defm14a
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
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Preliminary Proxy Statement |
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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Definitive Proxy Statement |
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Soliciting Material Pursuant to §240.14a-12 |
ENSCO International
Incorporated
(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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To the Stockholders of ENSCO International Incorporated:
You are cordially invited to the Special Meeting of Stockholders
of ENSCO International Incorporated, a Delaware corporation
(Ensco Delaware), to be held at the 5-Star Worldwide
Conference Center at Lincoln Plaza, Suite B30
Lower Level, 500 N. Akard Street, Dallas,
Texas 75201, on December 22, 2009, at 10:00 a.m.,
Central Standard Time. Only stockholders of record at the close
of business on November 16, 2009, are entitled to notice of
and to vote at the special meeting. Details of the business to
be presented at the special meeting can be found in the
accompanying Notice of Special Meeting of Stockholders and proxy
statement/prospectus.
At the special meeting, you will be asked to approve the
adoption of an Agreement and Plan of Merger and Reorganization
(the merger agreement) between Ensco Delaware and a
wholly-owned, indirect subsidiary of Ensco Delaware, which is
one of the initial steps of a proposed reorganization of the
corporate structure of Ensco Delaware and the group of companies
it controls (the reorganization). If the merger
agreement is approved, we would consummate a merger the result
of which is that you would hold American depositary shares
(collectively, the ADSs), evidenced by American
depositary receipts (ADRs), which will represent
Class A Ordinary Shares of a newly formed public limited
company named Ensco International plc or a similar
name (Ensco UK), incorporated under English law and
subject to U.K. tax laws. Ensco UK is currently a private
limited company named ENSCO International Limited.
After the completion of the merger, Ensco UK and its
subsidiaries will continue to conduct the same business
operations as conducted by Ensco Delaware before the transaction.
We currently anticipate that the effective time of the merger
will be at 12:01 a.m., Eastern Standard Time, on December
23, 2009, although the merger may be abandoned by our Board at
any time, including after stockholder approval.
We will submit an application to the New York Stock Exchange
(the NYSE) and expect that, immediately following
the effective time of the merger, the ADSs will be listed on the
NYSE under the symbol ESV, the current symbol for
Ensco Delaware common stock. We have no current plans to list
ADSs (or Ensco UKs shares) on any other securities
exchange, including the London Stock Exchange. We estimate that
up to 150 million ADSs representing Class A Ordinary
Shares of Ensco UK will be delivered in connection with the
merger and the transactions described in this proxy
statement/prospectus.
Upon completion of the reorganization, 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 NYSE, and we will
continue to report our consolidated financial results in
U.S. dollars and in accordance with U.S. generally
accepted accounting principles. We also must comply with any
additional reporting requirements of English law.
Generally, for U.S. federal income tax purposes
(i) stockholders of Ensco Delaware who are
U.S. persons should recognize gain, if any (but not loss),
as a result of the merger, and (ii) stockholders of Ensco
Delaware who are not U.S. persons will not be subject to
U.S. federal income tax as a result of the merger.
The reorganization cannot be completed unless the proposal to
adopt the merger agreement is approved by the holders of a
majority of Ensco Delawares outstanding shares entitled to
vote at the special meeting. The accompanying proxy
statement/prospectus contains important information about this
proposal and we encourage you to read it. In particular, you
should carefully consider the discussions in the sections of the
proxy statement/prospectus entitled Forward-Looking
Statements and Risk Factors beginning on
page 18.
As further explained in the accompanying proxy
statement/prospectus, we currently have substantial operations
in the U.K. Our Board of Directors expects that the
reorganization and the relocation of our principal executive
offices, including most of our senior executive officers and
other key decision makers, to the U.K., would, among other
anticipated benefits: enhance management efficiencies resulting
from the U.K. time zone overlap with geographies where we
operate, improve access to key customers located in the U.K. or
Western Europe or who routinely travel to the U.K., enhance our
access to European institutional investors, improve the general
customer and investor perception that we are an international
driller with an increasing focus on deepwater operations rather
than a Gulf of Mexico jackup driller, allow us to take advantage
of the U.K.s developed and favorable tax regime and
extensive tax treaty network, and allow us to potentially
achieve a global effective tax rate comparable to that of some
of our global competitors.
Our Board of Directors has determined that the reorganization
and the merger agreement are advisable and in the best interests
of Ensco Delaware and our stockholders and, as such, has
unanimously approved the reorganization and the merger
agreement. The Board of Directors recommends that you vote
FOR the proposal to adopt the merger agreement.
Your vote is very important, regardless of the number of
shares you own. Whether or not you plan to attend the
special meeting, please take the time to vote by completing and
mailing the enclosed proxy card or voting instruction card and
either return it in the pre-addressed envelope provided or vote
through the Internet or by telephone, as soon as possible. You
may revoke your proxy and vote in person if you decide to attend
the special meeting.
Yours very truly,
Daniel W. Rabun
Chairman, President and Chief Executive Officer
November 20, 2009
Neither the U.S. Securities and Exchange Commission nor
the U.K.s Financial Services Authority (the
FSA) has approved or disapproved of the securities
to be issued in the merger or determined if this proxy
statement/prospectus is truthful or complete. Any representation
to the contrary is a criminal offense. For the avoidance of
doubt, this proxy statement/prospectus is not intended to be and
is not a prospectus for purposes of the U.K. FSAs
Prospectus Rules.
This proxy statement/prospectus is dated November 20, 2009, and
is first being mailed to stockholders of Ensco Delaware along
with a form of proxy card or voting instruction card on or about
November 20, 2009.
NOTICE OF SPECIAL MEETING OF
STOCKHOLDERS
To Be Held On December 22, 2009
To the Stockholders of ENSCO International Incorporated, a
Delaware corporation (Ensco Delaware or the
Company):
Notice is hereby given that a Special Meeting of Stockholders of
the Company will be held at the
5-Star Worldwide
Conference Center at Lincoln Plaza, Suite B30
Lower Level, 500 N. Akard Street, Dallas, Texas 75201,
on Tuesday, December 22, 2009, at 10:00 a.m., Central
Standard Time, for the following purposes:
1. To adopt the Agreement and Plan of Merger and
Reorganization (the merger agreement), a copy of
which is attached to the accompanying proxy statement/prospectus
as Annex A, by and between Ensco Delaware and ENSCO
Newcastle LLC, a newly formed Delaware limited liability company
(Ensco Mergeco) and a wholly-owned subsidiary of
ENSCO Global Limited, a newly formed Cayman Islands exempted
company (Ensco Cayman) and a wholly-owned subsidiary
of Ensco Delaware, pursuant to which Ensco Mergeco will merge
(the merger) with and into Ensco Delaware, with
Ensco Delaware surviving the merger as a wholly-owned subsidiary
of Ensco Cayman. Ensco Cayman will become, in connection with
the merger, a wholly-owned subsidiary of ENSCO International
Limited, a newly formed private limited company incorporated
under English law which, prior to the effective time of the
merger, will re-register as a public limited company named
Ensco International plc (Ensco UK).
Pursuant to the merger agreement, each issued and outstanding
share of the common stock of Ensco Delaware will be converted
into the right to receive one American depositary share
(collectively, the ADSs), which represents one
Class A Ordinary Share of Ensco UK and is evidenced by an
American depositary receipt (an ADR). Ensco UK,
together with its subsidiaries, will own and continue to conduct
our business in substantially the same manner as is currently
being conducted by Ensco Delaware and its subsidiaries.
2. To approve any adjournments or postponements of the
special meeting to a later date to solicit additional proxies if
there are insufficient votes at the time of the special meeting
to approve the adoption of the Agreement and Plan of Merger and
Reorganization.
Stockholders will also consider and vote on such other business
as may properly come before the special meeting.
The proposal to adopt the merger agreement is more fully
described in the proxy statement/prospectus accompanying this
notice.
Stockholders of record at the close of business on November 16,
2009 are entitled to receive notice of and to vote at the
special meeting or any adjournment thereof. A list of all
stockholders entitled to vote at the special meeting is on file
at our executive offices, 500 North Akard Street,
Suite 4300, Dallas, Texas
75201-3331,
and will be made open to the examination of any stockholder, for
any purpose germane to the special meeting, during ordinary
business hours, for a period of ten days prior to the special
meeting.
You may vote by completing, signing, dating and returning your
proxy card or voting instruction card in the envelope provided.
You may also vote via the Internet at www.proxyvote.com or by
telephone at
1-800-690-6903
by following the instructions shown on the proxy card or voting
instruction card. Any stockholder attending the special meeting
may vote in person. If you have returned a proxy card or voting
instruction card or otherwise voted, you may revoke prior
instructions and cast your vote at the special meeting by
following the procedures described in the proxy
statement/prospectus accompanying this notice.
Your vote is very important, regardless of the number of shares
you own. Whether or not you are able to attend the special
meeting in person, it is important that your shares be
represented. Please vote as soon as possible. Voting promptly,
regardless of the number of shares of stock you hold, will aid
us in reducing the expense of an extended proxy solicitation.
Voting your shares by returning your proxy card or voting
instruction card or voting through the Internet or by telephone
does not affect your right to vote in person if you attend the
special meeting. For specific information regarding the voting
of your shares, please refer to the section entitled
General Information About the
Merger and the Special Meeting Questions and Answers
Relating to the Special Meeting, beginning on page 7
of the accompanying proxy statement/prospectus.
By Order of the Board of Directors,
Cary A. Moomjian, Jr.
Vice President, General Counsel and Secretary
November 20, 2009
FOR
SPECIFIC INSTRUCTIONS ON VOTING, PLEASE REFER TO THE PROXY
CARD OR VOTING
INSTRUCTION CARD INCLUDED WITH THE PROXY
MATERIALS.
TABLE OF
CONTENTS
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ANNEX A AGREEMENT AND PLAN OF MERGER AND
REORGANIZATION
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A-1
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ANNEX B ARTICLES OF ASSOCIATION OF ENSCO
INTERNATIONAL PLC
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B-1
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iii
In this proxy statement/prospectus, we refer to ENSCO
International Incorporated, the Delaware corporation whose
shares you currently own (together with its subsidiaries where
applicable), as Ensco or Ensco Delaware,
or the Company. Additionally, we sometimes refer to
Ensco Delaware as we, us, or
our. You refers to the stockholders of
Ensco Delaware. We refer to ENSCO International Limited, a newly
formed private limited company incorporated under English law
(which, prior to the effective time of the merger, will
re-register as a public limited company and be renamed
Ensco International plc) as Ensco UK. A
reference in this proxy statement/prospectus to ADSs means a
number of American depositary shares, which, immediately after
the merger, will be evidenced by one or more American depositary
receipts, or ADRs. Each ADS represents one
Class A Ordinary Share of Ensco UK, par value $0.10 per
share, each, a Class A Ordinary Share. The
number of ADSs to be issued to the stockholders of Ensco
Delaware is equal to the number of shares of common stock of
Ensco Delaware held by the stockholders of Ensco Delaware
immediately prior to the effective time of the merger described
in this proxy statement/prospectus. In addition, unless the
context indicates otherwise, when we refer to shares of
Ensco Delaware common stock issued and outstanding, we are
excluding the treasury shares of Ensco Delaware common stock
owned by or for the benefit of Ensco Delaware or its
subsidiaries. Unless otherwise noted, all monetary amounts are
stated in U.S. dollars.
This proxy statement/prospectus incorporates important business
and financial information about Ensco Delaware from documents
Ensco Delaware has filed with the U.S. Securities and
Exchange Commission, or the SEC, that are not
included in or delivered with this proxy statement/prospectus.
See Where You Can Find More Information.
You can obtain the documents incorporated by reference into this
proxy statement/prospectus by accessing the SEC website
maintained at www.sec.gov. Ensco Delaware will also
provide you with copies of the documents incorporated by
reference into this proxy statement/prospectus, without charge.
Those documents are available to any stockholder, including any
beneficial owner, upon request directed to ENSCO International
Incorporated at 500 North Akard Street, Suite 4300,
Dallas, Texas
75201-3331;
Attn: Investor Relations Department. To ensure timely
delivery of such documents, any request should be made by
December 11, 2009. The exhibits to those documents will
generally not be made available unless they are specifically
incorporated by reference into this proxy statement/prospectus
or are otherwise requested by you.
You should rely only on the information contained in, and
incorporated by reference into, this proxy statement/prospectus.
We have not authorized anyone to provide you any different or
additional information. Neither Ensco Delaware nor Ensco UK is
making an offer of the securities in any country, state,
province or territory where the offer is not permitted. For the
avoidance of doubt, this proxy statement/prospectus is not
intended to be and is not a prospectus for purposes of the U.K.
Financial Services Authoritys Prospectus Rules. You should
not assume that the information in this proxy
statement/prospectus is accurate as of any date other than the
date on the front cover of this proxy statement/prospectus or,
in the case of documents incorporated by reference, the date of
the referenced document, and neither the mailing of this proxy
statement/prospectus to you nor the issuance of ADSs in
connection with the merger shall create any implication to the
contrary.
iv
PROXY
STATEMENT FOR THE SPECIAL MEETING OF
STOCKHOLDERS OF ENSCO INTERNATIONAL INCORPORATED
TO BE HELD ON December 22, 2009
This proxy statement/prospectus and a proxy card or voting
instruction card are first being sent or distributed to
stockholders of Ensco on or about November 20, 2009. Our Board
of Directors, or the Board, is soliciting your proxy
to vote your shares at the Special Meeting of Stockholders to be
held at 5-Star Worldwide Conference Center at Lincoln Plaza,
Suite B30 Lower Level, 500 N. Akard
Street, Dallas, Texas 75201, on Tuesday, December 22, 2009,
at 10:00 a.m., Central Standard Time, or the special
meeting, and any adjourned sessions of the special
meeting. Our Board is soliciting your proxy to give all
stockholders of record the opportunity to vote on matters that
will be presented at the special meeting. This proxy
statement/prospectus provides information on these matters to
assist you in voting your shares.
GENERAL
INFORMATION ABOUT THE MERGER AND THE SPECIAL MEETING
The following questions and answers are intended to address
briefly some commonly asked questions regarding the proposed
merger and the special meeting. These questions and answers may
not address all questions that may be important to you. Please
refer to the more detailed information contained elsewhere in
this proxy statement/prospectus, its annexes and exhibits and
the documents referred to or incorporated by reference in this
proxy statement/prospectus. For instructions on obtaining the
documents incorporated by reference, see Where You Can
Find More Information.
Why am
I receiving this proxy statement/prospectus?
Our Board has approved a reorganization of our corporate
structure, which would include changing the jurisdiction of
incorporation of our parent company from Delaware to England and
relocating our principal executive offices to the U.K. We would
change the jurisdiction of incorporation of our parent company
through a merger that will result in Ensco UK becoming the
parent company of the Ensco group of companies and effectively
will result in your owning shares in an English company instead
of shares in a Delaware corporation. The merger agreement
requires stockholder approval, which is why we have called a
special meeting of stockholders and sent you this proxy
statement/prospectus.
Questions
and Answers Relating to the Merger
Who
are the parties to the merger?
The parties to the merger described in this proxy
statement/prospectus are Ensco Delaware and ENSCO Newcastle
LLC, or Ensco Mergeco, a newly formed Delaware
limited liability company. Ensco Mergeco is a wholly-owned
subsidiary of ENSCO Global Limited, a newly formed Cayman
Islands exempted company, or Ensco Cayman. Ensco
Cayman is a subsidiary of Ensco Delaware.
What
is the merger?
Under the Agreement and Plan of Merger and Reorganization, or
the merger agreement, Ensco Mergeco will merge into
Ensco Delaware (which we refer to as the merger),
with Ensco Delaware surviving the merger as a wholly-owned
subsidiary of Ensco Cayman. Upon consummation of the merger,
each issued and outstanding share of common stock of Ensco
Delaware will be converted into the right to receive one ADS.
Ensco UK, together with its subsidiaries (including Ensco
Delaware), will own and continue to conduct our business in
substantially the same manner as is currently being conducted by
Ensco Delaware and its subsidiaries.
What
are the major actions that have been performed or will be
performed to effect the merger?
Ensco Delaware has taken or will take the actions listed below
to effect the merger. Charts describing the ownership structure
among Ensco Delaware, Ensco UK, Ensco Cayman and Ensco Mergeco
before and after the effective time of the merger are also set
forth below.
1
Major
Actions
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Ensco Delaware formed Ensco UK as its wholly-owned subsidiary.
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Ensco Delaware deposited the Class A Ordinary Shares of
Ensco UK with National City Nominees Limited as nominee or agent
of Citibank, N.A., or Citibank, and as the
registered holder of Ensco UKs Class A Ordinary
Shares. Ensco Delaware and Citibank entered into a deposit
agreement providing for the issuance of ADSs representing all
issued Class A Ordinary Shares.
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Ensco Delaware formed Ensco Cayman as its wholly-owned
subsidiary.
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Ensco Cayman formed Ensco Mergeco as its wholly-owned subsidiary.
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Conditional upon the effectiveness of the registration statement
of which this proxy statement/prospectus is a part,
(i) Ensco Delaware will contribute the ADSs to Ensco
Cayman, and (ii) Ensco Cayman will contribute the ADSs to
Ensco Mergeco.
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Conditional upon stockholder approval of the merger agreement,
Ensco Delaware will contribute all shares of Ensco Cayman to
Ensco UK.
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Ensco Mergeco and Ensco Delaware will merge, and Ensco Mergeco
will deliver the ADSs to be delivered to the Ensco Delaware
stockholders to the exchange agent for exchange, and the
remaining ADSs will be delivered to Ensco Delaware pursuant to
the merger.
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Structure
Chart Prior to and after the Effective Time of the
Merger
The following diagram depicts our organizational structure
before and after the merger. The diagram does not depict any
legal entities owned by Ensco Delaware other than those related
to the merger nor any aspects of the reorganization that are
anticipated to take place after the effective time of the merger.
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What
will be Enscos corporate presence in the
U.K.?
In conjunction with the reorganization, we plan to expand our
presence in the U.K., including by relocating our principal
executive offices to England. We expect that most of our senior
executive officers and other key decision makers will move to
England. We also intend to hold most of our regularly scheduled
board meetings and our annual general meeting of shareholders in
the U.K.
What
will I receive in the merger?
The merger agreement provides that each share of Ensco Delaware
issued and outstanding immediately prior to the effective time
of the merger will be converted into the right to receive one
ADS. Each ADS will be evidenced by an ADR, and will represent
one Class A Ordinary Share.
The depositary or its nominee is the holder of the Class A
Ordinary Shares of Ensco UK underlying your ADSs. As a holder of
ADSs representing Class A Ordinary Shares, you will have
the rights set forth in the deposit agreement among us, the
depositary and you, which we refer to as the deposit
agreement. Although you will not be a registered
shareholder of Ensco UK and will not directly have shareholder
rights in Ensco UK, through your ownership of ADSs you generally
will be entitled to equivalent rights as a shareholder of Ensco
UK, although the exercise of certain rights may require you to
surrender your ADSs and withdraw the underlying Class A
Ordinary Shares. These arrangements are substantially comparable
to market standard arrangements for listing and trading shares
of U.K. companies on the NYSE and other stock exchanges in the
United States, or the U.S.
Will
the merger dilute my economic interest?
No. Immediately after the effective time of the merger, your
relative economic ownership in Ensco UK will remain
approximately the same as your relative economic ownership of
Ensco Delaware immediately before the merger.
Why
does Ensco want to engage in the merger?
The merger is part of a reorganization of Enscos corporate
structure, which includes a relocation of our principal
executive offices to England, which we refer to as the
reorganization. We expect that the reorganization
will, among other anticipated benefits:
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establish a corporate headquarters in the U.K. where we already
have substantial operations and which is more centrally located
within our area of worldwide operations;
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improve access to key customers located in the U.K. and Western
Europe or who routinely travel to the U.K.;
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enhance our access to European institutional investors;
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improve the general perception with customers and the investment
community that we are an international driller with an
increasing focus on deepwater operations rather than a Gulf of
Mexico jackup driller (which generally faces a perception of
shorter-term contracts, less contract backlog and higher
volatility of cash flow);
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locate us in a country with a stable and developed legal regime
with established standards of corporate governance, including
rights of shareholders, a favorable tax regime and an extensive
network of tax treaties; and
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allow us to potentially achieve a global effective tax rate
comparable to that of our global competitors.
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We expect that the reorganization also will result in
operational and administrative efficiencies over the long term
and enhance our ability to further expand in the Europe/Africa
and Asia Pacific geographic regions, which represented over
77 percent of our consolidated revenue for the year ended
December 31, 2008. We have had ongoing operations serving a
wide range of customers in the U.K. for over 16 years. As
we continue to grow our business internationally, we believe
that moving to the U.K. will provide increased strategic
flexibility and operational benefits. In addition, a number of
our competitors are incorporated outside of the U.S. and
already have
3
these competitive advantages. We thus believe the merger will
allow us to compete more effectively on a global scale. See
The Merger Agreement Background and Reasons
for the Merger.
Will
the merger affect current or future operations?
Our principal executive offices will be moved to the U.K., which
we expect will create more operational efficiencies. However,
the merger is not expected to have a material impact on how we
conduct
day-to-day
operations. While the new corporate structure would not change
our future operational plans to grow our business or diminish
our focus on our U.S. business, it may improve our ability
to expand within our Europe/Africa and Asia Pacific geographic
regions. The location of future operations will depend on the
needs of the business, which will be determined without regard
to Ensco UKs jurisdiction of incorporation. Please see
The Merger Agreement Background and Reasons
for the Merger.
What
actions are expected to be taken following the
merger?
Promptly following the consummation of the merger, Ensco UK, as
Ensco Delawares ultimate parent company, expects to
undertake additional transactions related to its corporate
structure that will result in the reorganization of certain of
Ensco UKs subsidiaries and their respective assets. We
refer to these activities and transactions in this proxy
statement/prospectus as subsequent actions. Refer to
Forward-Looking Statements and Risk
Factors below for a description of certain risks
associated with the reorganization.
When
do you expect to complete the merger?
If the proposal to adopt the merger agreement is approved by our
stockholders at the special meeting, we anticipate that the
merger will become effective as soon as practicable following
stockholder approval. We currently anticipate that the effective
time of the merger will be at 12:01 a.m., Eastern Standard
Time, on December 23, 2009, although the merger may be abandoned
by our Board at any time, including after stockholder approval.
Please see Forward-Looking Statements and Risk
Factors.
Is the
merger taxable to me?
For U.S. federal income tax purposes, the conversion of
each issued and outstanding share of the common stock of Ensco
Delaware into the right to receive an ADS upon the consummation
of the merger generally will be treated as an exchange of such
share for the ADS. Therefore, the U.S. federal income tax
discussion contained herein refers to an exchange
rather than a conversion in describing the
U.S. federal income tax consequences of the merger.
