as determined in good faith by the Board.
19
Section 7.5
Governing Law
. This Agreement shall be governed by and construed in accordance
with the internal laws of the State of Delaware applicable to contracts made and wholly-performed
within such state.
Section 7.6
Jurisdiction
. Except as otherwise set forth in this Agreement, any suit, action
or other proceeding (
Action
) seeking to enforce any provision of, or based on any matter arising
out of or in connection with, this Agreement shall be brought in the United States District Court
for the District of Delaware or any Delaware State court, so long as one of such courts shall have
subject matter jurisdiction over such Action, and each of the parties irrevocably consents to the
jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such Action
and irrevocably waives, to the fullest extent permitted by law, any objection that it may now or
hereafter have to the laying of the venue of any such Action in any such court or that any such
Action that is brought in any such court has been brought in an inconvenient forum. Process in any
such Action may be served on any party anywhere in the world, whether within or without the
jurisdiction of any such court. Without limiting the foregoing, each party agrees that service of
process on such party as provided in Section 7.1 shall be deemed effective service of process on
such party.
Section 7.7
WAIVER OF JURY TRIAL
. EACH PARTY IRREVOCABLY WAIVES ANY RIGHT TO TRIAL BY JURY IN
ANY ACTION ARISING OUT OF OR RELATED TO THIS AGREEMENT.
Section 7.8
Counterparts; Third Party Beneficiaries
. This Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same effect as if such
signatures were upon the same instrument. A facsimile or photocopied signature (which may be
delivered by facsimile) shall be deemed to be the functional equivalent of an original for all
purposes. This Agreement shall become effective when each party shall have received a counterpart
of this Agreement signed by the other party. No provision of this Agreement is intended to confer
and shall not confer upon any Person other than the parties any rights or remedies.
Section 7.9
Entire Agreement
. This Agreement constitutes the entire agreement among the
parties with respect to the subject matter of this Agreement and supersedes all prior agreements
and understandings, both oral and written, among the parties with respect to the subject matter of
this Agreement, including the letter of intent dated as of March 8, 2003 by and between FPC and the
Company.
Section 7.10
Captions
. The captions are included in this Agreement for convenience of
reference only and shall be ignored in the construction or interpretation of this Agreement. All
references to Sections or Articles contained in this Agreement shall be to Sections or Articles of
this Agreement unless otherwise stated.
Section 7.11
Specific Performance
. The parties acknowledge and agree that irreparable damage
would occur if any party fails to perform in accordance with the terms of this Agreement and that
the parties shall be entitled to specific performance in such event, in addition to any other
remedy at law or in equity.
20
Section 7.12
Severability
. If this Agreement, or any of its provisions, or the performance of
any provision, is found to be illegal or unenforceable, the parties shall be excused from the
performance of such portions of this Agreement as shall be found to be illegal or unenforceable
without affecting the validity of the remaining provisions of this Agreement; provided, however,
that the remaining provisions of this Agreement shall in their totality constitute a commercially
reasonable agreement.
Section 7.13
Uncertificated Shares
. Notwithstanding anything herein to the contrary, the
parties hereby acknowledge that the Shares issued in the Transaction are intended to be
uncertificated (the
Book Entry Shares
) and such issuance will be recorded on the Companys
Register of Members. With respect to the Book Entry Shares, the provisions of the Agreement
regarding share certificates shall be deemed modified as necessary to effect the intentions of the
parties. Following the Transfer of any Book Entry Shares in accordance with the terms of this
Agreement, the Shareholders shall take all necessary steps to ensure that the directors of the
Company update the Companys Register of Members to reflect such Transfer of Book Entry Shares.
Within a reasonable time after any Transfer of such Book Entry Shares, the Company shall send to
the new registered owner of such Book Entry Shares a written notice containing the information
required pursuant to the terms of this Agreement to be set forth or stated on share certificates.
[Signature pages follow]
21
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed by their
respective authorized officers as of the day and year first above written.
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Given under the Common Seal of
GLOBAL INDEMNITY PLC
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By:
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/s/
Larry A. Frakes
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Director
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By:
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/s/ Linda Hohn
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Director/Secretary
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U.N. HOLDINGS (CAYMAN), LTD.
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By:
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/s/
Saul A. Fox
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Name: Saul A. Fox
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Title: Director
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U.N. HOLDINGS (CAYMAN) II, LTD.
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By:
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/s/
Saul A. Fox
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Name: Saul A. Fox
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Title: Director
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U.N. CO-INVESTMENT FUND I (CAYMAN), L.P.
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By:
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Fox Paine Capital Co-Investors International
GP,
Ltd., its General Partner
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By:
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/s/
Saul A. Fox
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Name: Saul A. Fox
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Title: Director
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U.N. CO-INVESTMENT FUND II (CAYMAN), L.P.
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By:
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Fox Paine Capital Co-Investors International
GP,
Ltd., its General Partner
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By:
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/s/
Saul A. Fox
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Name: Saul A. Fox
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Title: Director
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U.N. CO-INVESTMENT FUND III (CAYMAN), L.P.
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By:
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Fox Paine Capital Co-Investors International
GP,
Ltd., its General Partner
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By:
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/s/ Saul A. Fox
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Name: Saul A. Fox
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Title: Director
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U.N. CO-INVESTMENT FUND IV (CAYMAN), L.P.
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By:
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Fox Paine Capital Co-Investors International
GP,
Ltd., its General Partner
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By:
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/s/ Saul A. Fox
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Name: Saul A. Fox
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Title: Director
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U.N. CO-INVESTMENT FUND V (CAYMAN), L.P.
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By:
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Fox Paine Capital Co-Investors International
GP,
Ltd., its General Partner
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By:
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/s/ Saul A. Fox
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Name: Saul A. Fox
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Title: Director
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U.N. CO-INVESTMENT FUND VI (CAYMAN), L.P.
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By:
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Fox Paine Capital Co-Investors International
GP,
Ltd., its General Partner
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By:
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/s/ Saul A. Fox
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Name: Saul A. Fox
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Title: Director
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U.N. CO-INVESTMENT FUND VII (CAYMAN), L.P.
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By:
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Fox Paine Capital Co-Investors International
GP,
Ltd., its General Partner
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By:
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/s/ Saul A. Fox
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Name: Saul A. Fox
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Title: Director
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U.N. CO-INVESTMENT FUND VIII (CAYMAN), L.P.
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By:
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Fox Paine Capital Co-Investors International
GP,
Ltd., its General Partner
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By:
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/s/ Saul A. Fox
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Name: Saul A. Fox
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Title: Director
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U.N. CO-INVESTMENT FUND IX (CAYMAN), L.P.
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By:
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Fox Paine Capital Co-Investors International
GP,
Ltd., its General Partner
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By:
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/s/ Saul A. Fox
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Name: Saul A. Fox
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Title: Director
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24
EXHIBIT 10.8
INDEMNIFICATION AGREEMENT
THIS
INDEMNIFICATION AGREEMENT (the Agreement), dated as of July 2, 2010, is by and among
United America Indemnity Ltd. , an exempted company incorporated and registered in the Cayman
Islands (the Company) and Fox Paine Capital Fund II International L.P., a Cayman Islands exempted
limited partnership (Fox Paine) that owns shares having a majority of the voting power of the
shares of the Company through one or both of U.N. Holdings (Cayman), Ltd. and U.N. Holdings
(Cayman) II, Ltd., each a Cayman Islands company.
W I T N E S S E T H
WHEREAS, the Company has been advised that its current corporate structure can be enhanced by
replacing it with Global Indemnity plc (GI plc) as the parent company (the Restructuring);
WHEREAS, in order to effect the Restructuring, it was decided (a) to form GI plc as a
subsidiary of the Company, with six (6) shares of GI plc held by others in trust for the benefit of
the Company, and (b) to implement a scheme of arrangement under the laws of the Cayman Islands (the
Scheme of Arrangement) pursuant to which (i) all outstanding Class A and Class B common shares of
the Company would be cancelled and the Company would issue to GI plc all of its outstanding common
shares, (ii) GI plc would issue Class A and Class B ordinary shares on a one-for-two basis to
owners of the Class A and Class B common shares of the Company that have been cancelled, with cash
being paid in lieu of fractional ordinary shares, and (iii) all previously outstanding ordinary
shares of GI plc would be reclassified as non-voting deferred shares, after which the Company would file an election to be treated
as an entity disregarded from GI plc for U.S. federal income tax purposes effective two days
following the effective time of the Scheme of Arrangement (collectively, the Transaction);
WHEREAS, one or more persons who either directly or indirectly own an interest in Fox Paine
will own (or may be treated as owning for purposes of Treasury Regulation section
1.367(a)-3(c)(5)(ii)) five (5) percent or more of either the voting power or value of the shares of
GI plc after the Transaction (the Partners);
WHEREAS, Fox Paine, the Partners, the Company and GI plc intend the Transaction to qualify as
a reorganization of the Company described in Section 368(a)(1)(F) and a reorganization of GI plc
described in Section 368(a)(1)(E) of the Internal Revenue Code of 1986, as amended from time to
time (the Code).
WHEREAS, the Partners should not be required, solely as a result of the Transaction, to enter
into agreements to recognize gain in accordance with Treasury Regulation section 1.367(a)-8
(GRAs);
WHEREAS, GI plc and its subsidiaries may engage or be treated for U.S. federal income tax
purposes as engaging in certain internal restructuring transactions after the Transaction that
could require the Partners to enter into GRAs in order to preserve the nonrecognition of some or
all of the gain realized by the Partners as a result of the Transaction;
WHEREAS, after completion of the Transaction, transfers of GI plc shares may be subject to
Irish stamp duty, currently imposed at a rate equal to one (1) percent of the greater of the price
paid and the fair market value of the shares transferred; and
WHEREAS, in connection with the Transaction, the Company and Fox Paine wish to enter into an
agreement regarding certain rights and obligations with respect to (i) triggering events under any
such GRAs in accordance with Treasury Regulation section 1.367(a)-8 and (ii) payment of Irish stamp
duty.
