DEF 14A
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(RULE 14a-101)
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT
NO. )
Filed by the
Registrant þ
Filed by a Party other than the
Registrant o
Check the appropriate box:
o Preliminary
Proxy Statement
o Confidential,
for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
þ Definitive
Proxy Statement
o Definitive
Additional Materials
o Soliciting
Material Under §240.14a-12
Cooper Industries, Ltd.
(Name of Registrant as Specified in
its Charter)
N/A
(Name of Person(s) Filing Proxy
Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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þ
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No fee required.
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Fee computed on table below per Exchange Act
Rules 14a-6(i)(1)
and 0-11.
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(1)
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Title of each class of securities to which transaction applies:
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(2)
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Aggregate number of securities to which transaction applies:
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(3)
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Per unit price or other underlying value of transaction computed
pursuant to Exchange Act
Rule 0-11
(set forth the amount on which the filing fee is calculated and
state how it was determined):
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(4)
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Proposed maximum aggregate value of transaction:
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by
Exchange Act
Rule 0-11(a)(2)
and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its
filing.
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(1)
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Amount previously paid:
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(2)
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Form, Schedule or Registration Statement No.:
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Cooper Industries, Ltd.
600 Travis, Suite 5600
Houston, Texas 77002
Dear Shareholder:
On August 31, at 11 a.m. Central Time, we will hold a
special court-ordered meeting of our Class A common
shareholders, in the
54th floor
conference room, Chase Tower, 600 Travis, Houston, Texas.
Our board of directors has unanimously approved, and is
submitting to our Class A common shareholders for their
approval, a proposal that would result in our Class A
public shareholders holding shares in an Irish company rather
than a Bermuda company. The proposed scheme of arrangement under
Bermuda law will effectively change the place of incorporation
of the company whose shares our Class A public shareholders
own from Bermuda to Ireland. Except for the effect of payment of
cash in lieu of fractional shares held of record, if any, the
number of shares owned by our Class A public shareholders
in Cooper Industries plc, the Irish incorporated company, on
completion of the transaction, will be the same as the number of
shares they hold in Cooper Industries, Ltd., the Bermuda
company, immediately prior to the completion of the transaction,
and their relative economic interest in Cooper Industries will
remain unchanged. The special court-ordered meeting is being
held in accordance with an order of the Supreme Court of Bermuda
issued on July 2, 2009, which Bermuda law required us to
obtain prior to holding the meeting. If Class A common
shareholders approve the scheme of arrangement at the meeting,
we will be required to make a subsequent application to the
Supreme Court of Bermuda seeking sanction or approval of the
scheme of arrangement, which application is scheduled to be
heard on September 4, 2009.
After the completion of the transaction, Cooper Industries plc
will continue to conduct the same business operations as
conducted by the Bermuda company before the transaction. We
expect the shares of Cooper Industries plc to be listed on the
New York Stock Exchange under the symbol CBE, the
same symbol under which our Class A common shares are
currently listed. Upon completion of the transaction, we will
remain subject to the U.S. Securities and Exchange
Commission reporting requirements, the mandates of the
Sarbanes-Oxley Act and the applicable corporate governance rules
of the New York Stock Exchange, and we will continue to report
our consolidated financial results in U.S. dollars and in
accordance with U.S. generally accepted accounting
principles.
If the scheme of arrangement is approved, we will also ask our
Class A common shareholders at the meeting to approve a
proposal to create distributable reserves, which are
required under Irish law in order to permit us to continue to
pay quarterly dividends after the completion of the transaction.
Under U.S. federal income tax law, shareholders of Cooper
Industries, Ltd. generally will not recognize gain or loss in
the transaction, except with respect to any cash received in
lieu of fractional shares held of record, if any.
This proxy statement provides you with detailed information
regarding the transaction. We encourage you to read this entire
document carefully. You should carefully consider Risk
Factors beginning on page 27 for a discussion of
risks before voting at the meeting.
The transaction cannot be completed without (1) the
affirmative vote of a majority in number of the record holders
of Cooper Industries, Ltd. Class A common shares present
and voting on the proposal at the meeting, whether in person or
by proxy, representing 75% or more in value of the Class A
common shares present and voting on the proposal at the meeting,
whether in person or by proxy, and (2) the sanction of the
Supreme Court of Bermuda. Your board of directors unanimously
recommends that you vote to approve the scheme of
arrangement.
Please mark, date, sign and return the enclosed proxy card
in the enclosed, postage-paid envelope as promptly as
possible, or appoint a proxy to vote your shares by using the
telephone or Internet, as described in the attached proxy
statement, so that your shares may be represented at the special
court-ordered meeting and voted in accordance with your wishes.
If you have any questions about the meeting, or if you require
assistance, please call Georgeson, Inc. at
1-877-278-4412
(toll-free in the U.S.) or 1-212-440-9800 (call collect).
Sincerely,
Kirk S. Hachigian
Chairman, President and Chief Executive Officer
Neither the U.S. Securities and Exchange Commission nor
any state securities commission has approved or disapproved of
the securities to be issued in the transaction or determined if
this proxy statement is truthful or complete. Any representation
to the contrary is a criminal offense.
This proxy statement is dated July 16, 2009 and is
first being mailed to shareholders on or about July 16,
2009.
NOTICE OF
SPECIAL COURT-ORDERED MEETING OF
CLASS A COMMON SHAREHOLDERS
IN THE SUPREME COURT OF BERMUDA
CIVIL JURISDICTION
(COMMERCIAL COURT)
2009: No. 195
IN THE MATTER OF COOPER INDUSTRIES, LTD.
AND IN THE MATTER OF SECTION 99 OF THE COMPANIES ACT
1981
NOTICE OF MEETING OF COOPER INDUSTRIES, LTD.
CLASS A COMMON SHAREHOLDERS TO BE HELD ON AUGUST 31,
2009
To the holders of Class A common shares of Cooper
Industries, Ltd.:
We will hold a special court-ordered meeting of our Class A
common shareholders in the
54th floor
conference room, Chase Tower, 600 Travis, Houston, Texas,
commencing at 11 a.m. Central Time, on August 31, 2009 to
vote:
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1.
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to approve the Scheme of Arrangement attached as Annex A to
the accompanying proxy statement. If the Scheme of Arrangement
is approved, it will effect a transaction pursuant to which each
holder of Cooper Industries, Ltd. Class A common shares
outstanding immediately before the transaction is effected,
other than subsidiaries of Cooper Industries, Ltd. that own
Class A common shares, will receive ordinary shares of
Cooper Industries plc, an Irish company and current subsidiary
of Cooper Industries, Ltd., with a par value of $0.01 per share,
on a one-for-one basis in respect of such Cooper Industries,
Ltd. Class A common shares (or, in the case of fractional
interests in shares of Cooper Industries, Ltd. held of record,
if any, cash for such fractional interests in shares in lieu of
ordinary shares of Cooper Industries plc); and
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2.
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if the Scheme of Arrangement is approved, and in connection with
the Scheme of Arrangement and the Reorganization (as defined in
the accompanying proxy statement), to approve the reduction of
the share premium of Cooper Industries plc to allow the creation
of distributable reserves that was previously unanimously
approved by Cooper Industries, Ltd. and the other current
shareholders of Cooper Industries plc (as described in this
proxy statement).
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If any other matters properly come before the meeting or any
adjournments or postponements of the meeting, the persons named
in the proxy card will vote the shares represented by all
properly executed proxies in their discretion.
All registered holders of our Class A common shares at the
close of business on July 13, 2009 are entitled to notice
of, and to vote at, the special court-ordered meeting and any
adjournments or postponements thereof.
The attached proxy statement and the accompanying proxy card are
being sent to Class A common shareholders on or about
July 16, 2009.
Admission to the special court-ordered meeting of
Class A common shareholders will be by ticket only and will
require photo identification from all shareholders. If you are a
registered Class A common shareholder and plan to attend
the meeting, please check the appropriate box on the proxy card
or, if you appoint a proxy by telephone or via the Internet,
indicate your plans to attend when prompted. If you hold your
shares beneficially through an intermediary such as a bank or
broker, you must bring proof of ownership, such as an account
statement from your broker, indicating your beneficial ownership
of Cooper Industries, Ltd. Class A common shares on
July 13, 2009, the record date for the meeting. In all
cases, retain the top portion of the proxy card as your
admission ticket to the meeting. Holders of record who attend
the meeting may vote their shares personally at the meeting even
if they have previously sent in proxies. If you are a
Class A common shareholder whose shares are held through an
intermediary such as a bank or broker and you plan to attend the
meeting and vote, you must obtain a legal proxy from your
broker. Please contact your broker for instructions on how to
obtain such a legal proxy.
The special court-ordered meeting is being held in accordance
with an order of the Supreme Court of Bermuda issued on
July 2, 2009, which Bermuda law required us to obtain prior
to holding the meeting. If the Scheme of Arrangement is approved
at the meeting, we will make a subsequent application to the
Supreme Court of Bermuda seeking sanction of the Scheme of
Arrangement, which must be obtained as a condition to the Scheme
of Arrangement becoming effective. We expect the sanction
hearing to be held on September 4, 2009 at 9:30 a.m.,
Bermuda time, at the Supreme Court in Hamilton, Bermuda. If you
are a Class A common shareholder who wishes to appear in
person or by counsel at the sanction hearing and present
evidence or arguments in support of or opposition to the Scheme
of Arrangement, you may do so. In addition, the Supreme Court
has wide discretion to hear from interested parties. Cooper
Industries, Ltd. will not object to the participation in the
sanction hearing by any beneficial holder of Class A common
shares.
This notice incorporates the accompanying proxy statement.
By Order of the Board of Directors
Terrance V. Helz
Associate General Counsel and Secretary
July 16, 2009
YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU EXPECT TO ATTEND
THE SPECIAL COURT-ORDERED MEETING, PLEASE PROMPTLY RETURN YOUR
SIGNED PROXY IN THE ENCLOSED ENVELOPE OR DIRECT THE VOTING OF
YOUR CLASS A COMMON SHARES BY TELEPHONE OR VIA THE INTERNET
AS DESCRIBED ON YOUR PROXY CARD.
This proxy statement incorporates documents by reference.
Please see Where You Can Find More Information
beginning on page 108 for a listing of documents
incorporated by reference. These documents are available to any
person, including any beneficial owner, upon request directed to
Cooper Industries, Ltd., P.O. Box 4446, Houston, Texas
77210, Attention: Secretary. To ensure timely delivery of these
documents, any request should be received by August 24,
2009. The exhibits to these documents will generally not be made
available unless they are specifically incorporated by reference
in this proxy statement.
TABLE OF
CONTENTS
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iii
COOPER
INDUSTRIES, LTD.
600 Travis, Suite 5600
HOUSTON, TEXAS 77002
PROXY STATEMENT
For the
Special Court-Ordered Meeting of Class A Common
Shareholders
To Be Held on August 31, 2009
This proxy statement is furnished to our Class A common
shareholders in connection with the solicitation of proxies on
behalf of the board of directors of Cooper Industries, Ltd. to
be voted at Cooper Industries, Ltd.s special court-ordered
meeting of Class A common shareholders (the
meeting or special court-ordered
meeting) to be held on August 31, 2009, and any
adjournments or postponements thereof, at the times and places
and for the purposes set forth in the accompanying Notice of
Special Court-Ordered Meeting of Class A Common
Shareholders of Cooper Industries, Ltd. This proxy statement and
the accompanying proxy card are being sent to Class A
common shareholders on or about July 16, 2009. Please
mark, date, sign and return the enclosed proxy card
to ensure that all of your shares are represented at the
special court-ordered meeting.
Shares represented by valid proxies will be voted in accordance
with instructions contained therein or, in the absence of such
instructions, at the proxys discretion. You may revoke
your proxy at any time before it is exercised by timely delivery
of a properly signed, later-dated proxy (including a proxy
provided through voting instructions by telephone or via the
Internet) or by voting in person at the meeting, as described in
this proxy statement. You may also notify our Secretary in
writing before the special court-ordered meeting that you are
revoking your proxy. If you hold your shares beneficially,
please follow the procedures required by your broker to revoke a
proxy. You should contact that firm directly for more
information on these procedures.
The board of directors has fixed the close of business on
July 13, 2009 as the record date for determination of
Class A common shareholders entitled to notice of, and to
vote at, the meeting and any adjournments or postponements
thereof. As of the record date, the issued shares of Cooper
Industries, Ltd. entitled to vote at the meeting consisted of
203,285,122 Class A common shares.
Admission to the meeting will be by ticket only and will require
photo identification from all shareholders. If you are a
registered Class A common shareholder and plan to attend
the meeting, please check the appropriate box on the proxy card
or, if you appoint a proxy by telephone or via the Internet,
indicate your plans to attend when prompted. If you hold your
shares beneficially through an intermediary such as a bank or
broker and plan to attend the meeting and vote, you must bring
proof of ownership, such as an account statement from your
broker, indicating your beneficial ownership of Cooper
Industries, Ltd. Class A common shares on July 13,
2009, the record date for the meeting, and you must obtain a
legal proxy from your broker. Please contact your broker for
instructions on how to obtain such a legal proxy. In all cases,
retain the top portion of the proxy card as your admission
ticket to the meeting.
TRANSACTION
STRUCTURE
We are seeking your approval at the special court-ordered
meeting of a Scheme of Arrangement under Bermuda law that will
effectively change the place of incorporation of the company
whose shares the Class A Public Shareholders (as defined
below) own from Bermuda to Ireland.
As explained in more detail below, the Scheme of Arrangement on
which we are asking you to vote will effect a transaction (the
Transaction) pursuant to which each holder of Cooper
Industries, Ltd. Class A common shares outstanding
immediately before the Transaction is effected, other than the
wholly owned subsidiaries of Cooper Industries, Ltd. that own
Cooper Industries, Ltd. Class A common shares
(collectively, the Class A Public Shareholders)
will receive ordinary shares of Cooper Industries public limited
company (Cooper Industries plc), an Irish company
and current subsidiary of Cooper Industries, Ltd., with a par
value of $.01 per share, on a one-for-one basis in respect of
such Cooper Industries, Ltd. Class A common shares (or, in
the case of fractional interests in Cooper Industries, Ltd.
Class A common shares (which we refer to in this proxy
statement as fractional shares) held of record, if
any, cash for such fractional shares in lieu of ordinary shares
of Cooper Industries plc). The Transaction is part of a broader
Reorganization, the first step of which was the
change of Cooper Industries, Ltd.s tax residency from
Bermuda to Ireland, which occurred in December 2008.
The Transaction involves several steps. Cooper Industries, Ltd.,
the Bermuda company whose Class A common shares you
currently own, incorporated a new Irish company named Cooper
Industries plc, as a direct subsidiary. On June 30, 2009,
we petitioned the Supreme Court of Bermuda (the Bermuda
Supreme Court) to order the calling of the meeting of
Cooper Industries, Ltd. Class A common shareholders to
approve the Scheme of Arrangement. On July 2, 2009, the
Bermuda Supreme Court ordered us to seek your approval of the
Scheme of Arrangement. We will hold the special court-ordered
meeting to approve the Scheme of Arrangement on August 31,
2009. If we obtain the necessary shareholder approval, the
Bermuda Supreme Court will hold a second hearing, which is
scheduled to be held on September 4, 2009, to sanction the
Scheme of Arrangement (the Sanction Hearing).
Assuming we receive the necessary approvals from the
shareholders and the sanction of the Bermuda Supreme Court and
the conditions to consummation of the Transaction are satisfied
(and we do not abandon the Transaction), we will file the court
order sanctioning the Scheme of Arrangement with the Bermuda
Registrar of Companies, at which time the Scheme of Arrangement
will become effective. Various steps of the Transaction will
occur effectively simultaneously at the Transaction
Time, which we anticipate will be after the close of
trading on the New York Stock Exchange (NYSE) on the
day the Scheme of Arrangement becomes effective, and before the
opening of trading on the NYSE on the next business day.
At the Transaction Time, the following steps will occur
effectively simultaneously:
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all fractional Class A common shares of Cooper Industries,
Ltd. held of record by the Class A Public Shareholders, if
any, will be cancelled and Cooper Industries, Ltd. will pay to
each Class A Public Shareholder holding fractional shares
that have been cancelled an amount based on the average of the
high and low trading prices of Cooper Industries, Ltd.
Class A common shares on the NYSE on the business day
immediately preceding the effective date of the Scheme of
Arrangement;
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all previously outstanding whole Class A common shares of
Cooper Industries, Ltd. held by the Class A Public
Shareholders will be cancelled;
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Cooper Industries, Ltd. will issue to Cooper Industries plc a
number of Class A common shares that is equal to the number
of Cooper Industries plc ordinary shares that is issued by
Cooper Industries plc as described in paragraph 4 below;
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4.
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Cooper Industries plc will issue ordinary shares on a
one-for-one basis to the Class A Public Shareholders
holding whole Cooper Industries, Ltd. Class A common shares
that have been cancelled; and
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all previously outstanding ordinary shares of Cooper Industries
plc, which prior to the Transaction Time will be held by Cooper
Industries, Ltd. and its nominees, will be acquired by Cooper
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Industries plc and cancelled for no consideration, in accordance
with a resolution passed by Cooper Industries, Ltd. and such
nominees.
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As a result of the Transaction, the Class A Public
Shareholders will become ordinary shareholders of Cooper
Industries plc and Cooper Industries, Ltd. will become a
subsidiary of Cooper Industries plc, as indicated in the diagram
below.
In connection with consummation of the Transaction:
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Cooper Industries plc will assume Cooper Industries, Ltd.s
existing obligations in connection with awards granted under
Cooper Industries, Ltd.s equity incentive plans and other
similar employee awards;
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Cooper Industries plc will enter into supplemental indentures to
the indentures governing the senior and medium term notes issued
by certain of Cooper Industries, Ltd.s subsidiaries,
pursuant to which Cooper Industries plc will guarantee the
obligations of those subsidiaries under the indentures and
supplemental indentures governing the senior and medium term
notes; and
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We will seek waivers under
and/or
amendments to our credit facilities in order to avoid technical
defaults that would otherwise result under each facility from
Cooper Industries, Ltd. becoming a wholly owned subsidiary of
Cooper Industries plc in connection with the Transaction.
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We refer to the foregoing transactions, together with the steps
of the Transaction and the change in Cooper Industries,
Ltd.s tax residency from Bermuda to Ireland that was
completed in December 2008, as the Reorganization.
As of July 13, 2009, there were 203,285,122 Class A
common shares of Cooper Industries, Ltd. issued, of which
166,765,446 were held by the Class A Public Shareholders
and 36,519,676 were held by wholly owned subsidiaries of Cooper
Industries, Ltd. These subsidiaries will not exchange their
Cooper Industries, Ltd. Class A common shares for Cooper
Industries plc ordinary shares in the Transaction. These
subsidiaries will continue to hold their Class A common
shares in Cooper Industries, Ltd. following the completion of
the Transaction.
There currently are no fractional shares held of record and we
do not expect there to be any such fractional shares held of
record immediately prior to the Transaction Time.
As of July 13, 2009, there were 105,420,258 Class B
common shares of Cooper Industries, Ltd. issued, the sole holder
of which is a wholly owned subsidiary of Cooper Industries, Ltd.
This subsidiary will not participate in the Scheme of
Arrangement and will not exchange its Cooper Industries, Ltd.
Class B common shares for Cooper Industries plc ordinary
shares in the Transaction. This subsidiary will continue to hold
its Class B common shares in Cooper Industries, Ltd.
following the completion of the Transaction.
The Class A common shares and Class B common shares
held by subsidiaries of Cooper Industries, Ltd. will not be
exchanged for Cooper Industries plc ordinary shares in the
Transaction in order to simplify the corporate structure of
Cooper Industries.
3
The following diagram shows the structure of Cooper Industries,
Ltd. before the completion of the Reorganization and after the
completion of the Reorganization. The diagram does not reflect
any legal entities owned by Cooper Industries, Ltd. other than
Cooper Industries plc and wholly owned subsidiaries that own
shares of Cooper Industries, Ltd.
In this proxy statement, we sometimes refer to Cooper
Industries, Ltd. before the Transaction and Cooper Industries
plc after the Transaction as we, our,
Cooper Industries or the Company.
4
QUESTIONS
AND ANSWERS ABOUT THE REORGANIZATION
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Q: |
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What am I being asked to vote on at the meeting? |
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You are being asked to vote on a Scheme of Arrangement under
Bermuda law that will effect a transaction, which we refer to as
the Transaction, pursuant to which the Class A Public
Shareholders will have their Class A common shares of
Cooper Industries, Ltd. cancelled and will receive in exchange
new ordinary shares, par value $.01 per share, of Cooper
Industries plc on a one-for-one basis with respect to the Cooper
Industries, Ltd. Class A common shares that have been
cancelled (or, in the case of fractional shares held of record,
if any, cash). The Transaction will effectively change the place
of incorporation of the company whose shares the Class A
Public Shareholders own from Bermuda to Ireland. As a result of
the Transaction, Class A Public Shareholders will become
shareholders of Cooper Industries plc. The subsidiaries of
Cooper Industries, Ltd. that hold Class A common shares of
Cooper Industries, Ltd. will not exchange their Cooper
Industries, Ltd. Class A common shares for Cooper
Industries plc ordinary shares in the Transaction. They will
continue to hold Class A common shares in Cooper
Industries, Ltd. following the completion of the Transaction. |
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Many of the principal attributes of Cooper Industries,
Ltd.s Class A common shares and Cooper Industries
plcs ordinary shares will be similar. However, there are
differences between the rights of Cooper Industries shareholders
under Irish law and under Bermuda law. In addition, there are
differences between Cooper Industries, Ltd.s memorandum of
association and bye-laws and Cooper Industries plcs
memorandum and articles of association as they will be in effect
after the Transaction. We discuss these differences in detail
under Description of Cooper Industries plc Shares
and Comparison of Rights of Shareholders and Powers of the
Board of Directors. Copies of forms of Cooper Industries
plcs memorandum and articles of association as they will
be in effect after the Transaction are attached to this proxy
statement as Annex B. |
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If the Scheme of Arrangement is approved, and in connection with
the Scheme of Arrangement and the Reorganization, you also will
be asked at the special court-ordered meeting to vote on a
proposal to approve the reduction of the share premium of Cooper
Industries plc to allow the creation of distributable reserves
that was previously unanimously approved by Cooper Industries,
Ltd. and the other current shareholders of Cooper Industries plc
(as described in this proxy statement). We refer to this
proposal in this proxy statement as the distributable
reserves proposal. Approval of the distributable reserves
proposal is not a condition to the Transaction. |
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Q: |
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Why did Cooper Industries, Ltd. move its tax residency to
Ireland? |
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A: |
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Cooper Industries, Ltd. moved its tax residency to Ireland in
December 2008. The move in tax residency was effected as a
result of a determination by our board of directors to hold at
least 50% of the scheduled board meetings each year in Ireland
and to make all key strategic decisions at the board level. |
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At the time the board determined to move the Companys tax
residency to Ireland, the board also decided to continue its
consideration of whether the Company should also reincorporate
in Ireland. Irelands corporate law and tax system
distinguishes between tax residence and place of incorporation.
There are companies that are incorporated outside Ireland but
are tax resident in Ireland (and vice versa). Once the board of
directors determined that moving tax residence from Bermuda to
Ireland was in the best interests of shareholders, it was
determined to move as soon as practicable. Because moving tax
residence to Ireland can be achieved without a shareholder vote
and because such a move (even without a change in place of
incorporation) could mitigate or avoid the application of the
various legislative and regulatory proposals described in the
next answer, this was a logical first step pending the
boards determination of whether to reincorporate in
Ireland. |
5
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Q: |
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Why do you want to change the place of incorporation of the
company in which the Class A Public Shareholders hold
shares from Bermuda to Ireland? |
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A: |
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Cooper Industries, Ltd. is currently incorporated in Bermuda,
where it has been incorporated since May 22, 2001. In 2002,
Cooper Industries, Ltd. became the ultimate parent company of
the Cooper group of companies, following a reincorporation from
Ohio. We reincorporated in Bermuda to take advantage of
financial and other business opportunities that were not
available under our corporate structure at the time, including: |
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Maximization of our potential business growth and cash flow, in
light of our expectation that in the future a greater portion of
our business would be generated from
non-U.S.
markets;
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Improvement of our worldwide effective tax rate;
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Use of the greater cash flow to invest for further earnings
growth, including by developing higher growth product lines and
acquiring complementary higher growth electrical and electronic
businesses;
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Use of the greater cash flow to reduce the amount of our debt
and repurchase shares; and
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Expansion of our investor base as our Companys shares
could become more attractive to
non-U.S.
investors.
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Bermuda, however, lacks a substantial network of commercial,
tax, and other treaties and established relationships with many
of the countries where Cooper Industries has major operations.
In addition, there continues to be negative publicity regarding,
and criticism of, companies that conduct substantial business in
the U.S. but are domiciled in countries that do not have tax
treaties with the U.S., like Bermuda. Also, legislative and
regulatory bodies in the U.S. and certain U.S. trading partners
have been actively considering proposals that would impact
multi-national companies incorporated in jurisdictions such as
Bermuda that do not have tax treaties with the U.S. or certain
U.S. trading partners. Further, proposals have from time to time
been made and/or legislation has been introduced to change the
U.S. tax law that, if enacted, could increase our tax burden if
we remained incorporated in Bermuda. For example, recent
legislative proposals would broaden the circumstances under
which we would be considered a U.S. resident. Other legislative
proposals could override certain tax treaties and limit the
treaty benefits on certain payments by our U.S. subsidiaries to
our non-U.S.
affiliates. Consequently, following a thorough review, Cooper
Industries determined that moving its place of incorporation out
of Bermuda, in addition to the earlier move in tax residence, is
best for shareholders, employees and other stakeholders. |
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As a result of reaching this decision, Cooper Industries
reviewed a number of alternatives with its board of directors
and outside advisors, including incorporating in a number of
different jurisdictions. We determined that incorporating in the
United States would have negative financial consequences for
Cooper Industries and its shareholders by increasing our global
effective tax rate, resulting in potentially significant
declines in net income, earnings per share and cash flow. We
ultimately decided to incorporate and become tax resident in a
jurisdiction that is a member of both the European Union and the
Organization for Economic Cooperation and Development (the
OECD), given: |
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Cooper Industries already substantial operations in
Europe, which experienced considerable growth in 2007 and 2008;
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The introduction of various OECD and European Union withholding
and other tax proposals that could adversely affect companies
incorporated in certain jurisdictions outside the OECD or the
European Union, respectively;
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Many of the favorable European Union tax directives and other
protections apply only to a company that is both incorporated
and tax resident in a European Union jurisdiction; and
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A company that is both incorporated and tax resident in a
European Union jurisdiction may improve its position with
respect to United States and other legislative and regulatory
proposals that may be adopted in the future.
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We selected Ireland after considering various factors, including
the following: |
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Cooper Industries is already tax resident in Ireland.
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As we continue to grow internationally, we believe that moving
to Ireland will provide increased strategic flexibility and
operational benefits. Ireland is a beneficial location
considering Cooper Industries presence in markets outside
the United States. We already have sales and customer service
operations in Ireland and we have hired a country manager to
focus on growing our commercial presence in Ireland. Also,
Cooper generates a substantial portion of its revenues outside
the United States, in countries such as the United Kingdom,
France, Germany, Canada and Mexico and countries in the Middle
East and Southeast Asia. Cooper Industries also has operations
in India and China and has majority-owned joint ventures with
operations in China. Ireland is well-located with respect to
these markets.
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Ireland enjoys strong relationships as a member of the European
Union, and has a long history of international investment and a
good network of commercial, tax, and other treaties with the
United States, the European Union and many other countries where
Cooper Industries has major operations.
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Both Ireland and Bermuda are common law jurisdictions which we
consider to be less prescriptive than many civil law
jurisdictions. As a result, we believe Irelands legal
system to be more flexible, predictable and familiar to Cooper
Industries, and more familiar to its shareholders, than that of
a civil law system.
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Ireland is an English-speaking country, is a member of the euro
zone, and has a stable business, legal and regulatory
environment.
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Ireland permits the payment of dividends in U.S. dollars.
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Please see Proposal Number One: The
Reorganization Background and Reasons for the
Reorganization for more information. |
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We cannot assure you that the anticipated benefits of the
Reorganization will be realized. In addition to the potential
benefits described above, the Reorganization will expose you and
us to some risks. These risks include the following: |
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The rights of Cooper Industries shareholders will change
due to differences between Bermuda and Irish law and between the
governing documents of Cooper Industries, Ltd. and Cooper
Industries plc;
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The market for Cooper Industries plc ordinary shares may differ
from the market for Cooper Industries, Ltd. Class A common
shares and Cooper Industries shares will likely be removed
from the S&P 500 and may be removed from other indices as a
result of the Transaction;
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Legislative and regulatory action in the U.S. could materially
and adversely affect us regardless of whether we complete the
Reorganization;
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The Reorganization may not allow us to maintain a competitive
worldwide effective tax rate and may result in additional costs
even if it is not completed;
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We cannot guarantee that material changes would not be made to
the financial or other terms of our credit facilities in
connection with obtaining the appropriate waivers and/or
amendments to such facilities;
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We may choose to abandon or delay the Transaction;
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7
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If the distributable reserves proposal is not approved, Cooper
Industries plc may not be able to pay dividends or repurchase
shares following the Transaction;
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Increased shareholder voting requirements in Ireland will reduce
our flexibility in some aspects of capital management;
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The transfer of Cooper Industries plc shares after the
Transaction may be subject to Irish stamp duty; and
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Following Cooper Industries change in tax residency in
December 2008, dividends received by shareholders may be subject
to Irish dividend withholding tax whether or not the Transaction
is completed.
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Please see the discussion under Risk Factors. Our
board of directors has considered both the potential advantages
of the Reorganization and these risks and has unanimously
approved the Scheme of Arrangement and recommended that the
shareholders vote for the Scheme of Arrangement. |
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Q: |
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Will the Reorganization affect our current or future
operations? |
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A: |
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We believe that the Reorganization will have no material impact
on how we conduct our day-to-day operations. The location of our
future operations will depend on the needs of our business,
independent of our legal domicile. |
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Q: |
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How will the Reorganization affect our presence in the United
States? |
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A: |
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There are no changes planned for our U.S. operations or
workforce as a result of the Reorganization. |
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Q: |
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What will be our corporate presence in Ireland? |
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In addition to Ireland being our intended jurisdiction of
incorporation and Irish law governing Cooper Industries plc, we
currently have sales and customer service operations in Ireland
and we have hired a country manager to focus on growing our
commercial presence in Ireland. We will also hold at least 50%
of our scheduled board of directors meetings in Ireland. |
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Q: |
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Will the Transaction dilute the economic interest in Cooper
Industries of the Class A Public Shareholders? |
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A: |
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No, except for the effect of payment of cash for fractional
shares held of record, if any, the relative economic ownership
in Cooper Industries of the Class A Public Shareholders
will not change as a result of the Transaction. |
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Q: |
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How will the Reorganization affect financial reporting? |
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A: |
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After the Reorganization, Cooper Industries will continue to
prepare financial statements in accordance with U.S. Generally
Accepted Accounting Principles (U.S. GAAP) and
report in U.S. dollars, and will continue to file reports on
Forms 10-K,
10-Q and
8-K with the
U.S. Securities and Exchange Commission (SEC), as it
currently does. In addition, in connection with annual general
meetings of Cooper Industries plc, shareholders of record will,
if required by law, be sent audited consolidated annual
financial statements prepared in accordance with Irish GAAP or
International Financial Reporting Standards (IFRS),
which we refer to as the Statutory Financial
Statements, in addition to the information shareholders
already receive. |
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What impact will the Reorganization have on Cooper
Industries current debt arrangements? |
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A: |
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There will be no material impact on Cooper Industries
senior and medium term notes. In connection with the
Reorganization, Cooper Industries plc will enter into
supplemental indentures under which it will guarantee the
obligations of the Cooper Industries subsidiaries that issued
the senior and medium term notes. Cooper Industries, Ltd. might
not, however, be released from any of its obligations in respect
of the |
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senior and medium term notes. Please see
Proposal Number One: The Reorganization
Guarantee of Senior and Medium Term Notes. |
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We will seek waivers under and/or amendments to our five-year
credit facility and our
364-day
credit facility in order to avoid a technical default that would
otherwise result under each facility from Cooper Industries,
Ltd. becoming a wholly owned subsidiary of Cooper Industries plc
in connection with the Transaction. One of the conditions to
consummation of the Transaction is that we obtain the
appropriate waivers and/or amendments on terms acceptable to us,
although we may waive this condition. Please see
Proposal Number One: The Reorganization
Conditions to Consummation of the Transaction. Although we
expect that no material change would be made to the financial or
other terms of the credit facilities in connection with
obtaining the appropriate waivers and/or amendments, we cannot
guarantee that there would not be any such material change. In
addition, although we expect that the Transaction will not
materially impact our ability to replace our existing five-year
credit facility that expires in November 2009, we cannot
guarantee that there would not be any such impact. Please see
Proposal Number One: The Reorganization
Credit Facilities and Risk Factors. |
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Will the Reorganization impact Cooper Industries
ability to access the capital and bank markets in the future? |
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We do not expect that the Reorganization will have any
significant effect on our ability to access the capital markets.
We expect to be able to access the capital and bank markets as
efficiently and on similar terms as we can today. |
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What effect would the failure to complete the Reorganization
have on Cooper Industries? |
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Cooper Industries, Ltd. will remain an Irish tax resident even
if the Reorganization is not completed. In addition, we will
incur certain costs whether or not the Reorganization is
completed. Cooper Industries will consider all possible
alternatives in the event that the Reorganization is not
completed. For more information, please see Risk
Factors. |
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Q: |
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What are the material tax consequences of the Transaction? |
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Please read the following questions and answers regarding some
of the potential tax consequences of the Transaction. Please
refer to Material Tax Considerations beginning on
page 44 for a description of the material U.S. federal
income tax and Irish tax consequences of the Transaction to
Cooper Industries, Ltd. Class A Public Shareholders.
Determining the actual tax consequences of the Transaction may
be complex and will depend on the specific situation of each
shareholder. Each shareholder is urged to consult his or her tax
advisor for a full understanding of the tax consequences of the
Transaction. |
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Q: |
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Is the Transaction taxable to the Class A Public
Shareholders? |
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Under U.S. federal income tax law, Class A Public
Shareholders generally will not recognize gain or loss in the
Transaction, except with respect to any cash received in lieu of
fractional shares. Certain five percent or greater shareholders
may, however, be required to timely enter into and maintain a
gain recognition agreement to avoid recognizing gain in the
Transaction. Under Irish tax law, no tax is due for Cooper
Industries, Ltd. Class A Public Shareholders in the
Transaction (including on the receipt of cash in respect of
fractional shares in the Transaction) unless such shareholders
have some connection with Ireland other than holding Cooper
Industries plc shares. Please see Material Tax
Considerations. |
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Is the Transaction a taxable transaction for Cooper
Industries, Ltd. or Cooper Industries plc? |
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No. The Transaction will not be a taxable transaction for
Cooper Industries, Ltd. or Cooper Industries plc. |
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Q: |
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Will the Transaction impact Cooper Industries effective
tax rate in 2009 or expectations for later years? |
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A: |
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The Reorganization is not anticipated to have any material
impact on Cooper Industries effective tax rate. |
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Does it matter, for tax or other reasons, whether the
Class A Public Shareholders hold shares
beneficially or of record? |
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Yes. In general, Cooper Industries shareholders hold their
shares in one of two ways. Some shareholders are directly
registered in their own names on Cooper Industries
shareholder records, as maintained by Cooper Industries
transfer agent (currently Computershare Trust Company,
N.A.). In this proxy statement, we generally refer to these
shareholders as holding their shares directly or
of record. Most of the Class A common shares
are held through banks, brokers, trustees, custodians or other
nominees. We generally refer to these shares as being held
beneficially, and to these banks, brokers, trustees,
custodians or other nominees as brokers. |
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There are different procedures for voting and attending the
meeting, depending on how shareholders hold their shares. Please
see The Special Court-Ordered Meeting Record
Date; Voting Rights; Vote Required for Approval and
The Special Court-Ordered Meeting How You Can
Vote. In addition, shareholders may be treated differently
under certain aspects of Irish law depending on whether they
hold shares beneficially through brokers who in turn hold those
shares through the Depository Trust Company
(DTC). Please see Material Tax
Considerations Irish Tax Considerations
Withholding Tax on Dividends and Material Tax
Considerations Irish Tax Considerations
Stamp Duty. |
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Will there be an Irish withholding tax on dividends on Cooper
Industries shares? |
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For the majority of shareholders, there is no Irish withholding
tax on dividends. |
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When we refer in this discussion of withholding tax to shares
held beneficially through brokers, we
are specifically referring to shares held beneficially through
brokers who in turn hold those shares through DTC. Shareholders
who hold shares beneficially through brokers who do not hold
those shares through DTC should consult their own tax advisors. |
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Irish withholding tax (if any) arises in respect of dividends
paid after Cooper Industries establishment of tax
residency in Ireland, which occurred in December 2008. Whether
Cooper Industries is required to deduct Irish dividend
withholding tax from dividends paid to a shareholder will depend
largely on whether that shareholder is resident for tax purposes
in a relevant territory. A list of the
relevant territories is included as Annex C to
this proxy statement. |
Shares
held by U.S. resident shareholders
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Dividends paid on Cooper Industries shares owned by residents of
the U.S. generally will not be subject to Irish withholding
tax. |
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For shares held beneficially, dividends will not be subject to
Irish withholding tax if the address of the relevant shareholder
in his or her brokers records is in the U.S. For
shares held directly, dividends will not be subject to Irish
withholding tax if the shareholder has provided a valid
Form W-9
showing a U.S. address or a valid U.S. taxpayer
identification number to Cooper Industries transfer agent.
The vast majority of our shareholders who hold their shares
directly have already provided a valid
Form W-9
to our transfer agent. If you currently have amounts withheld
from your dividend payments, we recommend that you contact our
transfer agent to confirm whether a validly executed
Form W-9
is on file. |
Shares
held by residents of relevant territories other than
the U.S.
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Dividends paid to shareholders of Cooper Industries who are
residents of countries that are European Union member states
(other than Ireland)
and/or other
countries with which Ireland has a tax treaty (other than the
U.S.) generally will not be subject to Irish withholding tax, as
long as they have provided Irish tax forms to their broker (for
shares held beneficially) or Cooper Industries (for shares held
directly). We refer to these countries, together with the United
States, as relevant territories, a list of which is
included as Annex C to this proxy statement. |
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Shareholders who are residents of relevant
territories other than the U.S. who held any Cooper
Industries shares on January 1, 2009, generally will
receive dividends in 2009 without any Irish withholding tax. For
shares held beneficially, dividends will be paid in 2009 without
any Irish withholding tax if the address of the relevant
shareholder in his or her brokers records is in a
relevant territory other than the U.S. For
shares held directly, dividends will be paid in 2009 without any
Irish withholding tax if the shareholder has provided a valid
U.S. tax form showing an address in a relevant
territory other than the U.S. to Cooper
Industries transfer agent. |
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Shareholders who are residents of relevant
territories other than the U.S. who acquire all their
Cooper Industries shares after January 1, 2009, must
complete the appropriate Irish dividend withholding tax forms in
order to receive their dividends without withholding tax. Such
shareholders must provide the appropriate Irish forms to their
brokers at least 7 business days before the record date for the
first dividend payment to which they are entitled (in the case
of shares held beneficially), or to Cooper Industries
transfer agent at least 7 business days before such record date
(in the case of shares held directly). |
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In addition, all shareholders who are residents of
relevant territories other than the
U.S. (regardless of when such shareholders acquired their
shares) must complete the appropriate Irish dividend withholding
tax forms in order to receive their dividends in 2010 and later
years without withholding tax. Such shareholders must provide
the appropriate Irish forms to their brokers at least 7 business
days before the record date for the first dividend paid in 2010
(in the case of shares held beneficially), or to Cooper
Industries transfer agent at least 7 business days before
such record date (in the case of shares held directly). |
Shares
held by residents of countries that are not relevant
territories
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Cooper Industries shareholders who do not reside in
relevant territories will be subject to Irish
withholding tax (currently at the rate of 20%), but there are a
number of other exemptions that could apply on a
case-by-case
basis. Such shareholders should seek their own advice as to
whether and how they may claim such exemptions. |
Important
information for all shareholders about Irish withholding
tax
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Cooper Industries will rely on information received directly or
indirectly from brokers and its transfer agent in determining
where shareholders reside, whether they have provided the
required U.S. tax information and whether they have
provided the required Irish dividend withholding tax forms, as
described above. Cooper Industries strongly recommends that
shareholders who will need to complete Irish forms as described
above do so and provide them to their brokers or Cooper
Industries transfer agent, as the case may be, as soon as
possible. Shareholders who do not need to complete Irish forms
should ensure that their residence or required U.S. tax
information has been properly recorded by their brokers or
provided to Cooper Industries transfer agent, as the case
may be, as described above. If any shareholder who is exempt
from withholding receives a dividend subject to Irish dividend
withholding tax, he or she may make an application for a refund
from the Irish Revenue Commissioners on the prescribed form. |
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Links to the various Irish Revenue forms are available at
http://www.revenue.ie/en/tax/dwt/forms/index.html.
Please contact your broker or your tax advisor if you have any
questions regarding Irish dividend withholding tax. |
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Please see Material Tax Considerations Irish
Tax Considerations Withholding Tax on
Dividends for a more detailed description of the Irish
withholding tax on dividends. |
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Is there Irish income tax on dividends on Cooper Industries
shares? |
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A: |
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For the majority of shareholders, there will not be any Irish
income tax on dividends. |
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Irish income tax (if any) generally arises for non-Irish
residents only in respect of dividends paid after Cooper
Industries establishment of tax residency in Ireland,
which occurred in December 2008. |
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Dividends paid on Cooper Industries shares owned by residents of
relevant territories or by other shareholders that
are otherwise exempt from Irish dividend withholding tax will
generally not be subject to Irish income tax unless they have
some connection to Ireland other than holding Cooper Industries
shares. Residents of relevant territories and other
shareholders that are otherwise exempt from Irish dividend
withholding tax who receive dividends subject to Irish
withholding tax should be able to make a reclaim of the
withholding tax from the Irish Revenue unless they have some
connection to Ireland other than holding Cooper Industries
shares. Cooper Industries shareholders who receive their
dividends subject to Irish dividend withholding tax will have no
further liability to Irish income tax on the dividend unless
they have some other connection with Ireland. |
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This answer does not address shareholders that are resident or
ordinarily resident in Ireland for Irish tax purposes and such
shareholders should seek their own advice. |
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Please see Material Tax Considerations Irish
Tax Considerations Income Tax on Dividends Paid on
Cooper Industries Shares for a more detailed description
of the Irish income tax on dividends. |
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Will there be an Irish stamp duty on the transfer of Cooper
Industries plc shares? |
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A: |
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For the majority of transfers of Cooper Industries plc shares,
there will not be any Irish stamp duty. |
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Irish stamp duty (if any) becomes payable only in respect of
share transfers occurring after completion of the Transaction. |
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When we refer in this discussion of stamp duty to shares held
beneficially through brokers, we are
specifically referring to shares held beneficially through
brokers who in turn hold those shares through DTC. Shareholders
who hold shares beneficially through brokers who do not hold
those shares through DTC should consult their own tax advisors. |
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A transfer of Cooper Industries plc shares from a seller who
holds shares beneficially to a buyer who holds the acquired
shares beneficially will not be subject to Irish stamp duty. A
transfer of Cooper Industries plc shares by a seller who holds
shares directly to any buyer, or by a seller who holds the
shares beneficially to a buyer who holds the acquired shares
directly, may be subject to Irish stamp duty (currently at the
rate of 1% of the price paid or the market value of the shares
acquired, if higher) payable by the buyer. A shareholder who
directly holds shares may transfer those shares into his or her
own broker account (or vice versa) without giving rise to Irish
stamp duty provided there is no change in the ultimate
beneficial ownership of the shares as a result of the transfer
and the transfer is not in contemplation of a sale of the
shares. In order to benefit from this exemption from stamp duty,
the shareholder must confirm to Cooper Industries plc that there
is no change in the ultimate beneficial ownership of the shares
as a result of the transfer and the transfer is not in
contemplation of a sale of the shares. A person wishing to
acquire shares directly may need to purchase the shares through
a broker account and then transfer such shares into his or her
own name. |
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Because of the potential Irish stamp duty on transfers of Cooper
Industries plc shares, Cooper Industries plc strongly recommends
that all directly registered shareholders open broker accounts
so they can transfer their shares into a broker account as soon
as possible, and in any event prior to completion of the
Transaction. Directly registered shareholders who want to
transfer their shares to a broker account should contact a
broker who can initiate the share transfer on their behalf.
Cooper Industries also strongly recommends that any person who
wishes to acquire Cooper Industries shares after completion of
the Transaction acquire such shares beneficially through a
broker. |
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We currently intend to pay (or cause one of our subsidiaries to
pay) stamp duty in connection with share transfers made in the
ordinary course of trading by a seller who holds shares directly
to a buyer who holds the acquired shares beneficially. In other
cases Cooper Industries may, in its absolute discretion, pay (or
cause one of its subsidiaries to pay) any stamp duty. Cooper
Industries plcs articles of association as they will be in
effect after the Transaction provide that, in the event of any
such payment, Cooper Industries plc (a) may seek
reimbursement from the buyer or seller, at its discretion,
(b) may set-off the stamp duty |
12
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against any dividends payable to the buyer or seller, at its
discretion, of those shares and (c) may claim a first and
permanent lien on the Cooper Industries plc shares on which
stamp duty has been paid by Cooper Industries plc or its
subsidiary for the amount of stamp duty paid. Cooper Industries
plcs lien shall extend to all dividends paid on those
shares. Parties to a share transfer may assume that any stamp
duty arising in respect of a transaction in Cooper Industries
plc shares has been paid unless one or both of such parties is
otherwise notified by Cooper Industries. |
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Please see Material Tax Considerations Irish
Tax Considerations Stamp Duty. |
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Q: |
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Will the Reorganization have any impact on Cooper
Industries ability to pay dividends or buy back shares? |
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A: |
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Under Irish law, dividends must be paid (and share repurchases
must generally be funded) out of distributable
reserves, which Cooper Industries plc will not have
immediately following the Transaction Time. Please see
Description of Cooper Industries plc Shares
Dividends and Description of Cooper Industries plc
Shares Share Repurchases and Redemptions. If
the Scheme of Arrangement is approved, Class A common
shareholders of Cooper Industries, Ltd. also will be asked at
the special court-ordered meeting to approve the reduction of
the share premium of Cooper Industries plc to allow the creation
of distributable reserves, in order to permit us to continue to
pay quarterly dividends (and repurchase shares) after the
Transaction. The approval of the distributable reserves proposal
is not a condition to the consummation of the Transaction.
Accordingly, if the Class A common shareholders of Cooper
Industries, Ltd. approve the Scheme of Arrangement but do not
approve the distributable reserves proposal, and the Transaction
is consummated, Cooper Industries plc may not have sufficient
distributable reserves to pay dividends (or to repurchase
shares) following the Transaction. |
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In addition, the creation of distributable reserves requires the
approval of the Irish High Court. Although we are not aware of
any reason why the High Court would not approve the creation of
distributable reserves, the issuance of the required order is a
matter for the discretion of the High Court and there is no
guarantee that such approval will be forthcoming. Please see
Risk Factors and Proposal Number Two:
Creation of Distributable Reserves. |
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Q: |
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Will the Reorganization have any material impact on another
companys ability to acquire Cooper Industries? |
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A: |
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No, the Reorganization should not materially affect the ability
of another company to acquire Cooper Industries. Please see
Comparison of Rights of Shareholders and Powers of the
Board of Directors Shareholder Approval of Business
Combinations and Appraisal Rights, Comparison of
Rights of Shareholders and Powers of the Board of
Directors Special Vote Required for Business
Combinations with Related Persons, and Comparison of
Rights of Shareholders and Powers of the Board of
Directors Other Anti-Takeover Measures. |
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Q: |
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When do you expect the Transaction to be completed? |
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A: |
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We are working toward completing the Transaction as quickly as
possible and, assuming the Scheme of Arrangement is approved by
the requisite shareholder vote, sanctioned by the Bermuda
Supreme Court and the other conditions to the consummation of
the Transaction are satisfied (and we do not abandon the
Transaction), we expect to do so as soon as practicable
following shareholder approvals. We currently expect to complete
the Transaction in 2009. Please see Annex E to this proxy
statement for an expected timetable. However, the Transaction
may be abandoned or delayed by our board of directors at any
time prior to the Scheme of Arrangement becoming effective, even
though the Scheme of Arrangement may have been approved by our
shareholders, sanctioned by the Bermuda Supreme Court and all
other conditions to the Transaction may have been satisfied, if
the board of directors determines that such course is in the
best interests of Cooper Industries, Ltd. Please see
Proposal Number One: The Reorganization
Amendment, Termination or Delay. |
13
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Q: |
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What will the Class A Public Shareholders receive for
their Cooper Industries, Ltd. Class A common shares? |
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A: |
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Each Class A Public Shareholder will receive one ordinary
Cooper Industries plc share for each whole Class A Cooper
Industries, Ltd. share held immediately prior to the completion
of the Transaction and cash for any fractional shares held of
record immediately prior to completion of the Transaction. |
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Q: |
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If the Scheme of Arrangement is approved, do Class A
Public Shareholders have to take any action to cancel their
Cooper Industries, Ltd. Class A common shares and receive
Cooper Industries plc shares? |
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A: |
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Assuming the Transaction becomes effective, the Cooper
Industries, Ltd. Class A common shares held by the
Class A Public Shareholders will be cancelled and Cooper
Industries plc ordinary shares will be issued without any action
on the part of the Class A Public Shareholders, regardless
of whether they currently hold Cooper Industries, Ltd. shares in
certificated form. All of Cooper Industries plcs ordinary
shares will be issued in uncertificated book-entry form.
Consequently, following the Transaction, the Cooper Industries,
Ltd. share certificates held by any Class A Public
Shareholders will cease to have effect as documents or evidence
of title. The transfer agent will make an electronic book-entry
in the names of the Class A Public Shareholders and will
mail them a statement evidencing their ownership of Cooper
Industries plc shares. Please see Proposal Number
One: The Reorganization No Action Required to Cancel
Cooper Industries, Ltd. Shares and Receive Cooper Industries plc
Shares. |
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Q: |
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Can I trade Cooper Industries, Ltd. Class A common
shares between the date of this proxy statement and the
effective time of the Transaction? |
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A: |
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Yes. The Cooper Industries, Ltd. Class A common shares will
continue to trade during this period. |
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Q: |
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How will the Transaction affect the stock exchange listing of
Cooper Industries shares? |
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A: |
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We expect that, immediately following the Transaction Time, the
Cooper Industries plc ordinary shares will be listed on the NYSE
under the symbol CBE, the same symbol under which
the Class A common shares of Cooper Industries, Ltd. are
currently listed. We do not plan to be listed on the Irish Stock
Exchange at the present time. |
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Q: |
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After the Transaction, will shares of Cooper Industries be
included in the S&P 500 Index? |
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A: |
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Our shares currently are a component of the Standard &
Poors 500 Index and other indices. Based on current
S&P guidelines, we believe it is likely that S&P would
remove our shares as a component of the S&P 500 in
connection with the Transaction. Cooper Industries shares
may also be removed from other indices. Although we are
uncertain as to whether and when S&P would take this
action, we do not believe that it would be effective until after
the special court-ordered meeting. S&P has removed the
shares of certain companies that recently changed their
jurisdictions of incorporation from the Cayman Islands to
Switzerland and from Bermuda to Ireland. Similar issues could
arise with respect to whether our shares will continue to be
included as a component in other indices or funds that may
impose a variety of qualifications that could be affected by the
Transaction. If our shares are removed as a component of the
S&P 500, or other indices, or no longer meet the
qualifications of such funds, institutional investors that are
required to track the performance of the S&P 500 or such
other indices or the funds that impose those qualifications
would be required to sell their shares, which we expect would
adversely affect the price of our shares. Any such adverse
impact on the price of our shares could be magnified by the
current heightened volatility in the financial markets. We may
continue to repurchase shares in the open market from time to
time under various authorizations, based on the favorability of
market conditions, as well as potential cash requirements for
acquisitions and debt repayments; accordingly, we may or may not
participate in the market at or around the time that S&P or
other indices or funds take any actions. Please see Risk
Factors and Description of Cooper Industries plc
Shares Share Repurchases and Redemptions. |
14
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Q: |
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How many shares can vote? |
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A: |
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As of July 13, 2009, the record date for the meeting, there
were 166,765,446 Class A common shares of Cooper
Industries, Ltd. held by the Class A Public Shareholders
and 36,519,676 Class A common shares of Cooper Industries,
Ltd. held by wholly owned subsidiaries of Cooper Industries,
Ltd. Each holder of Class A common shares is entitled to
one vote for each share held. An existing voting agreement
requires that the Class A common shares held by Cooper
Industries, Ltd.s subsidiaries will be voted (or abstained
from voting) in the same proportion as the Class A common
shares held by the Class A Public Shareholders. As of
July 13, 2009, there also were 105,420,258 Class B
common shares of Cooper Industries, Ltd. held by a wholly owned
subsidiary of Cooper Industries. Ltd. The Class B common
shares have no vote on the matters presented at this meeting. |
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Q: |
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What vote of Cooper Industries, Ltd. shareholders is required
to approve the proposals? |
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A: |
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In order for the Scheme of Arrangement to be approved, it must
receive the affirmative vote of a majority in number of the
record holders of the Cooper Industries, Ltd. Class A
common shares present and voting on the proposal at the meeting,
whether in person or by proxy, representing 75% or more in value
of the Class A common shares present and voting on the
proposal at the meeting, whether in person or by proxy. In
addition, as the Class A common shares held by wholly owned
subsidiaries of Cooper Industries, Ltd. will not be exchanged
for ordinary shares of Cooper Industries plc in the Transaction,
after the meeting we will obtain a separate consent from each
such subsidiary expressly consenting to its exclusion from the
Scheme of Arrangement. |
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In order for the distributable reserves proposal to be approved,
it must receive the affirmative vote of holders of at least a
majority of the Cooper Industries, Ltd. Class A common
shares present in person or by proxy at the meeting and voting
on the proposal. |
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Please see The Special Court-Ordered Meeting
Record Date; Voting Rights; Vote Required for Approval. |
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Q: |
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What quorum is required for action at the meeting? |
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A: |
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The presence, in person or by proxy, of the holders of shares
entitling them to exercise a majority of the voting power of
Cooper Industries, Ltd. on the record date constitutes a quorum
for the conduct of business. Abstentions and broker non-votes
will be counted as present for purposes of determining whether
there is a quorum in respect of the proposals. Please see
The Special Court-Ordered Meeting Record Date;
Voting Rights; Vote Required for Approval. |
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Q: |
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What vote does my board of directors recommend? |
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A: |
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The Cooper Industries, Ltd. board of directors unanimously
recommends that Cooper Industries, Ltd.s Class A
common shareholders vote FOR the proposal to approve
the Scheme of Arrangement and FOR the distributable
reserves proposal. |
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Q: |
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How do I vote? |
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A: |
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We request that you submit a proxy to vote your shares as
promptly as possible. You may submit a proxy to vote your shares
using one of the following methods of submitting a proxy if you
have shares registered in your own name: |
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electronically using the Internet,
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by telephone, or
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by signing and dating the enclosed proxy card and
returning it in the prepaid envelope.