Generally, for U.S. federal income tax purposes, a
U.S. holder, which is defined below in
Material Tax Considerations Relating to the
Merger U.S. Federal Income Tax
Considerations Material Tax Consequences to
Stockholders, should recognize gain, if any, but not loss,
on the receipt of ADSs in exchange for Ensco Delaware common
stock in connection with the merger. A U.S. holder should
generally recognize gain equal to the excess, if any, of the
fair market value of the ADSs received in the merger over the
U.S. holders adjusted tax basis in the shares of
Ensco Delaware common stock. Generally, this gain should be
capital gain. U.S. holders should not be permitted to
recognize any loss realized on the exchange of their shares of
Ensco Delaware common stock in the merger. In determining the
amount of gain recognized, each of the Ensco Delaware shares
transferred should be treated as the subject of a separate
exchange. Thus, if a U.S. holder transfers some Ensco
Delaware shares on which gains are realized and other Ensco
Delaware shares on which losses are realized, the
U.S. holder may not net the losses against the gains to
determine the amount of gain recognized. In the case of a loss,
the adjusted tax basis in each ADS received by a
U.S. holder should equal the adjusted tax basis of each
share of Ensco Delaware common stock exchanged therefor. Thus,
subject to any subsequent changes in the fair market value of
the ADSs, any loss should be preserved. Cash received by a
U.S. holder in exchange for a fractional share of Ensco
Delaware common stock should be treated as having been received
in redemption of such fractional share. Thus, gain or loss
generally should be recognized by such U.S. holder in an
amount equal to the difference between the amount of cash
received and the U.S. holders adjusted tax basis in
such fractional share. A
non-U.S. holder
generally will not be subject to U.S. federal income tax on
gain realized, if any, on the exchange of Ensco Delaware shares
for ADSs or on the
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receipt of cash in exchange for fractional shares of Ensco
Delaware common stock. Please see Material Tax
Considerations Relating to the Merger
U.S. Federal Income Tax Considerations Material
Tax Consequences to Stockholders.
For U.K. tax purposes, stockholders of Ensco Delaware who are
residents of the U.S., and not residents of the U.K., will
generally not be subject to U.K. taxation as a result of the
merger. Generally, U.K. resident stockholders of Ensco Delaware
may realize a chargeable gain or an allowable loss for U.K.
corporation tax or capital gains tax purposes (as the case may
be) as a result of the merger, which will be treated as giving
rise to a disposal of their stock in Ensco Delaware. Generally,
non-U.K. resident stockholders of Ensco Delaware should not be
subject to either U.K. corporation tax or capital gains tax as a
result of the merger, unless they carry on a trade in the U.K.
through a permanent establishment in the U.K. or through a
branch or agency in the U.K. for the purposes of U.K.
corporation tax or capital gains tax, respectively, and the
stock is attributable to that permanent establishment, branch or
agency. In general, you will be treated as acquiring the ADSs
received in the merger for consideration equal to the market
value at the effective time of the merger of your shares of
Ensco Delaware common stock converted in the merger. Please see
Material Tax Considerations Relating to the
Merger U.K. Tax Considerations Material
Tax Consequences to Shareholders.
For stockholders of Ensco Delaware who are citizens or residents
of, or otherwise subject to taxation in, a country other than
the U.S. or the U.K., the tax treatment of the merger will
depend on the applicable tax laws in such country.
WE URGE YOU TO CONSULT YOUR OWN TAX ADVISOR PRIOR TO THE SPECIAL
MEETING REGARDING THE PARTICULAR TAX CONSIDERATIONS OF THE
MERGER FOR YOU.
Will
Ensco Delaware or Ensco UK be taxed as a result of the
merger?
We believe that Ensco Delaware and Ensco UK should not incur any
significant taxes in connection with consummation of the merger.
Although changes in tax laws, treaties or regulations or the
interpretation or enforcement of these tax laws, treaties or
regulations could adversely affect the intended tax benefits of
the merger to Ensco UK and its subsidiaries or the tax treatment
of the post-merger corporate structure of Ensco UK, we do not
believe that any of such changes would result in a material
increase in taxes as compared to our current, pre-merger tax
position.
Has
the IRS or HMRC rendered a ruling on any aspects of the
merger?
No ruling has been requested from the U.S. Internal Revenue
Service, or IRS, in connection with the merger, and
the IRS has adopted a policy of not issuing a ruling that a
merger qualifies as non-taxable, unless there is a separate
significant issue related to the merger. Furthermore, the IRS
will not rule on whether the U.S. anti-inversion rules will
apply to the merger. See Material Tax Considerations
Relating to the Merger U.S. Federal Income Tax
Considerations The U.S. Anti-Inversion
Rules.
No ruling has been requested from H.M. Revenue &
Customs, or HMRC, as to the U.K. corporation tax
consequences of the merger.
What
types of information and reports will Ensco UK make available
following the merger?
After the effective time of the merger, we will continue to
prepare financial statements in accordance with
U.S. Generally Accepted Accounting Principles, or
U.S. GAAP, and report in U.S. dollars, and
will continue to file reports under the U.S. Securities
Exchange Act of 1934, as amended, or the Exchange
Act, including reports on
Forms 10-K,
10-Q and
8-K with the
SEC, as we currently do. We also must comply with any additional
reporting requirements of English law.
For so long as Ensco UK has a class of securities (which include
the ADSs) listed on the New York Stock Exchange, or
NYSE, Ensco UK will be subject to rules regarding
proxy solicitations and tender offers and the corporate
governance requirements of the NYSE, the Exchange Act and the
U.S. Sarbanes-Oxley Act of 2002 including, for example,
independence requirements for audit committee composition,
annual certification requirements and auditor independence
rules, unless certain circumstances change. Ensco UK will be
required to disclose any significant ways in which its corporate
governance practices differ from those followed by
U.S. domestic
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companies under the NYSEs listing standards. To the extent
possible under English law and the ADS arrangement contemplated
by the deposit agreement, Ensco UKs corporate governance
practices are expected to be comparable to those of Ensco
Delaware. Please see The Merger Agreement
Stock Exchange Listing, Comparison of Rights of
Stockholders/Shareholders, and Effect of the
Reorganization on Potential Future Status as a Foreign Private
Issuer.
What
must I do to obtain ownership of ADSs that I become entitled to
receive as a result of the merger?
If you hold Ensco Delaware share certificates, you will be sent
a letter of transmittal, which is to be used to surrender your
Ensco Delaware share certificates and to request that ADSs be
issued to you. The letter of transmittal will contain
instructions explaining the procedure for surrendering Ensco
Delaware share certificates and requesting ADSs. YOU SHOULD
NOT RETURN SHARE CERTIFICATES WITH THE ENCLOSED PROXY
CARD.
Beneficial holders of shares held in street name
through a bank, broker or other financial institution will not
be required to take any action. Your ownership of ADSs
representing Class A Ordinary Shares will be recorded in
book entry form by your broker. If you are currently a
beneficial holder, there will be no need for any additional
action on your part.
It is expected that, prior to the effective time of the merger,
Citibank will be appointed as the exchange agent for the merger.
Ensco UKs current share registrar is Computershare
Investor Services PLC, P.O. Box 82, The Pavilions,
Bridgwater Road, Bristol BS13 8AE, England, which will continue
to serve as the share registrar for its Class A Ordinary
Shares after the effective time of the merger, while Citibank
will continue to serve as depositary for the ADSs.
Citibanks depositary offices are located at 388 Greenwich
Street, New York, New York, 10013.
If I
hold share certificates representing Ensco Delaware shares, what
will be my rights in relation to Ensco UK before I exchange my
certificates for ADRs?
From and after the effective time of the merger and pursuant to
the terms of the merger agreement and the deposit agreement,
stockholders who hold share certificates in Ensco Delaware will
generally be entitled to the same rights with respect to Ensco
UK through their ownership of ADSs, including the right to
receive dividends declared by Ensco UK after the effective time
of the merger and the right to exercise voting and other
shareholder rights, upon surrender of their stock certificates,
although the exercise of certain rights may require you to
surrender your ADSs and withdraw the underlying Class A
Ordinary Shares. Until Ensco Delaware stock certificates or
book-entry shares are surrendered for exchange, any dividends or
other distributions declared by Ensco UK after the effective
time of the merger with respect to ADSs issued to former Ensco
Delaware stockholders, other than any ADSs held by Ensco
Delaware or any other subsidiary of Ensco UK, will accrue but
will not be paid, but holders of such shares will not have
voting rights with respect to Ensco UK. See The Merger
Agreement Ownership in Ensco UK; Conversion of
Shares, and The Merger Agreement
Dividends and Distributions; Withholdings. Citibank will
serve as exchange agent for the exchange of Ensco Delaware
certificates for Ensco UK ADRs.
What
happens to Ensco Delaware stock options, restricted stock and
other equity-based awards at the effective time of the
merger?
At the effective time of the merger, all outstanding options to
purchase shares of Ensco Delaware common stock and all
outstanding awards of restricted stock and other equity-based
awards granted to employees and directors by the Company under
our equity incentive plans prior to the effective time of the
merger will entitle the holder to purchase or receive, or
receive benefits or amounts based on, as applicable, an equal
number of ADSs. All of such equity-based awards will generally
be subject to the same terms and conditions as were applicable
to such awards granted or issued by Ensco Delaware immediately
prior to the effective time of the merger.
Immediately prior to the effective time of the merger, all
existing Ensco Delaware equity incentive plans, as may be
amended, will be adopted and assumed by Ensco UK except that
Ensco Delaware will remain the plan sponsor of certain equity
incentive plans (as further described in the merger agreement),
and ADSs, rights to ADSs or benefits or amounts based on ADSs
will thereafter be granted or issued under each equity incentive
plan instead of shares of Ensco Delaware currently being granted
or issued under such plans. Future awards would be subject to
and governed by the terms of our equity incentive plans, as
assumed by Ensco UK if applicable, and any agreements entered
into
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pursuant thereto. Please see The Merger
Agreement Stock Compensation and Benefit Plans and
Programs for more information, including a description of
the tax withholding and regulatory consequences of the merger.
Can I
trade my Ensco Delaware shares before the merger is
completed?
Yes. Ensco Delaware common stock will continue trading on the
NYSE through the last trading day prior to the date of
completion of the merger, which date of completion is currently
anticipated to be December 23, 2009.
After
the merger, where can I trade my ADSs?
It is a condition to the completion of the merger that the ADSs
will be authorized for listing on the NYSE. We will submit an
application to the NYSE and expect that, immediately following
the effective time of the merger, the ADSs will be listed on the
NYSE under the symbol ESV, the same symbol under
which your Ensco Delaware common stock is currently listed. We
do not plan to list the ADSs or Ensco UKs shares on any
other securities exchange, including the London Stock Exchange.
What
is the voting requirement to approve the proposal to adopt the
merger agreement? What is the voting requirement to approve the
other proposal?
For the merger to be able to proceed, the majority of the
outstanding shares of common stock of Ensco Delaware
entitled to vote at the special meeting must be voted in the
affirmative for the adoption of the merger agreement.
Proposal 2 will be approved upon establishment of a quorum
if the votes cast in favor of such proposal exceed the votes
cast opposing such proposal.
What
is the Boards voting recommendation?
Our Board recommends that you vote your shares as follows:
Proposal 1 FOR the adoption of the
merger agreement; and
Proposal 2 FOR the approval of any
adjournments or postponements of the special meeting to a later
date to solicit additional proxies if there are insufficient
votes at the time of the special meeting to approve the adoption
of the Agreement and Plan of Merger and Reorganization.
Questions
and Answers Relating to the Special Meeting
Who
may vote at the special meeting?
You have received these proxy materials because you held shares
of common stock of Ensco Delaware on November 16, 2009, the
record date established for the special meeting, or the
record date, and, therefore, you are qualified to
receive notice of and to vote at the special meeting.
As of the record date, there were 142,515,432 shares of
Ensco Delaware common stock outstanding and entitled to vote at
the special meeting. As of the record date, our directors and
executive officers and their affiliates beneficially owned, in
the aggregate, approximately 931,151 of such shares,
representing beneficial ownership of less than 1 percent of
the outstanding shares of Ensco Delaware common stock as of that
date, and these shares are included in the number of shares
entitled to vote at the special meeting.
What
is this proxy statement/prospectus?
This document serves as the proxy statement of Ensco Delaware in
connection with the solicitation of proxies to obtain votes on a
proposal to adopt the merger agreement and the other proposal
described herein. This document is also a prospectus of Ensco UK
for purposes of the U.S. Securities Act of 1933, as
amended, or the Securities Act, in connection with
the issuance in the merger of ADSs representing Class A
Ordinary Shares. For the avoidance of doubt, however, this proxy
statement/prospectus is not intended to be and is not a
prospectus for purposes of the U.K. FSAs Prospectus Rules.
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We
encourage you to read this proxy statement/prospectus
carefully.
What
is being delivered with the proxy
statement/prospectus?
These proxy materials include:
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The notice of special meeting and proxy statement/prospectus for
the special meeting; and
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The accompanying proxy card (or voting instruction card from
your broker or other intermediary) to register your vote on the
proposal to adopt the merger agreement and the other proposal
described herein.
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Why am
I receiving paper copies of these proxy materials when
previously I received only a Notice of Internet
Availability of Proxy Materials for the Companys
annual stockholders meeting?
Under SEC rules, we are required to distribute paper copies of
these proxy materials because of the subject matter of the
business to be conducted at the special meeting.
When
and where is the special meeting?
Our special meeting will take place on December 22, 2009, at
10:00 a.m., Central Standard Time, at the
5-Star
Worldwide Conference Center at Lincoln Plaza,
Suite B30 Lower Level, 500 N. Akard
Street, Dallas, Texas 75201. Only stockholders of record on the
record date (i.e., November 16, 2009) are invited to
attend the special meeting and are requested to vote on the
proposal described in this proxy statement/prospectus.
Who is
soliciting my proxy?
Proxies are being solicited by the Board of Ensco Delaware.
Who is
paying for the cost of this proxy solicitation?
We are paying the costs of soliciting proxies. Upon request, we
will reimburse brokers, banks, trusts and other nominees for
reasonable expenses incurred by them in forwarding the proxy
materials to beneficial owners of shares of our common stock.
In addition to soliciting proxies by mail and over the Internet,
our Board, our officers and employees, or our transfer agent,
may solicit proxies on our behalf, personally or by telephone,
and we have engaged a proxy solicitor to solicit proxies on our
behalf by telephone and by other means. We expect the cost of
our private proxy solicitor to be approximately $20,000. We will
also solicit proxies by
e-mail from
stockholders who are employees or who previously requested proxy
materials be sent electronically. Arrangements also may be made
with brokerage houses and other custodians, nominees and
fiduciaries for the forwarding of solicitation materials to the
beneficial owners of Ensco Delaware shares held by those
persons, and Ensco Delaware will reimburse such persons for
reasonable expenses incurred by them in connection with the
forwarding of solicitation materials.
Stockholders that vote through the Internet are advised that
there may be costs associated with electronic access, such as
usage charges from Internet access providers and telephone
companies that will be borne by the stockholder in order for the
stockholder to connect to or access the Internet site.
Whom
should I contact with questions?
We have retained D.F. King & Co., Inc. as proxy
solicitor in connection with the special meeting. Our
stockholders may contact our proxy soliciting agent at:
D.F. King & Co, Inc.
48 Wall Street,
22nd Floor
New York, New York 10005
Banks and Brokers may call 1-212-269-5550
All others may call toll-free at
1-800-859-8509
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Alternatively, you may obtain information from us by contacting
our Investor Relations Department by telephone at
(214) 397-3000,
or by mail at:
ENSCO International Incorporated
Attention: Investor Relations Department
500 North Akard Street, Suite 4300
Dallas, Texas
75201-3331
Where
are Ensco Delawares principal executive offices located
and what is the main telephone number?
Ensco Delawares principal executive offices are located at
500 North Akard Street, Suite 4300, Dallas,
Texas 75201-3331
and the main telephone number is
(214) 397-3000.
What
is the quorum requirement for the special meeting?
For purposes of the special meeting, the holders of at least a
majority of the shares of our common stock issued and
outstanding and entitled to vote at the special meeting will
constitute a quorum. For purposes of determining whether there
is a quorum, abstentions and broker non-votes,
described below under What happens if I do not give
specific voting instructions? How are broker non-votes
treated? and How are abstentions treated?, are
treated as shares that are present.
What
is the difference between holding shares as a stockholder of
record and as a beneficial owner of shares held in street
name?
Stockholders of Record. If your shares are
registered directly in your name with our transfer agent, you
are a stockholder of record with respect to those
shares, and this proxy statement/prospectus was sent directly to
you by us. As a record holder, you vote your shares directly by
following the instructions set forth in the enclosed proxy card.
Beneficial Owners of Shares Held in Street
Name. If your shares are held in the name of a
broker, bank, trust or other nominee as a custodian, you are a
street name holder or in the general account of the
broker or other organization. Consequently, this proxy
statement/prospectus was forwarded to you by that organization.
The organization holding your account is considered the
stockholder of record for purposes of voting at the special
meeting. As a beneficial owner, you have the right to direct
that organization on how to vote the shares held in your account
by executing a voting instruction card. You should receive
information regarding voting instructions directly from that
organization.
If I
am a stockholder of Ensco Delaware, how do I vote?
Stockholders of Record. If you are a
stockholder of record, you have several choices. You
can vote your shares by following the specific instructions
provided on the proxy card:
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via the Internet at www.proxyvote.com;
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over the telephone by calling
1-800-690-6903; or
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by mailing in the proxy card.
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Beneficial Owners of Shares Held in Street
Name. If you hold your shares in street
name, your broker, bank, trust or other nominee will
arrange to provide materials and instructions for voting your
shares.
Beneficial Owners of Shares Held in the ENSCO Savings
Plan. If you are a current or former
Ensco Delaware employee who holds shares in the ENSCO
Savings Plan, you will receive voting instructions from the
trustee of the plan for shares allocated to your account. If you
fail to give voting instructions to the trustee, your shares
will be voted by the trustee in the same proportion as shares
held by the trustee for which voting instructions were received.
To allow sufficient time for voting by the trustee and
administrator of the ENSCO Savings Plan, your voting
instructions for shares held in the plan must be received by
11:59 p.m. Eastern Standard Time on December 18, 2009.
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What
happens if I do not give specific voting instructions? How are
broker non-votes treated?
Stockholders of Record. All properly executed
proxy cards received by the Board from stockholders of record
that do not specify how stock should be voted will be voted
FOR the proposal to adopt the merger agreement and
the other proposal. With respect to any other matter that may
properly be brought before the special meeting, the shares shall
be voted in accordance with the judgment of the person or
persons named on the proxy card.
Beneficial Owners of Shares Held in Street
Name. If you are a beneficial owner of shares
held in street name and do not provide the organization that
holds your shares with specific voting instructions, under the
rules of various national and regional securities exchanges, the
organization that holds your shares may generally vote on
routine matters but cannot vote on
non-routine matters. If the organization that holds
your shares does not receive instructions from you on how to
vote your shares on a non-routine matter or otherwise elects not
to vote your shares in the absence of your direction on a
routine matter, the organization that holds your shares will
inform our Inspector of Election that it does not have the
authority (or otherwise declines) to vote on such matter with
respect to your shares. This is generally referred to as a
broker non-vote.
A vote on the proposal to adopt the merger agreement is regarded
as a non-routine matter and failure to direct your broker on how
to vote on such a proposal has the same effect as a vote AGAINST
it. A broker non-vote with respect to Proposal 2 will have
no effect on this proposal, it is a routine matter. We encourage
you to provide voting instructions to the organization that
holds your shares by carefully following the instructions
provided in the proxy card or voting instruction card.
Can I
vote my shares in person at the special meeting?
Stockholders of Record. If you are a
stockholder of record, you may vote your shares in
person at the special meeting.
Beneficial Owners of Shares Held in Street
Name. If you hold your shares in street
name, you must obtain a proxy from your broker, bank,
trust or other nominee giving you the right to vote the shares
at the special meeting.
How
are abstentions treated?
In determining the number of votes cast for a proposal, shares
abstaining from voting or not voted on a matter will be counted
for quorum purposes. However, shares abstaining from voting or
not voted with respect to Proposal 1 to approve the
adoption of the merger agreement will be treated as votes
AGAINST it. Shares abstaining from voting or not voted with
respect to Proposal 2 will have no effect on such proposal.
May I
change my vote after I have voted?
You may revoke your proxy or otherwise change your vote by doing
one of the following:
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by sending a written notice of revocation to our Secretary that
must be received prior to the special meeting, stating that you
revoke your proxy;
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by signing and submitting a later-dated proxy card that must be
received prior to the special meeting in accordance with the
instructions included in the proxy card; or
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by attending the special meeting and voting your shares in
person.
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If you voted electronically, you can also return to
www.proxyvote.com and change your vote before the special
meeting. Follow the same voting process and your original vote
will be superseded.
If you are a beneficial owner of our shares and a broker or
other nominee holds your shares, you can revoke your proxy or
otherwise change your vote by following the instructions
provided by your broker or other nominee.
10
Is my
vote confidential?
Proxy instructions, ballots, and voting tabulations that
identify individual stockholders are handled in a manner that
protects your voting privacy. Your vote will not be disclosed
either within our company or to third parties, except:
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as necessary to meet applicable legal requirements;
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to allow for the tabulation and certification of votes; and
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to facilitate a successful proxy solicitation.
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Occasionally, stockholders provide written comments on their
proxy card, which may be forwarded to management and our Board.
Where
can I find the voting results of the special
meeting?
The preliminary voting results will be announced at the special
meeting and disclosed in a press release following the special
meeting. The final voting results also will be tallied by the
Inspector of Election and published in a report of voting
results to be filed with the SEC promptly following the special
meeting. We also intend to publicly disclose the voting results
on our website within 14 days following the completion of
the special meeting, as well as publish the voting results in
our
Form 10-K
for the fiscal year ended December 31, 2009, which we will
file with the SEC. You can find the voting results and the
Form 10-K
on our website at www.enscointernational.com.
11
SUMMARY
This summary highlights selected information from this proxy
statement/prospectus and may not contain all of the information
that is important to you. For a more complete description of the
merger, you should read carefully this entire proxy
statement/prospectus, including the Annexes. See also
Where You Can Find More Information. The merger
agreement, a copy of which is attached as Annex A to this
proxy statement/prospectus, contains the terms and conditions of
the merger. The articles of association of Ensco UK as in effect
after the merger will serve purposes substantially similar to
the certificate of incorporation and bylaws of Ensco Delaware,
subject to certain changes required to comply with the U.K.
Companies Act 2006, or Companies Act. A copy
of the articles of association of Ensco UK, in the form attached
to this proxy statement/prospectus as Annex B, will govern
Ensco UK after the effective time of the merger.
THE
MERGER
Parties
to the Merger (see page 28)
Ensco Delaware is an international offshore contract drilling
company. We were originally formed as a Texas corporation in
1975, were reincorporated in Delaware in 1987 and are now one of
the leading providers of offshore contract drilling services to
the international oil and gas industry.
Ensco Mergeco is a newly formed Delaware limited liability
company and currently is a wholly-owned subsidiary of Ensco
Cayman, which is a newly formed Cayman Islands exempted company
and currently is a wholly-owned subsidiary of Ensco Delaware.
Neither Ensco Cayman nor Ensco Mergeco has a significant amount
of assets or liabilities and neither has engaged in any business
since its formation other than activities associated with its
anticipated participation in the merger.
The
Merger (see page 31)
Under the merger agreement, Ensco Mergeco will merge with and
into Ensco Delaware, with Ensco Delaware being the surviving
company. As a result of the merger, each of our stockholders
will have the right to receive the number of ADSs equal to the
number of shares of common stock of Ensco Delaware that such
stockholder owned immediately prior to the merger. Upon
completion of the merger, Ensco UK and its subsidiaries will own
and continue to conduct the business that Ensco Delaware and its
subsidiaries currently conduct in substantially the same manner.