NOW THEREFORE, in consideration of the premises and the mutual covenants and agreements set
forth herein and for other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties agree as follows:
1.
Definitions
. For purposes of this Agreement, the following terms shall have the
following meanings:
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(a)
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Actually Realized with respect to tax savings, shall mean the time that any
refund of taxes is actually received or applied against other taxes due, or the time of
the filing of a tax return on which a loss, deduction or credit or increase in basis is
applied to reduce the amount of taxes that would otherwise be payable.
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(b)
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Affiliate has the meaning specified in Rule 12b-2 of the Exchange Act.
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(c)
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Articles means the Articles of Association of GI plc.
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(d)
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Closing means the Scheme of Arrangement becoming effective.
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(e)
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Closing Date means the date on which the Closing occurs.
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(f)
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Code has the meaning specified in the recitals to this Agreement.
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(g)
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Company has the meaning specified in the recitals to this Agreement.
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(h)
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Company Assets means the assets of the Company immediately prior to the
Closing.
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(i)
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Controlled Asset Transfer means a transfer by GI plc of all or a portion of
the Company Assets to a corporation controlled (within the meaning of section 368(c) of
the Code) by GI plc, as described in Treasury Regulation section 1.367(a)-3(d).
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(j)
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Controlled Transferee means the transferee corporation receiving Company
Assets from GI plc pursuant to a Controlled Asset Transfer.
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(k)
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Controlled Transferee Stock means any stock received, or treated for U.S.
federal income tax purposes as received, by GI plc in exchange for all or a portion of
the Company Assets pursuant to a Controlled Asset Transfer.
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(l)
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Disposition of Company Assets means one or more sales or other transfers that
would constitute a disposition for any purpose of the Code and the Treasury Regulations
thereunder, within the period beginning immediately after the Closing and ending five
years after the last day of the taxable year that includes the Closing Date, by a
Controlled Transferee of all or substantially all of the Company Assets acquired by it
in the Controlled Asset Transfer other than (A) in the ordinary course of business, or
(B) in a transfer (i) in which gain or loss will not be required to be recognized under
U.S. federal income tax principles provided that such transfer would not be a
triggering event under Treasury Regulation section 1.367(a)-8, (ii) in which the
transferee agrees, with respect to any subsequent transfer of such Company Assets, to
be subject to the same obligations as apply to the Company and the Controlled
Transferee under this Agreement with respect to transfers of such Company Assets, (iii)
in which the Controlled Transferee agrees not to transfer the interest received in
exchange for the Company Assets transferred except in a transaction that would satisfy
the requirements of clauses (i), (ii) and (iv) in the definition of Disposition of
Controlled Transferee Stock, and (iv) in which the Controlled Transferee (and any other
recipient of an interest described in clause (iii)) agrees to notify the Notice Persons
of any transfer described in clause (iii) in the manner required by Section 4 of this
Agreement.
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(m)
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Disposition of Controlled Transferee Stock means a sale or other transfer
that would constitute a disposition for any purpose of the Code and the Treasury
Regulations thereunder, within the period beginning immediately after the Closing and
ending five years after the last day of the taxable year that includes the Closing
Date, (A) by GI plc of Controlled Transferee Stock or (B)(x) by GI plc of any interest
received in exchange for Controlled Transferee Stock in a transaction that satisfies
the requirements of clauses (i)-(iv) of this definition or (y) by the Controlled
Transferee of any interest(s) received in exchange for all or substantially all of the
Company Assets acquired by it in the Controlled Asset Transfer in a transaction that
satisfies the requirements of clauses (i)-(iv) of the definition of Disposition of
Company Assets (any such interests received, the Exchange Interests), in any manner
other than in a transaction: (i) in which all the Controlled Transferee Stock or all
the Exchange Interests are transferred to a
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single transferee; (ii) in which such
transferee of the Controlled Transferee Stock or Exchange Interests agrees to be
subject to the same obligations as apply to the Company under this Agreement; (iii) in
which GI plc (or any other transferor that
has agreed to be subject to the same obligations as apply to the Company under this
Agreement) agrees not to transfer the interest received in exchange for the
Controlled Transferee Stock or Exchange Interests transferred except in a
transaction that satisfies the requirements of clauses (i), (ii) and (iv) of this
sentence and to notify the Notice Persons of any such transfer in the manner
required by Section 4 of this Agreement; and (iv) with respect to which gain or loss
will not be required to be recognized by GI plc (or by any transferor of the
Exchange Interests that agreed to be subject to the same obligations as apply to the
Company under this Agreement) under U.S. federal income tax principles provided that
such transfer would not be a triggering event under Treasury Regulation section
1.367(a)-8.
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(n)
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DTC means the Depository Trust and Clearing Corporation.
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(o)
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Exchange Act means the United States Securities Exchange Act of 1934, as
amended from time to time, and the rules and regulations promulgated thereunder.
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(p)
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Exchange Interests has the meaning specified in Section 1(m).
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(q)
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Fox Paine has the meaning specified in the recitals to this Agreement.
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(r)
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GI plc has the meaning specified in the recitals to this Agreement.
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(s)
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GRA has the meaning specified in the recitals to this Agreement.
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(t)
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GRA Partner has the meaning specified in Section 4(b).
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(u)
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IRS means the United States Internal Revenue Service.
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(v)
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Notice Person has the meaning specified in Section 14.
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(w)
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Opinion has the meaning specified in Section 4(c).
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(x)
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Partners has the meaning specified in the recitals to this Agreement.
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(y)
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Restructuring has the meaning specified in the recitals to this Agreement.
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(z)
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Scheme of Arrangement has the meaning specified in the recitals to this
Agreement.
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(aa)
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Transaction has the meaning specified in the recitals to this agreement.
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(bb)
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Transferee means a person that is the transferee of Class A or Class B
ordinary shares of GI plc transferred by Fox Paine or its Affiliates.
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(cc)
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Treasury Regulations means the final and temporary (but not proposed) tax
regulations promulgated under the Code, as such regulations may be amended from time to
time.
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2.
Representations and Warranties
.
(a)
Fox Paine
. Fox Paine represents and warrants to the Company that: (i) Fox Paine is
duly authorized to execute, deliver and perform this Agreement; and (ii) this Agreement has been
duly executed by Fox Paine and is a valid and binding agreement of Fox Paine, enforceable against
Fox Paine in accordance with its terms.
(b)
The Company
. The Company represents and warrants to Fox Paine that: (i) the
Company is duly authorized to execute, deliver and perform this Agreement; and (ii) this Agreement
has been duly executed by the Company and is a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms.
3.
U.S. Federal Income Tax Treatment of the Transaction
. The Company and Fox-Paine
shall treat, and the Company shall cause GI plc to treat, the Transaction as a reorganization of
the Company described in Section 368(a)(1)(F) and a reorganization of GI plc described in Section
368(a)(1)(E) of the Code for all U.S. federal income tax purposes.
4.
Notification Requirements
.
(a) The Company shall provide Fox Paine with prior written notice before GI plc effects a
Controlled Asset Transfer that could reasonably be expected to give rise to an obligation of a
Partner to file a GRA in order to preserve nonrecognition of gain realized by such Partner as a
result of the Transaction. Such notification shall be provided 30 business days prior to the
closing of such Controlled Asset Transfer and shall include (i) a description of the Controlled
Asset Transfer, including the amount and nature of the property to be transferred, a description of
the amount of cash and the class, amount and characteristics of the stock or securities received in
the transfer, and the date on which such transfer is to take place; (ii) the name, address and
United States taxpayer identification number (if any) of the Controlled Transferee, (iii) the
applicable section of the Code which provides for non-recognition treatment with respect to such
Controlled Asset Transfer, if any; and (iv) any other information requested by Fox Paine or
the Partner that is reasonably necessary for the Partner to file a properly completed GRA.
5
(b) Fox Paine shall provide the Company in writing the name and address of a Partner promptly
after such Partner has filed a GRA pursuant to Treasury Regulation section 1.367(a)-8 (hereinafter,
a GRA Partner). A Partner shall not file a GRA with respect to the Transaction unless (i) Fox
Paine or such Partner has been notified of a Controlled Asset Transfer pursuant to Section 4(a) or
(ii) such filing is based on the advice of such Partners tax counsel or accountant, provided that
the Partner shall not file a GRA if the Company delivers or causes to be delivered to the Partner a
written opinion from a nationally recognized law or accounting firm concluding that at least
substantial authority exists for the position that such filing is not necessary to avoid gain
recognition pursuant to Section 367 of the Code. Before filing a GRA in a circumstance where the
Company has not provided notice pursuant to Section 4(a), a Partner shall first notify the Company
of the basis for its filing a GRA and shall give the Company a reasonable opportunity to provide
such opinion. If a taxing authority asserts that a GRA was required for a transaction for which
no GRA was filed, such contest and any resulting tax liability shall be governed as provided by
Sections 5(a), (b), (c) and (d).