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The instructions for these three methods are on the enclosed
proxy card. If you return your signed proxy card but do not mark
the boxes showing how you wish to vote, your shares will be
voted as recommended |
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by the board of directors. The giving of such proxy does not
affect your right to vote in person if you attend the meeting. |
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If your shares are not registered in your name and you hold
Cooper Industries, Ltd. shares beneficially, you may appoint
proxies to vote as provided by your broker. If your shares are
not registered in your name and you plan to attend the meeting
and vote your shares in person, you should contact your broker
to obtain a legal proxy executed in your favor and bring it to
the meeting in order to vote. For more details regarding voting,
please see The Special Court-Order Meeting How
You Can Vote. |
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Q: |
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Is my vote confidential? |
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A: |
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Proxy cards, proxies delivered by Internet or telephone, ballots
and voting tabulations that identify individual shareholders are
mailed or returned directly to an independent inspector of
election and handled in a manner that protects your voting
privacy. The independent inspector of election will count the
votes. We have adopted a confidential voting policy which
provides that your vote will not be disclosed except:
(1) to respond to written comments on the proxy card;
(2) as required by law; or (3) in other limited
circumstances, such as a proxy contest in opposition to the
Board. |
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Q: |
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What shares are included on my proxy card? |
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If you do not hold your shares through a broker, the shares
listed on your proxy card represent ALL of your shares,
including the following, as applicable: |
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shares
held in the Cooper Industries Dividend Reinvestment and Stock
Purchase Plan;
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shares
held in custody for your account by State Street Bank, as
Trustee of the Cooper Industries Retirement Savings and Stock
Ownership Plan (CO-SAV); and
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shares
held in a book-entry account at Computershare
Trust Company, N.A., Cooper Industries transfer
agent, including shares acquired through Cooper Industries
Employee Stock Purchase Plan.
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If you do not properly submit your proxy by one of the three
methods described above, your shares (except for CO-SAV) will
not be voted. See the question below for an explanation of the
voting procedure for CO-SAV shares. |
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If you hold shares in a broker account, you will receive a
separate proxy card and instructions from your broker. |
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Q: |
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How are Cooper Industries shares in CO-SAV voted? |
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If you hold Class A common shares through CO-SAV, you must
instruct the CO-SAV Trustee, State Street Bank, how to vote your
shares. If you do not properly submit your proxy by one of the
three methods described above (or if you submit your proxy with
an unclear voting designation, or with no voting designation at
all), then the Trustee will vote the shares in your CO-SAV
account in proportion to the way the other CO-SAV participants
voted their shares. The Trustee will also vote Class A
common shares not yet allocated to participants accounts
in proportion to the way that CO-SAV participants voted their
shares. CO-SAV votes receive the same confidentiality as all
other shares voted. |
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Q: |
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What if I plan to attend the meeting in person? |
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A: |
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We recommend that you submit your proxy regardless of whether
you plan to attend the meeting in person. For admission to the
meeting, all Class A common shareholders must bring photo
identification. Those who have beneficial ownership of
Class A common shares held by a broker must also provide
proof such as an account statement from their banks or brokers
that they own Cooper Industries, Ltd. Class A common shares
on July 13, 2009, the record date for the meeting. If you
hold your shares beneficially through a broker and you plan to
vote at the meeting, you must obtain a legal proxy from your
broker. Please contact your broker for instructions on how to
obtain such a legal proxy. |
16
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Q: |
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If my shares are held beneficially through my broker, will my
broker vote my shares for me? |
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A: |
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We recommend that you contact your broker. Your broker can give
you directions on how to instruct the broker to vote your
shares. Your broker may not be able to vote your shares unless
the broker receives appropriate instructions from you. |
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Q: |
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Can I change my vote after I grant my proxy? |
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A: |
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Yes. You can change your vote at any time before your proxy is
voted at the meeting. You may revoke your proxy any time prior
to its exercise by: |
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giving
written notice of the revocation to the Secretary of Cooper
Industries, Ltd. at any time before the meeting;
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by
submitting another properly signed proxy card with a later date
or submitting another proxy by telephone or via the Internet at
a later date; or
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appearing
at the meeting and voting in person.
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However, your attendance at the meeting alone will not revoke
your proxy. |
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If you have instructed a broker to vote your shares, you must
follow the procedure provided by your broker to change those
instructions. |
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Q: |
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Are proxy materials available on the Internet? |
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A: |
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Yes. Our proxy statement is available online at
http://www.cooperindustries.com
under the heading Investor Center, or on the
SECs website at
http://www.sec.gov. |
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Q: |
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Whom should I call if I have questions about the meeting or
the Reorganization? |
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A: |
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Please call the companys proxy solicitor, Georgeson, Inc.
at 1-877-278-4412 (toll-free in the U.S.) or
1-212-440-9800
(call collect) or write us at the Office of the Secretary,
Cooper Industries, Ltd., P.O. Box 4446, Houston, Texas
77210-4446. |
17
SUMMARY
This summary highlights selected information from this proxy
statement. It does not contain all of the information that is
important to you. To understand the Reorganization more fully,
and for a more complete legal description of the Transaction,
you should read carefully the entire proxy statement, including
the Annexes. The Scheme of Arrangement, attached as Annex A
to this proxy statement, is the legal document that governs the
Transaction. The memorandum and articles of association of
Cooper Industries plc, in the forms attached to this proxy
statement as Annex B, will govern Cooper Industries plc
after the completion of the Transaction. We encourage you to
read those documents carefully.
Parties
to the Transaction
Cooper Industries, Ltd. Cooper Industries,
Ltd. operates in two business segments: Electrical products and
Tools. Cooper Industries manufactures, markets and sells its
products and services throughout the world. Cooper Industries
has manufacturing facilities in 23 countries and currently
employs approximately 31,000 people. Operations in the
United States are conducted by wholly owned subsidiaries of
Cooper, organized by the two business segments. Activities
outside the United States contribute significantly to the
revenues and operating earnings of both segments of Cooper
Industries. These activities are conducted in major commercial
countries by wholly owned subsidiaries and jointly-owned
companies, the management of which is structured through Cooper
Industries two business segments. With its two business
segments, Cooper serves four major markets: the industrial,
commercial, utility and residential markets. Cooper also serves
the electronics and telecommunications markets.
Cooper Industries plc. Cooper Industries plc
is a newly incorporated Irish company and is currently wholly
owned by Cooper Industries, Ltd., except for six shares that are
held by six nominee shareholders in trust for Cooper Industries,
Ltd. to satisfy Irish legal requirements with respect to the
shareholding structure of an Irish public limited company.
Cooper Industries plc has only nominal assets and capitalization
and has not engaged in any business or other activities other
than in connection with its incorporation and the Transaction.
As a result of the Transaction, Cooper Industries plc will
become the parent holding company of Cooper Industries, Ltd. The
principal executive offices of Cooper Industries plc are located
at 5 Fitzwilliam Square, Dublin 2, Ireland and the telephone
number at that address is
353-1-661 8770
and its administrative headquarters are located at 600 Travis,
Suite 5600, Houston, Texas 77002 and the telephone number
at that address is
713-209-8400.
The
Reorganization
(see
page 32)
The Transaction will effectively change the place of
incorporation of the company whose shares the Class A
Public Shareholders own from Bermuda to Ireland.
Transaction. The Transaction involves several
steps. Cooper Industries, Ltd., the Bermuda company whose
Class A common shares you currently own, formed Cooper
Industries plc, as a direct subsidiary. On June 30, 2009,
we petitioned the Bermuda Supreme Court to order the calling of
a meeting of Cooper Industries, Ltd. Class A common
shareholders to approve the Scheme of Arrangement. On
July 2, 2009, the Bermuda Supreme Court ordered us to seek
your approval of the Scheme of Arrangement. We will hold the
special court-ordered meeting to approve the Scheme of
Arrangement on August 31, 2009. If we obtain the necessary
shareholder approval, the Bermuda Supreme Court will hold the
Sanction Hearing, which is scheduled to be held on
September 4, 2009, to sanction the Scheme of Arrangement.
Assuming we receive the necessary approvals from the
shareholders, sanctioning of the Bermuda Supreme Court and the
conditions to consummation of the Transaction are satisfied (and
we do not abandon the Transaction), we will file the court order
sanctioning the Scheme of Arrangement with the Bermuda Registrar
of Companies, at which time the Scheme of Arrangement will be
effective. Various steps of the Transaction will occur
effectively simultaneously at the Transaction Time, which we
anticipate will be after the close of trading on the NYSE on the
day the Scheme of Arrangement becomes effective, and before the
opening of trading on the NYSE on the next business day.
18
At the Transaction Time, the following steps will occur
effectively simultaneously:
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1.
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all fractional Class A common shares of Cooper Industries,
Ltd. held of record by the Class A Public Shareholders, if
any, will be cancelled and Cooper Industries, Ltd. will pay to
each Class A Public Shareholder holding fractional shares
that have been cancelled an amount based on the average of the
high and low trading prices of Cooper Industries, Ltd.
Class A common shares on the NYSE on the business day
immediately preceding the effective date of the Scheme of
Arrangement;
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2.
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all previously outstanding whole Class A common shares of
Cooper Industries, Ltd. held by the Class A Public
Shareholders will be cancelled;
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3.
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Cooper Industries, Ltd. will issue to Cooper Industries plc a
number of Class A common shares that is equal to the number
of Cooper Industries plc ordinary shares that is issued by
Cooper Industries plc as described in paragraph 4 below;
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4.
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Cooper Industries plc will issue ordinary shares on a
one-for-one basis to the Class A Public Shareholders
holding whole Cooper Industries, Ltd. Class A common shares
that have been cancelled; and
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5.
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all previously outstanding ordinary shares of Cooper Industries
plc, which prior to the Transaction Time will be held by Cooper
Industries, Ltd. and its nominees, will be acquired by Cooper
Industries plc and cancelled for no consideration, in accordance
with a resolution passed by Cooper Industries, Ltd. and such
nominees.
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As a result of the Transaction, the Class A Public
Shareholders will become ordinary shareholders of Cooper
Industries plc and Cooper Industries, Ltd. will become a
subsidiary of Cooper Industries plc.
In connection with consummation of the Transaction:
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Cooper Industries plc will assume Cooper Industries, Ltd.s
existing obligations in connection with awards granted under
Cooper Industries, Ltd.s equity incentive plans and other
similar employee awards;
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Cooper Industries plc will enter into supplemental indentures to
the indentures governing the senior and medium term notes issued
by certain of Cooper Industries, Ltd.s subsidiaries,
pursuant to which Cooper Industries plc will guarantee the
obligations of those subsidiaries under the indentures and
supplemental indentures governing the senior and medium term
notes; and
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We will seek waivers under
and/or
amendments to our credit facilities in order to avoid technical
defaults that would otherwise result from Cooper Industries,
Ltd. becoming a wholly owned subsidiary of Cooper Industries plc
in connection with the Transaction.
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We refer to the foregoing transactions, together with the steps
of the Transaction and the change in Cooper Industries,
Ltd.s tax residency from Bermuda to Ireland that was
completed in December 2008, as the Reorganization.
As of July 13, 2009, there were 203,285,122 Class A
common shares of Cooper Industries, Ltd. issued, of which
166,765,446 were held by the Class A Public Shareholders
and 36,519,676 were held by wholly owned subsidiaries of Cooper
Industries, Ltd. These subsidiaries will not exchange their
Cooper Industries, Ltd. Class A common shares for Cooper
Industries plc ordinary shares in the Transaction. These
subsidiaries will continue to hold their Class A common
shares in Cooper Industries, Ltd. following the completion of
the Transaction.
There currently are no fractional shares held of record and we
do not expect there to be any such fractional shares held of
record immediately prior to the Transaction Time.
As of July 13, 2009, there were 105,420,258 Class B
common shares of Cooper Industries, Ltd. issued, the sole holder
of which is a wholly owned subsidiary of Cooper Industries, Ltd.
This subsidiary will not participate in the Scheme of
Arrangement and will not exchange its Cooper Industries, Ltd.
Class B common
19
shares for Cooper Industries plc ordinary shares in the
Transaction. This subsidiary will continue to hold its
Class B common shares in Cooper Industries, Ltd. following
the completion of the Transaction.
The Class A common shares and Class B common shares
held by subsidiaries of Cooper Industries, Ltd. will not be
exchanged for Cooper Industries plc ordinary shares in the
Transaction in order to simplify the corporate structure of
Cooper Industries.
After the Transaction, the Class A Public Shareholders will
continue to own an interest in a parent company, Cooper
Industries plc, that will continue to conduct the same business
operations as conducted by Cooper Industries, Ltd. before the
Transaction. Except for the effect of payment of cash in lieu of
fractional shares held of record, if any, the number of shares
those shareholders will own in Cooper Industries plc will be the
same as the number of shares they owned in Cooper Industries,
Ltd. immediately prior to the Transaction, and the relative
economic interest of Class A Public Shareholders in Cooper
Industries will remain unchanged.
The completion of the Reorganization will change the governing
law that applies to us from Bermuda law to Irish law. There are
differences between Bermuda law and Irish law, and between
Cooper Industries, Ltd.s memorandum of association and
bye-laws on the one hand, and Cooper Industries plcs
memorandum and articles of association, as they will be in
effect after the Transaction, on the other hand. Please see
Comparison of Rights of Shareholders and Powers of the
Board of Directors for a summary of some of these
differences.
Upon completion of the Reorganization, we will remain subject to
SEC reporting requirements, the mandates of the Sarbanes-Oxley
Act and the applicable corporate governance rules of the NYSE,
and we will continue to report our consolidated financial
results in U.S. dollars and in accordance with
U.S. GAAP. In addition, in connection with annual general
meetings of Cooper Industries plc, shareholders of record will,
if required by law, be sent Statutory Financial Statements in
addition to the information shareholders already receive.
Reasons
for the Reorganization
(see
page 33)
Cooper Industries, Ltd. is currently incorporated in Bermuda,
where it has been incorporated since May 22, 2001. In 2002,
Cooper Industries, Ltd. became the ultimate parent company of
the Cooper group of companies, following a reincorporation from
Ohio. We reincorporated in Bermuda to take advantage of
financial and other business opportunities that were not
available under our corporate structure at the time, including:
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Maximization of our potential business growth and cash flow, in
light of our expectation that in the future a greater portion of
our business would be generated from
non-U.S. markets;
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Improvement of our worldwide effective tax rate;
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Use of the greater cash flow to invest for further earnings
growth, including by developing higher growth product lines and
acquiring complementary higher growth electrical and electronic
businesses;
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Use of the greater cash flow to reduce the amount of our debt
and repurchase shares; and
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Expansion of our investor base as our Companys shares
could become more attractive to
non-U.S. investors.
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Bermuda, however, lacks a substantial network of commercial,
tax, and other treaties and established relationships with many
of the countries where Cooper Industries has major operations.
In addition, there continues to be negative publicity regarding,
and criticism of, companies that conduct substantial business in
the U.S. but are domiciled in countries that do not have
tax treaties with the U.S., like Bermuda. Also, legislative and
regulatory bodies in the U.S. and certain U.S. trading
partners have been actively considering proposals that would
impact multi-national companies incorporated in jurisdictions
such as Bermuda that do not have tax treaties with the U.S. or
certain U.S. trading partners. Further, proposals have from time
to time been made
and/or
legislation has been introduced to change the U.S. tax law
that, if enacted, could increase
20
our tax burden if we remained incorporated in Bermuda. For
example, recent legislative proposals would broaden the
circumstances under which we would be considered a
U.S. resident. Other legislative proposals could override
certain tax treaties and limit the treaty benefits on certain
payments by our U.S. subsidiaries to our
non-U.S. affiliates.
Consequently, following a thorough review, Cooper Industries
determined that moving its place of incorporation out of
Bermuda, in addition to the earlier move in tax residence, is
best for shareholders, employees and other stakeholders.
As a result of reaching this decision, Cooper Industries
reviewed a number of alternatives with its board of directors
and outside advisors, including incorporating in a number of
different jurisdictions. We determined that incorporating in the
United States would have negative financial consequences for
Cooper Industries and its shareholders by increasing our global
effective tax rate, resulting in potentially significant
declines in net income, earnings per share and cash flow. We
ultimately decided to incorporate and become tax resident in a
jurisdiction that is a member of both the European Union and the
OECD, given:
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Cooper Industries already substantial operations in
Europe, which experienced considerable growth in 2007 and 2008;
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The introduction of various OECD and European Union withholding
and other tax proposals that could adversely affect companies
incorporated in certain jurisdictions outside the OECD or the
European Union, respectively;
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Many of the favorable European Union tax directives and other
protections apply only to a company that is both incorporated
and tax resident in a European Union jurisdiction; and
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A company that is both incorporated and tax resident in a
European Union jurisdiction may improve its position with
respect to United States and other legislative and regulatory
proposals that may be adopted in the future.
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We selected Ireland after considering various factors, including
the following:
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Cooper Industries is already tax resident in Ireland.
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As we continue to grow internationally, we believe that moving
to Ireland will provide increased strategic flexibility and
operational benefits. Ireland is a beneficial location
considering Cooper Industries presence in markets outside
the United States. We already have sales and customer service
operations in Ireland and we have hired a country manager to
focus on growing our commercial presence in Ireland. Also,
Cooper generates a substantial portion of its revenues outside
the United States, in countries such as the United Kingdom,
France, Germany, Canada and Mexico and countries in the Middle
East and Southeast Asia. Cooper Industries also has operations
in India and China and has majority-owned joint ventures with
operations in China. Ireland is well-located with respect to
these markets.
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Ireland enjoys strong relationships as a member of the European
Union, and has a long history of international investment and a
good network of commercial, tax, and other treaties with the
United States, the European Union and many other countries
where Cooper Industries has major operations.
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Both Ireland and Bermuda are common law jurisdictions which we
consider to be less prescriptive than many civil law
jurisdictions. As a result, we believe Irelands legal
system to be more flexible, predictable and familiar to Cooper
Industries, and more familiar to its shareholders, than that of
a civil law system.
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Ireland is an English-speaking country, is a member of the euro
zone, and has a stable business, legal and regulatory
environment.
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Ireland permits the payment of dividends in U.S. dollars.
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21
We cannot assure you that the anticipated benefits of the
Reorganization will be realized. In addition to the potential
benefits described above, the Reorganization will expose you and
us to some risks. These risks include the following:
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The rights of Cooper Industries shareholders will change
due to differences between Bermuda and Irish law and between the
governing documents of Cooper Industries, Ltd. and Cooper
Industries plc;
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The market for Cooper Industries plc ordinary shares may differ
from the market for Cooper Industries, Ltd. Class A common
shares and Cooper Industries shares will likely be removed
from the S&P 500 and may be removed from other indices as a
result of the Transaction;
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Legislative and regulatory action in the U.S. could
materially and adversely affect us regardless of whether we
complete the Reorganization;
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The Reorganization may not allow us to maintain a competitive
worldwide effective tax rate and may result in additional costs
even if it is not completed;
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We cannot guarantee that material changes would not be made to
the financial or other terms of our credit facilities in
connection with obtaining the appropriate waivers
and/or
amendments to such facilities;
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We may choose to abandon or delay the Transaction;
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If the distributable reserves proposal is not approved, Cooper
Industries plc may not be able to pay dividends or repurchase
shares following the Transaction;
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Increased shareholder voting requirements in Ireland will reduce
our flexibility in some aspects of capital management;
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The transfer of Cooper Industries plc shares after the
Transaction may be subject to Irish stamp duty; and
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Following Cooper Industries change in tax residency in
December 2008, dividends received by shareholders may be subject
to Irish dividend withholding tax whether or not the Transaction
is completed.
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Please see the discussion under Risk Factors. Our
board of directors has considered both the potential advantages
of the Reorganization and these risks and has unanimously
approved the Scheme of Arrangement and recommended that the
shareholders vote for the Scheme of Arrangement.
Tax
Considerations
(see page 44)
Under U.S. federal income tax law, the Class A Public
Shareholders generally will not recognize gain or loss in the
Transaction, except with respect to any cash received in lieu of
fractional shares. Certain five percent or greater shareholders
may, however, be required to timely enter into and maintain a
gain recognition agreement to avoid recognizing a gain as a
result of the Transaction. Under Irish tax law, no tax is due
for the Class A Public Shareholders in the Transaction
(including on the receipt of cash in respect of fractional
shares in the Transaction) unless such shareholders have some
connection with Ireland other than holding Cooper Industries plc
shares. Please refer to Material Tax Considerations
for a description of the material U.S. federal income tax
and Irish tax consequences of the Transaction to Class A
Public Shareholders. Determining the actual tax consequences of
the Transaction to you may be complex and will depend on your
specific situation. Accordingly, you are urged to consult your
tax advisor for a full understanding of the tax consequences of
the Transaction to you.
Rights of
Shareholders
(see page 55)
Many of the principal attributes of Cooper Industries,
Ltd.s Class A common shares and Cooper Industries
plcs ordinary shares will be similar. However, there are
differences between the rights of Cooper Industries
shareholders under Irish law and under Bermuda law. In addition,
there are differences between
22
Cooper Industries, Ltd.s memorandum of association and
bye-laws and Cooper Industries plcs memorandum and
articles of association as they will be in effect after the
Transaction. We discuss these differences in detail under
Description of Cooper Industries plc Shares and
Comparison of Rights of Shareholders and Powers of the
Board of Directors. Copies of forms of Cooper Industries
plcs memorandum and articles of association as they will
be in effect after the Transaction are attached to this proxy
statement as Annex B.
Stock
Exchange
Listing
(see page 66)
We expect that, immediately following the Transaction Time, the
Cooper Industries plc ordinary shares will be listed on the NYSE
under the symbol CBE, the same symbol under which
the Class A common shares of Cooper Industries, Ltd. are
currently listed. We do not plan to be listed on the Irish Stock
Exchange at the present time.
Court
Sanction of the Scheme of
Arrangement
(see page 36)
We cannot complete the Reorganization without the sanction of
the Scheme of Arrangement by the Bermuda Supreme Court. Subject
to the Class A common shareholders of Cooper Industries,
Ltd. approving the Scheme of Arrangement, a Bermuda Supreme
Court hearing will be required to seek the sanction of the
Scheme of Arrangement. At the Sanction Hearing, the Bermuda
Supreme Court may impose such conditions as it deems appropriate
in relation to the Scheme of Arrangement but may not impose any
material changes without the joint consent of Cooper Industries,
Ltd. and Cooper Industries plc. Cooper Industries, Ltd. may,
subject to U.S. securities law constraints, consent to any
modification of the Scheme of Arrangement on behalf of the
shareholders which the Bermuda Supreme Court may think fit to
approve or impose. In determining whether to exercise its
discretion and sanction the Scheme of Arrangement, the Bermuda
Supreme Court will determine, among other things, whether the
Scheme of Arrangement is fair to Cooper Industries, Ltd.
Class A common shareholders.
Creation
of Distributable
Reserves
(see page 43)
Under Irish law, Cooper Industries plc requires
distributable reserves in its unconsolidated balance
sheet prepared in accordance with the Irish Companies Acts
1963-2009
(the Irish Companies Acts) to enable it to make
distributions (including the payment of cash dividends) to its
shareholders, or generally to redeem or buy back shares. Please
see Description of Cooper Industries plc
Shares Dividends and Description of
Cooper Industries plc Shares Share Repurchases and
Redemptions. Immediately following implementation of the
Transaction, the unconsolidated balance sheet of Cooper
Industries plc will not contain any distributable reserves. The
current shareholders of Cooper Industries plc (which are Cooper
Industries, Ltd. and its nominees) have unanimously passed a
resolution to reduce the share premium of Cooper Industries plc
to allow the creation of distributable reserves following the
Transaction. If the Scheme of Arrangement is approved, and in
connection with the Scheme of Arrangement and the
Reorganization, Class A common shareholders of Cooper
Industries, Ltd. also will be asked at the special court-ordered
meeting to approve the reduction of the share premium of Cooper
Industries plc to allow the creation of distributable reserves
that was previously unanimously approved by Cooper Industries,
Ltd. and the other current shareholders of Cooper Industries
plc. If the Class A common shareholders of Cooper
Industries, Ltd. approve the reduction of the share premium of
Cooper Industries plc to allow the creation of distributable
reserves and the Transaction is completed, we will seek to
obtain the approval of the Irish High Court, which is required
for the creation of distributable reserves to be effective, as
soon as practicable following implementation of the Transaction.
The approval of the High Court is expected to be obtained within
six weeks of the consummation of the Transaction. Please see
Risk Factors.
Market
Price and Dividend
Information
(see page 105)
On June 8, 2009, the last trading day before the public
announcement of the Transaction, the closing price of the Cooper
Industries, Ltd. Class A common shares on the NYSE was
$35.52 per share. On July 13, 2009, the most recent
practicable date before the date of this proxy statement, the
closing price of the Cooper Industries, Ltd. Class A common
shares was $29.71 per share.
23
No
Appraisal Rights
(see
page 39)
Under Bermuda law, the Class A common shareholders of
Cooper Industries, Ltd. do not have any right to an appraisal of
the value of their shares or payment for them in connection with
the Transaction.
Accounting
Treatment of the Transaction
(see
page 40)
Under U.S. GAAP, the Transaction represents a transaction
between entities under common control. Assets and liabilities
transferred between entities under common control are accounted
for at cost. Accordingly, the assets and liabilities of Cooper
Industries plc will be reflected at their carrying amounts in
the accounts of Cooper Industries, Ltd. at the Transaction Time.
Special
Court-Ordered
Meeting
(see page 100)
Time, Place, Date and Purpose. The special
court-ordered meeting will be held on August 31, 2009 at 11
a.m. Central Time, in the
54th floor
conference room, Chase Tower, 600 Travis, Houston, Texas. At the
meeting, Cooper Industries, Ltd.s board of directors will
ask the Class A common shareholders to vote:
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1.
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to approve the Scheme of Arrangement, pursuant to which the
Class A Public Shareholders will have their Class A
common shares of Cooper Industries, Ltd. cancelled and will
receive in exchange new ordinary shares, par value $0.01 per
share, of Cooper Industries plc on a one-for-one basis with
respect to the Cooper Industries, Ltd. Class A common
shares that have been cancelled (or, in the case of fractional
shares held of record, if any, cash); and
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2.
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if the Scheme of Arrangement is approved, and in connection with
the Scheme of Arrangement and the Reorganization, to approve the
reduction of the share premium of Cooper Industries plc to allow
the creation of distributable reserves that was previously
unanimously approved by Cooper Industries, Ltd. and the other
current shareholders of Cooper Industries plc (as described in
this proxy statement).
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If any other matters properly come before the meeting or any
adjournments or postponements of the meeting, the persons named
in the proxy card will vote the shares represented by all
properly executed proxies in their discretion.
Record Date. Only holders of record of Cooper
Industries, Ltd. Class A common shares on July 13,
2009 are entitled to notice of and to vote at the meeting or any
adjournments or postponements of the meeting.
Quorum. The presence, in person or by proxy,
of the holders of Class A common shares entitling them to
exercise a majority of the voting power of the Class A
common shareholders of Cooper Industries, Ltd. on the record
date constitutes a quorum for the conduct of business.
Abstentions and broker non-votes will be counted as present for
purposes of determining whether there is a quorum in respect of
the proposals. Please see The Special Court-Ordered
Meeting Record Date; Voting Rights; Vote Required
for Approval.
Recommendation
of the Board of
Directors
(see page 39)
The Cooper Industries, Ltd. board of directors unanimously
recommends that Cooper Industries, Ltd.s Class A
common shareholders vote FOR the proposal to approve
the Scheme of Arrangement and FOR the distributable
reserves proposal. Approval of the distributable reserves
proposal is not a condition to the Transaction.
Required
Vote
(see page 100)
In order for the Scheme of Arrangement to be approved, it must
receive the affirmative vote of a majority in number of the
record holders of the Cooper Industries, Ltd. Class A
common shares present and voting on the proposal at the meeting,
whether in person or by proxy, representing 75% or more in value
of the Class A common shares present and voting on the
proposal at the meeting, whether in person or by proxy. In
addition, as the Class A common shares held by wholly owned
subsidiaries of Cooper Industries, Ltd. will not be
24
exchanged for ordinary shares of Cooper Industries plc in the
Transaction, after the meeting we will obtain a separate consent
from each such subsidiary expressly consenting to its exclusion
from the Scheme of Arrangement.
In order for the distributable reserves proposal to be approved,
it must receive the affirmative vote of holders of at least a
majority of the Cooper Industries, Ltd. Class A common
shares present in person or by proxy at the meeting and voting
on the proposal.
Proxies
(see
page 101)
General. A proxy card is being sent to each
Class A common shareholder as of the record date. If you
properly received a proxy card, you may submit a proxy to vote
on the proposals by marking your proxy card appropriately,
executing it in the space provided, dating it and returning it
to us. If you hold your shares beneficially through a broker,
you should follow the instructions provided by your broker when
voting your shares. If you have timely submitted a properly
executed proxy card or appointed your proxy and provided your
voting instructions by telephone or on the Internet and clearly
indicated your votes, your shares will be voted as indicated.
Revocation. You may revoke your proxy at any
time prior to its exercise by:
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giving written notice of the revocation to the Secretary of
Cooper Industries, Ltd. at any time before the meeting;
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submitting another properly signed proxy card with a later date
or submitting another proxy by telephone or via the Internet at
a later date; or
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appearing at the meeting, and voting in person.
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However, your attendance at the meeting alone will not revoke
your proxy.
If you have instructed a broker to vote your shares, you must
follow the procedure provided by your broker to change those
instructions.
Selected
Historical Financial and Other Data
The following table presents selected historical financial and
other data for Cooper Industries, Ltd. The statement of income
data for the quarters ended March 31, 2009 and
March 31, 2008 and the balance sheet data at March 31,
2009 and March 31, 2008 have been derived from our
unaudited condensed consolidated financial statements. The
statement of income data for fiscal years 2008, 2007, 2006, 2005
and 2004 and the balance sheet data at December 31, 2008,
December 31, 2007, December 31, 2006,
December 31, 2005 and December 31, 2004 are derived
from our audited consolidated financial statements. The
unaudited financial statements have been prepared on the same
basis as the audited financial statements and, in the opinion of
management, include all adjustments, consisting only of normal
recurring adjustments, necessary for a fair presentation of the
information set forth herein.
The selected historical financial and other data presented below
should be read in conjunction with the financial statements and
accompanying notes and Managements Discussion and
Analysis of Financial Condition and Results of Operations
included in Cooper Industries, Ltd.s Annual Report on
Form 10-K
for the year ended December 31, 2008 and Quarterly Report
on
Form 10-Q
for the quarter ended March 31, 2009, and other financial
information incorporated by reference in this proxy statement.
Results of operations for the quarter ended March 31,
2009 may not be indicative of the results of operations
that may be achieved for the entire year. In addition, the
historical financial information may not be indicative of Cooper
Industries plcs future performance.
25
We have included no data for Cooper Industries plc because this
entity was incorporated on June 4, 2009 and, accordingly,
was not in existence during any of the periods shown below.
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Quarter Ended
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Years Ending December 31,
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March 31,
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March 31,
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2009
|
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2008
|
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2008
|
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2007
|
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2006
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2005
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2004
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(In millions, except per share data)
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INCOME STATEMENT DATA:
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Revenues
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$
|
1,256.8
|
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$
|
1,546.1
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$
|
6,521.3
|
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|
$
|
5,903.1
|
|
|
$
|
5,184.6
|
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|
$
|
4,730.4
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$
|
4,462.9
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Income from continuing operations
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$
|
81.2
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|
|
$
|
153.4
|
|
|
$
|
615.6
|
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|
$
|
692.3
|
|
|
$
|
484.3
|
|
|
$
|
391.1
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|
|
$
|
339.8
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Income (charge) from discontinued operations, net of taxes
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18.9
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|
|
|
|
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|
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16.6
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|
|
|
|
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(20.3
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)
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|
|
(227.2
|
)
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|
|
|
|
|
|
|
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|
|
|
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|
|
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Net income
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$
|
100.1
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|
|
$
|
153.4
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|
|
$
|
632.2
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|
|
$
|
692.3
|
|
|
$
|
464.0
|
|
|
$
|
163.9
|
|
|
$
|
339.8
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|
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|
|
|
|
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INCOME PER COMMON SHARE DATA:
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Basic
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Income from continuing operations
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$
|
.49
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|
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$
|
.87
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$
|
3.54
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|
|
$
|
3.80
|
|
|
$
|
2.64
|
|
|
$
|
2.12
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|
|
$
|
1.84
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Income (charge) from discontinued operations
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|
|
.11
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|
|
|
|
|
|
|
.10
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|
|
|
|
|
|
|
(.11
|
)
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|
|
(1.23
|
)
|
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|
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|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
.60
|
|
|
$
|
.87
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|
|
$
|
3.64
|
|
|
$
|
3.80
|
|
|
$
|
2.53
|
|
|
$
|
.89
|
|
|
$
|
1.84
|
|
|
|
|
|
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|
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|
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|
Diluted
|
|
|
|
|
|
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|
|
|
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|
|
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Income from continuing operations
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|
$
|
.48
|
|
|
$
|
.86
|
|
|
$
|
3.51
|
|
|
$
|
3.73
|
|
|
$
|
2.58
|
|
|
$
|
2.06
|
|
|
$
|
1.79
|
|
Income (charge) from discontinued operations
|
|
|
.11
|
|
|
|
|
|
|
|
.09
|
|
|
|
|
|
|
|
(.11
|
)
|
|
|
(1.19
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Net income
|
|
$
|
.59
|
|
|
$
|
.86
|
|
|
$
|
3.60
|
|
|
$
|
3.73
|
|
|
$
|
2.47
|
|
|
$
|
.87
|
|
|
$
|
1.79
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE SHEET DATA (End of Period):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
6,024.2
|
|
|
$
|
6,268.2
|
|
|
$
|
6,164.9
|
|
|
$
|
6,133.5
|
|
|
$
|
5,374.8
|
|
|
$
|
5,215.1
|
|
|
$
|
5,407.8
|
|
Long-term debt, excluding current maturities
|
|
|
924.6
|
|
|
|
1,207.4
|
|
|
|
932.5
|
|
|
|
909.9
|
|
|
|
702.8
|
|
|
|
1,002.9
|
|
|
|
698.6
|
|
Shareholders equity
|
|
|
2,632.2
|
|
|
|
2,726.8
|
|
|
|
2,607.4
|
|
|
|
2,841.9
|
|
|
|
2,475.3
|
|
|
|
2,205.2
|
|
|
|
2,286.5
|
|
CASH DIVIDENDS DECLARED PER COMMON SHARE
|
|
$
|
.25
|
|
|
$
|
.25
|
|
|
$
|
1.00
|
|
|
$
|
.84
|
|
|
$
|
.74
|
|
|
$
|
.74
|
|
|
$
|
.70
|
|
In October 1998, Cooper Industries sold its Automotive Products
segment for $1.9 billion in proceeds. Discontinued
operations charges of $20.3 million, net of a
$11.4 million income tax benefit in 2006 and
$227.2 million, net of a $127.8 million income tax
benefit in 2005 were recorded for potential liabilities related
to the Automotive Products segment sale and the Federal-Mogul
bankruptcy. In 2008, discontinued operations income of
$16.6 million, net of a $9.4 million income tax
expense, was recorded to reflect ongoing resolution of the
potential liabilities through the tort system when the
Bankruptcy Court denied Cooper Industries participation in
the Federal-Mogul 524(g) trust. In the quarter ended
March 31, 2009, discontinued operations income of
$18.9 million, net of a $12.0 million income tax
expense, was recorded from negotiated insurance coverage
settlements consummated in the first quarter that were not
previously recognized. See Note 16 of the Notes to the
Consolidated Financial Statements included in our Annual Report
on
Form 10-K
for the year ended on December 31, 2008 and in our
Quarterly Report on
Form 10-Q
for the quarter ended March 31, 2009.
Unaudited
Summary Pro Forma Financial Information
Pro forma financial statements for Cooper Industries plc are not
presented in this proxy statement because no significant pro
forma adjustments are required to be made to the historical
statement of income and balance sheet of Cooper Industries, Ltd.
as of and for the quarter ended March 31, 2009 and to the
historical statement of income and balance sheet of Cooper
Industries, Ltd. as of and for the year ended December 31,
2008. Those financial statements are included in Cooper
Industries, Ltd.s Quarterly Report on
Form 10-Q
for the quarter ended March 31, 2009 and Annual Report on
Form 10-K
for the year ended December 31, 2008, respectively.
26
RISK
FACTORS
Before you decide how to vote on the Scheme of Arrangement,
you should consider carefully the following risk factors, in
addition to the other information contained in this proxy
statement and the documents incorporated by reference,
including, without limitation, our Annual Report on
Form 10-K
for the year ended December 31, 2008, our Quarterly Report
on
Form 10-Q
for the quarter ended March 31, 2009 and subsequent filings
with the SEC.
The
rights of Cooper Industries Class A Public
Shareholders will change as a result of the
Transaction.
Because of differences between Irish law and Bermuda law and
differences between the governing documents of Cooper Industries
plc and Cooper Industries, Ltd., the rights of Cooper
Industries Class A Public Shareholders will change if
the Transaction is completed. For a description of these
differences, please see Comparison of Rights of
Shareholders and Powers of the Board of Directors.
The
market for the Cooper Industries plc shares may differ from the
market for the Cooper Industries, Ltd. shares, and Cooper
Industries shares will likely be removed as a component of the
Standard & Poors 500 Index and may be removed
from other indices or certain other funds.
We intend to list the Cooper Industries plc ordinary shares on
the NYSE under the symbol CBE, the same trading
symbol as the Cooper Industries, Ltd. Class A common
shares. The market price, trading volume or volatility of the
Cooper Industries plc shares could be different than those of
the Cooper Industries, Ltd. Class A common shares.
Our shares currently are a component of the Standard &
Poors 500 Index and other indices. Based on current
S&P guidelines, we believe it is likely that S&P would
remove our shares as a component of the S&P 500 in
connection with the Transaction. Cooper Industries shares
may also be removed from other indices. Although we are
uncertain as to whether and when S&P would take this
action, we do not believe that it would be effective until after
the special court-ordered meeting. S&P has removed the
shares of certain companies that recently changed their
jurisdictions of incorporation from the Cayman Islands to
Switzerland and from Bermuda to Ireland. Similar issues could
arise with respect to whether our shares will continue to be
included as a component in other indices or funds that may
impose a variety of qualifications that could be affected by the
Transaction. If our shares are removed as a component of the
S&P 500 or other indices or no longer meet the
qualifications of such funds, institutional investors that are
required to track the performance of the S&P 500 or such
other indices or the funds that impose those qualifications
would be required to sell their shares, which we expect would
adversely affect the price of our shares. Any such adverse
impact on the price of our shares could be magnified by the
current heightened volatility in the financial markets. We may
continue to repurchase shares in the open market from time to
time under various authorizations, based on the favorability of
market conditions, as well as potential cash requirements for
acquisitions and debt repayments; accordingly, we may or may not
participate in the market at or around the time that S&P or
other indices or funds take any actions. Please see
Description of Cooper Industries plc Shares
Share Repurchases and Redemptions.
Legislative
and regulatory action could materially and adversely affect us
regardless of whether we complete the
Reorganization.
Legislative and regulatory action may be taken in the
U.S. which, if ultimately enacted, could override tax
treaties upon which we rely or broaden the circumstances under
which we would be considered a U.S. resident regardless of
whether we complete the Reorganization, each of which could
materially and adversely affect our effective tax rate
and/or
require us to take further action, at potentially significant
expense, to seek to preserve our effective tax rate. We cannot
predict the outcome of any specific legislative proposals.
However, if proposals were enacted that had the effect of
disregarding the Reorganization or limiting our ability as an
Irish company to take advantage of the tax treaties between
Ireland and other jurisdictions including the U.S., we could be
subjected to increased taxation
and/or
potentially significant expense. In addition, any future
amendments to the current income tax treaties between Ireland
and other jurisdictions
27
(including the United States) could subject us to increased
taxation. Also, legislative and regulatory bodies in the
U.S. and certain U.S. trading partners have been
actively discouraging multi-national companies from doing
business in so-called tax haven jurisdictions such
as Bermuda. The Reorganization may not eliminate the risk that
these legislative and regulatory actions will apply to us.
As a company incorporated in the European Union, we are subject
to European Union law and this could impose regulatory burdens
on us in the future.
In addition, there continues to be negative publicity regarding,
and criticism of, companies that conduct substantial business in
the U.S. but are domiciled in countries that do not have
tax treaties with the United States, like Bermuda. We
cannot assure you that moving our jurisdiction of incorporation
to Ireland will eliminate the risk that we may be subject to
similar criticism.
The
Reorganization may not allow us to maintain a competitive
worldwide effective corporate tax rate.
We believe that the Reorganization should improve our ability to
maintain a competitive worldwide effective corporate tax rate.
We cannot give any assurance as to what our effective tax rate
will be after the Reorganization, however, because of, among
other things, uncertainty regarding the tax policies of the
jurisdictions where we operate. Our actual effective tax rate
may vary from this expectation and that variance may be
material. Additionally, the tax laws of Ireland and other
jurisdictions could change in the future, and such changes could
cause a material change in our effective tax rate.
The
Reorganization will result in additional direct and indirect
costs, even if the Reorganization is not
completed.
Although we do not expect these costs to be material, we will
incur additional direct costs as a result of the Reorganization.
Following the change of our tax residency to Ireland which took
place in December 2008, we have been holding, and will continue
to hold, certain board meetings in Ireland. We also expect to
incur costs and expenses, including professional fees, to comply
with Irish corporate and tax laws and financial reporting
requirements. In addition, we expect to incur attorneys
fees, accountants fees, filing fees, mailing expenses and
financial printing expenses in connection with the
Reorganization, even if the Scheme of Arrangement is not
approved or completed. The Reorganization also may negatively
affect us by diverting attention of our management and employees
from our operating business during the period of implementation
and by increasing other administrative costs and expenses.
We
cannot guarantee that material changes would not be made to the
financial or other terms of our credit facilities in connection
with obtaining the appropriate waivers and/or amendments to such
facilities.
We will seek waivers under
and/or
amendments to our five-year credit facility and our
364-day
credit facility in order to avoid a technical default that would
otherwise result under each facility from Cooper Industries,
Ltd. becoming a wholly owned subsidiary of Cooper Industries plc
in connection with the Transaction. One of the conditions to
consummation of the Transaction is that we obtain the
appropriate waivers
and/or
amendments on terms acceptable to us, although we may waive this
condition. Please see Proposal Number One: The
Reorganization Conditions to Consummation of the
Transaction. Although we expect that no material change
would be made to the financial or other terms of the credit
facilities in connection with obtaining the appropriate waivers
and/or
amendments, we cannot guarantee that there would not be any such
material change. In addition, although we expect that the
Transaction will not materially impact our ability to replace
our existing five-year credit facility that expires in November
2009, we cannot guarantee that there would not be any such
material impact. Please see Proposal Number One: The
Reorganization Credit Facilities.
We may
choose to abandon or delay the Transaction.
We may abandon or delay the Transaction at any time prior to the
Scheme of Arrangement becoming effective by action of our board
of directors, even after the special court-ordered meeting and
the sanction of the Bermuda Supreme Court, if the board of
directors determines that such course is in the best interests
of
28
Cooper Industries, Ltd. While we currently expect the
Transaction to take place as soon as practicable after obtaining
shareholder approval of the Scheme of Arrangement at the
meeting, our board of directors may delay the Transaction for a
significant time or may abandon the Transaction after the
meeting because, among other reasons, of an increase in our
estimated cost of the Transaction or a determination by the
board of directors that the Transaction may not result in the
benefits we expect. Please see Proposal Number One:
The Reorganization Amendment, Termination or
Delay.
If the
Class A common shareholders of Cooper Industries, Ltd. do
not approve the distributable reserves proposal, Cooper
Industries plc may not have sufficient distributable reserves to
pay dividends (or to repurchase shares) following the
Transaction. In addition, there is no guarantee that Irish High
Court approval of the creation of distributable reserves will be
forthcoming.
Under Irish law, dividends must be paid (and share repurchases
must generally be funded) out of distributable
reserves, which Cooper Industries plc will not have
immediately following the Transaction Time. Please see
Description of Cooper Industries plc Shares
Dividends and Description of Cooper Industries plc
Shares Share Repurchases and Redemptions. If
the Scheme of Arrangement is approved, Class A common
shareholders of Cooper Industries, Ltd. also will be asked at
the special court-ordered meeting to approve the reduction of
the share premium of Cooper Industries plc to allow the creation
of distributable reserves, in order to permit us to continue to
pay quarterly dividends (and repurchase shares) after the
Transaction. The approval of the distributable reserves proposal
is not a condition to the consummation of the Transaction.
Accordingly, if the Class A common shareholders of Cooper
Industries, Ltd. approve the Scheme of Arrangement but do not
approve the distributable reserves proposal, and the Transaction
is consummated, Cooper Industries plc may not have sufficient
distributable reserves to pay dividends (or to repurchase
shares) following the Transaction.
In addition, the creation of distributable reserves requires the
approval of the Irish High Court. Although we are not aware of
any reason why the High Court would not approve the creation of
distributable reserves, the issuance of the required order is a
matter for the discretion of the High Court and there is no
guarantee that such approval will be forthcoming. Please see
Proposal Number Two: Creation of Distributable
Reserves.
As a
result of increased shareholder voting requirements in Ireland
relative to Bermuda, we will have less flexibility with respect
to certain aspects of capital management than we now
have.
Under Bermuda law, our directors may issue, without shareholder
approval, any common shares authorized in our memorandum of
association that are not issued. Irish law allows our
shareholders to authorize share capital to be issued by our
board of directors without further shareholder approval but this
authorization must be renewed by the shareholders every five
years and we cannot guarantee that this authorization will
always be approved. Additionally, subject to specified
exceptions, including the opt-out described in Cooper Industries
plcs articles of association, Irish law grants statutory
pre-emptive rights to existing shareholders to subscribe for new
issuances of shares for cash. This opt-out must also be renewed
by the shareholders every five years and we cannot guarantee
that the opt-out of pre-emptive rights will always be approved.
Cooper Industries, Ltd. is, and Cooper Industries plc will be,
subject to the rules of the New York Stock Exchange that
require shareholder approval of certain share issuances. While
we do not believe that the differences between Bermuda law and
Irish law relating to our capital management will have an
adverse effect on the Company, we cannot assure you that
situations will not arise where the flexibility we now have in
Bermuda would have provided benefits to our shareholders. Please
see Comparison of Rights of Shareholders and Powers of the
Board of Directors Capitalization,
Comparison of Rights of Shareholders and Powers of the
Board of Directors Pre-emption Rights, Share
Warrants and Share Options and Comparison of Rights
of Shareholders and Powers of the Board of Directors
Distributions and Dividends; Repurchases and Redemptions.
29
After
the Reorganization, a future transfer of Cooper Industries plc
shares may be subject to Irish stamp duty.
In certain circumstances, the transfer of shares in an Irish
incorporated company will be subject to Irish stamp duty
(currently at the rate of 1% of the higher of the price paid or
the market value of the shares acquired) payable by the buyer.
Although in the majority of transactions there will be no stamp
duty because both the seller and buyer hold the shares
beneficially, this additional risk for the buyer could adversely
affect the price of our shares. Please see Material Tax
Considerations Irish Tax Considerations
Stamp Duty.
Following
Cooper Industries change in tax residency in December
2008, dividends received by shareholders may be subject to Irish
dividend withholding tax whether or not the Transaction is
completed.
In certain circumstances, Cooper Industries will be required to
deduct Irish dividend withholding tax (currently at the rate of
20%) from dividends paid to its shareholders. Irish withholding
tax (if any) arises in respect of dividends paid after Cooper
Industries establishment of tax residency in Ireland,
which occurred in December 2008. In the majority of cases,
shareholders resident in the U.S. will not be subject to
Irish withholding tax, and shareholders resident in a number of
other countries will not be subject to Irish withholding tax
provided that they complete certain Irish dividend withholding
tax forms. However, some shareholders may be subject to
withholding tax, which could adversely affect the price of our
shares. Please see Material Tax Considerations
Irish Tax Considerations Withholding Tax on
Dividends.
Cooper Industries strongly recommends that each shareholder
consult his or her own tax advisor as to the tax consequences of
holding shares in and receiving dividends from Cooper
Industries.
30
FORWARD-LOOKING
STATEMENTS
We have made forward-looking statements in this proxy statement
and the documents incorporated by reference in this proxy
statement that are based on our managements beliefs and
assumptions and on information currently available to our
management. Forward-looking statements include information
concerning our possible or assumed future markets, demand for
products and services, results of operations, business
strategies, financing plans, competitive position, potential
growth opportunities, potential operating performance
improvements, the effects of competition and the effects of
future legislation or regulations. Forward-looking statements
include all statements that are not historical facts and can be
identified by the use of forward-looking terminology such as the
words believe, expect, plan,
intend, anticipate,
estimate, predict,
potential, continue, may,
should or the negative of these terms or similar
expressions.
Forward-looking statements involve risks, uncertainties and
assumptions. Actual results may differ materially from those
expressed in these forward-looking statements. You should not
put undue reliance on any forward-looking statements.
The factors that could cause actual future results to differ
materially from current expectations include, but are not
limited to, our ability to obtain approval of the Companys
shareholders and the Bermuda Supreme Court for, and to satisfy
the other conditions to, the Reorganization on the expected
timeframe or at all, our ability to obtain waivers under
and/or
amendments to our credit facilities in connection with the
Reorganization, our ability to realize the expected benefits
from the Reorganization, the occurrence of difficulties in
connection with the Reorganization, any unanticipated costs in
connection with the Reorganization, political developments,
market and economic conditions, changes in raw material,
transportation and energy costs, industry competition, the
ability to execute and realize the expected benefits from
strategic initiatives including revenue growth plans and cost
control and productivity improvement programs, the magnitude of
any disruptions from manufacturing rationalizations, changes in
mix of products sold, mergers and acquisitions and their
integration into Cooper Industries, the timing and amount of any
share repurchases by Cooper Industries, changes in financial
markets including currency exchange rate fluctuations, changing
legislation and regulations including changes in tax law, tax
treaties or tax regulations, and the resolution of potential
liabilities and insurance recoveries resulting from on-going
Pneumo-Abex related asbestos claims.
The above factors are in addition to those factors discussed
under Risk Factors and Proposal Number
One: The Reorganization Background and Reasons for
the Reorganization and elsewhere in this proxy statement,
as well as those in the documents that we incorporate by
reference into this proxy statement (including, without
limitation, the Risk Factors section of our Annual
Report on
Form 10-K
for the year ended December 31, 2008 and our Quarterly
Report on
Form 10-Q
for the quarter ended March 31, 2009 and subsequent SEC
filings). There may be other risks and uncertainties that we are
unable to predict at this time or that we currently do not
expect to have a material adverse effect on our business. We
expressly disclaim any obligation to update these
forward-looking statements other than as required by law.
31
PROPOSAL NUMBER
ONE: THE REORGANIZATION
The Transaction will effectively change the place of
incorporation of the company whose shares the Class A
Public Shareholders own from Bermuda to Ireland.
As explained in more detail below, the Scheme of Arrangement on
which we are asking you to vote will effect the Transaction,
which is part of a broader Reorganization. The first step in
that Reorganization was the change of Cooper Industries,
Ltd.s tax residency from Bermuda to Ireland, which
occurred in December 2008.
The Transaction involves several steps. Cooper Industries, Ltd.,
the Bermuda company whose Class A common shares you
currently own, incorporated a new Irish company named Cooper
Industries plc as a direct subsidiary. On June 30, 2009, we
petitioned the Bermuda Supreme Court to order the calling of the
meeting of Cooper Industries, Ltd. Class A common
shareholders to approve the Scheme of Arrangement. On
July 2, 2009, the Bermuda Supreme Court ordered us to seek
your approval of the Scheme of Arrangement. We will hold the
special court-ordered meeting to approve the Scheme of
Arrangement on August 31, 2009. If we obtain the necessary
shareholder approval, the Bermuda Supreme Court will hold the
Sanction Hearing, which is scheduled to be held on
September 4, 2009, to sanction the Scheme of Arrangement.
Assuming we receive the necessary approvals from the
shareholders, sanctioning of the Bermuda Supreme Court and the
conditions to consummation of the Transaction are satisfied (and
we do not abandon the Transaction), we will file the court order
sanctioning the Scheme of Arrangement with the Bermuda Registrar
of Companies, at which time the Scheme of Arrangement will
become effective. Various steps of the Transaction will occur
effectively simultaneously at the Transaction Time, which we
anticipate will be after the close of trading on the NYSE on the
day the Scheme of Arrangement becomes effective, and before the
opening of trading on the NYSE on the next business day.
At the Transaction Time, the following steps will occur
effectively simultaneously:
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|
1.
|
all fractional Class A common shares of Cooper Industries,
Ltd. held of record by the Class A Public Shareholders, if
any, will be cancelled and Cooper Industries, Ltd. will pay to
each Class A Public Shareholder holding fractional shares
that have been cancelled an amount based on the average of the
high and low trading prices of Cooper Industries, Ltd.