In connection with the merger, a number of Class A Ordinary
Shares (which are represented by ADSs) will have been issued
equal in number to (i) the number of shares of common stock
of Ensco Delaware that will have been issued and outstanding
immediately prior to the effective time of the merger
(disregarding treasury shares and shares held by its
subsidiaries, which we expect to cancel), plus (ii) the
remaining Class A Ordinary Shares of Ensco UK previously
issued and deposited with National City Nominees Limited, as
nominee of Citibank, in respect of an equal number of ADSs that
will be held by Ensco Delaware after the merger and are expected
to be used in connection with outstanding and future grants or
awards pursuant to equity incentive plans maintained or
sponsored by Ensco UK or its subsidiaries. Our Board reserves
the right to defer or abandon the merger at any time, including
after stockholder approval. Please see Risk
Factors Our Board may choose to defer or abandon the
merger at any time, as well as other risk factors set
forth under Forward-Looking Statements and
Risk Factors.
Reasons
for the Merger (see page 29)
In reaching its decision to approve the adoption of the merger
agreement and the reorganization, our Board identified several
potential benefits to our stockholders, which are described
below under The Merger Agreement Background
and Reasons for the Merger. The merger is part of a
reorganization of Ensco Delawares corporate structure. We
expect that the reorganization will, among other anticipated
benefits:
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establish a corporate headquarters in the U.K. where we already
have substantial operations and which is more centrally located
within our area of worldwide operations;
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improve access to key customers located in the U.K. and Western
Europe or who routinely travel to the U.K.;
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enhance our access to European institutional investors;
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improve the general perception with customers and the investment
community that we are an international driller with an
increasing focus on deepwater operations rather than a Gulf of
Mexico jackup driller (which generally faces a perception of
shorter-term contracts, less contract backlog and higher
volatility of cash flow);
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locate us in a country with a stable and developed legal regime
with established standards of corporate governance, including
the rights of shareholders, a favorable tax regime and an
extensive network of tax treaties; and
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allow us to potentially achieve a global effective tax rate
comparable to that of our global competitors.
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We expect that the reorganization also will result in
operational and administrative efficiencies over the long term
and enhance our ability to expand in the Europe/Africa and Asia
Pacific geographic regions, which represented over
77 percent of our consolidated revenue for the year ended
December 31, 2008. We have had ongoing operations serving a
wide range of customers in the U.K. for over 16 years. As
we continue to grow our business internationally, we believe
that moving to the U.K. will provide increased strategic
flexibility and operational benefits. In addition, a number of
our competitors are incorporated outside of the U.S. and already
have these competitive advantages. We thus believe the merger
will allow us to compete more effectively on a global scale. See
The Merger Agreement Background and Reasons
for the Merger.
Refer to Forward-Looking Statements and Risk
Factors below for a description of certain risks
associated with the reorganization.
Conditions
to Completion of the Merger (see page 34)
The merger will not be completed unless the following
conditions, among others, are satisfied or, if allowed by law,
waived:
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upon the SECs declaration of effectiveness of the
registration statement on Form
S-4 with
respect to the merger, Ensco Delaware will have contributed all
ADSs to Ensco Cayman, which will in turn have contributed all
such ADSs to Ensco Mergeco;
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the merger agreement will have been adopted by the requisite
vote of Ensco Delaware stockholders;
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Ensco UK will have re-registered as a public limited company;
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following stockholder approval of the merger agreement, Ensco
Delaware will have contributed all shares of Ensco Cayman to
Ensco UK;
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a special resolution will have been passed to alter the rights
of the holders of the Class A Ordinary Shares to have the
same rights as holders of Class B Ordinary Shares, nominal
value £1.00 each, or Class B Ordinary
Shares, conditional upon the merger becoming unconditional;
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the ADSs will have been authorized for listing on the NYSE,
subject to official notice of issuance;
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Baker & McKenzie LLP, legal counsel to Ensco Delaware,
will have delivered a tax opinion in form and substance
acceptable to Ensco Delaware;
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no decree, order or injunction will have been in effect with
respect to the SEC registration statement of which this proxy
statement/prospectus is a part;
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a registration statement on
Form F-6
filed with the SEC in connection with the issuance of the ADSs
to be delivered pursuant to the merger will have become
effective under the Securities Act, and no stop order with
respect thereto shall be in effect; and
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no law or order prohibiting or pending lawsuit seeking to
prohibit the merger will have been issued or filed by any U.S.,
European Union or U.K. governmental entity, subject to certain
exceptions described in this proxy statement/prospectus.
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13
Our Board does not intend to waive (where capable of waiver) any
of these or any other conditions unless it determines that the
merger is in the best interest of Ensco Delaware and our
stockholders despite the condition(s) not being satisfied in
whole or in part. Notwithstanding the foregoing, our Board
reserves the right to defer or abandon the merger at any time,
including after stockholder approval, for the reasons described
under Risk Factors Our Board may choose to
defer or abandon the merger at any time.
In addition, the expected timing for the completion of the
merger and the reorganization may be impacted by other
conditions described in this proxy statement/prospectus.
Regulatory
Approvals (see page 36)
The only material governmental or regulatory approvals or
actions that we are aware are required to complete the merger
are compliance with U.S. federal and state securities laws,
U.K. securities laws, the NYSE rules and regulations, the
Delaware General Corporation Law, or DGCL, and the
Companies Act.
Rights of
Dissenting Stockholders (see page 36)
Under the DGCL, you will not have appraisal rights in connection
with the merger.
Accounting
Treatment of the Merger (see page 37)
The merger will be accounted for using the historical cost basis
method of accounting. Because the merger will be accounted for
as a reorganization of entities under common control, there will
be no revaluation of Ensco Delawares assets and
liabilities.
TAX
CONSIDERATIONS
Taxation
of Ensco Delaware and Ensco UK (see page 44)
We believe that Ensco Delaware and Ensco UK should not incur any
significant taxes in connection with consummation of the merger.
Although changes in tax laws, treaties or regulations or the
interpretation or enforcement of these tax laws, treaties or
regulations could adversely affect the intended tax benefits of
the merger to Ensco UK and its subsidiaries or the tax treatment
of the post-merger corporate structure of Ensco UK, we do not
believe that any of such changes would result in a material
increase in taxes compared to our current, pre-merger tax
position.
U.S. Tax
Considerations (see page 39)
For U.S. federal income tax purposes, the conversion of
each issued and outstanding share of the common stock of Ensco
Delaware into the right to receive an ADS upon the consummation
of the merger generally will be treated as an exchange of such
share for the ADS. Therefore, the U.S. federal income tax
discussion contained herein refers to an exchange
rather than a conversion in describing the
U.S. federal income tax consequences of the merger.
Taxation
of U.S. Holders
Generally, for U.S. federal income tax purposes, a
U.S. holder should recognize gain, if any, but not loss, on
the receipt of ADSs in exchange for Ensco Delaware common stock
in connection with the merger. A U.S. holder should
generally recognize gain equal to the excess, if any, of the
fair market value of the ADSs received in the merger over the
U.S. holders adjusted tax basis in the shares of
Ensco Delaware common stock exchanged therefor. Generally, this
gain should be capital gain. U.S. holders should not be
permitted to recognize any loss realized on the exchange of
their shares of Ensco Delaware common stock in the merger. In
determining the amount of gain recognized, each of the Ensco
Delaware shares transferred should be treated as the subject of
a separate exchange. Thus, if a U.S. holder transfers some
Ensco Delaware shares on which gains are realized and other
Ensco Delaware shares on which losses are realized, the
U.S. holder may not net the losses against the gains to
determine the amount of gain recognized. In the case of a loss,
the adjusted tax basis in each ADS received by a
U.S. holder should equal the adjusted tax basis of each
share of Ensco Delaware common stock exchanged therefor. Thus,
subject to any
14
subsequent changes in the fair market value of the ADSs, any
loss should be preserved. In addition, the holding period for
any ADSs received by U.S. holders should include the
holding period of the Ensco Delaware shares exchanged therefor.
Cash received by a U.S. holder in exchange for a fractional
share of Ensco Delaware common stock should be treated as having
been received in redemption of such fractional share. Thus, gain
or loss generally should be recognized by such U.S. holder
in an amount equal to the difference between the amount of cash
received and the U.S. holders adjusted tax basis in
such fractional share. Please see Material Income Tax
Considerations Relating to the Merger
U.S. Federal Income Tax Considerations Material
Tax Consequences to Stockholders.
Taxation
of Non-U.S.
Holders
A
non-U.S. holder
generally will not be subject to U.S. federal income or
withholding tax on gain realized, if any, on the exchange of
Ensco Delaware shares for ADSs or on the receipt of cash in
exchange for fractional shares of Ensco Delaware common stock.
U.K. Tax
Considerations (see page 47)
Taxation
of U.K. Holders
Generally, U.K. resident stockholders of Ensco Delaware may
realize a chargeable gain or an allowable loss for U.K.
corporation tax or capital gains tax purposes (as the case may
be) as a result of the merger, which will be treated as giving
rise to a disposal of their stock in Ensco Delaware. In general,
you will be treated as acquiring the ADSs received in the merger
for a consideration equal to the market value at the effective
time of the merger of your shares of Ensco Delaware common stock
converted in the merger. Please see Material Tax
Considerations Relating to the Merger U.K. Tax
Considerations Material Tax Consequences to
Shareholders.
Taxation
of Non-U.K. Holders
Generally, non-U.K. resident stockholders of Ensco Delaware
should not be subject to either U.K. corporation tax or capital
gains tax on a chargeable gain or allowable loss arising as a
result of the merger, unless they carry on a trade in the U.K.
through a permanent establishment in the U.K. or through a
branch or agency in the U.K. for the purposes of U.K.
corporation tax or capital gains tax respectively, and the stock
is attributable to that permanent establishment, branch or
agency. In those circumstances, the non-U.K. resident
stockholders may realize a chargeable gain or an allowable loss
for U.K. corporation tax or capital gains tax purposes (as the
case may be) as a result of the merger, which will be treated as
giving rise to a disposal of their stock in Ensco Delaware. In
general, you will be treated as acquiring the ADSs received in
the merger for a consideration equal to the market value at the
effective time of the merger.
Other Tax
Considerations
For stockholders of Ensco Delaware who are citizens or residents
of, or otherwise subject to taxation in, a country other than
the U.S. or the U.K., the tax treatment of the merger will
depend on the applicable tax laws in such country.
WE ENCOURAGE YOU TO READ THE SECTIONS ENTITLED
MATERIAL TAX CONSIDERATIONS RELATING TO THE
MERGER U.S. FEDERAL INCOME TAX
CONSIDERATIONS MATERIAL TAX CONSEQUENCES TO
STOCKHOLDERS, AND MATERIAL TAX CONSIDERATIONS
RELATING TO THE MERGER U.K. TAX
CONSIDERATIONS MATERIAL TAX CONSEQUENCES TO
SHAREHOLDERS FOR A MORE DETAILED DESCRIPTION OF THESE TAX
CONSIDERATIONS. WE ALSO URGE YOU TO CONSULT YOUR OWN TAX ADVISOR
PRIOR TO THE SPECIAL MEETING REGARDING THE PARTICULAR TAX
CONSIDERATIONS OF THE MERGER APPLICABLE TO YOU.
15
OTHER
INFORMATION
Ownership
in Ensco UK; Conversion of Shares (see page 32)
Your ownership of ADSs will be recorded in book entry form by
your broker if you are currently a beneficial holder, with no
need for any additional action on your part. If you hold shares
directly, following the effective time of the merger, ADSs will
be delivered to the exchange agent for delivery to you upon
surrender of the certificates representing Ensco Delaware common
stock. Please see The Merger Agreement
Ownership in Ensco UK; Conversion of Shares for further
information, including procedures for surrendering share
certificates.
Rights of
Stockholders/Shareholders (see page 36)
There are differences between the principal attributes of the
Ensco Delaware shares and the Class A Ordinary Shares
represented by the ADSs, which include differences between the
rights of stockholders under the DGCL and the rights of
shareholders under the Companies Act, differences between the
provisions of Ensco Delawares certificate of incorporation
and bylaws and Ensco UKs articles of association, and
differences between the rights of a holder of Ensco Delaware
common stock and the terms and conditions related to the ADSs as
described in the deposit agreement. Please see Description
of American Depositary Shares of Ensco UK,
Description of the Class A Ordinary Shares of Ensco
UK and Comparison of Rights of
Stockholders/Shareholders.
Stock
Exchange Listings (see page 36)
It is a condition to the completion of the merger that the ADSs
representing Class A Ordinary Shares will be authorized for
listing on the NYSE, subject to official notice of issuance and
satisfaction of other standard conditions. We will submit an
application to the NYSE and expect that, immediately following
the effective time of the merger, the ADSs will be listed on the
NYSE under the symbol ESV, which is the same symbol
under which shares of Ensco Delaware are currently listed.
Market
Price Information
On November 6, 2009, the last trading day before the public
announcement of the merger, the closing price of our shares on
the NYSE was $48.03 per share. On November 16, 2009, the most
recent practicable date before the date of this proxy
statement/prospectus, the closing price of our shares was $47.45
per share.
Recommendation
of the Board (see page 35)
Our Board has unanimously determined that the reorganization to
be effected by the merger is advisable and in the best interests
of Ensco Delaware and our stockholders and, as such, has
unanimously approved the reorganization and the merger
agreement. The Board recommends that you vote FOR
the adoption of the merger agreement.
Special
Meeting of Stockholders (see page 7)
You can vote at the special meeting if you owned Ensco Delaware
common stock at the close of business on the record date
(i.e., November 16, 2009). On that date, there were
142,515,432 shares of Ensco Delaware common stock
outstanding and entitled to vote. For the merger to be able to
proceed, the majority of the outstanding shares of common stock
of Ensco Delaware entitled to vote at the special meeting must
be voted in the affirmative for the adoption of the merger
agreement. As of the record date, our directors and executive
officers and their affiliates beneficially owned, in the
aggregate, approximately 931,151 of such shares, representing
beneficial ownership of less than 1 percent of the
outstanding shares of Ensco Delaware common stock as of that
date. These shares are included in the number of shares entitled
to vote at the special meeting.
16
SELECTED
HISTORICAL CONSOLIDATED FINANCIAL DATA
The selected historical consolidated financial data of Ensco
Delaware for each of the years in the five-year period ended
December 31, 2008 has been derived from Item 6.
Selected Financial Data included in our Annual Report on
Form 10-K
for the year-ended December 31, 2008 filed with the SEC on
February 26, 2009, or the 2008
Form 10-K,
as updated in our Current Report on
Form 8-K
filed with the SEC on October 14, 2009, or the
October
Form 8-K,
both of which are incorporated by reference into this proxy
statement/prospectus.
The October
Form 8-K
updated our
Form 10-K
to reflect retrospective application of SFAS No. 160,
Noncontrolling Interests in Consolidated Financial
Statements, or SFAS 160, and FASB Staff
Position
EITF 03-6-1
Determining Whether Instruments Granted in Share-Based
Payment Transactions are Participating Securities, or
FSP
EITF 03-6-1,
and to reclassify ENSCO 69 as discontinued operations for all
periods presented. The selected financial data should be read in
conjunction with the audited consolidated financial statements
of Ensco Delaware included in Item 8. Financial
Statements and Supplementary Data, and Item 7.
Managements Discussion and Analysis of Financial Condition
and Results of Operations in our 2008
Form 10-K,
as updated in the October
Form 8-K.
The selected historical condensed consolidated financial data
for the nine-month periods ended September 30, 2009 and
2008 were derived from the unaudited interim condensed
consolidated financial statements of Ensco Delaware included in
our Quarterly Report on
Form 10-Q
for the nine-month period ending September 30, 2009, filed
with the SEC on October 22, 2009, or the September
Form 10-Q.
Certain selected historical condensed consolidated balance sheet
data were derived from the unaudited interim condensed
consolidated balance sheet of Ensco Delaware included in our
Quarterly Report on
Form 10-Q
for the nine month period ended September 30, 2008, filed
with the SEC on October 23, 2008. This data should be read
in conjunction with the unaudited condensed consolidated
financial statements of Ensco Delaware included in
Item 1. Financial Statements and Supplementary
Data, and Item 2. Managements Discussion
and Analysis of Financial Condition and Results of
Operations in our September
Form 10-Q,
which are incorporated by reference into this proxy
statement/prospectus.
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Nine-Month Period
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Ended September 30,
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Year Ended December 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 amounts)
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Consolidated Statement of Income Data
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Revenues
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$
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1,446.3
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$
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1,788.8
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$
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2,393.6
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$
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2,058.2
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$
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1,748.7
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$
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991.1
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$
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699.0
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Operating expenses
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Contract drilling (exclusive of depreciation)
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524.8
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566.8
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752.0
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644.1
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543.5
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434.9
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390.6
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Depreciation
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149.8
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139.4
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186.5
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177.5
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168.5
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147.5
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127.2
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General and administrative
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41.6
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41.7
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53.8
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59.5
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44.6
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32.0
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33.1
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Operating income
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730.1
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1,040.9
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1,401.3
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1,177.1
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992.1
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376.7
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148.1
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Other income (expense), net
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6.2
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4.8
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(4.2
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37.8
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(5.9
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(24.0
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(33.6
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Provision for income taxes
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133.8
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192.0
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237.3
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244.8
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241.3
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94.8
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27.5
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Income from continuing operations
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602.5
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853.7
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1,159.8
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970.1
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744.9
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257.9
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87.0
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|
(Loss) income from discontinued operations,
net(1)
|
|
|
(28.2
|
)
|
|
|
1.6
|
|
|
|
(3.1
|
)
|
|
|
28.8
|
|
|
|
30.3
|
|
|
|
27.5
|
|
|
|
6.2
|
|
Cumulative effect of accounting change,
net(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.6
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
574.3
|
|
|
|
855.3
|
|
|
|
1,156.7
|
|
|
|
998.9
|
|
|
|
775.8
|
|
|
|
285.4
|
|
|
|
93.2
|
|
Less: Net income attributable to noncontrolling interests
|
|
|
(3.6
|
)
|
|
|
(4.3
|
)
|
|
|
(5.9
|
)
|
|
|
(6.9
|
)
|
|
|
(6.1
|
)
|
|
|
(0.5
|
)
|
|
|
(0.2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Ensco
|
|
$
|
570.7
|
|
|
$
|
851.0
|
|
|
$
|
1,150.8
|
|
|
$
|
992.0
|
|
|
$
|
769.7
|
|
|
$
|
284.9
|
|
|
$
|
93.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per common share basic
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
$
|
4.22
|
|
|
$
|
5.91
|
|
|
$
|
8.06
|
|
|
$
|
6.52
|
|
|
$
|
4.83
|
|
|
$
|
1.69
|
|
|
$
|
0.58
|
|
Discontinued operations
|
|
|
(0.20
|
)
|
|
|
0.01
|
|
|
|
(0.02
|
)
|
|
|
0.19
|
|
|
|
0.20
|
|
|
|
0.18
|
|
|
|
0.04
|
|
Cumulative effect of accounting change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
4.02
|
|
|
$
|
5.92
|
|
|
$
|
8.04
|
|
|
$
|
6.71
|
|
|
$
|
5.03
|
|
|
$
|
1.87
|
|
|
$
|
0.62
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine-Month Period
|
|
|
|
|
|
|
Ended September 30,
|
|
|
Year Ended December 31,
|
|
|
|
2009
|
|
|
2008
|
|
|
2008
|
|
|
2007
|
|
|
2006
|
|
|
2005
|
|
|
2004
|
|
|
|
(In millions, except per share amounts)
|
|
|
Earnings (loss) per common share diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
$
|
4.21
|
|
|
$
|
5.90
|
|
|
$
|
8.04
|
|
|
$
|
6.50
|
|
|
$
|
4.81
|
|
|
$
|
1.68
|
|
|
$
|
0.58
|
|
Discontinued operations
|
|
|
(0.20
|
)
|
|
|
0.01
|
|
|
|
(0.02
|
)
|
|
|
0.19
|
|
|
|
0.20
|
|
|
|
0.18
|
|
|
|
0.04
|
|
Cumulative effect of accounting change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
4.01
|
|
|
$
|
5.91
|
|
|
$
|
8.02
|
|
|
$
|
6.69
|
|
|
$
|
5.01
|
|
|
$
|
1.86
|
|
|
$
|
0.62
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Ensco common shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
563.7
|
|
|
$
|
842.1
|
|
|
$
|
1,138.2
|
|
|
$
|
984.7
|
|
|
$
|
765.4
|
|
|
$
|
283.9
|
|
|
$
|
92.7
|
|
Diluted
|
|
$
|
563.7
|
|
|
$
|
842.1
|
|
|
$
|
1,138.2
|
|
|
$
|
984.7
|
|
|
$
|
765.4
|
|
|
$
|
283.9
|
|
|
$
|
92.7
|
|
Weighted-average common shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
140.3
|
|
|
|
142.2
|
|
|
|
141.6
|
|
|
|
146.7
|
|
|
|
152.2
|
|
|
|
151.7
|
|
|
|
150.5
|
|
Diluted
|
|
|
140.4
|
|
|
|
142.6
|
|
|
|
141.9
|
|
|
|
147.2
|
|
|
|
152.8
|
|
|
|
152.3
|
|
|
|
150.5
|
|
Cash dividends per common share
|
|
$
|
0.075
|
|
|
$
|
0.075
|
|
|
$
|
0.10
|
|
|
$
|
0.10
|
|
|
$
|
0.10
|
|
|
$
|
0.10
|
|
|
$
|
0.10
|
|
Consolidated Balance Sheet and Cash Flow Statement Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Working capital
|
|
$
|
1,147.8
|
|
|
$
|
769.4
|
|
|
$
|
973.0
|
|
|
$
|
625.8
|
|
|
$
|
602.3
|
|
|
$
|
347.0
|
|
|
$
|
277.9
|
|
Total assets
|
|
|
6,455.2
|
|
|
|
5,457.2
|
|
|
|
5,830.1
|
|
|
|
4,968.8
|
|
|
|
4,334.4
|
|
|
|
3,617.9
|
|
|
|
3,322.0
|
|
Long-term debt, net of current portion
|
|
|
265.8
|
|
|
|
282.9
|
|
|
|
274.3
|
|
|
|
291.4
|
|
|
|
308.5
|
|
|
|
475.4
|
|
|
|
527.1
|
|
Ensco stockholders equity
|
|
|
5,284.2
|
|
|
|
4,376.1
|
|
|
|
4,676.9
|
|
|
|
3,752.0
|
|
|
|
3,216.0
|
|
|
|
2,540.0
|
|
|
|
2,193.9
|
|
Cash flow from continuing operations
|
|
|
938.2
|
|
|
|
733.8
|
|
|
|
1,125.4
|
|
|
|
1,211.2
|
|
|
|
922.9
|
|
|
|
336.7
|
|
|
|
230.4
|
|
|
|
|
(1) |
|
See Note 11 to the 2008 consolidated financial statements
included in Item 8. Financial Statements and
Supplementary Data of our October
Form 8-K. |
|
(2) |
|
On January 1, 2006, we recognized a cumulative adjustment
related to the adoption of SFAS No. 123 (revised
2004) Share-Based Payment, or
FAS 123(R). See Note 9 to the 2008
consolidated financial statements included in Item 8.
Financial Statements and Supplementary Data of our October
Form 8-K. |
SUMMARY
PRO FORMA FINANCIAL INFORMATION
Pro forma financial statements for Ensco UK are not presented in
this proxy statement/prospectus because no significant pro forma
adjustments are required to be made to the historical unaudited
interim condensed consolidated financial statements of Ensco
Delaware for the nine-month period ended September 30, 2009
or to the historical audited consolidated financial statements
of Ensco Delaware for the year-ended December 31, 2008.