(c) The Company shall (or shall cause a Controlled Transferee to) notify Fox Paine of any sale
or other transfer that would constitute a disposition for U.S. federal income tax purposes, within
the period beginning immediately after the Closing and ending five years after the last day of the
taxable year that includes the Closing Date, (i) by GI plc of any Controlled Transferee Stock or
Exchange Interests or (ii) (A) by a Controlled Transferee, (B) by one or more other transferees of
Company Assets, or (C) by both a Controlled Transferee and one or more such transferees, (whether
in one or a series of transactions) of any Exchange Interests or of all or substantially all of the
Company Assets acquired by such transferee other than in the ordinary course of business. Such
notification shall be provided 30 business days prior to the closing of such disposition
transaction and shall include (x) a description of the disposition, including the amount and nature
of the property to be transferred, a description of the class, amount and characteristics of the
stock or securities received in the transfer (if any), and the date on which such transfer is to
take place, (y) the name, address and United States taxpayer identification number (if any) of the
transferee and (z) with respect to any disposition as to which gain or loss will not be required to
be recognized under U.S. federal income tax principles, the applicable section of the Code which
provides for such non-recognition treatment. The Company shall cause GI plc not to (and shall
cause the Controlled Transferee or other transferee not to) consummate such disposition unless (i)
it first provides to Fox Paine a written opinion of a nationally recognized law or accounting firm
reasonably acceptable to Fox Paine stating that the transaction should not constitute a triggering
event pursuant to Treasury Regulation section 1.367(a)-8 that would cause a GRA Partner to
recognize some or all of the gain not recognized by such GRA Partner with respect to the
Transaction as a result of entering into the GRA (an Opinion) or (ii) it confirms in writing that
it will indemnify the GRA Partners pursuant to Section 5(a) (for the avoidance of doubt, as
modified by Sections 5(b) and 5(c)). If such Opinion is provided by the Company, neither Fox Paine
nor any GRA Partner shall treat such transfer as giving rise to a
triggering event. In
6
connection
with any transfer for which notice was given under Section 4(a) or for which an Opinion was
provided under Section 4(c), Fox Paine and each GRA Partner shall comply with any GRA requirements
(including, filing a new GRA) necessary
to avoid a triggering event under Treasury Regulation section 1.367(a)-8 in connection with
such transfer and such Opinion may include an assumption that Fox Paine and each GRA Partner have
complied with specifically enumerated GRA requirements necessary to avoid recognition of gain. The
Company shall provide Fox Paine with information regarding all events that could affect the GRA,
including triggering events and other gain recognition events as provided by Treasury Regulation
section 1.367(a)-8(c)(2)(iv).
5.
Indemnification
.
(a) Subject to the conditions of Section 5(b), (c), and (d), the Company shall reimburse and
indemnify each Partner for, and hold each Partner harmless on an after-tax basis against, any
increase (determined on a with and without basis) in the Partners United States federal, state or
local income tax liability (including any interest or penalties relating thereto, except to the
extent such interest or penalties arise from a failure of any Partner to promptly (i) notify the
Company that the applicable taxing authority (if any) has made a claim or (ii) pay such tax
liability after the Company has paid to the Partner the amount required by this Section 5(a)) and
reasonable attorneys fees (except as provided below under Section 5(d)), actually incurred by such
Partner as a result of (i) in the case of a GRA Partner, any Disposition of Company Assets or
Disposition of Controlled Transferee Stock and (ii) in the case of a Partner that is not a GRA
Partner, a failure to file a GRA with respect to the Transaction if (x) the Company fails to give
notice under Section 4(a) or (y) the Partner received an opinion pursuant to Section 4(b) to the
effect that there was at least substantial authority that no GRA was required with respect to the
Transaction; provided, for the avoidance of doubt, the Company shall be under no obligation to
reimburse and indemnify a Partner to the extent the Partner failed to file a GRA after receiving
notification pursuant to Section 4(a), unless such partner received an opinion pursuant to Section
4(b).
(b) The Company shall be under no obligation to reimburse and indemnify a Partner pursuant to
Section 5(a) or Section 5(e) unless such Partner shall have agreed to promptly pay when Actually
Realized to the Company the amount of (i) any refunds of amounts paid by the Company to such
Partner hereunder to the extent such refunds result from a determination, as applicable, that no
GRA was required to be filed or any existing GRA was not triggered, and (ii) any United States
federal, state or local tax savings Actually Realized by such Partner as a direct or indirect
result of a transaction for which an indemnification payment was made by the Company as described
in Section 5(a) (increased by any further tax savings as a result of any payment by such Partner
under this Section 5(b)); provided, that such Partner shall not be required to pay the Company
amounts of any refunds or tax savings to the extent they exceed the sum of all payments made by the
Company to such Partner under Section 5(a). For the avoidance of doubt, such tax savings shall be
determined on a with and without basis and shall include (but not be limited to) any tax benefit
Actually Realized that is attributable to (i) an increase in tax basis in the shares of GI plc
and/or interests in any pass-through entity which directly or indirectly owns such stock and (ii)
the deductibility of any payments for which indemnification is sought pursuant to Section 5(a).
7
(c) Any request by a Partner for reimbursement or indemnification under Section 5(a) above
shall be delivered to the Company in writing and shall set forth in reasonable detail a description
of the basis for the request and the amount payable to such Partner and the nature and amount
(to the extent it can be determined at such time) of any tax benefits or potential tax benefits for
which the Partner may be required to pay the Company pursuant to Section 5(b). Fox Paine and the
Partners will cooperate with the Companys reasonable requests to determine any tax benefits that
are Actually Realized (including providing the Company with the relevant with and without
calculations) and agree to notify the Company promptly upon a sale of the stock of GI plc or an
interest in a pass-through entity which directly or indirectly owns such stock or otherwise upon
determining that a tax benefit has been Actually Realized. At the Companys request, the amount
payable to a Partner by the Company, or by a Partner to the Company, under this Section 5 shall be
verified and certified by a nationally recognized firm of independent U.S. accountants mutually
acceptable to the Company and such Partner. The Company shall pay the fees of such accountants,
and such Partner and the Company shall cooperate in good faith with such accountants.
(d) In the event that a taxing authority asserts that a transfer gives rise to a tax
liability for which a Partner would be entitled to reimbursement or indemnification pursuant to
Section 5(a), the Company shall be under no obligation to reimburse and indemnify such Partner
unless (i) such Partner promptly informs the Company of any such claim made by the taxing
authority; (ii) such Partner agrees to contest in good faith such claim and any adverse judicial
decision relating thereto (provided that there is a realistic possibility of success for such
contest in the good-faith determination of the Partner based on advice received by the Partner from
a nationally recognized law or accounting firm reasonably acceptable to the Company and such
Partner and the Company pays the amount of any tax (including penalties and interest required to be
paid by the Company hereunder) or posts any bond required under applicable law to be paid or posted
in order to contest such claim in the forum chosen by the Partner); (iii) such Partner consults in
good faith with the Company and allows the Company reasonable opportunity to participate in such
tax contest; and (iv) such Partner does not pay, discharge, settle, compromise, litigate, or
otherwise dispose (collectively, dispose) of such claim without obtaining the prior written
consent of the Company, which consent shall not be unreasonably withheld, conditioned or delayed,
provided
,
however
, the Partner may dispose of any claim for which it has determined
there is no realistic possibility of success in accordance with (ii) above without the prior
written consent of the Company. The Company shall pay all of its own costs and expenses, as well as
all reasonable out-of-pocket costs and expenses of such Partner, incurred in connection with such
contest; provided, for the avoidance of doubt, the Company shall only pay such amounts to the
extent they relate to the tax liability for which the Partner would be entitled to indemnification
hereunder; provided, further, the Company shall not be liable for costs or expenses relating to the
legal or other advisors of Fox Paine or the Partners if the Company has notified Fox Paine of a
sale or other transfer pursuant to Section 4(c) that would be a triggering event and for which the
Company has agreed to indemnify the GRA Partners pursuant to Section 4(c) and such Partner does not
report such triggering event on its tax return.
8
(e) To the extent that Fox Paine and its Affiliates convert or dispose of their Class B
ordinary Shares (i) in the manner set out in Section 6 below, or (ii) pursuant to any other
procedures established by the Board of Directors pursuant to Section 3(d)(ii) of the Articles
(unless Fox Paine, in accordance with such Section, has notified the Company of its unwillingness
to have such Class B ordinary shares converted so as to be redeemable), the
Company shall reimburse and indemnify Fox Paine and its Affiliates and the Transferees for,
and hold Fox Paine and its Affiliates and their Transferees harmless on an after-tax basis against,
any Irish stamp duty (including any interest or penalties relating thereto, except to the extent
such interest or penalties arise from a failure of Fox Paine or its Affiliates, or the Transferees,
to promptly pay such tax liability after the Company has paid to such person the amount required by
this Section 5(e)) arising on such conversion or disposal. The Company shall not be required to
reimburse or indemnify Fox Paine, its Affiliates or the Transferees for any such Irish stamp duty
(or any interest or penalties relating thereto) unless (i) the Irish taxing authority has asserted
that such Irish stamp duty is due and payable and Fox Paine, its Affiliates or the Transferees have
promptly notified the Company that the Irish taxing authority has made such a claim; or (ii) there
has been a change of law (or the official interpretation of the law), after the date hereof, such
that Irish stamp duty arises on a conversion or disposal of shares effected by taking the steps set
out in Section 6 below. The Company at its own expense may control any proceeding with the Irish
taxing authority related to such claim,
provided
that
there is a realistic
possibility of success for such contest in the good-faith determination of the Company based on
advice received by the Company from a nationally recognized law or accounting firm reasonably
acceptable to the Company and Fox Paine, its Affiliates or the Transferees, as applicable. For the
avoidance of doubt, any refund of Irish stamp tax indemnified or reimbursed by the Company
hereunder shall be for the Companys account.