Class A common shares on the NYSE on the business day
immediately preceding the effective date of the Scheme of
Arrangement;
|
|
|
2.
|
all previously outstanding whole Class A common shares of
Cooper Industries, Ltd. held by the Class A Public
Shareholders will be cancelled;
|
|
|
3.
|
Cooper Industries, Ltd. will issue to Cooper Industries plc a
number of Class A common shares that is equal to the number of
Cooper Industries plc ordinary shares that is issued by Cooper
Industries plc as described in paragraph 4 below;
|
|
|
4.
|
Cooper Industries plc will issue ordinary shares on a
one-for-one
basis to the Class A Public Shareholders holding
Class A common shares that have been cancelled; and
|
|
|
5.
|
all previously outstanding ordinary shares of Cooper Industries
plc, which prior to the Transaction Time will be held by Cooper
Industries, Ltd. and its nominees, will be acquired by Cooper
Industries plc and cancelled for no consideration, in accordance
with a resolution passed by Cooper Industries, Ltd. and such
nominees.
|
As a result of the Transaction, the Class A Public
Shareholders will become ordinary shareholders of Cooper
Industries plc and Cooper Industries, Ltd. will become a
subsidiary of Cooper Industries plc.
In connection with consummation of the Transaction:
|
|
|
|
|
Cooper Industries plc will assume Cooper Industries, Ltd.s
existing obligations in connection with awards granted under
Cooper Industries, Ltd.s equity incentive plans and other
similar employee awards;
|
|
|
|
Cooper Industries plc will enter into supplemental indentures to
the indentures governing the senior and medium term notes issued
by certain of Cooper Industries, Ltd.s subsidiaries,
pursuant to which Cooper
|
32
|
|
|
|
|
Industries plc will guarantee the obligations of those
subsidiaries under the indentures and supplemental indentures
governing the senior and medium term notes; and
|
|
|
|
|
|
We will seek waivers under
and/or
amendments to our credit facilities in order to avoid technical
defaults that would otherwise result from Cooper Industries,
Ltd. becoming a wholly owned subsidiary of Cooper Industries plc
in connection with the Transaction.
|
We refer to the foregoing transactions, together with the steps
of the Transaction and the change in Cooper Industries,
Ltd.s tax residency from Bermuda to Ireland that was
completed in December 2008, as the Reorganization.
As of July 13, 2009, there were 203,285,122 Class A
common shares of Cooper Industries, Ltd. issued, of which
166,765,446 were held by the Class A Public Shareholders
and 36,519,676 were held by wholly owned subsidiaries of Cooper
Industries, Ltd. These subsidiaries will not exchange their
Cooper Industries, Ltd. Class A common shares for Cooper
Industries plc ordinary shares in the Transaction. These
subsidiaries will continue to hold their Class A common
shares in Cooper Industries, Ltd. following the completion of
the Transaction.
There currently are no fractional shares held of record and we
do not expert there to be any such fractional shares held of
record immediately prior to the Transaction Time.
As of July 13, 2009, there were 105,420,258 Class B
common shares of Cooper Industries, Ltd. issued, the sole holder
of which is a wholly owned subsidiary of Cooper Industries, Ltd.
This subsidiary will not participate in the Scheme of
Arrangement and will not exchange its Cooper Industries, Ltd.
Class B common shares for Cooper Industries plc ordinary
shares in the Transaction. This subsidiary will continue to hold
its Class B common shares in Cooper Industries, Ltd.
following the completion of the Transaction.
The Class A common shares and Class B common shares
held by subsidiaries of Cooper Industries, Ltd. will not be
exchanged for Cooper Industries plc ordinary shares in the
Transaction in order to simplify the corporate structure of
Cooper Industries.
Background
and Reasons for the Reorganization
Cooper Industries, Ltd. is currently incorporated in Bermuda,
where it has been incorporated since May 22, 2001. In 2002,
Cooper Industries, Ltd., became the ultimate parent company of
the Cooper group of companies, following a reincorporation from
Ohio. We reincorporated in Bermuda to take advantage of
financial and other business opportunities that were not
available under our corporate structure at the time, including:
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Maximization of our potential business growth and cash flow, in
light of our expectation that in the future a greater portion of
our business would be generated from
non-U.S. markets;
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Improvement of our worldwide effective tax rate;
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Use of the greater cash flow to invest for further earnings
growth, including by developing higher growth product lines and
acquiring complementary higher growth electrical and electronic
businesses;
|
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Use of the greater cash flow to reduce the amount of our debt
and repurchase shares; and
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|
|
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Expansion of our investor base as our Companys shares
could become more attractive to
non-U.S. investors.
|
Bermuda, however, lacks a substantial network of commercial,
tax, and other treaties and established relationships with many
of the countries where Cooper Industries has major operations.
In addition, there continues to be negative publicity regarding,
and criticism of, companies that conduct substantial business in
the U.S. but are domiciled in countries that do not have
tax treaties with the U.S., like Bermuda. Also, legislative and
regulatory bodies in the U.S. and certain U.S. trading
partners have been actively considering proposals that would
impact multi-national companies incorporated in jurisdictions
such as Bermuda that do not have tax treaties with the U.S. or
certain U.S. trading partners. Further, proposals have from time
to time been made
and/or
legislation has been introduced to change the U.S. tax law
that, if enacted, could increase our tax burden if we remained
incorporated in Bermuda. For example, recent legislative
proposals would
33
broaden the circumstances under which we would be considered a
U.S. resident. Other legislative proposals could override
certain tax treaties and limit the treaty benefits on certain
payments by our U.S. subsidiaries to our
non-U.S. affiliates.
Consequently, following a thorough review, Cooper Industries
determined that moving its place of incorporation out of
Bermuda, in addition to the earlier move in tax residence, is
best for shareholders, employees and other stakeholders.
As a result of reaching this decision, Cooper Industries
reviewed a number of alternatives with its board of directors
and outside advisors, including incorporating in a number of
different jurisdictions. We determined that incorporating in the
United States would have negative financial consequences for
Cooper Industries and its shareholders by increasing our global
effective tax rate, resulting in potentially significant
declines in net income, earnings per share and cash flow. We
ultimately decided to incorporate and become tax resident in a
jurisdiction that is a member of both the European Union and the
OECD, given:
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Cooper Industries already substantial operations in
Europe, which experienced considerable growth in 2007 and 2008;
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The introduction of various OECD and European Union withholding
and other tax proposals that could adversely affect companies
incorporated in certain jurisdictions outside the OECD or the
European Union, respectively;
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Many of the favorable European Union tax directives and other
protections apply only to a company that is both incorporated
and tax resident in a European Union jurisdiction; and
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A company that is both incorporated and tax resident in a
European Union jurisdiction may improve its position with
respect to United States and other legislative and regulatory
proposals that may be adopted in the future.
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We selected Ireland after considering various factors, including
the following:
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Cooper Industries is already tax resident in Ireland.
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As we continue to grow internationally, we believe that moving
to Ireland will provide increased strategic flexibility and
operational benefits. Ireland is a beneficial location
considering Cooper Industries presence in markets outside
the United States. We already have sales and customer service
operations in Ireland and we have hired a country manager to
focus on growing our commercial presence in Ireland. Also,
Cooper generates a substantial portion of its revenues outside
the United States, in countries such as the United Kingdom,
France, Germany, Canada and Mexico and countries in the Middle
East and Southeast Asia. Cooper Industries also has operations
in India and China and has majority-owned joint ventures with
operations in China. Ireland is well-located with respect to
these markets.
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Ireland enjoys strong relationships as a member of the European
Union, and has a long history of international investment and a
good network of commercial, tax, and other treaties with the
United States, the European Union and many other countries
where Cooper Industries has major operations.
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Both Ireland and Bermuda are common law jurisdictions which we
consider to be less prescriptive than many civil law
jurisdictions. As a result, we believe Irelands legal
system to be more flexible, predictable and familiar to Cooper
Industries, and more familiar to its shareholders, than that of
a civil law system.
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Ireland is an English-speaking country, is a member of the euro
zone, and has a stable business, legal and regulatory
environment.
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Ireland permits the payment of dividends in U.S. dollars.
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34
We cannot assure you that the anticipated benefits of the
Reorganization will be realized. In addition to the potential
benefits described above, the Reorganization will expose you and
us to some risks. These risks include the following:
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The rights of Cooper Industries shareholders will change
due to differences between Bermuda and Irish law and between the
governing documents of Cooper Industries, Ltd. and Cooper
Industries plc;
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The market for Cooper Industries plc ordinary shares may differ
from the market for Cooper Industries, Ltd. Class A common
shares and Cooper Industries shares will likely be removed
from the S&P 500 and may be removed from other indices as a
result of the Transaction;
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Legislative and regulatory action in the U.S. could
materially and adversely affect us regardless of whether we
complete the Reorganization;
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The Reorganization may not allow us to maintain a competitive
worldwide effective tax rate and may result in additional costs
even if it is not completed;
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We cannot guarantee that material changes would not be made to
the financial or other terms of our credit facilities in
connection with obtaining the appropriate waivers
and/or
amendments to such facilities;
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We may choose to abandon or delay the Transaction;
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If the distributable reserves proposal is not approved, Cooper
Industries plc may not be able to pay dividends or repurchase
shares following the Transaction;
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Increased shareholder voting requirements in Ireland will reduce
our flexibility in some aspects of capital management;
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The transfer of Cooper Industries plc shares after the
Transaction may be subject to Irish stamp duty; and
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Following Cooper Industries change in tax residency in
December 2008, dividends received by shareholders may be subject
to Irish dividend withholding tax whether or not the Transaction
is completed.
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Please see the discussion under Risk Factors. Our
board of directors has considered both the potential advantages
of the Reorganization and these risks and has unanimously
approved the Scheme of Arrangement and recommended that the
shareholders vote for the Scheme of Arrangement.
Amendment,
Termination or Delay
Subject to U.S. securities law constraints, the Scheme of
Arrangement may be amended, modified or supplemented at any time
before or after its adoption by the Class A common
shareholders of Cooper Industries, Ltd. at the special
court-ordered meeting. However, after adoption, no amendment,
modification or supplement may be made or effected that legally
requires further approval by Cooper Industries, Ltd.
Class A common shareholders without obtaining that approval.
At the Sanction Hearing, the Bermuda Supreme Court may impose
such conditions as it deems appropriate in relation to the
Scheme of Arrangement but may not impose any material changes
without the joint consent of Cooper Industries, Ltd. and Cooper
Industries plc. Cooper Industries, Ltd. may, subject to
U.S. securities law constraints, consent to any
modification of the Scheme of Arrangement on behalf of the
Class A common shareholders which the Bermuda Supreme Court
may think fit to approve or impose.
The board of directors of Cooper Industries, Ltd. may terminate
the Scheme of Arrangement and abandon the Transaction, or delay
the Transaction, at any time prior to the effectiveness of the
Scheme of Arrangement without obtaining the approval of Cooper
Industries, Ltd. Class A common shareholders, even though
the Scheme of Arrangement may have been approved by our
Class A common shareholders and sanctioned by the Bermuda
Supreme Court and all other conditions to the Transaction may
have been satisfied, if the board of directors determines that
such course is in the best interests of Cooper Industries, Ltd.
35
Unless the Scheme of Arrangement has become effective on or
before March 31, 2010 or such later date, if any, as Cooper
Industries, Ltd. may agree and the Bermuda Supreme Court may
allow, the Scheme of Arrangement will lapse by its terms and not
come into effect.
Conditions
to Consummation of the Transaction
The Transaction will not be completed unless, among other
things, the following conditions are satisfied or, if allowed by
law, waived:
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the Scheme of Arrangement is approved by the requisite vote of
Class A common shareholders of Cooper Industries, Ltd.;
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the requisite court order sanctioning the Scheme of Arrangement
is obtained from the Bermuda Supreme Court;
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there is no threatened, pending or effective decree, order,
injunction or other legal restraint prohibiting the consummation
of the Transaction or related transactions;
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the Cooper Industries plc shares to be issued pursuant to the
Transaction are authorized for listing on the NYSE, subject to
official notice of issuance;
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all consents and governmental authorizations that are necessary,
desirable or appropriate in connection with the Transaction and
related transactions (including, without limitation, appropriate
waivers under
and/or
amendments to our five-year credit facility and our
364-day
credit facility) are obtained on terms acceptable to Cooper
Industries and are in full force and effect;
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Cooper Industries receives an opinion from Skadden, Arps, Slate,
Meagher & Flom LLP, in form and substance reasonably
satisfactory to it, confirming in general, as of the effective
date of the Scheme of Arrangement, that the discussion under
Material Tax Considerations U.S. Federal
Income Tax Considerations fairly summarizes such
considerations with respect to U.S. holders and
non-U.S. holders
(each as defined therein); and
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Cooper Industries receives an opinion from Arthur Cox,
Solicitors, in form and substance reasonably satisfactory to it,
confirming, as of the effective date of the Scheme of
Arrangement, the matters discussed under Material Tax
Considerations Irish Tax Considerations.
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Court
Sanction of the Scheme of Arrangement
Pursuant to Section 99 of the Bermuda Companies Act 1981
(the Bermuda Companies Act), the Scheme of
Arrangement must be sanctioned by the Supreme Court in Bermuda.
This requires Cooper Industries, Ltd. to file a petition (the
Petition) for the Scheme of Arrangement with the
Bermuda Supreme Court. Prior to the mailing of this proxy
statement, Cooper Industries, Ltd. obtained directions from the
Bermuda Supreme Court providing for the convening of a Cooper
Industries, Ltd. Class A common shareholders meeting and
other procedural matters regarding the meeting and the Bermuda
Supreme Court proceeding, including a date upon which the
Bermuda Supreme Court will hear the Petition. A copy of the
Bermuda Supreme Courts directions is attached as
Annex D to this proxy statement. Subject to Class A
common shareholders of Cooper Industries, Ltd. approving the
Scheme of Arrangement with the vote required by the Bermuda
Companies Act, a Sanction Hearing will be required to hear the
Petition and sanction the Scheme of Arrangement. At the Sanction
Hearing, the Bermuda Supreme Court may impose such conditions as
it deems appropriate in relation to the Scheme of Arrangement
but may not impose any material changes without the joint
consent of Cooper Industries, Ltd. and Cooper Industries plc.
Cooper Industries, Ltd. may, subject to U.S. securities law
constraints, consent to any modification of the Scheme of
Arrangement on behalf of the Class A common shareholders
which the Bermuda Supreme Court may think fit to approve or
impose. In determining whether to exercise its discretion and
sanction the Scheme of Arrangement, the Bermuda Supreme Court
will determine, among other things, whether the Scheme of
Arrangement is fair to Cooper Industries, Ltd.s
Class A common shareholders. We expect the Sanction Hearing
to be held on September 4, 2009 at 9:30 a.m., Bermuda
time, at the Bermuda Supreme Court in Hamilton, Bermuda. If you
are a Class A
36
common shareholder who wishes to appear in person or by counsel
at the Sanction Hearing and present evidence or arguments in
support of or opposition to the Scheme of Arrangement, you may
do so. In addition, the Bermuda Supreme Court has wide
discretion to hear from interested parties. Cooper Industries,
Ltd. will not object to the participation in the Sanction
Hearing by any beneficial holder of Class A common shares.
In accordance with its terms, the Scheme of Arrangement will
become effective as soon as a copy of the Order of the Bermuda
Supreme Court sanctioning the Scheme of Arrangement has been
delivered to the Registrar of Companies of Bermuda as required
by Section 99 of the Bermuda Companies Act. Please see
Proposal Number One: The Reorganization
Conditions to Consummation of the Transaction for more
information on the conditions to the Transaction.
The Scheme of Arrangement is attached as Annex A to this
proxy statement. At the special court-ordered meeting, Cooper
Industries, Ltd.s Class A common shareholders will be
asked to approve the Scheme of Arrangement. If the shareholders
approve the Scheme of Arrangement, then Cooper Industries, Ltd.
will apply for sanction of the Scheme of Arrangement at the
Sanction Hearing. We encourage all Class A common
shareholders to read the Scheme of Arrangement in its entirety
for a complete description of its terms and conditions.
Once the Scheme of Arrangement is effective, the Bermuda Supreme
Court will have exclusive jurisdiction to hear and determine any
suit, action or proceeding and to settle any dispute which
arises out of or is connected with the terms of the Scheme of
Arrangement or its implementation or out of any action taken or
omitted to be taken under the Scheme of Arrangement or in
connection with the administration of the Scheme of Arrangement.
A Class A common shareholder who wishes to enforce any
rights under the Scheme of Arrangement after such time must
notify Cooper Industries, Ltd. in writing of his or her
intention at least five business days prior to commencing a new
proceeding. After the effective date of the Scheme of
Arrangement, no shareholder may commence a proceeding against
Cooper Industries plc or Cooper Industries, Ltd. in respect of
or arising from the Scheme of Arrangement except to enforce its
rights under the Scheme of Arrangement where a party has failed
to perform its obligations under the Scheme of Arrangement.
When under any provision of the Scheme of Arrangement a matter
is to be determined by Cooper Industries, Ltd., then Cooper
Industries, Ltd. will have discretion to interpret those matters
under the Scheme of Arrangement in a manner that it considers
fair and reasonable, and its decisions will be binding on all
concerned.
Federal
Securities Law Consequences; Resale Restrictions
The issuance of Cooper Industries plc shares to Cooper
Industries, Ltd.s shareholders in connection with the
Transaction will not be registered under the Securities Act of
1933, as amended (the Securities Act). Section
3(a)(10) of the Securities Act exempts securities issued in
exchange for one or more outstanding securities from the general
requirement of registration where the terms and conditions of
the issuance and exchange of such securities have been approved
by any court of competent jurisdiction, after a hearing upon the
fairness of the terms and conditions of the issuance and
exchange at which all persons to whom such securities will be
issued have a right to appear and to whom adequate notice of the
hearing has been given. In determining whether it is appropriate
to sanction the Scheme of Arrangement, the Bermuda Supreme Court
will consider at the Sanction Hearing whether the terms and
conditions of the Scheme of Arrangement are fair to Cooper
Industries, Ltd.s Class A common shareholders. The
Bermuda Supreme Court has fixed the date and time for the
Sanction Hearing, which will be held at the Bermuda Supreme
Court in Hamilton, Bermuda, as September 4, 2009, at
9:30 a.m., Bermuda time. The Cooper Industries plc ordinary
shares issued to the Class A Public Shareholders in
connection with the Transaction will be freely transferable,
except for restrictions applicable to certain
affiliates of Cooper Industries, Ltd. under the
Securities Act, as follows:
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Persons who were not affiliates of Cooper Industries, Ltd. at
the Transaction Time and have not been affiliates within
90 days prior to such time will be permitted to sell any
Cooper Industries plc shares received in the Transaction without
regard to Rule 144 under the Securities Act.
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Persons who were affiliates of Cooper Industries, Ltd. at the
Transaction Time or were affiliates within 90 days prior to
such time will be permitted to resell any Cooper Industries plc
shares they receive pursuant to the Transaction in the manner
permitted by Rule 144. In computing the holding period of
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the Cooper Industries plc shares for the purposes of
Rule 144(d), such persons will be permitted to
tack the holding period of their Cooper Industries,
Ltd. shares held prior to the Transaction Time.
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Persons whose shares of Cooper Industries, Ltd. bear a legend
restricting transfer will receive shares of Cooper Industries
plc that are subject to the same restrictions.
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Persons who may be deemed to be affiliates of Cooper Industries,
Ltd. and Cooper Industries plc for these purposes generally
include individuals or entities that control, are controlled by,
or are under common control with, Cooper Industries, Ltd. and
Cooper Industries plc, and would not include shareholders who
are not executive officers, directors or significant
shareholders of Cooper Industries, Ltd. and Cooper Industries
plc.
We have not filed a registration statement with the SEC covering
any resales of the Cooper Industries plc shares to be received
by the Class A Public Shareholders in connection with the
Transaction. Cooper Industries plc will file certain
post-effective amendments to existing effective registration
statements of Cooper Industries, Ltd. concurrently with the
completion of the Transaction.
Upon consummation of the Transaction, the ordinary shares of
Cooper Industries plc will be deemed to be registered under
Section 12(b) of the Securities Exchange Act of 1934, as
amended (the Exchange Act), by virtue of
Rule 12g-3
under the Exchange Act, without the filing of any Exchange Act
registration statement.
Effective
Date and Transaction Time
If the Scheme of Arrangement is approved by the requisite
shareholder vote, is sanctioned by the Bermuda Supreme Court and
the other conditions to the consummation of the Transaction are
satisfied (and we do not abandon the Transaction), the Scheme of
Arrangement will become effective upon our filing of the court
order sanctioning the Scheme of Arrangement with the Bermuda
Registrar of Companies. Various steps of the Transaction will
occur effectively simultaneously at the Transaction Time, which
we anticipate will be after the close of trading on the NYSE on
the day the Scheme of Arrangement becomes effective, and before
the opening of trading on the NYSE on the next business day. The
expected timetable for the Transaction is set forth as
Annex E to this proxy statement.
In the event the conditions to the Transaction are not
satisfied, the Transaction may be abandoned or delayed, even
after approval by our Class A common shareholders and the
sanction of the Bermuda Supreme Court. In addition, the
Transaction may be abandoned or delayed by our board of
directors at any time prior to the Scheme of Arrangement
becoming effective, even though the Scheme of Arrangement may
have been adopted by our Class A common shareholders and
sanctioned by the Bermuda Supreme Court and all other conditions
to the Transaction may have been satisfied, if the board of
directors determines that such course is in the best interests
of Cooper Industries, Ltd. Please see Proposal Number
One: The Reorganization Amendment, Termination or
Delay.
Management
of Cooper Industries plc
When the Transaction is completed, the executive officers and
directors of Cooper Industries, Ltd. immediately prior to the
completion of the Transaction are expected to be the executive
officers and directors of Cooper Industries plc. Cooper
Industries plcs memorandum and articles of association, as
they will be in effect after the Transaction, provides that
directors will be divided into three classes, designated
Class I, Class II and Class III and that each
class will consist, as nearly as may be possible, of one-third
of the total number of directors constituting the entire board.
The initial division of the board into classes will be the same
as the classes for the current directors of Cooper Industries,
Ltd. The term of the initial Class I directors will
terminate on the date of the 2010 annual general meeting; the
term of the initial Class II directors will terminate on
the date of the 2011 annual general meeting; and the term of the
initial Class III directors will terminate on the date of
the 2012 annual general meeting. At each annual general meeting
of members beginning in 2010, successors to the class of
directors whose term expires at that annual general meeting will
be elected for a three-year term.
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Indemnification
Agreements
The directors and officers of Cooper Industries, Ltd. currently
have indemnification agreements with Cooper Industries, Ltd.,
and Cooper Industries, Ltd.s bye-laws currently provide
the directors and officers with certain indemnification and
expense advancement rights. In connection with the Transaction,
we expect that Cooper Industries, Ltd. and Cooper Industries plc
will enter into indemnification agreements (or deed poll
indemnities) with or with respect to each of Cooper Industries
plcs directors and its Secretary, providing for the
indemnification of, and advancement of expenses to, these
persons. We expect that the indemnification and expense
advancement rights provided under these indemnification
agreements (or deed poll indemnities) will be substantially
similar to those currently afforded under existing
indemnification agreements with Cooper Industries, Ltd., with
the primary differences being such modifications as may be
necessary to preserve such rights in light of the limitations on
the ability of an Irish company to indemnify its directors or
its secretary and to provide protections in respect of the
indemnitees service to Cooper Industries, Ltd. prior to
the Transaction. For information on the ability of an Irish
company to indemnify its directors or its secretary, please see
Comparison of Rights of Shareholders and Powers of the
Board of Directors Indemnification of Directors and
Officers; Insurance. In addition, in connection with the
Transaction, we expect that Cooper Industries plc will enter
into indemnification agreements with each of Cooper Industries
plcs officers (other than its directors and Secretary)
that will be substantially similar to existing indemnification
agreements with Cooper Industries, Ltd., with the primary
differences being such modifications as may be necessary to
provide protections in respect of the indemnitees service
to Cooper Industries, Ltd. prior to the Transaction.
Interests
of Certain Persons in the Reorganization
Except for the indemnification agreements described above, no
person who has been a director or executive officer of Cooper
Industries, Ltd. at any time since the beginning of the last
fiscal year, or any associate of any such person, has any
substantial interest in the Reorganization, except for any
interest arising from his or her ownership of securities of
Cooper Industries. No such person is receiving any extra or
special benefit not shared on a pro rata basis by all other
holders of shares of Cooper Industries, Ltd.
Required
Vote; Board Recommendation
The special court-ordered meeting will be conducted in
accordance with the directions of the Bermuda Supreme Court. The
presence, in person or by proxy, of the holders of a majority of
the Class A common shares outstanding and entitled to vote
at the meeting constitutes a quorum. Abstentions and broker
non-votes will be counted as present for purposes of determining
whether there is a quorum in respect of the proposals. Please
see The Special Court-Ordered Meeting Record
Date; Voting Rights; Vote Required for Approval. Assuming
the presence of a quorum at the meeting, in order for the Scheme
of Arrangement to be approved, it must receive the affirmative
vote of a majority in number of the record holders of the Cooper
Industries, Ltd. Class A common shares present and voting
on the proposal at the meeting, whether in person or by proxy,
representing 75% or more in value of the Class A common
shares present and voting on the proposal at the meeting,
whether in person or by proxy. In order for the distributable
reserves proposal to be approved, it must receive the
affirmative vote of holders of at least a majority of the Cooper
Industries, Ltd. Class A common shares present in person or
by proxy at the meeting and voting on the proposal.
The Cooper Industries, Ltd. board of directors unanimously
recommends that the Class A common shareholders vote
FOR the proposal to approve the Scheme of
Arrangement and FOR the distributable reserves
proposal.
Regulatory
Matters
We are not aware of any other governmental approvals or actions
that are required to complete the Transaction other than
compliance with U.S. federal and state securities laws and
Bermuda and Irish corporate law. We do not believe that any
significant regulatory approvals will be required to effect the
Transaction.
No
Appraisal Rights
Under Bermuda law, none of the Class A common shareholders
of Cooper Industries, Ltd. has any right to an appraisal of the
value of their shares or payment for them in connection with the
Transaction.
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No Action
Required to Cancel Cooper Industries, Ltd. Shares and Receive
Cooper Industries plc Shares
Assuming the Transaction becomes effective, the Cooper
Industries, Ltd. Class A common shares held by the
Class A Public Shareholders will be cancelled and Cooper
Industries plc ordinary shares will be issued without any action
on the part of the Class A Public Shareholders, regardless
of whether they currently hold Cooper Industries, Ltd. shares in
certificated form. All of Cooper Industries plcs ordinary
shares will be issued in uncertificated book-entry form.
Consequently, following the Transaction, the Cooper Industries,
Ltd. share certificates held by any Class A Public
Shareholders will cease to have effect as documents or evidence
of title. The transfer agent will make an electronic book-entry
in the names of the Class A Public Shareholders and will
mail them a statement evidencing their ownership of Cooper
Industries plc shares.
Dividend
Policy
Cooper Industries paid dividends of $1.00 per share on its
Class A common shares in fiscal year 2008. Please see
Market Price and Dividend Information. We expect
that we will continue to pay comparable dividends to holders of
our ordinary shares following the Transaction. The timing,
declaration and payment of future dividends to holders of our
ordinary shares after the Transaction, however, will fall within
the discretion of our board of directors and will depend upon
many factors, including the statutory requirements of Irish law,
our earnings and financial condition, the capital requirements
of our businesses, industry practice and any other factors the
board of directors deems relevant.
Under Irish law, dividends must be paid out of
distributable reserves, which Cooper Industries plc
will not have immediately following the Transaction Time but
which we are taking steps to create. Please see Risk
Factors, Description of Cooper Industries plc
Shares Dividends and
Proposal Number Two: Creation of Distributable
Reserves. We may delay the Transaction to minimize any
disruption to the timing of our quarterly dividend. Please see
Proposal Number One: The Reorganization
Amendment, Termination or Delay.
For a description of the Irish tax rules relating to dividends,
please see Material Tax Considerations Irish
Tax Considerations.
Share
Compensation Plans
If the Transaction is completed, Cooper Industries plc will
adopt and assume Cooper Industries, Ltd.s obligations
under equity incentive plans, and those plans will be amended as
necessary to give effect to the Transaction, including to
provide (1) that shares of Cooper Industries plc will be
issued, held, available or used to measure benefits as
appropriate under the plans, in lieu of shares of Cooper
Industries, Ltd., including upon exercise of any options or
share appreciation rights or upon vesting of restricted stock
units issued under those plans; and (2) for the appropriate
substitution of Cooper Industries plc for Cooper Industries,
Ltd. in those plans.
Stock
Exchange Listing
Cooper Industries, Ltd.s Class A common shares are
currently listed on the NYSE. There is currently no established
public trading market for the ordinary shares of Cooper
Industries plc. We intend to make application so that,
immediately following the Transaction Time, the ordinary shares
of Cooper Industries plc will be listed on the NYSE under the
symbol CBE, the same symbol under which the Cooper
Industries, Ltd. Class A common shares are currently
listed. We do not plan to be listed on the Irish Stock Exchange
at the present time.
Accounting
Treatment of the Transaction
Under U.S. GAAP, the Transaction represents a transaction
between entities under common control. Assets and liabilities
transferred between entities under common control are accounted
for at cost. Accordingly, the assets and liabilities of Cooper
Industries plc will be reflected at their carrying amounts in
the accounts of Cooper Industries, Ltd. at the Transaction Time.
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Guarantee
of Senior and Medium Term Notes
Upon completion of the Transaction, Cooper Industries plc will
enter into supplemental indentures to the indentures governing
the following senior and medium term notes issued by Cooper
Industries, LLC and Cooper US, Inc., subsidiaries of Cooper
Industries, Ltd.:
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Senior unsecured notes issued on October 28, 2002 by Cooper
Industries, LLC (as successor to Cooper Industries, Inc.) in an
amount equal to $275 million that mature on
November 1, 2009. The fixed rate notes have a stated
interest rate of 5.50% and are guaranteed by Cooper Industries,
Ltd. and certain of its subsidiaries. The notes have an
effective annual cost of 5.71%;
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Medium term notes issued on September 25, 1995 by Cooper
Industries, LLC (as successor to Cooper Industries, Inc.) in an
amount equal to $2.3 million with maturities through 2010.
The fixed rate notes have a stated interest rate of 6.91% and
are guaranteed by Cooper Industries, Ltd.;
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Senior unsecured notes issued on November 8, 2005 by Cooper
US, Inc. in an amount equal to $325 million that mature on
November 15, 2012. Payment of the notes is guaranteed by
Cooper Industries, Ltd. and certain of its subsidiaries.
Proceeds of the notes were swapped with cross-currency
interest-rate swaps to 272.6 million, effectively
converting the seven-year U.S. notes to seven-year Euro
notes with an annual interest rate of 3.55%;
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Senior unsecured notes issued on June 18, 2007 by Cooper
US, Inc. in an amount equal to $300 million due in 2017.
The fixed rate notes have a stated interest rate of 6.10% and
are guaranteed by Cooper Industries, Ltd. and certain of its
principal operating subsidiaries. Combined with interest rate
hedges, the 6.10% notes have an effective annual cost of
5.75%; and
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Senior unsecured notes issued on March 27, 2008 by Cooper
US, Inc. in an amount equal to $300 million due in 2015.
The fixed rate notes have a stated interest rate of 5.45% and
are guaranteed by Cooper Industries, Ltd. and certain of its
principal operating subsidiaries. The notes have an effective
annual cost of 5.56%.
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The supplemental indentures will provide that Cooper Industries
plc will guarantee the obligations of issuers of the applicable
notes under the applicable indentures. Cooper Industries, Ltd.
might not, however, be released from any of its obligations in
respect of the senior and medium term notes.
Credit
Facilities
We will seek waivers under
and/or
amendments to our five-year credit facility and our
364-day
credit facility in order to avoid a technical default that would
otherwise result under each facility from Cooper Industries,
Ltd. becoming a wholly owned subsidiary of Cooper Industries plc
in connection with the Transaction. One of the conditions to
consummation of the Transaction is that we obtain the
appropriate waivers
and/or
amendments on terms acceptable to us, although we may waive this
condition. Please see Proposal Number One: The
Reorganization Conditions to Consummation of the
Transaction. Although we expect that no material change
would be made to the financial or other terms of the credit
facilities in connection with obtaining the appropriate waivers
and/or
amendments, we cannot guarantee that there would not be any such
material change. In addition, although we expect that the
Transaction will not materially impact our ability to replace
our existing five-year credit facility that expires in November
2009, we cannot guarantee that that there would not be any such
material change. Please see Risk Factors. We also
expect that, if the Transaction is consummated, the credit
facilities would be amended to add Cooper Industries plc as a
guarantor of the obligations under the five-year credit facility
and the
364-day
credit facility.
Effect of
the Reorganization on Potential Future Status as a Foreign
Private Issuer
Upon completion of the Reorganization, we will remain subject to
SEC reporting requirements, the mandates of the Sarbanes-Oxley
Act and the corporate governance rules of the NYSE, and we will
continue to report our consolidated financial results in
U.S. dollars and in accordance with U.S. GAAP.
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Cooper Industries, Ltd. currently is not a foreign private
issuer within the meaning of the rules promulgated under
the Exchange Act, and we do not currently believe that Cooper
Industries plc will qualify as a foreign private
issuer upon completion of the Reorganization. The
definition of a foreign private issuer has two
parts one based on a companys percentage of
U.S. resident shareholders and the other on its business
contacts with the U.S. An organization incorporated under
the laws of a foreign country qualifies as a foreign private
issuer unless both parts of the definition are satisfied as of
the last business day of its most recently completed second
fiscal quarter. Cooper Industries, Ltd. currently satisfies the
shareholder test because more than 50% of our outstanding voting
securities are held by U.S. residents, and we currently
expect that Cooper Industries plc will meet the shareholder test
upon the completion of the Reorganization. The business contacts
test requires that any of the following be true with respect to
the organization incorporated under the laws of a foreign
country: (A) the majority of its executive officers or
directors are U.S. citizens or residents, (B) more
than 50% of its assets are located in the United States, or
(C) its business is administered principally in the United
States. Cooper Industries, Ltd. currently meets the business
contacts test, and we currently expect that Cooper Industries
plc will meet the business contacts test upon the completion of
the Reorganization. However, Cooper Industries plc may fail to
satisfy the shareholder test
and/or the
business contacts test at some time in the future and, as a
result, qualify for status as a foreign private issuer. If that
occurs, Cooper Industries plc would be exempt from certain
requirements applicable to U.S. public companies, including:
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the rules requiring the filing of Quarterly Reports on
Form 10-Q
and Current Reports on
Form 8-K
with the SEC;
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the SECs rules regulating proxy solicitations;
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the provisions of Regulation FD;
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the filing of reports of beneficial ownership under
Section 16 of the Exchange Act (although beneficial
ownership reports may be required under Section 13 of the
Exchange Act); and
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short-swing trading liability imposed on insiders
who purchase and sell securities within a six-month period.
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In addition, Cooper Industries plc would then be allowed to:
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file annual reports within six months after the end of a fiscal
year, and within four months after the end of a fiscal year
beginning with fiscal years ending on or after December 15,
2011;
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include more limited compensation disclosure in its filings with
the SEC;
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apply accounting principles other than U.S. GAAP to its
financial statements, although reconciliation to U.S. GAAP
would be required if IFRS is not used; and
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choose which reporting currency to use in presenting its
financial statements.
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42
PROPOSAL NUMBER
TWO: CREATION OF DISTRIBUTABLE RESERVES
Under Irish law, Cooper Industries plc requires
distributable reserves in its unconsolidated balance
sheet prepared in accordance with the Irish Companies Acts to
enable it to make distributions (including the payment of cash
dividends) to its shareholders, or generally to buy back shares.
Please see Description of Cooper Industries plc
Shares Dividends and Description of
Cooper Industries plc Shares Share Repurchases and
Redemptions. Immediately following implementation of the
Transaction, the unconsolidated balance sheet of Cooper
Industries plc will not contain any distributable reserves, and
shareholders equity in such balance sheet will
be comprised entirely of share capital (equal to the
aggregate par value of the Cooper Industries plc shares issued
in the Transaction) and share premium (resulting
from the issuance of Cooper Industries plc shares in the
Transaction and equal to (a) the aggregate market value of
the Cooper Industries, Ltd. shares as of the close of trading on
the NYSE on the day the Scheme of Arrangement becomes effective,
less (b) the share capital). The current shareholders of
Cooper Industries plc (which are Cooper Industries, Ltd. and its
nominees) have unanimously passed a resolution that would create
distributable reserves following the Transaction by converting
to distributable reserves all of the share premium of Cooper
Industries plc, less the total outstanding financial
indebtedness of Cooper Industries, Ltd. and its subsidiaries as
of immediately prior to the Transaction Time. Based upon the
closing sale price of Cooper Industries, Ltd.s
Class A common shares and the outstanding financial
indebtedness of Cooper Industries, Ltd. and its subsidiaries as
of July 13, 2009, if the Transaction Time were to occur
after the close of trading on that date, distributable reserves
of Cooper Industries plc created in this manner would be
approximately 3.7 billion.
If the Scheme of Arrangement is approved, and in connection with
the Scheme of Arrangement and the Reorganization, Class A
common shareholders of Cooper Industries, Ltd. also will be
asked at the special court-ordered meeting to approve the
reduction of the share premium of Cooper Industries plc to allow
the creation of distributable reserves that was previously
unanimously approved by Cooper Industries, Ltd. and the other
current shareholders of Cooper Industries plc. If the
Class A common shareholders of Cooper Industries, Ltd.
approve the reduction of the share premium of Cooper Industries
plc to allow the creation of distributable reserves and the
Transaction is completed, we will seek to obtain the approval of
the Irish High Court, which is required for the creation of
distributable reserves to be effective, as soon as practicable
following implementation of the Transaction. The approval of the
High Court is expected to be obtained within six weeks after the
consummation of the Transaction.
The approval of the distributable reserves proposal is not a
condition to the consummation of the Transaction. Accordingly,
if the Class A common shareholders of Cooper Industries,
Ltd. approve the Scheme of Arrangement but do not approve the
distributable reserves proposal, and the Transaction is
consummated, Cooper Industries plc may not have sufficient
distributable reserves to pay dividends (or to repurchase
shares) following the Transaction. In addition, although we are
not aware of any reason why the High Court would not approve the
creation of distributable reserves, there is no guarantee that
such approval will be forthcoming. Please see Risk
Factors.
43
MATERIAL
TAX CONSIDERATIONS
The information presented under the caption
U.S. Federal Income Tax Considerations below is
a discussion of the anticipated material U.S. federal
income tax consequences to U.S. holders and
non-U.S. holders
(as defined below) of the Transaction and of investing in the
Cooper Industries plc shares received in the Transaction. The
information presented under the caption Irish Tax
Considerations is a discussion of the anticipated material
Irish tax consequences of the Transaction for Class A
Public Shareholders and of investing in the Cooper Industries
plc shares. The information presented under the caption
Bermuda Tax Considerations is a discussion of the
anticipated material Bermuda tax consequences of the Transaction.
You should consult your tax advisor regarding the applicable tax
consequences to you of the Transaction and investing in the
Cooper Industries plc shares under the laws of the United States
(federal, state and local), Ireland, Bermuda and any other
applicable foreign jurisdiction.
The discussion set forth below does not discuss any U.S., Irish
or Bermuda tax consequences to the subsidiaries of Cooper
Industries, Ltd. that hold Cooper Industries, Ltd. Class A
common shares.
U.S.
Federal Income Tax Considerations
Scope
of Discussion
This discussion generally does not address any aspects of
U.S. taxation other than U.S. federal income taxation,
is not a complete analysis or description of all potential tax
consequences of the Transaction or of holding or disposing of
Cooper Industries plc shares, and does not address all tax
considerations that may be relevant to Class A Public
Shareholders. Special rules that are not discussed in the
general descriptions below also may apply to Class A Public
Shareholders, based on their particular circumstances. In
particular, this discussion addresses only tax consequences to
holders that hold their Cooper Industries, Ltd. Class A
common shares, and that will hold their Cooper Industries plc
ordinary shares after the Transaction, as capital assets for
U.S. federal income tax purposes. This discussion does not
address all of the U.S. federal income tax consequences
that may be relevant to holders in light of their particular
circumstances or to holders who may be subject to special
treatment under U.S. federal income tax laws, such as:
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a bank or other financial institution;
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a tax-exempt entity;
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an insurance company;
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a person holding shares as part of a straddle, hedge, integrated
transaction, or covered transaction;
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a person who has been, but is no longer, a citizen or resident
of the United States;
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a person holding shares through a partnership or other
pass-through entity;
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a person who is liable for alternative minimum tax;
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a broker-dealer or trader in securities, commodities or
currencies;
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a grantor trust;
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a U.S. holder whose functional currency is not the
U.S. dollar;
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a regulated investment company;
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a real estate investment trust;
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a holder who received the Cooper Industries, Ltd. Class A
common shares through the exercise of employee stock options or
otherwise as compensation; or
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a holder of Cooper Industries plc shares who, immediately after
the Transaction, actually or constructively owns 10% or more of
the total combined voting power of all classes of shares
entitled to vote of Cooper Industries plc.
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44
This discussion is based on the Internal Revenue Code of 1986,
as amended, which we refer to in this discussion as the
Code, Treasury Regulations promulgated under the
Code, court decisions, published opinions and administrative
pronouncements of the Internal Revenue Service and other
applicable authorities, and income tax treaties to which the
United States is a party, all as in effect and available on the
date of this proxy statement and all of which are subject to
change or differing interpretations, possibly with retroactive
effect. The discussion assumes that neither Cooper Industries,
Ltd. nor Cooper Industries plc is currently, or was in the years
preceding the Transaction, a passive foreign investment
company under the Code (a PFIC). No ruling has
been requested from the Internal Revenue Service as to the
U.S. federal income tax consequences of the Transaction,
post-Transaction ownership and disposition of Cooper Industries
plc shares or any other matter. There can be no assurance that
the Internal Revenue Service would not challenge any of the
U.S. federal income tax consequences described below and
that a court would not uphold such challenge.
As used in this discussion, a U.S. holder is a
beneficial owner of Cooper Industries, Ltd. Class A common
shares (or record owner that does not hold such shares on behalf
of another person), or, after the completion of the Transaction,
Cooper Industries plc shares, that is:
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a citizen or individual resident of the United States;
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a corporation or other entity treated as a corporation for
U.S. federal income tax purposes that is created or
organized under U.S. federal or state law;
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an estate whose worldwide income is subject to U.S. federal
income tax; or
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a trust if a court within the United States is able to exercise
primary supervision over the administration of the trust and one
or more U.S. persons have the authority to control all
substantial decisions of the trust.
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A
non-U.S. holder
is any beneficial owner of Cooper Industries, Ltd. Class A
common shares (or record owner that does not hold such shares on
behalf of another person), or after the completion of the
Transaction, Cooper Industries plc shares, that is not a
partnership for U.S. federal income tax purposes and is not
a U.S. holder. For purposes of this summary,
holder or shareholder means either a
U.S. holder or a
non-U.S. holder
or both, as the context may require.
If a partnership (including any entity or arrangement treated as
a partnership for U.S. federal income tax purposes) is a
beneficial owner of Cooper Industries, Ltd. Class A common
or Cooper Industries plc shares (or record owner that does not
hold such shares on behalf of another person), the tax treatment
of a partner in that partnership will generally depend on the
status of the partner and the activities of the partnership.
Holders of Cooper Industries, Ltd. Class A common or Cooper
Industries plc shares that are partnerships and partners in
these partnerships are urged to consult their tax advisors
regarding the U.S. federal income tax consequences to them
of the Transaction.
THIS SUMMARY IS NOT A SUBSTITUTE FOR AN INDIVIDUAL ANALYSIS OF
THE TAX CONSEQUENCES OF THE TRANSACTION TO YOU. WE URGE YOU TO
CONSULT A TAX ADVISOR REGARDING THE PARTICULAR FEDERAL, STATE,
LOCAL AND FOREIGN TAX CONSEQUENCES OF THE TRANSACTION IN LIGHT
OF YOUR OWN SITUATION.
Material
Tax Consequences to U.S. Holders
The
Transaction
The receipt by Cooper Industries, Ltd. shareholders of Cooper
Industries plc shares following the cancellation of their Cooper
Industries, Ltd. Class A common shares generally will
constitute a tax-free exchange for U.S. federal income tax
purposes. The discussion below describes the general
consequences to U.S. holders and
non-U.S. holders
of the Transaction qualifying as such.
U.S. Holders Owning Less Than Five Percent of Cooper
Industries plc. Under Section 367(a) of
the Code and the Treasury Regulations thereunder,
U.S. holders who own (applying ownership attribution rules)
less than five percent of the shares of Cooper Industries plc
immediately after the Transaction will not
45
recognize gain or loss in the Transaction, except with respect
to any cash received in lieu of fractional shares. The tax basis
of the Cooper Industries plc shares received by
U.S. holders in the Transaction will be equal to the tax
basis of their Cooper Industries, Ltd. Class A common
shares held prior to the Transaction, decreased by the amount of
any tax basis allocable to any fractional shares for which cash
is received. The holding period of the Cooper Industries plc
shares received by U.S. holders will include the period
those holders held their Cooper Industries, Ltd. Class A common
shares. U.S. holders who hold their Cooper Industries, Ltd.
Class A common shares with differing tax bases or holding
periods are urged to consult their tax advisors with regard to
identifying the tax bases and holding periods of the particular
Cooper Industries plc shares received in the Transaction.
U.S. Holders Owning Five Percent or More of Cooper
Industries plc. Under Section 367(a) of
the Code and the Treasury Regulations thereunder,
U.S. holders who own (applying ownership attribution rules)
five percent or more of the shares of Cooper Industries plc
immediately after the Transaction generally will be required to
file and maintain with the IRS a gain recognition
agreement and related materials, which we refer to as a
GRA, in order to defer gain realized in the
Transaction. Provided such holders timely file and maintain a
GRA, (1) such holders will not recognize gain or loss in
the Transaction, except with respect to any cash received in
lieu of fractional shares, (2) the tax basis of the Cooper
Industries plc shares received by such holders in the
Transaction will be equal to the tax basis of their Cooper
Industries, Ltd. Class A common shares held prior to the
Transaction, decreased by the amount of any tax basis allocable
to any fractional shares for which cash is received and
(3) the holding period of the Cooper Industries plc shares
received by recognize a loss in the Transaction. Five percent or
greater U.S. holders should consult their own tax advisor
to determine whether and when to file a GRA and the tax
implications thereof.
Cash Received In Lieu of Fractional
Shares. A U.S. holder who receives cash
in lieu of fractional shares of Cooper Industries plc shares
should generally recognize capital gain or loss in an amount
equal to the difference between the amount of cash received and
the portion of the holders tax basis in the Cooper
Industries, Ltd. Class A common shares that was allocable
to the fractional share. The capital gain or loss will be
long-term capital gain or loss if the holding period for the
fractional share is more than one year as of the date of the
Transaction.
Tax
Consequences of Owning Cooper Industries plc Shares Received in
the Transaction
Receiving Distributions on Cooper Industries plc
Shares. U.S. holders will be required to
include in income the gross amount of any distribution received
on the Cooper Industries plc shares to the extent that the
distribution is paid out of Cooper Industries plcs current
or accumulated earnings and profits as determined for
U.S. federal income tax purposes, which we refer to as a
dividend. With respect to non-corporate U.S. holders,
certain dividends received in taxable years beginning before
January 1, 2011 from a qualified foreign corporation will
be subject to U.S. federal income tax at a maximum rate of
15%. As long as the Cooper Industries plc shares are listed on
the New York Stock Exchange (or certain other stock exchanges)
and/or
Cooper Industries plc qualifies for benefits under the
Ireland-U.S. Tax Treaty, Cooper Industries plc will be
treated as a qualified foreign corporation for this purpose.
This reduced rate will not be available in all situations,
including if Cooper Industries were a PFIC in the taxable year
of the dividend payment or the prior taxable year, and
U.S. holders should consult their tax advisors regarding
the application of the relevant rules to their particular
circumstances. Dividends from Cooper Industries plc will not be
eligible for the dividends-received deduction, which is
generally allowed to U.S. corporate shareholders on
dividends received from certain domestic and foreign
corporations.
Distributions in excess of the current and accumulated earnings
and profits of Cooper Industries plc will be applied first to
reduce the U.S. holders tax basis in its Cooper
Industries plc shares, and thereafter will constitute gain from
the sale or exchange of such shares, which will be taxed in the
manner described below under
Dispositions
of Cooper Industries plc Shares.
Dispositions of Cooper Industries plc
Shares. U.S. holders of Cooper
Industries plc shares generally should recognize capital gain or
loss for U.S. federal income tax purposes on the sale,
exchange or other taxable disposition of Cooper Industries plc
shares in an amount equal to the difference between the amount
46
realized from such sale, exchange or other taxable disposition
and the U.S. holders tax basis in such shares. In the
case of a non-corporate U.S. holder, capital gains are
subject to reduced rates of tax if the holders holding
period for such Cooper Industries plc shares exceeds twelve
months. The deductibility of capital losses is subject to
limitations.
Treatment
of Certain Irish Taxes
Any stamp duty or Irish capital acquisitions tax imposed on a
U.S. holder as described below under the heading
Irish Tax Considerations will not be
creditable against U.S. federal income taxes, although a
U.S. holder may be entitled to deduct such taxes, subject
to applicable limitations under the Code. U.S. holders
should consult an independent tax advisor regarding the tax
treatment of these Irish taxes.
Material
Tax Consequences to
Non-U.S.
Holders
The
Transaction
In general, the receipt of Cooper Industries plc shares by
non-U.S. holders
following the cancellation of their Cooper Industries, Ltd.
Class A common shares will not be subject to U.S. federal
income or withholding tax on any realized gain with respect to
the Transaction.
Tax
Consequences of Owning Cooper Industries plc Shares Received in
the Transaction
Non-U.S. holders
of Cooper Industries plc shares generally will not be subject to
U.S. federal income or withholding tax on dividend income
from Cooper Industries plc and will not be subject to
U.S. federal income or withholding tax on any gain
recognized on a subsequent disposition of Cooper Industries plc
shares, unless:
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such gain or dividend income is effectively connected with the
conduct by the holder of a trade or business within the United
States or, if a treaty applies, is attributable to a permanent
establishment or fixed place of business maintained by such
holder in the United States; or
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in the case of capital gain of a holder who is an individual,
such holder is present in the United States for 183 days or
more during the taxable year in which the capital gain is
recognized and certain other conditions are met.
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Information
Reporting and Backup Withholding
U.S. holders that own at least five percent of Cooper
Industries plc immediately after the Transaction will be
required to file certain reporting statements.
Dividends on Cooper Industries plc shares paid within the United
States or through certain
U.S.-related
financial intermediaries are subject to information reporting
and may be subject to backup withholding (currently at a 28%
rate) unless the holder (1) is a corporation or other
exempt recipient or (2) provides a taxpayer identification
number and satisfies certain certification requirements.
Information reporting requirements and backup withholding may
also apply to the cash proceeds of a sale of the Cooper
Industries plc shares.
In addition to being subject to backup withholding, if a
U.S. holder of Cooper Industries plc shares does not
provide us (or our transfer agent) with the holders
correct taxpayer identification number or other required
information, the holder may be subject to penalties imposed by
the Internal Revenue Service. Any amounts withheld under the
backup withholding rules may be allowed as a refund or a credit
against the holders U.S. federal income tax liability.
In order not to be subject to backup withholding tax on a
subsequent disposition of Cooper Industries plc shares, or
dividends paid on those shares, a
non-U.S. holder
may be required to provide a taxpayer identification number,
certify the holders foreign status or otherwise establish
an exemption.
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Irish Tax
Considerations
Scope
of Discussion
The following is a general summary of the main Irish tax
considerations applicable to certain investors who are the
beneficial owners of Cooper Industries, Ltd. Class A common
shares and who receive Cooper Industries plc shares in the
Transaction. It is based on existing Irish law and practices in
effect on the date of this proxy statement and on discussions
and correspondence with the Irish Revenue Commissioners.
Legislative, administrative or judicial changes may modify the
tax consequences described below.
The statements do not constitute tax advice and are intended
only as a general guide. Furthermore, this information applies
only to Cooper Industries, Ltd. Class A common shares and
Cooper Industries plc shares held as capital assets and does not
apply to all categories of shareholders, such as dealers in
securities, trustees, insurance companies, collective investment
schemes and shareholders who have, or who are deemed to have,
acquired their Cooper Industries plc shares by virtue of an
office or employment. This summary is not exhaustive and
shareholders should consult their own tax advisors as to the tax
consequences in Ireland, or other relevant jurisdictions of the
Transaction, including the acquisition, ownership and
disposition of the Cooper Industries plc shares.
Irish
Tax on Chargeable Gains
Neither the receipt by Class A Public Shareholders of
Cooper Industries plc shares as consideration for the
cancellation of their Cooper Industries, Ltd. shares in the
Transaction nor the receipt of cash by Class A Public
Shareholders in lieu of fractional shares in the Transaction
will give rise to a liability to Irish tax on chargeable gains
for persons that are not resident or ordinarily resident in
Ireland for Irish tax purposes and do not hold such shares in
connection with a trade or business carried on by such holder in
Ireland through a branch or agency.
The issuance, pursuant to the Transaction, of Cooper Industries
plc shares to Class A Public Shareholders who are resident
or ordinarily resident for tax purposes in Ireland, or who hold
their shares in connection with a trade or business carried on
by such holder in Ireland through a branch or agency, should be
treated as falling within the relief for a reorganization for
the purposes of taxation of chargeable gains. Accordingly, the
Cooper Industries plc shares issued to Class A Public
Shareholders in accordance with their entitlements as
Class A Public Shareholders should be treated as the same
asset and as acquired at the same time as the Cooper Industries,
Ltd. Class A common shares. The receipt of cash in lieu of
fractional shares may trigger a liability to Irish tax on
chargeable gains for such shareholders. Shareholders should
consult their own tax advisor if they believe they may be
subject to Irish tax.