Those financial statements are included in our September
Form 10-Q
and our October
Form 8-K,
respectively, both of which are incorporated by reference into
this proxy statement/prospectus.
FORWARD-LOOKING
STATEMENTS
This proxy statement/prospectus contains forward-looking
statements that are subject to a number of risks and
uncertainties and are based on information as of the date
hereof. Forward-looking statements include words such as
anticipate, believe,
estimate, expect, intend,
plan, project, could,
may, might, should,
will and words and phrases of similar import. The
forward-looking statements include, but are not limited to,
statements about the merger and subsequent reorganization and
our plans, objectives, expectations and intentions with respect
thereto and with respect to future operations, including the
benefits and tax savings or impact described in this proxy
statement/prospectus that we expect to achieve as a result of
the merger and subsequent reorganization. Forward-looking
statements also include statements regarding future operations,
cash generation, the impact of recently contracted premium
jackups, contributions from the deepwater expansion program and
expense management,
18
industry trends or conditions and the business environment;
statements regarding future levels of, or trends in, day rates,
utilization, revenues, operating expenses, contract term,
contract backlog, capital expenditures, insurance, financing and
funding; statements regarding future construction (including
construction in progress and completion thereof), enhancement,
upgrade or repair of rigs and timing thereof; statements
regarding future delivery, mobilization, relocation or other
movement of rigs and timing thereof; statements regarding future
availability or suitability of rigs and the timing thereof, and
statements regarding the likely outcome of litigation, legal
proceedings, investigations or insurance or other claims and the
timing thereof.
Forward-looking statements are made pursuant to safe harbor
provisions of the Private Securities Litigation Reform Act of
1995. Numerous factors could cause actual results to differ
materially from those in the forward-looking statements,
including:
|
|
|
|
|
the merger may not be approved by our stockholders,
|
|
|
|
our Board may choose to defer or abandon the merger at any time,
|
|
|
|
changes in foreign or domestic laws, including tax laws, that
could effectively preclude us from completing the merger or
reduce or eliminate the benefits we expect to achieve from the
reorganization,
|
|
|
|
negative publicity resulting from the proposed merger having an
adverse effect on our business,
|
|
|
|
an SEC stop order or other action or any other decree, order or
injunction preventing the registration statement of which this
proxy statement/prospectus is a part from becoming or remaining
effective or preventing us from holding the special meeting or
completing the merger,
|
|
|
|
an inability to satisfy all of the conditions to closing set
forth in the merger agreement,
|
|
|
|
an inability to realize expected benefits from the merger or the
occurrence of difficulties in connection with the merger,
|
|
|
|
costs related to the merger, which could be greater than
expected,
|
|
|
|
industry conditions and competition, including changes in rig
supply and demand or new technology,
|
|
|
|
risks associated with the global economy and its impact on
capital markets and liquidity,
|
|
|
|
prices of oil and natural gas, and their impact upon future
levels of drilling activity and expenditures,
|
|
|
|
further declines in rig activity, which may cause us to idle or
stack additional rigs,
|
|
|
|
excess rig availability or supply resulting from delivery of new
drilling rigs,
|
|
|
|
heavy concentration of our rig fleet in premium jackups,
|
|
|
|
cyclical nature of the industry,
|
|
|
|
worldwide expenditures for oil and natural gas drilling,
|
|
|
|
the ultimate resolution of the ENSCO 69 situation in general and
the potential return of the rig or package policy political risk
insurance recovery in particular,
|
|
|
|
changes in the timing of revenue recognition resulting from the
deferral of certain revenues for mobilization of our drilling
rigs, time waiting on weather or time in shipyards, which are
recognized over the contract term upon commencement of drilling
operations,
|
|
|
|
operational risks, including excessive unplanned downtime and
hazards created by severe storms and hurricanes,
|
|
|
|
risks associated with offshore rig operations or rig relocations
in general, and in foreign jurisdictions in particular,
|
|
|
|
renegotiation, nullification, cancellation or breach of
contracts or letters of intent with customers or other parties,
including failure to negotiate definitive contracts following
announcements or receipt of letters of intent,
|
19
|
|
|
|
|
inability to collect receivables,
|
|
|
|
changes in the dates new contracts actually commence,
|
|
|
|
changes in the dates our rigs will enter a shipyard, be
delivered, return to service or enter service,
|
|
|
|
risks inherent to domestic and foreign shipyard rig
construction, repair or enhancement, including risks associated
with concentration of our ENSCO 8500
Series®
rig construction contracts in a single foreign shipyard,
unexpected delays in equipment delivery and engineering or
design issues following shipyard delivery,
|
|
|
|
availability of transport vessels to relocate rigs,
|
|
|
|
environmental or other liabilities, risks or losses, whether
related to hurricane damage, losses or liabilities (including
wreckage or debris removal) in the Gulf of Mexico or otherwise,
that may arise in the future which are not covered by insurance
or indemnity in whole or in part,
|
|
|
|
limited availability or high cost of insurance coverage for
certain perils such as hurricanes in the Gulf of Mexico or
associated removal of wreckage or debris,
|
|
|
|
self-imposed or regulatory limitations on drilling locations in
the Gulf of Mexico during hurricane season,
|
|
|
|
impact of current and future government laws and regulation
affecting the oil and gas industry in general and our operations
in particular, including taxation, as well as repeal or
modification of same,
|
|
|
|
our ability to attract and retain skilled personnel,
|
|
|
|
governmental action and political and economic uncertainties,
including expropriation, nationalization, confiscation or
deprivation of our assets,
|
|
|
|
terrorism or military action impacting our operations, assets or
financial performance,
|
|
|
|
outcome of litigation, legal proceedings, investigations or
insurance or other claims,
|
|
|
|
adverse changes in foreign currency exchange rates, including
their impact on the fair value measurement of our derivative
financial instruments,
|
|
|
|
potential long-lived asset or goodwill impairments, and
|
|
|
|
potential reduction in fair value of our auction rate securities.
|
Moreover, the United States Congress, the IRS, the United
Kingdom Parliament or HMRC may attempt to enact new statutory or
regulatory provisions that could adversely affect Ensco
UKs status as a
non-U.S. corporation
or otherwise adversely affect Ensco UKs anticipated global
tax position following the merger and the subsequent actions.
Retroactive statutory or regulatory actions have occurred in the
past, and there can be no assurance that any such provisions, if
enacted or promulgated, would not have retroactive application
to Ensco UK, the merger or the subsequent actions.
The factors identified above are believed to be important
factors (but not necessarily all of the important factors) that
could cause actual results to differ materially from those
expressed in any forward-looking statement made by us. Other
factors not discussed herein could also have material adverse
effects on us. All forward-looking statements included in this
prospectus and any accompanying prospectus supplement are
expressly qualified in their entirety by the foregoing
cautionary statements. We undertake no obligation to update any
forward-looking statement (or its associated cautionary
language), whether as a result of new information or future
events.
20
RISK
FACTORS
In considering whether to vote in favor of the proposal to adopt
the merger agreement in connection with the reorganization, you
should consider carefully the following risks or investment
considerations, in addition to the other information in this
proxy statement/prospectus. As set forth below, we have
identified the material factors you should consider before
making a decision on whether to vote in favor of the proposal to
adopt the merger agreement and the other proposal described
herein, and we have identified the material risks that could
cause our actual plans or results to differ materially from
those included in the forward-looking statements contained or
incorporated by reference herein. You should consider these
risks when deciding how to vote. In addition, you should also
review carefully the risk factors discussed in Part I,
Item 1A Risk Factors of our 2008
Form 10-K
and in our subsequent reports filed pursuant to the Securities
Exchange Act of 1934, as amended, as they discuss risks
affecting our business generally that could also cause our
actual plans or results to differ materially from those included
in the forward-looking statements contained or incorporated by
reference herein.
Some
Ensco Delaware stockholders will recognize a taxable gain as a
result of the merger and, in some cases, will not be able to
recognize any losses realized.
For U.S. federal income tax purposes, the conversion of
each issued and outstanding share of the common stock of Ensco
Delaware into the right to receive an ADS upon the consummation
of the merger generally will be treated as an exchange of such
share for the ADS. Therefore, the U.S. federal income tax
discussion contained herein refers to an exchange
rather than a conversion in describing the
U.S. federal income tax consequences of the merger.
Generally, for U.S. federal income tax purposes, a
U.S. holder, which is defined below in Material Tax
Considerations Relating to the Merger
U.S. Federal Income Tax Considerations Material
Tax Consequences to Stockholders, should recognize gain,
if any, but not loss, on the receipt of ADSs in exchange for
Ensco Delaware common stock in connection with the merger. A
U.S. holder should generally recognize gain equal to the
excess, if any, of the fair market value of the ADSs received in
the merger over the U.S. holders adjusted tax basis
in the shares of Ensco Delaware common stock exchanged therefor.
Generally, this gain should be capital gain. U.S. holders
should not be permitted to recognize any loss realized on the
exchange of their shares of Ensco Delaware common stock in the
merger. In determining the amount of gain recognized, each of
the Ensco Delaware shares transferred should be treated as the
subject of a separate exchange. Thus, if a U.S. holder
transfers some Ensco Delaware shares on which gains are realized
and other Ensco Delaware shares on which losses are realized,
the U.S. holder may not net the losses against the gains to
determine the amount of gain recognized. In the case of a loss,
the adjusted tax basis in each ADS received by a
U.S. holder should equal the adjusted tax basis of each
share of Ensco Delaware common stock exchanged therefor. Thus,
subject to any subsequent changes in the fair market value of
the ADSs, any loss should be preserved. In addition, the holding
period for any ADSs received by U.S. holders should include
the holding period of the Ensco Delaware shares exchanged
therefor. Cash received by a U.S. holder in exchange for a
fractional share of Ensco Delaware common stock should be
treated as having been received in redemption of such fractional
share. Thus, gain or loss generally should be recognized by such
U.S. holder in an amount equal to the difference between
the amount of cash received and the U.S. holders
adjusted tax basis in such fractional share. A
non-U.S. holder
generally will not be subject to U.S. federal income tax on
gain realized, if any, on the exchange of Ensco Delaware shares
for ADSs or on the receipt of cash in exchange for fractional
shares of Ensco Delaware common stock. Please see Material
Tax Considerations Relating to the Merger
U.S. Federal Income Tax Considerations Material
Tax Consequences to Stockholders.
Generally, U.K. resident stockholders of Ensco Delaware may
realize a chargeable gain or an allowable loss for U.K.
corporation tax or capital gains tax purposes (as the case may
be) as a result of the merger, which will be treated as giving
rise to a disposal of their stock in Ensco Delaware. Generally,
non-U.K. resident stockholders of Ensco Delaware should not be
subject to either U.K. corporation tax or capital gains tax as a
result of the merger, unless they carry on a trade in the U.K.
through a permanent establishment in the U.K. or through a
branch or agency in the U.K. for the purposes of U.K.
corporation tax or capital gains tax respectively, and the stock
is attributable to that permanent establishment, branch or
agency. In general, you will be treated as acquiring the ADSs
received in the merger for a consideration equal to the market
value at the effective time of the merger of your shares of
Ensco
21
Delaware common stock converted in the merger. Please see
Material Tax Considerations Relating to the
Merger U.K. Tax Considerations Material
Tax Consequences to Shareholders.
For stockholders of Ensco Delaware who are citizens or residents
of, or otherwise subject to taxation in, a country other than
the U.S. or the U.K., the tax treatment of the merger will
depend on the applicable tax laws in such country.
WE URGE YOU TO CONSULT YOUR OWN TAX ADVISOR PRIOR TO THE SPECIAL
MEETING REGARDING THE PARTICULAR TAX CONSIDERATIONS OF THE
MERGER APPLICABLE TO YOU.
HMRC
may disagree with our conclusions on the U.K. tax treatment of
the merger and HMRC has not provided (and we have not requested)
a ruling on the U.K. tax aspects of the merger.
Based on current U.K. corporation tax law and the current
U.K.-U.S. income tax treaty, as amended, and any amendments
to either current U.K. corporation tax law or such treaty
announced prior to the date hereof, we expect that the merger
will not result in any material U.K. corporation tax liability
to any of Ensco Delaware, Ensco UK or Ensco Mergeco. Further, we
believe that we have satisfied all stamp duty reserve tax, or
SDRT, payment and filing obligations in connection
with the issuance and deposit of the Class A Ordinary
Shares into the ADS facility pursuant to the deposit agreement.
However, if HMRC disagrees with this view, it may take the
position that material U.K. corporation tax or SDRT liabilities
or amounts on account thereof are payable by any one or more of
these companies as a result of the reorganization, in which case
we expect that we would contest such assessment. To contest such
assessment, we may be required to remit cash or provide security
of the amount in dispute, or such lesser amount as permitted
under U.K. law and acceptable to HMRC, to prevent HMRC from
seeking enforcement actions pending the dispute of such
assessment. If we were unsuccessful in disputing the assessment,
the implications could be materially adverse to us. HMRC has not
provided (and we have not requested) a ruling on the U.K. tax
aspects of the merger. There can be no assurance that HMRC will
agree with our interpretation of the U.K. tax aspects of the
merger or any related matters associated therewith.
The
IRS may disagree with our conclusions on tax treatment of the
merger.
We expect that the merger will not result in any material
U.S. federal income tax liability to Ensco Delaware or
Ensco UK. However, the IRS may disagree with our assessments of
the effects or interpretation of the tax laws, treaties or
regulations or their enforcement with respect to the merger.
Nevertheless, even if our conclusions on the U.S. tax
treatment of the merger to Ensco Delaware and Ensco UK do not
ultimately prevail, we do not believe that a contrary treatment
of the merger by the IRS would result in a material increase in
U.S. taxes compared to our current, pre-merger
U.S. tax position. In this event, however, we may not
realize the expected tax benefits of the merger and our results
of operations may be adversely affected in comparison to what
they would have been if the IRS agreed with our conclusions.
Ensco
UKs net income and cash flow would be reduced if Ensco UK
becomes subject to U.S. corporate income tax.
Ensco UK and other
non-U.S. Ensco
UK affiliates will conduct their operations in a manner intended
to ensure that Ensco UK and its
non-U.S. affiliates
do not engage in the conduct of a U.S. trade or business.
However, if Ensco UK or any of its
non-U.S. affiliates
is or are engaged in a trade or business in the U.S., Ensco UK
or such
non-U.S. affiliates
would be required to pay U.S. corporate income tax on
income that is subject to the taxing jurisdiction of the
U.S. If this occurs, our results of operations may be
adversely affected. Additionally, after the merger, Ensco
Delaware and its then existing U.S. subsidiaries will
continue to be subject to U.S. corporate income tax on
their worldwide income, and Ensco Delawares then existing
foreign subsidiaries will continue to be subject to
U.S. corporate income tax on their U.S. operations.
22
Ensco
UK may be treated as a U.S. corporation for U.S. federal income
tax purposes following the merger.
Generally for U.S. federal income tax purposes, a
corporation is considered tax resident in the place of its
incorporation. Because Ensco UK is incorporated under U.K. law,
it should be deemed a U.K. corporation under these general
rules. However, Section 7874 of the U.S. Internal
Revenue Code of 1986, as amended (which we refer to as the
Code) generally provides that a corporation
organized outside the U.S. which acquires substantially all
of the assets of a corporation organized in the U.S. will
be treated as a U.S. corporation (and, therefore, a
U.S. tax resident) for U.S. federal income tax
purposes if shareholders of the acquired U.S. corporation
own at least 80 percent (of either the voting power or the
value) of the stock of the acquiring foreign corporation after
the acquisition and the acquiring foreign corporation does not
have substantial business activities in the country in which it
is organized. Pursuant to the merger, Ensco UK will acquire
directly or indirectly all of Ensco Delawares assets, and
Ensco Delaware shareholders will hold 100 percent of Ensco
UK by virtue of their stock ownership of Ensco Delaware. As a
result. Ensco Delaware and, following the merger, Ensco UK must
have substantial business activities in the U.K. for Ensco UK to
avoid being treated as a U.S. corporation for
U.S. federal income tax purposes under Section 7874.
There is no safe harbor or other guidance that
confirms when a foreign corporations business activities
in its country of incorporation are deemed to be substantial.
Therefore, it is possible that the IRS would interpret the
Section 7874 anti-inversion rules so as to
treat Ensco UK as a U.S. corporation after the consummation
of the merger. Moreover, the United States Congress, the IRS,
the United Kingdom Parliament or HMRC may enact new statutory or
regulatory provisions that could adversely affect Ensco
UKs status as a
non-U.S. corporation
or otherwise adversely affect Ensco UKs anticipated global
tax position following the merger and the subsequent actions.
Retroactive statutory or regulatory actions have occurred in the
past, and there can be no assurance that any such provisions, if
enacted or promulgated, would not have retroactive application
to Ensco UK, the merger or the subsequent actions.
However, Ensco UK is a company formed under English law, and
Ensco Delaware has historic, continuous and substantial business
activities in the U.K as a result of its longstanding North Sea
drilling activities and management and control over the Europe
and Africa Business Unit, headquartered in Aberdeen, Scotland.
We, therefore, believe Ensco UK should not be treated as a
U.S. corporation for U.S. federal income tax purposes
under Section 7874. However, there is no certainty that the
IRS will not assert a contrary position, in which case, we could
become involved in tax controversy with the IRS regarding
possible additional U.S. tax liability. If we are
unsuccessful in resolving any such tax controversy in our favor,
we would likely not realize the tax savings we anticipate
achieving through the merger and the reorganization, and we
could be liable for additional U.S. federal income tax as a
result of certain transactions undertaken as part of the
reorganization. Please see Material Tax Considerations
Relating to the Merger U.S. Federal Income Tax
Considerations The U.S. Anti-Inversion
Rules.
The
merger may not allow us to maintain a competitive worldwide
effective tax rate.
We believe that the merger should improve our ability to
maintain a competitive worldwide effective tax rate because the
U.K. corporate tax rate is lower than the U.S. corporate
tax rate and because the U.K. has implemented a dividend
exemption system that generally does not subject non-U.K.
earnings to U.K. tax when such earnings are repatriated to the
U.K. in the form of dividends from non-U.K. subsidiaries. In
addition, the U.K. Government is consulting on reform of the
U.K. controlled foreign companies rules (under which, in some
circumstances, low-taxed profits of foreign subsidiaries of U.K.
companies may be taxed in the U.K.) with a view to moving
towards a more territorial system of taxing foreign profits of
U.K. companies. No reform proposals have yet been proposed by
the U.K. Government and no new legislation is expected before
2011.
However, we cannot provide any assurances as to what our
effective tax rate will be after the merger because of, among
other things, uncertainty regarding the nature and extent of our
business activities in any particular jurisdiction in the future
and the tax laws of such jurisdictions, as well as changes in
U.S. and other tax laws. Our actual effective tax rate may
vary from our expectation and that variance may be material.
Additionally, the tax laws of the U.K. and other jurisdictions
could change in the future, and such changes could cause a
material change in our worldwide effective tax rate.
We also could be subject to future audits conducted by foreign
and domestic tax authorities, and the resolution of such audits
could significantly impact our effective tax rate in future
periods, as would any reclassification or
23
other matter (such as changes in applicable accounting rules)
that increases the amounts we have provided for income taxes in
our consolidated financial statements. There can be no assurance
that we would be successful in attempting to mitigate the
adverse impacts resulting from any changes in law, audits and
other matters. Our inability to mitigate the negative
consequences of any changes in the law, audits and other matters
could cause our effective tax rate to increase and our results
of operations to suffer.
Our
Board may choose to defer or abandon the merger at any
time.
Completion of the merger may be deferred or abandoned by action
of our Board at any time, including after stockholder approval.
While we currently expect the merger to take place promptly
after the proposal to adopt the merger agreement is approved at
the special meeting, to be followed (in short order) by the
subsequent actions, the Board may defer completion before or
after the special meeting or may abandon the merger at any time,
including after stockholder approval, because of, among other
reasons, changes in existing or proposed tax legislation,
failure of Baker & McKenzie LLP to deliver tax
opinions in form and substance acceptable to us, our
determination that HMRC does not agree with our view of the U.K.
corporation tax or SDRT implications of certain aspects of the
reorganization, our determination that the IRS does not agree
with our views on certain tax matters, our determination that
the reorganization would involve tax or other risks that
outweigh their benefits, our determination that the level of
expected benefits associated with the reorganization would
otherwise be reduced, a dispute with the taxation authorities
over the reorganization (or certain aspects thereof), changes in
U.K. or U.S. tax laws, rates, or regulations that would
adversely affect our ability to achieve the expected benefits of
the reorganization, an unexpected increase in the cost to
complete the reorganization or any other determination by our
Board that the reorganization would not be in the best interests
of Ensco Delaware or its stockholders or that the reorganization
would have material adverse consequences to Ensco Delaware or
its stockholders.
Changes
in domestic and foreign laws, including tax law changes, could
adversely affect Ensco UK, its subsidiaries and its
shareholders.
Changes in tax laws, regulations or treaties or the
interpretation or enforcement thereof, in both or either of the
U.S. or the U.K., could adversely affect the tax
consequences of the reorganization to Ensco UK and its
shareholders
and/or our
effective tax rates (whether associated with the reorganization
or otherwise). With respect to the reorganization, for example,
one reason for the reorganization is to begin to align our
structure so as to have the opportunity, going forward, to
continue to take advantage of U.K. corporate tax rates, which
are lower than the U.S. income tax rates, and to take
advantage of the recent dividend exemption system implemented in
the U.K., which generally does not subject non-U.K. earnings to
U.K. tax when such earnings are repatriated to the U.K. as
dividends. Future changes in tax laws, regulations or treaties
or the interpretation or enforcement thereof, particularly any
such changes resulting in a material change in the U.S. and
the U.K. tax rates relative to each other, could reduce or
eliminate the benefits that we expect to achieve from the
reorganization.
The
expected benefits of the reorganization may not be
realized.
We cannot be assured that all of the goals of the reorganization
will be achievable, particularly as the achievement of the
benefits are in many important respects subject to factors that
we do not control. These factors would include such things as
the reactions of third parties with whom we enter into contracts
and do business and the reactions of investors, analysts and
U.K. and U.S. taxing authorities.
While we expect the reorganization will enable us to continue to
take advantage of lower U.K. tax rates and the benefits of the
U.K. dividend exemption system for certain non-U.K. source
dividends repatriated to the U.K. in the years after
implementation of the reorganization to a greater extent than
would likely have been available if the reorganization was not
completed, these benefits may not be achieved. In particular,
U.K. or U.S. tax authorities may challenge our application
and/or
interpretation of relevant tax laws, regulations or treaties,
valuations and methodologies or other supporting documentation,
and, if they are successful in doing so, we may not experience
the level of benefits we anticipate; or, we may be subject to
adverse tax consequences. Even if we are successful in
maintaining our positions, we may incur significant expense in
contesting positions asserted or claims made by tax authorities.
24
Our effective tax rates and the benefits described herein are
also subject to a variety of other factors, many of which are
beyond our ability to control, such as changes in the rate of
economic growth in the U.K. and the U.S., the financial
performance of our business in various jurisdictions, currency
exchange rate fluctuations (especially as between the British
pound and the U.S. dollar), and significant changes in
trade, monetary or fiscal policies of the U.K. or the U.S.,
including changes in interest rates. The impact of these
factors, individually and in the aggregate, is difficult to
predict, in part because the occurrence of the events or
circumstances described in such factors may be (and, in fact,
often seem to be) interrelated, and the impact to us of the
occurrence of any one of these events or circumstances could be
compounded or, alternatively, reduced, offset, or more than
offset, by the occurrence of one or more of the other events or
circumstances described in such factors.