6.
Procedures Applicable to Transfer and Conversion
.
Fox Paine, its Affiliates, and the Transferees shall be entitled to reimbursement and indemnity
pursuant to Section 5(e) to the extent they convert their Class B ordinary shares into Class A
ordinary shares and/or dispose of their Class B ordinary shares in the following manner, unless
agreed in writing in advance by the Company. If Fox Paine, an Affiliate or Transferee provides
written notice to the Company of a proposed transfer of Class B ordinary shares or a proposed
conversion of Class B ordinary shares into Class A ordinary shares, the Company shall provide
notice to Fox Paine and its Affiliates that such conversion or transfer must comply with the
procedures set forth in this Section 6 as a condition to reimbursement and indemnity of Irish stamp
duty pursuant to Section 5(e).
(a) Where Fox Paine or one of its Affiliates (the Converter) wishes to convert Class B
ordinary shares into Class A ordinary shares
,
this will be effected by the Company redeeming the
relevant Class B ordinary shares and issuing the same number of new Class A ordinary shares in the
name of Cede & Co (to be held in DTC on behalf of the Converter) as permitted by Article
3(d)(ii)(A) of the Articles;
(b) Where Fox Paine or one of its Affiliates (the Transferor) wishes to convert Class B
ordinary shares into Class A ordinary shares with a view to a sale or other transfer of the Class A
ordinary shares to a Transferee which neither holds Class B ordinary shares nor is an Affiliate of
Fox Paine, this will be effected by the Company redeeming the relevant Class B ordinary shares and
issuing the same number of new Class A ordinary shares in the name of Cede & Co (to be held in DTC
on behalf of the Transferor) and by the Transferor transferring those new Class A ordinary shares
to the Transferee through DTC, as permitted by Article 3(d)(ii)(A) of the Articles; and
9
(c) Where Fox Paine or one of its Affiliates wishes to sell or transfer Class B ordinary
shares and a Transferee either (A) is a nominee or Affiliate of Fox Paine and such transfer will
not result in a change of beneficial ownership (as determined under 13d-3 under the Exchange Act)
or (B) is already a holder of Class B ordinary shares, this will be effected by the Company
redeeming the relevant Class B ordinary shares and issuing the same number of new Class B ordinary
shares in the name of the Transferee, as permitted by Article 3(d)(ii)(B) of the Articles.
7.
Operational Rules
. For purposes of this Agreement, (A) the assets of an entity
disregarded from its direct or indirect owner for U.S. federal income tax purposes shall be treated
as held by such owner and (B) a sale or other disposition (i) by any entity disregarded from its
direct or indirect owner for U.S. federal income tax purposes shall be treated as a sale or other
disposition by such owner and (ii) of any entity disregarded from its direct or indirect owner for
U.S. federal income tax purposes shall be treated as a sale or other disposition of the assets of
such entity by such owner.
8.
Governing Law
. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York (without regard to the conflict of laws principles or rules
thereof).
9.
Submission to Jurisdiction; Waiver of Immunity
. Each party hereto, on behalf of
itself and its successors and assigns, hereby irrevocably (a) consents to submit itself to the
personal jurisdiction of the
United States District Court for the Southern District of New York or
any court of the State of New York
located in such district solely for the purpose of any action,
suit or proceeding commenced to resolve any dispute that arises out of this Agreement (b) waives
any objection which it may now or hereafter have to the venue of any such action, suit or
proceeding, and (c) irrevocably waives any immunity from jurisdiction to which it might otherwise
be entitled in any such action, suit or proceeding which may be instituted in any state or federal
court in the
State of New York
, and irrevocably waives any immunity from the maintaining of an
action against it to enforce any judgment for money obtained in any such action, suit or proceeding
and, to the extent permitted by applicable law, any immunity from execution.
10.
Additional Parties
. No party hereto shall assign its rights or obligations
hereunder without the prior written consent of the other party, except that Fox Paines rights and
obligations shall inure to the benefit of and be binding upon each Partner and any person who
shares or succeeds to such Partners tax liability as a matter of law. (A) Each of the Partners
and (B) with respect to and as set forth in Section 5(e), each of the Affiliates of Fox Paine and
the Transferees, is an express third party beneficiary of the Agreement with rights to enforce the
obligations of the Company; provided, that, no such person shall be entitled to exercise any rights
hereunder unless at the time such rights are exercised, such person at the request of the Company
agrees in writing that it shall be bound by any and all obligations applicable to such person under
this Agreement.
10
11.
Effective Date
. This Agreement shall become effective at the Closing.
12.
Timing of Payments
. All payments required to be made pursuant to Section 5(a)
shall be made by the Company to the Partner no later than 5 business days before such payment is
required to be paid to a taxing authority. All payments required to be made pursuant to Section
5(b) shall be made by the Partner to the Company no later than 5 business days after a tax benefit
is Actually Realized. All payments of expenses required to be made pursuant to Section 5(d) and
5(e) shall be made by the Company to the Partner, Fox Paine or its Affiliates, or the Transferee,
as applicable, as soon as practicable but in any event no later than twenty (20) days after written
demand is presented to the Company.
13.
Currency of Payments
. All payments to be made to any party under any of the
provisions hereof shall be made in U.S. Dollars.
14.
Notices
. All notices, requests, demands and other communications made in
connection with this Agreement shall be in writing and shall be (a) mailed by first-class,
registered or certified mail, return receipt requested, postage prepaid, (b) transmitted by hand
delivery, (c) transmitted by facsimile or (d) sent by overnight courier, addressed as follows (each
such addressee a Notice Person):
if to the Company, to:
United America Indemnity Ltd.
Walker House,
87 Mary Street,
George Town, Grand Cayman
KY1-9005, Cayman Islands
Attn: Larry A. Frakes
With a copy to
United America Indemnity Group, Inc.,
Three Bala Plaza East, Suite 300,
Bala Cynwyd, PA 19004.
If to Fox Paine or its Affiliates, to:
Fox Paine Capital Fund II International L.P.
Suite 150
3500 Alameda de las Pulgas
Menlo Park, CA 94025
11
With a copy to:
Fox Paine & Company, LLC
Suite 150
3500 Alameda de las Pulgas
Menlo Park, CA 94025
Attn: Saul A. Fox
Fax: +1 (650) 295-4045
And a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
1440 New York Avenue, N.W.
Washington, D.C. 20005-2111
Attn: Paul W. Oosterhuis
Fax: +1 (202) 661-8232
15.
Miscellaneous
. This Agreement contains the entire understanding of the parties
with respect to the subject matter hereof and may not be amended, modified or supplemented except
in writing signed by the Company and, insofar as it applies to Fox Paine and its Affiliates or the
Partners, by Fox Paine. If any term, provision or covenant of this Agreement is held by a court of
competent jurisdiction to be invalid, void or unenforceable, the remainder of the terms, provisions
and covenants of this Agreement shall remain in full force and effect, unless such action would
substantially impair the benefits to either party of the remaining provisions of this Agreement.
This Agreement may be executed in one or more counterparts, each of which will be deemed an
original and all of which together will constitute one and the same instrument.
IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement, or has caused this
Agreement to be executed, as of the date and year first above written.
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UNITED AMERICA INDEMNITY LTD.
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By:
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/s/ Larry A. Frakes
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Name:
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Larry A. Frakes
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Title:
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President and Chief Executive Officer
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FOX PAINE CAPITAL FUND II INTERNATIONAL L.P.,
acting by Fox Paine Capital International GP L.P., its general partner, acting by Fox Paine
International GP, Ltd., its general partner
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By:
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/s/ Saul A. Fox
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Name:
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Saul A. Fox
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Title:
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Director
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12
EXHIBIT 10.9
INDEMNIFICATION AGREEMENT
This
Indemnification Agreement is dated July 2, 2010 (this
Agreement
) and is between
United America Indemnity, Ltd., an exempted company incorporated with limited liability under the
laws of the Cayman Islands (the
Indemnitor
) and wholly owned subsidiary of Global
Indemnity plc, an Irish public limited Company (the
Company
), and
[
Name of
director/secretary/officer
]
, a [director][officer][secretary] of the Company,
(
Indemnitee
).
Background
The Company believes that in order to attract and retain highly competent persons to serve as
directors or in other capacities, including as officers and secretary, it must provide such persons
with adequate protection through indemnification against the risks of claims and actions against
them arising out of their services to and activities on behalf of the Company.
The Indemnitee has previously served as a [director][secretary][officer] for the Indemnitor,
which, upon the effectiveness of the scheme of arrangement of the Indemnitor under section 86 of
the Companies Law (2009 Revision) of the Cayman Islands (as amended, the
Companies Law
),
has become a wholly owned subsidiary of the Company.
The Company and the Indemnitor desire and have requested the Indemnitee to serve as a
[director] [officer] [secretary] of the Company and, in order to induce the Indemnitee to serve as
a [director] [officer] [secretary] of the Company, the Indemnitor is willing to grant the
Indemnitee the indemnification provided for herein. Indemnitee is willing to so serve on the basis
that such indemnification be provided.
The parties by this Agreement desire to set forth their agreement regarding indemnification
and the advancement of expenses.
In consideration of Indemnitees service to the Company and the Indemnitor and the covenants
and agreements set forth below, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto, intending to be legally bound,
hereby agree as follows:
Section 1.
Indemnification
.