Withholding
Tax on Dividends
Distributions made by Cooper Industries are generally subject to
dividend withholding tax (DWT) at the standard rate
of income tax (currently 20 percent) unless one of the
exemptions described below applies, which we believe will be the
case for the majority of shareholders. DWT (if any) arises in
respect of dividends paid after Cooper Industries
establishment of tax residency in Ireland, which occurred in
December 2008. For DWT purposes, a dividend includes any
distribution made by Cooper Industries to its shareholders,
including cash dividends, non-cash dividends and additional
stock or units taken in lieu of a cash dividend. Cooper
Industries is responsible for withholding DWT at source and
forwarding the relevant payment to the Irish Revenue
Commissioners.
When we refer in this discussion of withholding tax to shares
held beneficially through brokers, we
are specifically referring to shares held beneficially through
brokers who in turn hold those shares through DTC. Shareholders
who hold shares beneficially through brokers who do not hold
those shares through DTC should consult their own tax advisors.
When we refer in this discussion of withholding tax to
Cooper Industries shareholders or
shareholders or the like, we are referring to the
Class A Public Shareholders prior to the Transaction and
the shareholders of Cooper Industries plc following the
Transaction, as applicable.
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Certain shareholders (both individual and corporate) are
entitled to an exemption from DWT. In particular, a non-Irish
resident shareholder is not subject to DWT on dividends received
from Cooper Industries if the shareholder is:
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an individual shareholder resident for tax purposes in a
relevant territory, and the individual is neither
resident nor ordinarily resident in Ireland;
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a corporate shareholder that is not resident for tax purposes in
Ireland and which is ultimately controlled, directly or
indirectly, by persons resident in a relevant
territory;
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a corporate shareholder resident for tax purposes in a
relevant territory provided that the corporate
shareholder is not under the control, whether directly or
indirectly, of a person or persons who is or are resident in
Ireland;
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a corporate shareholder that is not resident for tax purposes in
Ireland and whose principal class of shares (or those of its
75 percent parent) is substantially and regularly traded on
a recognized stock exchange either in a relevant
territory or on such other stock exchange approved by the
Irish Minister for Finance; or
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a corporate shareholder that is not resident for tax purposes in
Ireland and is wholly owned, directly or indirectly, by two or
more companies where the principal class of shares of each of
such companies is substantially and regularly traded on a
recognized stock exchange in a relevant territory or
on such other stock exchange approved by the Irish Minister for
Finance,
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and provided that, in all cases noted above but subject to the
matters described below, the shareholder has provided the
appropriate forms to his or her broker at least 7 business days
(and the relevant information is further transmitted to Cooper
Industries qualifying intermediary) before the record date
for the dividend (in the case of shares held beneficially), or
to Cooper Industries transfer agent at least 7 business
days before such record date (in the case of shares held
directly).
Cooper Industries has an agreement in place with The Bank of New
York Mellon (BNYM) (which is recognized by the Irish
Revenue Commissioners as a qualifying intermediary)
which satisfies one of the Irish requirements for dividends to
be paid free of DWT to certain shareholders who hold their
shares through DTC, as described below. The agreement generally
provides for certain arrangements relating to cash distributions
in respect of those shares of Cooper Industries (the
Deposited Securities) that are held through DTC. The
agreement provides that the qualifying intermediary shall
distribute or otherwise make available to Cede & Co.,
as nominee for DTC, any cash dividend or other cash distribution
with respect to the Deposited Securities, after Cooper
Industries delivers or causes to be delivered to the qualifying
intermediary the cash to be distributed.
Cooper Industries will rely on information received directly or
indirectly from brokers and its transfer agent in determining
where shareholders reside, whether they have provided the
required U.S. tax information and whether they have
provided the required Irish dividend withholding tax forms, as
described below. Shareholders who are required to file Irish
forms in order to receive their dividends free of DWT should
note that such forms are valid for five years and new forms must
be filed before the expiration of that period in order to
continue to enable them to receive dividends without DWT. Links
to the various Irish Revenue forms are available at
http://www.revenue.ie/en/tax/dwt/forms/index.html.
For a list of relevant territories as defined for
the purposes of DWT, please see Annex C to this proxy
statement.
Shares
Held by U.S. Resident Shareholders
Dividends paid on Cooper Industries shares that are owned by
residents of the U.S. and held beneficially will not be
subject to DWT provided that the address of the beneficial owner
of the shares in the records of the broker is in the
U.S. Cooper Industries strongly recommends that such
shareholders ensure that their information has been properly
recorded by their brokers (so that such brokers can further
transmit the relevant information to Cooper Industries
qualifying intermediary).
49
Dividends paid on Cooper Industries shares that are owned by
residents of the U.S. and held directly will not be subject
to DWT provided that the shareholder has provided a valid
Form W-9
showing a U.S. address or a valid U.S. taxpayer
identification number to Cooper Industries transfer agent.
Cooper Industries strongly recommends that shareholders who are
residents of the U.S. and hold shares directly ensure that
an appropriate
Form W-9
or taxpayer identification number has been provided to Cooper
Industries transfer agent. If you currently have amounts
withheld from your dividend payments, we recommend that you
contact our transfer agent to confirm whether a validly executed
Form W-9
is on file.
If any shareholder who is resident in the U.S. receives a
dividend subject to DWT, he or she should generally be able to
make an application for a refund from the Irish Revenue
Commissioners on the prescribed form.
Shares
Held by Residents of Relevant Territories Other Than
the U.S.
Shareholders who are residents of relevant
territories other than the U.S. who held any Cooper
Industries shares on January 1, 2009, generally will
receive dividends in 2009 without any DWT. For shares held
beneficially, dividends will be paid in 2009 without any DWT if
the address of the relevant shareholder in his or her
brokers records is in a relevant territory
other than the U.S. Cooper Industries strongly recommends
that such shareholders ensure that their information has been
properly recorded by their brokers (so that such brokers can
further transmit the relevant information to Cooper
Industries qualifying intermediary). For shares held
directly, dividends will be paid in 2009 without any DWT if the
shareholder has provided a valid U.S. tax form showing an
address in a relevant territory other than the
U.S. to Cooper Industries transfer agent. Cooper
Industries strongly recommends that such shareholders ensure
that the appropriate tax form has been provided to Cooper
Industries transfer agent.
Shareholders who are residents of relevant
territories other than the U.S. who acquire all their
Cooper Industries shares after January 1, 2009, must
complete the appropriate Irish dividend withholding tax forms in
order to receive their dividends without DWT. Such shareholders
must provide the appropriate Irish dividend withholding tax
forms to their brokers at least 7 business days (so that such
brokers can further transmit the relevant information to Cooper
Industries qualifying intermediary) before the record date
for the first dividend payment to which they are entitled (in
the case of shares held beneficially), or to Cooper
Industries transfer agent at least 7 business days before
such record date (in the case of shares held directly). Cooper
Industries strongly recommends that such shareholders complete
the appropriate Irish forms and provide them to their brokers or
Cooper Industries transfer agent, as the case may be, as
soon as possible after acquiring their shares.
In addition, all shareholders who are residents of
relevant territories other than the
U.S. (regardless of when such shareholders acquired their
shares) must complete the appropriate Irish dividend withholding
tax forms in order to receive their dividends in 2010 and later
years without DWT. Such shareholders must provide the
appropriate Irish forms to their brokers at least 7 business
days (so that such brokers can further transmit the relevant
information to Cooper Industries qualifying intermediary)
before the record date for the first dividend paid in 2010 (in
the case of shares held beneficially), or to Cooper
Industries transfer agent at least 7 business days before
such record date (in the case of shares held directly). Cooper
Industries strongly recommends that such shareholders complete
the appropriate Irish forms and provide them to their brokers or
Cooper Industries transfer agent, as the case may be, as
soon as possible.
If any shareholder who is resident in a relevant
territory receives a dividend subject to DWT, he or she
may make an application for a refund from the Irish Revenue
Commissioners on the prescribed form.
Please note that this exemption from DWT does not apply to a
shareholder (other than a body corporate) that is resident or
ordinarily resident in Ireland or to a body corporate that is
under the control, whether directly or indirectly, of a person
or persons who is or are resident in Ireland.
However, it may be possible for such a shareholder to rely on a
double tax treaty to limit the applicable DWT. Shareholders
should consult their own tax advisor if they believe they may be
subject to DWT.
50
Shares
Held by Residents of Ireland
Most Irish tax resident or ordinarily resident shareholders will
be subject to DWT in respect of dividend payments on their
Cooper Industries plc shares.
Shareholders who are residents of Ireland but are entitled to
receive dividends without DWT must complete the appropriate
Irish forms and provide them to their brokers at least 7
business days (so that such brokers can further transmit the
relevant information to Cooper Industries qualifying
intermediary) before the record date for the first dividend to
which they are entitled (in the case of shares held
beneficially), or to Cooper Industries transfer agent at
least 7 business days before such record date (in the case of
shares held directly). Shareholders who are resident or
ordinarily resident in Ireland or are otherwise subject to Irish
tax should consult their own tax advisor.
Shares
Held by Other Persons
Cooper Industries shareholders who do not reside in
relevant territories or in Ireland will be subject
to DWT, but there are a number of other exemptions that could
apply on a
case-by-case
basis. Dividends paid to such shareholders will be paid subject
to DWT unless the relevant shareholder has provided the
appropriate Irish dividend withholding tax form to his or her
broker at least 7 business days (so that such broker can further
transmit the relevant information to Cooper Industries
qualifying intermediary) before to the record date for the first
dividend to which they are entitled (in the case of shares held
beneficially), or to Cooper Industries transfer agent at
least 7 business days before such record date (in the case of
shares held directly). Cooper Industries strongly recommends
that such shareholders to whom an exemption applies complete the
appropriate Irish forms and provide them to their brokers or
Cooper Industries transfer agent, as the case may be, as
soon as possible.
If any shareholder who is not a resident of a relevant
territory or Ireland but is exempt from withholding
receives a dividend subject to DWT, he or she may make an
application for a refund from the Irish Revenue Commissioners on
the prescribed form.
Income
Tax on Dividends Paid on Cooper Industries Shares
Irish income tax (if any) arises in respect of dividends paid
after Cooper Industries establishment of tax residency in
Ireland, which occurred in December 2008.
When we refer in this discussion of income tax to Cooper
Industries shareholders or shareholders or the
like, we are referring to the Class A Public Shareholders
prior to the Transaction and the shareholders of Cooper
Industries plc following the Transaction, as applicable.
A shareholder who is neither resident nor ordinarily resident in
Ireland and who is entitled to an exemption from DWT, generally
has no liability for Irish income tax or the income and health
levies on a dividend from Cooper Industries plc unless he or she
holds his or her Cooper Industries shares through a branch or
agency in Ireland through which a trade is carried on.
Shareholders who are neither resident nor ordinarily resident in
Ireland and who are not entitled to an exemption from DWT
generally have no additional Irish income tax liability or a
liability to the income or health levy unless the shareholder
holds Cooper Industries shares through a branch or agency in
Ireland through which a trade is carried on. The DWT deducted by
Cooper Industries discharges such liability to Irish income tax
provided that the shareholder furnishes a statement of DWT
imposed to the Irish Revenue.
A shareholders who is a resident of a relevant
territory or is otherwise exempt from DWT should be able
to make a reclaim of the DWT from the Irish Revenue
Commissioners unless the shareholder holds Cooper Industries
shares through a branch or agency in Ireland through which a
trade is carried on.
Irish resident or ordinarily resident shareholders may be
subject to Irish tax
and/or
levies on dividends received from Cooper Industries plc. Such
shareholders should consult their own tax advisor.
51
Capital
Acquisitions Tax
Irish capital acquisitions tax (CAT) comprises
principally of gift tax and inheritance tax. CAT could apply to
a gift or inheritance of Cooper Industries plc ordinary shares
irrespective of the place of residence, ordinary residence or
domicile of the parties. This is because Cooper Industries plc
ordinary shares are regarded as property situated in Ireland as
the share register of Cooper Industries must be held in Ireland.
The person who receives the gift or inheritance has primary
liability for CAT.
CAT is levied at a rate of 25 percent above certain
tax-free thresholds. The appropriate tax-free threshold is
dependent upon (1) the relationship between the donor and
the donee and (2) the aggregation of the values of previous
gifts and inheritances received by the donee from persons within
the same group threshold. Gifts and inheritances passing between
spouses are exempt from CAT.
Stamp
Duty
Irish stamp duty (if any) becomes payable only in respect of
share transfers occurring after completion of the Transaction.
No stamp duty will be payable on the cancellation of the
Class A common shares of Cooper Industries, Ltd. held by
Class A Public Shareholders immediately prior to the
Transaction or the issue of Cooper Industries plc ordinary
shares under the Transaction.
When we refer in this discussion of stamp duty to shares held
beneficially through brokers, we are
specifically referring to shares held beneficially through
brokers who in turn hold those shares through DTC. Shareholders
who hold shares beneficially through brokers who do not hold
those shares through DTC should consult their own tax advisors.
A transfer of Cooper Industries plc shares from a seller who
holds shares beneficially to a buyer who holds the acquired
shares beneficially will not be subject to Irish stamp duty.
A transfer of Cooper Industries plc shares by a seller who holds
shares directly to any buyer, or by a seller who holds the
shares beneficially to a buyer who holds the acquired shares
directly, may be subject to Irish stamp duty (currently at the
rate of 1% of the price paid or the market value of the shares
acquired, if higher). Stamp duty is a liability of the buyer or
transferee. A shareholder who holds Cooper Industries plc shares
directly may transfer those shares into his or her own broker
account (or vice versa) without giving rise to Irish stamp duty
provided there is no change in the ultimate beneficial ownership
of the shares as a result of the transfer and the transfer is
not in contemplation of a sale of the shares. In order to
benefit from this exemption from stamp duty, the shareholder
must confirm to Cooper Industries plc that there is no change in
the ultimate beneficial ownership of the shares as a result of
the transfer and the transfer is not in contemplation of a sale
of the shares. A person wishing to acquire shares directly may
need to purchase the shares through a broker account and then
transfer such shares into his or her own name.
Because of the potential Irish stamp duty on transfers of Cooper
Industries plc shares, Cooper Industries strongly recommends
that all directly registered shareholders open broker accounts
so they can transfer their shares into a broker account as soon
as possible, and in any event prior to completion of the
Transaction. Directly registered shareholders who want to
transfer their shares to a broker account should contact a
broker who can initiate the share transfer on their behalf.
Cooper Industries also strongly recommends that any person who
wishes to acquire Cooper Industries plc shares after completion
of the Transaction acquire such shares beneficially through a
broker.
We currently intend to pay (or cause one of our subsidiaries to
pay) stamp duty in connection with share transfers made in the
ordinary course of trading by a seller who holds shares directly
to a buyer who holds the acquired shares beneficially. In other
cases Cooper Industries may, in its absolute discretion, pay (or
cause one of its subsidiaries to pay) any stamp duty. Cooper
Industries plcs articles of association as they will be in
effect after the Transaction provide that, in the event of any
such payment, Cooper Industries plc (a) may seek
reimbursement from the buyer or seller, at its discretion,
(b) may set-off the stamp duty against any dividends
payable to the buyer or seller, at its discretion, of those
shares and (c) may claim a first and permanent lien on
52
the Cooper Industries plc shares on which stamp duty has been
paid by Cooper Industries plc or its subsidiary for the amount
of stamp duty paid. Cooper Industries plcs lien shall
extend to all dividends paid on those shares. Parties to a share
transfer may assume that any stamp duty arising in respect of a
transaction in Cooper Industries plc shares has been paid unless
one or both of such parties is otherwise notified by Cooper
Industries.
Bermuda
Tax Considerations
The Transaction will not result in any income tax consequences
under Bermuda law to Cooper Industries, Ltd. or Cooper
Industries plc or their respective shareholders.
53
DESCRIPTION
OF COOPER INDUSTRIES PLC SHARES
The following description of Cooper Industries plcs share
capital is a summary. This summary is not complete and is
subject to the complete text of Cooper Industries plcs
forms of memorandum and articles of association attached as
Annex B to this proxy statement and to the Irish Companies
Acts. We encourage you to read those laws and documents
carefully. There are differences between Cooper Industries,
Ltd.s memorandum of association and bye-laws and Cooper
Industries plcs memorandum and articles of association as
they will be in effect after the Transaction; however, there are
no material differences between those documents, except for
changes (a) that are required by Irish law (i.e., certain
provisions of the Cooper Industries, Ltd. bye-laws were not
replicated in the Cooper Industries plc articles of association
because Irish law would not permit such replication, and certain
provisions were included in the Cooper Industries plc articles
of association although they were not in the Cooper Industries,
Ltd. bye-laws because Irish law requires such provisions to be
included in the articles of association of an Irish public
limited company), or (b) that are necessary in order to
preserve the current rights of shareholders and powers of the
board of directors of Cooper Industries following the
Transaction. See Comparison of Rights of Shareholders and
Powers of the Board of Directors. Except where otherwise
indicated, the description below reflects Cooper Industries
plcs memorandum and articles of association as those
documents will be in effect upon completion of the Transaction.
Capitalization
Authorized Share Capital. The authorized share
capital of Cooper Industries plc is 40,000 and $7,600,000,
divided into 40,000 ordinary shares with a par value of 1
per share, 750,000,000 ordinary shares, par value $0.01 per
share and 10,000,000 preferred shares, par value $0.01 per
share, which preferred shares may be designated and created as
shares of any other classes or series of shares with the
respective rights and restrictions determined by action of the
board of directors. The authorized share capital includes 40,000
ordinary shares with a par value of 1 per share in order
to satisfy statutory requirements for the incorporation of all
Irish public limited companies.
Cooper Industries plc may issue shares subject to the maximum
prescribed by its authorized share capital contained in its
memorandum of association. Following the Transaction, we expect
that Cooper Industries plc will have issued approximately
167,000,000 ordinary shares. This means that Cooper Industries
plc would be able to issue further shares comprised of
approximately 583,000,000 ordinary shares, par value of
$0.01 per share, and 10,000,000 preferred shares, par value
$0.01 per share. In connection with the Transaction, Cooper
Industries plc will also assume Cooper Industries, Ltd.s
existing obligations to deliver shares under our equity
incentive plans and other similar employee awards pursuant to
the terms thereof.
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. On a poll, an ordinary
resolution requires a majority of the total number of
votes of the shares of Cooper Industries plc present in person
or represented 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. Because of this requirement of Irish law,
the articles of association of Cooper Industries plc authorize
the board of directors of Cooper Industries plc to issue new
ordinary or preferred shares without shareholder approval for a
period of five years from the date of Cooper Industries
plcs incorporation.
The authorized share capital may be increased by way of an
ordinary resolution of Cooper Industries plcs shareholders.
The rights and restrictions to which the ordinary shares will be
subject will be prescribed in Cooper Industries plcs
articles of association. Cooper Industries plcs articles
of association entitle the board of directors, without
shareholder approval, to determine the terms of the preferred
shares issued by Cooper Industries plc. Preferred shares may be
preferred as to dividends, rights upon the dissolution of, or
upon any distribution of the assets of, Cooper Industries plc,
or voting in such manner as the directors of Cooper Industries
plc may resolve. The preferred shares may also be redeemable at
the option of the holder of the
54
preferred shares or at the option of Cooper Industries plc, or
both, and may be convertible into or exchangeable for shares of
any other class or classes, or of any other series, of Cooper
Industries plc, depending on the terms of such preferred shares.
The Company may also convert any of its shares into redeemable
shares subject to a member being able to notify the Company of
his or her unwillingness to have his or her shares so converted
at any time prior to the date of conversion.
Irish law does not recognize fractional shares held of record;
accordingly, Cooper Industries plcs articles of
association do not provide for the issuance of fractional shares
of Cooper Industries plc, and the official Irish register of
Cooper Industries plc will not reflect any fractional shares.
Whenever as a result of an alteration or reorganization of the
share capital of Cooper Industries plc any shareholder would
become entitled to fractions of a share, the directors may, on
behalf of those shareholders, sell the shares representing the
fractions for the best price reasonably obtainable to any person
and distribute the proceeds of sale in due proportion among
those shareholders. This ability of the directors of Cooper
Industries 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 Cooper Industries plc
will be 40,000, comprised of 40,000 ordinary shares with a
par value of 1 per share (the Euro Share
Capital). In connection with the consummation of the
Transaction, the Euro Share Capital will be acquired by Cooper
Industries plc and will then be cancelled by Cooper Industries
plc. We expect that Cooper Industries plc will then issue
approximately 167,000,000 ordinary shares having a par value of
$0.01 each. All shares issued on completion of the Transaction
will be issued as fully paid up.
Pre-emption
Rights, Share Warrants and Share Options
Certain statutory pre-emption rights apply automatically in
favor of Cooper Industries plcs shareholders where shares
in Cooper Industries plc are to be issued for cash. However,
Cooper Industries plc has opted out of these pre-emption rights
in its articles of association as permitted under Irish company
law. Because Irish law requires this opt-out to be renewed every
five years by a special resolution of the shareholders, Cooper
Industries plcs articles of association provide that this
opt-out must be so renewed. On a poll, a special
resolution requires not less than 75% of the votes of the
shares of Cooper Industries plc present in person or represented
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
Cooper Industries plc pro rata to their existing shareholding
before the shares can be issued to any new shareholders. The
statutory pre-emption 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 Cooper Industries plc provide
that the board is authorized, from time to time, in its
discretion, to grant such persons, for such periods and upon
such terms as the board deems advisable, options to purchase
such number of shares of any class or classes or of any series
of any class as the board 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
may issue shares upon exercise of warrants or options without
shareholder approval or authorization.
Cooper Industries plc will be subject to the rules of the New
York Stock Exchange that require shareholder approval of certain
issuances.
Dividends
Under Irish law, dividends and distributions may only be made
from distributable reserves. Distributable reserves, broadly,
means the accumulated realized profits of Cooper Industries plc
less accumulated realized losses of Cooper Industries plc. In
addition, no distribution or dividend may be made unless the net
assets of Cooper Industries plc are equal to, or in excess of,
the aggregate of Cooper Industries plcs called up share
capital plus undistributable reserves and the distribution does
not reduce Cooper Industries plcs net assets
55
below such aggregate. Undistributable reserves include the share
premium account, the capital redemption reserve fund and the
amount by which Cooper Industries plcs accumulated
unrealized profits, so far as not previously utilized by any
capitalization, exceed Cooper Industries 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 Cooper Industries plc has
sufficient distributable reserves to fund a dividend must be
made by reference to relevant accounts of Cooper
Industries plc. The relevant accounts will be either
the last set of unconsolidated 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
Cooper Industries plcs unconsolidated financial position
in accord with accepted accounting practice. The annual audited
accounts must be filed in the Companies Registration Office (the
official public registry for companies in Ireland).
Although Cooper Industries plc will not have any distributable
reserves immediately following the Transaction Time, we are
taking steps to create such distributable reserves. Please see
Risk Factors and Proposal Number Two:
Creation of 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 Cooper Industries plc. Cooper Industries plcs articles
of association authorize the directors to declare such dividends
as appear justified from the profits of Cooper Industries 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 the shareholders may direct that the payment 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 Cooper Industries plc may deduct from any
dividend payable to any member all sums of money (if any)
payable by such member to Cooper Industries plc in relation to
the shares of Cooper Industries plc.
The directors of Cooper Industries plc are also entitled to
issue shares with preferred rights to participate in dividends
declared by Cooper Industries plc. The holders of such preferred
shares may, depending on their terms, be entitled to claim
arrears of a declared dividend out of subsequently declared
dividends in priority to ordinary shareholders.
For information about the Irish tax issues relating to dividend
payments, please see Material Tax
Considerations Irish Tax Considerations.
Share
Repurchases and Redemptions
Overview
Article 3(d)(i) of Cooper Industries plcs articles of
association provides that any share which Cooper Industries plc
has acquired or agreed to acquire shall be deemed to be a
redeemable share. Accordingly, for Irish company law purposes,
the repurchase of shares by Cooper Industries plc will
technically be effected as a redemption of those shares as
described below under Share Repurchases and
Redemptions Repurchases and Redemptions by Cooper
Industries plc. If the articles of association of Cooper
Industries plc did not contain Article 3(d)(i), repurchases
by Cooper Industries plc would be subject to many of the same
rules that apply to purchases of Cooper Industries plc shares by
subsidiaries described below under Share
Repurchases and Redemptions Purchases by
Subsidiaries of Cooper Industries plc, 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 in this proxy statement to
repurchasing or buying back shares of Cooper Industries plc, we
are referring to the redemption of shares by Cooper Industries
plc pursuant to Article 3(d)(i) of the articles of
association or the purchase of shares of Cooper Industries plc
by a subsidiary of Cooper Industries plc, in each case in
accordance with the Cooper Industries plc articles of
association and Irish company law as described below.
56
Repurchases
and Redemptions by Cooper Industries plc
Under Irish law, a company can issue redeemable shares and
redeem them out of distributable reserves (which are described
above under Dividends) or the proceeds
of a new issue of shares for that purpose. Although Cooper
Industries plc will not have any distributable reserves
immediately following the Transaction Time, we are taking steps
to create such distributable reserves. Please see Risk
Factors and Proposal Number Two: Creation of
Distributable Reserves. The issue of redeemable shares may
only be made by Cooper Industries 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
Cooper Industries 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 Cooper Industries plc shares.
The board of directors of Cooper Industries plc will also be
entitled to issue preferred shares which may be redeemed at the
option of either Cooper Industries plc or the shareholder, or
both, depending on the terms of such preferred shares. Please
see Capitalization Authorized
Share Capital above for additional information on
redeemable shares.
Repurchased and redeemed shares may be cancelled or held as
treasury shares. The nominal value of treasury shares held by
Cooper Industries plc at any time must not exceed 10% of the
nominal value of the issued share capital of Cooper Industries
plc. While Cooper Industries plc holds shares as treasury
shares, it cannot exercise any voting rights in respect of those
shares. Treasury shares may be cancelled by Cooper Industries
plc or reissued subject to certain conditions.
Purchases
by Subsidiaries of Cooper Industries plc
Under Irish law, it may be permissible for an Irish or non-Irish
subsidiary to purchase shares of Cooper Industries plc either
on-market or off-market. A general authority of the shareholders
of Cooper Industries plc is required to allow a subsidiary of
Cooper Industries plc to make on-market purchases of Cooper
Industries plc 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 Cooper
Industries plc shares is required. We expect that Cooper
Industries plc will seek to renew such general authority, which
must expire no later than 18 months after the date on which
it was granted, at the first annual general meeting of Cooper
Industries plc in 2010 and at subsequent annual general
meetings. In order for a subsidiary of Cooper Industries plc to
make an on-market purchase of Cooper Industries plcs
ordinary shares, such shares must be purchased on a
recognized stock exchange. The NYSE, on which the
shares of Cooper Industries plc will be listed following the
Transaction, is not currently specified as a recognized stock
exchange for this purpose by Irish company law. We understand,
however, that it is likely that the Irish authorities will take
appropriate steps in the near future to add the NYSE to the list
of recognized stock exchanges. For an off-market purchase by a
subsidiary of Cooper Industries plc, the proposed purchase
contract must be authorized by special resolution of the
shareholders of Cooper Industries 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 Cooper Industries
plc.
The number of shares held by the subsidiaries of Cooper
Industries 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 Cooper Industries plc. While a subsidiary holds
shares of Cooper Industries plc, it cannot exercise any voting
rights in respect of those shares. The acquisition of the shares
of Cooper Industries plc by a subsidiary must be funded out of
distributable reserves of the subsidiary.
Existing
Share Repurchase Program
On February 12, 2008, Cooper Industries, Ltd.s board
of directors authorized the repurchase of ten million common
shares. On February 9, 2009, Cooper Industries, Ltd.s
board of directors increased the share repurchase authorization
by ten million shares. Cooper Industries, Ltd. has also
announced that the board
57
authorized the repurchase of shares issued from time to time
under its equity compensation plans, matched savings plan and
dividend reinvestment plan in order to offset the dilution that
results from issuing shares under these plans. Cooper
Industries, Ltd. may continue to repurchase shares under these
authorizations from time to time. The decision whether to do so
will be dependent on the favorability of market conditions, as
well as potential cash requirements for acquisitions and debt
repayments. As of July 13, 2009, 12,766,635 shares
remained available under the existing share repurchase program
plus the number of shares to be issued from time to time under
equity compensation plans to offset the dilution that results
from issuing shares under these plans.
Prior to the consummation of the Transaction, we expect
(a) the board of directors of Cooper Industries plc to
authorize the repurchase of Cooper Industries plc shares by
Cooper Industries plc and (b) Cooper Industries, Ltd. and
its nominee shareholders of Cooper Industries plc to authorize
the purchase of Cooper Industries plc shares by subsidiaries of
Cooper Industries plc, such that Cooper Industries plc and its
subsidiaries will be authorized to purchase shares in an
aggregate amount approximately equal to the remaining
authorization under the existing Cooper Industries, Ltd. share
repurchase program as of the Transaction Time.
As noted above, because repurchases of Cooper Industries plc
shares by Cooper Industries plc will technically be effected as
a redemption of those shares pursuant to Article 3(d) of
the articles of association, such repurchases may be made
whether or not the NYSE is a recognized stock
exchange, and shareholder approval for such repurchases
will not be required.
However, because purchases of Cooper Industries plc shares by
subsidiaries of Cooper Industries plc may be made only on a
recognized stock exchange and only if the required
shareholder approval has been obtained, we expect that the
shareholder authorization for purchases by subsidiaries of
Cooper Industries plc described above will be effective as of
the later of (a) the Transaction Time and (b) the date
on which the NYSE becomes a recognized stock exchange for this
purpose. This authorization will lapse on the date of the first
annual general meeting of Cooper Industries plc, at which time
we expect that we would seek shareholder approval to renew this
authorization.
Bonus
Shares
Under Cooper Industries plcs articles of association, the
board may resolve to capitalize any amount credited to any
reserve or fund available for distribution or the share premium
account of Cooper Industries plc for issuance and distribution
to shareholders as fully paid bonus shares on the same basis of
entitlement as would apply in respect of a dividend distribution.
Consolidation
and Division; Subdivision
Under its articles of association, Cooper Industries 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
Cooper Industries plc may, by ordinary resolution, cancel any
shares which, at the date of the passing of the resolution, are
unissued or 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 the shares so cancelled. Cooper Industries plc
also may, by special resolution and subject to confirmation by
the Irish High Court, reduce or cancel its issued share capital
in any way. The distributable reserves proposal discussed above
in Proposal Number Two: Creation of Distributable
Reserves involves a reduction of share capital, more
specifically the share premium of Cooper Industries plc, for
purposes of Irish law.
General
Meetings of Shareholders
Cooper Industries 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
58
meeting is held in each calendar year following the first annual
general meeting, no more than nine months after Cooper
Industries plcs fiscal year-end. The first annual general
meeting of Cooper Industries plc may be held outside Ireland.
Thereafter, any annual general meeting may be held outside
Ireland if a resolution so authorizing has been passed at the
preceding annual general meeting. Because of the fifteen-month
requirement described in this paragraph, Cooper Industries
plcs articles of association include a provision
reflecting this requirement of Irish law.
Extraordinary general meetings of Cooper Industries plc may be
convened by the Chairman of the board of directors, the board of
directors, or on requisition of the shareholders holding not
less than 10% of the paid up share capital of Cooper Industries
plc carrying voting rights. In limited circumstances, Cooper
Industries plcs auditors can require the board of
directors to convene extraordinary general meetings of Cooper
Industries plc. Extraordinary general meetings are generally
held for the purposes of approving shareholder resolutions of
Cooper Industries plc as may be required from time to time.
Notice of a general meeting must be given to all shareholders of
Cooper Industries plc and to the auditors of Cooper Industries
plc. The articles of association of Cooper Industries plc
provide that the maximum notice period is 60 days. 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.
General meetings may be called by shorter notice, but only with
the consent of the auditors of Cooper Industries plc and all
of the shareholders entitled to attend and vote thereat.
Because of the
21-day and
14-day
requirements described in this paragraph, Cooper Industries
plcs articles of association include provisions reflecting
these requirements of Irish law.
In the case of an extraordinary general meeting convened on
requisition of the shareholders of Cooper Industries plc, the
proposed purpose of the meeting must be set out in the
requisition notice, which may contain any resolution. Upon
receipt of this requisition notice, the board of directors has
21 days to convene a meeting of Cooper Industries
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 the requisitioning shareholders, may themselves convene a
meeting, which meeting must be held within three months of the
receipt by the board of directors 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 ordinary resolution at a general meeting and serve
for three-year terms, succeeding to the class of directors whose
term expires at the annual meeting at which directors are
elected. Because Irish law requires majority voting for the
election of directors, which could result in the number of
directors falling below the minimum prescribed by the articles
due to the failure of nominees to be elected, Cooper Industries
plcs articles of association provide that if, at any
general meeting of shareholders, the number of directors is
reduced below the minimum prescribed by the articles of
association due to the failure of any persons nominated to be
directors to be elected, then in those circumstances, the
nominee or nominees who receive the highest number of votes in
favor of election shall be elected in order to maintain such
prescribed minimum number of directors and each such director
shall remain a director (subject to the provisions of the Irish
Companies Acts and the articles) only until the conclusion of
the next annual general meeting of Cooper Industries plc unless
such director is elected by the shareholders during such meeting.
If the directors become aware that the net assets of Cooper
Industries plc are half or less of the amount of Cooper
Industries plcs
called-up
share capital, the directors of Cooper Industries plc must
convene an extraordinary general meeting of Cooper Industries
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.
59
Voting
Where a poll is demanded at a general meeting, every shareholder
shall have one vote for each ordinary share that he or she holds
as of the record date for the meeting. Voting rights on a poll
may be exercised by shareholders registered in Cooper Industries
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
Cooper Industries plcs articles of association. The
articles of association of Cooper Industries plc permit the
appointment of proxies by the shareholders to be notified to
Cooper Industries plc electronically.
Cooper Industries plcs articles of association provide
that all resolutions shall be decided by a show of hands unless
a poll is demanded by: the chairman; at least three shareholders
present in person or represented by proxy; any shareholder or
shareholders present in person or proxy and holding between them
not less than 10% of the total voting rights of all the members
having the right to vote at such meeting; or a shareholder or
shareholders present in person or represented by proxy holding
shares in the company conferring the right to vote at such
meeting, being shares on which an aggregate sum has been paid up
equal to not less than 10% of the total sum paid up on all such
shares conferring such right. Each Cooper Industries plc
ordinary shareholder of record as of the record date has one
vote at a general meeting on a show of hands.
In accordance with the articles of association of Cooper
Industries plc, the directors of Cooper Industries plc may from
time to time cause Cooper Industries plc to issue preferred
shares. These preferred shares may have such voting rights as
may be specified in the terms of such preferred shares.
Treasury shares will not be entitled to vote at general meetings
of shareholders.
Irish company law requires special resolutions of the
shareholders at a general meeting to approve certain matters.
Examples of matters requiring special resolutions include:
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Amending the objects or memorandum of association of Cooper
Industries plc;
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Amending the articles of association of Cooper Industries plc;
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Approving the change of name of Cooper Industries plc;
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Authorizing the entering into of a guarantee or provision of
security in connection with a loan, quasi-loan 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 Cooper Industries 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 Cooper Industries 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 a majority in
number representing 75% of the shareholders present and voting,
whether in person or by proxy.
60
Variation
of Class Rights Attaching to Shares
Variation of all or any special rights attached to any class of
shares of Cooper Industries plc is addressed in the articles of
association of Cooper Industries plc as well as the Irish
Companies Acts. Any variation of class rights attaching to the
issued shares of Cooper Industries plc must be approved in
writing by holders of three quarters (3/4) of the issued shares
in 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.
Quorum
for General Meetings
The holders of shares entitling them to exercise a majority of
the voting power of Cooper Industries plc on the relevant record
date shall constitute a quorum to hold a general meeting of the
shareholders. No business may take place at a general meeting of
Cooper Industries 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 Cooper
Industries 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 to be voted upon by shareholders.
Inspection
of Books and Records
Under Irish law, shareholders have the right to:
(a) receive a copy of the memorandum and articles of
association of Cooper Industries plc and any act of the Irish
Government which alters the memorandum of association of Cooper
Industries plc; (b) inspect and obtain copies of the
minutes of general meetings and resolutions of Cooper Industries
plc; (c) 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 Cooper Industries plc; (d) receive
copies of balance sheets and directors and auditors
reports which have previously been sent to shareholders prior to
an annual general meeting; and (e) receive balance sheets
of a subsidiary company of Cooper Industries plc which have
previously been sent to shareholders prior to an annual general
meeting for the preceding ten years. The auditors of Cooper
Industries plc will also have the right to inspect all books,
records and vouchers of Cooper Industries plc. If required by
law, the auditors report must be circulated to the
shareholders with copies of the balance sheet and
directors report 21 days before the annual general
meeting and must be read to the shareholders at Cooper
Industries plcs annual general meeting.
Acquisitions
and Appraisal Rights
There are a number of mechanisms for acquiring an Irish public
limited company, including:
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(a)
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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 a majority
in number representing 75% of the shareholders present and
voting, whether in person or by proxy;
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(b)
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through a tender offer by a third party for all of the shares of
Cooper Industries plc. Where the holders of 80% or more of
Cooper Industries plcs ordinary shares have accepted an
offer for their shares in Cooper Industries 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 Cooper Industries plc were listed
on the Irish Stock Exchange or another regulated stock exchange
in the European Union (E.U.), this threshold would
be increased to 90%; and
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(c)
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it is also possible for Cooper Industries plc to be acquired by
way of a merger with an
E.U.-incorporated
public company under the E.U. Cross Border Merger Directive
2005/56. Such a merger must be approved by a special resolution.
If Cooper Industries plc is being merged with another E.U.
public company under the E.U. Cross Border Merger Directive
2005/56 and the consideration payable to Cooper Industries
plcs shareholders is not all in the form of cash, Cooper
Industries plcs shareholders may be entitled to require
their shares to be acquired at fair value.
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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 property and
assets.
61
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 5% of the shares of an Irish public limited
company. A shareholder of Cooper Industries plc must therefore
make such a notification to Cooper Industries plc if as a result
of a transaction the shareholder will be interested in 5% or
more of the shares of Cooper Industries plc; or if as a result
of a transaction a shareholder who was interested in more than
5% of the shares of Cooper Industries plc ceases to be so
interested. Where a shareholder is interested in more than 5% of
the shares of Cooper Industries plc, any alteration of his or
her interest that brings his or her total holding through the
nearest whole percentage number, whether an increase or a
reduction, must be notified to Cooper Industries 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 Cooper
Industries 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 Cooper
Industries 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
Cooper Industries 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.
In addition to the above disclosure requirement, Cooper
Industries plc, under the Irish Companies Acts, may by notice in
writing require a person whom Cooper Industries 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 Cooper
Industries 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 Cooper Industries plc, to give such
further information as may be required by Cooper Industries plc
including particulars of such persons own past or present
interests in shares of Cooper Industries 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 Cooper Industries plc on a
person who is or was interested in shares of Cooper Industries
plc and that person fails to give Cooper Industries plc any
information required within the reasonable time specified,
Cooper Industries 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:
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(a)
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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;
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(b)
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no voting rights shall be exercisable in respect of those shares;
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(c)
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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
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(d)
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no payment shall be made of any sums due from Cooper Industries
plc on those shares, whether in respect of capital or otherwise.
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Where the shares in Cooper Industries 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
Business
Combinations with Related Persons
Cooper Industries plcs articles of association include a
provision according to which the affirmative vote of the holders
of not less than 80% of the voting power of Cooper Industries
plc on the relevant record date is
62
required for the approval or authorization of any Business
Combination with a Related Person; provided,
however, that the 80% voting requirement is not applicable if:
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(a)
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Cooper Industries plcs Continuing Directors by
a two-thirds (2/3) vote have expressly approved the Business
Combination either in advance of or subsequent to the
acquisition of outstanding ordinary shares of Cooper Industries
plc that caused the Related Person involved in the Business
Combination to become a Related Person; or
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(b)
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If the following conditions are satisfied:
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(i)
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The aggregate amount of the cash and the fair market value of
the property, securities or other consideration to be received
in the Business Combination by holders of the ordinary shares of
Cooper Industries plc, other than the Related Person involved in
the Business Combination, is not less than the Highest Per
Share Price (with appropriate adjustments for
recapitalizations, reclassifications, share consolidations and
divisions and dividends in specie) paid by the Related
Person in acquiring any of its holdings of Cooper Industries
plcs ordinary shares, all as determined by two-thirds
(2/3) of the Continuing Directors; and
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(ii)
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A proxy statement complying with the requirements of the
Exchange Act shall have been mailed at least thirty
(30) days prior to any vote on the Business Combination, to
all shareholders of Cooper Industries plc for the purpose of
soliciting shareholder approval of the Business Combination.
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A Business Combination is generally defined as a
merger, sale or other disposition of all or a substantial part
of the assets of Cooper Industries plc or of a Related Person,
and the issuance or transfer by Cooper Industries plc of any of
its securities to a Related Person, among other transactions. A
Related Person is generally defined as a person who,
together with affiliates and associates, owns, as of the record
date for the determination of shareholders entitled to notice of
and to vote on any Business Combination, or immediately prior to
the consummation of such transaction, in the aggregate 20% or
more of the outstanding ordinary shares of Cooper Industries
plc. A Continuing Director is generally defined as
someone who either (a) was a member of the board of
directors of Cooper Industries plc immediately prior to the time
that the Related Person involved in a Business Combination
became a Related Person, or (b) was designated (before his
or her initial election as director) as a Continuing Director by
two-thirds (2/3) of the then Continuing Directors.
Shareholder
Rights Plans and Share Issuances
Irish law does not expressly prohibit companies from issuing
share purchase rights or adopting a shareholder rights plan as
an anti-takeover measure.
Prior to the consummation of the Transaction, Cooper Industries
plc will adopt a rights plan the content of which will be
substantially similar to that of the Amended Rights Plan of
Cooper Industries, Ltd. described below under Comparison
of Rights of Shareholders and Powers of the Board of
Directors Other Anti-Takeover Measures
Cooper Industries, Ltd. Shareholder Rights Plans and
Share Issuances.
Subject to Cooper Industries plcs articles of association,
Irish law and the Irish Takeover Rules described below, the
board also has power to issue any authorized and unissued shares
of Cooper Industries plc, and, in the case of preferred shares,
on such terms and conditions as it may determine (as described
above under Capitalization
Authorized Share Capital) and any such action should be
taken in the best interests of Cooper Industries plc. It is
possible, however, that the terms and conditions of any issue of
preferred shares could discourage a takeover or other
transaction that holders of some or a majority of the ordinary
shares believe to be in their best interests or in which holders
might receive a premium for their shares over the then market
price of the shares.
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 Cooper Industries
plc will be governed by the Irish Takeover Panel Act 1997 and
the Irish Takeover Rules
63
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 Cooper Industries
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 Cooper Industries 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.
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 Cooper Industries 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 Cooper Industries 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.
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If the bidder or any of its concert parties has acquired
ordinary shares of Cooper Industries plc (a) 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 Cooper Industries plc or (b) 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
Cooper Industries plc ordinary share shall be not less than the
highest price paid by the bidder or its concert parties during,
in the case of (a), the period of 12 months prior to the
commencement of the offer period and, in the case of (b), 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 Cooper Industries 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, together with any concert parties, 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 Cooper
Industries 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 Cooper
Industries plc is prohibited, if such acquisition(s), when
aggregated with shares or rights already held, would result in
the acquirer, together with any concert parties, holding 15% or
more but less than 30% of the voting rights of Cooper Industries
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 Cooper
Industries plc is not permitted to take any action which might
frustrate an offer for the shares of Cooper Industries 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
(a) the issue of shares, options or convertible securities,
(b) material disposals, (c) entering into contracts
other than in the ordinary course of business or (d) 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 has reason to
believe an offer is imminent. Exceptions to this prohibition are
available where:
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(a)
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the action is approved by the offeree at a general
meeting; or
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(b)
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with the consent of the Irish Takeover Panel where:
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(i)
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the Irish Takeover Panel is satisfied the action would not
constitute a frustrating action;
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(ii)
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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;
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(iii)
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in accordance with a contract entered into prior to the
announcement of the offer; or
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(iv)
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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.
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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, Comparison of Rights of Shareholders and
Powers of the Board of Directors Election of
Directors, Comparison of Rights of Shareholders and
Powers of the Board of Directors Vacancies on Board
of Directors, Comparison of Rights of Shareholders
and Powers of the Board of
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Directors Removal of Directors,
Comparison of Rights of Shareholders and Powers of the
Board of Directors Shareholder Consent to Action
Without Meeting, Comparison of Rights of
Shareholders and Powers of the Board of Directors
Director Nominations; Proposals of Shareholders and
Comparison of Rights of Shareholders and Powers of the
Board of Directors Amendment of Governing
Documents below.
Corporate
Governance
The articles of association of Cooper Industries plc delegate
authority over the management of Cooper Industries plc to the
board of directors. The board of directors may then delegate
management of Cooper Industries 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 Cooper Industries plc.
It is the intention of Cooper Industries plc to replicate the
existing committees that are currently in place for Cooper
Industries, Ltd. which include an Audit Committee, a Management
Development & Compensation Committee and a Committee
on Nominations and Corporate Governance. It also is the
intention of Cooper Industries plc to adopt Cooper Industries,
Ltd.s current corporate governance principles.
Legal
Name; Formation; Fiscal Year; Registered Office
The legal and commercial name of the newly incorporated Irish
company is Cooper Industries public limited company. Cooper
Industries plc was incorporated in Ireland as a public limited
company on June 4, 2009 with company registration number
471954. Cooper Industries plcs fiscal year ends on
December 31 and Cooper Industries plcs registered address
is 5 Fitzwilliam Square, Dublin 2, Ireland.
Duration;
Dissolution; Rights upon Liquidation
Cooper Industries plcs duration will be unlimited. Cooper
Industries 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 Cooper Industries plc cast at a
general meeting is required. Cooper Industries 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 Cooper Industries plc has failed to
file certain returns.
The rights of the shareholders to a return of Cooper Industries
plcs assets on dissolution or winding up, following the
settlement of all claims of creditors, may be prescribed in
Cooper Industries plcs articles of association or the
terms of any preferred shares issued by the directors of Cooper
Industries 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 Cooper Industries plc. If the
articles of association contain no specific provisions in
respect of a dissolution or winding up then, subject to the
priorities of any creditors, the assets will be distributed to
shareholders in proportion to the
paid-up par
value of the shares held. Cooper Industries plcs articles
provide that the preferred shares may be entitled to such rights
upon the dissolution of, or upon any distribution of the assets
of, Cooper Industries plc, as the directors will fix at the time
of issuance.
Uncertificated
Shares
Holders of ordinary shares of Cooper Industries plc will not
have the right to require Cooper Industries plc to issue
certificates for their shares. Cooper Industries plc will only
issue uncertificated ordinary shares, but retains the right to
issue certificates at its sole discretion.
Stock
Exchange Listing
We expect that, immediately following the Transaction Time, the
Cooper Industries plc ordinary shares will be listed on the NYSE
under the symbol CBE, the same symbol under which
the Class A common
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shares of Cooper Industries, Ltd. are currently listed. We do
not plan to be listed on the Irish Stock Exchange at the present
time.
No
Sinking Fund
The shares have no sinking fund provisions.
No
Liability for Further Calls or Assessments
The shares to be issued in the Transaction will be duly and
validly issued and fully paid.
Transfer
and Registration of Shares
Cooper Industries plcs share register will be maintained
by its transfer agent. Registration in this share register will
be determinative of membership in Cooper Industries plc. A
shareholder of Cooper Industries 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 through the same depository or other
nominee will not be registered in Cooper Industries plcs
share register, as the depository or other nominee will remain
the record holder of such shares.
A duly stamped written instrument of transfer is required under
Irish law in order to register on Cooper Industries plcs
official share register any transfer of shares (a) from a
person who holds such shares directly to any other person,
(b) from a person who holds such shares beneficially to a
person who holds such shares directly, or (c) 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. Where
such stamp duty arises, it must be paid in order to have the
instrument of transfer duly stamped prior to registration of the
transfer on Cooper Industries plcs official Irish share
register. A person wishing to acquire shares directly may need
to purchase the shares through a broker account and then
transfer such shares into his or her own name.
We currently intend to pay (or cause one of our subsidiaries to
pay) stamp duty in connection with share transfers made in the
ordinary course of trading by a seller who holds shares directly
to a buyer who holds the acquired shares beneficially through
brokers who in turn hold those shares through DTC. In other
cases Cooper Industries may, in its absolute discretion, pay (or
cause one of its subsidiaries to pay) any stamp duty. Cooper
Industries plcs articles of association as they will be in
effect after the Transaction provide that, in the event of any
such payment, Cooper Industries plc (a) may seek
reimbursement from the buyer or seller, at its discretion,
(b) may set-off the stamp duty against any dividends
payable to the buyer or seller, at its discretion, of those
shares and (c) may claim a first and permanent lien on the
Cooper Industries plc shares on which stamp duty has been paid
by Cooper Industries plc or its subsidiary for the amount of
stamp duty paid. Cooper Industries plcs lien shall extend
to all dividends paid on those shares. Parties to a share
transfer may assume that any stamp duty arising in respect of a
transaction in Cooper Industries plc shares has been paid unless
one or both of such parties is otherwise notified by Cooper
Industries. Alternatively, Cooper Industries plcs articles
of association provide that the board may implement a mechanism
in respect of the sale of shares either by or to a shareholder
who holds them directly, so that the sale is effected by way of
a redemption of the shares of the seller that are the subject of
the sale and a new issue of an equal number of shares to the
buyer.
Cooper Industries plcs articles of association as they
will be in effect after the Transaction delegate to Cooper
Industries plcs Secretary or Assistant Secretary the
authority to execute an instrument of transfer on behalf of a
transferring party. In order to help ensure that the official
share register is regularly updated to reflect trading of Cooper
Industries plc shares occurring through normal electronic
systems, we intend to
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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 Cooper Industries
plc for this purpose) or request that Cooper Industries plc
execute an instrument of transfer on behalf of the transferring
party in a form determined by Cooper Industries 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 Cooper Industries plcs transfer agent, the
transferee will be registered as the legal owner of the relevant
shares on Cooper Industries plcs official Irish share
register (subject to the matters described below).
The board of directors of Cooper Industries plc may decline to
recognize any instrument of transfer unless the instrument of
transfer is in respect of one class of share only.
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 directors may from time to
time determine.
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COMPARISON
OF RIGHTS OF SHAREHOLDERS AND
POWERS OF THE BOARD OF DIRECTORS
Your rights as a shareholder of Cooper Industries, Ltd. and the
relative powers of Cooper Industries, Ltd.s board of
directors are governed by Bermuda law and Cooper Industries,
Ltd.s memorandum of association and bye-laws. After the
Transaction, the Class A Public Shareholders will become
shareholders of Cooper Industries plc, and their rights and the
relative powers of Cooper Industries plcs board of
directors will be governed by Irish law and Cooper Industries
plcs memorandum and articles of association as they will
be in effect after the Transaction.
Many of the principal attributes of Cooper Industries,
Ltd.s Class A common shares and Cooper Industries
plcs ordinary shares will be similar. However, there are
differences between the rights of Cooper Industries
shareholders under Irish law and under Bermuda law. In addition,
there are differences between Cooper Industries, Ltd.s
memorandum of association and bye-laws and Cooper Industries
plcs memorandum and articles of association as will be in
effect after the Transaction; however, there are no material
differences between those documents, except for changes
(a) that are required by Irish law (i.e., certain
provisions of the Cooper Industries, Ltd. bye-laws were not
replicated in the Cooper Industries plc articles of association
because Irish law would not permit such replication, and certain
provisions were included in the Cooper Industries plc articles
of association although they were not in the Cooper Industries,
Ltd. bye-laws because Irish law requires such provisions to be
included in the articles of association of an Irish public
limited company), or (b) that are necessary in order to
preserve the current rights of shareholders and powers of the
board of directors of Cooper Industries following the
Transaction. The following discussion is a summary of material
changes in shareholders rights resulting from the
Transaction. This summary is not complete and does not cover all
of the differences between Irish law and Bermuda law affecting
companies and their shareholders or all the differences between
Cooper Industries, Ltd.s memorandum of association and
bye-laws and Cooper Industries plcs memorandum and
articles of association. We believe this summary is accurate. It
is, however, subject to the complete text of the relevant
provisions of the Irish Companies Acts, the Bermuda Companies
Act, Cooper Industries, Ltd.s memorandum of association
and bye-laws and Cooper Industries plcs memorandum and
articles of association as will be in effect after the
Transaction. We encourage shareholders to read those laws and
documents carefully. Cooper Industries plcs form of
memorandum and articles of association as will be in effect
after the Transaction is attached to this proxy statement as
Annex B. For information on how to obtain Cooper
Industries, Ltd.s memorandum of association and bye-laws,
please see Where You Can Find More Information.
Except where otherwise indicated, the discussion of Cooper
Industries plc below reflects Cooper Industries plcs
memorandum and articles of association as those documents will
be in effect upon completion of the Transaction.
Capitalization
Authorized
Share Capital
Cooper Industries, Ltd. The authorized share
capital of Cooper Industries, Ltd. is $7,600,000, consisting of
500,000,000 Class A common shares, par value of $.01 per
share, 250,000,000 Class B common shares, par value $.01
per share and 10,000,000 preferred shares, par value $.01 per
share, which preferred shares may be designated and created as
shares of any other classes or series of shares with the
respective rights and restrictions determined by action of the
board of directors. The Class B common shares are
convertible into Class A common shares on a one-to-one
basis in the following circumstances: (1) as consideration
for any acquisition by Cooper Industries of the stock or assets
of a third party and (2) to satisfy obligations under
equity plans to issue Class A common shares to plan
participants. The Class B common shares are automatically
converted into Class A common shares on a one-for-one basis
in the event of a transfer of a Class B common share to any
person other than a wholly owned subsidiary of Cooper
Industries, Ltd.
The board of directors of Cooper Industries, Ltd. may issue
shares subject to the maximum prescribed by its authorized share
capital contained in its memorandum of association.
Pursuant to the bye-laws, the board of directors has the power
to issue new common or preferred shares without shareholder
approval.
69
In accordance with the provisions of the bye-laws, the
authorized share capital may be increased by way of a resolution
of the holders of a majority of the total number of votes of the
shares of Cooper Industries, Ltd. present in person or
represented by proxy and entitled to vote at the meeting
convened to increase the share capital.