Following
the effective time of the merger, it is likely that we will be
removed from the S&P 500 stock index and other indices,
which could have an adverse impact on our share
price.
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 the S&P
would remove our shares (or refuse to include the ADSs after the
effective time of the merger) as a component of the S&P 500
upon the effectiveness of the merger. Although we are uncertain
as to when the S&P would take this action, we do not
believe that it would be effective until after the special
meeting of stockholders described in this proxy
statement/prospectus. The S&P has removed the shares of
other companies that recently reincorporated to European
jurisdictions whether through a continuation, scheme of
arrangement, merger transaction similar to the type of merger
transaction described in this proxy statement (prospectus) or
otherwise.
Similar issues could arise with respect to whether the ADSs will
be included as a component in other indices or funds that impose
a variety of qualifications that could be affected by the
merger. If the ADSs are not included 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 ADSs which could adversely
affect the price of the ADSs. Any such adverse impact on the
price of our shares could be magnified by the current heightened
volatility in the financial markets.
Your
rights as a stockholder of Ensco Delaware will change as a
result of the merger in a manner that may be less favorable to
you.
The consummation of the merger will change the governing law
that applies to our stockholders from Delaware law (which
applies to common shares of Ensco Delaware) to English law
(which applies to the Class A Ordinary Shares) and New York
contract law (which applies under the deposit agreement). Some
of the principal attributes of the common stock of Ensco
Delaware and the Class A Ordinary Shares will be similar.
There are, however, several significant differences between the
rights of stockholders under Delaware law and shareholders under
English law, and there are differences between our current
certificate of incorporation and bylaws and the proposed
articles of association that will apply to our stockholders
after the consummation of the merger through the ADS
arrangements contemplated by the deposit agreement. For a
detailed discussion of these differences, see Comparison
of Rights of Stockholders/Shareholders.
The
enforcement of civil liabilities against Ensco UK may be more
difficult.
Because Ensco UK will be a public limited company incorporated
under English law, after the effective time of the merger
investors could experience more difficulty enforcing judgments
obtained against Ensco UK in U.S. courts than would
currently be the case for U.S. judgments obtained against
Ensco Delaware. In addition, it may be more difficult (or
impossible) to bring some types of claims against Ensco UK in
courts in England than it would be to bring similar claims
against a U.S. company in a U.S. court.
25
The
market for ADSs representing Class A Ordinary Shares may
differ from the current market for Ensco Delaware
shares.
Although it is anticipated that the ADSs will be authorized for
listing on the NYSE under the symbol ESV, which is
the same symbol under which shares of Ensco Delaware are
currently listed, the market prices, trading volume and
volatility of the ADSs could be different from those of the
Ensco Delaware shares.
The
value of ADSs that you may be entitled to receive in the merger
depends on the market price of the Ensco Delaware shares before
the merger and of the ADSs at the effective time of the
merger.
The number of ADSs that you will be entitled to receive in the
merger in exchange for the Ensco Delaware common stock you own
is fixed at one ADS per common share of Ensco Delaware. Because
the market price of the Ensco Delaware common stock will
fluctuate from the date hereof until the effective time of the
merger, the value at the time of the completion of the merger of
the ADSs that you receive will depend on the market price of the
Ensco Delaware common stock at that time. There can be no
assurance as to the market value of the common shares of Ensco
Delaware at the effective time of the merger. Therefore, there
can be no assurance as to the market value of any ADSs that you
receive.
We
expect to incur transaction costs in connection with the
completion of the reorganization, some of which will be incurred
whether or not the reorganization is completed.
We have begun to incur and expect to incur in 2009 and 2010 a
total of up to approximately $7.0 million in transaction
costs in connection with the reorganization. The substantial
majority of these costs will be incurred regardless of whether
the reorganization is completed and prior to your vote on the
proposal.
Following the merger and in connection with the reorganization,
we plan to engage in several transactions that will result in
the reorganization of Ensco Delaware and certain of its
subsidiaries. Ensco Delaware will likely recognize gain, and be
subject to U.S. federal income tax on such gain, as a
result of certain of these transactions. The amount of income
taxes incurred in connection with these transactions will depend
on a number of factors. Based on information currently
available, we do not expect these transactions to have a
significant impact on our reported income tax expense.
In connection with the completion of the reorganization, we will
reevaluate the ability to realize or utilize our deferred tax
assets related to U.S. operations under the new Ensco UK
corporate structure and we may recognize a non-cash, deferred
tax expense upon the conclusion of this evaluation. Based on
information currently available, we do not expect the additional
deferred tax expense to be significant.
As a
result of increased shareholder approval requirements, we may
have less flexibility as a U.K. public limited company than as a
Delaware corporation with respect to certain aspects of capital
management.
Under Delaware law, our directors may issue, without further
shareholder approval, any shares authorized in our certificate
of incorporation that are not already issued or reserved.
Delaware law also provides substantial flexibility in
establishing the terms of preferred shares. However, English law
provides that a board of directors may only allot shares with
the prior authorization of shareholders, such authorization
being up to the aggregate nominal amount of shares and for a
maximum period of five years, each as specified in the articles
of association or relevant shareholder resolution. This
authorization would need to be renewed by our shareholders upon
its expiration (i.e., at least every five years). We
anticipate that an ordinary resolution will be adopted prior to
the effective time of the merger to authorize the allotment of
additional shares, and renewal of such authorization for
additional five year terms may be sought more frequently. See
Description of Class A Ordinary Shares of Ensco
UK Preemptive Rights and New Issues of Shares.
English law also generally provides shareholders with preemptive
rights when new shares are issued for cash; however, it is
possible for the articles of association, or shareholders in
general meeting, to exclude preemptive rights. Such an exclusion
of preemptive rights may be for a maximum period of up to five
years from the date of adoption of the articles of association,
if the exclusion is contained in the articles of association, or
from the date of the shareholder resolution, if the exclusion is
by shareholder resolution; in either case, this exclusion would
need to
26
be renewed upon its expiration (i.e., at least every five
years). We anticipate that a special resolution will be adopted
to exclude preemptive rights prior to the effective time of the
merger, and renewal of such exclusion for additional five year
terms may be sought more frequently. See Description of
Class A Ordinary Shares of Ensco UK Preemptive
Rights and New Issues of Shares.
English law also generally prohibits a company from repurchasing
its own shares by way of off market purchases
without the prior approval of 75 percent of shareholders by
special resolution. Such approval lasts for a maximum period of
up to five years. English law prohibits Ensco UK from conducting
on market purchases as its shares will not be traded
on a recognized investment exchange in the U.K. We anticipate
that a special resolution will be adopted to permit off
market purchases prior to the effective time of the
merger. See Description of Class A Ordinary shares of
Ensco UK Alteration of Share Capital/Repurchase of
Shares. This special resolution will need to be renewed
upon expiration (i.e., at least every five years) but may
be sought more frequently for additional five year terms.
We cannot assure you that situations will not arise where such
shareholder approval requirements for any of these actions would
deprive our shareholders of substantial benefits.
The
reorganization will result in additional ongoing costs to
us.
The completion of the reorganization will result in an increase
in some of our ongoing expenses and require us to incur some new
expenses. Some costs, including those related to employees in
our U.K. offices and holding board meetings in the U.K., are
expected to be higher than would be the case if our principal
executive offices were not relocated to England. We also expect
to incur new expenses, including professional fees, to comply
with U.K. corporate and tax laws.
Negative
publicity resulting from the proposed merger could adversely
affect our business and our stock price.
Foreign reincorporations like the proposed merger that have been
undertaken by other companies have generated significant press
coverage, much of which has been negative. Negative publicity
generated by the proposed merger could cause some of our
customers or suppliers to be more reluctant to do business with
us. This could have an adverse impact on our business. Negative
publicity could also cause some of our stockholders to sell our
stock or decrease the demand for new investors to purchase our
stock, which could have an adverse impact on our stock price.
Our
ability to declare dividends and repurchase shares will be more
limited following the merger.
Under English law, with limited exceptions, Ensco UK will only
be able to declare dividends, make distributions or repurchase
shares out of distributable profits.
Distributable profits are a companys
accumulated, realized profits, so far as not previously utilized
by distribution or capitalization, less its accumulated,
realized losses, so far as not previously written off in a
reduction or reorganization of capital duly made. Immediately
after the merger, Ensco UK will not have distributable
profits. It is expected that, subject to the risk factors
discussed in this section and in Part I, Item 1A
Risk Factors of our 2008
Form 10-K
and to the factors discussed in Forward-Looking
Statements above, Ensco UK will have income from
continuing operations following the merger sufficient to
accumulate distributable profits in an amount
sufficient to continue paying quarterly dividends at a rate of
$0.025 per share on the anticipated schedule for the foreseeable
future and to continue our repurchases of shares from employees
in connection with the settlement of income tax withholding
obligations arising from the vesting of share awards. However,
unless we were to cause Ensco Delaware to declare a dividend
payable indirectly to Ensco UK and pay the associated
withholding taxes, Ensco UK would not initially have
distributable profits sufficient to fully implement
our previously disclosed board of directors authorization to
repurchase up to $562.0 million of our shares.
27
PROPOSAL 1
APPROVAL OF THE ADOPTION OF THE MERGER AGREEMENT
The following includes a brief summary of the material
provisions of the merger agreement, a copy of which is attached
as Annex A and incorporated by reference into this proxy
statement/prospectus. We encourage you to read the merger
agreement in its entirety for a more complete description of the
merger. In the event of any discrepancy between the terms of the
merger agreement and the following summary, the merger agreement
will control.
THE
MERGER AGREEMENT
Introduction
The merger agreement you are being asked to adopt at the special
meeting provides for a merger that would result in your shares
of Ensco Delaware common stock being converted into the right to
receive ADSs representing Class A Ordinary Shares of Ensco
UK which will be, at the effective time of the merger, a public
limited company incorporated under English law. Ensco UK,
together with its subsidiaries, will thereafter own and continue
to conduct our business in substantially the same manner as is
currently being conducted by Ensco Delaware and its
subsidiaries. Immediately following the merger, you will have
the right to own an interest in Ensco UK (i.e., a right
to receive ADSs representing the Class A Ordinary Shares of
Ensco UK), which will be managed by the same board of directors
and executive officers that manage Ensco Delaware immediately
prior to the merger. Additionally, the consolidated assets and
business of Ensco UK will be the same as those of Ensco Delaware
immediately prior to the merger.
Under the merger agreement, Ensco Mergeco, a wholly-owned
subsidiary of Ensco Cayman (which itself is currently a
wholly-owned subsidiary of Ensco Delaware) will merge with and
into Ensco Delaware, with Ensco Delaware surviving the merger as
a wholly-owned subsidiary of Ensco Cayman. If the merger
agreement is adopted by the stockholders, we anticipate that the
merger will become effective shortly after such approval. We
currently anticipate that the merger will become effective at
12:01 a.m., Eastern Standard Time, on December 23, 2009,
and the subsequent actions will commence thereafter.
The
Parties to the Merger
Ensco Delaware is an international offshore contract drilling
company. We are one of the leading providers of offshore
contract drilling services to the international oil and gas
industry. Our operations are concentrated in the geographic
regions of Asia Pacific (which includes Asia, the Middle East,
Australia and New Zealand), Europe/Africa and North and South
America. We have assembled one of the largest and most capable
offshore drilling rig fleets in the world. We have grown our
fleet through corporate acquisitions, rig acquisitions and new
rig construction. We were formed as a Texas corporation in 1975
and were reincorporated in Delaware in 1987.
Ensco Mergeco is a Delaware limited liability company and
currently a wholly-owned subsidiary of Ensco Cayman, which is a
newly formed Cayman Islands exempted company and currently is a
wholly-owned subsidiary of Ensco Delaware. Neither Ensco Cayman
nor Ensco Mergeco has a significant amount of assets or
liabilities and neither has engaged in any business since its
formation other than activities associated with its anticipated
participation in the reorganization.
The principal executive offices of Ensco Delaware and Ensco
Mergeco in the U.S. are currently located at 500 North
Akard Street, Suite 4300, Dallas, Texas
75201-3331,
U.S.A., and the telephone number of each company is
(214) 397-3000.
The principal executive offices of Ensco UK are currently
located at ENSCO House, Badentoy Avenue, Badentoy Industrial
Estate, Aberdeen, AB12 4YB, Scotland, and the telephone number
is +44 (1224) 780 400. We expect to move the principal
executive offices of Ensco UK to a location in England in
connection with the merger and the subsequent actions.
The principal executive offices of Ensco Cayman are currently
located at Maples Corporate Services Limited,
PO Box 309, Ugland House, South Church Street, George
Town, Grand Cayman, KY1-1104, Cayman Islands, and the telephone
number is +1 345 949 8066.
28
Background
and Reasons for the Merger
The merger is part of a reorganization of Enscos corporate
structure, which includes a change of our place of incorporation
from Delaware to England and the relocation of our principal
executive offices to England. We expect that the reorganization
will, among other things, establish a corporate headquarters in
the U.K. where we already have substantial operations and which
is more centrally located within our area of worldwide
operations, locate us in a country with a stable and developed
legal regime with established standards of corporate governance,
including provisions for the rights of shareholders, and a
favorable tax regime that should improve our ability to maintain
a competitive worldwide effective corporate tax rate, among
other anticipated benefits. In that regard, we expect that the
reorganization will also result in operational and
administrative efficiencies over the long term and enhance our
ability to expand in the U.K., Europe and internationally.
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The U.K. is more centrally located than our current executive
offices to our worldwide operations, in terms of both time zone
overlap and travel time. We expect that relocating most of our
senior executives to a more central location will permit them to
coordinate and interact with worldwide operations during their
normal business hours. Thus, the relocation will allow us to
better support our worldwide operations and improve executive
oversight of these operations.
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We conduct a significant part of our business operations in
international offshore areas such as the North Sea, the
Mediterranean Sea, the Middle East, India, Southeast Asia,
Australia and New Zealand. A significant majority of our
business is conducted outside of the U.S. Our revenues from
non-U.S. operations
constituted 61.9 percent, 76.9 percent and
79.7 percent of our worldwide revenues for the years 2006,
2007 and 2008, respectively, and we project that approximately
86 percent of our revenues for the year ending
December 31, 2009 will be from
non-U.S. sources.
Based on global oil and gas activity, we anticipate that we will
derive an increasing percentage of our future revenues from
non-U.S. operations.
The merger is intended to position our company to further
benefit from these growth opportunities and allow our management
to more effectively implement our global strategy and increase
our focus on customer development in these areas by positioning
our headquarters closer to these areas.
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Legislative proposals to revise the Code, in general, and to
tighten the international tax provisions of the Code, in
particular, have been introduced by the current
U.S. administration and U.S. Congress. Many of these
proposals, if enacted, would have an adverse effect on our
worldwide effective tax rate. There is substantial uncertainty
regarding whether some or all of such proposals, or other
proposals, will be enacted as part of fundamental U.S. tax
reform in 2010 or later years. Without the reorganization, this
uncertainty would make it more difficult for us to predict our
worldwide effective tax rate for future years and the impact of
U.S. taxation on our future cash flows. In contrast, the
U.K. has taken steps to decrease uncertainty about its
international tax regime by proposing the liberalization of
certain of its international tax provisions to better harmonize
them with the foreign dividend exemption system recently
implemented in the U.K. In addition, the U.K. has a more
extensive tax treaty network than the U.S. We believe that
the merger will improve our global tax position and
substantially lower our risk related to possible changes in tax
and other laws, possible changes in U.S. tax treaties and
disputes with tax and other authorities. As such, we believe the
merger will provide greater predictability and improve our
ability to maintain a competitive worldwide effective corporate
tax rate.
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The U.K. currently has lower corporate tax rates than the
U.S. and generally has a more favorable tax regime with
respect to non-U.K. earnings of companies repatriated in the
form of dividends than the U.S. has with respect to
non-U.S. earnings.
In addition, HMRC has granted a clearance to Ensco UK based on
its facts and circumstances confirming that it will be exempt
from certain aspects of the U.K. corporate tax regime applicable
to certain non-U.K. subsidiaries of Ensco UK through the period
ending December 31, 2012, which period may be reduced or
altered by subsequent legislation. We expect that the U.K.
corporate tax system will continue to be more favorable than the
U.S. tax system, and we, therefore, anticipate that the
merger may enhance our ability to realize significant tax
savings. However, we cannot give any assurance as to what our
tax savings will be after the merger. After the merger, our tax
rate will depend on, among other things, profitability and the
relative mix of profitability from our operations worldwide and
our ability to react to any changes in tax laws, treaties and
policies and the interpretation of these laws, treaties and
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policies in the jurisdictions where we operate or are
incorporated or are resident. Our actual effective tax rate may
vary materially from our expectations.
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From a customer and investor relations perspective, we have
found it difficult to overcome the market perception that we are
primarily a U.S. Gulf of Mexico jackup drilling contractor.
We believe that U.S. Gulf of Mexico jackup drillers
generally face a perception of shorter-term contracts, less
contract backlog and higher volatility of cash flow. This
negative customer and investor relations perception has
continued even though the overwhelming majority of our revenues
are being earned outside the U.S. and we have expended a
significant amount of effort to position ourselves with
customers and investors as an international drilling contractor
with an increasing focus on deepwater drilling. We believe that
changing our place of incorporation from Delaware to England and
relocating our principal executive offices to England will
greatly assist in our efforts to position ourselves as an
international drilling contractor in the eyes of the investment
community and our customers.
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The U.K. is a major financial center known for its stability and
financial sophistication. We do not currently have a substantial
number of shareholders resident in the U.K. We believe that it
will be easier for us to develop relations with potential U.K.
and other European institutional investors and increase that
investor base if the Company is based in the U.K. While a
listing on the London Stock Exchange or any other securities
exchange is not currently planned, it may be considered in the
future. We believe the enhanced relations with potential U.K.
and European investors will result in an expanded U.K. and
European Union shareholder base.
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The U.K. has historically been the center for the global oil
service sector insurance market, and we have developed strong
relationships with those insurance providers over the years.
With the globalization of our existing rig fleet and our
$3 billion investment in new ultra-deepwater,
semisubmersible rig construction, our risk management profile
and insurance needs have become increasingly complicated. We
believe that it will be easier for us to continue to develop
relationships with key insurance providers if we are located
closer to those insurance markets and enhancing those
relationships will be critical to our future success.
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The U.K. has a stable and well-developed legal system that we
believe encourages high standards of corporate governance and
provides shareholders with substantial rights. Generally, the
rights of a shareholder of a U.K. company are substantially
similar to, and in some cases more favorable to shareholders
than, the rights of a shareholder of a U.S. company,
although the exercise of certain rights may require you to
surrender your ADSs and withdraw the underlying Class A
Ordinary Shares. See Description of Class A Ordinary
Shares of Ensco UK, Description of American
Depositary Shares of Ensco UK and Comparison of
Rights of Stockholders/Shareholders.
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In approving the merger, our Board was cognizant of and
considered a variety of negative or potentially negative
factors, including the fact that we expect to incur costs to
complete the reorganization and establish a corporate office in
the U.K., the fact that the cost to maintain a corporate office
in the U.K. is expected to exceed the cost that would have been
incurred to maintain a similar corporate office in the U.S., and
the fact that the expected benefits of the reorganization may
not be realized for a variety of reasons, including as a result
of taxing authorities disagreeing with our conclusions on tax
treatment or changing applicable tax laws and regulations with
potentially retroactive effect.
In the course of its review of the reorganization and its
attendant risks, our Board engaged in discussions with
management and external advisors to evaluate potentially
negative consequences of the reorganization. After completing
its process of review of the expected benefits and potential
risks, the Board determined that the reorganization was in the
best interests of Ensco Delaware and its stockholders as the
expected benefits of the reorganization outweighed the risks.
Please see Forward-Looking Statements and Risk
Factors for further discussion of the negative and
potentially negative factors discussed above and for a
discussion of factors that could prevent us from achieving the
benefits described above that we anticipate from completion of
the reorganization.
30
The
Merger
The steps that have been taken to date, and that will be taken,
to complete the merger are:
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Ensco Delaware formed Ensco UK as an English private limited
company, with Ensco Delaware as its sole shareholder, holding in
aggregate 50,000 Class B Ordinary Shares.
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Ensco Delaware entered into a subscription agreement with Ensco
UK pursuant to which Ensco Delaware subscribed for
150 million Class A Ordinary Shares, but directed that
those Class A Ordinary Shares be issued directly to and
deposited with Citibank or its nominee or agent as registered
holder. Ensco UK and Citibank entered into a deposit agreement
providing for the issuance to Ensco Delaware of ADSs
representing the Class A Ordinary Shares of Ensco UK.
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Ensco Delaware formed Ensco Cayman as a Cayman Islands exempted
company and a direct wholly-owned subsidiary of Ensco Delaware.
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Ensco Cayman formed Ensco Mergeco as a Delaware limited
liability company and a direct wholly-owned subsidiary of Ensco
Cayman.
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Ensco Delaware and Ensco Cayman entered into a contribution
agreement whereby Ensco Delaware agreed that, conditional upon
the effectiveness of the registration statement of which this
proxy statement/prospectus is a part, Ensco Delaware will
contribute all ADSs to Ensco Cayman. Ensco Cayman and Ensco
Mergeco entered into a contribution agreement whereby Ensco
Cayman agreed that, conditional upon its receiving such ADSs,
Ensco Cayman will contribute all ADSs to Ensco Mergeco.
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Ensco Delaware and Ensco UK entered into a contribution
agreement whereby Ensco Delaware agreed that, conditional upon
stockholder approval of the merger agreement, Ensco Delaware
will contribute all shares of Ensco Cayman to Ensco UK.
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Prior to the time the stockholders approve the adoption of the
merger agreement, Ensco UK will re-register as a public limited
company and change its name to Ensco International
plc.
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A special resolution of Ensco UK will be passed to alter the
rights of the holders of the Class A Ordinary Shares to
have the same rights as holders of Class B Ordinary Shares,
conditional upon the merger becoming unconditional in all
respects.
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After the stockholders approve the adoption of the merger
agreement, Ensco Delaware will contribute all shares of Ensco
Cayman to Ensco UK.
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When the merger becomes effective,
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Each share of Ensco Delaware common stock (other than treasury
shares) will be converted by operation of law into and become
the right to receive one ADS. This will result in each holder of
Ensco Delaware common stock receiving one ADS for each share of
Ensco Delaware common stock held immediately prior to the
merger. The remaining ADSs will be held by Ensco Delaware as the
surviving corporation in the merger;
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Each holder of Ensco Delaware common stock exchanged in the
merger who would otherwise have received a fraction of an ADS
will receive cash in an amount determined by multiplying the
fractional interest to which such holder would otherwise be
entitled by the closing price for a share of Ensco Delaware
common stock as reported by Bloomberg on the last trading day
prior to the effective time of the merger. Any cash payment in
exchange for a fractional interest will be made in
U.S. dollars; and
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Each issued share of Ensco Mergeco will be converted by
operation of law into one share of Ensco Delaware (as the
surviving corporation), which will be held by Ensco Cayman.
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In addition, all shares of Ensco Delaware common stock held in
treasury immediately prior to the merger will automatically be
cancelled and retired and will cease to exist, without
consideration being delivered for such cancellation and all
Class B Ordinary Shares of Ensco UK will remain
outstanding, but will have no voting rights or rights to
dividends or distributions to the extent that they are held by
Ensco Delaware.