To the fullest extent permitted by the Companies Law:
(a) The Indemnitor shall indemnify Indemnitee if Indemnitee was or is made or is threatened to
be made a party to, or is otherwise involved in, as a witness or otherwise, any threatened, pending
or completed action, suit or proceeding (brought in the right of the Company or otherwise), whether
civil, criminal, administrative or investigative and whether formal or informal, including appeals,
by reason of the fact that Indemnitee is or was or has agreed to serve as a director, secretary,
officer, employee or agent of the Company, or while serving as a director, secretary or officer,
employee or agent of the Company or the Indemnitor, is or was serving or has agreed to serve at the
request of the Company and/or Indemnitor as a director, secretary, officer, employee or agent
(which, for purposes hereof, shall include a trustee, fiduciary, partner or manager or similar
capacity) of another corporation, limited liability company, partnership, joint venture, trust,
employee benefit plan or other enterprise, or by reason of any action alleged to have been taken or
omitted in any such capacity.
(b) The indemnification provided by this Section 1 shall be from and against all loss and
liability suffered and expenses (including attorneys fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by or on behalf of Indemnitee in connection with such
action, suit or proceeding, including any appeals.
Section 2.
Advance Payment of Expenses
. To the fullest extent permitted by the
Companies Law, expenses (including attorneys fees) incurred by Indemnitee in appearing at,
participating in or defending any action, suit or proceeding or in connection with an enforcement
action as contemplated by Section 3(e), shall be paid by the Indemnitor in advance of the final
disposition of such action, suit or proceeding as soon as reasonably practicable, but in no event
later than 30 days after receipt by the Indemnitor of a statement or statements from Indemnitee
requesting such advance or advances from time to time. Advances shall be unsecured and without
interest and made without regard to Indemnitees ability to repay such advances. The Indemnitee
hereby undertakes to repay any amounts advanced (without interest) to the extent that it is
ultimately determined by a court of competent jurisdiction that Indemnitee is not entitled to be
indemnified by the Indemnitor in respect thereof. No other form of undertaking shall be required
of Indemnitee other than the execution of this Agreement. This Section 2 shall be subject to
Section 3(b) and shall not apply to any claim made by Indemnitee for which indemnity is excluded
pursuant to Section 6.
Section 3.
Procedure for Indemnification; Notification and Defense of Claim
.
(a) Promptly after receipt by Indemnitee of notice of the commencement of any action, suit or
proceeding, Indemnitee shall, if a claim in respect thereof is to be made against the Indemnitor
hereunder, notify the Indemnitor in writing of the commencement thereof. The failure to promptly
notify the Indemnitor of the commencement of the action, suit or proceeding, or of Indemnitees
request for indemnification, will not relieve the Indemnitor from any liability that it may have to
Indemnitee hereunder, except to the extent the Indemnitor is actually and materially prejudiced in
its defense of such action, suit or proceeding as a result of such failure. To obtain
indemnification under this Agreement, Indemnitee shall submit to the Indemnitor a written request
therefor including such documentation and information as is reasonably available to Indemnitee and
is reasonably necessary to enable the Indemnitor to determine whether and to what extent Indemnitee
is entitled to indemnification, provided, however, that under no circumstances shall documentation
be required to be provided that, prepared in connection with legal services, contain references to
legal work performed or to expenditures made that would cause Indemnitee to waive any privilege
accorded by applicable law.
(b) With respect to any action, suit or proceeding of which the Indemnitor is so notified as
provided in this Agreement, the Indemnitor shall, subject to the last two sentences of this
paragraph, be entitled to assume the defense of such action, suit or proceeding, with counsel
reasonably acceptable to Indemnitee, upon the delivery to Indemnitee of written notice of its
election to do so. After delivery of such notice, approval of such counsel by Indemnitee and the
retention of such counsel by the Indemnitor, the Indemnitor will not be liable to Indemnitee under
this Agreement for any subsequently-incurred fees of separate counsel engaged by Indemnitee with
respect to the same action, suit or proceeding unless the employment of separate counsel by
Indemnitee has been previously authorized in writing by the Indemnitor. Notwithstanding
Indemnitors assumption of the defense of any such action, suit or proceeding, the Indemnitor shall
be obligated to pay the fees and expenses of Indemnitees separately engaged counsel to the extent
(i) the employment of counsel by Indemnitee is authorized by the Indemnitor, (ii) counsel for the
Indemnitor or Indemnitee shall have reasonably concluded that there is a conflict of interest or
position between the Indemnitor and Indemnitee in the conduct of any such defense such that
Indemnitee needs to be separately represented, (iii) the fees and expenses are non-duplicative and
reasonably incurred in connection with Indemnitees role in the action, suit or proceeding despite
the Indemnitors assumption of the defense, (iv) the Indemnitor is not financially or legally able
to perform
its indemnification obligations or (v) the Indemnitor shall not have retained, or shall not
continue to retain, such counsel to defend such action, suit or proceeding. Regardless of any
provision in this Agreement, the Indemnitee shall have the right to employ counsel in any suit,
action or proceeding at Indemnitees personal expense. In addition, the Indemnitor will not be
entitled, without the written consent of Indemnitee, to assume the defense of any claim brought by
or in the right of the Indemnitor.
(c) To the fullest extent permitted by the Companies Law, the Indemnitors assumption of the
defense of an action, suit or proceeding in accordance with paragraph (b) above will constitute an
irrevocable acknowledgement by the Indemnitor that any loss and liability suffered by Indemnitee
and expenses (including attorneys fees), judgments, fines and amounts paid in settlement by or for
the account of Indemnitee incurred in connection therewith are indemnifiable by the Indemnitor
under Section 1 of this Agreement.
(d) The determination whether to grant Indemnitees indemnification request shall be made
promptly and in any event within 30 days following the Indemnitors receipt of a request for
indemnification in accordance with Section 3(a). If the Indemnitor determines that Indemnitee is
entitled to such indemnification or, as contemplated by paragraph (c) above, the Indemnitor has
acknowledged such entitlement, the Indemnitor will make payment to Indemnitee of the indemnifiable
amount within such 30 day period. If the Indemnitor is not deemed to have so acknowledged such
entitlement or the Indemnitors determination of whether to grant Indemnitees indemnification
request shall not have been made within such 30 day period, the requisite determination of
entitlement to indemnification shall, subject to Section 6, nonetheless be deemed to have been made
and Indemnitee shall be entitled to such indemnification, absent (i) a misstatement by Indemnitee
of a material fact, or an omission of a material fact necessary to make Indemnitees statement not
materially misleading, in connection with the request for indemnification, or (ii) a prohibition of
such indemnification under the Companies Law.
(e) In the event that (i) the Indemnitor determines in accordance with this Section 3 that
Indemnitee is not entitled to indemnification under this Agreement, (ii) the Indemnitor denies a
request for indemnification, in whole or in part, or fails to respond or make a determination of
entitlement to indemnification within 30 days following receipt of a request for indemnification as
described above, (iii) payment of indemnification is not made within such 30 day period, (iv)
advancement of expenses is not timely made in accordance with Section 2, or (v) the Indemnitor or
any other person takes or threatens to take any action to declare this Agreement void or
unenforceable, or institutes any litigation or other action or proceeding designed to deny, or to
recover from, the Indemnitee the benefits provided or intended to be provided to Indemnitee
hereunder, Indemnitee shall be entitled to an adjudication in any court of competent jurisdiction
of Indemnitees entitlement to such indemnification or advancement of expenses. Indemnitees
expenses (including attorneys fees) incurred in connection with successfully establishing
Indemnitees right to indemnification or advancement of expenses, in whole or in part, in any such
proceeding or otherwise shall also be indemnified by the Indemnitor to the fullest extent permitted
by the Companies Law.
(f) Upon written request by Indemnitee for indemnification pursuant to Section 3(a), a
determination, if required by applicable law, with respect to Indemnitees entitlement thereto
shall be made in the specific case (i) if a Change in Control of the Company shall have occurred,
by Independent Counsel in a written opinion to the Indemnitors board of directors, a copy of which
shall be delivered to Indemnitee or (ii) if a Change in Control of the Company shall not have
occurred, (A) by a majority vote of the Disinterested Directors, even though less than a quorum of
the Indemnitors board of directors, (B) by a committee of Disinterested Directors designated by a
majority vote of the Disinterested Directors, even though less than a quorum of the Indemnitors
board of directors, or (C) if there are no such Disinterested Directors or, if such Disinterested
Directors so direct, by Independent Counsel in a written opinion to the Indemnitors board of
directors, a copy of which shall be delivered to Indemnitee.
If it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall
be made as soon as practicable, but in no event later than thirty (30) days after such
determination. Indemnitee shall cooperate with the person, persons or entity making the
determination with respect to Indemnitees entitlement to indemnification, including providing to
such person, persons or entity upon reasonable advance request any documentation or information
that is not privileged or otherwise protected from disclosure and that is reasonably available to
Indemnitee and reasonably necessary to such determination. Any costs or expenses (including
attorneys fees and disbursements) reasonably incurred by Indemnitee in so cooperating with the
person, persons or entity making such determination shall be borne by the Indemnitor, to the extent
permitted by applicable law.