The rights and restrictions to which the Class A and
Class B shares are subject are prescribed in Cooper
Industries, Ltd.s bye-laws. Cooper Industries, Ltd.s
bye-laws authorize the board of directors, without shareholder
approval, to determine the terms of any preferred shares issued
by Cooper Industries, Ltd. Preferred shares may be preferred as
to dividends, rights upon the dissolution of, or upon any
distribution of the assets of, Cooper Industries, Ltd., or
voting in such manner as the directors of Cooper Industries,
Ltd. may resolve. The preferred shares may, among other things,
also be redeemable at the option of the holder of the preferred
shares or at the option of Cooper Industries, Ltd., or both, and
may be convertible into or exchangeable for shares of any other
class or classes, or of any other series, of Cooper Industries,
Ltd., depending on the terms of such preferred shares. The
Company may also convert any of its shares into redeemable
shares subject to a member being able to notify the Company of
his or her unwillingness to have his or her shares so converted
at any time prior to the date of conversion.
As permitted by Bermuda law, Cooper Industries, Ltd.s
bye-laws provide for the issuance of fractional shares.
Cooper Industries plc. The authorized share
capital of Cooper Industries plc is 40,000 and $7,600,000,
divided into 40,000 ordinary shares with a par value of 1
per share, 750,000,000 ordinary shares, par value of $0.01 per
share and 10,000,000 preferred shares, par value $0.01 per
share, which preferred shares may be designated and created as
shares of any other classes or series of shares with the
respective rights and restrictions determined by action of the
board of directors. The authorized share capital includes 40,000
ordinary shares with a par value of 1 per share, even
though there is no analogous authorization in the Cooper
Industries, Ltd. bye-laws, in order to satisfy statutory
requirements for the incorporation of all Irish public limited
companies.
Cooper Industries plc may issue shares subject to the maximum
prescribed by its authorized share capital contained in its
memorandum of association. Following the Transaction, we expect
that Cooper Industries plc will have issued approximately
167,000,000 ordinary shares. This means that Cooper Industries
plc would be able to issue further shares comprised of
approximately 583,000,000 ordinary shares, par value of $0.01
per share, and 10,000,000 preferred shares, par value $0.01 per
share. In connection with the Transaction, Cooper Industries plc
will also assume Cooper Industries, Ltd.s existing
obligations to deliver shares under our equity incentive plans
and other similar employee awards pursuant to the terms thereof.
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. On a poll, an ordinary
resolution requires a majority of the total number of
votes of the shares of Cooper Industries plc present in person
or represented 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. Because of this requirement of Irish law,
which does not have an analog under Bermuda law, the articles of
association of Cooper Industries plc authorize the board of
directors of Cooper Industries plc to issue new ordinary or
preferred shares without shareholder approval for a period of
five years from the date of Cooper Industries plcs
incorporation, even though the Cooper Industries, Ltd. bye-laws
do not include an analogous provision.
The authorized share capital may be increased by way of an
ordinary resolution of Cooper Industries plcs shareholders.
The rights and restrictions to which the ordinary shares will be
subject will be prescribed in Cooper Industries plcs
articles of association. Cooper Industries plcs articles
of association entitle the board of directors, without
shareholder approval, to determine the terms of the preferred
shares issued by Cooper Industries plc. Preferred shares may be
preferred as to dividends, rights upon the dissolution of, or
upon any distribution of the assets of, Cooper Industries plc,
or voting in such manner as the directors of Cooper Industries
plc may resolve. The preferred shares may also be redeemable at
the option of the holder of the preferred shares or at the
option of Cooper Industries plc, or both, and may be convertible
into or
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exchangeable for shares of any other class or classes, or of any
other series, of Cooper Industries plc, depending on the terms
of such preferred shares.
Unlike Bermuda law, Irish law does not recognize fractional
shares held of record; accordingly, Cooper Industries plcs
articles of association do not provide for the issuance of
fractional shares of Cooper Industries plc, even though Cooper
Industries, Ltd.s bye-laws do so provide, and the official
Irish register of Cooper Industries plc will not reflect any
fractional shares. Whenever as a result of an alteration or
reorganization of the share capital of Cooper Industries plc any
shareholder would become entitled to fractions of a share, the
directors may, on behalf of those shareholders, sell the shares
representing the fractions for the best price reasonably
obtainable to any person and distribute the proceeds of sale in
due proportion among those shareholders. This ability of the
directors of Cooper Industries plc to dispose of fractional
shares is required in order to comply with the Irish law
prohibition on fractional shares held of record, which is not
analogously provided for under Bermuda law.
Issued
Share Capital
Cooper Industries, Ltd. As of July 13,
2009, there were 203,285,122 Class A common shares of
Cooper Industries, Ltd. issued, of which 166,765,446 were held
by the Class A Public Shareholders, and 36,519,676 were
held by wholly owned subsidiaries of Cooper Industries, Ltd.
There also were 105,420,258 Class B common shares issued,
all of which were held by a wholly owned subsidiary of Cooper
Industries, Ltd. There were no preferred shares issued.
Cooper Industries plc. Immediately prior to
the Transaction, the issued share capital of Cooper Industries
plc will be 40,000, comprised of the Euro Share Capital.
In connection with the consummation of the Transaction, the Euro
Share Capital will be acquired by Cooper Industries plc and will
then be cancelled by Cooper Industries plc. We expect that
Cooper Industries plc will then issue approximately 167,000,000
ordinary shares having a par value of $0.01 each. All shares
issued on completion of the Transaction will be issued as fully
paid up.
Consolidation
and Division; Subdivision
Cooper Industries, Ltd. Under its bye-laws,
Cooper Industries, Ltd. may by resolution of the holders of a
majority of the total number of votes of the shares of Cooper
Industries, Ltd. present in person or represented by proxy and
entitled to vote at the meeting convened to consider the matter,
or, where required, of a separate class of shareholders,
consolidate and divide all or any of its share capital into
shares of a larger par value than its existing shares or
subdivide its share capital into shares of a smaller par value
than is fixed by its memorandum of association.
Cooper Industries plc. Under its articles of
association, Cooper Industries 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
Cooper Industries, Ltd. Cooper Industries,
Ltd. may (subject to the requirements of the Bermuda Companies
Act), by resolution of the holders of a majority of the total
number of votes of the shares of Cooper Industries, Ltd. present
in person or represented by proxy and entitled to vote at the
meeting convened to consider the matter, cancel any shares
which, at the date of the passing of the resolution, are
unissued or 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 the shares so cancelled. Cooper Industries, Ltd.
also may, by resolution of the holders of a majority of the
total number of votes of the shares of Cooper Industries, Ltd.
present in person or represented by proxy and entitled to vote
at the meeting convened to consider the matter or, where
required, of a separate class of shareholders, reduce or cancel
its issued share capital in any way.
Cooper Industries plc. Cooper Industries plc
may, by ordinary resolution, cancel any shares which, at the
date of the passing of the resolution, are unissued or 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 the
shares so cancelled. Cooper
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Industries plc also may, by special resolution and subject to
confirmation by the Irish High Court, reduce or cancel its
issued share capital in any way. The distributable reserves
proposal discussed above in Proposal Number Two: Creation
of Distributable Reserves involves a reduction of share
capital, more specifically the share premium of Cooper
Industries plc, for purposes of Irish law.
Pre-emption
Rights, Share Warrants and Share Options
Cooper Industries, Ltd. Shareholders do not
have pre-emption rights under the Bermuda Companies Act over
further issuances of shares of Cooper Industries, Ltd. Cooper
Industries, Ltd.s bye-laws provide that shareholders shall
not have pre-emption rights.
The bye-laws of Cooper Industries, Ltd. provide that 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 deems advisable, options to purchase
such number of shares of any class or classes or of any series
of any class as the board may deem advisable, and to cause
warrants or other appropriate instruments evidencing such
options to be issued.
Cooper Industries, Ltd. is subject to the rules of the New York
Stock Exchange that require shareholder approval of certain
issuances.
Cooper Industries plc. Certain statutory
pre-emption rights apply automatically in favor of Cooper
Industries plcs shareholders where shares in Cooper
Industries plc are to be issued for cash. However, Cooper
Industries plc has opted out of these pre-emption rights in its
articles of association as permitted under Irish company law.
Because Irish law requires this opt-out to be renewed every five
years by a special resolution of the shareholders, and there is
no analogous provision of Bermuda law, Cooper Industries
plcs articles of association provide that this opt-out
must be so renewed, even though Cooper Industries, Ltd.s
bye-laws do not include an analogous provision. On a poll, a
special resolution requires not less than 75% of the
votes of the shares of Cooper Industries plc present in person
or represented 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 Cooper Industries plc pro rata to their existing
shareholding before the shares can be issued to any new
shareholders. The statutory pre-emption 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 Cooper Industries plc provide
that the board is authorized, from time to time, in its
discretion, to grant such persons, for such periods and upon
such terms as the board deems advisable, options to purchase
such number of shares of any class or classes or of any series
of any class as the board 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
may issue shares upon exercise of warrants or options without
shareholder approval or authorization.
Cooper Industries plc will be subject to the rules of the New
York Stock Exchange that require shareholder approval of certain
issuances.
Distributions
and Dividends; Repurchases and Redemptions
Distributions
and Dividends
Cooper Industries, Ltd. Under Bermuda law, a
company is not required to present proposed dividends or
proposals to make a distribution from contributed surplus to its
shareholders for approval or adoption. Under the Bermuda
Companies Act, the board of directors of a company may not
declare or pay a dividend or make a distribution from
contributed surplus to the shareholders if there are reasonable
grounds for believing that (a) the company is, or would
after the payment be, unable to pay its liabilities as they
become due; or (b) the realizable value of the
companys assets would thereby be less than the aggregate
of its liabilities and its issued share capital and share
premium accounts.
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Contributed surplus includes proceeds arising from donated
shares, credits resulting from the redemption or conversion of
shares at less than the amount set up as nominal capital and
donations of cash and other assets of the company.
Cooper Industries, Ltd. may deduct from any dividend,
distribution or other monies payable to a shareholder by Cooper
Industries, Ltd. on or in respect of any shares all sums of
money (if any) payable by the shareholder to Cooper Industries,
Ltd. on account of calls or otherwise in respect of shares of
Cooper Industries, Ltd.
The directors of Cooper Industries, Ltd. are also entitled to
issue preferred shares with preferred rights to participate in
dividends declared by Cooper Industries, Ltd. The holders of
such preferred shares may, depending on their terms, be entitled
to claim arrears of a declared dividend out of subsequently
declared dividends in priority to common shareholders.
Cooper Industries plc. Under Irish law,
dividends and distributions may only be made from distributable
reserves. Distributable reserves, broadly, means the accumulated
realized profits of Cooper Industries plc less accumulated
realized losses of Cooper Industries plc. In addition, no
distribution or dividend may be made unless the net assets of
Cooper Industries plc are equal to, or in excess of, the
aggregate of Cooper Industries plcs called up share
capital plus undistributable reserves and the distribution does
not reduce Cooper Industries plcs net assets below such
aggregate. Undistributable reserves include the share premium
account, the capital redemption reserve fund and the amount by
which Cooper Industries plcs accumulated unrealized
profits, so far as not previously utilized by any
capitalization, exceed Cooper Industries 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 Cooper Industries plc has
sufficient distributable reserves to fund a dividend must be
made by reference to relevant accounts of Cooper
Industries plc. The relevant accounts will be either
the last set of unconsolidated 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
Cooper Industries plcs unconsolidated financial position
in accord with accepted accounting practice. The annual audited
accounts must be filed in the Companies Registration Office (the
official public registry for companies in Ireland).
Although Cooper Industries plc will not have any distributable
reserves immediately following the Transaction Time, we are
taking steps to create such distributable reserves. Please see
Risk Factors and Proposal Number Two:
Creation of 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 Cooper Industries plc. Cooper Industries plcs articles
of association authorize the directors to declare such dividends
as appear justified from the profits of Cooper Industries 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 the shareholders may direct that the payment 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.
Although the provisions of Cooper Industries plcs articles
of association described in this paragraph are different from
the analogous provisions of Cooper Industries, Ltd.s
bye-laws, these differences are required due to differences
between Irish law and Bermuda law with respect to distributions
and dividends.
The directors of Cooper Industries plc may deduct from any
dividend payable to any member all sums of money (if any)
payable by such member to Cooper Industries plc in relation to
the shares of Cooper Industries plc.
The directors of Cooper Industries plc are also entitled to
issue shares with preferred rights to participate in dividends
declared by Cooper Industries plc. The holders of such preferred
shares may, depending on their terms, be entitled to claim
arrears of a declared dividend out of subsequently declared
dividends in priority to ordinary shareholders.
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For information about the Irish tax issues relating to dividend
payments, please see Material Tax
Considerations Irish Tax Considerations.
Share
Repurchases and Redemptions
Cooper Industries, Ltd. Under the Bermuda
Companies Act, shares of a Bermuda company may be repurchased if
so authorized by its bye-laws or memorandum of association, and
preferred shares may be redeemed at the option of the company if
so authorized by its bye-laws or, in the case of shares
redeemable at the option of the holder, its memorandum of
association, provided that: (a) no such shares shall be
repurchased or redeemed except out of the capital paid thereon,
or out of the funds of the company available for dividend or
distribution, or out of the proceeds of a new issue of shares
made for the purposes of redemption or repurchase; (b) the
premium, if any, payable on redemption or repurchase, is
provided out of the companys funds which would be
otherwise available for dividend or distribution or out of the
companys share premium account before the shares are
repurchased or redeemed; and (c) there are no reasonable
grounds for believing that the company is, or after such
redemption or repurchase would be, unable to pay its liabilities
as they become due. Bermuda law does not distinguish between
on-market and off-market purchases of a companys own
shares.
Under Cooper Industries, Ltd.s bye-laws, the board may, at
its discretion, authorize the purchase by Cooper Industries,
Ltd. of its own shares of any class upon such terms as the board
may determine, provided that such purchase is effected in
accordance with the provisions of the Bermuda Companies Act.
Shareholder approval for the purchase of Cooper Industries,
Ltd.s shares by Cooper Industries, Ltd. (or any of its
subsidiaries) is not required.
Under Cooper Industries, Ltd.s bye-laws, the board of
directors is authorized to provide for the issuance of preferred
shares with such rights (including redemption rights) as the
board of directors may adopt by resolution.
Generally, under Bermuda law, repurchased or redeemed shares may
be cancelled or held as treasury shares, provided that a
provision entitling a company to hold treasury shares is
contained in its bye-laws or memorandum of association. Cooper
Industries, Ltd.s bye-laws and memorandum of association
do not contain a provision entitling Cooper Industries, Ltd. to
hold treasury shares.
Under Bermuda law, it is permissible for a Bermudian or
non-Bermudian subsidiary to purchase shares of Cooper
Industries, Ltd. While the subsidiary holds the shares of Cooper
Industries, Ltd., there is no statutory prohibition with respect
to such shareholder exercising voting rights in respect of those
shares; however, there may be circumstances in which such shares
could not be voted by the subsidiary. An existing voting
agreement between Cooper Industries, Ltd. and some of its
subsidiaries holding common shares of Cooper Industries, Ltd.
provides that those subsidiaries shall vote (or abstain from
voting) such shares in the same proportion as the Class A
Public Shareholders vote (or abstain from voting) to ensure that
voting of shares by such subsidiaries will not dilute the voting
power of the Class A Public Shareholders.
Cooper Industries plc. Article 3(d)(i) of
Cooper Industries plcs articles of association provides
that any share which Cooper Industries plc has acquired or
agreed to acquire shall be deemed to be a redeemable share.
Accordingly, for Irish company law purposes, the repurchase of
shares by Cooper Industries plc will technically be effected as
a redemption of those shares as described below under
Distributions and Dividends; Repurchases and
Redemptions Share Repurchases and
Redemptions Repurchases and Redemptions by Cooper
Industries plc. If the articles of association of Cooper
Industries plc did not contain Article 3(d)(i), repurchases
by Cooper Industries plc would be subject to many of the same
rules that apply to purchases of Cooper Industries plc shares by
subsidiaries described below under
Distributions and Dividends; Repurchases and
Redemptions Share Repurchases and
Redemptions Purchases by Subsidiaries of Cooper
Industries plc, including the shareholder approval
requirements described below and the requirement that any
on-market purchases be effected on a recognized stock
exchange. Because Bermuda law does not impose such
requirements with respect to share repurchases by Cooper
Industries, Ltd. and we desired to preserve the status quo with
respect to share repurchases to the greatest extent possible
after the Transaction, Article 3(d)(i) was included in the
Cooper Industries plc articles of association, even though there
is no analogous provision in the
74
Cooper Industries, Ltd. bye-laws. Except where otherwise noted,
when we refer elsewhere in this proxy statement to repurchasing
or buying back shares of Cooper Industries plc, we are referring
to the redemption of shares by Cooper Industries plc pursuant to
Article 3(d) of the articles of association or the purchase
of shares of Cooper Industries plc by a subsidiary of Cooper
Industries plc, in each case in accordance with the Cooper
Industries plc articles of association and Irish company law as
described below.
Repurchases
and Redemptions by Cooper Industries plc
Under Irish law, a company can issue redeemable shares and
redeem them out of distributable reserves (which are described
above under Distributions and Dividends;
Repurchases and Redemptions Distributions and
Dividends) or the proceeds of a new issue of shares for
that purpose. Although Cooper Industries plc will not have any
distributable reserves immediately following the Transaction
Time, we are taking steps to create such distributable reserves.
Please see Risk Factors and
Proposal Number Two: Creation of Distributable
Reserves. The issue of redeemable shares may only be made
by Cooper Industries 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 Cooper
Industries 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. As is currently the case with
Cooper Industries, Ltd., shareholder approval will not be
required to redeem Cooper Industries plc shares.
The board of directors of Cooper Industries plc will also be
entitled to issue preferred shares which may be redeemed at the
option of either Cooper Industries plc or the shareholder, or
both, depending on the terms of such preferred shares. Please
see Capitalization Authorized
Share Capital above for additional information on
redeemable shares.
Repurchased and redeemed shares may be cancelled or held as
treasury shares. The nominal value of treasury shares held by
Cooper Industries plc at any time must not exceed 10% of the
nominal value of the issued share capital of Cooper Industries
plc. While Cooper Industries plc holds shares as treasury
shares, it cannot exercise any voting rights in respect of those
shares. Treasury shares may be cancelled by Cooper Industries
plc or reissued subject to certain conditions.
Purchases
by Subsidiaries of Cooper Industries plc
Under Irish law, it may be permissible for an Irish or non-Irish
subsidiary to purchase shares of Cooper Industries plc either
on-market or off-market. A general authority of the shareholders
of Cooper Industries plc is required to allow a subsidiary of
Cooper Industries plc to make on-market purchases of Cooper
Industries plc 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 Cooper
Industries plc shares is required. We expect that Cooper
Industries plc will seek to renew such general authority, which
must expire no later than 18 months after the date on which
it was granted, at the first annual general meeting of Cooper
Industries plc in 2010 and at subsequent annual general
meetings. In order for a subsidiary of Cooper Industries plc to
make an on-market purchase of Cooper Industries plcs
ordinary shares, such shares must be purchased on a
recognized stock exchange. The NYSE, on which the
shares of Cooper Industries plc will be listed following the
Transaction, is not currently specified as a recognized stock
exchange for this purpose by Irish company law. We understand,
however, that it is likely that the Irish authorities will take
appropriate steps in the near future to add the NYSE to the list
of recognized stock exchanges. For an off-market purchase by a
subsidiary of Cooper Industries plc, the proposed purchase
contract must be authorized by special resolution of the
shareholders of Cooper Industries 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 Cooper Industries
plc.
The number of shares held by the subsidiaries of Cooper
Industries 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 Cooper Industries plc. While a subsidiary holds
shares of Cooper Industries
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plc, it cannot exercise any voting rights in respect of those
shares. The acquisition of the shares of Cooper Industries plc
by a subsidiary must be funded out of distributable reserves of
the subsidiary.
Existing
Share Repurchase Program
On February 12, 2008, Cooper Industries, Ltd.s board
of directors authorized the repurchase of ten million common
shares. On February 9, 2009, Cooper Industries, Ltd.s
board of directors increased the share repurchase authorization
by ten million shares. Cooper Industries, Ltd. has also
announced that the board authorized the repurchase of shares
issued from time to time under its equity compensation plans,
matched savings plan and dividend reinvestment plan in order to
offset the dilution that results from issuing shares under these
plans. Cooper Industries, Ltd. may continue to repurchase shares
under these authorizations from time to time. The decision
whether to do so will be dependent on the favorability of market
conditions, as well as potential cash requirements for
acquisitions and debt repayments. As of July 13, 2009,
12,766,635 shares remained available under the existing
share repurchase program plus the number of shares to be issued
from time to time under equity compensation plans to offset the
dilution that results from issuing shares under these plans.
Prior to the consummation of the Transaction, we expect
(a) the board of directors of Cooper Industries plc to
authorize the repurchase of Cooper Industries plc shares by
Cooper Industries plc and (b) Cooper Industries, Ltd. and
its nominee shareholders of Cooper Industries plc to authorize
the purchase of Cooper Industries plc shares by subsidiaries of
Cooper Industries plc, such that Cooper Industries plc and its
subsidiaries will be authorized to purchase shares in an
aggregate amount approximately equal to the remaining
authorization under the existing Cooper Industries, Ltd. share
repurchase program as of the Transaction Time.
As noted above, because repurchases of Cooper Industries plc
shares by Cooper Industries plc will technically be effected as
a redemption of those shares pursuant to Article 3(d) of
the articles of association, such repurchases may be made
whether or not the NYSE is a recognized stock
exchange, and shareholder approval for such repurchases
will not be required.
However, because purchases of Cooper Industries plc shares by
subsidiaries of Cooper Industries plc may be made only on a
recognized stock exchange and only if the required
shareholder approval has been obtained, we expect that the
shareholder authorization for purchases by subsidiaries of
Cooper Industries plc described above will be effective as of
the later of (a) the Transaction Time and (b) the date
on which the NYSE becomes a recognized stock exchange for this
purpose. This authorization will lapse on the date of the first
annual general meeting of Cooper Industries plc, at which time
we expect that we would seek shareholder approval to renew this
authorization.
Bonus
Shares
Cooper Industries, Ltd. Subject to
satisfaction of the solvency requirements provided for in the
Bermuda Companies Act, the board may resolve to capitalize any
amount credited to any reserve or fund available for
distribution or the share premium account of Cooper Industries,
Ltd. for issuance and distribution to shareholders as fully paid
bonus shares on the same basis of entitlement as would apply in
respect of a dividend distribution.
Cooper Industries plc. Under Cooper Industries
plcs articles of association, the board may resolve to
capitalize any amount credited to any reserve or fund available
for distribution or the share premium account of Cooper
Industries plc for issuance and distribution to shareholders as
fully paid bonus shares on the same basis of entitlement as
would apply in respect of a dividend distribution.
Shareholder
Approval of Business Combinations and Appraisal Rights
Cooper Industries, Ltd. There are a number of
mechanisms for acquiring a Bermuda company, including:
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(a)
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a court-approved scheme of arrangement under the Bermuda
Companies Act. A scheme of arrangement with shareholders
requires the approval of a majority in number of registered
holders present
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and voting either in person or by proxy, representing 75% in
value of the shares (or class of shares), present and voting
either in person or by proxy at a meeting called to approve the
scheme and the sanction of the Bermuda Supreme Court;
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(b)
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through a tender offer by a third party for all of the shares of
Cooper Industries, Ltd. Where the holders of 90% or more of
Cooper Industries, Ltd.s shares have accepted an offer for
their shares in Cooper Industries, Ltd., 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;
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(c)
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the Bermuda Companies Act also allows the holders of not less
than 95% of the shares or any class of shares of a company
(referred to as the purchasers) to give notice to
the remaining shareholders or class of shareholders of their
intention to acquire the shares of the remaining shareholders on
the terms set forth in the notice. When such notice is given,
the purchasers are entitled to acquire the shares of the
remaining shareholders and are bound by the terms set forth in
the notice, unless a remaining shareholder applies to the
Bermuda Supreme Court for an appraisal of the value of the
shares to be purchased from him or her, in which event the
purchasers shall be entitled to acquire the remaining shares at
the price fixed by the court or cancel the acquisition
notice; and
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(d)
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under the Bermuda Companies Act, two or more companies
registered in Bermuda can amalgamate and continue as one
amalgamated company. A Bermuda exempted company and a foreign
corporation may amalgamate and continue either as a Bermuda
exempted company or as a foreign corporation. The statutory
threshold for approval of an amalgamation is 75% of shareholders
voting at a special general meeting or such other majority as is
stipulated in the bye-laws of the company.
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Under Bermuda 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 property and
assets.
Cooper Industries plc. There are a number of
mechanisms for acquiring an Irish public limited company,
including:
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(a)
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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 a majority
in number representing 75% of the shareholders present and
voting, whether in person or by proxy;
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(b)
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through a tender offer by a third party for all of the shares of
Cooper Industries plc. Where the holders of 80% or more of
Cooper Industries plcs ordinary shares have accepted an
offer for their shares in Cooper Industries 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 Cooper Industries plc were listed
on the Irish Stock Exchange or another regulated stock exchange
in the E.U., this threshold would be increased to 90%; and
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(c)
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it is also possible for Cooper Industries plc to be acquired by
way of a merger with an
E.U.-incorporated
public company under the E.U. Cross Border Merger Directive
2005/56. Such a merger must be approved by a special resolution.
If Cooper Industries plc is being merged with another E.U.
public company under the E.U. Cross Border Merger Directive
2005/56 and the consideration payable to Cooper Industries
plcs shareholders is not all in the form of cash, Cooper
Industries plcs shareholders may be entitled to require
their shares to be acquired at fair value.
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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 property and
assets.
Disclosure
of Interests in Shares
Cooper Industries, Ltd. The Bermuda Companies
Act does not include provisions related to disclosure of
interests in shares analogous to the provisions of the Irish
Companies Acts described below.
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Cooper Industries plc. Under the Irish
Companies Acts, there is a notification requirement for
shareholders who acquire or cease to be interested in 5% of the
shares of an Irish public limited company. A shareholder of
Cooper Industries plc must therefore make such a notification to
Cooper Industries plc if as a result of a transaction the
shareholder will be interested in 5% or more of the shares of
Cooper Industries plc; or if as a result of a transaction a
shareholder who was interested in more than 5% of the shares of
Cooper Industries plc ceases to be so interested. Where a
shareholder is interested in more than 5% of the shares of
Cooper Industries plc, any alteration of his or her interest
that brings his or her total holding through the nearest whole
percentage number, whether an increase or a reduction, must be
notified to Cooper Industries 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 Cooper Industries
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 Cooper
Industries 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
Cooper Industries 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.
In addition to the above disclosure requirement, Cooper
Industries plc, under the Irish Companies Acts, may by notice in
writing require a person whom Cooper Industries 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 Cooper
Industries 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 Cooper Industries plc, to give such
further information as may be required by Cooper Industries plc
including particulars of such persons own past or present
interests in shares of Cooper Industries 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 Cooper Industries plc on a
person who is or was interested in shares of Cooper Industries
plc and that person fails to give Cooper Industries plc any
information required within the reasonable time specified,
Cooper Industries 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:
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(a)
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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;
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(b)
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no voting rights shall be exercisable in respect of those shares;
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(c)
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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
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(d)
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no payment shall be made of any sums due from Cooper Industries
plc on those shares, whether in respect of capital or otherwise.
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Where the shares in Cooper Industries 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.
Special
Vote Required for Business Combinations with Related
Persons
Cooper Industries, Ltd. Cooper Industries,
Ltd.s bye-laws include a provision according to which the
affirmative vote of the holders of not less than 80% of the
voting power of Cooper Industries, Ltd. on the relevant record
date is required for the approval or authorization of any
Business Combination with a Related
Person; provided, however, that the 80% voting requirement
is not applicable if:
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(a)
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Cooper Industries, Ltd.s Continuing Directors
by a two-thirds (2/3) vote have expressly approved the Business
Combination either in advance of or subsequent to the
acquisition of outstanding Class A
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common shares of Cooper Industries, Ltd. that caused the Related
Person involved in the Business Combination to become a Related
Person; or
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(b) If the following conditions are satisfied:
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(i)
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The aggregate amount of the cash and the fair market value of
the property, securities or other consideration to be received
in the Business Combination by holders of the Class A
common shares of Cooper Industries, Ltd., other than the Related
Person involved in the Business Combination, is not less than
the Highest Per Share Price (with appropriate
adjustments for recapitalizations, reclassifications, stock
splits, reverse stock splits and stock dividends) paid by the
Related Person in acquiring any of its holdings of the
Class A common shares of Cooper Industries, Ltd., all as
determined by two-thirds (2/3) of the Continuing
Directors; and
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(ii)
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A proxy statement complying with the requirements of the
Exchange Act shall have been mailed at least thirty
(30) days prior to any vote on the Business Combination, to
all shareholders of Cooper Industries, Ltd. for the purpose of
soliciting shareholder approval of the Business Combination.
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A Business Combination is generally defined as a
merger, sale or other disposition of all or a substantial part
of the assets of Cooper Industries, Ltd. or of a Related Person,
and the issuance or transfer by Cooper Industries, Ltd. of any
of its securities to a Related Person, among other transactions.
A Related Person is generally defined as a person
who, together with affiliates and associates, owns, as of the
record date for the determination of shareholders entitled to
notice of and to vote on any Business Combination, or
immediately prior to the consummation of such transaction, in
the aggregate 20% or more of the outstanding Class A common
shares of Cooper Industries, Ltd. A Continuing
Director is generally defined as someone who either
(a) was a member of the board of directors of Cooper
Industries, Ltd. immediately prior to the time that the Related
Person involved in a Business Combination became a Related
Person, or (b) was designated (before his or her initial
election as director) as a Continuing Director by two-thirds
(2/3) of the then Continuing Directors.
Cooper Industries plc. Cooper Industries
plcs articles of association include a provision according
to which the affirmative vote of the holders of not less than
80% of the voting power of Cooper Industries plc on the relevant
record date is required for the approval or authorization of any
Business Combination with a Related
Person; provided, however, that the 80% voting requirement
is not applicable if:
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(a)
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Cooper Industries plcs Continuing Directors by
a two-thirds (2/3) vote have expressly approved the Business
Combination either in advance of or subsequent to the
acquisition of outstanding ordinary shares of Cooper Industries
plc that caused the Related Person involved in the Business
Combination to become a Related Person; or
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(b) If the following conditions are satisfied:
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(i)
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The aggregate amount of the cash and the fair market value of
the property, securities or other consideration to be received
in the Business Combination by holders of the ordinary shares of
Cooper Industries plc, other than the Related Person involved in
the Business Combination, is not less than the Highest Per
Share Price (with appropriate adjustments for
recapitalizations, reclassifications, share consolidations and
divisions and dividends in specie) paid by the Related
Person in acquiring any of its holdings of Cooper Industries
plcs ordinary shares, all as determined by two-thirds
(2/3) of the Continuing Directors; and
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(ii)
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A proxy statement complying with the requirements of the
Exchange Act shall have been mailed at least thirty
(30) days prior to any vote on the Business Combination, to
all shareholders of Cooper Industries plc for the purpose of
soliciting shareholder approval of the Business Combination.
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A Business Combination is generally defined as a
merger, sale or other disposition of all or a substantial part
of the assets of Cooper Industries plc or of a Related Person,
and the issuance or transfer by Cooper Industries plc of any of
its securities to a Related Person, among other transactions. A
Related Person is
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generally defined as a person who, together with affiliates and
associates, owns, as of the record date for the determination of
shareholders entitled to notice of and to vote on any Business
Combination, or immediately prior to the consummation of such
transaction, in the aggregate 20% or more of the outstanding
ordinary shares of Cooper Industries plc. A Continuing
Director is generally defined as someone who either
(a) was a member of the board of directors of Cooper
Industries plc immediately prior to the time that the Related
Person involved in a Business Combination became a Related
Person, or (b) was designated (before his or her initial
election as director) as a Continuing Director by two-thirds
(2/3) of the then Continuing Directors.
Other
Anti-Takeover Measures
Cooper
Industries, Ltd.
Shareholder
Rights Plans and Share Issuances
The board of directors of Cooper Industries, Ltd. adopted a
Shareholder Rights Plan that authorized the issuance of one
right for each common share outstanding on May 22, 2002.
Each Right entitled the holder to buy one one-hundredth of a
share of Series A Participating Preferred Stock at a
purchase price of $225 per one one-hundredth of a share or, in
certain circumstances common shares having a value of twice the
purchase price. Each right became exercisable only in certain
circumstances constituting a potential change of control on a
basis considered inadequate by the board of directors. The
rights were scheduled to expire August 5, 2007.
On August 3, 2007, Cooper Industries, Ltd. entered into an
Amended and Restated Rights Agreement (the Amended Rights
Plan). The Amended Rights Plan extends the final
expiration of the Shareholder Rights Plan to August 1,
2017. In addition, the Amended Rights Plan increases the
exercise price of each full right from $225 to $600 (equivalent
to $300 for each one-half of a right, which is the fraction of a
right that is currently associated with each Class A common
share following the two-for-one stock split effective March
2007); eliminates a
ten-day
window to redeem the rights after a person has become an
Acquiring Person; adds a provision that allows the
board of directors to exchange the outstanding and exercisable
rights for additional common shares (or, in certain situations,
a number of Series A Participating Preferred Shares) at the
rate of one common share per right, at any time after a person
becomes an Acquiring Person, and adds a provision
clarifying that Cooper Industries, Ltd. is allowed to lower the
acquiror ownership threshold at which dilution is triggered to
no less than 10% at anytime prior to the time any person becomes
an Acquiring Person.
An Acquiring Person is generally defined as any
person who or which, together with all affiliates and associates
of such person, owns 15% or more of the Class A common
shares outstanding.
Subject to Cooper Industries, Ltd.s bye-laws and Bermuda
law, the board also has power to issue any authorized and
unissued shares of Cooper Industries, Ltd., and, in the case of
preferred shares, on such terms and conditions as it may
determine (as described above under
Capitalization Authorized Share
Capital). Any such action should be taken in the best
interests of Cooper Industries, Ltd. It is possible, however,
that the terms and conditions of any issue of preferred shares
could discourage a takeover or other transaction that holders of
some or a majority of the common shares believe to be in their
best interests or in which holders might receive a premium for
their shares over the market price of the shares.
Cooper
Industries plc.
Shareholder
Rights Plans and Share Issuances
Irish law does not expressly prohibit companies from issuing
share purchase rights or adopting a shareholder rights plan as
an anti-takeover measure.
Prior to the consummation of the Transaction, Cooper Industries
plc will adopt a rights plan the content of which will be
substantially similar to that of the Amended Rights Plan of
Cooper Industries, Ltd. described above.
Subject to Cooper Industries plcs articles of association,
Irish law and the Irish Takeover Rules described below, the
board also has power to issue any authorized and unissued shares
of Cooper Industries plc, and, in the case of preferred shares,
on such terms and conditions as it may determine (as described
above under
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Capitalization Authorized Share
Capital) and any such action should be taken in the best
interests of Cooper Industries plc. It is possible, however,
that the terms and conditions of any issue of preferred shares
could discourage a takeover or other transaction that holders of
some or a majority of the ordinary shares believe to be in their
best interests or in which holders might receive a premium for
their shares over the then market price of the shares.
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 Cooper Industries
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 Cooper Industries
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 Cooper Industries 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.
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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 Cooper Industries 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 Cooper Industries 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 Cooper Industries plc (a) 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 Cooper Industries plc or (b) 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
Cooper Industries plc ordinary share shall be not less than the
highest price paid by the bidder or its concert parties during,
in the case of (a), the period of 12 months prior to the
commencement of the offer period and, in the case of (b), 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 Cooper Industries 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, together with any concert parties, 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 Cooper
Industries 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 Cooper
Industries plc is prohibited, if such acquisition(s), when
aggregated with shares or rights already held, would result in
the acquirer, together with any concert parties, holding 15% or
more but less than 30% of the voting rights of Cooper Industries
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 Cooper
Industries plc is not permitted to take any action which might
frustrate an offer for the shares of Cooper Industries 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
(a) the issue of shares, options or convertible securities,
(b) material disposals, (c) entering into contracts
other than in the ordinary course of business or (d) 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 has reason to
believe an offer is imminent. Exceptions to this prohibition are
available where:
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(a)
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the action is approved by the offeree at a general
meeting; or
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(b)
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with the consent of the Irish Takeover Panel where:
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(i)
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the Irish Takeover Panel is satisfied the action would not
constitute a frustrating action;
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(ii)
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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;
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(iii)
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in accordance with a contract entered into prior to the
announcement of the offer; or
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(iv)
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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.
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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, Disclosure of Interests in
Shares and Special Vote Required for
Business Combinations with Related Persons, in addition to
Election of Directors,
Vacancies on Board of Directors,
Removal of Directors,
Board and Committee Composition;
Management, Shareholder Consent to
Action Without Meeting, Director
Nominations; Proposals of Shareholders and
Amendment of Governing Documents below.
Election
of Directors
Cooper Industries, Ltd. Cooper Industries,
Ltd.s bye-laws provide for a minimum of nine and a maximum
of fifteen directors. The bye-laws provide that the number of
directors to be elected at any time within the maximum and the
minimum limitations provided in the previous sentence will be
determined from time to time by the board pursuant to a
resolution to be adopted by the affirmative vote of a majority
of the directors in office. The directors are divided into three
classes. Each class consists, as nearly as possible, of
one-third of the total number of directors constituting the
entire board. At each annual general meeting of shareholders,
successors to the class of directors whose term expires at that
annual general meeting are elected for a three-year term. If the
number of directors is changed from time to time, any increase
or decrease is apportioned among the classes so as to maintain
the number of directors in each class as nearly equal as
possible. In no case will a decrease in the number of directors
shorten the term of any incumbent director. A director shall
hold office until the annual general meeting for the year in
which his or her term expires and until his or her successor
shall be elected and shall qualify, subject, however, to prior
death, resignation, retirement, disqualification or removal from
office.
Directors are elected by the affirmative vote of a plurality of
the votes cast by the holders of shares entitled to vote at a
general meeting.
Cooper Industries plc. The Irish Companies
Acts provide for a minimum of two directors. Cooper Industries
plcs articles of association provide for a minimum of
seven directors and a maximum of thirteen. The directors shall
be divided into three classes, designated Class I,
Class II and Class III. Each class shall consist, as
nearly as possible, of one-third of the total number of
directors constituting the entire board. The initial division of
the board into classes will be the same as the classes for the
current directors of Cooper Industries, Ltd. The term of the
initial Class I directors shall terminate on the date of
the 2010 annual general meeting; the term of the initial
Class II directors shall terminate on the date of the 2011
annual general meeting; and the term of the initial
Class III directors shall terminate on the date of the 2012
annual general meeting. At each annual general meeting of
members beginning in 2010, successors to the class of directors
whose term expires at that annual general meeting shall be
elected for a three-year term. If the number of directors is
changed, any increase or decrease shall be apportioned among the
classes so as to maintain the number of directors in each class
as nearly equal as possible. In no case will a decrease in the
number of directors shorten the term of any incumbent director.
A director shall hold office until the annual general meeting
for the year in which his or her term expires and until his or
her successor shall be elected and shall qualify, subject,
however, to prior death, resignation, retirement,
disqualification or removal from office. Although the Cooper
Industries, Ltd. bye-laws provide that the number of directors
elected within the minimum and maximum fixed by the bye-laws
will be determined by the board of directors, the Cooper
Industries plc articles of association do not include analogous
provisions because Irish law does not recognize the concept of
board size within the minimum and maximum number of
directors.
Directors are elected by ordinary resolution at a general
meeting. Irish law requires majority voting for the election of
directors, which could result in the number of directors falling
below the minimum prescribed by the articles due to the failure
of nominees to be elected, while Bermuda law permits plurality
voting, which could not lead to such a result. Accordingly,
Cooper Industries plcs articles of association provide
that if, at any general meeting of shareholders, the number of
directors is reduced below the minimum prescribed by the
articles of association due to the failure of any persons
nominated to be directors to be elected, then in those
circumstances,
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the nominee or nominees who receive the highest number of votes
in favor of election shall be elected in order to maintain such
prescribed minimum number of directors and each such director
shall remain a director (subject to the provisions of the Irish
Companies Acts and the articles) only until the conclusion of
the next annual general meeting of Cooper Industries plc unless
such director is elected by the shareholders during such meeting.
Vacancies
on Board of Directors
Cooper Industries, Ltd. Any vacancy on the
board of directors, including a vacancy that results from an
increase in the number of directors or from the death,
resignation, retirement, disqualification or removal of a
director, is deemed a casual vacancy. Subject to the terms of
any one or more classes or series of preferred shares, any
casual vacancy may be filled by a majority of the board then in
office, provided that a quorum is present.
Any director of any class elected to fill a vacancy resulting
from an increase in the number of directors of such class holds
office for a term that coincides with the remaining term of that
class. Any director elected to fill a vacancy not resulting from
an increase in the number of directors has the same remaining
term as that of his or her predecessor. Subject to Bermuda law
and the bye-laws, during any vacancy in the board of directors,
the remaining directors shall have full power to act as the
board of directors of Cooper Industries, Ltd.
Cooper Industries plc. Any vacancy on the
board of directors, including a vacancy that results from an
increase in the number of directors or from the death,
resignation, retirement, disqualification or removal of a
director, shall be deemed a casual vacancy. Subject to the terms
of any one or more classes or series of preferred shares, any
casual vacancy may be filled by decision of a majority of the
board then in office, provided that a quorum is present.
Any director of any class elected to fill a vacancy resulting
from an increase in the number of directors of such class shall
hold office for a term that shall coincide with the remaining
term of that class. Any director elected to fill a vacancy not
resulting from an increase in the number of directors shall have
the same remaining term as that of his or her predecessor.
Subject to Irish law and the articles of association, during any
vacancy in the board of directors, the remaining directors shall
have full power to act as the board of directors of Cooper
Industries plc.
Removal
of Directors
Cooper Industries, Ltd. Cooper Industries,
Ltd.s bye-laws provide that any director may be removed
from office by the affirmative vote of the holders of at least
80% of the voting power of Cooper Industries on the record date
in favor of such removal, unless a majority of the board of
directors has previously voted in favor of such removal, in
which case the shareholders will be entitled to remove a
director with a majority of the votes cast at a meeting held in
accordance with the requirements of the Bermuda Companies Act.
Cooper Industries plc. The Irish Companies
Acts provide that notwithstanding anything contained in the
articles of association of a company or in any agreement between
that company and a director, the shareholders may by an ordinary
resolution remove a director from office before the expiration
of his or her term. Because of this provision of the Irish
Companies Acts, which does not have an analog under Bermuda law,
Cooper Industries plcs articles of association do not
include the same provisions in respect of removal of directors
that are included in the Cooper Industries, Ltd. bye-laws;
instead, the articles of association provide that Cooper
Industries plc may, by ordinary resolution, remove any director
before the expiration of his period of office notwithstanding
anything in any agreement between Cooper Industries plc and the
removed director.
Board and
Committee Composition; Management
Cooper Industries, Ltd. The bye-laws of Cooper
Industries, Ltd. provide that the board of directors at any time
may elect from its number an executive committee and other
committees, each of which must consist of not less than three
directors. Each member of each such committee shall hold office
at the pleasure of the board and may be removed by the board at
any time with or without cause. Vacancies occurring in the
committees may be filled by the board. Except as the executive
committees powers and duties may be limited or otherwise
prescribed by the board, the executive committee, during the
intervals between the meetings of
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the board, shall possess and may exercise all of the powers of
the board in the management and control of the business and
property of Cooper Industries, Ltd.; and other committees shall
have such powers of the board as from time to time delegated to
them by the board; provided, however, that no committee shall be
empowered to elect directors to fill vacancies among the
directors or any committee of the directors.
Cooper Industries plc. The articles of
association of Cooper Industries plc provide that the board of
directors at any time may elect from its number an executive
committee and other committees, each of which shall consist of
not less than three directors. Each member of each such
committee shall hold office at the pleasure of the board and may
be removed by the board at any time with or without cause.
Vacancies occurring in the committees may be filled by the
board. Except as the executive committees powers and
duties may be limited or otherwise prescribed by the board, the
executive committee, during the intervals between the meetings
of the board, shall possess and may exercise all of the powers
of the board in the management and control of the business and
property of Cooper Industries plc; and other committees shall
have such powers of the board as shall be from time to time
delegated to them by the board; provided, however, that no
committee shall be empowered to elect directors to fill
vacancies among the directors or on any committee of the
directors.
Duties of
the Board of Directors
Cooper Industries, Ltd. As a general rule,
directors common law and statutory duties are to the
company as a whole and not to individual shareholders or
creditors (however directors must have regard to the interests
of creditors if the company is insolvent or in the zone of
insolvency).
Directors owe two types of duties to a company: a fiduciary duty
and a duty of skill and care. A directors fiduciary duty
to the company has four general aspects: (a) duty to act in
good faith and in the best interests of the company;
(b) duty to exercise powers for a proper purpose (i.e.,
generally should not exercise their powers in such a way as to
prevent a majority of the shareholders from exercising their
rights); (c) duty not to put themselves in a position in
which their duties to the company and their personal interests
may conflict; and (d) duty to void secret profits, meaning
that unless the bye-laws specifically provide, a director may
not make a personal profit from any opportunities arising out of
his or her directorship.
The duty of skill and care a director must exercise has three
aspects: (a) skill of a person of his or her particular
knowledge and experience; (b) attention to the business;
and (c) reliance on others, meaning that a director may
rely in good faith on officers who have been appointed for
specific purposes of attending to the detail of the management,
or a professional who provides a report to the directors whose
profession gives credibility to a statement made by such person,
however they cannot absolve themselves entirely of their
responsibility by delegation to others.
Cooper Industries plc. The directors of Cooper
Industries plc have certain statutory and fiduciary duties. All
of the directors have equal and overall responsibility for the
management of Cooper Industries plc (although directors who also
serve as employees will have additional responsibilities and
duties arising under their employment arrangements and will be
expected to exercise a greater degree of skill and diligence
than non-executive directors). The principal directors
duties include the common law fiduciary duties of good faith and
exercising due care and skill. The statutory duties include
ensuring the maintenance of proper books of account, having
annual accounts prepared, having an annual audit performed, the
duty to maintain certain registers and make certain filings as
well as disclosure of personal interests. Particular duties also
apply to directors of insolvent companies (for example, the
directors could be liable to sanctions where they are deemed by
the court to have carried on the business of Cooper Industries
plc while insolvent, without due regard to the interests of
creditors). For public limited companies like Cooper Industries
plc, directors are under a specific duty to ensure that the
secretary is a person with the requisite knowledge and
experience to discharge the role.
Indemnification
of Directors and Officers; Insurance
Cooper Industries, Ltd. Any provision in the
bye-laws or any contract or other arrangement of a company
purporting to indemnify a director or officer against liability
in respect of any fraud or dishonesty is
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void. However it is permissible to indemnify directors or
officers from liability arising from negligence, default, breach
of duty or breach of trust not involving dishonesty or fraud.
This exemption will cover all liabilities, loss, damage or
expense (including but not limited to liabilities under
contract, tort and statute). This indemnification may also cover
any liabilities which the director or officer incurs in
defending any proceedings (criminal or civil) where relief
is granted to him, where he or she is acquitted, or where
judgment is given in his or her favor. The bye-laws of Cooper
Industries, Ltd. provide that Cooper Industries, Ltd. will
indemnify any director or officer or any former director or
officer of Cooper Industries, Ltd., or any person who is serving
or has served at the request of Cooper Industries, Ltd. as a
director, officer, or trustee of another corporation, joint
venture, trust or other enterprise against expenses, including
attorneys fees, judgments, fines, and amounts paid in
settlement actually and reasonably incurred by him or her in
connection with any threatened, pending, or completed action,
suit or proceeding, whether civil, criminal, administrative or
investigative, other than an action by or in the right of Cooper
Industries, Ltd., to which he or she was, is, or is threatened
to be made a party by reason of the fact that he or she is or
was such director, officer or trustee; the indemnity contained
in the bye-laws shall not extend to any matter which would
render it void pursuant to Bermuda law. In the case of any
threatened, pending or completed action, suit or proceeding by
or in the right of Cooper Industries, Ltd., Cooper Industries,
Ltd. will indemnify any director or officer or any former
director or officer of Cooper Industries, Ltd. against expenses,
including attorneys fees, actually and reasonably incurred
in connection with the defense or settlement thereof, except no
indemnification shall be made in respect of any claim, issue or
matter as to which such person shall have been adjudged to be
liable for fraud or dishonesty in the performance of his or her
duty to Cooper Industries, Ltd. unless and only to the extent
that the Bermuda Supreme Court in Bermuda or the court in which
such action or suit was brought will determine upon application
that despite the adjudication of liability, but in view of all
the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses as the court
shall deem proper. In addition, the directors and officers of
Cooper Industries, Ltd. currently have indemnification
agreements with Cooper Industries, Ltd. Please see
Proposal Number One: The Reorganization
Indemnification Agreements.
Under the Bermuda Companies Act, a company may itself take out a
policy of insurance for the benefit of any director or officer
against any liability incurred for his or her failure to
exercise the care, diligence and skill of a
reasonably prudent person. Insurance may also be purchased to
cover any liability arising from any negligence, default, breach
of duty or breach of trust of such director, other than breaches
involving fraud or other dishonesty.
Cooper Industries plc. Cooper Industries
plcs articles of association confer an indemnity on its
directors and Secretary that is more limited than the analogous
indemnity in Cooper Industries, Ltd.s bye-laws, because
the Irish Companies Acts prescribe that such an indemnity only
permits a company to pay the costs or discharge the liability of
a director or the secretary where judgment is given in any civil
or criminal action in respect of such costs or liability, or
where an Irish court grants relief because the director or
secretary acted honestly and reasonably and ought fairly to be
excused. This restriction does not apply to executives who are
not directors or the Secretary of Cooper Industries plc. Any
provision which seeks to indemnify a director or secretary of an
Irish company over and above this shall be void under Irish law,
whether contained in its articles of association or any contract
between the director or secretary and the company.
In addition, the articles of association of Cooper Industries
plc also contain an indemnity for officers (other than the
directors and Secretary) which is substantially similar to the
indemnity for officers in Cooper Industries, Ltd.s
bye-laws.
The directors of Cooper Industries plc may on a
case-by-case
basis decide at their discretion that it is in the best interest
of Cooper Industries plc to indemnify an individual director
from any liability arising from his or her position as a
director of Cooper Industries plc. However, this discretion must
be exercised bona fide in the best interests of Cooper
Industries plc as a whole.
Irish companies may take out directors and officers liability
insurance, as well as other types of insurance, for their
directors and officers.
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In addition, in connection with the Transaction, we expect that
Cooper Industries, Ltd. and Cooper Industries plc will enter
into indemnification agreements (or deed poll indemnities) with
or with respect to each of Cooper Industries plcs
directors and its Secretary, as well as indemnification
agreements with each of Cooper Industries plcs officers
(other than its directors and Secretary). Please see
Proposal Number One: The Reorganization
Indemnification Agreements.
Limitation
on Director Liability
Cooper Industries, Ltd. Although it is
permissible to exempt directors or officers from liability
arising from negligence, default, breach of duty or breach of
trust not involving dishonesty or fraud, Cooper Industries,
Ltd.s bye-laws do not contain any provision exempting
directors or officers from such liability. The Cooper
Industries, Ltd. bye-laws do, however, provide indemnification
rights to directors and officers as described above under
Indemnification of Directors and Officers;
Insurance. Where a breach of duty has been established,
directors may be statutorily exempted by the Bermuda courts from
personal liability for negligence or breach of duty, if among
other things, the Bermuda court determines they have acted
honestly and reasonably and they ought fairly to be excused.
Cooper Industries plc. Under Irish law, a
company may not exempt its directors from liability for
negligence or a breach of duty, and therefore Cooper Industries
plcs articles of association do not include provisions
exempting directors from liability. However, where a breach of
duty has been established, directors may be statutorily exempted
by an Irish court from personal liability for negligence or
breach of duty if, among other things, the court determines that
they have acted honestly and reasonably, and that they may
fairly be excused as a result.
Conflicts
of Interest
Cooper Industries, Ltd. As a matter of common
law applied in Bermuda, a director of a Bermuda company should
seek to avoid placing himself in a position where there is an
actual conflict, or a possible conflict, between the duties he
or she owes to the company and either his or her personal
interest or other duties that he or she owes to a third party,
and if a director is in any way, directly or indirectly,
interested in a proposed transaction or arrangement with the
company, he or she must declare the nature and extent of that
interest to the other directors at the first opportunity.
Although Bermuda law and Cooper Industries, Ltd.s bye-laws
would not prohibit such director from participating in any vote
in relation to such proposed transaction or arrangement
following such disclosure, he or she would be prohibited from
doing so pursuant to the policy on conflicts of interest adopted
by Cooper Industries, Ltd. The common law duty of a director to
avoid conflicts of interest also extends to not making personal
profit from opportunities that result from directorship.
This common law duty of a director to avoid conflicts of
interest generally is not breached in respect of matters that
have been declared by the director to the company at the
appropriate time and authorized by the directors generally.
Cooper Industries plc. As a matter of Irish
law, a director is under a general fiduciary duty to avoid
conflicts of interest. Directors who have a personal interest in
a proposed transaction or arrangement with Cooper Industries plc
are required to declare the nature of their interest, whether
direct or indirect, at a meeting of the directors of Cooper
Industries plc. Cooper Industries plc is required to maintain a
register of such declared interests which must be available for
inspection by the shareholders. Although Irish law and Cooper
Industries plcs articles of association would not prohibit
such director from participating in any vote in relation to such
proposed transaction or arrangement following such disclosure,
he or she would be prohibited from doing so pursuant to the
policy on conflicts of interest that Cooper Industries plc
expects to adopt in connection with the Transaction. The
fiduciary duty of a director to avoid conflicts of interest also
extends to not making personal profit from opportunities that
result from directorship.