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Each outstanding option, share of restricted stock and other
equity-based award issued under our equity incentive plans for
the purchase or receipt of, or benefits or amounts based on,
shares of Ensco Delaware common stock will represent the right
to purchase or receive, or receive benefits or amounts based on,
as applicable, the same number of ADSs representing Class A
Ordinary Shares of Ensco UK on the same terms.
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Ensco Mergeco or Ensco Delaware as the surviving corporation
will deliver the ADSs to be delivered to the Ensco Delaware
stockholders to the exchange agent for exchange, and the
remaining ADSs will be retained by Ensco Delaware as the
surviving corporation in the merger.
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The merger agreement may be amended, modified or supplemented at
any time by the parties thereto before or after it is adopted by
the stockholders of Ensco Delaware. However, after adoption by
the stockholders, no amendment, modification or supplement may
be made or effected that requires further approval by Ensco
Delaware stockholders without obtaining that approval. Further,
our Board may abandon the merger at any time, including after
stockholder approval.
Ownership
in Ensco UK; Conversion of Shares
The conversion of Ensco Delaware common stock into the right to
receive the merger consideration will occur automatically at the
effective time of the merger. The exchange agent will, as soon
as reasonably practicable after the effective time of the
merger, exchange certificates representing Ensco Delaware shares
for the merger consideration in the form of ADSs to be received
in the merger pursuant to the terms of the merger agreement.
Class A Ordinary Shares have been delivered to the
custodian for the ADSs and, in exchange, the depositary has
issued to Ensco Delaware the ADSs that will be delivered to the
stockholders of Ensco Delaware after the effective time of the
merger. The ADSs will be contributed to Ensco Mergeco prior to
the effective time of the merger and, following the effective
time of the merger, will be delivered to the exchange agent for
delivery to Ensco Delaware stockholders upon surrender of the
certificates representing Ensco Delaware common stock.
If you are currently a beneficial holder, your ownership of ADSs
will be recorded in book entry form by your broker.
If you hold Ensco Delaware stock certificates, soon after the
effective time of the merger, you will be sent a letter of
transmittal, which is to be used to surrender your Ensco
Delaware stock certificates and to request that ADSs be issued
to you. The letter of transmittal will contain instructions
explaining the procedure for surrendering Ensco Delaware stock
certificates and receiving ADSs. YOU SHOULD NOT RETURN
STOCK CERTIFICATES WITH THE ENCLOSED PROXY CARD. If a
certificate for Ensco Delaware common stock has been lost,
stolen or destroyed, the exchange agent will issue the merger
consideration properly deliverable under the merger agreement
upon compliance by the applicable stockholder with the
replacement requirements established by the exchange agent.
Dividends
and Distributions; Withholding
Until Ensco Delaware stock certificates or book-entry shares are
surrendered for exchange, any dividends or other distributions
of Ensco UK declared after the effective time of the merger with
respect to ADSs will accrue but will not be paid. Ensco UK will
pay to former Ensco Delaware stockholders any unpaid dividends
or other distributions, without interest, only after they have
duly surrendered their Ensco Delaware stock certificates or
book-entry shares. After the effective time of the merger, there
will be no transfers on the stock transfer books of Ensco
Delaware of any Ensco Delaware shares. If stock certificates
representing Ensco Delaware shares are presented for transfer
after the completion of the merger, they will be cancelled and
exchanged for the merger consideration into which the Ensco
Delaware shares represented by that certificate have been
converted.
The exchange agent will be entitled to deduct and withhold from
the merger consideration payable to any Ensco Delaware
stockholder the amounts it is required to deduct and withhold
under the Code or any provision of any state, local or foreign
tax law. If the exchange agent withholds any amounts, these
amounts will be treated for all purposes of the merger as having
been paid to the stockholders from whom they were withheld.
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Subsequent
Actions
The merger is part of a reorganization of Ensco Delawares
corporate structure. Promptly following the consummation of the
merger, Ensco UK, as Ensco Delawares new parent company,
expects to commence additional transactions related to its
corporate structure that will result in the reorganization of
Ensco Delaware and certain of Ensco UKs subsidiaries and
their respective assets, in order to achieve the benefits of the
reorganization described above under
Background and Reasons for the Merger.
In connection with these subsequent actions, we may also be
required to redeem, repurchase or repay our 4.65% Bonds due 2020
and our 6.36% Bonds due 2015, and pay a make-whole premium, to
the extent that certain consents or approvals are not obtained
from the United States Maritime Administration on a timely
basis. As of October 31, 2009, these bonds had an aggregate
principal amount outstanding of $131.8 million and the
make-whole premium would have been approximately
$17.5 million. We do not expect any actions to be required
with respect to our 7.20% Debentures due 2027, which have
an aggregate principal amount outstanding of $150.0 million
as of October 31, 2009, but may enter into supplemental
indentures as necessary or advisable to provide for guarantees
or assumption of debt by Ensco UK or certain of its subsidiaries
in connection with certain subsequent actions. Refer to
Forward-Looking Statements and Risk
Factors above for a description of certain risks
associated with the reorganization.
Possible
Abandonment
Pursuant to the merger agreement, the Board may exercise its
discretion to terminate the merger agreement, and therefore
abandon the reorganization, at any time, including after
stockholder approval. Please see Risk Factors
Our Board may choose to defer or abandon the merger at any
time.
Additional
Agreements
The Comparison of Rights of
Stockholders/Shareholders Indemnification of
Directors and Officers sets out the position under English
law in relation to director and officer liability and
indemnification. We expect to enter into new indemnity
agreements and deeds of indemnity with directors, executive
officers and certain other officers and employees (including
directors, officers and employees of subsidiaries and other
affiliates). These indemnification agreements and deeds of
indemnity will require that Ensco UK and Ensco Delaware
indemnify and hold harmless such persons, to the fullest extent
permitted by applicable law, against all losses suffered or
incurred by him or her which arise in connection with his or her
appointment as a director or officer, as applicable, an act done
in connection with his or her performance of his or her
functions as a director or officer or an official investigation
ordered into the affairs of the company of which he or she is
serving as a director or officer at the request of the
indemnifying company. Ensco Delaware also intends to amend its
bylaws to provide similar indemnification rights to such
persons. However, the Companies Act prohibits an English company
from indemnifying directors and certain officers in particular
circumstances which are set out in the relevant indemnity
agreements and generally summarized in the Comparison of
Rights of Stockholders/Shareholders Indemnification
of Directors and Officers.
The reorganization is not intended to constitute a change in
control for purposes of Ensco Delawares equity incentive
plans and change in control severance agreements. We have
amended
and/or
intend to amend the equity incentive plans, change in control
severance agreements and certain other plans and agreements, as
necessary or advisable and to the extent permitted, to provide
that any outstanding equity award is converted into rights to
ADSs on an equivalent one-share to one-ADS basis as of the
effective time of the merger and to provide that the
reorganization will not constitute a change in control under the
terms of the applicable plans or agreements. Please see below
Stock Compensation and Benefit Plans and
Programs.
We have a $350 million unsecured revolving credit facility
with a syndicate of lenders for general corporate purposes. The
credit facility has a five-year term, which will expire in June
2010. As of the date of this proxy statement/prospectus, there
were no amounts outstanding under the credit facility. In
connection with the merger and subsequent reorganization, we
expect to amend certain provisions of the credit facility. If we
are unsuccessful in amending the credit facility after the
effective time of the merger, we may be in breach of certain
provisions of the credit facility.
33
Conditions
to Completion of the Merger
Unless, among other things, the following conditions or
requirements are satisfied or, if allowed by law, waived, the
merger, and therefore the reorganization, will not be completed:
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upon the SECs declaration of effectiveness of the
registration statement on Form
S-4 with
respect to the merger, Ensco Delaware will have contributed all
ADSs to Ensco Cayman, which will in turn have contributed all
such ADSs to Ensco Mergeco;
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the merger agreement will have been adopted by the requisite
vote of stockholders of Ensco Delaware;
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Ensco UK will have re-registered as a public limited company;
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following stockholder approval of the merger agreement, Ensco
Delaware will have contributed all shares of Ensco Cayman to
Ensco UK;
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a special resolution will have been passed to alter the rights
of the holders of the Class A Ordinary Shares to have the
same rights as holders of Class B Ordinary Shares,
conditional upon the merger becoming unconditional;
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the ADSs to be issued pursuant to the merger will have been
authorized for listing on the NYSE, subject to official notice
of issuance and satisfaction of other standard conditions;
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Baker & McKenzie LLP, counsel to Ensco Delaware, will
have delivered a tax opinion in form and substance acceptable to
the Company;
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no decree, order or injunction will have been in effect with
respect to the SEC registration statement of which this proxy
statement/prospectus is a part;
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a registration statement on
Form F-6
filed with the Securities and Exchange Commission in connection
with the issuance of the ADSs to be delivered pursuant to the
merger will have become effective under the Securities Act, and
no stop order with respect thereto shall be in effect;
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no law or order prohibiting or pending law suit seeking to
prohibit the merger will have been issued or filed by any U.S.,
European Union or U.K. governmental entity, subject to certain
exceptions described in this proxy statement/prospectus; and
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all material consents and authorizations of, filings or
registrations with, and notices to, any governmental or
regulatory authority required of Ensco Delaware, Ensco UK or
their subsidiaries to consummate the merger will have been
obtained or made.
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Our Board does not intend to waive (where capable of waiver) any
of these conditions or requirements unless it determines that
the merger is in the best interests of Ensco Delaware and our
stockholders, despite the condition(s) not being satisfied in
whole or in part. Additionally, our Board reserves the right to
defer or abandon the merger at any time, including after
stockholder approval, for the reasons described under Risk
Factors Our Board may choose to defer or abandon the
merger at any time.
Stock
Compensation and Benefit Plans and Programs
We have a variety of equity incentive plans, compensation plans,
and other plans, agreements, awards and arrangements outstanding
that provide for options, restricted shares or other rights to
purchase or receive shares of Ensco Delaware (or the right to
receive benefits or amounts by reference to those shares). We
refer to these plans, agreements, awards and arrangements as our
equity incentive plans. As part of the merger, Ensco UK will
assume and adopt Ensco Delawares rights and obligations
under the equity incentive plans, all as of the effective time
of the merger, except that Ensco Delaware will remain the plan
sponsor of certain equity incentive plans (as further described
in the merger agreement). The equity incentive plans and certain
other plans and agreements have been
and/or will
be amended or modified (i) to facilitate the assumption and
adoption by Ensco UK of the applicable equity incentive plans
and the various rights, duties or obligations thereunder,
(ii) to the extent required to reflect the issuance of
rights over ADSs (rather than rights over Ensco Delaware
shares), (iii) to provide for the appropriate substitution
of Ensco UK in place of Ensco Delaware where applicable,
(iv) to provide that the merger will not
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constitute a change in control under the terms of the equity
incentive plans, change in control severance agreements and
certain other plans and agreements to the extent permitted or
applicable, and (v) to comply with applicable English or
U.S. corporate or tax law requirements. Stockholder
approval of the adoption of the merger agreement will also
constitute stockholder approval of the adoption and assumption
of the equity incentive plans by Ensco UK as contemplated by
this proxy statement/prospectus. Equity incentive plans that
provide benefits to employees and directors of Ensco Delaware
and its subsidiaries will, if applicable, upon being assumed by
Ensco UK, continue to provide benefits to such employees or
directors consistent with the current manner, subject to the
limitations set forth in the relevant plan, as such plan may be
amended from time to time. To the extent that awards of
restricted stock or similar restricted share rights are granted
following the effective time of the merger, the holder may be
obligated to pay the nominal or par value to receive the ADSs
due to English corporate law requirements.
At the effective time of the merger, all outstanding options to
purchase shares of Ensco Delaware common stock granted or issued
prior to the effective time of the merger, and all outstanding
shares of restricted stock of Ensco Delaware and other
equity-based awards awarded under our equity incentive plans,
will entitle the holder to purchase or receive, or receive
benefits or amounts based on, as applicable, an equal number of
ADSs. All of such stock options, restricted stock and other
equity-based awards will be subject to the same terms and
conditions as were applicable to such awards granted or issued
by Ensco Delaware immediately prior to the effective time of the
merger other than as discussed above.
Holders of outstanding nonqualified options, awards of
restricted stock or other equity-based awards, as well as
beneficial owners of Ensco Delaware shares acquired under the
ENSCO Savings Plan, the Multinational Savings Plan and
potentially certain other plans, other than U.S. taxpayers
who perform all of their services within the U.S., may be
subject to tax as a result of the conversion of the underlying
shares of Ensco Delaware common stock to ADSs, depending on the
country where the holders are citizens or tax residents or the
country where they resided during the life of such equity awards
of Ensco Delaware. However, holders of outstanding nonqualified
options, awards of restricted stock and beneficial ownership of
Ensco Delaware shares acquired under the ENSCO Savings Plan who
are U.S. taxpayers should not recognize taxable gain for
U.S. income tax purposes as a result of the conversion. Tax
withholding
and/or
reporting may be required by the Company or one of its
affiliates
and/or the
holder of the applicable equity award, and certain employer
social insurance contributions or other taxes may be due as a
result of the conversion of the equity awards from Ensco
Delaware awards to ADS awards. Depending on the country where
the holders are citizens or residents or the country where they
resided during the life of the Ensco Delaware awards, it is also
possible that the conversion of equity awards will trigger
certain regulatory filings or notices to employees concerning
the tax consequences.
Effective
Time of the Merger
We anticipate that the merger will become effective at
12:01 a.m., Eastern Standard Time, on December 23, 2009 and
that the subsequent actions will promptly commence thereafter.
Our Board will have the right, however, to defer or abandon the
merger at any time, including after stockholder approval, if it
concludes that completion of the reorganization would not be in
the best interests of Ensco Delaware or our stockholders.
Management
of Ensco UK
Immediately prior to the effective time of the merger, the
directors and executive officers of Ensco UK will be the same as
the then-current directors and executive officers of Ensco
Delaware, and the directors within each class of directors as
currently in effect with respect to Ensco Delaware will be
directors of the corresponding class of directors with respect
to Ensco UK. If the merger is completed, the members of the
Ensco UK board of directors, or the Ensco UK Board,
will serve until the earlier of the next meeting of shareholders
at which an election of their respective class of directors is
required or until their successors are elected, and the
executive officers will serve until their successors are elected
or earlier death, disability or retirement.
Recommendation
and Required Vote
The affirmative vote of the holders of a majority of the
outstanding shares of Ensco Delaware common stock entitled to
vote at the special meeting is required to approve the proposal
to adopt the merger agreement. Our Board
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believes that the reorganization, to be effected by the merger
agreement and subsequent actions, is advisable and in the best
interests of Ensco Delaware and our stockholders.
ACCORDINGLY, OUR BOARD HAS UNANIMOUSLY APPROVED THE
REORGANIZATION AND THE MERGER AGREEMENT. OUR BOARD RECOMMENDS
THAT STOCKHOLDERS VOTE FOR THE ADOPTION OF THE
MERGER AGREEMENT.
Regulatory
Approvals
The only governmental or regulatory approvals or actions that
are required to complete the merger are compliance with
U.S. federal and state securities laws, the NYSE rules and
regulations, U.K. securities laws and Delaware and English
company law (including the filing with the Secretary of State of
the State of Delaware of a certificate of merger).
Rights of
Dissenting Stockholders
Under the DGCL, you will not have appraisal rights in connection
with the merger because, among other reasons, the ADSs you have
a right to receive in the merger will be listed on the NYSE.
Comparison
of Rights of Holders of Ensco Delaware Shares with Holders of
ADSs representing Ensco UK Shares.
There are numerous differences between the rights of a
stockholder in Ensco Delaware, a Delaware corporation, and the
rights of a holder of ADSs representing Class A Ordinary
Shares of Ensco UK, a company incorporated under English law.
The characteristics of and the differences between Ensco
Delaware common stock, the Class A Ordinary Shares and ADSs
representing Class A Ordinary Shares are summarized under
Description of American Depositary Shares of Ensco
UK and Description of the Class A Ordinary
Shares of Ensco UK and Comparison of Rights of
Stockholders/Shareholders.
Stock
Exchange Listing
Ensco Delaware common stock is currently listed on the NYSE
under the symbol ESV. There is currently no
established public trading market for the Class A Ordinary
Shares or ADSs representing shares of Ensco UK. However, it is a
condition to the completion of the merger that the ADSs will be
authorized for listing on the NYSE, subject to official notice
of issuance and satisfaction of other standard conditions. As
such, we expect that as of the effective time of the merger, the
ADSs will be authorized for listing on the NYSE, and we expect
such ADSs will be listed on the NYSE under the symbol
ESV.
36
Dividends
The following table sets forth the quarterly cash dividends paid
per share of Ensco Delaware common stock in the periods
indicated.
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Dividend
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Fiscal Year
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Declared
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2007
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First Quarter (Declared February 2007)
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$
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0.025
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Second Quarter (Declared May 2007)
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$
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0.025
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Third Quarter (Declared August 2007)
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$
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0.025
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Fourth Quarter (Declared November 2007)
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$
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0.025
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2008
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First Quarter (Declared February 2008)
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$
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0.025
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Second Quarter (Declared May 2008)
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$
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0.025
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Third Quarter (Declared August 2008)
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$
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0.025
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Fourth Quarter (Declared November 2008)
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$
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0.025
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2009
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First Quarter (Declared February 2009)
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$
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0.025
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Second Quarter (Declared May 2009)
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$
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0.025
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Third Quarter (Declared August 2009)
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$
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0.025
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On November 3, 2009, the Board declared a dividend of
$0.025 per share to be paid on December 18, 2009, to
shareholders of record on December 7, 2009. The Ensco UK
Board currently intends to declare quarterly dividends out of
current earnings, if appropriate in view of its profitability,
liquidity, financial condition, reinvestment opportunities and
capital requirements. Ensco UK will initially adopt Ensco
Delawares prior practice with respect to dividends, which
has been to pay quarterly cash dividends on our common stock
since the third quarter of 1997, subject to the discretion of
the board of directors. Following completion of the merger, as
part of an overall review of capital allocation activities,
Ensco UK will evaluate both its dividend and share repurchase
policies. We expect that Ensco UK would make quarterly dividends
after the completion of this review. Notwithstanding the
foregoing, the declaration and payment of all future dividends
and any share repurchases will remain subject to the discretion
of Ensco UKs Board and the limitations set forth in the
Companies Act, which generally provide that dividends,
distributions and share repurchases may only be made out of
distributable profits. See Risk Factors Our
ability to declare dividends and repurchase shares will be more
limited following the merger.
Accounting
Treatment of the Merger
Historical cost basis accounting, rather than acquisition method
accounting, will be applied to the merger. Given that, for
accounting purposes, there will be no change in control and
Ensco Delawares stockholders will be in the same economic
position immediately before and after the reorganization, and
because the reorganization will be accounted for as an internal
reorganization of entities under common control, there will be
no revaluation of Ensco Delawares assets and liabilities.
Effect of
the Reorganization on Potential Future Status as a Foreign
Private Issuer
We do not believe that, after the completion of the
reorganization, Ensco UK will be classified as a foreign
private issuer within the meaning of the rules promulgated
under the Exchange Act. 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 country outside
the U.S. 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.
The shareholder test requires more than 50 percent of the
outstanding voting securities of a
non-U.S. domiciled
organization to be held by
non-U.S. residents.
We currently expect that Ensco UK will meet the shareholder test
37
upon the completion of the reorganization because we understand
that more than 50 percent of our outstanding voting
securities are held by U.S. residents.
The business contacts test requires that any of the following be
true with respect to a
non-U.S. domiciled
organization: (i) the majority of its executive officers or
directors are U.S. citizens or residents; (ii) more
than 50 percent of its assets are located in the U.S.; or
(iii) its business is administered principally in the
U.S. We currently expect that Ensco UK will meet the
business contacts test upon the completion of the
reorganization. However, Ensco UK could fail to satisfy either
test at some time in the future and, as a result, qualify for
status as a foreign private issuer. If that occurs, Ensco UK
would be exempt from certain requirements applicable to
U.S. public companies, including, among others:
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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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38
MATERIAL
TAX CONSIDERATIONS RELATING TO THE MERGER
This section contains a general discussion of certain material
tax consequences of (1) the merger, (2) post-merger
ownership and disposition of ADSs and (3) post-merger
operations of Ensco UK.
The discussion under the caption
U.S. Federal Income Tax
Considerations addresses (1) application of the
U.S. anti-inversion rules to Ensco Delaware, Ensco UK and
the exchanging holders, (2) the material U.S. federal
income tax consequences of the merger to Ensco Delaware and to
Ensco UK, and (3) the material U.S. federal income tax
consequences to U.S. holders and
non-U.S. holders
(each as defined below) of (a) exchanging Ensco Delaware
shares for ADSs in the merger and (b) owning and disposing
of ADSs received in the merger.
The discussion of the merger and of ownership and disposition of
ADSs received in the merger under the caption
U.K. Tax Considerations addresses the
material U.K. tax consequences to stockholders of Ensco Delaware
resident for tax purposes in the U.K. and in a country other
than the U.K. It also addresses certain U.K. tax considerations
of the merger and subsequent operations for Ensco UK and Ensco
Delaware.
The discussion below is not a substitute for an individual
analysis of the tax consequences of the merger, post-merger
ownership and disposition of ADSs or post-merger operations of
Ensco UK. You should consult your own tax advisor regarding the
particular U.S. (federal, state and local), U.K. and other
non-U.S. tax
consequences of these matters in light of your particular
situation.
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 listing of all potential tax
consequences of the merger or of holding and disposing of ADSs,
and does not address all tax considerations that may be relevant
to Ensco Delaware shareholders. In particular, the discussion
below addresses tax consequences to those who hold their Ensco
Delaware shares, and who will hold their ADSs, solely as capital
assets, which is the opinion of our external counsel. The
discussion below does not address any tax consequences to Ensco
Delaware or Ensco UK shareholders, as applicable, who, for
U.S. federal tax purposes, are subject to special rules,
such as:
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banks, financial institutions or insurance companies;
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tax-exempt entities;
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persons who hold shares as part of a straddle, hedge, integrated
transaction or conversion transaction;
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persons who have been, but are no longer, citizens or residents
of the U.S.;
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persons holding shares through a partnership or other fiscally
transparent person;
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dealers or traders in securities, commodities or currencies;
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grantor trusts;
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persons subject to the alternative minimum tax;
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U.S. persons whose functional currency is not
the U.S. dollar;
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regulated investment companies and real estate investment trusts;
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persons who received the Ensco Delaware shares through the
exercise of incentive stock options or through the issuance of
restricted stock under an equity incentive plan or through a tax
qualified retirement plan (such as the ENSCO Savings
Plan); or
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persons who own (directly or through attribution)
10 percent or more, determined by voting power or value, of
Ensco Delaware common stock or Ensco UK common stock.
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This discussion is based on the Code, the Treasury regulations
promulgated thereunder, or the Treasury Regulations,
judicial and administrative interpretations thereof and the
Convention Between the United States of
39
America and the United Kingdom for the Avoidance of Double
Taxation with respect to Taxes on Income, or the
U.K.-U.S. Tax Treaty, in each case as in effect
and available on the date of this proxy statement/prospectus.
Each of the foregoing is subject to change, which change could
apply with retroactive effect and could affect the tax
consequences described in this proxy statement/prospectus.
Neither Ensco Delaware nor Ensco UK will request a ruling from
the IRS as to the U.S. federal tax consequences of the
merger, post-merger ownership and disposition of ADSs or any
other matter. There can be no assurance that the IRS will not
challenge any of the U.S. federal tax consequences
described below.