(g) In the event the determination of entitlement to indemnification is to be made by
Independent Counsel pursuant to Section 3(f), the Independent Counsel shall be selected as provided
in this Section 3(g). If a Change in Control of the Company shall not have occurred, the
Independent Counsel shall be selected by the Indemnitors board of directors, and the Indemnitor
shall give written notice to Indemnitee advising him or her of the identity of the Independent
Counsel so selected. If a Change in Control of the Company shall have occurred, the Independent
Counsel shall be selected by Indemnitee (unless Indemnitee shall request that such selection be
made by the Indemnitors board of directors, in which event the preceding sentence shall apply),
and Indemnitee shall give written notice to the Indemnitor advising it of the identity of the
Independent Counsel so selected. In either event, Indemnitee or the Indemnitor, as the case may be,
may, within ten (10) days after such written notice of selection shall have been given, deliver to
the Indemnitor or to Indemnitee, as the case may be, a written objection to such selection;
provided
,
however
, that such objection may be asserted only on the ground that the Independent
Counsel so selected does not meet the requirements of Independent Counsel as defined in this
Agreement, and the objection shall set forth with particularity the factual basis of such
assertion. Absent a proper and timely objection, the person so selected shall act as Independent
Counsel. If such written objection is so made and substantiated, the Independent Counsel so
selected may not serve as Independent Counsel unless and until such objection is withdrawn or a
court of competent jurisdiction has determined that such objection is without merit. If, within
twenty (20) days after the later of (i) submission by Indemnitee of a written request for
indemnification pursuant to Section 3(a) hereof and (ii) the final disposition of the action, suit
or proceeding, the parties have not agreed upon an Independent Counsel, either the Indemnitor or
Indemnitee may petition a court of competent jurisdiction for resolution of any objection which
shall have been made by the Indemnitor or Indemnitee to the others selection of Independent
Counsel and for the appointment as Independent Counsel of a person selected by the court or by such
other person as the court shall designate, and the person with respect to whom all objections are
so resolved or the person so appointed shall act as Independent Counsel under Section 3(f) hereof.
Upon the due commencement of any judicial proceeding pursuant to Section 3(e) of this Agreement,
the Independent Counsel shall be discharged and relieved of any further responsibility in such
capacity (subject to the applicable standards of professional conduct then prevailing). The
Indemnitor agrees to pay the reasonable fees and expenses of any Independent Counsel and to fully
indemnify such counsel against any and all expenses, claims, liabilities and damages arising out of
or relating to this Agreement or its engagement pursuant hereto.
(h) In making a determination with respect to entitlement to indemnification hereunder, the
person, persons or entity making such determination shall presume that the Indemnitee is entitled
to indemnification and advancement of expenses under this Agreement upon submission of a request
therefor in accordance with Section 2 or Section 3 of this Agreement, as the case may be. The
Indemnitor shall have the burden of proof in overcoming such presumption, and such presumption
shall be used as a basis for a determination of entitlement to indemnification and advancement of
expenses unless the Indemnitor overcomes such presumption by clear and convincing evidence.
(i) To the fullest extent not prohibited by law, the Company and the Indemnitor shall be
precluded from asserting in any judicial proceeding commenced pursuant to this Section 3 that the
procedures and presumptions of this Agreement are not valid, binding and enforceable and shall
stipulate in any such court that the Company and the Indemnitor are bound by all the provisions of
this Agreement.
(j) The termination of any action, suit or proceeding or of any claim, issue or matter
therein, by judgment, order, settlement or conviction, or upon a plea of
nolo contendere
or its
equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself
adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee
acted in a manner that was knowingly fraudulent or was the result of willful misconduct.
Section 4.
Insurance and Subrogation
.
(a) The Company shall use all reasonable efforts to purchase and maintain a policy or policies
of insurance with reputable insurance companies with A.M. Best ratings of A or better, providing
Indemnitee with coverage for any liability asserted against, and incurred by, Indemnitee or on
Indemnitees behalf by reason of the fact that Indemnitee is or was or has agreed to serve as a
director, secretary, officer, employee or agent of the Company or the Indemnitor, or while serving
as a director or officer of the Company or the Indemnitor, is or was serving or has agreed to serve
at the request of the Company or Indemnitor as a director, secretary, officer, employee or agent
(which, for purposes hereof, shall include a trustee, fiduciary, partner or manager or similar
capacity) of another corporation, limited liability company, partnership, joint venture, trust,
employee benefit plan or other enterprise, or arising out of Indemnitees status as such, whether
or not the Indemnitor would have the power to indemnify Indemnitee against such liability under the
provisions of this Agreement. Such insurance policies shall have coverage terms and policy limits
at least as favorable to Indemnitee as the insurance coverage provided in either case to any other
director, secretary, officer, employee or agent of the Company or the Indemnitor. If the Company
has such insurance in effect at the time the Indemnitor receives from Indemnitee any notice of the
commencement of an action, suit or proceeding, the Indemnitor shall give prompt notice of the
commencement of such action, suit or proceeding to the insurers in accordance with the procedures
set forth in the policy. The Indemnitor shall thereafter take all necessary or desirable action to
cause such insurers to pay, on behalf of Indemnitee, all amounts payable as a result of such
proceeding in accordance with the terms of such policy.
(b) In the event of any payment by the Indemnitor under this Agreement, the Indemnitor shall
be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee with
respect to any insurance policy. Indemnitee shall execute all papers required and take all action
necessary to secure such rights, including execution of such documents as are necessary to enable
the Indemnitor to bring suit to enforce such rights in accordance with the terms of such insurance
policy. The Indemnitor shall pay or reimburse all expenses actually and reasonably incurred by
Indemnitee in connection with such subrogation.
(c) Subject to Section 9(b), the Indemnitor shall not be liable under this Agreement to make
any payment of amounts otherwise indemnifiable hereunder (including, but not limited to, judgments,
fines and amounts paid in settlement, and ERISA excise taxes or penalties) if and to the extent
that Indemnitee has otherwise actually received such payment under this Agreement or any insurance
policy, contract, agreement or otherwise.
Section 5.
Certain Definitions
.
For purposes of this Agreement, the following
definitions shall apply:
(a) The term
action, suit or proceeding
shall be broadly construed and shall
include, without limitation, the investigation, preparation, prosecution, defense, settlement,
arbitration and appeal of, and the giving of testimony in, any threatened, pending or completed
claim, action, suit, arbitration, alternative dispute mechanism or proceeding, whether civil,
criminal, administrative or investigative.
(b) The term
by reason of the fact that Indemnitee is or was or has agreed to serve as a
director, secretary, officer, employee or agent of the Company or the Indemnitor, or while serving
as a director or officer of the Company or Indemnitor, is or was serving or has agreed to serve at
the request of the Company or Indemnitor as a director, secretary, officer, employee or agent
(which, for purposes hereof, shall include a trustee, partner or manager or similar capacity) of
another corporation, limited liability company, partnership, joint venture, trust, employee benefit
plan or other enterprise
shall be broadly construed and shall include, without limitation, any
actual or alleged act or omission to act.
(c) The term
Change in Control
shall be deemed to occur upon the earliest to occur
after the date of this Agreement of any of the following events:
(i) Acquisition of Stock by Third Party.
Any Person (as defined below), other than Fox Paine
or any Affiliate of Fox Paine (as defined below) or any underwriters or initial purchasers in
connection with a bona fide offering of the Companys securities, is or becomes the Beneficial
Owner (as defined below), directly or indirectly, of securities of the Company representing fifty
percent (50%) or more of the combined voting power of the Companys then outstanding securities,
other than by a transfer by an existing shareholder to an Affiliate of an existing shareholder;
(ii) Change in Board Composition.
During any period of two consecutive years (not including
any period prior to the execution of this Agreement), individuals who at the beginning of such
period constitute the Companys board of directors, and any new directors (other than a director
designated by a person who has entered into an agreement with the Company to effect a transaction
described in Sections 5(c)(i), 5(c)(iii), and 5(c)(iv)) whose election by the board of directors or
nomination for election by the Companys shareholders was approved by a vote of at least two-thirds
of the directors then still in office who either were directors at the beginning of the period or
whose election or nomination for election was previously so approved, cease for any reason to
constitute at least a majority of the members of the Companys board of directors;
(iii) Corporate Transactions.
The effective date of a merger, takeover or consolidation of the
Company with any other entity, other than a merger, takeover or consolidation which would result in
the voting securities of the Company outstanding immediately prior to such merger or consolidation
continuing to represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity) more than 50% of the combined voting power of the voting
securities of the surviving entity outstanding immediately after such merger or consolidation and
with the power to elect at least a majority of the board of directors or other governing body of
such surviving entity;
(iv) Liquidation.
The approval by the shareholders of the Company of the winding up or a
complete liquidation of the Company or an agreement for the sale or disposition by the Company of
all or substantially all of the Companys assets; and
(v) Other Events.
Any other event of a nature that would be required to be reported in
response to Item 6(e) of Schedule 14A of Regulation 14A (or in response to any similar item on any
similar schedule or form) promulgated under the Securities Exchange Act of 1934, as amended,
whether or not the Company is then subject to such reporting requirement.
For purposes of this Section 5(c), the following terms shall have the following meanings:
Affiliate
shall mean any Person, that directly or indirectly through one or more
intermediaries, controls or is under common control with another Person.
Beneficial Owner
shall have the meaning given to such term in Rule 13d-3 under the
Securities Exchange Act of 1934, as amended;
provided, however,
that
Beneficial Owner
shall
exclude any Person otherwise becoming a Beneficial Owner by reason of (i) the shareholders of the
Company approving a merger of the Company with another entity or (ii) the Companys board of
directors approving a sale of securities by the Company to such Person.
Fox Paine
shall mean Fox Paine & Company, LLC, a Delaware limited liability company,
and its successors and assigns.
Person
shall have the meaning as set forth in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended;
provided, however,
that
Person
shall exclude
(i) the Company, (ii) the Indemnitor, (iii) any trustee or other fiduciary holding securities under
an employee benefit plan of the Company or the Indemnitor, and (iv) any corporation owned, directly
or indirectly, by the shareholders of the Company in substantially the same proportions as their
ownership of stock of the Company.