Shareholders
Suits
Cooper Industries, Ltd. Under Bermuda law, a
court will generally refuse to interfere with the management of
a company on behalf of minority shareholders who are
dissatisfied with the conduct of a
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companys affairs by its board of directors. However, each
shareholder is entitled to have the affairs of the company
properly conducted in accordance with law. Therefore, if those
who control the company persistently disregard the requirements
of law or of the companys memorandum of association or
bye-laws, the court may grant relief. Bermuda courts ordinarily
would be expected to follow English precedent, which would
permit the court to intervene in any of the following
circumstances: (a) where the act complained of is alleged
to be beyond the corporate power of the company or illegal;
(b) where the act complained of is alleged to constitute a
fraud against the minority shareholders by those controlling the
company, provided that the majority shareholders have used their
controlling position to prevent the company from taking action
against the wrongdoers; (c) where an act requires approval
by a greater percentage of the companys shareholders than
actually approved it; or (d) where such an action is
necessary in order that there not be a violation of the
companys memorandum of association or bye-laws.
Under the Bermuda Companies Act, a shareholder is entitled to
complain to the court that the affairs of the company are being
conducted in a manner which is oppressive or unfairly
prejudicial to the shareholders, or some of them, and seek a
winding up of the company or an alternative remedy.
An individual shareholder may seek to bring an action on behalf
of the company to enforce the companys rights, and
judgment in such a case would be in favor of the company.
A shareholder can bring a claim when he is alleging that the
wrong has been done to him personally in his capacity as a
shareholder. Typically, shareholders personal claims arise
from a breach or threatened breach of the bye-laws.
Cooper Industries plc. In Ireland, the
decision to institute proceedings is generally taken by a
companys board of directors who will usually be empowered
to manage the companys business. In certain limited
circumstances, a shareholder may be entitled to bring a
derivative action on behalf of Cooper Industries plc. The
central question at issue in deciding whether a minority
shareholder may be permitted to bring a derivative action is
whether, unless the action is brought, a wrong committed against
Cooper Industries plc would otherwise go un-redressed.
The principal case law in Ireland indicates that to bring a
derivative action a person must first establish a prima facie
case (1) that the company is entitled to the relief claimed
and (2) that the action falls within one of the five
exceptions derived from case law, as follows:
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Where an ultra vires or illegal act is perpetrated.
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Where more than a bare majority is required to ratify the
wrong complained of.
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Where the shareholders personal rights are infringed.
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Where a fraud has been perpetrated upon a minority by those in
control.
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Where the justice of the case requires a minority to be
permitted to institute proceedings.
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The shareholders of Cooper Industries plc may also bring
proceedings against Cooper Industries plc where the affairs of
Cooper Industries plc are being conducted, or the powers of the
directors are being exercised, in a manner oppressive to the
shareholders or in disregard of their interests. Oppression
connotes conduct which is burdensome, harsh or wrong. The
conduct must relate to the internal management of Cooper
Industries plc. This is an Irish statutory remedy and the court
can grant any order it sees fit, usually providing for the
purchase or transfer of the shares of any shareholder.
Shareholder
Consent to Action Without Meeting
Cooper Industries, Ltd. The Bermuda Companies
Act provides that anything, other than the removal of a director
or auditor, which may be done by resolution of a company at a
general meeting or a meeting of any class of shareholders may
also be done by resolution in writing and that such resolution
should be signed by shareholders representing the majority that
would have been required had such resolution been adopted at a
general meeting, or such other majority stipulated in the
companys bye-laws. The bye-laws provide that the
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bye-laws may be amended without a meeting by the written consent
of all of the holders of record of shares of Cooper Industries,
Ltd. See Amendment of Governing
Documents.
Cooper Industries plc. The Irish Companies
Acts provide that shareholders may approve a resolution without
a meeting if (a) all shareholders sign the written
resolution and (b) the companys articles of
association permit written resolutions of shareholders. Because
Irish law only permits a company to give shareholders the right
to take action by unanimous written consent, while Bermuda law
permits a company to give shareholders the right to take action
by majority written consent, Cooper Industries plcs
articles of association do not provide shareholders with the
right to take action by majority written consent, even though
Cooper Industries, Ltd.s bye-laws do provide shareholders
with such a right. However, Cooper Industries plcs
articles of association do provide shareholders with the right
to take action by unanimous written consent as permitted by
Irish law.
Annual
Meetings of Shareholders
Cooper Industries, Ltd. A general meeting of
Cooper Industries, Ltd.s shareholders shall be convened at
least once in every calendar year, and be referred to as the
annual general meeting. The general meetings may be held in
Bermuda or at such other place as may be determined by the
Chairman of the board, the Deputy Chairman or the President and
specified in the notice of meeting.
Notice of an annual general meeting must be given to all
shareholders of Cooper Industries, Ltd. The Bermuda Companies
Act provides that, notwithstanding any provisions in the
bye-laws of a company, at least 5 days notice shall be
given of any meeting of a company, other than an adjourned
meeting. The Cooper Industries, Ltd. bye-laws provide that
notice of an annual general meeting shall be given not less than
10 nor more than 60 days before the date of the meeting.
As a matter of Bermuda company law, the matters which must be
transacted at an annual general meeting (unless waived in
accordance with the Bermuda Companies Act) are the presentation
of financial statements of Cooper Industries, Ltd. and the
appointment of an auditor to hold office until the close of the
next annual general meeting (and, if no such appointment is
made, the auditor in office shall continue until a successor is
appointed).
Cooper Industries plc. Cooper Industries 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 Cooper
Industries plcs fiscal year-end. The first annual general
meeting of Cooper Industries plc may be held outside Ireland.
Thereafter, any annual general meeting may be held outside
Ireland if a resolution so authorizing has been passed at the
preceding annual general meeting.
Notice of an annual general meeting must be given to all
shareholders of Cooper Industries plc and to the auditors of
Cooper Industries plc. The articles of association of Cooper
Industries plc provide that the maximum notice period is
60 days. The minimum notice period is 21 days
notice in writing for an annual general meeting. Because of the
fifteen-month requirement described in the previous paragraph
and the
21-day
requirement described in this paragraph, which are different
from the analogous provisions of Bermuda law, Cooper Industries
plcs articles of association include provisions reflecting
these requirements of Irish law, even though the analogous
provisions of Cooper Industries, Ltd.s bye-laws differ in
this respect.
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.
Special
Meetings of Shareholders
Cooper Industries, Ltd. Special general
meetings of Cooper Industries, Ltd. may be convened by the
Chairman of the board of directors, the Deputy Chairman, the
board of directors, the President, or on
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requisition of the shareholders holding not less than 10% of the
paid up share capital of Cooper Industries, Ltd. carrying the
right to vote at a general meeting. Special general meetings are
generally held for the purposes of approving shareholder
resolutions of Cooper Industries, Ltd. as may be required from
time to time.
Notice of a special general meeting must be given to all
shareholders of Cooper Industries, Ltd. entitled to receive
notice. The Bermuda Companies Act provides that, notwithstanding
any provisions in the bye-laws of a company, at least
5 days notice shall be given of any meeting of a
company, other than an adjourned meeting. The Cooper Industries,
Ltd. bye-laws provide that notice of a special general meeting
shall be given not less than 10 nor more than 60 days
before the date of the meeting.
In the case of a special general meeting convened on requisition
of the shareholders of Cooper Industries, Ltd., the proposed
purpose of the meeting must be set out in the requisition
notice, which may contain any resolution. Upon receipt of this
requisition notice, the board of directors has 21 days to
convene a meeting of Cooper Industries, Ltd.s shareholders
to vote on the matters set out in 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.
Cooper Industries plc. Extraordinary general
meetings of Cooper Industries plc may be convened by the
Chairman of the board of directors, the board of directors, or
on requisition of the shareholders holding not less than 10% of
the paid up share capital of Cooper Industries plc carrying
voting rights. In limited circumstances, Cooper Industries
plcs auditors can require the board of directors to
convene extraordinary general meetings of Cooper Industries plc.
Extraordinary general meetings are generally held for the
purposes of approving shareholder resolutions of Cooper
Industries plc as may be required from time to time.
Notice of an extraordinary general meeting must be given to all
shareholders of Cooper Industries plc and to the auditors of
Cooper Industries plc. The articles of association of Cooper
Industries plc provide that the maximum notice period is
60 days. The minimum notice periods are 21 days
notice in writing for an extraordinary general meeting to
approve a special resolution and 14 days notice in
writing for any other extraordinary general meeting. General
meetings may be called by shorter notice, but only with the
consent of the auditors of Cooper Industries plc and all
of the shareholders entitled to attend and vote thereat.
Because of the
21-day and
14-day
requirements described in this paragraph, which are different
from the analogous provisions of Bermuda law, Cooper Industries
plcs articles of association include provisions reflecting
these requirements of Irish law, even though the analogous
provisions of Cooper Industries, Ltd.s bye-laws differ in
this respect.
In the case of an extraordinary general meeting convened on
requisition of the shareholders of Cooper Industries plc,
the proposed purpose of the meeting must be set out in the
requisition notice, which may contain any resolution. Upon
receipt of this requisition notice, the board of directors has
21 days to convene a meeting of Cooper Industries
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 the requisitioning shareholders, may themselves convene a
meeting, which meeting must be held within three months of the
receipt by the board of directors of the requisition notice.
If the directors become aware that the net assets of Cooper
Industries plc are half or less of the amount of Cooper
Industries plcs
called-up
share capital, the directors of Cooper Industries plc must
convene an extraordinary general meeting of Cooper Industries
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.
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Record
Dates for Shareholder Meetings
Cooper Industries, Ltd. Cooper Industries,
Ltd.s bye-laws provide for the board to fix a record date
for the purpose of determining the shareholders entitled to:
(a) notice of or to vote at any general meeting of
shareholders or any adjournment or postponement thereof;
(b) consent to corporate action in writing without a
meeting; (c) receive payment of any dividend or other
distribution or allotment of rights; (d) exercise any
rights in respect of any change, conversion or exchange of
shares; or (e) for the purpose of any other lawful action.
If no record date is fixed, the record date for determining
shareholders for any such purpose shall be at the close of
business on the day on which the board adopts the resolution
relating thereto.
Cooper Industries plc. Cooper Industries
plcs articles of association provide for the board to fix
a record date for the purpose of determining the shareholders
entitled to: (a) notice of
and/or to
vote at any general meeting of Cooper Industries plc or any
adjournment or postponement thereof; (b) consent to
corporate action in writing without a general meeting of the
company; (c) receive payment of any dividend or other
distribution or allotment of rights; (d) exercise any
rights in respect of any change, conversion or exchange of
shares; or (e) for the purpose of any other action
permitted by law. If no record date is fixed, the record date
for determining shareholders for any such purpose shall be at
the close of the business day on which the board adopts the
resolution relating thereto.
Director
Nominations; Proposals of Shareholders
Cooper Industries, Ltd. Cooper Industries,
Ltd.s bye-laws provide that at any annual general meeting,
only such business shall be conducted as shall have been
properly brought before the meeting: by or at the direction of
the board of directors; by any shareholder who complies with the
procedures set forth in Cooper Industries, Ltd.s bye-laws;
or by any shareholders pursuant to the valid exercise of the
power granted under the Bermuda Companies Act. For business to
be properly brought before an annual general meeting by a
shareholder, the shareholder must have given timely notice
thereof in proper written form to the Secretary of Cooper
Industries, Ltd. and satisfied all requirements under applicable
rules promulgated by the SEC or the NYSE or any other exchange
on which the Cooper Industries, Ltd.s securities are
traded.
To be timely for consideration at the annual general meeting, a
shareholders notice must be received by the Secretary of
Cooper Industries, Ltd. not less than 45 calendar days, or such
greater length of time as permitted by appropriate rules of the
SEC, in advance of the anniversary of the date that Cooper
Industries, Ltd.s proxy statement was released to
shareholders in connection with the previous years annual
general meeting.
To be in proper written form, a shareholders notice to the
Secretary must set forth as to each matter such shareholder
proposes to bring before the annual general meeting: (a) a
brief description of the business desired to be brought before
the annual general meeting and the reasons for conducting such
business at the annual general meeting, (b) the name and
record address of such shareholder, (c) the class or series
and number of capital shares of Cooper Industries, Ltd. which
are owned beneficially or of record by such shareholder,
(d) a description of all arrangements or understandings
between such shareholder and any other person or persons
(including their names) in connection with the proposal of such
business by such shareholder and any material interest of such
shareholder in such business, and (e) a representation that
such shareholder intends to appear in person or by proxy at the
annual general meeting to bring such business before the
meeting. To be in proper written form, a shareholders
notice to the Secretary regarding nomination of any person for
election to the board of directors must also set forth as to
each person whom the shareholder proposes to nominate for
election as a director: (a) the name, age, business address
and residence address of the person, (b) the principal
occupation or employment of the person, (c) the class or
series and number of capital shares of Cooper Industries, Ltd.
which are owned beneficially or of record by the person and
(d) any other information relating to the person that would
be required to be disclosed in a proxy statement or other
filings required to be made in connection with solicitations of
proxies for election of directors pursuant to Section 14 of
the Exchange Act and the rules and regulations promulgated
thereunder. Such notice must be accompanied by a written consent
of each proposed nominee to being named as a nominee and to
serve as a director if elected.
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The bye-laws of Cooper Industries, Ltd. provide that, at a
special general meeting, only such business shall be conducted
as shall be specified in the notice of meeting (or any
supplement thereto) given by or at the direction of the board.
Additionally, Bermuda law provides that shareholders holding not
less than 5% of the total voting rights or 100 or more
registered shareholders together may require a proposal to be
submitted to an annual general meeting. Generally, notice of
such a proposal must be deposited at Cooper Industries,
Ltd.s registered office not less than six weeks before the
date of the meeting, unless the meeting is subsequently called
for a date six weeks or less after the notice has been
deposited. In addition, the Bermuda Companies Acts provide that
shareholders holding not less than 10% of the total voting
rights may call an extraordinary general meeting for the purpose
of considering director nominations or other proposals, as
described above under Special Meetings of
Shareholders.
Cooper Industries plc. Cooper Industries
plcs articles of association provide that at any annual
general meeting, only such business shall be conducted as shall
have been properly brought before the meeting: by or at the
direction of the board of directors; or by any shareholder who
complies with the procedures set forth in Cooper Industries
plcs articles of association. For business to be properly
brought before an annual general meeting by a shareholder, the
shareholder must have given timely notice thereof in proper
written form to Cooper Industries plcs Secretary and
satisfied the requirements under applicable rules promulgated by
the SEC or the NYSE or any other exchange on which the Cooper
Industries plcs securities are traded. Although Cooper
Industries, Ltd.s bye-laws provide that business may be
brought before an annual general meeting by any shareholders
pursuant to the valid exercise of the power granted under the
Bermuda Companies Act, while the analogous provisions of Cooper
Industries plcs articles of association do not so provide,
this is due to the fact that, as described above, the Bermuda
Companies Act provides shareholders with statutory rights to
propose business at annual general meetings, while the Irish
Companies Acts do not provide shareholders with analogous
statutory rights.
To be timely for consideration at the annual general meeting, a
shareholders notice must be received by the Secretary of
Cooper Industries plc not less than 45 calendar days, or such
greater length of time as permitted by appropriate rules of the
SEC, in advance of the anniversary of the date that Cooper
Industries plcs proxy statement was released to
shareholders in connection with the previous years annual
general meeting (or no later than January 27, 2010 with
respect to the 2010 annual general meeting).
To be in proper written form, a shareholders notice to the
Secretary must set forth as to each matter such shareholder
proposes to bring before the annual general meeting: (a) a
brief description of the business desired to be brought before
the annual general meeting and the reasons for conducting such
business at the annual general meeting, (b) the name and
record address of such shareholder, (c) the class or series
and number of shares of Cooper Industries plc which are owned
beneficially or of record by such shareholder, (d) a
description of all arrangements or understandings between such
shareholder and any other person or persons (including their
names) in connection with the proposal of such business by such
shareholder and any material interest of such shareholder in
such business, and (e) a representation that such
shareholder intends to appear in person or by proxy at the
annual general meeting to bring such business before the
meeting. To be in proper written form, a shareholders
notice to the Secretary regarding nomination of any person for
election to the board of directors must also set forth as to
each person whom the shareholder proposes to nominate for
election as a director: (a) the name, age, business address
and residence address of the person, (b) the principal
occupation or employment of the person, (c) the class or
series and number of shares of Cooper Industries plc which are
owned beneficially or of record by the person, and (d) any
other information relating to the person that would be required
to be disclosed in a proxy statement or other filings required
to be made in connection with solicitations of proxies for
election of directors pursuant to Section 14 of the
Exchange Act and the rules and regulations promulgated
thereunder. Such notice must be accompanied by a written consent
of each proposed nominee to being named as a nominee and to
serve as a director if elected.
The articles of association of Cooper Industries plc provide
that, except as provided by law, at an extraordinary general
meeting, only such business shall be conducted as shall have
been specified in the notice of meeting (or any supplement
thereto) given by or at the direction of the board.
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In addition, the Irish Companies Acts provide that shareholders
holding not less than 10% of the total voting rights may call an
extraordinary general meeting for the purpose of considering
director nominations or other proposals, as described above
under Special Meetings of Shareholders.
Adjournment
of Shareholder Meetings
Cooper Industries, Ltd. Cooper Industries,
Ltd.s bye-laws provide that at any meeting duly called at
which a quorum is present, the holders of a majority of the
voting shares represented thereat may adjourn such meeting from
time to time without notice other than by announcement of the
chairman of the meeting. Cooper Industries, Ltd.s bye-laws
also provide that any meeting duly called at which a quorum is
not present shall be adjourned and Cooper Industries, Ltd. shall
provide a valid notice in the event that such meeting is to be
reconvened.
Cooper Industries plc. Cooper Industries
plcs articles of association provide that at any meeting
duly called at which a quorum is present, the holders of a
majority of the voting shares represented thereat may adjourn
such meeting from time to time without notice other than by
announcement of the chairman of the meeting. Cooper Industries
plcs articles of association also provide that any meeting
duly called at which a quorum is not present shall be adjourned
and Cooper Industries plc shall provide a valid notice in the
event that such meeting is to be reconvened.
Voting
Rights
Cooper Industries, Ltd. Where a poll is
demanded at a general meeting, each Class A common share
has one vote for each Class A common share that he or she
holds as of the record date for the meeting. Voting rights on a
poll may be exercised by shareholders registered in Cooper
Industries, Ltd.s 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. Subject to
any required preferred shares class vote, the holders of
Class A common shares will vote as a single class with the
holders of preferred shares and Class B common shares on
any matter on which Class B common shares are entitled to
vote under the Bermuda Companies Act. Generally, the holders of
Class B common shares are not entitled to vote. However,
under the Bermuda Companies Act, each Class B common share
of Cooper Industries, Ltd. carries the right to vote in respect
of an amalgamation or merger, whether or not it otherwise
carries the right to vote. Cooper Industries, Ltd. and its
subsidiaries that hold Class A common shares or
Class B common shares previously entered into a voting
agreement which provides the subsidiaries shall vote (or abstain
from voting) such shares in the same proportion as the
Class A Public Shareholders vote (or abstain from voting)
to ensure that voting of shares by such subsidiaries will not
dilute the voting power of the Class A Public Shareholders.
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 Bermuda law and Cooper Industries,
Ltd.s bye-laws. Bermuda law permits the appointment of
proxies by the shareholders to be notified to Cooper Industries,
Ltd. electronically.
The Bermuda Companies Act provides that any question proposed
for consideration at a general meeting shall be decided by a
show of hands or by a count of votes received in the form of
electronic record, unless a poll is demanded by: the chairman;
at least three shareholders present in person or represented by
proxy; any shareholder or shareholders present in person or
proxy and holding between them not less than 10% of the total
voting rights of all the members having the right to vote at
such meeting; or a shareholder or shareholders present in person
or represented by proxy holding shares in the company conferring
the right to vote at such meeting, being shares on which an
aggregate sum has been paid up equal to not less than 10% of the
total sum paid up on all such shares conferring such right.
Where a poll is not demanded, shareholders present in person or
by proxy at such meeting shall be entitled to one vote and shall
cast such vote by raising his or her hand.
In accordance with the bye-laws of Cooper Industries, Ltd., the
directors of Cooper Industries, Ltd. may from time to time cause
Cooper Industries, Ltd. to issue preferred shares. These
preferred shares may have such voting rights as may be specified
in the terms of such preferred shares.
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Subject to voting with respect to business combinations with
related persons, the election of directors and the amendments to
certain bye-laws as provided for in Cooper Industries,
Ltd.s bye-laws, on a poll, any matter submitted to
shareholders at a general meeting at which a quorum is present
requires the affirmative vote of the holders of a majority of
the total number of votes of the shares present in person or
represented by proxy and entitled to vote, unless otherwise
required by the Bermuda Companies Act or the bye-laws.
Cooper Industries plc. Where a poll is
demanded at a general meeting, every shareholder shall have one
vote for each ordinary share that he or she holds as of the
record date for the meeting. Voting rights on a poll may be
exercised by shareholders registered in Cooper Industries
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 Cooper Industries plcs articles
of association. The articles of association of Cooper Industries
plc permit the appointment of proxies by the shareholders to be
notified to Cooper Industries plc electronically.
Cooper Industries plcs articles of association provide
that all resolutions shall be decided by a show of hands unless
a poll is demanded by: the chairman; at least three shareholders
present in person or represented by proxy; any shareholder or
shareholders present in person or proxy and holding between them
not less than 10% of the total voting rights of all the members
having the right to vote at such meeting; or a shareholder or
shareholders present in person or represented by proxy holding
shares in the company conferring the right to vote at such
meeting, being shares on which an aggregate sum has been paid up
equal to not less than 10% of the total sum paid up on all such
shares conferring such right. Each Cooper Industries plc
ordinary shareholder of record as of the record date has one
vote at a general meeting on a show of hands.
In accordance with the articles of association of Cooper
Industries plc, the directors of Cooper Industries plc may from
time to time cause Cooper Industries plc to issue preferred
shares. These preferred shares may have such voting rights as
may be specified in the terms of such preferred shares.
Treasury shares will not be entitled to vote at general meetings
of shareholders.
Irish company law requires special resolutions of the
shareholders at a general meeting to approve certain matters.
Examples of matters requiring special resolutions include:
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Amending the objects or memorandum of association of Cooper
Industries plc;
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Amending the articles of association of Cooper Industries plc;
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Approving the change of name of Cooper Industries plc;
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Authorizing the entering into of a guarantee or provision of
security in connection with a loan, quasi-loan 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 Cooper Industries 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 Cooper Industries 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 a majority in
number representing 75% of the shareholders present and voting,
whether in person or by proxy.
Variation
of Class Rights Attaching to Shares
Cooper Industries, Ltd. The rights attached to
any class of shares, unless otherwise provided by the term of
issue of the shares of that class may be varied with the consent
in writing of the holders of three quarters (3/4) of the issued
shares of that class or with the sanction of a resolution passed
at a separate general meeting of the holders of the shares of
the class.
Cooper Industries plc. Variation of all or any
special rights attached to any class of shares of Cooper
Industries plc is addressed in the articles of association of
Cooper Industries plc as well as the Irish Companies Acts. Any
variation of class rights attaching to the issued shares of
Cooper Industries plc must be approved in writing by holders of
three quarters (3/4) of the issued shares in 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.
Amendment
of Governing Documents
Cooper Industries, Ltd. Under the Bermuda
Companies Act, amendments to the memorandum of association of a
Bermuda company must be approved by at least a majority of votes
cast by the shareholders voting on the amendments. Cooper
Industries, Ltd.s bye-laws provide that the bye-laws may
be altered, changed, or amended in any respect, or superseded by
new bye-laws, in whole or in part, by the board of directors,
subject to approval by the affirmative vote of the holders of
record of shares entitling them to exercise a majority of the
voting power of Cooper Industries, Ltd. on the relevant record
date with respect thereto at an annual or special general
meeting called for such purpose or without a meeting by the
written consent of all of the holders of record of shares of
Cooper Industries, Ltd. The affirmative vote of the holders of
at least 80% of Cooper Industries, Ltd.s voting power on
the relevant record date shall be required to alter, amend or
repeal certain bye-laws including bye-laws governing the number,
election and term of directors. An 80% shareholder vote
also generally is required to amend, change or repeal the
bye-laws
described above under Special Vote Required
for Business Combinations with Related Persons, unless
two-thirds
(2/3) of the Continuing Directors recommend such amendment,
change or repeal to shareholders, in which case the affirmative
vote of a majority of the voting power of Cooper Industries,
Ltd. on the relevant record date shall be required.
Cooper Industries plc. Irish companies may
only alter their memorandum and articles of association by at
least the passing of a special resolution. In general the
articles of association would typically be altered, changed, or
amended, or superseded by new articles, in whole or in part, on
the recommendation of the board of directors, and would be
subject to approval by special resolution of shareholders at an
annual or extraordinary general meeting called for such purpose
or without a meeting by the written consent of all of the
holders of record of shares of Cooper Industries plc. The
affirmative vote of the holders of at least 80% of Cooper
Industries plcs voting power on the relevant record date
shall be required to alter, amend or repeal certain provisions
of the articles of association, including those governing the
number, election and term of directors. An 80% shareholder
vote also generally is required to amend, change or repeal the
articles described above under Special Vote
Required for Business Combinations with Related Persons,
unless
two-thirds
(2/3) of the Continuing Directors recommend such amendment,
change or repeal to shareholders, in which case a special
resolution of shareholders of Cooper Industries plc on the
relevant record date shall be required.
Quorum
Requirements
Cooper Industries, Ltd. The holders of shares
entitling them to exercise a majority of the voting power of
Cooper Industries, Ltd. on the relevant record date shall
constitute a quorum to hold a general meeting of the
shareholders. No business may take place at a general meeting of
Cooper Industries, Ltd. 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 bye-laws of Cooper
Industries, Ltd. Abstentions and broker non-votes will be
counted as
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present for purposes of determining whether there is a quorum in
respect of the proposals to be voted upon by shareholders.
Cooper Industries plc. The holders of shares
entitling them to exercise a majority of the voting power of
Cooper Industries plc on the relevant record date shall
constitute a quorum to hold a general meeting of the
shareholders. No business may take place at a general meeting of
Cooper Industries 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 Cooper
Industries 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 to be voted upon by shareholders.
Inspection
of Books and Records
Cooper Industries, Ltd. Under Bermuda law,
shareholders have the right to: (a) inspect or obtain
copies of the minutes of general meetings of the company;
(b) receive a copy of the memorandum of association and the
bye-laws of Cooper Industries, Ltd.; (c) inspect or obtain
copies of the register of directors and officers and the
register of charges of Cooper Industries, Ltd.; (d) receive
financial statements, as required by the Bermuda Companies Act
before the annual general meeting; (e) inspect or obtain a
copy of the share register of Cooper Industries, Ltd. on any
business day, subject to reasonable restrictions imposed by the
board of directors; and (f) receive the auditors
report as part of the financial statements provided to them by
Cooper Industries, Ltd. The Bermuda Companies Act requires that
financial information be provided at a minimum of 5 days
prior to the general meeting of shareholders.
Cooper Industries plc. Under Irish law,
shareholders have the right to: (a) receive a copy of the
memorandum and articles of association of Cooper Industries plc
and any act of the Irish Government which alters the memorandum
of association of Cooper Industries plc; (b) inspect and
obtain copies of the minutes of general meetings and resolutions
of Cooper Industries plc; (c) 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 Cooper Industries plc;
(d) receive copies of balance sheets and directors
and auditors reports which have previously been sent to
shareholders prior to an annual general meeting; and
(e) receive balance sheets of a subsidiary company of
Cooper Industries plc which have previously been sent to
shareholders prior to an annual general meeting for the
preceding ten years. The auditors of Cooper Industries plc will
also have the right to inspect all books, records and vouchers
of Cooper Industries plc. If required by law, the auditors
report must be circulated to the shareholders with copies of the
balance sheet and directors report 21 days before the
annual general meeting and must be read to the shareholders at
Cooper Industries plcs annual general meeting.
Transfer
and Registration of Shares
Cooper Industries, Ltd. Cooper Industries,
Ltd.s branch share register is maintained by its transfer
agent. Registration in this share register is determinative of
membership in Cooper Industries, Ltd. A shareholder of Cooper
Industries, Ltd. who holds shares beneficially is not a 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 through the same
depository or other nominee is not registered in Cooper
Industries, Ltd.s share register, as the depository or
other nominee remains the record holder of such shares.
Subject to the Bermuda Companies Act and Cooper Industries,
Ltd.s bye-laws, any shareholder may transfer all or any of
its shares. The instrument of transfer of a share shall be
signed by or on behalf of the transferor and where any share is
not fully paid, the instrument of transfer shall be signed by or
on behalf of the transferee.
The board of directors may decline to register any transfer
unless:
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(i)
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the instrument of transfer is duly stamped and lodged with
Cooper Industries, Ltd. at such place as the board shall appoint
for the purpose, accompanied by the certificate for the shares
(if any has been issued) to which it relates and such other
evidence as the board of directors may reasonably require to
show the right of the transferor to make the transfer, or
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(ii)
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the instrument of transfer is in respect of only one class of
share; and
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(iii)
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where applicable, the permission of the Bermuda Monetary
Authority has been obtained.
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The registration of transfers may be suspended by the directors
at such times and for such period, not exceeding in the whole
30 days each year, as the directors may from time to time
determine.
Cooper Industries plc. Cooper Industries
plcs share register will be maintained by its transfer
agent. Registration in this share register will be determinative
of membership in Cooper Industries plc. A shareholder of Cooper
Industries 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 through the same depository or other nominee will
not be registered in Cooper Industries plcs share
register, as the depository or other nominee will remain the
record holder of such shares.
A duly stamped written instrument of transfer is required under
Irish law in order to register on Cooper Industries plcs
official share register any transfer of shares (a) from a
person who holds such shares directly to any other person,
(b) from a person who holds such shares beneficially to a
person who holds such shares directly, or (c) 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. Where
such stamp duty arises, it must be paid in order to have the
instrument of transfer duly stamped prior to registration of the
transfer on Cooper Industries plcs official Irish share
register. A person wishing to acquire shares directly may need
to purchase the shares through a broker account and then
transfer such shares into his or her own name.
We currently intend to pay (or cause one of our subsidiaries to
pay) stamp duty in connection with share transfers made in the
ordinary course of trading by a seller who holds shares directly
to a buyer who holds the acquired shares beneficially through
brokers who in turn hold those shares through DTC. In other
cases Cooper Industries may, in its absolute discretion, pay (or
cause one of its subsidiaries to pay) any stamp duty. Cooper
Industries plcs articles of association as they will be in
effect after the Transaction provide that, in the event of any
such payment, Cooper Industries plc (a) may seek
reimbursement from the buyer or seller, at its discretion,
(b) may set-off the stamp duty against any dividends
payable to the buyer or seller, at its discretion, of those
shares and (c) may claim a first and permanent lien on the
Cooper Industries plc shares on which stamp duty has been paid
by Cooper Industries plc or its subsidiary for the amount of
stamp duty paid. Cooper Industries plcs lien shall extend
to all dividends paid on those shares. Parties to a share
transfer may assume that any stamp duty arising in respect of a
transaction in Cooper Industries plc shares has been paid unless
one or both of such parties is otherwise notified by Cooper
Industries. Alternatively, Cooper Industries plcs articles
of association provide that the board may implement a mechanism
in respect of the sale of shares either by or to a shareholder
who holds them directly, so that the sale is effected by way of
a redemption of the shares of the seller that are the subject of
the sale and a new issue of an equal number of shares to the
buyer.
Cooper Industries plcs articles of association as they
will be in effect after the Transaction delegate to Cooper
Industries plcs Secretary or Assistant Secretary the
authority to execute an instrument of transfer on behalf of a
transferring party. In order to help ensure that the official
share register is regularly updated to reflect trading of Cooper
Industries plc 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 Cooper
Industries plc for this purpose) or request that Cooper
Industries plc execute an instrument of transfer on behalf of
the transferring party in a form determined by Cooper Industries
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 Cooper Industries plcs transfer
agent, the transferee will be registered as the legal owner of
the relevant shares on Cooper Industries plcs official
Irish share register (subject to the matters described below).
97
The board of directors of Cooper Industries plc may decline to
recognize any instrument of transfer unless the instrument of
transfer is in respect of one class of share only.
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 directors may from time to time
determine.
Rights
upon Liquidation
Cooper Industries, Ltd. Upon the liquidation
of Cooper Industries, Ltd., after creditors have been paid the
full amounts owing to them and the holders of any issued shares
ranking senior to the common shares as to distribution on
liquidation or
winding-up
are entitled to receive have been paid or set aside for payment,
then the holders of Cooper Industries, Ltd.s common shares
are entitled to receive, pro rata, any remaining assets
available for distribution to the holders of common shares.
Cooper Industries, Ltd.s bye-laws provide that the
preferred shares may be entitled to such rights upon the
dissolution of, or upon any distribution of the assets of,
Cooper Industries plc, as the directors will fix at the time of
issuance. The liquidator may deduct from the amount payable in
respect of those common shares any liabilities the holder has to
or with Cooper Industries, Ltd. Assets received by the holders
of Cooper Industries, Ltd.s common shares in liquidation
may consist in whole or in part of property. That property is
not required to be of the same kind for all shareholders. The
winding up of Cooper Industries, Ltd. may be either by the Court
or voluntary. Cooper Industries, Ltd. may be wound up
voluntarily by resolution of the shareholders in general meeting.
Cooper Industries plc. The rights of the
shareholders to a return of Cooper Industries plcs assets
on dissolution or winding up, following the settlement of all
claims of creditors, may be prescribed in Cooper Industries
plcs articles of association or the terms of any preferred
shares issued by the directors of Cooper Industries 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
Cooper Industries plc. If the articles of association contain no
specific provisions in respect of a dissolution or winding up
then, subject to the priorities of any creditors, the assets
will be distributed to shareholders in proportion to the
paid-up par
value of the shares held. Cooper Industries plcs articles
provide that the preferred shares may be entitled to such
rights, upon the dissolution of, or upon any distribution of the
assets of, Cooper Industries plc, as the directors will fix at
the time of issuance. Cooper Industries 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 Cooper Industries
plc cast at a general meeting is required. Cooper Industries 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 Cooper Industries plc has failed to
file certain returns.
Enforcement
of Civil Liabilities Against Foreign Persons
Cooper Industries, Ltd. Cooper Industries,
Ltd. has been advised by its Bermuda counsel, Appleby, that a
judgment for the payment of money rendered by a court in the
U.S. based on civil liability would not be automatically
enforceable in Bermuda. There is no treaty between Bermuda and
the United States providing for the reciprocal enforcement of
foreign judgments. Cooper Industries, Ltd. has also been advised
by its Bermuda counsel that a final and conclusive judgment
obtained in a court in the U.S. under which a sum of money
is payable as compensatory damages may be the subject of an
action in the Bermuda Supreme Court under the common law
doctrine of obligations. Such an action should be successful
upon proof that the sum of money is due and payable, and without
having to prove the facts supporting the underlying judgment, as
long as (a) the court that gave the judgment was competent
to hear the action in accordance with private international law
principles as applied by the courts in Bermuda; and (b) the
judgment is not contrary to public policy in Bermuda, was not
obtained by fraud or in proceedings contrary to natural justice
of Bermuda and is not based on an error in Bermuda law.
Enforcement of such a judgment against assets in Bermuda may
involve the conversion of the judgment debt into Bermuda
dollars, but the Bermuda Monetary Authority has indicated that
its present policy is to give the consents necessary to enable
recovery in the currency of the obligation. No stamp duty or
similar or other tax is payable in Bermuda on the enforcement of
a foreign judgment. Court fees will be payable in connection
with proceedings for enforcement.
98
Cooper Industries plc. Cooper Industries plc
has been advised by its Irish counsel, Arthur Cox, that a
judgment for the payment of money rendered by a court in the
United States based on civil liability would not be
automatically enforceable in Ireland. There is no treaty between
Ireland and the United States providing for the reciprocal
enforcement of foreign judgments. The following requirements
must be met before the foreign judgment will be deemed to be
enforceable in Ireland:
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The judgment must be for a definite sum;
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The judgment must be final and conclusive; and
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The judgment must be provided by a court of competent
jurisdiction.
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An Irish court will also exercise its right to refuse judgment
if the foreign judgment was obtained by fraud, if the judgment
violated Irish public policy, if the judgment is in breach of
natural justice or if it is irreconcilable with an earlier
foreign judgment.
99
THE
SPECIAL COURT-ORDERED MEETING
We are furnishing this proxy statement to our shareholders in
connection with the solicitation of proxies by Cooper
Industries, Ltd.s board of directors for use at a meeting
of Cooper Industries, Ltd. shareholders to consider the Scheme
of Arrangement and any adjournments or postponements of the
meeting. We are first mailing this proxy statement and
accompanying form of proxy to shareholders beginning on or about
July 16, 2009.
General
The special court-ordered meeting will be conducted in
accordance with the directions of the Bermuda Supreme Court.
Time,
Place and Date
The meeting will be held on August 31, 2009 at 11 a.m.
Central Time, in the
54th
floor conference room, Chase Tower, 600 Travis, Houston, Texas.
Purpose
of the Meeting
At the meeting, Cooper Industries, Ltd.s board of
directors will ask the shareholders to vote:
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1.
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to approve the Scheme of Arrangement, pursuant to which the
Class A Public Shareholders will receive ordinary shares of
Cooper Industries plc on a
one-for-one
basis in respect of their outstanding Cooper Industries, Ltd.
Class A common shares (or, in the case of fractional shares
held of record, if any, cash for such fractional shares in lieu
of ordinary shares of Cooper Industries plc); and
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2.
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if the Scheme of Arrangement is approved, and in connection with
the Scheme of Arrangement and the Reorganization, to approve the
reduction of the share premium of Cooper Industries plc to allow
the creation of distributable reserves that was previously
unanimously approved by Cooper Industries, Ltd. and the other
current shareholders of Cooper Industries plc (as described in
this proxy statement).
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If any other matters properly come before the meeting or any
adjournments or postponements of the meeting, the persons named
in the proxy card will vote the shares represented by all
properly executed proxies in their discretion.
Cooper Industries, Ltd.s board of directors has
unanimously approved the Scheme of Arrangement and unanimously
recommends that you vote FOR all of the
proposals.
Record
Date; Voting Rights; Vote Required for Approval
The board has fixed the close of business on July 13, 2009
as the record date for the meeting.
Only holders of record of Cooper Industries, Ltd. Class A
common shares on the record date are entitled to notice of and
to vote at the meeting or any adjournments or postponements of
the meeting. You will not be the holder of record of shares that
you hold beneficially. Instead, the depository (for
example, Cede & Co., as nominee for DTC) or other
nominee will be the holder of record of such shares.
On the record date for the meeting, approximately
203,285,122 Cooper Industries, Ltd. Class A common
shares were issued and entitled to be voted at the meeting. Each
Cooper Industries, Ltd. Class A common share entitles the
holder to one vote. The wholly owned subsidiaries of Cooper
Industries, Ltd. held 36,519,676 Class A common shares on
the record date. An existing voting agreement requires that the
Class A common shares held by the Cooper subsidiaries will
be voted (or abstained from voting) in the same proportion as
the Class A common shares held by the Class A Public
Shareholders. As a result, the voting of shares held by Cooper
subsidiaries does not dilute the voting power of other
shareholders. The Class B common shares that are held by a
subsidiary of Cooper Industries, Ltd. have no vote on the
matters presented at this meeting.
100
The presence, in person or by proxy, of the holders of
Class A common shares entitling them to exercise a majority
of the voting power of the Class A common shareholders of
Cooper Industries, Ltd. constitutes a quorum for the conduct of
business. Abstentions and broker non-votes will be counted as
present for purposes of determining whether there is a quorum in
respect of the proposals.
Assuming the presence of a quorum, the Scheme of Arrangement
must be approved by a majority in number of the registered
holders of Cooper Industries, Ltd. Class A common shares
present and voting on the proposal at the meeting, whether in
person or by proxy, representing 75% or more in value of the
Cooper Industries, Ltd. Class A common shares present and
voting on the proposal at the meeting, whether in person or by
proxy. For the purpose of calculating the majority in
number requirement for the approval of the proposal, each
registered shareholder, present and voting in person or by
proxy, will be counted as a single shareholder, regardless of
the number of shares voted by that shareholder. If a registered
shareholder elects to vote a portion of such holders
Cooper Industries, Ltd. Class A common shares in favor of
the proposal, and a portion against the proposal, then, subject
to any reasonable objection that may be raised, that registered
shareholder will be counted as one shareholder voting in favor
of the proposal and as one shareholder voting against the
proposal, thereby effectively canceling out that registered
shareholders vote for the purposes of the majority
in number calculation. In addition, as the Class A
common shares held by wholly owned subsidiaries of Cooper
Industries, Ltd. will not be exchanged for ordinary shares of
Cooper Industries plc in the Transaction, after the meeting we
will obtain a separate consent from each such subsidiary
expressly consenting to its exclusion from the Scheme of
Arrangement.
Assuming the presence of a quorum, the distributable reserves
proposal requires the affirmative vote of holders of Cooper
Industries, Ltd. Class A common shares representing at
least a majority of the Cooper Industries, Ltd. Class A
common shares present in person or by proxy at the meeting and
voting on the proposal.
Under Bermuda law, shareholders are not entitled to
dissenters or appraisal rights with respect to the matters
to be considered and voted on at the special court-ordered
meeting.
Our directors and executive officers have indicated that they
intend to vote their shares in favor of all of the proposals. On
the record date, our directors and executive officers and their
affiliates had the right to vote less than 1% of the issued
Cooper Industries, Ltd. Class A common shares.
Proxies
A proxy card is being sent to each Class A common
shareholder of record as of the record date. If you properly
received a proxy card, you may grant a proxy to vote on the
proposals presented in one of the three ways which are explained
below under How You Can Vote.
If you have timely submitted a properly executed proxy card or
provided your voting instructions by telephone or via the
Internet and clearly indicated your votes, your shares will be
voted as indicated.
If you have timely submitted a properly executed proxy card or
provided your voting instructions by telephone or via the
Internet and have not clearly indicated your votes, the persons
named in the proxy card will vote your shares in their
discretion. If any other matters properly come before the
meeting or any adjournments or postponements of the meeting, the
persons named in the proxy card will vote the shares represented
by all properly executed proxies in their discretion.
You may abstain on the proposal to approve the Scheme of
Arrangement or the distributable reserves proposal (or any of
them) by marking ABSTAIN with respect to any or all
of the proposals.
Brokers who hold shares on behalf of customers have the
authority to vote on routine proposals when they
have not received instructions from beneficial owners, but are
precluded from exercising their voting discretion with respect
to proposals for non-routine matters. Proxies
submitted by brokers without instructions from customers for
these non-routine matters are referred to as broker non-votes.
We believe the proposal to approve the Scheme of Arrangement and
the distributable reserves proposal are proposals for
non-routine matters.
101
An abstention or broker non-vote on the proposal to approve the
Scheme of Arrangement has the effect of a vote not being cast
with respect to the relevant shares in relation to the proposal.
As a consequence, such shares will not be considered when
determining whether the proposal to approve the Scheme of
Arrangement has received the required approval by a majority in
number of the record holders of the Cooper Industries, Ltd.
Class A common shares present and voting on the proposal,
whether in person or by proxy, representing 75% or more in value
of the Class A common shares present and voting on the
proposal, whether in person or by proxy.
An abstention or broker non-vote on the distributable reserves
proposal has the effect of a vote not being cast with respect to
the relevant shares in relation to the proposal. As a
consequence, such shares will not be considered when determining
whether the distributable reserves proposal has received the
required approval by holders of Cooper Industries, Ltd.
Class A common shares representing at least a majority of
the Cooper Industries, Ltd. Class A shares present in
person or by proxy at the meeting and voting on the proposal.
You may revoke your proxy at any time prior to its exercise by:
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giving written notice of the revocation to the Secretary of
Cooper Industries, Ltd. at any time before the meeting;
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submitting another properly signed proxy card with a later date
or submitting another proxy by telephone or via the Internet at
a later date; or
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appearing at the meeting and voting in person.
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Your presence without voting at the meeting will not
automatically revoke your proxy, and any revocation during the
meeting will not affect votes on matters with respect to which
the polls have closed. If you hold your shares beneficially
through a broker, you should follow the instructions provided by
your broker in revoking your previously granted proxy.
If you do not appoint a proxy and you do not vote at the
meeting, you will still be bound by the outcome. You are
therefore strongly urged to attend and vote at the meeting in
person or by proxy.
The accompanying proxy is being solicited on behalf of the board
of directors of Cooper Industries, Ltd. The expenses of
preparing, printing and mailing the proxy and the materials used
in the solicitation will be borne by Cooper Industries, Ltd. In
addition to solicitation by mail, Cooper Industries, Ltd. will
make arrangements with brokerage houses and other custodians,
nominees and fiduciaries to send the proxy materials to
beneficial owners, and Cooper Industries, Ltd. will, upon
request, reimburse those brokerage houses and custodians for
their reasonable related expenses. Cooper Industries, Ltd. has
retained Georgeson, Inc. for a fee of $16,000, plus expenses, to
aid in the solicitation of proxies from its shareholders. To the
extent necessary in order to ensure sufficient representation at
its meeting, Cooper Industries, Ltd. or its proxy solicitor may
solicit the return of proxies by personal interview, mail,
telephone, facsimile, Internet or other means of electronic
transmission. The extent to which this will be necessary depends
upon how promptly proxies are returned. We urge you to send in
your proxy without delay.
How You
Can Vote
Each outstanding Class A common share is entitled to one
vote at the special court-ordered meeting. Pursuant to the rules
of the SEC, boxes are provided on the proxy card for
shareholders to mark if they wish to vote for,
against or abstain on each proposal. We
may accept your proxy by any form of communication permitted by
Bermuda law and Cooper Industries, Ltd.s bye-laws.
Accordingly, you may vote by proxy or in person at the meeting.
If your shares are held in your name rather than through a
broker, you can vote by proxy in three convenient ways:
By
Telephone:
You may call
1-800-652-8683
from the U.S., Canada and Puerto Rico (this call is free) or
from all other countries dial the international access code plus
1-781-575-2300 to vote by telephone anytime up to
11:59 p.m. Eastern Time on August 30, 2009. If you
submit your proxy by telephone, you do NOT need to
102
return your proxy card. If you plan to attend the special
court-ordered meeting, please retain the top portion of your
proxy card as your admission ticket and bring photo
identification.
By
Internet:
Please refer to your proxy card for instructions. The web site
for submitting your proxy is available at
www.envisionreports.com/cbe and is available 24 hours a
day, seven days a week. Have your proxy card in hand when
accessing the web site. In order for your shares to be
represented at the special court-ordered meeting, proxy vote
must be received by 11:59 p.m. Eastern Time on
August 30, 2009. If you use this Internet service, you do
NOT need to return your proxy card. If you plan to attend the
special court-ordered meeting, please retain the top portion of
the proxy card as your admission ticket and bring photo
identification. When granting your proxy on the Internet, please
respond to the question asking whether you plan to attend the
special court-ordered meeting.
By
Mail:
If you choose to return your executed proxy card by mail, please
mark your proxy card, date and sign it, and return it in the
enclosed postage-paid envelope. If you misplaced your business
reply envelope and are a record holder of common shares, you
should mail your proxy card to Cooper Industries, Ltd.,
c/o Office
of the Secretary, Suite 5600, 600 Travis, Houston, Texas
77002. If you hold shares through someone else, such as a
broker, you should follow the mailing instructions from that
firm. If you plan to attend the special court-ordered meeting,
please retain the top portion of the proxy card as your
admission ticket and bring photo identification and proof of
ownership on July 13, 2009, such as an account statement
from your broker. Please mark, date, sign and return the
proxy card that has been mailed to you to ensure that
all of your shares are represented at the special court-ordered
meeting.
If you do not wish to vote all of your Class A common
shares in the same manner on any particular proposal(s), you may
split your vote by clearly hand-marking the proxy card to
indicate how you want to vote your common shares. You may not
split your vote if you are voting by the Internet or by
telephone.
If you hold your shares beneficially through a broker, the
broker may generally vote the shares it holds in accordance with
instructions received. Therefore, please follow the instructions
provided by your broker when voting your shares. Moreover, if
you hold your shares beneficially through a broker and you plan
to attend the special court-ordered meeting, you must bring
photo identification and proof of ownership, such as a bank or
brokerage firm account statement or a letter from the broker
holding your shares, confirming your beneficial ownership of
such shares as of the record date for the meeting. If you hold
your shares beneficially through a broker and you plan to vote
at the meeting, you must obtain a legal proxy from the broker.
Please contact your broker for instructions on how to obtain
such a legal proxy.
Validity
The chairman of the meeting will determine all questions as to
validity, form, and eligibility, including time of receipt and
acceptance of proxies. His or her determination will be final
and binding. The chairman of the meeting has the right to waive
any irregularities or conditions as to the manner of voting. The
chairman of the meeting may accept your proxy by any form of
written or electronic communication so long as it is reasonably
assured that the communication is authorized by you.
We expect the Sanction Hearing to be held on
September 4, 2009 at 9:30 a.m., Bermuda time, at the
Bermuda Supreme Court in Hamilton, Bermuda. If you are a
Class A common shareholder who wishes to appear in person
or by counsel at the Sanction Hearing and present evidence or
arguments in support of or opposition to the Scheme of
Arrangement, you may do so. In addition, the Bermuda Supreme
Court has wide discretion to hear from interested parties.
Cooper Industries, Ltd. will not object to the participation in
the Sanction Hearing by any beneficial holder of Class A
common shares.
103
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
5%
Beneficial Owners
We know of no person who was the beneficial owner of more than
five percent of any class of voting securities as of
July 13, 2009, other than the following which have filed
statements of ownership on Schedule 13G with the SEC.
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Amount and
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Nature of
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Beneficial
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Percent of
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Title of Class
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Name and Address of Beneficial Owner
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Ownership
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Class(4)
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Class A common shares
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FMR LLC
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23,181,076
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(1)
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13.88
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%
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82 Devonshire Street
Boston, MA 02109
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Class A common shares
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Barrow, Hanley, Mewhinney & Strauss
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14,177,700
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(2)
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8.49
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%
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2200 Ross Avenue,
31st
Floor
Dallas, TX 75201-2761
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Class A common shares
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Vanguard Windsor Funds
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13,669,800
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(3)
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8.19
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%
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Vanguard Windsor II Fund
100 Vanguard Boulevard
Malvern, PA 19355
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(1) |
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Based on Schedule 13G filed February 17, 2009, jointly
on behalf of Edward C. Johnson
3rd, FMR
LLC, and its subsidiaries and affiliates, Fidelity
Management & Research Company (Fidelity),
FIL Limited, Pyramis Global Advisors, LLC, Pyramis Global
Advisors Trust Company and Strategic Advisors, Inc. The shares
are beneficially owned as follows: Fidelity
22,441,994 shares (including 11,010,641 held by Fidelity
Contrafund); FIL Limited 248,430 shares;
Pyramis Global Advisors LLC 40,200 shares;
Pyramis Global Advisors Trust Company
167,240 shares; and Strategic Advisors, Inc.
283,212 shares. The Fidelity Funds Board of Trustees
has sole voting power over the shares that are beneficially
owned by Fidelity, and Edward C. Johnson
3rd and
FMR LLC, through control of Fidelity and the Fidelity Funds,
each has sole dispositive power over the 22,441,994 shares
owned by the Fidelity Funds. Edward C. Johnson
3rd and
FMR LLC, through control of Pyramis Global Advisors, LLC,
Pyramis Global Advisors Trust Company, and FMR LLC
subsidiaries including Strategic Advisors, Inc., each has sole
dispositive power and sole power to vote or direct the voting of
the shares beneficially owned by such affiliated companies. FIL
Limited has sole dispositive and voting power over
248,430 shares. The address of Fidelity and Strategic
Advisors, Inc. is 82 Devonshire Street, Boston, MA 02109. The
address of FIL Limited is Pembroke Hall, 42 Crow Lane, Hamilton,
Bermuda and the address of Pyramis Global Advisors, LLC and
Pyramis Global Advisors Trust Company is 53 State Street,
Boston, MA 02109. |
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(2) |
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Based on Schedule 13G filed February 11, 2009 by
Barrow, Hanley, Mewhinney & Strauss, Inc., which has
sole dispositive power over 14,177,700 shares, sole voting
power over 90,000 shares and shared voting power over
14,087,700 shares. |
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Based on Schedule 13G filed February 12, 2009 by
Vanguard Windsor Funds Vanguard Windsor II
Fund, which has sole voting power over 13,669,800 shares. |
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Calculated on the basis of 166,908,287 Class A common
shares that were held by Class A Public Shareholders as of
December 31, 2008 and excludes the Class A common
shares held by Cooper Industries, Ltd.s subsidiaries. |
Directors
and Executive Officers
As of July 13, 2009, each director and executive officer
named in the following table beneficially owned the number of
Class A common shares of Cooper Industries, Ltd. listed in
the following table. Each of the named individuals owned less
than 1% and all directors and executive officers as a group
beneficially owned
104
2.0% of the Cooper Industries, Ltd. Class A common shares
held by Class A Public Shareholders as of that date.
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Number of Shares
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Name of Beneficial Owner
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Beneficially
Owned(1)
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Stephen G. Butler
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56,263
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(2)
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Robert M. Devlin
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82,097
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(2)(4)
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Ivor J. Evans
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49,650
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(2)
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Kirk S. Hachigian
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1,370,082
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Linda A. Hill
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52,306
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(2)
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Lawrence D. Kingsley
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12,604
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(2)
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James J. Postl
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|
|
49,442
|
(2)
|
Dan F. Smith
|
|
|
71,323
|
(2)
|
Gerald B. Smith
|
|
|
44,791
|
(2)
|
Mark S. Thompson
|
|
|
12,724
|
(2)
|
James R. Wilson
|
|
|
57,680
|
(2)
|
Terry A. Klebe
|
|
|
602,769
|
(3)
|
Gary A. Masse
|
|
|
79,365
|
|
C. Thomas OGrady
|
|
|
177,795
|
|
Michael A. Stoessl
|
|
|
180,541
|
|
All Directors and Executive Officers as a Group
|
|
|
3,528,384
|
(2)(3)(4)
|
|
|
|
(1) |
|
Includes shares held by executive officers in Cooper
Industries Retirement Savings and Stock Ownership Plan.