For purposes of this discussion, a U.S. holder
is a beneficial owner of Ensco Delaware shares or, after the
completion of the merger, ADSs, that for U.S. federal
income tax purposes is:
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an individual citizen or resident alien of the U.S.;
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a corporation or other entity taxable as a corporation created
or organized in or under the laws of the U.S. or any state
thereof or the District of Columbia;
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an estate the income of which is subject to U.S. federal
income taxation regardless of its source; or
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a trust, if such trust validly has elected to be treated as a
U.S. person for U.S. federal income tax purposes or if
(1) a U.S. court can exercise primary supervision over
its administration and (2) one or more U.S. persons
have the authority to control all of the substantial decisions
of such trust.
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A
non-U.S. holder
is a beneficial owner of Ensco Delaware shares or, after the
completion of the merger, ADSs, other than a U.S. holder or
an entity or arrangement treated as a partnership for
U.S. federal income tax purposes, or a
Partnership. If a Partnership is a beneficial owner
of Ensco Delaware shares or ADSs, 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 Ensco
Delaware shares or ADSs that are Partnerships and partners in
such Partnerships should consult their tax advisors regarding
the U.S. federal income tax consequences to them of the
merger and the ownership and disposition of ADSs. For purposes
of this discussion, holder or
shareholder means either a U.S. holder or a
non-U.S. holder
or both, as the context may require.
For U.S. federal income tax purposes, the conversion of
each issued and outstanding share of the common stock of Ensco
Delaware into the right to receive an ADS upon the consummation
of the merger generally will be treated as an exchange of such
share for the ADS. Therefore, the U.S. federal income tax
discussion contained herein refers to an exchange
rather than a conversion in describing the
U.S. federal income tax consequences of the merger.
The
U.S. Anti-Inversion Rules
Although Ensco UK is incorporated in the U.K., the IRS may
assert that Ensco UK should be treated as a
U.S. corporation (and, therefore, a U.S. tax resident)
for U.S. federal income tax purposes under
Section 7874 of the Code. At the time of enactment of
Section 7874 in 2004, a number of publicly-traded
U.S. multinational corporations had expatriated to
non-U.S. jurisdictions.
In most cases, those corporations expatriated to tax haven
jurisdictions in which the applicable U.S. multinational
corporation had no (or minimal) historic business activities. As
a general matter, absent the application of Section 7874, a
corporation is considered, for U.S. federal income tax
purposes, to be a tax resident of the jurisdiction in which it
is incorporated.
Under Section 7874, a corporation created or organized
outside the U.S. will be treated as a U.S. corporation
for U.S. federal income tax purposes, when (i) the
foreign corporation directly or indirectly acquires
substantially all of the assets held directly or indirectly by a
U.S. corporation, (ii) the shareholders of the
acquired U.S. corporation hold at least 80 percent of
the vote or value of the shares of the foreign acquiring
corporation by reason of holding stock in the U.S. acquired
corporation, and (iii) the foreign corporations
expanded affiliated group does not have substantial
business activities in the foreign corporations country of
incorporation relative to its expanded affiliated groups
worldwide activities. Solely for purposes of Section 7874,
expanded affiliated group means the foreign
corporation and all subsidiaries in which the foreign
corporation, directly or indirectly, owns more than
50 percent of the stock by vote and value.
40
Ensco UK will indirectly acquire all of the assets of Ensco
Delaware, and the former shareholders of Ensco Delaware will
acquire, as a result of the merger, 100 percent of the
stock in Ensco UK by reason of holding stock in Ensco Delaware.
After the merger, however, the Ensco UK expanded affiliated
group intends to continue the substantial business activities in
the U.K. that the Ensco Delaware expanded affiliated group
currently conducts. Therefore, Ensco UK should not be treated as
a U.S. corporation for U.S. federal income tax
purposes.
Section 7874 does not define the term substantial
business activities or otherwise quantify the activities
that the foreign corporation and its expanded affiliated group
should have in the foreign corporations country of
incorporation. Temporary Treasury Regulations issued under
section 7874 of the Code in June 2009, or the 2009
Regulations, also decline to define or quantify
substantial business activities. Rather, the 2009
Regulations provide that whether a foreign corporations
expanded affiliated group has substantial business activities in
the foreign corporations country of organization in
relation to its worldwide activities is based on all facts and
circumstances. The 2009 Regulations provide that relevant items
to be considered in determining whether an expanded affiliated
group has substantial business activities in a foreign country
when compared to the total activities of the expanded affiliated
group include, but are not limited to, the following:
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(i)
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business activities in the foreign country that are material to
the achievement of the expanded affiliated groups overall
business objectives;
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(ii)
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the historical conduct of continuous business activities in the
foreign country by the U.S. corporations expanded
affiliated group prior to the acquisition of the
U.S. corporations assets;
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(iii)
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the conduct of continuous business activities of the expanded
affiliated group in the foreign country occurring in the
ordinary course of one or more active trades or businesses
involving:
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(A)
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property the expanded affiliated group owns that is located in
the foreign country,
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(B)
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the performance of services by individuals in the foreign
country who are employed by the expanded affiliated
group, and
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(C)
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sales of goods or services to customers in the foreign country
by the expanded affiliated group;
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(iv)
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the performance of substantial managerial activities in the
foreign country by expanded affiliated group officers and
employees who are based in the foreign country; and
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(v)
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a substantial degree of ownership of the expanded affiliated
group by investors resident in the foreign country.
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The 2009 Regulations further provide that the presence or
absence of any of the above items is not determinative, and the
weight given to any item depends on the facts and circumstances.
Former temporary Treasury Regulations, or the 2006
Regulations contained a safe harbor that
focused solely on the items listed in (iii) above. The
safe harbor tested whether the percentage of each
such item in the foreign corporations country of
incorporation equaled or exceeded 10 percent of such item
worldwide over a single calendar year. Thus, under the 2006
Regulations, a foreign corporation was generally deemed to meet
the substantial business activities test safe harbor
if the relevant assets, employees and revenues of the expanded
affiliated group in the foreign corporations country of
incorporation constituted at least 10 percent of the
expanded affiliated groups worldwide assets, employees and
revenues, respectively. The ratios of the Ensco Delaware
expanded affiliated groups assets, employees and revenues
in the U.K. compared to its worldwide assets, employees and
revenues exceeded the former 10 percent safe
harbor contained in the 2006 Regulations for each calendar
year from 2005 through 2008 and are projected to exceed the
former safe harbor in 2009. The 2009 Regulations
contain no safe harbor or examples to illustrate the
application of the relevant factors to determine whether
substantial business activities exist. There is no judicial or
administrative guidance on the meaning of substantial
business activities for purposes of Section 7874.
Notwithstanding the absence of a safe harbor or
other quantitative guidance in the 2009 Regulations, we believe
that the activities the Ensco Delaware expanded affiliated group
conducts in the U.K. should satisfy the substantial business
activities test set forth in the 2009 Regulations. Moreover, it
is a condition to closing of the merger that Ensco Delaware
receives from Baker & McKenzie LLP, counsel to the
Company, or Counsel, an
41
opinion of Counsel concluding that Section 7874 should not
apply to the merger. Pending receipt of Counsels opinion,
our belief that Section 7874 should not apply to the merger
is based on an analysis of the relevant items listed in the 2009
Regulations, as summarized below.
(i) U.K. Activities Material to Overall Strategic Business
Objectives
The Company provides offshore contract drilling services to the
oil and gas industry. We have determined that we will focus the
Companys resources on premium jackup rig and
ultra-deepwater semisubmersible rig operations because these
businesses offer high margins, are within the Companys
core competency and we believe that demand for these services
will continue to grow in coming years. We believe that a growing
part of the Companys business will continue to come from
customer contracts in the North Sea, Mediterranean Sea, West
Africa, the Middle East, India, Southeast Asia, Australia and
New Zealand, or the Foreign Drilling Markets.
Over the past 20 years,
U.S.-based
major integrated oil companies and major independents have
expanded outside of the U.S. Consequently, the Company
performs the vast majority of its work in the Foreign Drilling
Markets. This trend is driven by the fact that a large
percentage of the worlds remaining hydrocarbons are
located in the Foreign Drilling Markets. Specifically,
94 percent of the proven worldwide oil reserves and
95 percent of the proven worldwide gas reserves are located
in the Foreign Drilling Markets. By contrast, only
6 percent of the proven worldwide oil reserves and only
5 percent of the proven worldwide gas reserves are located
in the U.S. Accordingly, the Company expects the best
opportunities for premium jackup rig and ultra-deepwater
semisubmersible rig operations to be in the Foreign Drilling
Markets. Moreover, the national oil companies, or
NOCs, control approximately 70 percent of all
proven worldwide oil and gas reserves, and all of the NOCs are
headquartered in and operate outside of the U.S. These NOCs
now represent Enscos most important customer base for the
future. The U.K. is geographically positioned closer to
Enscos customers and the most hydrocarbon-rich areas of
the world.
Ensco Delawares predecessor was formed in 1975 with a
primary focus on operations in the U.S. and the Gulf of
Mexico. At that time, Houston and Dallas were the main centers
of the oil service industry, and we derived substantially all of
our revenue from
U.S.-based
operations. Over time, many oil service companies left Dallas to
follow their customers, and today Ensco Delaware is the only
major oil service company remaining in Dallas. As a result of
these and other dynamics impacting the drilling industry,
including the location of the worlds oil and gas reserves,
Ensco Delaware and its competitors have witnessed a steady
migration of offshore drilling rigs out of the U.S. Gulf of
Mexico to international markets since 2000. Consistent with
these global trends, we expect that we will derive approximately
86 percent of our 2009 gross revenues from our
operations in the Foreign Drilling Markets.
Our primary goal is to continue to be a leading provider of
offshore drilling services to the international oil and gas
industry. In particular, the Company wishes to be a leading
provider of premium jackup rig and ultra-deepwater
semisubmersible rig operations in the Foreign Drilling Markets.
To achieve this objective, we have determined that Ensco should
relocate its principal executive offices and most of its senior
executive officers to the U.K. because the U.K. is strategically
closer to the Companys customers and the Foreign Drilling
Markets. This geographical proximity will allow for more
efficient responses to, and meetings with, the Companys
customers because the physical distance between the Company and
our customers will be much smaller. Possibly even more
importantly, the time-zone differences will be smaller.
As a result, the Companys assets, activities and employees
(including its executive officers) in the U.K., along with the
management and control of drilling contracts throughout Europe
and Africa, are critically important for the Company to achieve
its current and future business objectives. The reorganization
will efficiently leverage the Companys existing Europe and
Africa Business Unit operations, and provide a growing hub for
the Company to respond to its customers and manage its
operations in the Foreign Drilling Markets.
(ii) Historical Conduct of Continuous Business Activities
in the U.K.
The Ensco Delaware expanded affiliated group established its
North Sea operations in Great Yarmouth, England in 1993. It has
since continuously engaged in drilling activities within the
U.K. The Ensco Delaware expanded affiliated group relocated its
base of U.K. operations to Aberdeen, Scotland in 1994.
Simultaneously with the 1994 relocation, the expanded affiliated
group also established its Europe and Africa Business Unit
headquarters in Aberdeen. The Europe and Africa Business Unit
generated approximately 34 percent of Ensco Delawares
worldwide revenues in 2008 and is projected to account for
approximately 29 percent of worldwide revenues in
42
2009. For the strategic business reasons discussed above,
including most importantly the location of the worlds
proven oil and gas reserves and the NOCs, the Ensco Delaware
expanded affiliated groups drilling activities in the U.K.
sector, in particular, and in the North Sea, in general, have
steadily increased since 1993.
(iii) Continuous Business Activities Involving UK Property,
Employees and Revenues
In the ordinary course of its offshore drilling business, the
Ensco Delaware expanded affiliated group has been engaged in
continuous and substantial business activities within the U.K.
Moreover, to meet its business objectives going forward, it is
strategically important that the expanded affiliated group of
Ensco UK continue the conduct of continuous and substantial
business activities in the U.K. As a result, we intend to
continue and expand our existing business activities in the U.K.
Evidencing the Ensco Delaware expanded affiliated groups
substantial business activities within the U.K., the Ensco
Delaware expanded affiliated group owns and operates substantial
assets located in the U.K., including drilling rigs, a storage
facility and supply yard, drilling equipment, spares and
supplies, and office buildings that are part of our historic and
continuous business activities in the U.K. Specifically,
approximately 18 percent of our rig fleet is currently
located in and dedicated to our North Sea operations. For these
purposes, the North Sea operations include operations in the
Danish and Dutch sectors of the North Sea, which are contiguous
to the U.K. sector of the North Sea. North Sea assets and
employees periodically and naturally migrate within the U.K.,
Danish and Dutch sectors of the North Sea. In general, however,
our North Sea rig fleet has historically spent most of its time
working in the U.K. sector of the North Sea. The Ensco Delaware
expanded affiliated group also has over 400 full-time
employees that perform services in the U.K.
With respect to revenues, the U.K. has steadily become a more
important market for the Ensco Delaware expanded affiliated
group over the last 6 years. As a percentage of the Ensco
Delaware expanded affiliated groups worldwide revenues,
third-party customer revenues received for performing drilling
services in the U.K. generally increased from 7 percent in
2003 to approximately 20 percent in 2008 and are projected
to account for approximately 18 percent of the Ensco
Delaware expanded affiliated groups worldwide revenues in
2009. These percentages materially increase if revenues from
contracts in the Danish and Dutch sectors of the North Sea are
included. In addition, Ensco Delaware projects that the Europe
and Africa Business Unit, which is managed and controlled from
the U.K., will account for approximately 29 percent of its
worldwide customer revenues in 2009. These percentages reflect
the overall shift of Ensco Delawares operations to
international markets, which now account for approximately
86 percent of its total revenues. This shift is also
evident in the steady decline of revenue generated in the U.S.,
which is projected to account for only approximately
14 percent of the Ensco Delaware expanded affiliated group
worldwide customer revenues in 2009, which is less than the
revenues from performing drilling services in the U.K during
2009.
(iv) Substantial Management Activities in the U.K.
After relocating to Aberdeen, Scotland in 1994, the U.K.
headquarters have served an increasingly important managerial
role within the Ensco Delaware expanded affiliated group. The
Aberdeen facility is the headquarters for the Europe and Africa
Business Unit, which is one of four business operating units
(largely based on geography) within the Ensco Delaware expanded
affiliated group. The General Manager of the Europe and Africa
Business Unit is based in Aberdeen, Scotland and manages the
day-to-day
operations of the Europe and Africa Business Unit. He has seven
direct reports, also based in Aberdeen, who collectively assist
him in managing six departments within the Europe and Africa
Business Unit, namely, Finance & Administration,
Marketing & Sales, Engineering, Operations, Human
Resources, and Safety, Health, Environment and Quality. The
General Manager and these seven direct reports actively manage
and control the
day-to-day
operations of more than 700 personnel based in the Europe
and Africa Business Unit.
For the strategic business reasons discussed above, management
in the U.K. has grown. More importantly, for the same reasons,
the Company expects this long-term historic growth of management
in the U.K. to continue. The Company expects to concentrate more
of its management activities in the U.K., including most of its
senior executive officers. The Company has determined that it is
important for these officers to be closer to the NOCs, who are
the Companys most important customers, and to the Foreign
Drilling Markets where it conducts its operations. Given its
strategic location and the Companys long-term historic
presence in the U.K., we have determined that
43
having most of our senior executive officers in the U.K. will
help the Company achieve its strategic objectives, as outlined
above.
(v) Substantial UK Investors
Ensco Delaware does not currently have a substantial number of
shareholders resident in the U.K. (although U.K. shareholders
comprise the second largest percentage of shareholders after the
U.S. shareholder group). Mutual funds and institutional
investors own approximately 90 percent of Ensco
Delawares total shares. Ensco Delaware does not currently
contemplate a dual listing of Ensco UK shares on the London
Stock Exchange. Nevertheless, Ensco believes that it will be
easier to develop relationships with potential U.K. and other
European investors and grow its investor base once substantial
senior management is based in the U.K. The enhanced
relationships with potential U.K. and European investors are
likely to result in an expanded U.K. and European Union
shareholder base. However, it is unlikely that U.K. residents
will comprise a substantial portion of Enscos shareholder
base in the near term.
Based on the foregoing, Ensco Delaware believes that the Ensco
Delaware expanded affiliated group has substantial business
activities in the U.K., and as a result, Ensco UK should not be
treated as a U.S. corporation for U.S. federal income
tax purposes under Section 7874 of the Code following the
merger. The following discussion of material U.S. federal
income tax consequences related to the merger, therefore,
assumes that Ensco UK will be respected as a U.K. corporation
for U.S. federal income tax purposes.
Material
Tax Consequences of the Merger to Ensco Delaware and Ensco
UK
Neither Ensco Delaware nor Ensco UK should be subject to
U.S. federal income tax as a result of the merger.
Material
Tax Consequences to Stockholders
Material
Tax Consequences to U.S. Holders
Consequences
of the Merger
The merger should qualify as a reorganization within
the meaning of Section 368(a) of the Code
and/or an
exchange under Section 351 of the Code. However, pursuant
to special rules contained in Section 367(a) of the Code
and the Treasury Regulations promulgated thereunder,
U.S. holders exchanging their Ensco Delaware shares for
ADSs pursuant to the merger should recognize gain, if any, but
not loss. In general, for U.S. federal income tax purposes,
a U.S. holder should recognize gain equal to the excess of
the fair market value of the ADSs received by the
U.S. holder pursuant to the merger over such holders
adjusted basis in the Ensco Delaware shares exchanged therefor.
Any such gain should be capital gain, and should be long-term
capital gain if the Ensco Delaware shares have been held by such
holder for more than one year at the effective time of the
merger. A U.S. holder that recognizes gain pursuant to the
merger should have an adjusted tax basis in the ADSs it receives
equal to the adjusted tax basis of the Ensco Delaware shares
exchanged therefor, increased by the amount of gain recognized.
A U.S. holder should not be permitted to recognize any loss
realized on the exchange of its Ensco Delaware shares in the
merger. The adjusted tax basis of the ADSs received by a
U.S. holder with a loss on its Ensco Delaware shares should
be equal to such U.S. holders adjusted tax basis in
its Ensco Delaware shares surrendered in exchange therefor.
Thus, subject to any subsequent changes in the fair market value
of the ADSs, any loss should be preserved.
In determining the amount of gain recognized, each of the Ensco
Delaware shares transferred should be treated as the subject of
a separate exchange. Thus, if a U.S. holder transfers some
Ensco Delaware shares on which gains are realized and other
Ensco Delaware shares on which losses are realized, the
U.S. holder may not net the losses against the gains to
determine the amount of gain recognized. The holding period for
any ADSs received by U.S. holders should include the
holding period of the Ensco Delaware shares exchanged therefor.
Cash received by a U.S. holder in exchange for a fractional
share of Ensco Delaware common stock should be treated as having
been received in redemption of such fractional share. Thus, gain
or loss generally should be recognized by such U.S. holder
in an amount equal to the difference between the amount of cash
received and the U.S. holders adjusted tax basis in
such fractional share.
44
Receiving
Distributions on ADSs
Subject to the discussion below under Passive
Foreign Investment Company Provisions, U.S. holders
will be required to include in gross income the gross amount of
any distribution received on the ADSs to the extent that the
distribution is paid out of Ensco UKs current or
accumulated earnings and profits as determined for
U.S. federal income tax purposes. We refer to such a
distribution herein 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 percent. As long as the ADSs are listed
on the NYSE (or certain other stock exchanges)
and/or Ensco
UK qualifies for benefits under the U.K.-U.S. Tax Treaty,
Ensco UK will be treated as a qualified foreign corporation for
this purpose. This reduced rate will not be available in all
situations, and U.S. holders should consult their own tax
advisors regarding the application of the relevant rules to
their particular circumstances. U.S. holders generally will
not be eligible for dividends-received deduction with respect to
dividends from Ensco UK.
Distributions in excess of the current and accumulated earnings
and profits of Ensco UK should be applied first to reduce the
U.S. holders tax basis in its ADSs, and thereafter
should constitute gain from the sale or exchange of such shares.
In the case of a non-corporate U.S. holder, the maximum
U.S. federal income tax rate applicable to such
gain is 15 percent under current law if the
holders holding period for such ADSs exceeds twelve
months. This reduced rate is scheduled to expire effective for
taxable years beginning after December 31, 2010. Special
rules not described herein may apply to U.S. holders who do
not have a uniform tax basis and holding period in all of their
ADSs, and any such U.S. holders are urged to consult their
own tax advisors with regard to such rules.
Dispositions
of ADSs
Subject to the discussion below under Passive
Foreign Investment Company Provisions, a U.S. holder
of ADSs generally should recognize capital gain or loss for
U.S. federal income tax purposes on the sale, exchange or
other taxable disposition of ADSs in an amount equal to the
difference between the amount 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, the maximum U.S. federal income tax rate
applicable to such gain is 15 percent under current law if
the holders holding period for such ADSs exceeds twelve
months. This reduced rate is scheduled to expire effective for
taxable years beginning after December 31, 2010. The
deductibility of capital losses are subject to limitations.
Passive
Foreign Investment Company Provisions
The treatment of U.S. holders of ADSs in some cases could
be materially different from that described above if, at any
relevant time, Ensco UK were a passive foreign investment
company, which we refer to as a PFIC.
For U.S. tax purposes, a foreign corporation is classified
as a PFIC for any taxable year if either
(1) 75 percent or more of its gross income is
passive income (as defined for U.S. federal
income tax purposes) or (2) the average percentage of
assets held by such corporation which produce passive income or
which are held for the production of passive income is at least
50 percent. For purposes of applying the tests in the
preceding sentence, the foreign corporation is deemed to own its
proportionate share of the assets, and to receive directly its
proportionate share of the income, of any other corporation of
which the foreign corporation owns, directly or indirectly, at
least 25 percent by value of the stock. Ensco UK believes
that it will not be a PFIC following the merger.
The tests for determining PFIC status are applied annually, and
it is difficult to accurately predict future income and assets
relevant to this determination. Accordingly, Ensco UK cannot
assure U.S. holders that it will not become a PFIC. If
Ensco UK should determine in the future that it is a PFIC, it
will endeavor to so notify U.S. holders of ADSs, although
there can be no assurance that it will be able to do so in a
timely and complete manner. U.S. holders of ADSs should
consult their own tax advisors about the PFIC rules, including
the availability of certain elections.
45
Material
Tax Consequences to
Non-U.S.
Holders
Consequences
of the Merger
A
non-U.S. holder
generally will not be subject to U.S. federal income or
withholding tax on gain realized, if any, on the exchange of
Ensco Delaware shares for ADSs or on the receipt of cash in
exchange for fractional shares of Ensco Delaware common stock
unless: (1) such gain is effectively connected with the
conduct by the
non-U.S. holder
of a trade or business within the U.S. (or, if a tax treaty
applies, is attributable to a permanent establishment or fixed
place of business maintained by the
non-U.S. holder
in the U.S.); (2) in the case of certain capital gains
recognized by a
non-U.S. holder
that is an individual, such individual is present in the
U.S. for 183 days or more during the taxable year in
which the capital gain is recognized and certain other
conditions are met; (3) the
non-U.S. holder
is subject to backup withholding; or (4) Ensco Delaware is
or has been a U.S. real property holding
corporation within the meaning of Section 897(c)(2)
of the Code at any time within the shorter of the five-year
period preceding the merger or such
non-U.S. holders
holding period, and the
non-U.S. holder
holds, or has held at any time during such shorter period, more
than 5 percent of the Ensco Delaware common stock. Ensco
Delaware does not believe that it is or has been a
U.S. real property holding corporation within the last five
years.