(d) The term
Disinterested Director
shall mean a director of the Indemnitor who is
not and was not a party to the action, suit or proceeding in respect of which indemnification is
sought by the Indemnitee.
(e) The term
expenses
shall be broadly construed and shall include, without
limitation, all direct and indirect costs of any type or nature whatsoever (including, without
limitation, all attorneys fees and related disbursements, appeal bonds, other out-of-pocket costs
and reasonable compensation for time spent by Indemnitee for which Indemnitee is not otherwise
compensated by the Indemnitor or any third party), actually and reasonably incurred by Indemnitee
in connection with either the investigation, defense or appeal of an action, suit or proceeding or
establishing or enforcing a right to indemnification under this Agreement or otherwise incurred in
connection with a claim that is indemnifiable hereunder.
(f) The term
Independent Counsel
shall mean (a) a law firm, or a partner or member
of a law firm, that is experienced in matters of corporation law and such law firm, or if a partner
or member of a law firm, the law firm for which such partner or member is a partner or member,
neither presently is, nor in the past five years has been retained to represent (i) the Company,
the Indemnitor, the Indemnitee or any beneficial owner of securities of the Company representing
fifteen percent (15%) or more of the consolidated voting power of the Companys then outstanding
securities (such beneficial owner an
Interested Stockholder
) in any matter material to
any such party (other than as Independent Counsel with respect to matters concerning Indemnitee
under this Agreement, or other indemnitees under similar indemnification agreements), or (ii) any
other party to the action, suit or proceeding giving rise to a claim for indemnification hereunder
or (b) a law firm, or a partner or member of a law firm, that is experienced in matters of
corporation law and has been selected by the Indemnitee, as approved by each of the Company and the
Indemnitor (which approval shall not be unreasonably withheld or delayed), to act as Independent
Counsel pursuant to this Agreement. Notwithstanding the foregoing, the term
Independent
Counsel
shall not include any person who, under the applicable standards of professional
conduct then prevailing, would have a conflict of interest in representing any of the Company, the
Indemnitor, the Indemnitee or any Interested Stockholder in an action to determine the Indemnitees
rights under this Agreement unless each of the Company, the Indemnitor and the Indemnitee waive
such conflict of interest in writing.
(g) The term
judgments, fines and amounts paid in settlement
shall be broadly
construed and shall include, without limitation, all direct and indirect payments of any type or
nature whatsoever, as well as any penalties or excise taxes assessed on a person with respect to an
employee benefit plan).
Section 6.
Limitation on Indemnification
.
Notwithstanding any other provision herein
to the contrary, the Indemnitor shall not be obligated pursuant to this Agreement:
(a)
Claims Initiated by Indemnitee
. To indemnify or advance expenses to Indemnitee
with respect to an action, suit or proceeding (or part thereof), however denominated, initiated by
Indemnitee, other than (i) an action, suit or proceeding brought to establish or enforce a right to
indemnification or advancement of expenses under this Agreement (which shall be governed by the
provisions of Section 6(b) of this Agreement); (ii) an action, suit or proceeding (or part
thereof) that was authorized or consented to by the Board of Directors of the Indemnitor, it being
understood and agreed that such authorization or consent shall not be unreasonably withheld in
connection with any compulsory counterclaim brought by Indemnitee in response to an action, suit or
proceeding otherwise indemnifiable under this agreement; (iii) indemnification provided by the
Indemnitor pursuant to the powers vested in the Indemnitor under applicable law; or (iv) as
otherwise required by applicable law.
(b)
Action for Indemnification
. To indemnify Indemnitee for any expenses incurred by
Indemnitee with respect to any action, suit or proceeding instituted by Indemnitee to enforce or
interpret this Agreement, unless Indemnitee is successful in such action, suit or proceeding in
establishing Indemnitees right, in whole or in part, to indemnification or advancement of expenses
hereunder (in which case such indemnification or advancement shall be to the fullest extent
permitted by the Companies Law), or unless and to the extent that the court in such action, suit or
proceeding shall determine that, despite Indemnitees failure to establish their right to
indemnification, Indemnitee is entitled to indemnity for such expenses; provided, however, that
nothing in this Section 6(b) is intended to limit the Indemnitors obligations with respect to the
advancement of expenses to Indemnitee in connection with any such action, suit or proceeding
instituted by Indemnitee to enforce or interpret this Agreement, as provided in Section 2 hereof.
(c)
Section 16(b) Matters
. To indemnify Indemnitee on account of any suit in which
judgment is rendered against Indemnitee for disgorgement of profits made from the purchase or sale
by Indemnitee of securities of the Company pursuant to the provisions of Section 16(b) of the
Securities Exchange Act of 1934, as amended.
(d)
Fraud or Willful Misconduct
. To indemnify Indemnitee on account of conduct by
Indemnitee where such conduct has been determined by a final (not interlocutory) judgment or other
adjudication of a court or arbitration or administrative body of competent jurisdiction as to which
there is no further right or option of appeal or the time within which an appeal must be filed has
expired without such filing to have been knowingly fraudulent or constitute willful misconduct.
(e)
Prohibited by Law
. To indemnify Indemnitee in any circumstance where such
indemnification has been determined by a final (not interlocutory) judgment or other adjudication
of a court or arbitration or administrative body of competent jurisdiction as to which there is no
further right or option of appeal or the time within which an appeal must be filed has expired
without such filing to be prohibited by law.
Section 7.
Certain Settlement Provisions
.
The Indemnitor shall have no obligation to
indemnify Indemnitee under this Agreement for any amounts paid in settlement of any action, suit or
proceeding without the Indemnitors prior written consent. The Indemnitor and the Company shall
not,
without the prior written consent of the Indemnitee, settle any action, suit or proceeding for
which the Indemnitee would be entitled to indemnification under this Agreement, unless such
settlement includes an unconditional release of such Indemnitee from all liability on claims that
are the subject matter of such proceeding. Neither the Indemnitor, the Company nor Indemnitee will
unreasonably withhold his, her, its or their consent to any proposed settlement.
Section 8.
Savings Clause
.
If any provision or provisions (or portion thereof) of this
Agreement shall be invalidated on any ground by any court of competent jurisdiction, then the
Indemnitor shall nevertheless indemnify Indemnitee if Indemnitee was or is made or is threatened to
be made a party or is otherwise involved in, whether as a witness or otherwise, any threatened,
pending or completed action, suit or proceeding (brought in the right of the Company or otherwise),
whether civil, criminal, administrative or investigative and whether formal or informal, including
appeals, by reason of the fact that Indemnitee is or was or has agreed to serve as a director,
secretary, officer, employee or agent of the Company or the Indemnitor, or while serving as a
director or officer of the Company or the Indemnitor, is or was serving or has agreed to serve at
the request of the Company or the Indemnitor as a director, secretary, officer, employee or agent
(which, for purposes hereof, shall include a trustee, partner or manager or similar capacity) of
another corporation, limited liability company, partnership, joint venture, trust, employee benefit
plan or other enterprise, or by reason of any action alleged to have been taken or omitted in such
capacity, from and against all loss and liability suffered and expenses (including attorneys
fees), judgments, fines and amounts paid in settlement reasonably incurred by or on behalf of
Indemnitee in connection with such action, suit or proceeding, including any appeals, to the
fullest extent permitted by any applicable portion of this Agreement that shall not have been
invalidated and to the fullest extent permitted by the Companies Law.
Section 9.
Contribution/Jointly Indemnifiable Claims
.
(a) In order to provide for just and equitable contribution in circumstances in which the
indemnification provided for herein is unavailable to Indemnitee in whole or in part, whether held
by a court of competent jurisdiction or otherwise, to be unavailable , it is agreed that, in such
event, the Indemnitor shall, to the fullest extent permitted by law, contribute to the payment of
all of Indemnitees loss and liability suffered and expenses (including attorneys fees),
judgments, fines and amounts paid in settlement reasonably incurred by or on behalf of Indemnitee
in connection with any action, suit or proceeding, including any appeals, in an amount that is just
and equitable in the circumstances of such action, suit or proceeding in order to reflect (i) the
relative benefits received by the Indemnitor and Indemnitee as a result of the events and
transactions giving rise to such action, suit or proceeding; and (ii) the relative fault of
Indemnitee and the Indemnitor (and its other directors, officers, employees and agents) in
connection with such events and transactions; provided, that, without limiting the generality of
the foregoing, such contribution shall not be required where such holding by the court is due to
any limitation on indemnification set forth in Section 4(c), 6 or 7 hereof.