Also includes shares issuable upon the exercise of options
granted under either the Stock Incentive Plan or the
Directors Stock Plan that are exercisable (or vest) within
a period of 60 days from July 13, 2009, as follows:
Mr. Butler 16,000 shares;
Mr. Devlin 18,000 shares;
Mr. Evans 16,000 shares;
Mr. Hachigian 1,053,932 shares;
Ms. Hill 22,000 shares;
Mr. Postl 12,000 shares;
Mr. D. Smith 12,000 shares;
Mr. G. Smith 20,000 shares;
Mr. Wilson 8,000 shares;
Mr. Klebe 420,768 shares;
Mr. Masse 50,999 shares;
Mr. OGrady 125,000 shares;
Mr. Stoessl 110,602 shares; and all
directors and executive officers as a group
2,326,027 shares. None of the shares beneficially owned by
the directors and executive officers have been pledged as
security. |
|
|
|
(2) |
|
Includes shares the receipt of which has been deferred by the
directors under the Directors Stock Plan and the
Directors Retainer Fee Stock Plan, as follows:
Mr. Butler 25,323 shares;
Mr. Devlin 20,899 shares;
Mr. Evans 31,852 shares;
Ms. Hill 23,108 shares;
Mr. Kingsley 8,485 shares;
Mr. Postl 35,624 shares; Mr. D.
Smith 55,925 shares; Mr. G.
Smith 17,383 shares;
Mr. Thompson 8,485 shares; and
Mr. Wilson 43,938 shares. |
|
|
|
(3) |
|
Includes shares the receipt of which has been deferred pursuant
to the Stock Incentive Plan and the Management Annual Incentive
Plan, as follows: Mr. Klebe 28,992 shares
and all executive officers as a group
28,992 shares. |
|
|
|
(4) |
|
Includes 21,000 shares held by the Devlin Foundation for
which Mr. Devlin serves as trustee. |
MARKET
PRICE AND DIVIDEND INFORMATION
The following table presents the high and low sales prices of
Cooper Industries, Ltd. Class A common shares for the
periods indicated, as reported by the NYSE, in addition to the
dividends declared per Class A common share during those
periods.
Cooper Industries, Ltd.s Class A common shares are
listed on the NYSE under the symbol CBE. As of
July 13, 2009, the record date for determining holders of
Cooper Industries, Ltd. Class A common shares, there were
20,113 holders of record of Cooper Industries, Ltd.
Class A common shares.
105
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
High
|
|
|
Low
|
|
|
Dividend
|
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
First quarter
|
|
$
|
31.33
|
|
|
$
|
18.86
|
|
|
$
|
0.25
|
|
Second quarter (through July 13, 2009)
|
|
|
36.64
|
|
|
|
24.71
|
|
|
|
0.25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
|
|
|
|
|
|
|
|
|
|
|
First quarter
|
|
$
|
53.25
|
|
|
$
|
35.37
|
|
|
$
|
0.25
|
|
Second quarter
|
|
|
47.55
|
|
|
|
39.40
|
|
|
|
0.25
|
|
Third quarter
|
|
|
49.64
|
|
|
|
36.96
|
|
|
|
0.25
|
|
Fourth quarter
|
|
|
40.27
|
|
|
|
19.32
|
|
|
|
0.25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2007
|
|
|
|
|
|
|
|
|
|
|
|
|
First quarter
|
|
$
|
48.12
|
|
|
$
|
40.00
|
|
|
$
|
0.21
|
|
Second quarter
|
|
|
58.20
|
|
|
|
45.03
|
|
|
|
0.21
|
|
Third quarter
|
|
|
59.05
|
|
|
|
47.00
|
|
|
|
0.21
|
|
Fourth quarter
|
|
|
57.25
|
|
|
|
47.07
|
|
|
|
0.21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
We intend to file an application with the NYSE to list the
Cooper Industries plc ordinary shares that Class A Public
Shareholders will receive in the Transaction. We expect that,
immediately following the Transaction Time, the Cooper
Industries plc ordinary shares will be listed on the NYSE under
the symbol CBE, the same symbol under which your
shares are currently listed. We do not plan to be listed on the
Irish Stock Exchange at the present time.
INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
The consolidated financial statements of Cooper Industries, Ltd.
appearing in Cooper Industries, Ltd.s Annual Report
(Form 10-K)
for the year ended December 31, 2008, and the effectiveness
of Cooper Industries, Ltd.s internal control over
financial reporting as of December 31, 2008, have been
audited by Ernst & Young LLP, independent registered
public accounting firm, as set forth in their reports thereon,
and incorporated herein by reference.
LEGAL
MATTERS
Skadden, Arps, Slate, Meagher & Flom LLP will pass
upon certain U.S. federal income tax consequences of the
Transaction. Arthur Cox, Solicitors, will pass upon certain
Irish tax consequences of the Transaction.
FUTURE
SHAREHOLDER PROPOSALS
Shareholder Proposals in the Proxy
Statement. Rule 14a-8
under the Exchange Act addresses when a company must include a
shareholders proposal in its proxy statement and identify
the proposal in its form of proxy when the company holds an
annual or special meeting of shareholders. Under
Rule 14a-8,
in order for your proposals to be considered for inclusion in
the proxy statement and proxy card relating to our 2010 annual
general meeting, your proposals must be sent to the Secretary of
Cooper Industries plc at 600 Travis, Suite 5600, Houston,
Texas 77002, if the Transaction has become effective, or the
Secretary of Cooper Industries, Ltd. at the same address, if the
Transaction has not become effective, in either case so that it
is received by no later than November 12, 2009. However, if
the date of the 2010 annual general meeting changes by more than
30 days from the anniversary of the 2009 annual general
meeting (for purposes of determining the deadline for the 2010
annual general meeting, the last annual general meeting of
Cooper Industries, Ltd.), the deadline is a reasonable time
before we begin to print and mail our proxy materials. We will
notify you of this deadline in a Quarterly Report on
Form 10-Q
or in another communication to you. Shareholder proposals must
also be otherwise eligible for inclusion.
106
Shareholder Proposals and Nominations for Directors to Be
Presented at Meetings. If you desire to bring a
matter before an annual meeting and the proposal is submitted
outside the process of
Rule 14a-8,
you must follow the procedures set forth in Cooper Industries
plcs memorandum and articles of association, if the
Transaction has become effective, or Cooper Industries,
Ltd.s bye-laws, if the Transaction has not become
effective.
Cooper
Industries plc
Cooper Industries plcs articles of association provide
that at any annual general meeting, only such business shall be
conducted as shall have been properly brought before the
meeting: by or at the direction of the board of directors; or by
any shareholder who complies with the procedures set forth in
Cooper Industries plcs articles of association. For
business to be properly brought before an annual general meeting
by a shareholder, the shareholder must have given timely notice
thereof in proper written form to Cooper Industries plcs
Secretary and satisfied all requirements under applicable rules
promulgated by the SEC or the NYSE or any other exchange on
which the Cooper Industries plcs securities are traded.
To be timely for consideration at the annual general meeting, a
shareholders notice must be received by the Secretary of
Cooper Industries plc not less than 45 calendar days, or such
greater length of time as permitted by appropriate rules of the
SEC, in advance of the anniversary of the date that Cooper
Industries plcs proxy statement was released to
shareholders in connection with the previous years annual
general meeting (or no later than January 27, 2010 with
respect to the 2010 annual general meeting).
To be in proper written form, a shareholders notice to the
Secretary must set forth as to each matter such shareholder
proposes to bring before the annual general meeting: (a) a
brief description of the business desired to be brought before
the annual general meeting and the reasons for conducting such
business at the annual general meeting, (b) the name and
record address of such shareholder, (c) the class or series
and number of shares of Cooper Industries plc which are owned
beneficially or of record by such shareholder, (d) a
description of all arrangements or understandings between such
shareholder and any other person or persons (including their
names) in connection with the proposal of such business by such
shareholder and any material interest of such shareholder in
such business, and (e) a representation that such
shareholder intends to appear in person or by proxy at the
annual general meeting to bring such business before the
meeting. To be in proper written form, a shareholders
notice to the Secretary regarding nomination of any person for
election to the board of directors must also set forth as to
each person whom the shareholder proposes to nominate for
election as a director: (a) the name, age, business address
and residence address of the person, (b) the principal
occupation or employment of the person, (c) the class or
series and number of shares of Cooper Industries plc which are
owned beneficially or of record by the person, and (d) any
other information relating to the person that would be required
to be disclosed in a proxy statement or other filings required
to be made in connection with solicitations of proxies for
election of directors pursuant to Section 14 of the
Exchange Act and the rules and regulations promulgated
thereunder. Such notice must be accompanied by a written consent
of each proposed nominee to being named as a nominee and to
serve as a director if elected.
Cooper
Industries, Ltd.
Cooper Industries, Ltd.s bye-laws provide that at any
annual general meeting, only such business shall be conducted as
shall have been properly brought before the meeting: by or at
the direction of the board of directors; by any shareholder who
complies with the procedures set forth in Cooper Industries,
Ltd.s bye-laws; or by any shareholders pursuant to the
valid exercise of the power granted under the Bermuda Companies
Act. For business to be properly brought before an annual
general meeting by a shareholder, the shareholder must have
given timely notice thereof in proper written form to the
Secretary of Cooper Industries, Ltd. and satisfied all
requirements under applicable rules promulgated by the SEC or
the NYSE or any other exchange on which the Cooper Industries,
Ltd.s securities are traded.
To be timely for consideration at the annual general meeting, a
shareholders notice must be received by the Secretary of
Cooper Industries, Ltd. not less than 45 calendar days, or such
greater length of time as permitted by appropriate rules of the
SEC, in advance of the anniversary of the date that Cooper
Industries, Ltd.s proxy statement was released to
shareholders in connection with the previous years annual
general
107
meeting. The deadline under Cooper Industries, Ltd.s
bye-laws is January 27, 2010 for the 2010 annual general
meeting.
To be in proper written form, a shareholders notice to the
Secretary must set forth as to each matter such shareholder
proposes to bring before the annual general meeting: (a) a
brief description of the business desired to be brought before
the annual general meeting and the reasons for conducting such
business at the annual general meeting, (b) the name and
record address of such shareholder, (c) the class or series
and number of capital shares of Cooper Industries, Ltd. which
are owned beneficially or of record by such shareholder,
(d) a description of all arrangements or understandings
between such shareholder and any other person or persons
(including their names) in connection with the proposal of such
business by such shareholder and any material interest of such
shareholder in such business, and (e) a representation that
such shareholder intends to appear in person or by proxy at the
annual general meeting to bring such business before the
meeting. To be in proper written form, a shareholders
notice to the Secretary regarding nomination of any person for
election to the board of directors must also set forth as to
each person whom the shareholder proposes to nominate for
election as a director: (a) the name, age, business address
and residence address of the person, (b) the principal
occupation or employment of the person, (c) the class or
series and number of capital shares of Cooper Industries, Ltd.
which are owned beneficially or of record by the person and
(d) any other information relating to the person that would
be required to be disclosed in a proxy statement or other
filings required to be made in connection with solicitations of
proxies for election of directors pursuant to Section 14 of
the Exchange Act and the rules and regulations promulgated
thereunder. Such notice must be accompanied by a written consent
of each proposed nominee to being named as a nominee and to
serve as a director if elected.
Additionally, Bermuda law provides that shareholders holding not
less than 5% of the total voting rights or 100 or more
registered shareholders together may require a proposal to be
submitted to an annual general meeting. Generally, notice of
such a proposal must be deposited at Cooper Industries,
Ltd.s registered office not less than six weeks before the
date of the meeting, unless the meeting is subsequently called
for a date six weeks or less after the notice has been deposited.
You may obtain a copy of the memorandum and articles of
association of Cooper Industries plc, as they will be in effect
after the Transaction, or the bye-laws of Cooper Industries,
Ltd., in which these procedures are set forth, upon written
request to the Secretary of Cooper Industries, Ltd., 600 Travis,
Suite 5600, Houston, Texas 77002.
HOUSEHOLDING
The SEC permits a single proxy statement to be sent to any
household at which two or more shareholders reside if they
appear to be members of the same family. Each shareholder
continues to receive a separate proxy card. This procedure,
referred to as householding, reduces the volume of duplicate
information shareholders receive and reduces mailing and
printing expenses. While we do not household in mailings to
shareholders of record, a number of brokerage firms have
instituted householding.
As a result, if you hold your shares beneficially through a
broker and you reside at an address at which two or more
shareholders reside, you will likely be receiving only one proxy
statement unless any shareholder at that address has given the
broker contrary instructions. However, if any such beneficial
shareholder residing at such an address wishes to receive a
separate proxy statement in the future, or if any such
beneficial shareholder that elected to continue to receive
separate proxy statements wishes to receive a single proxy
statement in the future, that shareholder should contact their
broker. Any shareholder can receive a copy of this proxy
statement by contacting us at Cooper Industries, Ltd.,
Suite 5600, 600 Travis, Houston, Texas 77002, Attention:
Secretary or by accessing it at the Companys website at
www.cooperindustries.com.
WHERE YOU
CAN FIND MORE INFORMATION
Cooper Industries, Ltd. files annual, quarterly and current
reports, proxy statements and other information with the SEC.
You may read and copy any document Cooper Industries, Ltd. files
at the SECs public
108
reference rooms located at 100 F Street, N.E.,
Washington, D.C. 20549. Please call the SEC at
1-800-SEC-0330
for further information on the public reference rooms. These SEC
filings are also available to the public on the SECs web
site at:
http://www.sec.gov.
Copies of these reports, proxy statements and other information
can also be inspected at the offices of the NYSE at
20 Broad Street, New York, New York 10005.
Cooper Industries, Ltd.s web site is located at:
http://www.cooperindustries.com.
Cooper Industries, Ltd.s Annual Reports on
Form 10-K,
Quarterly Reports on
Form 10-Q,
Current Reports on
Form 8-K
and other filings with the SEC are available, free of charge,
through its web site, as soon as reasonably practicable after
those reports or filings are electronically filed with or
furnished to the SEC. Information on Coopers web site or
any other web site is not incorporated by reference in this
proxy statement and does not constitute a part of this proxy
statement.
SEC rules and regulations permit Cooper Industries, Ltd. to
incorporate by reference the information Cooper
Industries, Ltd. files with the SEC. This means that Cooper
Industries, Ltd. can disclose important information to you by
referring you to those documents. Some documents or information,
such as that called for by Item 7.01 of
Form 8-K,
are deemed furnished and not filed in accordance with SEC rules.
None of those documents and none of that information is
incorporated by reference into this proxy statement. The
information incorporated by reference is considered to be part
of this proxy statement. Information that Cooper Industries,
Ltd. files later with the SEC will automatically update and
supersede this information.
Cooper Industries, Ltd. incorporates by reference the documents
listed below and any filings Cooper Industries, Ltd. will make
with the SEC under Sections 13(a), 13(c), 14 or 15(d) of
the Exchange Act (excluding any information
furnished but not filed) following the
date of this document, but prior to the date of the meeting. The
documents incorporated by reference are:
|
|
|
|
|
Annual Report on
Form 10-K
for the fiscal year ended December 31, 2008;
|
|
|
|
Quarterly Report on
Form 10-Q
for the quarter ended March 31, 2009;
|
|
|
|
Current Reports on
Form 8-K
filed with the SEC on May 4, 2009 and June 9,
2009; and
|
|
|
|
The descriptions of Cooper Industries, Ltd.s Class A
common shares and the associated Preferred Share Purchase Rights
in the registration statement on Form
8-A filed
with the SEC on May 16, 2002, as amended by Amendment
No. 1 to such
Form 8-A
filed with the SEC on August 24, 2007, together with any
amendment or report filed with the SEC for the purpose of
updating such descriptions.
|
You can request a free copy of the above filings or any filings
subsequently incorporated by reference into this proxy statement
(other than any exhibits to such filings not specifically
incorporated by reference) by writing or calling:
Secretary
Cooper Industries, Ltd.
Suite 5600
600 Travis
Houston, Texas 77002
713-209-8400
In order to ensure timely delivery of these documents, your
request should be received by August 24, 2009.
We have not authorized anyone to give any information or make
any representation about the Reorganization or the Transaction
or about us that differs from or adds to the information in this
proxy statement or in the documents incorporated by reference.
Therefore, you should not rely upon any information that differs
from or is in addition to the information contained in this
proxy statement or in the documents incorporated by reference.
The information contained in this proxy statement speaks only as
of the date on the cover, unless the information specifically
indicates that another date applies.
109
Annex A
IN THE
SUPREME COURT OF BERMUDA
CIVIL JURISDICTION (COMMERCIAL COURT)
2009: NO. 195
IN THE
MATTER OF
COOPER INDUSTRIES, LTD.
and
IN THE
MATTER OF SECTION 99 OF
THE COMPANIES ACT 1981
SCHEME OF
ARRANGEMENT
between
COOPER
INDUSTRIES, LTD. and
THE
CLASS A COMMON SHAREHOLDERS
(as hereinafter defined)
A-1
PART 1
PRELIMINARY
A. Definitions
In this Scheme of Arrangement, unless inconsistent with the
subject or context, the following expressions shall bear the
following meanings:
|
|
|
Allowed Proceeding |
|
Any proceeding by a Scheme Shareholder to enforce its rights
under this Scheme where any party fails to perform its
obligations under this Scheme. |
|
Business Day |
|
Any day other than a day on which banks are required or
permitted by law to be closed in Houston, Texas, USA, Bermuda or
Dublin, Ireland. |
|
Class A Common Shareholders |
|
The holders of Class A Common Shares appearing on the
Register of Members of the Company immediately prior to the
Transaction Time. |
|
Class A Common Shares |
|
The Class A common shares in the capital of the Company of
par value $0.01 per share. |
|
Companies Act |
|
The Companies Act 1981 (Bermuda). |
|
Company |
|
Cooper Industries, Ltd., a Bermuda exempted limited liability
company with registration number EC 30537. |
|
Conditions |
|
The conditions listed in clause 36. |
|
Cooper Ireland |
|
Cooper Industries plc, a company incorporated under the laws of
Ireland with its registered office at 5 Fitzwilliam Square,
Dublin 2, Ireland and with a registered number of 471954. |
|
Court |
|
The Supreme Court of Bermuda. |
|
Court Meeting |
|
The meeting of the Class A Common Shareholders to be held
pursuant to the directions of the Court to consider the Scheme. |
|
Credit Facilities |
|
The Five-Year Credit Agreement by and among Cooper Industries,
Ltd., Cooper US, Inc., and the Banks as defined therein, dated
as of November 3rd, 2004, and the 364-Day Credit Agreement
by and among Cooper Industries, Ltd., Cooper US, Inc. and Bank
of America, N.A. dated as of March 18, 2008 and amended as
of February 27, 2009. |
|
Effective Date |
|
The date on which an office copy of the Order of the Court
sanctioning this Scheme and making such facilitating orders as
are appropriate pursuant to section 99 of the Companies Act
shall have been delivered to the Registrar for registration, at
which time this Scheme shall become effective. |
|
NYSE |
|
The New York Stock Exchange. |
|
Person |
|
Any individual, company, corporation, estate, limited liability
company, partnership, joint venture, association, joint stock
company, trust unincorporated organisation or government or any
agency or political subdivision thereof or other entity. |
|
Proceeding |
|
Any process, suit, action, legal or other proceeding including
without limitation any arbitration, mediation, alternative
dispute resolution, judicial review, adjudication, demand,
execution, restraint, forfeiture, re-entry, seizure, lien,
enforcement of judgement, enforcement of any security or
enforcement of any letters of credit. |
A-3
|
|
|
Prohibited Proceeding |
|
Any proceeding against the Company or Cooper Ireland or their
property in any jurisdiction whatsoever other than an Allowed
Proceeding. |
|
|
|
Proxy Statement |
|
The Proxy Statement of the Company on Schedule 14A expected
to be filed on or about 16 July 2009 with the U.S. Securities
and Exchange Commission pursuant to Section 14(a) of the
U.S. Securities Exchange Act of 1934 and in connection with the
Scheme. |
|
|
|
Record Date |
|
The close of business (New York time) on 13 July 2009. |
|
|
|
Register of Members |
|
The branch register of the Company kept in accordance with
Section 65 of the Companies Act by Computershare Trust
Company, N.A., the Companys transfer agent. |
|
Registrar |
|
The Registrar of Companies of Bermuda. |
|
Scheme |
|
This scheme of arrangement in its present form or with or
subject to any modification or addition or condition which the
Court may approve or impose. |
|
Scheme Consideration |
|
One Cooper Ireland ordinary share to be issued and allotted by
Cooper Ireland in consideration for each whole Scheme Share held
immediately prior to the Transaction Time by a Scheme
Shareholder; plus (in respect of any fraction of a Scheme Share
held immediately prior to the Transaction Time by a Scheme
Shareholder) a cash payment for that fraction of a share
determined by taking the average of the high and low trading
prices of the Scheme Shares on the NYSE on the Business Day
immediately preceding the Effective Date. |
|
Scheme Shareholders |
|
The holders of Scheme Shares appearing on the Register of
Members of the Company immediately prior to the Transaction Time. |
|
Scheme Shares |
|
All Class A Common Shares of the Company in issue
immediately prior to the Transaction Time, other than
Class A Common Shares held by wholly owned subsidiaries of
the Company. |
|
Transaction Time |
|
7:30 p.m. Eastern Time on the Effective Date or such other time
as established in accordance with resolutions of the Board of
Directors of the Company or any duly authorised committee
thereof (provided that the Transaction Time shall not precede
the time at which an office copy of the Order of the Court
sanctioning this Scheme and making such facilitating orders as
are appropriate pursuant to section 99 of the Companies Act
shall have been delivered to the Registrar for registration). |
|
Transfer Agent |
|
The transfer agent of the Company. |
|
$ |
|
United States dollars, the lawful currency of the United States
of America. |
1. In this Scheme, unless the context otherwise requires or
otherwise expressly provides:
1.1. References to Recitals, Parts, clauses and sub-clauses
are references to the Recitals, Parts, clauses and sub-clauses
respectively of this Scheme;
1.2. References to a statute or a statutory provision
include the same as subsequently modified, amended or re-enacted
from time to time;
A-4
1.3. References to an agreement, deed or document shall be
deemed also to refer to such agreement, deed or document as
amended, supplemented, restated, verified, replaced
and/or
novated (in whole or in part) from time to time and any
agreement, deed or document executed pursuant thereto;
1.4. The singular includes the plural and vice versa and
words importing one gender shall include all genders;
1.5. Headings to Recitals, Parts, clauses and sub-clauses
are for ease of reference only and shall not affect the
interpretation of this Scheme; and
1.6. To the extent that there shall be any conflict or
inconsistency between the terms of this Scheme and the Proxy
Statement then the terms of this Scheme shall prevail.
2. The Company was incorporated on 22 May 2001 in
Bermuda under the Companies Act 1981 of Bermuda with an
authorized share capital of $12,000 divided into
1,200,000 shares, par value U.S. $0.01 per share, and as of
the Record Date had an authorized share capital of $7,600,000
divided into 500,000,000 Class A Common Shares, par value
U.S. $0.01 per share, of which 203,285,122 shares had
been issued (of which 36,519,676 shares are held by wholly
owned subsidiaries of the Company) and 250,000,000 Class B
common shares, par value U.S. $0.01 per share, of which
105,420,258 shares had been issued (all of which are held
by a wholly owned subsidiary of the Company), and 10,000,000
Preferred Shares, par value $0.01 per share, of which none had
been issued.
3. The Class A Common Shares are listed on the NYSE.
|
|
D.
|
The
Purpose of the Scheme
|
4. The purpose of this Scheme is to effect the cancellation
of each whole non-fractional issued Scheme Share and the
issuance, in consideration thereof, of one issued, fully paid
and non-assessable Cooper Ireland ordinary share. The Scheme and
the cancellation and issuance of shares will be effected in
consecutive stages.
5. First, Cooper Ireland has already been formed as a
subsidiary of the Company.
6. Second, at the Transaction Time each fractional part of
a Scheme Share will be cancelled and shall cease to exist. Each
Scheme Shareholder holding a fractional part of a Scheme Share
will be entitled to receive a cash payment for that fraction of
a share determined by taking the appropriate fraction of the
average of the high and low trading prices for a Scheme Share on
the NYSE on the Business Day immediately prior to the Effective
Date.
7. Third, (a) at the Transaction Time, each whole
non-fractional Scheme Share shall be cancelled and shall cease
to exist; (b) as consideration for the issuance by Cooper
Ireland of new shares to Scheme Shareholders as described in
clause (c) below, the Company will issue and allot to
Cooper Ireland a number of Class A Common Shares that is
equal to the number of Cooper Ireland ordinary shares to be
issued by Cooper Ireland as described in clause (c) below;
and (c) Cooper Ireland shall issue and allot to each Scheme
Shareholder, who previously held a whole non-fractional Scheme
Share, one new Cooper Ireland ordinary share as consideration
for each whole Scheme Share previously held by such Scheme
Shareholder.
8. After the Scheme is carried out, the Company will be a
wholly owned subsidiary of Cooper Ireland and the Scheme
Shareholders (other than those Scheme Shareholders who
previously held only a fractional part of a Class A Common
Share) will be shareholders of Cooper Ireland holding an
identical number of shares in Cooper Ireland (except for the
fractional parts that have been cancelled).
9. Cooper Ireland has agreed to appear at the hearing of
the petition to sanction this Scheme and undertakes to be bound
by its terms and issue and allot the new fully paid Cooper
Ireland ordinary shares.
A-5
PART 2
THE SCHEME
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A.
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Application
and Effectiveness of the Scheme
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10. The compromise and arrangement effected by this Scheme
shall apply to all Class A Common Shares and be binding on
all Class A Common Shareholders.
11. From the Effective Date all of the right, title and
interest of the Scheme Shareholders in the Scheme Shares shall
be subject to the arrangement implemented by the mechanism set
out in Part 2.
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C.
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Cancellation
and Issuance of Shares and Consideration
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12. Firstly, at the Transaction Time, the following shall
occur:
12.1 Any fractional part of a Scheme Share issued shall be
cancelled and cease to exist.
12.2 The Company will direct the Transfer Agent to pay (out
of funds previously provided by the Company) to each Scheme
Shareholder holding a fractional part of a Scheme Share a cash
payment for that fraction of a share determined by taking the
appropriate fraction of the average of the high and low trading
prices for a Scheme Share on the NYSE on the Business Day
immediately prior to the Effective Date.
13. Secondly, and at the Transaction Time, the following
shall occur:
13.1 All issued whole non-fractional Scheme Shares shall be
cancelled and shall cease to exist.
13.2 In consideration for the issuance by Cooper Ireland of
new Cooper Ireland shares to Scheme Shareholders as set forth in
clause 13.3, the Company shall issue and allot a number of fully
paid Class A Common Shares to Cooper Ireland that is equal to
the number of Cooper Ireland ordinary shares to be issued by
Cooper Ireland as set forth in clause 13.3.
13.3 In consideration of each issued whole non-fractional
Scheme Share cancelled and the Class A Common Shares issued
to Cooper Ireland as set out above, Cooper Ireland shall issue
and allot to each of the Scheme Shareholders who previously held
whole non-fractional Scheme Shares such number of Cooper Ireland
ordinary shares as is equal to the number of whole
non-fractional Scheme Shares previously held by the Scheme
Shareholder.
13.4 For the avoidance of doubt, the wholly owned
subsidiaries of the Company that own Class A Common Shares
in the Company prior to the Transaction Time, will continue to
hold the same number of Class A Common Shares in the Company
following the Transaction Time.
13.5 For the avoidance of doubt, the wholly owned
subsidiary of the Company that owns Class B common shares
in the Company prior to the Transaction Time, will continue to
hold the same number of Class B common shares in the Company
following the Transaction Time.
PART 3
GENERAL
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A.
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Identification
of Shareholders Entitled to Notice of and to Vote at the Court
Meeting
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14. The holders of Class A Common Shares and the
number of Class A Common Shares that they hold for the
purposes of voting at the Court Meeting shall be determined as
those recorded on the Register of Members as at the Record Date.
15. At the Transaction Time, the Company will direct the
Transfer Agent to hold the cash part of the Scheme Consideration
in respect of any fractional part of a Scheme Share for the
account of the relevant
A-6
Scheme Shareholder. The Company shall procure payment by the
Transfer Agent of the cash part of the Scheme Consideration to
the relevant Scheme Shareholder promptly thereafter.
16. At the Transaction Time, Cooper Ireland shall issue and
allot the Cooper Ireland ordinary shares comprising part of the
Scheme Consideration to the Scheme Shareholders.
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C.
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Rights of
Scheme Shareholders
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17. From the Effective Date, each holder of Scheme Shares
shall in accordance with the Scheme cease to have any rights
with respect to Scheme Shares, except the right to receive the
Scheme Consideration. Upon the cancellation of the Scheme Shares
the Register of Members shall be updated to reflect such
cancellation.
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D.
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Effective
Date, Transaction Time and Notification to Scheme
Shareholders
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18. Subject to the provisions of clauses 25, 26 and 36
below, this Scheme shall become binding and effective at the
time at which an office copy of the Order of the Court
sanctioning this Scheme and making such facilitating orders as
are appropriate pursuant to section 99 of the Companies Act
shall have been delivered to the Registrar for registration, but
the transactions contemplated by the Scheme shall not occur
until the Transaction Time and in the order designated above.
19. Cooper Ireland shall give notification of this Scheme
having become effective by issuing a press release and by
furnishing or filing a Current Report on
Form 8-K
with the U.S. Securities and Exchange Commission.
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E.
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Stay of
Prohibited Proceedings
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20. None of the Class A Common Shareholders shall
commence a Prohibited Proceeding in respect of or arising from
this Scheme after the Effective Date.
21. A Scheme Shareholder may commence an Allowed Proceeding
against the Company or Cooper Ireland after the Transaction Time
provided that it has first given the Company or Cooper Ireland
five Business Days prior notice in writing of its
intention to do so.
22. All mandates and other instructions in force at the
Effective Date in relation to the Scheme Shares (including
elections for payment of dividends (if any)) shall, immediately
after the Transaction Time, be deemed to be valid as effective
mandates or instructions in respect of the ordinary shares of
Cooper Ireland received in consideration of such Scheme Shares;
provided, however, that nothing in this Scheme shall in any way
affect the right (if any) of a Scheme Shareholder to receive any
declared dividend that has not been paid prior to the
Transaction Time in respect of the Scheme Shares.
23. The Company shall pay in full all costs, charges,
expenses and disbursements reasonably incurred by the Company in
connection with the negotiation, preparation and implementation
of this Scheme as and when they arise, including the costs of
holding the Court Meeting and the costs of obtaining the
sanction of the Court and the costs of placing the notices
required by this Scheme.
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G.
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Existing
Instruments of Transfer and Certificates
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24. As from the Transaction Time, all instruments of
transfer and certificates validly existing at the Transaction
Time in respect of a transfer or holding of any Scheme Shares
shall cease to have effect as documents or evidence of transfer
or title and every holder thereof shall be bound on the request
of the Company to deliver up to the Company the certificate(s)
in respect of its, his or her entire holding of Scheme Shares.
A-7
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H.
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Amendment,
Termination or Delay
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25. Subject to U.S. securities law constraints, this
Scheme may be amended, modified or supplemented at any time
before or after its adoption by the Class A Common
Shareholders of the Company at the Court Meeting. However, after
adoption, no amendment, modification or supplement may be made
or effected that legally requires further approval by
Class A Common Shareholders of the Company without
obtaining that approval. At the Court hearing to sanction this
Scheme, the Court may impose such conditions as it deems
appropriate in relation to this Scheme but may not impose any
material changes without the joint consent of the Company and
Cooper Ireland. The Company may, subject to U.S. securities
law constraints, consent to any modification of this Scheme on
behalf of the Class A Common Shareholders which the Court
may think fit to approve or impose.
26. The Board of Directors of the Company may terminate
this Scheme, or delay the effectiveness of this Scheme, at any
time prior to its effectiveness without obtaining the approval
of the Class A Common Shareholders of the Company, even
though the Scheme may have been approved at the Court Meeting
and sanctioned by the Court and all other Conditions may have
been satisfied, if the Board of Directors determines that such
course is in the best interests of the Company.
27. Any notice or other written communication to be given
under or in relation to this Scheme other than pursuant to
clauses 19 and 32 shall be given in writing and shall be
deemed to have been duly given if it is delivered by hand or
sent by post to:
27.1. in the case of the Company, Cooper Industries, Ltd.,
P.O. Box 4446, Houston, Texas 77210, Attention:
Secretary;
27.2. in the case of any Scheme Shareholder, its last known
address according to the Company;
27.3. in the case of any other person, any address set
forth for that person in any agreement entered into in
connection with this Scheme or the last known address according
to the Company, or by fax to its last known fax number according
to the Company.
28. Any notice or other written communication to be given
under this Scheme shall be deemed to have been served as
provided in Bye-Law 19 of the Company Bye-Laws.
29. In proving service, it shall be sufficient proof, in
the case of a notice sent by post, that the envelope was
properly stamped, addressed and placed in the post.
30. Save in the case of the notice, written communications
or documents required to be filed pursuant to clause 19,
the accidental omission to send any notice, written
communication or other document in accordance with
clauses 27 to 28 above or the non-receipt of any such
notice by the Scheme Shareholder, shall not affect the
provisions of this Scheme.
31. The Company shall not be responsible for any loss or
delay in the transmission of any notices, other documents or
payments posted by or to the Scheme Shareholder which shall be
posted at the risk of the Scheme Shareholder.
32. Any notice or other written communication that is
required to be given to all or substantially all the
Class A Common Shareholders may (but is not required to) be
made by furnishing or filing a Current Report on
Form 8-K
with the US Securities and Exchange Commission and shall be
deemed to be served upon acceptance by the EDGAR system thereof.
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J.
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Exercise
of Discretion
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33. When under any provision of this Scheme a matter is to
be determined by the Company, then it will have discretion to
interpret such matter under the Scheme in a manner that it
considers fair and reasonable, and its decisions will be binding
on all concerned.
A-8
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K.
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Governing
Law and Jurisdiction
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34. At and with effect from the Effective Date, the
operative terms of this Scheme shall be governed by, and
construed in accordance with, the laws of Bermuda and the
Class A Common Shareholders hereby agree that the Courts of
Bermuda shall have exclusive jurisdiction to hear and determine
any suit, action or proceeding and to settle any dispute which
arises out of or connected with the terms of this Scheme or
their implementation or out of any action taken or omitted to be
taken under this Scheme or in connection with the administration
of this Scheme and for such purposes, the Class A Common
Shareholders irrevocably submit to the jurisdiction of the
Supreme Court of Bermuda, provided however, that nothing in this
clause shall affect the validity of other provisions determining
governing law and jurisdiction between the Company and the
Class A Common Shareholders, whether contained in any
contract or otherwise.
35. The terms of this Scheme and the obligations imposed on
the Company hereunder shall take effect subject to any
prohibition or condition imposed by any applicable law.
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L.
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Pre-Conditions
to the Scheme, the Effective Date and the Transaction
Time
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36. The effectiveness of this Scheme and the occurrence of
the Effective Date and the Transaction Time are each conditional
upon the satisfaction or, if allowed by law, waiver of each of
the following conditions:
36.1. The Scheme is approved by the requisite vote of
Class A Common Shareholders of the Company;
36.2. The Scheme is sanctioned by the Court;
36.3. There is no threatened, pending or effective decree,
order, injunction or other legal restraint prohibiting the
consummation of the Scheme or related transactions;
36.4. The ordinary shares of Cooper Ireland to be issued to
Scheme Shareholders are authorized for listing on the NYSE,
subject to official notice of issuance;
36.5. All consents and governmental authorizations that are
necessary, desirable or appropriate in connection with the
Scheme and related transactions (including, without limitation,
waivers under
and/or
amendments to each of the Credit Facilities) are obtained on
terms acceptable to the Company and are in full force and effect;
36.6. The Company receives an opinion from Skadden, Arps,
Slate, Meagher & Flom LLP, in form and substance
reasonably satisfactory to it, confirming in general, as of the
Effective Date, that the discussion under the section of the
Proxy Statement entitled Material Tax
Considerations U.S. Federal Income Tax
Considerations fairly summarizes such considerations with
respect to U.S. holders and non-U.S. holders (each as defined
therein); and
36.7. The Company receives an opinion from Arthur Cox,
Solicitors, in form and substance reasonably satisfactory to it,
confirming, as of the Effective Date, the matters discussed
under the section of the Proxy Statement entitled Material
Tax Considerations Irish Income Tax
Considerations.
37. Unless the Effective Date shall have occurred on or
before 31 March 2010 or such later date, if any, as the
Company may agree and the Court may allow, this Scheme shall
lapse.
Dated 2009
A-9
Companies
Acts 1963 to 2009
A PUBLIC
COMPANY LIMITED BY SHARES
MEMORANDUM
and ARTICLES OF ASSOCIATION
of
COOPER
INDUSTRIES PUBLIC LIMITED COMPANY
Incorporated
the 4th day of June 2009
Arthur
Cox
Arthur Cox Building
Earlsfort Terrace
Dublin 2
B-1
Cert.
No.: 471954
Companies
Acts 1963 to 2009
A PUBLIC
COMPANY LIMITED BY SHARES
MEMORANDUM
OF ASSOCIATION
-of-
COOPER
INDUSTRIES PUBLIC LIMITED COMPANY
1. The name of the Company is
Cooper Industries public limited company.
2. The Company is to be a
public limited company.
3. The objects for which the
Company is established are:
(1)
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(a)
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To carry on business of a diversified, global company that
provides products, services and solutions through the design,
manufacture, sale and service of industrial, commercial and
consumer products, and to do all things usually dealt in by
persons carrying on the abovementioned businesses or any of them
or likely to be required in connection with any of such business.
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(b)
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To carry on business as a holding company and to acquire and
hold shares, debenture stock, bonds, mortgages, obligations and
securities of any kind issued or guaranteed by any company, body
corporate or undertaking of whatever nature and wherever
constituted or carrying on business, and shares, stock,
debentures, debenture stock, bonds, obligations and other
securities issued or guaranteed by any government, sovereign
ruler, commissioners, trust, local authority or other public
body, whether in Ireland or elsewhere, and to vary, transpose,
dispose or otherwise deal with from time to time as may be
considered expedient any of the Companys investments for
the time being.
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(c)
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To acquire the entire issued share capital of Cooper Industries,
Ltd. a Bermudian registered company.
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(2)
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To acquire any such shares and other securities as are mentioned
in the preceding paragraph by subscription, syndicate
participation, 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 incident to the
ownership thereof.
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(3)
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To co-ordinate the administration, policies, management,
supervision, control, research, planning, trading and any and
all other activities of any company or companies now or
hereafter incorporated or acquired which may be or may become a
Group Company (which expression, in this and the next following
paragraphs means a company, wherever incorporated, which is or
becomes a holding company or a subsidiary of, or affiliated
with, the Company within the meanings respectively assigned to
those terms in the Companies Acts 1963 to 2009).
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(4)
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To provide financing and financial investment, management and
advisory services to any Group Company, which shall include but
not be limited to granting or providing credit and financial
accommodation, lending and making advances with or without
interest to any Group Company and lending to or depositing with
any bank funds or other assets to provide security (by way of
mortgage, charge, pledge, lien or otherwise) for loans or other
forms of financing granted to such Group Company by such bank,
and borrowing and receiving advances with or without interest
from any Group Company.
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(5)
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To be involved in packaging of goods of all kinds.
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(6)
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To buy, sell and deal in goods of all kinds.
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(7)
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To be involved in designing and manufacturing of all kinds.
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B-2
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(8)
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To undertake scientific research including the improvement,
discovery and development of processes, inventions, patents and
designs and the construction, maintenance and operation of
laboratories and research centres.
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(9)
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To undertake all forms of engineering.
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(10)
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To undertake the acquiring by purchase or otherwise and holding
as an investment inventions, patents, trade marks, trade names,
trade secrets, designs and the like.
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(11)
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To undertake the buying, selling, hiring, letting and dealing in
conveyances of any sort.
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(12)
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To acquire by purchase or otherwise and hold, sell, dispose of
and deal in real property and in personal property including
investments of all kinds wheresoever situated.
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(13)
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To enter into any guarantee, contract of indemnity or suretyship
and to assure, support or secure with or without consideration
or benefit the performance of any obligations of any person or
persons and to guarantee the fidelity of individuals filling or
about to fill situations of trust or confidence.
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(14)
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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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(15)
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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 encumbrances, for any estate or interest whatsoever,
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 of 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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(16)
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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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(17)
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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 to
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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(18)
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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 therefore or at no rent
and subject to or free from covenants and restrictions as the
Directors shall deem appropriate.
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B-3
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(19)
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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, merge, consolidate or 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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(20)
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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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(21)
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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 the Company.
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(22)
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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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(23)
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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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(24)
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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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(25)
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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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(26)
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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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(27)
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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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B-4
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(28)
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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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(29)
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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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(30)
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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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(31)
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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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(32)
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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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(33)
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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 or benefits 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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(34)
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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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(35)
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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 merger,
consolidation or 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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(36)
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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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(37)
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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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(38)
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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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(39)
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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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(40)
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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
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B-5
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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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(41)
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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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(42)
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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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(43)
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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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(44)
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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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(45)
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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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(46)
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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$7,600,000 divided into 40,000 ordinary shares of
1 each, 750,000,000 ordinary shares of US$0.01 each
and 10,000,000 preferred shares of US$0.01 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.
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B-6
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
Fand Limited
Arthur Cox Building
Earlsfort Terrace
Dublin 2
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Thirty-Nine Thousand, Nine Hundred and Ninety-Four Ordinary
Shares
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For and on behalf of
Attleborough Limited
Arthur Cox Building
Earlsfort Terrace
Dublin 2
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One Ordinary Share
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For and on behalf of
Emma Hickey
Arthur Cox Building
Earlsfort Terrace
Dublin 2
Chartered Secretary
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One Ordinary Share
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For and on behalf of
Jaqueline McGowan-Smyth
Arthur Cox Building
Earlsfort Terrace
Dublin 2
Chartered Secretary
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One Ordinary Share
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For and on behalf of
James Heary
Arthur Cox Building
Earlsfort Terrace
Dublin 2
Chartered Accountant
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One Ordinary Share
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For and on behalf of
Richard Steen
Arthur Cox Building
Earlsfort Terrace
Dublin 2
Solicitor
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One Ordinary Share
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For and on behalf of
Dermot Marah
Arthur Cox Building
Earlsfort Terrace
Dublin 2
Solicitor
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One Ordinary Share
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Dated the 4th day of June 2009
Witness to the above signatures:
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Louise Gaffney
Arthur Cox Building
Earlsfort Terrace
Dublin 2
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B-7
COMPANIES
ACTS 1963 TO 2009
A PUBLIC
COMPANY LIMITED BY SHARES
ARTICLES OF
ASSOCIATION
-of-
COOPER
INDUSTRIES PUBLIC LIMITED COMPANY
PRELIMINARY
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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.
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2.
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In these articles:
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Act
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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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1983 Act
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means the Companies (Amendment) Act, 1983.
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1990 Act
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means the Companies Act 1990 (No. 33 of 1990).
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Acts
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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
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includes any number or address used for the purposes of
communication by way of electronic mail or other electronic
communication.
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Clear Days
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in relation to the period of notice, means 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.
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electronic communication
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has the meaning given to those words in the Electronic Commerce
Act 2000.
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electronic signature
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has the meaning given to those words in the Electronic Commerce
Act 2000.
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Ordinary Resolution
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means an ordinary resolution of the Companys members
within the meaning of section 141 of the Act.
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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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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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the Company
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means the company whose name appears in the heading to these
articles.
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B-8
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the Directors or the Board
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means the directors from time to time and 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.
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the Group
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means the Company and its subsidiaries from time to time and for
the time being.
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the Holder
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in relation to any share, means 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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the Office
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means the registered office from time to time and for the time
being of the Company.
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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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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.
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(a)
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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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(b)
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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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(c)
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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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(d)
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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.
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(e)
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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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3. (a) |
The share capital of the Company is 40,000 and
US$7,600,000 divided into 40,000 ordinary shares of 1
each, 750,000,000 ordinary shares of US$0.01 each and 10,000,000
preferred shares of US$0.01 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, the right to attend and speak at any
general meeting of the Company and to exercise one vote per
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; 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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B-9
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(c).
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(c)
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The Directors are authorised to issue all or any of the
authorised but unissued preferred shares from time to time in
one or more classes or series, and to fix for each such class or
series such voting power, full or limited, or no voting power,
and such designations, preferences and relative, participating,
optional or other special rights and such qualifications,
limitations or restrictions thereof, as shall be stated and
expressed in the resolution or resolutions adopted by the Board
providing for the issuance of such class or series, including,
without limitation, the authority to provide that any such class
or series may be:
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(i)
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redeemable at the option of the Company, or the Holders, or
both, with the manner of the redemption to be set by the Board,
and redeemable at such time or times, including upon a fixed
date, and at such price or prices;
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(ii)
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entitled to receive dividends (which may be cumulative or
non-cumulative) at such rates, on such conditions and at such
times, and payable in preference to, or in such relation to, the
dividends payable on any other class or classes of shares or any
other series;
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(iii)
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entitled to such rights upon the dissolution of, or upon any
distribution of the assets of, the Company; or
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(iv)
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convertible into, or exchangeable for, shares of any other class
or classes of shares, or of any other series of the same or any
other class or classes of shares, of the Company at such price
or prices or at such rates of exchange and with such adjustments
as the Directors determine,
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which rights and restrictions may be as stated in such
resolution or resolutions of the Directors as determined by them
in accordance with this article 3(c). The Board may at any
time before the allotment of any preferred share by further
resolution in any way amend the designations, preferences,
rights, qualifications, limitations or restrictions, or vary or
revoke the designations of such preferred shares.
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 preferred shares
in accordance with this article 3.
(d)
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(i)
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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
(who may or may not be a member of the Company) pursuant to
which the Company acquires or will acquire ordinary shares in
the Company, or an interest in ordinary shares in the Company,
from such third party. In these circumstances, the acquisition
of such shares or interest in 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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(ii)
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Subject to Section 210(4) of the 1990 Act, on a third party
(who may or may not be a member of the Company) (the
Acquirer) agreeing with any member (or with a
person who has an interest in the shares in the Company of that
member (the Beneficial Owner)) of the Company
that it will acquire any of the shares in the Company of that
member (the Redeeming Member), the Board may
determine to implement a redemption mechanism in respect of
those shares (the Redemption Mechanism), such
mechanism to be effected in accordance with such procedures and
as to such type or types of such transactions as the Board may
resolve and publish (if required) from time to time. Under the
Redemption Mechanism, the Board may deem the Redeeming
Member to have given the Company an irrevocable notice of its
wish that the shares the subject of the agreement (the
Notified Shares) be immediately converted so
as to be redeemable, subject to the right of the Redeeming
Member or Beneficial Owner to notify the Company of its
unwillingness to have such shares so converted as provided for
under Section 210(2) of the 1990
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B-10
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Act. The Notified Shares shall thereafter be redeemed
immediately before the completion of any such acquisition by the
Acquirer 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).
Moreover, the Redemption Agent shall hold the
Redemption Amount on trust and apply it in respect of an
allotment and issue of ordinary shares for their nominal value,
fully paid, in the Company equal in number to the Notified
Shares, to the Acquirer (the New Issue), such
allotment and issue 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 be effected by way of a reissue of the treasury shares
created pursuant to the redemption of the Notified Shares.
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4. |
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)
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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; or
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(b)
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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
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(c)
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pursuant to Section 210 of the 1990 Act, convert any of its
shares into Redeemable Shares.
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5. |
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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6. (a) |
Without prejudice to the authority conferred on the Directors
pursuant to article 3 to issue preferred 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 may, whether or not the Company is being wound up, be
varied or abrogated with the consent in writing of the Holders
of three-fourths of the issued shares in 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, provided
that, if the relevant class of Holders has only one Holder, that
person present in person or by proxy, shall constitute the
necessary quorum.
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(b)
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The redemption or purchase of preferred shares or any class of
preferred shares shall not constitute a variation of rights of
the preferred Holders where the redemption or purchase of the
preferred shares has been authorised solely by a resolution of
the ordinary Holders.
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(c)
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The issue, redemption or purchase of any of the 10,000,000
preferred shares of US$0.01 per share shall not constitute a
variation of the rights of the Holders of ordinary shares.
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(d)
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The issue of preferred shares or any class of preferred shares
which rank pari passu with, or junior to, any existing
preferred shares or class of preferred shares shall not
constitute a variation of the existing preferred shares or class
of preferred shares.
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7. |
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.
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B-11
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8. (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 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, but so that no share shall be issued at a discount save
in accordance with sections 26(5) and 28 of the 1983 Act,
and so that, in the case of shares offered to the public for
subscription, the amount payable on application on each share
shall not be less than one-quarter of the nominal amount of the
share and the whole of any premium thereon.
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(b)
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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 to purchase such number of
shares of any class or classes or of any series of any class as
the Board may deem advisable, and to cause warrants or other
appropriate instruments evidencing such options to be issued.
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(c)
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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 the Companys authorised share capital 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)
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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)
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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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9.
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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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10.
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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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11.
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No person shall be entitled to a share certificate in respect of
any ordinary share held by them in the share capital of the
Company, whether such ordinary share was allotted or transferred
to them, and the Company shall not be bound to issue a share
certificate to any such person entered in the Register.
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12.
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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
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13. (a) |
The instrument of transfer of any share may be executed for and
on behalf of the transferor by the Secretary or an Assistant
Secretary, and the Secretary or Assistant Secretary shall be
deemed to have
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B-12
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been irrevocably appointed agent for the transferor 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. Any document which records the
name of the transferor, the name of the transferee, the class
and number of shares agreed to be transferred, the date of the
agreement to transfer shares and the price per share, shall,
once executed by the transferor or the Secretary or Assistant
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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|
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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 the transferee (at its discretion),
(ii) set-off the stamp duty against any dividends payable
to the transferor or the transferee (at its discretion) of those
shares 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.
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|
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(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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|
|
14.
|
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 may approve.
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|
15.
|
The Directors may decline to recognise any instrument of
transfer unless the instrument of transfer is in respect of one
class of share only.
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16.
|
If the Directors refuse to register a transfer they shall,
within two months after the date on which the transfer was
lodged with the Company, send to the transferee notice of the
refusal.
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17.
|
The Directors shall from time to time fix a record date for the
purposes of determining the rights of members entitled to:
(i) notice of
and/or to
vote at any general meeting of the Company or any adjournment or
postponement thereof; (ii) consent to corporate action in
writing without a general meeting of the company;
(iii) receive payment of any dividend or other distribution
or allotment of rights; (iv) exercise any rights in respect
of any change, conversion or exchange of shares; or (v) for
the purpose of any other action permitted by law. If no record
date is fixed, the record date for determining shareholders for
any such purpose shall be at the close of the business day on
which the Board adopts the resolution relating thereto.
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18.
|
Registration of transfers may be suspended at such times and for
such period, not exceeding in the whole 30 days in each
year, as the Directors may from time to time determine subject
to the requirements of Section 121 of the Act.
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19.
|
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.
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B-13
TRANSMISSION
OF SHARES
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20.
|
In the case of the death of a member, the survivor or survivors
where the deceased was a joint Holder, and the 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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21.
|
Any person becoming entitled to a share in consequence of the
death or bankruptcy of a member may, 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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|
22.
|
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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23.
|
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, so,
however, that the Directors may at any time give notice
requiring such person to elect either to be registered himself
or to transfer the share, and if the notice is not complied with
within 90 days, the Directors may thereupon withhold
payment of all dividends, bonuses or other moneys payable in
respect of the share until the requirements of the notice have
been complied with.
|
ALTERATION
OF CAPITAL
|
|
24.
|
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.
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25.
|
The Company may by resolution and, where required, by resolution
of a separate class of shareholders:
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|
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|
|
(a)
|
divide its share capital into several classes and attach thereto
respectively any preferential, deferred, qualified or special
rights, privileges or conditions;
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(b)
|
consolidate and divide all or any of its share capital into
shares of a larger amount than its existing shares;
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(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;
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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; or
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(e)
|
change the currency denomination of its share capital.
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|
26.
|
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.
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|
27.
|
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
|
B-14
|
|
|
representing the fractions for the best price reasonably
obtainable to any person and distribute the proceeds of sale 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.
|
GENERAL
MEETINGS
|
|
28.
|
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 the 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 of Ireland.
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29.
|
All general meetings other than annual general meetings shall be
called extraordinary general meetings.
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|
|
30. (a) |
Extraordinary general meetings, for any purpose or purposes, may
be convened by the Chairman or the Board;
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|
|
|
|
(b)
|
Extraordinary general meetings shall also be convened on such
requisition, or in default may be convened by such
requisitionists, as provided in section 132 of the Act.
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|
|
31. |
A Director who is not a member of the Company shall nevertheless
be entitled to attend and speak at general meetings.
|
NOTICE OF
GENERAL MEETINGS
|
|
32. (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 more than sixty Clear
Days notice and not less than twenty-one Clear Days
notice and all other extraordinary general meetings shall be
called by not more than sixty Clear Days notice and not
less than fourteen Clear Days notice.
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|
|
|
|
(b)
|
Any notice convening a general meeting shall specify the day,
time and place of the meeting and, in the case of special
business, the general nature of that business and, in reasonable
prominence, that a member entitled to attend and vote is
entitled to appoint a proxy to attend, speak and vote in his
place and that a proxy need not be a member of the Company. Such
notice shall be given by mail or by
e-mail or
electronic communication at the members address as it
appears on the Register or at any other address given in writing
by the member to the Company for such purpose. It shall also,
where relevant, give particulars of any Directors who are to
retire at the meeting and of any persons who are recommended by
the Directors for appointment or re-appointment as Directors at
the meeting or in respect of whom notice has been duly given to
the Company of the intention to propose them for appointment or
re-appointment as Directors at the meeting. Provided that the
latter requirement shall only apply where the intention to
propose the person has been received by the Company in
accordance with the provisions of these articles. Subject to any
restrictions imposed on any shares, the notice of the meeting
shall be given to all the members of the Company who are
entitled to vote as of the record date set by the Directors and
to the Directors and the Auditors.
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|
|
(c)
|
The accidental omission to give notice of a meeting or send an
instrument of proxy in relation thereto, or the non-receipt of
notice of a meeting by or such instrument of proxy, any person
entitled to receive notice shall not invalidate the proceedings
at the meeting.
|
PROCEEDINGS
AT GENERAL MEETINGS
|
|
33. |
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.
|
B-15
|
|
34.
|
Except as provided by law, at any extraordinary general meeting,
only such business shall be conducted as shall have been
specified in the notice of meeting (or any supplement thereto)
given by or at the direction of the Board.
|
|
35.
|
At any annual general meeting, only such business shall be
conducted as shall have been properly brought before the meeting
(a) by or at the direction of the Board of Directors, or
(b) by any member of the Company who complies with the
procedures set forth in this article 35. For business to be
properly brought before an annual general meeting by a member,
the member must have given timely notice thereof in proper
written form to the Secretary and satisfied all requirements
under applicable rules promulgated by the United States
Securities and Exchange Commission or by the New York Stock
Exchange or any other exchange on which the Companys
securities are traded. To be timely for consideration at the
annual general meeting, a members notice must be received
by the Secretary at his or her office not less than 45 calendar
days, or such greater length of time as permitted by appropriate
rules of the United States Securities and Exchange Commission,
in advance of the anniversary of the date that the
Companys proxy statement was released to members in
connection with the previous years annual general meeting
(or no later than 27 January 2010 with respect to the 2010
annual general meeting). To be in proper written form, a
members notice to the Secretary must set forth as to each
matter such member proposes to bring before the annual general
meeting: (a) a brief description of the business desired to
be brought before the annual general meeting and the reasons for
conducting such business at the annual general meeting,
(b) the name and record address of such member,
(c) the class or series and number of shares of the Company
which are owned beneficially or of record by such member,
(d) a description of all arrangements or understandings
between such member and any other person or persons (including
their names) in connection with the proposal of such business by
such member and any material interest of such member in such
business, and (e) a representation that such member intends
to appear in person or by proxy at the annual general meeting to
bring such business before the meeting. To be in proper written
form, a members notice to the Secretary regarding
nomination of any person for election to the Board must also set
forth as to each person whom the member proposes to nominate for
election as a director: (a) the name, age, business address
and residence address of the person, (b) the principal
occupation or employment of the person, (c) the class or
series and number of shares of the Company which are owned
beneficially or of record by the person and (d) any other
information relating to the person that would be required to be
disclosed in a proxy statement or other filings required to be
made in connection with solicitations of proxies for election of
directors pursuant to Section 14 of the United States
Securities Exchange Act of 1934, as amended (the
Exchange Act), and the rules and regulations
promulgated thereunder. Such notice must be accompanied by a
written consent of each proposed nominee to being named as a
nominee and to serve as a Director if elected. No business shall
be conducted at the annual general meeting of members except
business brought before the annual general meeting in accordance
with the procedures set forth in this article 35; provided,
however, that once business has been properly brought before the
annual general meeting in accordance with such procedures,
nothing in this article 35 shall be deemed to preclude any
discussions by any shareholder of any such business.
|
|
36.
|
The Holders of shares entitling them to exercise a majority of
the voting power of the Company on the relevant record date
shall constitute a quorum to hold a general meeting of the
shareholders provided that at any meeting duly called at which a
quorum is present, the holders of a majority of the voting
shares represented thereat may adjourn such meeting from time to
time without notice other than by announcement of the chairman
of the meeting; and provided further that any meeting duly
called at which a quorum is not present shall be adjourned and
the Company shall provide notice pursuant to article 32 in
the event that such meeting is to be reconvened. In addition,
the Chairman of the meeting may at any time without the consent
of the meeting adjourn the meeting to another time and or place
if, in his opinion, it would facilitate the conduct of the
meeting to do so.
|
|
37.
|
The Chairman (if any) of the Board or, in his or her absence,
the lead or presiding non-management director, shall preside as
chairman at every general meeting. In the absence of the
Chairman of the Board or the lead or presiding non-management
director. Directors present shall choose one of their number to
act or if one Director only is present he or she shall preside
as chairman if willing to act. If no Director is present or if
each
|
B-16
|
|
|
of the Directors present declines to take the chair, the persons
present and entitled to vote at the meeting shall elect one of
their number to be chairman.
|
|
|
38. |
At any general meeting a resolution put to the vote of the
meeting shall be decided on a show of hands unless a poll is
(before or on the declaration of the result of the show of
hands) demanded by:
|
|
|
|
|
(a)
|
the Chairman; or
|
|
|
(b)
|
by at least three members present in person or by proxy; or
|
|
|
(c)
|
by any member or members present in person or by proxy and
representing not less than one-tenth of the total voting rights
of all the members having the right to vote at the
meeting; or
|
|
|
(d)
|
by a member or members holding shares in the Company conferring
the right to vote at the meeting being shares on which an
aggregate sum has been paid up equal to not less than one-tenth
of the total sum paid up on all the shares conferring that right.
|
Unless a poll is so demanded, a declaration by the Chairman that
a resolution has, on a show of hands, been carried or carried
unanimously, or by a particular majority, or lost, and an entry
to that effect in the book containing the minutes of the
proceedings of the Company, shall be conclusive evidence of the
fact without proof of the number or proportion of the votes
recorded in favour of or against such resolution.
The demand for a poll may be withdrawn.
|
|
39.
|
Except as provided in article 40, if a poll is duly
demanded it shall be taken in such manner as the Chairman
directs, and the result of the poll shall be deemed to be the
resolution of the meeting at which the poll was demanded.
|
|
40.
|
A poll demanded on the election of the Chairman or on a question
of adjournment shall be taken forthwith. A poll demanded on any
other question shall be taken at such time as the chairman of
the meeting directs, and any business other than that on which a
poll has been demanded may be proceeded with pending the taking
of the poll.
|
|
41.
|
Subject to section 141 of the Act, a resolution in writing
signed by all of the members for the time being entitled to
attend and vote on such resolution at a general meeting (or
being bodies corporate by their duly authorised representatives)
shall be as valid and effective for all purposes as if the
resolution had been passed at a general meeting of the Company
duly convened and held, and may consist of several documents in
like form each signed by one or more persons, and if described
as a special resolution shall be deemed to be a special
resolution within the meaning of the Act. Any such resolution
shall be served on the Company.
|
VOTES OF
MEMBERS
|
|
42.
|
Subject to any special rights or restrictions as to voting for
the time being attached by or in accordance with these articles
to any class of shares, on a show of hands every member present
in person and every proxy shall have one vote, but so that no
one member shall on a show of hands have more than one vote in
respect of the aggregate number of shares of which he is the
Holder, and on a poll every member who is present in person or
by proxy shall have one vote for each share of which he is the
Holder.
|
|
43.
|
When there are joint Holders, the vote of the senior who tenders
a vote, whether in person or by proxy, shall be accepted to the
exclusion of the votes of the other joint Holders; and for this
purpose, seniority shall be determined by the order in which the
names stand in the Register.
|
|
44.
|
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,
whether on a show of hands or on a poll, by his committee,
receiver, guardian or other person appointed by that court and
any such committee, receiver, guardian or other person may vote
by proxy on a show of hands or 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
|
B-17
|
|
|
adjourned meeting at which the right to vote is to be exercised
and in default the right to vote shall not be exercisable.
|
|
|
45.
|
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.
|
|
46.
|
Votes may be given either personally or by proxy.
|
|
|
47. (a) |
Every member entitled to attend and vote at a general meeting
may appoint a proxy to attend, speak and vote on his behalf. The
appointment of a proxy or corporate representative shall be in
such form and may be accepted by the Company at such place and
at such time as the Board or the Secretary shall from time to
time determine, subject to applicable requirements of the United
States Securities and Exchange Commission and the New York Stock
Exchange or such other exchange or exchanges on which the
Companys shares are listed. No such instrument appointing
a proxy or corporate representative shall be voted or acted upon
after 2 years from its date.
|
|
|
|
|
(b)
|
Without limiting the foregoing, the Directors may from time to
time permit appointments of a proxy to be made by means of an
electronic or internet communication or facility and may in a
similar manner permit supplements to, or amendments or
revocations of, any such 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 electronic or
internet communication or facility is to be treated as received
by the Company. The Directors may treat any such electronic or
internet communication or facility which purports to be or is
expressed to be sent on behalf of a Holder of shares as
sufficient evidence of the authority of the person sending that
instruction to send it on behalf of that Holder.
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|
|
48.
|
Any body corporate which is a member of the Company may
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.
|
|
49.
|
An appointment of proxy relating to more than one meeting
(including any adjournment thereof) having once been received by
the Company for the purposes of any meeting shall not require to
be delivered, deposited or received again by the Company for the
purposes of any subsequent meeting to which it relates.
|
|
50.
|
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.
|
|
|
51. (a) |
A vote given or poll demanded 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, 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.
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|
|
|
|
(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
|
B-18
|
|
|
|
|
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.
|
|
|
52. |
The instrument appointing a proxy shall be deemed to confer
authority to demand or join in demanding a poll.
|
DIRECTORS
|
|
53.
|
The number of Directors shall not be less than seven nor more
than thirteen.
|
|
54.
|
The Board is authorised to fix a reasonable compensation for
Directors and to provide a fee and reimbursement of expenses for
attendance at any meeting of the Board to be paid to each
Director who is not otherwise a salaried secretary, executive or
employee of the Company.
|
|
55.
|
Unless the Company otherwise directs, a Director may be or
become a director or executive of, or otherwise interested in,
any company promoted by the Company or in which the Company may
be interested as holder or otherwise, and no such Director shall
be accountable to the Company for any remuneration or other
benefits received by him as a director or executive of, or from
his interest in, such other company.
|
BORROWING
POWERS
|
|
56. |
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 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
|
|
57.
|
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.
|
|
58.
|
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.
|
|
59.
|
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 Directors in accordance with
Section 194 of the Act, and shall be able to vote in
respect of any such contract, appointment or arrangement and
shall be counted in the quorum present at the meeting.
|
|
60.
|
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 remuneration and otherwise as the Directors may determine,
and no Director or intending Director shall be disqualified by
his office from contracting or being interested, directly or
indirectly, in any contract or arrangement with the Company or
any such other 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 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.
|
B-19
|
|
61.
|
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,
secretaries or executives of such other company or providing for
the payment of remuneration or pensions to the Directors,
secretaries or executives of such other company.
|
|
62.
|
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, but nothing herein contained shall authorise a
Director or his firm to act as auditor to the Company.
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63.
|
All cheques, promissory notes, drafts, bills of exchange and
other negotiable instruments and all receipts for money paid to
the Company shall be signed, countersigned 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 on behalf of the Company.
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64.
|
The Directors shall cause minutes to be made in books provided
for the purpose:
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|
|
|
(a)
|
of all appointments of officers made by the Directors;
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|
(b)
|
of the names of the Directors present at each meeting of the
Directors and of any committee of the Directors; and
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(c)
|
of all resolutions and proceedings at all meetings of the
Company and of the Directors and of committees of Directors.
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65.
|
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.
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66.
|
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 secretaries)
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 insurance 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.
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DISQUALIFICATION
OF DIRECTORS
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67. |
The office of a Director shall be vacated ipso facto if
the Director:
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|
|
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(a)
|
is restricted or disqualified to act as a Director under the
provisions of Part VII of the 1990 Act;
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(b)
|
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
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|
(c)
|
is removed from office under either of articles 68 and 70.
|
B-20
APPOINTMENT
AND ROTATION OF DIRECTORS
|
|
68.
|
The Directors shall be divided into three classes, designated
Class I, Class II and Class III. Each class shall
consist, as nearly as may be possible, of one-third of the total
number of Directors constituting the entire Board. The initial
division of the Board into classes shall be made by the decision
of the affirmative vote of a majority of the Directors in
office. The term of the initial Class I directors shall
terminate on the date of the 2010 annual general meeting; the
term of the initial Class II directors shall terminate on
the date of the 2011 annual general meeting; and the term of the
initial Class III directors shall terminate on the date of
the 2012 annual general meeting. At each annual general meeting
of members beginning in 2010, successors to the class of
directors whose term expires at that annual general meeting
shall be elected for a three-year term. Save as otherwise
permitted in these articles, Directors will be elected by way of
Ordinary Resolution of the Company in general meeting. If the
number of Directors is changed, any increase or decrease shall
be apportioned among the classes so as to maintain the number of
Directors in each class as nearly equal as possible. In no case
will a decrease in the number of Directors shorten the term of
any incumbent Director. A Director shall hold office until the
annual general meeting for the year in which his or her term
expires and until his or her successor shall be elected and
shall qualify, subject, however, to prior death, resignation,
retirement, disqualification or removal from office. Any vacancy
on the Board of Directors, including a vacancy that results from
an increase in the number of directors or from the death,
resignation, retirement, disqualification or removal of a
Director, shall be deemed a casual vacancy. Subject to the terms
of any one or more classes or series of preferred shares, any
casual vacancy may be filled by decision of a majority of the
Board then in office, provided that a quorum is present. Any
Director of any class elected to fill a vacancy resulting from
an increase in the number of Directors of such class shall hold
office for a term that shall coincide with the remaining term of
that class. Any Director elected to fill a vacancy not resulting
from an increase in the number of Directors shall have the same
remaining term as that of his or her predecessor. A Director
retiring at a meeting shall retain office until the close or
adjournment of the meeting.
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|
69.
|
During any vacancy in the Board, the remaining Directors shall
have full power to act as the Board. If, at any general meeting
of the Company, the number of Directors is reduced below the
minimum prescribed by article 53 due to the failure of any
persons nominated to be Directors to be elected, then in those
circumstances, the nominee or nominees who receive the highest
number of votes in favour of election shall be elected in order
to maintain such prescribed minimum number of Directors and each
such Director shall remain a Director (subject to the provisions
of the Acts and these articles) only until the conclusion of the
next annual general meeting of the Company unless such Director
is elected by the shareholders during such meeting.
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|
70.
|
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.
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71.
|
The Board shall have the power to appoint executives on such
terms as the Board sees fit and to give such titles and
responsibilities to those executives as it sees fit.
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PROCEEDINGS
OF DIRECTORS
|
|
72.
|
The Directors may meet together for the dispatch of business,
adjourn and otherwise regulate their meetings as they may think
fit. The quorum necessary for the transaction of the business of
the Directors shall be a majority of the Directors in office at
the time when the meeting is convened. Unless a greater number
is expressly required by law or these articles, the affirmative
votes of a majority of votes cast by the Directors present at a
meeting at which a quorum is present shall be the act of the
Board. Each director present and voting shall have one vote.
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73.
|
Any Director may participate in a meeting of the Directors by
means of telephonic or other similar communication whereby all
persons participating in the meeting can hear each other speak,
and participation in a meeting in this manner shall be deemed to
constitute presence in person at such meeting and any director
may be situated in any part of the world for any such meeting.
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B-21
|
|
74.
|
The Directors may elect a chairman (Chairman)
of their meetings and determine the period for which such
persons are to hold office. The Chairman shall preside as
chairman at every meeting of the Board. In the absence of the
Chairman, the Directors present may choose one of their number
to be chairman of the meeting.
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75.
|
The Chairman, or at least one third of the Directors, may at any
time summon a meeting of the Directors.
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|
76.
|
Notwithstanding anything in these articles or in the Acts which
might be construed as providing to the contrary, notice of every
meeting of the Directors stating the place, date and hour shall
be given to all Directors either by mail not less than forty
eight (48) hours before the date of the meeting, by
telephone, facsimile, email, or any other electronic means on
not less than twenty four (24) hours notice, or on
such shorter notice as person or persons calling such meeting
may deem necessary or appropriate in the circumstances. Any
director may waive any notice required to be given by law or
under these articles, and the attendance of a director at a
meeting shall be deemed to be a waiver by such Director. The
accidental omission to give notice of a meeting to any Director
shall not invalidate the proceedings at that meeting. Unless
otherwise indicated in the notice thereof, any business may be
transacted at any Directors meeting.
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|
77.
|
A resolution or other document in writing (in electronic form or
otherwise) signed (whether by electronic signature, advanced
electronic signature or otherwise as approved by the Directors)
by all the Directors entitled to receive notice of a meeting of
Directors or of a committee of Directors shall be as valid as if
it had been passed at a meeting of Directors or (as the case may
be) a committee of Directors duly convened and held and may
consist of several documents in the like form each signed by one
or more Directors, and such resolution or other document or
documents when duly signed may be delivered or transmitted
(unless the Directors shall otherwise determine either generally
or in any specific case) by facsimile transmission, electronic
mail or some other similar means of transmitting the contents of
documents.
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|
78.
|
The Board at any time may elect from its number an executive
committee and other committees, each of which shall consist of
not less than three Directors. Each member of each such
committee shall hold office at the pleasure of the Board and may
be removed by the Board at any time with or without cause.
Vacancies occurring in the committee may be filled by the Board.
During any vacancy on a committee, the remaining members shall
have full power to act as the committee. Each committee may
prescribe its own rules for calling and holding meetings and its
method of procedure, subject, however, to any rules prescribed
by the Board, and, if no such rules shall have been prescribed,
the rules applicable to calling and holding meetings of the
Board shall apply to the committee meetings. A quorum for any
meeting of a committee shall consist of at least 50% of the
members in office at the time and at each meeting of the
committee at which a quorum is present, all questions and
business shall be determined by the affirmative vote of not less
than a majority of the members present. Except as the executive
committees powers and duties may be limited or otherwise
prescribed by the Board, the executive committee, during the
intervals between the meetings of the Board, shall possess and
may exercise all of the powers of the Board in the management
and control of the business and property of the Company; and
other committees shall have such powers of the Board as shall be
from time to time delegated to them by the Board; provided,
however, that no committee shall be empowered to elect directors
to fill vacancies among the directors or on any committee of the
directors. Subject to said exceptions, persons dealing with the
Company shall be entitled to rely upon any action of a committee
with the same force and effect as though such action had been
taken by the Board. Subject to the rights of third persons, any
action of a committee shall be subject to revision or alteration
by the Board. The Board is authorised to fix a reasonable
compensation for members of the committees.
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|
79.
|
A committee may elect a Chairman of its meeting. If no such
Chairman is elected, or if at any meeting the Chairman is not
present within five minutes after the time appointed for holding
the same, the members present may choose one of their number to
be Chairman of the meeting.
|
|
80.
|
All acts done by any meeting of the Directors or of a committee
of Directors or by any person acting as a Director shall,
notwithstanding that it be afterwards discovered that there was
some defect in the appointment of any such Director or person
acting as aforesaid, or that they or any of them were
disqualified, be as valid as if every such person had been duly
appointed and was qualified to be a Director.
|
B-22
THE
SEAL
|
|
81. (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 by some other person
appointed by the Directors for that purpose) and shall be
countersigned by the Secretary or by a second Director or by
some other person appointed by the Directors for that purpose.
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|
|
|
|
(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
|
|
82.
|
The Company in general meeting may declare dividends, but no
dividends shall exceed the amount recommended by the Directors.
|
|
83.
|
The Directors may from time to time pay to the members such
dividends as appear to the Directors to be justified by the
profits of the Company.
|
|
84.
|
No dividend or interim dividend shall be paid otherwise than in
accordance with the provisions of Part IV of the 1983 Act.
|
|
85.
|
The Directors may, before recommending any dividend, set aside
out of the profits of the Company 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 lawfully determine. The Directors may also, without placing
the same to reserve, carry forward any profits which they may
think it prudent not to divide.
|
|
86.
|
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.
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|
87.
|
The Directors may deduct from any dividend payable to any member
all sums of money (if any) immediately payable by the member to
the Company on account of calls or otherwise in relation to the
shares of the Company.
|
|
88.
|
Any general meeting declaring a dividend or bonus may direct
payment of such dividend or bonus wholly or partly by the
distribution of specific assets and in particular of paid up
shares, debentures or debenture stocks of any other company or
in any one or more of such ways, and the Directors shall give
effect to such resolution, and where any difficulty arises in
regard to such distribution, the Directors may settle the same
as they think expedient, and in particular fix the value for
distribution of such specific assets or any part thereof and may
determine that cash payments shall be made to any members upon
the footing of the value so fixed, in order to adjust the rights
of all the parties, and may vest any such specific assets in
trustees as may seem expedient to the Directors.
|
|
89.
|
Any dividend or other moneys payable in respect of any share may
be paid by cheque or warrant sent by post, 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 members 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
|
B-23
|
|
|
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.
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|
|
90.
|
No dividend shall bear interest against the Company.
|
|
91.
|
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
|
|
92. (a) |
The Directors shall cause to be kept proper books of account,
whether in the form of documents, electronic form or otherwise,
that:
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|
|
(i)
|
correctly record and explain the transactions of the Company;
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|
|
(ii)
|
will at any time enable the financial position of the Company to
be determined with reasonable accuracy;
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|
|
(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
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|
(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.
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|
|
(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)
|
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 purpose.
|
CAPITALISATION
OF PROFITS
|
|
93. |
Without prejudice to any powers conferred on the Directors as
aforesaid and subject to the Directors authority to issue
and allot shares under articles 8(c) and 8(d), the
Directors may resolve to capitalise any part of the amount for
the time being standing to the credit of any of the
Companys reserve accounts or to the credit of the profit
and loss account which is not available for distribution by
applying such sum in paying up in full unissued shares to be
allotted as fully paid bonus shares to those members of the
Company who would have been entitled to that sum if it were
distributable and had been distributed by way of dividend (and
in the
|
B-24
|
|
|
same proportions) and the Directors shall give effect to such
resolution. Whenever such a resolution is passed in pursuance of
this article 93, the Directors shall make all
appropriations and applications of the undivided profits
resolved to be capitalised thereby and all allotments and issues
of fully paid shares or debentures, if any, and generally shall
do all acts and things required to give effect thereto with full
power to the Directors to make such provisions as they shall
think fit for the case of shares or debentures becoming
distributable in fractions (and, in particular, without
prejudice to the generality of the foregoing, either to
disregard such fractions or to sell the shares or debentures
represented by such fractions and distribute the net proceeds of
such sale to and for the benefit of the Company or to and for
the benefit of the members otherwise entitled to such fractions
in due proportions) and to authorise any person to enter on
behalf of all the members concerned into an agreement with the
Company providing for the allotment to them respectively,
credited as fully paid up, of any further shares or debentures
to which they may become entitled on such capitalisation or, as
the case may require, for the payment up by the application
thereto of their respective proportions of the profits resolved
to be capitalised of the amounts remaining unpaid on their
existing shares and any agreement made under such authority
shall be binding on all such members.
|
AUDIT
|
|
94. |
Auditors shall be appointed and their duties regulated in
accordance with sections 160 to 163 of the Act or any
statutory amendment thereof.
|
NOTICES
|
|
95. |
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 used has
been approved by the Directors).
|
|
|
|
|
(a)
|
A notice or document to be given, served, sent or delivered in
pursuance of these articles may be given to, served on or
delivered to any member by the Company:
|
|
|
|
|
(i)
|
by handing same to him or his authorised agent;
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|
|
(ii)
|
by leaving the same at his registered address;
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|
|
(iii)
|
by sending the same by the post in a pre-paid cover addressed to
him at his registered address; or
|
|
|
(iv)
|
by sending, with the consent of the member 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 member notified to the Company by the member
for such purpose (or if not so notified, then to the address of
the member last known to the Company).
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|
|
|
|
(b)
|
For the purposes of these articles and the Act, a document shall
be deemed to have been sent to a member if a notice is given,
served, sent or delivered to the member and the notice specifies
the website or hotlink or other electronic link at or through
which the member may obtain a copy of the relevant document.
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|
|
(c)
|
Where a notice or document is given, served or delivered
pursuant to
sub-paragraph
(a)(i) or (ii) of this article, the giving, service or
delivery thereof shall be deemed to have been effected at the
time the same was handed to the member or his authorised agent,
or left at his registered address (as the case may be).
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|
|
(d)
|
Where a notice or document is given, served or delivered
pursuant to
sub-paragraph
(a)(iii) of this article, the giving, service or delivery
thereof shall be deemed to have been effected at the expiration
of twenty-four hours after the cover containing it was posted.
In proving service or delivery it shall be sufficient to prove
that such cover was properly addressed, stamped and posted.
|
|
|
(e)
|
Where a notice or document is given, served or delivered
pursuant to
sub-paragraph
(a)(iv) of this article, the giving, service or delivery thereof
shall be deemed to have been effected at the expiration of
48 hours after despatch.
|
B-25
|
|
|
|
(f)
|
Every legal personal representative, committee, receiver,
curator bonis or other legal curator, assignee in bankruptcy,
examiner or liquidator of a member shall be bound by a notice
given as aforesaid if sent to the last registered address of
such member, or, in the event of notice given or delivered
pursuant to
sub-paragraph
(a)(iv), if sent to the address notified by the Company by the
member for such purpose notwithstanding that the Company may
have notice of the death, lunacy, bankruptcy, liquidation or
disability of such member.
|
|
|
(g)
|
Notwithstanding anything contained in this article 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.
|
|
|
(h)
|
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.
|
|
|
(i)
|
Without prejudice to the provisions of
sub-paragraphs
(a)(i) and (ii) of this article, 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 (as defined
below) 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. A 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.
|
|
|
96. |
Notice may be given by the Company to the joint Holders of a
share by giving the notice to the joint Holder whose name stands
first in the Register in respect of the share and notice so
given shall be sufficient notice to all the joint Holders.
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|
|
97. (a) |
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.
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|
|
|
(b)
|
A notice may be given by the Company to the persons entitled to
a share in consequence of the death or bankruptcy of a member by
sending or delivering it, in any manner authorised by these
articles for the giving of notice to a member, addressed to them
at the address, if any, supplied by them for that purpose. Until
such an address has been supplied, a notice may be given in any
manner in which it might have been given if the death or
bankruptcy had not occurred.
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|
|
98.
|
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.
|
|
99.
|
A member present, either in person or by proxy, at any meeting
of the Company or the Holders of any class of shares in the
Company shall be deemed to have received notice of the meeting
and, where requisite, of the purposes for which it was called.
|
B-26
WINDING
UP
|
|
100. |
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. Provided that
this article shall not affect the rights of the Holders of
shares issued upon special terms and conditions.
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|
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101. (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.
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(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.
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102. |
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, with the like
sanction, may 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.
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INDEMNITY
|
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103. (a) |
Subject to the provisions of and so far as may be admitted by
the Acts, every Director and Secretary 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.
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(b)
|
The Company shall indemnify any current or former executive of
the Company (excluding any Directors or Secretary) or any person
who is serving or has served at the request of the Company as a
director, executive or trustee of another company, joint
venture, trust or other enterprise against expenses, including
attorneys fees, judgements, fines, and amounts paid in
settlement actually and reasonably incurred by him or her in
connection with any threatened, pending, or completed action,
suit or proceeding, whether civil, criminal, administrative or
investigative, other than an action by or in the right of the
Company, to which he or she was, is, or is threatened to be made
a party by reason of the fact that he or she is or was such a
director, executive or trustee, provided always that the
indemnity contained in this paragraph (b) shall not extend
to any matter which would render it void pursuant to the Acts.
|
B-27
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(c)
|
In the case of any threatened, pending or completed action, suit
or proceeding by or in the right of the Company, the Company
shall indemnify each person indicated in paragraph (b) of
this article against expenses, including attorneys fees,
actually and reasonably incurred in connection with the defence
or the settlement thereof, except no indemnification shall be
made in respect of any claim, issue or matter as to which such
person shall have been adjudged to be liable for fraud or
dishonesty in the performance of his or her duty to the Company
unless and only to the extent that the High Court of Ireland or
the court in which such action or suit was brought shall
determine upon application that despite the adjudication of
liability, but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for
such expenses as the court shall deem proper.
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(d)
|
Expenses, including attorneys fees, incurred in defending
any action, suit or proceeding referred to in paragraphs
(b) and (c) of this article may be paid by the Company
in advance of the final disposition of such action, suit or
proceeding as authorised by the Board in the specific case upon
receipt of an undertaking by or on behalf of the director,
executive, trustee, or other indemnitee to repay such amount,
unless it shall ultimately be determined that he or she is
entitled to be indemnified by the Company as authorised by these
articles.
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(e)
|
It being the policy of the Company that indemnification of the
persons specified in this article shall be made to the fullest
extent permitted by law, the indemnification provided by this
article shall not be deemed exclusive (a) of any other
rights to which those seeking indemnification or advancement of
expenses may be entitled under these articles, the memorandum of
association of the Company, any agreement, any insurance
purchased by the Company, vote of members or disinterested
directors, or pursuant to the direction (however embodied) of
any court of competent jurisdiction, or otherwise, both as to
action in his or her official capacity and as to action in
another capacity while holding such office, or (b) of the
power of the Company to indemnify any person who is or was an
employee or agent of the Company or of another company, joint
venture, trust or other enterprise which he or she is serving or
has served at the request of the Company, to the same extent and
in the same situations and subject to the same determinations as
are hereinabove set forth with respect to a director, executive
or trustee. As used in this paragraph (e), references to the
Company include all constituent companies in a
consolidation or merger in which the Company or a predecessor to
the Company by consolidation or merger was involved. The
indemnification provided by this article shall continue as to a
person who has ceased to be a director, executive or trustee and
shall inure to the benefit of the heirs, executors, and
administrators of such a person.
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(f)
|
The Directors shall have power to purchase and maintain for any
Director, the Secretary or other officers or employees of the
Company insurance against any such liability as referred to in
Section 200 of the Act.
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(g)
|
The Company may additionally indemnify any employee or agent of
the Company or any director, executive, employee or agent of any
of its subsidiaries to the fullest extent permitted by law.
|
DESTRUCTION
OF DOCUMENTS
104. The Company may destroy:
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(a)
|
any dividend mandate or any variation or cancellation thereof or
any notification of change of name or address, at any time after
the expiry of two years from the date such mandate variation,
cancellation or notification was recorded by the Company;
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(b)
|
any instrument of transfer of shares which has been registered,
at any time after the expiry of six years from the date of
registration; and
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(c)
|
any other document on the basis of which any entry in the
Register was made, at any time after the expiry of six years
from the date an entry in the Register was first made in respect
of it, and it shall be presumed conclusively in favour of the
Company that every share certificate (if any) so destroyed was a
valid certificate duly and properly sealed and that every
instrument of transfer so destroyed was a valid and effective
instrument duly and properly registered and that every other
document destroyed
|
B-28
|
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|
hereunder was a valid and effective document in accordance with
the recorded particulars thereof in the books or records of the
Company provided always that:
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(i)
|
the foregoing provisions of this article shall apply only to the
destruction of a document in good faith and without express
notice to the Company that the preservation of such document was
relevant to a claim;
|
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(ii)
|
nothing contained in this article shall be construed as imposing
upon the Company any liability in respect of the destruction of
any such document earlier than as aforesaid or in any case where
the conditions of proviso (a) above are not
fulfilled; and
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(iii)
|
references in this article to the destruction of any document
include references to its disposal in any manner.
|
SHAREHOLDER
RIGHTS PLAN
|
|
105. |
The Board is hereby expressly authorised to adopt and amend any
shareholder rights plan upon such terms and conditions as the
Board deems expedient and in the interests of the Company,
subject to applicable law.
|
BUSINESS
COMBINATION
|
|
106. (a) |
The affirmative vote of the holders of not less than 80% of the
voting power of the Company on the relevant record date shall be
required for the approval or authorisation of any Business
Combination (as hereinafter defined); provided, however,
that the 80% voting requirement shall not be applicable, and the
provisions of the Acts and of these articles relating to the
percentage of shareholder approval, if any, shall apply to any
such Business Combination if:
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|
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(i)
|
The Continuing Directors of the Company (as herein
defined) by a two-thirds (2/3) vote have expressly approved the
Business Combination either in advance of or subsequent to the
acquisition of issued ordinary shares of the Company that caused
the Related Person (as hereinafter defined) involved in the
Business Combination to become a Related Person; or
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(ii)
|
If the following conditions are satisfied:
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(A)
|
The aggregate amount of the cash and the fair market value of
the property, securities or other consideration to be received
in the Business Combination by holders of the ordinary shares of
the Company, other than the Related Person involved in the
Business Combination, is not less than the Highest Per
Share Price (with appropriate adjustments for
recapitalisations, reclassifications, share consolidations and
divisions and dividends in specie) paid by the Related
Person in acquiring any of its holdings of the Companys
ordinary shares, all as determined by two-thirds (2/3) of the
Continuing Directors; and
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(B)
|
A proxy statement complying with the requirements of the
Exchange Act, as amended, shall have been mailed at least
30 days prior to any vote on the Business Combination, to
all shareholders of the Company for the purpose of soliciting
shareholder approval of the Business Combination. The proxy
statement shall contain at the front thereof, in a prominent
place, the position of the Continuing Directors as to the
advisability (or inadvisability) of the Business Combination
and, if deemed appropriate by two-thirds (2/3) of the Continuing
Directors, the opinion of an investment banking firm selected by
two-thirds (2/3) of the Continuing Directors as to the fairness
of the terms of the Business Combination, from the point of view
of the holders of the issued ordinary shares of the Company
other than the Related Person involved in the Business
Combination.
|
B-29
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(b)
|
For purposes of this article:
|
(i) The term
Business Combination means:
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|
(A)
|
any merger, consolidation, amalgamation or share exchange of the
Company or any of its subsidiaries into or with a Related
Person, in each case irrespective of which body corporate or
company is the surviving entity;
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(B)
|
any sale, lease, exchange, mortgage, pledge, transfer or other
disposition to or with a Related Person (in a single transaction
or a series of related transactions) of all or a Substantial
Part (as hereinafter defined) of the assets of the Company
(including without limitation any securities of a subsidiary) or
a Substantial Part of the assets of any of its subsidiaries;
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(C)
|
any sale, lease, exchange, mortgage, pledge, transfer or other
disposition to or with the Company or to or with any of its
subsidiaries (in a single transaction or series of related
transactions) of all or a Substantial Part of the assets of a
Related Person;
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(D)
|
the issuance or transfer of any securities of the Company or any
of its subsidiaries by the Company or any of its subsidiaries to
a Related Person (other than an issuances or transfer of
securities which is effected on a pro rata basis to all
shareholders of the Company);
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(E)
|
any reclassification of securities (including any share
consolidation), recapitalisations or any other transaction
involving the Company or any of its subsidiaries, that would
have the effect of increasing the voting power of a Related
Person;
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(F)
|
the adoption of any plan or proposal for the liquidation or
dissolution of the Company proposed by or on behalf of a Related
Person; and
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(G)
|
the entering into of any agreement, contract or other
arrangement providing for any of the transactions described in
this definition of Business Combination.
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(ii)
|
The term Related Person shall mean any individual,
company, partnership or other person or entity other than the
Company or any of its subsidiaries which, as of the record date
for the determination of shareholders entitled to notice of and
to vote on any Business Combination, or immediately prior to the
consummation of such transaction, together with its
Affiliates and Associates (as defined in
Rule 12b-2
of the Regulations under the Exchange Act as in effect at the
date of the adoption of these articles by the shareholders of
the Company, are Beneficial Owners (as defined in
Rule 13d-3
of the Exchange Act) in the aggregate of 20% or more of the
issued ordinary shares of the Company, and any Affiliate or
Associate of any such individual, company, partnership or other
person or entity. Notwithstanding the definition of
Beneficial Owner in this subparagraph (ii), any
ordinary shares of the Company that any Related Person has the
right to acquire pursuant to any agreement, or upon exercise of
conversion rights, warrants or options, or otherwise, shall be
deemed beneficially owned by the Related Person.
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(iii)
|
The term Substantial Part shall mean more than 20%
of the fair market value, as determined by two-thirds (2/3) of
the Continuing Directors, of the total consolidated assets of
the Company and its subsidiaries taken as a whole, as of the end
of its most recent accounting year ending prior to the time the
determination is being made.
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(iv)
|
For the purposes of paragraph (a)(ii)(A) of this article, in the
event of a Business Combination in which the Company is the
surviving company, the term other consideration to be
received shall include, without limitation, ordinary
shares or other shares of the Company retained by holders of the
ordinary shares other than Related Persons or parties to such
Business Combination.
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(v)
|
The term Continuing Directors shall mean a director
who either (i) was a member of the Board immediately prior
to the time that the Related Person involved in a Business
Combination became a Related Person, or (ii) was designated
(before his or her initial election as director) as a Continuing
Director by two-thirds (2/3) of the then Continuing Directors.
|
B-30
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(vi)
|
A Related Person shall be deemed to have acquired an
ordinary share of the Company at the time when such Related
Person became the Beneficial Owner thereof. With respect to the
shares owned by Affiliates, Associates or other persons whose
ownership is attributed to a Related Person under the foregoing
definition of Related Person, the price paid for said shares
shall be deemed to be the higher of (i) the price paid upon
the acquisition thereof by the Affiliate, Associate, or other
person, or (ii) the market price of the shares in question
at the time when the Related Person became the Beneficial Owner
thereof.
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(vii)
|
The term Highest Per Share Price as used in this
article shall mean the highest price determined by two-thirds
(2/3) of the Continuing Directors to have been paid at any time
by the Related Person for any ordinary share or ordinary shares
of the Company. In determining the Highest Per Share Price, all
purchases by the Related Person shall be taken into account
regardless of whether the shares were purchased before or after
the Related Person became Related Person. The Highest Per Share
Price shall include any brokerage commissions, transfer taxes or
duties and soliciting dealers fees paid by the Related
Person with respect to ordinary shares of the Company acquired
by the Related Person.
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(c)
|
Any amendment, change or repeal of this article, or any other
amendment of the Companys articles which would have the
effect of modifying or permitting circumvention of the article,
shall require the approval, at a meeting of the shareholders of
the Company, of the holders of at least 80% of the voting power
of the Company on the relevant record date; provided, however,
that this paragraph (c) of this article shall not apply to,
and such 80% approval shall not be required for, any such
amendment, change or repeal recommended to shareholders by
two-thirds (2/3) of the Continuing Directors and such amendment,
change or repeal so recommended shall require only authorisation
by way of Special Resolution of shareholders of the Company on
the relevant record date. For the purposes of this paragraph
(c) of this article only, if at the time when any such
amendment, change, or repeal is under consideration there is no
proposed Business Combination (in which event, the definition of
Continuing Director in paragraph (b)(v) of this article would be
inapplicable), the Continuing Directors shall be
deemed to be those persons who are members of the Board at the
time the Company becomes publicly traded on the New York Stock
Exchange plus those persons who are Continuing Directors under
paragraph (b)(v)(ii) of this article except that if there are no
Continuing Directors under paragraph (b)(v)(i) of this article
then the Directors in office at the time such determination is
made shall be deemed to be the Continuing Directors.
|
AMENDMENTS
|
|
107. |
Notwithstanding any other provisions of these articles or any
provision of law which might otherwise permit a lesser vote or
no vote, but in addition to any affirmative vote of the holders
of any particular class or series of shares required by law or
these articles, the affirmative vote of the holders of at least
80% of the Companys voting power on the relevant record
date shall be required to alter, amend or repeal
articles 53, 68 and 69 and 106 and 107 (except as provided
in article 106(c)).
|
B-31
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Names, Addresses and Descriptions of Subscribers
|
|
Number of Shares Taken by Each Subscriber
|
|
For and on behalf of
Fand Limited
Arthur Cox Building
Earlsfort Terrace
Dublin 2
|
|
Thirty-Nine Thousand, Nine
Hundred and Ninety-Four Ordinary Shares
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For and on behalf of
Attleborough Limited
Arthur Cox Building
Earlsfort Terrace
Dublin 2
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|
One Ordinary Share
|
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For and on behalf of
Emma Hickey
Arthur Cox Building
Earlsfort Terrace
Dublin 2
Chartered Secretary
|
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One Ordinary Share
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|
For and on behalf of
Jacqueline McGowan - Smyth
Arthur Cox Building
Earlsfort Terrace
Dublin 2
Chartered Secretary
|
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One Ordinary Share
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|
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For and on behalf of
James Heary
Arthur Cox Building
Earlsfort Terrace
Dublin 2
Chartered Accountant
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One Ordinary Share
|
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|
|
For and on behalf of
Richard Steen
Arthur Cox Building
Earlsfort Terrace
Dublin 2
Solicitor
|
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One Ordinary Share
|
|
|
|
For and on behalf of
Dermot Marah
Arthur Cox Building
Earlsfort Terrace
Dublin 2
Solicitor
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One Ordinary Share
|
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|
|
Dated the 4th day of June 2009
Witness to the above signatures:
|
|
Louise Gaffney
Arthur Cox Building,
Earlsfort Terrace, Dublin 2
|
B-32
Companies
Acts 1963 to 2009
A PUBLIC
COMPANY LIMITED BY SHARES
MEMORANDUM
and ARTICLES OF ASSOCIATION
of
COOPER
INDUSTRIES PUBLIC LIMITED COMPANY
Incorporated
the 4th day of June 2009
Arthur
Cox
Arthur Cox Building
Earlsfort Terrace
Dublin 2
B-33
Annex C
Relevant
Territories
|
|
|
1. Australia
|
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27. Luxembourg
|
2. Austria
|
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28. Macedonia
|
3. Belgium
|
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29. Malaysia
|
4. Bulgaria
|
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30. Malta
|
5. Canada
|
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31. Mexico
|
6. Chile
|
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32. Moldova
|
7. China
|
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33. Netherlands
|
8. Croatia
|
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34. New Zealand
|
9. Cyprus
|
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35. Norway
|
10. Czech Republic
|
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36. Pakistan
|
11. Denmark
|
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37. Poland
|
12. Estonia
|
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38. Portugal
|
13. Finland
|
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39. Romania
|
14. France
|
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40. Russia
|
15. Georgia
|
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41. Slovak Republic
|
16. Germany
|
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42. Slovenia
|
17. Greece
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43. South Africa
|
18. Hungary
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44. Spain
|
19. Iceland
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45. Sweden
|
20. India
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46. Switzerland
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21. Israel
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47. The Republic of Turkey
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22. Italy
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48. United Kingdom
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23. Japan
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49. United States
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24. Korea
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50. Vietnam
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25. Latvia
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51. Zambia
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26. Lithuania
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C-1
Annex D
IN THE
SUPREME COURT OF BERMUDA
CIVIL JURISDICTION
(COMMERCIAL COURT)
2009: NO. 195
IN THE
MATTER OF SECTION 99 OF THE COMPANIES ACT 1981
AND IN
THE MATTER OF COOPER INDUSTRIES, LTD.
ORDER FOR
DIRECTIONS
UPON
READING
the
Originating Summons filed herein
AND UPON
HEARING
Counsel
for Cooper Industries, Ltd. (the Company)
AND UPON
READING
the
First Affidavit of Terrance V. Helz, Associate General Counsel
and Secretary, made on June 29, 2009 and the exhibit thereto
IT IS
HEREBY ORDERED
as
follows:
1. The Company do convene a meeting (the Cooper
Scheme Meeting) of the holders of the Class A common
shares of the Company as at the Record Date (the
Shareholders), the Cooper Scheme Meeting to be held
at 54th floor conference room, Chase Tower, 600 Travis,
Houston, Texas, at 11.00 a.m. Central Time, on
31 August, 2009 or at such other time and date within three
months from the date of the Order as may be determined pursuant
to resolutions of the board of directors of the Company or a
duly authorised committee thereof, for the purpose of
considering and if thought fit approving (with or without
modification) the scheme of arrangement (the Cooper
Scheme).
2. This Honourable Court appoints Kirk S. Hachigian, being
Chairman of the Board of Directors, President and Chief
Executive Officer of Cooper Industries, Ltd., or failing him
Gerald B. Smith, being the independent lead director of Cooper
Industries, Ltd., or failing him, any other director of Cooper
Industries, Ltd. to act as Chairman of the Cooper Scheme Meeting.
3. The Petition herein be set down to be heard on
September 4, 2009 at 9.30 a.m.
AND IT IS
DIRECTED
that:
4. At least 21 days before the day appointed for the
Cooper Scheme Meeting a Notice convening the Cooper Scheme
Meeting and advertising the date of the hearing of the Petition
in the form or substantially in the form of the notice produced
to the Court be inserted once each in The Royal Gazette or The
Bermuda Sun and the US and international editions of The Wall
Street Journal.
5. At least 30 days before the day appointed for the
Cooper Scheme Meeting a Notice convening the same and enclosing:
a. a copy of the Cooper Scheme and a copy of the Proxy
Statement as is required to be furnished pursuant to
section 100 of the Companies Act 1981, in the form or
substantially in the form of the document produced to the
Court; and
D-1
b. a form of proxy for use at the Cooper Scheme Meeting in
the form or substantially in the form produced to the Court,
(1) be sent by hand, courier or pre-paid post (or by air
mail, as appropriate) addressed to each of the holders of
Class A common shares of the Company holding such shares at
the address shown on the Register of Members of the Company as
at the Record Date or at any other address given in writing by
such shareholder to the Company for such purpose, and
(2) be available at 54th floor conference room, Chase
Tower, 600 Travis, Houston, Texas and by filing the Proxy
Statement on Schedule 14A with the United States Securities
and Exchange Commission provided that (i) the accidental
omission to serve any shareholder with notice of the Cooper
Scheme Meeting, or the non-receipt by any shareholder of notice
of the Cooper Scheme Meeting, shall not invalidate the
proceedings at the Cooper Scheme Meeting and
(ii) notwithstanding any of the foregoing it shall be
sufficient to prove that, in the case of delivery by courier,
such documents delivered to a courier and in envelopes addressed
to the person or persons concerned at their said addresses
respectively.
6. The presence, in person or by proxy, of the holders of a
majority of voting power in respect of the Class A common
shares issued and entitled to vote at the Cooper Scheme Meeting
shall constitute a quorum for the conduct of business at the
Cooper Scheme Meeting.
7. Any Shareholder will be able to vote any number of such
Shareholders shares for the Cooper Scheme, to
vote any number of such Shareholders shares
against the Cooper Scheme, and to abstain from
voting any number of such Shareholders shares. In the
cases of banks, brokers, and other nominees who hold shares in
their name on behalf of others, the vote(s) (or abstention(s))
represent the instruction to the bank, broker or nominee from
the underlying beneficiary(ies) or investor(s). If a Shareholder
elects to vote a portion of such Shareholders shares in
favour of the Cooper Scheme, and a portion against the Cooper
Scheme, then, subject to any reasonable objections that may be
raised, that Shareholder would, for the purpose of the
majority in number count, be counted as one
Shareholder for the Cooper Scheme (as to the number
of such Shareholders shares being voted for
the Cooper Scheme), and one Shareholder against the
Cooper Scheme (as to the number of shares being voted
against the Cooper Scheme).
8. The form of proxy in the form or substantially in the
form produced to the Court and the provisions to be made
permitting Shareholders to vote, including by mail,
electronically or otherwise, be approved for use at the Cooper
Scheme Meeting.
9. The Chairman of the Cooper Scheme Meeting (the
Chairman) is to be entitled to accept the warranty
on the said forms of proxy as to the authority of the signatory
to cast the votes thereby cast without further investigation.
10. The Chairman is to be at liberty to accept a faxed or
electronic copy of a form of proxy but may require production of
the original if he considers this to be necessary or desirable
for the purpose of verification.
11. The Company be at liberty to set a record date (the
Record Date) for determining the Shareholders
entitled to receive notice of, and to vote at, the Cooper Scheme
Meeting, namely July 13, 2009.
12. In the case of joint registered Shareholders, the vote
of either holder whether in person or by proxy will be accepted
with or without a corresponding vote of the other holder.
13. In the case of a Shareholder which is a corporation,
the Shareholder may by written instrument authorize such person
as it thinks fit to act as its representative at the Cooper
Scheme Meeting and the person so authorized shall be entitled to
exercise the same powers on behalf of the corporation as that
corporation could exercise if it was an individual. The Chairman
may accept such assurances as he thinks fit as to the right of
any person to attend and vote at the Cooper Scheme Meeting on
behalf of a Shareholder who is a corporation.
14. The Chairman is to be at liberty to accept a form of
proxy, notwithstanding that the form of proxy has not been
completed in accordance with the instructions contained therein,
provided that the Chairman considers that the information
contained therein is sufficient to establish the entitlement of
the Shareholder to vote. Should the form of
D-2
proxy be returned duly signed but without a specific direction
as to how the shareholder wishes to vote, the persons appointed
as proxies are authorized to vote or abstain at the
proxies discretion.
15. The Chairman is to be at liberty to appoint inspectors
or scrutineers to count and tally the votes cast at the Cooper
Scheme Meeting.
16. Within 7 days of the Cooper Scheme Meeting (and in
any event no later than the date set for the hearing of the
Petition herein) the said Chairman do report the result of the
Cooper Scheme Meeting to the Court.
DATED this 2 day of July, 2009
Puisne Judge
D-3
Annex E
Expected
Timetable
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Description
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Proposed Date
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Record Date for determining the Cooper Industries, Ltd.
Class A common shareholders eligible to vote at the
shareholder meeting
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July 13, 2009
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Proxy Statement and form of proxy first mailed to Cooper
Industries, Ltd. Class A common shareholders
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On or about July 16, 2009
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Latest time for submitting forms of proxy:
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via Telephone
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11:59 p.m., Eastern Time, on August 30, 2009
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via Internet
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11:59 p.m., Eastern Time, on August 30, 2009
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via proxy card
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Must be received at any time prior to the
commencement of the shareholder meeting
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Shareholder meeting
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11 a.m., Central Time, on August 31, 2009
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Court hearing to sanction the Scheme of Arrangement
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September 4, 2009
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Anticipated effective date of the Scheme of Arrangement
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September 8, 2009
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Anticipated Transaction Time
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7:30 p.m., Eastern Time, on September 8, 2009
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E-1
ADMISSION TICKET
Special Court-Ordered Meeting of Class A Common Shareholders
August 31, 2009, 11:00 a.m. Central Time
54th floor conference room
Chase Tower, 600 Travis,
Houston, Texas 77002
Upon arrival, please present this admission ticket and photo identification at the registration desk.
Please tear off this Admission Ticket. If you plan to attend the Special Court-Ordered Meeting of Class A Common Shareholders,
you will need this ticket to gain entrance to the meeting. This ticket is valid to admit the shareholder to the meeting.
You must present this ticket to gain admission to the meeting.
You should send in your proxy or vote electronically or by telephone even if you plan to attend the meeting.
▼
IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE,
FOLD ALONG THE PERFORATION, DETACH AND RETURN
THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. ▼
Proxy Cooper Industries, Ltd.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
SPECIAL COURT-ORDERED MEETING OF CLASS A COMMON SHAREHOLDERS
August 31, 2009
The undersigned hereby appoints Bruce M. Taten and Terrance V. Helz, or either of them, as proxies,
each with full power of substitution, and hereby authorizes them to represent and vote all of the
Class A Common Shares of Cooper Industries, Ltd. that the shareholder(s) is/are entitled to vote at
the Special Court-Ordered Meeting of Class A Common Shareholders to be held at 11:00 a.m., Central
Time, on August 31, 2009 at 54th floor conference room, Chase Tower, 600 Travis, Houston, Texas
77002 and any adjournments or postponements thereof, as indicated on the reverse side of this proxy
card with respect to the proposals set forth in the proxy statement and in their discretion upon
any matter that may properly come before the meeting or any adjournments or postponements of the
meeting.
If you do not wish to vote all of your Class A Common Shares in the same manner on any particular
proposal(s), you may split your vote by clearly hand-marking the reverse side of this proxy card to
indicate how you want to vote your Class A Common Shares. You may not split your vote if you are
voting by the Internet or by telephone.
THIS PROXY WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED BY THE SHAREHOLDER(S). IF NO SUCH
DIRECTIONS ARE MADE, THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD
OF DIRECTORS.
This card also constitutes voting instructions for any Class A Common Shares held for the
shareholder in Coopers Dividend Reinvestment and Stock Purchase Plan and the Cooper Industries
Retirement Savings and Stock Ownership
Plan, as well as any Class A Common Shares acquired through Coopers Employee Stock Purchase Plan
that are being held in a book-entry account at Computershare Trust Company, N.A., as described in
the proxy statement.
(Continued, and please sign on reverse side.)
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Using a black ink pen, mark your
votes with an X as shown
in this example. Please do not
write outside the designated areas.
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x |
Admission Ticket
Electronic Voting Instructions
You can vote by Internet or telephone!
Available 24 hours a day, 7 days a week!
Instead of mailing your proxy, you may choose one of the two voting methods outlined below to vote
your proxy.
VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE BAR.
Proxies submitted by the Internet or telephone must be received by 11:59 p.m., Eastern Time, on
August 30, 2009.
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Vote by Internet
Log on to the Internet and go to www.envisionreports.com/cbe
Follow the steps outlined on the secured website. |
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Vote by telephone
Call toll free 1-800-652-VOTE (8683) within the United
States,
Canada & Puerto Rico any time on a
touch tone
telephone. There is NO CHARGE to you for the call.
Outside the US, Canada & Puerto Rico, call 1-781-575-2300 on
a touch tone telephone. Standard rates will apply.
Follow the instructions provided by the recorded message. |
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Special Court-Ordered Meeting Proxy Card |
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C0123456789 |
12345
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▼
IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE,
FOLD ALONG THE PERFORATION, DETACH AND RETURN
THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. ▼
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+ |
A
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Proposals The Board of Directors recommends a vote FOR Proposals 1 and 2. |
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For |
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Against |
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Abstain |
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1. Approval of the
Scheme of
Arrangement
attached to the
accompanying proxy
statement as Annex
A.
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o
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o
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o
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2. If the Scheme of
Arrangement is
approved, and in
connection with the
Scheme of
Arrangement and the
Reorganization,
approval of the
reduction of the
share premium of
Cooper Industries
plc to allow the
creation of
distributable
reserves that was
previously
unanimously
approved by Cooper
Industries, Ltd.
and the other
current
shareholders of
Cooper Industries
plc (as described
in the accompanying
proxy statement).
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o
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o
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o
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In their discretion,
the proxies are
authorized to vote
upon such other
matters as may
properly come
before the meeting
or any adjournments
or postponements of
the meeting. |
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B
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Non-Voting Items |
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Change of Address Please print new address below. |
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Meeting Attendance |
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Mark box to the right
if you plan to attend
the Special Meeting.
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o |
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C
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Authorized Signatures This section must be completed for your vote to be counted. Date and
Sign Below |
Please date and sign name exactly as it appears hereon. Executors, administrators, trustees, etc.
should so indicate when signing. If the shareholder is a corporation, the full corporate name
should be inserted and the proxy signed by an officer of the corporation indicating his/her title.
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Date (mm/dd/yyyy) Please print date below.
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Signature 1 Please keep signature within the box.
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Signature 2 Please keep signature within the box. |
/
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