(b) Given that certain jointly indemnifiable claims may arise due to the service of the
Indemnitee as a director, secretary, officer, employee or agent of the Indemnitor or Company at the
request of the Indemnitee-related entities, the Indemnitor acknowledges and agrees that the
Indemnitor shall be fully and primarily responsible for the payment to the Indemnitee in respect of
indemnification or advancement of expenses in connection with any such jointly indemnifiable claim,
pursuant to and in accordance with the terms of this Agreement, irrespective of any right of
recovery the Indemnitee may have from the Indemnitee-related entities. Under no circumstance shall
the Indemnitor be entitled to any right of subrogation or contribution by the Indemnitee-related
entities and no right of advancement or recovery the Indemnitee may have from the
Indemnitee-related entities shall reduce or otherwise alter the rights of the Indemnitee or the
obligations of the Indemnitor hereunder. In the event that any of the Indemnitee-related entities
shall make any payment to the Indemnitee in respect of
indemnification
or advancement of expenses with respect to any jointly indemnifiable claim, the Indemnitee-related
entity making such payment shall be subrogated to the extent of such payment to all of the rights
of recovery of the Indemnitee against the Indemnitor, whether pursuant to this agreement, the
memorandum and articles of association of the Indemnitor or otherwise, and Indemnitee shall execute
all papers reasonably required and shall do all things that may be reasonably necessary to secure
such rights, including the execution of such documents as may be necessary to enable the
Indemnitee-related entities effectively to bring suit to enforce such rights. The Indemnitor and
Indemnitee agree that each of the Indemnitee-related entities shall be third-party beneficiaries
with respect to this Section 9(b), entitled to enforce this Section 9(b) as though each such
Indemnitee-related entity were a party to this Agreement. For purposes of this Section 9(b), the
following terms shall have the following meanings:
(i) The term
Indemnitee-related entities
means any corporation, limited liability
company, partnership, joint venture, trust, employee benefit plan or other enterprise (other than
the Company, the Indemnitor or any other corporation, limited liability company, partnership, joint
venture, trust, employee benefit plan or other enterprise, for which Indemnitee has agreed, on
behalf of the Company or the Indemnitor or at the Companys or the Indemnitors request, to serve
as a director, secretary, officer, employee or agent and which service is covered by the indemnity
described in this Agreement) from whom an Indemnitee may be entitled to indemnification or
advancement of expenses with respect to which, in whole or in part, the Indemnitor may also have an
indemnification or advancement obligation (other than as a result of obligations under an insurance
policy).
(ii) The term
jointly indemnifiable claims
shall be broadly construed and shall
include, without limitation, any action, suit or proceeding for which the Indemnitee shall be
entitled to indemnification or advancement of expenses from both the Indemnitee-related entities
and the Indemnitor pursuant to the Companies Law, any agreement or the memorandum and articles of
association, partnership agreement, operating agreement, certificate of formation, certificate of
limited partnership or comparable organizational documents of the Company or the Indemnitee-related
entities, as applicable.
Section 10.
Form and Delivery of Communications
.
All notices, requests, demands and
other communications under this Agreement shall be in writing and shall be deemed to have been duly
given if (a) delivered by hand, upon receipt by the party to whom said notice or other
communication shall have been directed, (b) mailed by certified or registered mail with postage
prepaid, on the third business day after the date on which it is so mailed, (c) mailed by reputable
overnight courier, one day after deposit with such courier and with written verification of
receipt, or (d) sent by email or facsimile transmission, with receipt of oral confirmation that
such transmission has been received. Notice to the Company shall be directed to:
Global Indemnity plc
Arthur Cox Building, Earlsfort Terrace
Dublin 2
Ireland
Attention: Larry A. Frakes
Phone: + 353 1618 0517
Facsimile: +353 1616 3901
Email: info @uai.ky
Notice to the Indemnitor shall be directed to:
United America Indemnity, Ltd.
Walker House, 87 Mary Street
George Town, Grand Cayman KY1-9005
Attention: Larry A. Frakes
Phone: (610) 664-1500
Facsimile: (345) 949-7886
Email: info @uai.ky
Notice to Indemnitee shall be directed to:
[XXXXXX]
[Address]
Phone: [(XXX)-XXX-XXXX]
Email: [XXX@XXX.com],
Facsimile: [(XXX)-XXX-XXXX].
Section 11.
Nonexclusivity
.
The provisions for indemnification and advancement of
expenses set forth in this Agreement shall not be deemed exclusive of any other rights which
Indemnitee may have under any provision of law, in any court in which a proceeding is brought, the
Companys memorandum and articles of association, other agreements or otherwise, and Indemnitees
rights hereunder shall inure to the benefit of the heirs, executors and administrators of
Indemnitee. No amendment or alteration of the Companys memorandum and articles of association or
any other agreement shall adversely affect the rights provided to Indemnitee under this Agreement.
To the extent that a change in applicable law, whether by statute or judicial decision, permits
greater indemnification or advancement of expenses than would be afforded currently under the
memorandum and articles of association of the Indemnitor and this Agreement, it is the intent of
the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded
by such change, subject to the restrictions expressly set forth herein or therein. Except as
expressly set forth herein, no right or remedy herein conferred is intended to be exclusive of any
other right or remedy, and every other right and remedy shall be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. Except as expressly set forth herein, the assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other
right or remedy.
Section 12.
No Construction as Employment Agreement
.
Nothing contained herein shall
be construed as giving Indemnitee any right to be retained as a director of the Company or the
Indemnitor or in the employ of the Company or the Indemnitor. For the avoidance of doubt, the
indemnification and advancement of expenses provided under this Agreement shall continue as to the
Indemnitee even though he or she may have ceased to be a director, secretary, officer, employee or
agent of the Company or the Indemnitor.
Section 13.
Interpretation of Agreement
.
It is understood that the parties hereto
intend this Agreement to be interpreted and enforced so as to provide indemnification to Indemnitee
to the fullest extent now or hereafter permitted by the Companies Law.
Section 14.
Entire Agreement
.
This Agreement and the documents expressly referred to
herein constitute the entire agreement between the parties hereto with respect to the matters
covered hereby, and any other prior or contemporaneous oral or written understandings or agreements
with respect to the matters covered hereby are expressly superseded by this Agreement.
Section 15.
Modification and Waiver
.
No supplement, modification, waiver or amendment
of this Agreement shall be binding unless executed in writing by all of the parties hereto. No
amendment, alteration or repeal of this Agreement shall adversely affect any right of Indemnitee
under this Agreement in respect of any action taken or omitted by such Indemnitee in his or her
service as a director, secretary, officer, employee or agent of Company or Indemnitor, or while
serving as a director or officer of the Company or Indemnitor, is or was serving or has agreed to
serve at the request of the Company and/or
Indemnitor as a director, secretary, officer, employee or agent (which, for purposes hereof, shall
include a trustee, fiduciary, partner or manager or similar capacity) of another corporation,
limited liability company, partnership, joint venture, trust, employee benefit plan or other
enterprise, prior to such amendment, alteration or repeal. No waiver of any of the provisions of
this Agreement shall be deemed to or shall constitute a waiver of any other provision hereof
(whether or not similar) nor shall such waiver constitute a continuing waiver. For the avoidance
of doubt, this Agreement may not be terminated by the Indemnitor without Indemnitees prior written
consent.
Section 16.
Successor and Assigns
.
All of the terms and provisions of this Agreement
shall be binding upon, shall inure to the benefit of and shall be enforceable by the parties hereto
and their respective successors, assigns, heirs, executors, administrators and legal
representatives. The Indemnitor shall require and cause any direct or indirect successor (whether
by purchase, merger, consolidation or otherwise) to all or substantially all of the business or
assets of such Indemnitor, by written agreement in form and substance reasonably satisfactory to
Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the
same extent that the Indemnitor would be required to perform if no such succession had taken place.
Section 17.
Service of Process and Venue
.
The Indemnitor, the Indemnitee and the
Company hereby irrevocably and unconditionally (a) agree that any action or proceeding arising out
of or in connection with this Agreement shall be brought only in the Grand Court of the Cayman
Islands (the
Cayman Court
), (b) consent to submit to the jurisdiction of the Cayman
Court for purposes of any action or proceeding arising out of or in connection with this
Agreement, (c) appoints to the extent such party is not otherwise subject to service of process in
Walkers Corporate Services Limited, Cayman Islands, irrevocably FAO Neydis Taveras, Walkers
Corporate Services Limited, Walker House, 87 Mary Street, George Town, Grand Cayman, KY1-9005,
Cayman Islands as its agent in the Cayman Islands as such partys agent for acceptance of legal
process in connection with any such action or proceeding against such party with the same legal
force and validity as if served upon such party personally within the Cayman Islands, (d) waive
any objection to the laying of venue of any such action or proceeding in the Cayman Court, and (e)
waive, and agree not to plead or to make, any claim that any such action or proceeding brought in
the Cayman Court has been brought in an improper or inconvenient forum.
Section 18.
Governing Law
.
This Agreement shall be governed by and construed in
accordance with the laws of the Cayman Islands. If a court of competent jurisdiction shall make a
final determination that the provisions of the law of any country other than Cayman Islands govern
indemnification by the Indemnitor of Indemnitee, then the indemnification provided under this
Agreement shall in all instances be enforceable to the fullest extent permitted under such law,
notwithstanding any provision of this Agreement to the contrary.
Section 19.
Duration
. This Agreement shall continue until and terminate upon the
later of (a) six years after the date that Indemnitee shall have ceased to serve as a director,
secretary, officer, employee or agent of the Company or the Indemnitor, or while serving as a
director, secretary, officer, employee or agent of the Company or the Indemnitor, is or was serving
or has agreed to serve at the request of the Company and/or Indemnitor as a director, secretary,
officer, employee or agent (which, for purposes hereof, shall include a trustee, fiduciary, partner
or manager or similar capacity) of another corporation, limited liability company, partnership,
joint venture, trust, employee benefit plan or other enterprise, as applicable; or (b) one year
after the final termination of any action, suit or proceeding, including any appeal, then pending
in respect of which Indemnitee is granted rights of indemnification or advancement of expenses
hereunder and of any proceeding commenced by Indemnitee pursuant to Section 3(e) of this Agreement
relating thereto.
Section 20.
Counterparts
.
This Agreement may be executed in two or more counterparts,
each of which shall be deemed to be an original and all of which together shall be deemed to be one
and the same instrument, notwithstanding that both parties are not signatories to the original or
same counterpart.
Section 21.
Headings
.
The section and subsection headings contained in this
Agreement are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
This Indemnification Agreement has been duly executed and delivered to be effective the date
stated above.
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UNITED AMERICA INDEMNITY, LTD.
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By:
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Name:
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Title:
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INDEMNITEE:
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Name:
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