If a
non-U.S. holder
is a citizen or resident of, or otherwise subject to taxation
in, a country other than the U.S. or the U.K., the tax
consequences of the exchange of Ensco Delaware shares for ADSs
will depend on the applicable tax laws in such country.
Consequences
of Owning and Disposing of ADSs
A
non-U.S. holder
generally should not be subject to U.S. federal income or
withholding tax on dividends from Ensco UK unless: (1) the
dividends are effectively connected with the
non-U.S.
holders conduct of a trade or business in the
U.S. (or, if a tax treaty applies, the dividends are
attributable to a permanent establishment or fixed place of
business maintained by the
non-U.S. holder
in the U.S.); or (2) such
non-U.S. holder
is subject to backup withholding.
In addition, a
non-U.S. holder
generally will not be subject to U.S. federal income or
withholding tax on any gain recognized on the sale, exchange or
other disposition of ADSs unless: (1) such gain is
effectively connected with the conduct by the
non-U.S. holder
of a trade or business within the U.S. (or, if a tax treaty
applies, is attributable to a permanent establishment or fixed
place of business maintained by the
non-U.S. holder
in the U.S.); (2) in the case of certain capital gains
recognized by a
non-U.S. holder
that is an individual, such individual is present in the
U.S. for 183 days or more during the taxable year in
which the capital gain is recognized and certain other
conditions are met; or (3) the
non-U.S. holder
is subject to backup withholding.
If a
non-U.S. holder
is a citizen or resident of, or otherwise subject to taxation
in, a country other than the U.S. or the U.K., the tax
consequences of owning and disposing of ADSs will depend on the
applicable tax laws in such country.
Material
Tax Consequences to U.S. Holders if Ensco UK is Ultimately
Determined to Be a U.S. Corporation for U.S. Federal
Income Tax Purposes
Notwithstanding the foregoing, it is possible that the IRS may
assert and ultimately establish that Ensco UK should be treated
as a U.S. corporation for U.S. federal income tax
purposes under Section 7874 of the Code. If the IRS were to
prevail,
Section 1.7874-2T(m)(1)
of the 2009 Regulations provides that Ensco UK should be deemed
to convert to a U.S. corporation in a
reorganization described in
Section 368(a)(1)(F) of the Code on the day before the
effective date of the merger. Consequently, the merger should
qualify as a reorganization within the meaning of
Section 368(a) of the Code, and the holders of Ensco
Delaware shares should not be subject to U.S. federal
income tax on the receipt of ADSs in exchange for their Ensco
Delaware shares under Section 367(a) of the Code or
otherwise. In such case, the adjusted tax basis of the ADSs
received by a U.S. holder should be equal to such
holders adjusted tax basis in its Ensco Delaware shares
exchanged therefor. In addition, the holding period for any ADSs
received by holders should include the holding period of the
Ensco Delaware shares exchanged therefor. The consequences of
owning and disposing of the ADSs should be the same as those of
owning and disposing of Ensco Delaware shares.
46
If the IRS asserts and ultimately establishes that Ensco UK
should be treated as a U.S. corporation for
U.S. federal income tax purposes under Section 7874 of
the Code, the resolution of the tax controversy may not be known
until several years following the merger. Consequently, a
U.S. holder that reported gain on its 2009 U.S. income
tax return under Section 367(a) of Code as a result of the
merger (as discussed above) may need to file an amended
U.S. federal income tax return for the year in which the
merger occurred in order to reflect that such U.S. holder
should not have recognized gain under Section 367(a) of the
Code. Furthermore, such U.S. holder may need to file an
amended U.S. federal income tax return for any taxable year
in which such U.S. holder disposed of any ADS received in
the merger in order to reflect that the U.S. holders
adjusted tax basis in such ADS should equal such holders
adjusted tax basis in its Ensco Delaware shares exchanged
therefor.
Importantly, it is possible that a tax controversy on the
application of Section 7874 to the merger may not be
resolved within the period of time a holder is eligible to file
an amended return. As such, it is possible that certain holders
may not have the opportunity to amend their 2009
U.S. income tax returns, or subsequent tax returns, as
described herein. Thus, certain holders who recognize gain under
Section 367(a) of the Code in 2009 could lose the
opportunity to seek a refund of tax paid with respect to such
gain if the IRS asserts and ultimately establishes that no gain
should have been realized by such holder in 2009 because Ensco
UK should be treated as a U.S. corporation for
U.S. federal income tax purposes under Section 7874 of
the Code. In addition, such holders may not be permitted to
increase their adjusted tax basis in their ADSs, notwithstanding
that such holders recognized gain under Section 367(a) of
the Code.
Information
Reporting and Backup Withholding
U.S. holders that own at least five percent (of total
voting power or total value) of Ensco Delaware immediately
before,
and/or at
least five percent (of total voting power or total value) of
Ensco UK immediately after, the merger will be required to file
with the IRS certain Section 368(a) reorganization
and/or
Section 351 statements. Other information reporting,
including with respect to certain U.S. holders, information
reporting on IRS Form 926, could also apply to the merger.
Shareholders of Ensco Delaware should consult their own tax
advisors about the information reporting requirements that could
be applicable to the exchange of Ensco Delaware shares for ADSs
in the merger and any potential penalties associated with a
failure to satisfy such requirements.
Dividends on ADSs paid within the U.S. or through certain
U.S.-related
financial intermediaries are subject to information reporting
and may be subject to backup withholding (currently at a
28 percent rate) unless the holder (1) is a
corporation or other exempt recipient (including generally
non-U.S. holders
who establish such foreign status) or (2) provides a
taxpayer identification number and satisfies certain
certification requirements. Information reporting requirements
and backup withholding may also apply to the payment of proceeds
from a sale of ADSs within the U.S. 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, provided that the holder furnishes certain required
information to the IRS. Holders should consult their tax advisor
regarding the application of information reporting and backup
withholding to their particular situations.
If a U.S. holder of ADSs does not provide us (or our paying
agent) the holders correct taxpayer identification number
or other required information, the holder may be subject to
penalties imposed by the IRS.
THE U.S. FEDERAL INCOME TAX CONSEQUENCES SUMMARIZED ABOVE
ARE FOR GENERAL INFORMATION ONLY. EACH ENSCO DELAWARE
SHAREHOLDER SHOULD CONSULT HIS OR HER TAX ADVISOR AS TO THE
PARTICULAR CONSEQUENCES THAT MAY APPLY TO SUCH SHAREHOLDER.
U.K. Tax
Considerations
Material
Tax Consequences to Shareholders
Scope of
Discussion
The following paragraphs are the opinion of our external counsel
and are intended as a general guide to current U.K. tax law and
HMRC practice applying as at the date of this document (both of
which are subject to change at any time, possibly with
retrospective effect) in respect of the taxation of capital
gains, the taxation of dividends paid
47
by Ensco UK and stamp duty and stamp duty reserve tax on the
transfer of Class A Ordinary Shares, uncertificated ADSs
and ADSs evidenced by ADRs. They relate only to persons who are
beneficial owners of the ADSs, or the ADS Holders.
These paragraphs may not relate to certain classes of holders of
the ADSs, such as employees or directors of Ensco UK or its
affiliates, persons who are connected with Ensco UK, insurance
companies, charities, collective investment schemes, pension
schemes or persons who hold ADSs otherwise than as an
investment, or individuals who are not domiciled in the U.K.
These paragraphs do not describe all of the circumstances in
which ADS Holders may benefit from an exemption or relief from
taxation. It is recommended that all ADS Holders obtain their
own taxation advice. In particular, non-U.K. resident or
domiciled ADS Holders are advised to consider the potential
impact of any relevant double tax agreements.
Taxation
of Merger
Capital
Gains Tax
At the effective time of the merger, an individual stockholder
of Ensco Delaware who is resident or ordinarily resident in the
U.K. will be treated as disposing of his or her stock in Ensco
Delaware for a consideration equal to the market value of the
stock at that time, which may, depending on the
stockholders individual circumstances, give rise to a
chargeable gain or an allowable loss for the purposes of capital
gains tax. An individual stockholder who is neither resident nor
ordinarily resident in the U.K. will not be chargeable to
capital gains tax on capital gains arising on the disposal of
his or her stock in Ensco Delaware, unless the stockholder
carries on a trade, profession or vocation in the U.K. through a
branch or agency in the U.K. and the stock was acquired, used in
or for the purposes of the branch or agency or used in or for
the purposes of the trade, profession or vocation carried on by
the stockholder through the branch or agency. In these
circumstances, the stockholder will be treated as disposing of
their stock in Ensco Delaware for a consideration equal to the
market value of the stock at that time, which may, depending on
the stockholders individual circumstances, give rise to a
chargeable gain or an allowable loss for the purposes of capital
gains tax. The rate of capital gains tax on chargeable gains is
18 percent for the tax year 2009/2010.
The merger should not be treated as giving rise to a
distribution which will be chargeable to income tax. The
individual stockholder will be treated as acquiring the ADSs for
a consideration equal to his or her market value at the time of
the merger for capital gains tax purposes.
Corporation
Tax
At the effective time of the merger, a corporate stockholder of
Ensco Delaware who is resident in the U.K. will be treated as
disposing of its stock in Ensco Delaware for a consideration
equal to the market value of the stock at that time, which may,
depending on the stockholders individual circumstances,
give rise to a chargeable gain or an allowable loss for the
purposes of corporation tax. A corporate stockholder which is
not resident in the U.K. will not be liable for corporation tax
on chargeable gains accruing on the disposal of its stock in
Ensco Delaware unless it carries on a trade in the U.K. through
a permanent establishment in the U.K. and the stock was
acquired, used in or for the purposes of the permanent
establishment or used in or for the purposes of the trade
carried on by the stockholder through the permanent
establishment. In these circumstances, the non-U.K. resident
stockholder of the Ensco Delaware stock may, depending on its
individual circumstances, be chargeable to corporation tax on
chargeable gains arising from a disposal of its Ensco Delaware
stock. The merger should not be treated as giving rise to a
distribution which will be chargeable to corporation tax.
The full rate of corporation tax on chargeable gains in
financial years 2009 and 2010 is 28 percent, although small
companies may be entitled to claim the small companies rate of
tax, in which case chargeable gains will be subject to
corporation tax at rates of between 21 percent and
28 percent. A corporate stockholder of Ensco Delaware will
be entitled to an indexation allowance in computing the amount
of a chargeable gain accruing on the disposal of its Ensco
Delaware stock, which will provide relief for the effects of
inflation by references to movements in the U.K. retail price
index. If the conditions of the substantial shareholding
exemption set out in s.192A and Schedule 7AC of the
Taxation of Chargeable Gains Act 1992 are satisfied in relation
to a chargeable gain accruing to a corporate holder of Ensco
Delaware stock, the chargeable gain will be exempt from
corporation tax. The conditions of the substantial shareholding
exemption which must be satisfied will depend on the individual
48
circumstances of the corporate stockholder. One of the
conditions of the substantial shareholding exemption which must
be satisfied is that the stockholder must have held a
substantial shareholding in Ensco Delaware throughout a
twelve-month period beginning not more than two years before the
day on which the disposal takes place. Ordinarily, a corporate
stockholder will not be regarded as holding a substantial
shareholding in Ensco Delaware unless it (whether alone or
together with other group companies) holds not less than
10 percent of Ensco Delawares ordinary share capital.
The corporate stockholder will be treated as acquiring the ADSs
for a consideration equal to their market value at the effective
time of the merger for corporation tax purposes.
Taxation
of Dividends
Withholding
Tax
Dividends paid by Ensco UK will not be subject to any
withholding or deduction for or on account of U.K. tax,
irrespective of the residence or the individual circumstances of
the ADS Holders.
Income Tax
An individual ADS Holder who is resident or ordinarily resident
in the U.K. may, depending on his or her individual
circumstances, be subject to income tax on dividends received
from Ensco UK. An individual ADS Holder who is not resident or
ordinarily resident in the U.K. will not be chargeable to income
tax on dividends received from Ensco UK, unless the ADS Holder
carries on (whether solely or in partnership) any trade,
profession or vocation through a branch or agency in the U.K.
and the ADSs are used by or held by or for that branch or
agency. In these circumstances, the non-U.K. resident ADS Holder
may, depending on his or her individual circumstances, be
chargeable to income tax on dividends received from Ensco UK.
The rate of income tax which is chargeable on dividends received
by higher rate taxpayers in the tax year 2009/2010 is
32.5 percent. Individual ADS Holders who are resident in
the U.K. will be entitled to a tax credit equal to one-ninth of
the amount of the dividend received from Ensco UK, which will be
taken into account in computing the gross amount of the dividend
which is chargeable to income tax. The tax credit will be
credited against the ADS Holders liability (if any) to
income tax on the gross amount of the dividend. An individual
ADS Holder who is not subject to income tax on dividends
received from Ensco UK will not be entitled to claim payment of
the tax credit in respect of such dividends. The right of an
individual ADS Holder who is not resident in the U.K. to a tax
credit will depend on his or her individual circumstances. The
U.K. Government announced in its Budget 2009 on April 22,
2009 that individuals whose total income chargeable to income
tax exceeds £150,000 will be chargeable to income tax in
respect of dividends in excess of that amount at the new rate of
42.5 percent in the tax year 2010/2011. An
individuals dividend income is treated as the top slice of
their total income which is chargeable to income tax.
Corporation
Tax
Unless an exemption is available as discussed below, a corporate
ADS Holder that is resident in the U.K. will be subject to
corporation tax on dividends received from Ensco UK. A corporate
ADS Holder that is not resident in the U.K. will not be subject
to corporation tax on dividends received from Ensco UK unless
the ADS Holder carries on a trade in the U.K. through a
permanent establishment in the U.K. and the dividends form part
of the profits of a trade carried on through or from the
permanent establishment or the ADSs are used by, for or held by
or for, the permanent establishment. In these circumstances, the
non-U.K. resident corporate ADS Holder may, depending on its
individual circumstances and if the exemption discussed below is
not available, be chargeable to corporation tax on dividends
received from Ensco UK.
The full rate of corporation tax chargeable on dividends
received from Ensco UK in financial years 2009 and 2010 is
28 percent, although smaller companies may be entitled to
claim the small companies rate of tax. If dividends paid by
Ensco UK fall within an exemption from corporation tax set out
in Part 9A of the Corporation Tax Act 2009, the receipt of
the dividend by a corporate ADS Holder will be exempt from
corporation tax. Generally, the conditions for exemption from
corporation tax on dividends paid by Ensco UK should be
satisfied, although the conditions which must be satisfied in
any particular case will depend on the individual circumstances
of the corporate ADS Holders.
49
ADS Holders that are regarded as small companies should
generally be exempt from corporation tax on dividends received
from Ensco UK, unless the dividends are made as part of a tax
advantage scheme. ADS Holders that are not regarded as small
companies should generally be exempt from corporation tax on
dividends received from Ensco UK on the basis that the
Class A Ordinary Shares underlying the ADSs should be
regarded as non-redeemable ordinary shares. Alternatively, ADS
Holders that are not small companies should also generally be
exempt from corporation tax on dividends received from Ensco UK
if they hold ADSs which represent less than 10 percent of
the issued share capital of Ensco UK, would be entitled to less
than 10 percent of the profits available for distribution
to holders of the issued share capital of Ensco UK and would be
entitled on a winding up to less than 10 percent of the
assets of Ensco UK available for distribution to holders of its
issued share capital. In certain limited circumstances, the
exemption from corporation tax will not apply to such ADS
Holders if a dividend is made as part of a scheme which has a
main purpose of falling within the exemption from corporation
tax.
Taxation
of Capital Gains
Capital
Gains Tax
A disposal of ADSs by an individual ADS Holder who is resident
or ordinarily resident in the U.K. may, depending on his or her
individual circumstances, give rise to a chargeable gain or an
allowable loss for the purposes of capital gains tax. An
individual ADS Holder who temporarily ceases to be resident or
ordinarily resident in the U.K. for a period of less than five
years and who disposes of his or her ADSs during that period of
temporary non-residence may be liable to capital gains tax on a
chargeable gain accruing on the disposal on his or her return to
the U.K. under certain anti-avoidance rules. An individual ADS
Holder who is neither resident nor ordinarily resident in the
U.K. will not be chargeable to capital gains tax on capital
gains arising on the disposal of their ADSs unless the ADS
Holder carries on a trade, profession or vocation in the U.K.
through a branch or agency in the U.K. and the ADSs were
acquired, used in or for the purposes of the branch or agency or
used in or for the purposes of the trade, profession or vocation
carried on by the ADS Holder through the branch or agency. In
these circumstances, the non-U.K. resident ADS Holder may,
depending on his or her individual circumstances, be chargeable
to capital gains tax on chargeable gains arising from a disposal
of their ADSs. The rate of capital gains tax on chargeable gains
is 18 percent in the tax year 2009/2010.
Corporation
Tax
A disposal of ADSs by a corporate ADS Holder which is resident
in the U.K. may give rise to a chargeable gain or an allowable
loss for the purposes of corporation tax. A corporate ADS Holder
that is not resident in the U.K. will not be liable for
corporation tax on chargeable gains accruing on the disposal of
its ADSs unless it carries on a trade in the U.K. through a
permanent establishment in the U.K. and the ADSs were acquired,
used in or for the purposes of the permanent establishment or
used in or for the purposes of the trade carried on by the ADS
Holder through the permanent establishment. In these
circumstances, the non-U.K. resident ADS Holder may, depending
on its individual circumstances, be chargeable to corporation
tax on chargeable gains arising from a disposal of its ADSs.
The full rate of corporation tax on chargeable gains in
financial years 2009 and 2010 is 28 percent, although small
companies may be entitled to claim the small companies rate of
tax. Corporate ADS Holders will be entitled to an indexation
allowance in computing the amount of a chargeable gain accruing
on a disposal of the ADSs, which will provide relief for the
effects of inflation by reference to movements in the U.K.
retail price index. If the conditions of the substantial
shareholding exemption set out in s.192A and Schedule 7AC
of the Taxation of Chargeable Gains Act 1992 are satisfied in
relation to a chargeable gain accruing to a corporate ADS
Holder, the chargeable gain will be exempt from corporation tax.
The conditions of the substantial shareholding exemption which
must be satisfied will depend on the individual circumstances of
the corporate ADS Holder. One of the conditions of the
substantial shareholding exemption which must be satisfied is
that the corporate ADS Holder must have held a substantial
shareholding in Ensco UK throughout a twelve-month period
beginning not more than two years before the day on which the
disposal takes place. Ordinarily, a corporate ADS Holder will
not be regarded as holding a substantial shareholding in Ensco
UK unless it (whether alone, or together with other group
companies) directly holds not less than 10 percent of Ensco
UKs ordinary share capital (not represented by ADRs).
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Stamp
Duty and Stamp Duty Reserve Tax
The discussion below relates to holders of Class A Ordinary
Shares or ADSs wherever resident (but not to holders such as
market makers, brokers, dealers and intermediaries, to whom
special rules apply).
Transfer of
Class A Ordinary Shares and Uncertificated ADSs
Provided that any instrument of transfer is not executed in the
U.K. and remains at all times outside the U.K. and the transfer
does not relate to any matter or thing done or to be done in the
U.K., no stamp duty is payable on the acquisition or transfer of
(i) Class A Ordinary Shares not represented by ADSs
and (ii) uncertificated ADSs (i.e., not evidenced by
ADRs) held in a direct registration system. ADSs held in
book-entry form on the facilities of The Depository
Trust Company are not considered to be in a direct
registration system. However, an unconditional agreement for
such transfer, or a conditional agreement which subsequently
becomes unconditional, will be liable to stamp duty reserve tax,
or SDRT, generally at the rate of 0.5 percent
of the consideration for the transfer; but such liability will
be cancelled if the agreement is completed by a duty stamped
instrument of transfer within six years of the date of the
agreement, or if the agreement was conditional, the date the
agreement became unconditional. Where stamp duty is paid, any
SDRT previously paid will be repaid on the making of an
appropriate claim. Stamp duty and SDRT are normally paid by the
purchaser.
Transfer of
ADSs Evidenced by ADRs
No stamp duty need, in practice, be paid on the acquisition or
transfer of ADSs evidenced by ADRs provided that any instrument
of transfer or contract for sale is not executed in the U.K. and
remains at all times outside the U.K. and the transfer does not
relate to any matter or thing done or to be done in the U.K. An
agreement for the transfer of ADSs evidenced by ADRs will not
give rise to a SDRT liability.
THE U.K. TAX CONSEQUENCES SUMMARIZED ABOVE ARE FOR GENERAL
INFORMATION ONLY. EACH ENSCO DELAWARE STOCKHOLDER SHOULD CONSULT
HIS OR HER TAX ADVISOR AS TO THE PARTICULAR U.K. TAX
CONSEQUENCES THAT MAY APPLY TO SUCH STOCKHOLDER.
Material
U.K. Tax Considerations Relating to and After the
Merger
The following paragraphs are intended to be a general summary of
certain material U.K. tax consequences relating to the merger
based on current English law relating to corporation tax, stamp
duty and stamp duty reserve tax and on Ensco Delawares
external counsels understanding of the current
administrative policies and practices of HMRC published in
writing prior to the date hereof. This summary, and all other
statements, do not otherwise take into account or anticipate any
changes in law or practice, whether legislative, governmental or
judicial decision or action, which could possibly be made
effective on a retroactive basis. This summary does not address
all U.K. corporation tax, stamp duty or stamp duty reserve tax
consequences that may be relevant to Ensco Delaware, Ensco UK or
any of their subsidiaries, and is not intended to be, nor should
it be construed to be, legal or tax advice to any person.
The
Merger
We expect that none of Ensco Delaware, Ensco UK or any of their
subsidiaries will incur UK corporation tax as a result of
completion of the merger.
Subject to certain exemptions, a charge to stamp duty or SDRT
generally arises under U.K. law on the issue, transfer or
appropriation of shares of companies incorporated in the U.K. to
the issuer of depositary receipts, its nominee or agent. Such
stamp duty or SDRT is payable by the issuer of the depositary
receipts. The rate of such stamp duty or SDRT is generally
1.5 percent of either (i) in the case of an issue of
shares, the issue price of the shares concerned, (ii) in
the case of a transfer of shares, the amount or value of the
consideration for the transfer, or (iii) in the case of an
appropriation of shares, the value of the shares concerned.
However, in view of the judgment of the European Court of
Justice in HSBC Holdings plc, Vidacos Nominees Ltd v HMRC
Case C-569/07 given on October 1, 2009, such charge to
stamp duty or SDRT may be prohibited by Council Directive
69/335/EEC of July 17, 1969 concerning indirect taxes on
the raising of capital (as amended).
51
The U.K. Government is considering the judgment of the Court and
has not announced what action (if any) it intends to take in
relation to the stamp duty and SDRT treatment of the issue,
transfer or appropriation of shares of companies incorporated in
the U.K. to the issuer of depositary receipts. Accordingly, with
respect to the issue of Class A Ordinary Shares to the
depositary on September 29, 2009, SDRT at the rate of
1.5 percent on the issue price of the Class A Ordinary
Shares has been paid by Ensco Delaware on behalf of the
depositary on the basis that all rights to claim repayment of
the SDRT are reserved. Any claim for payment of overpaid SDRT,
based on the HSBC Holdings judgment or otherwise, must be
submitted to HMRC within six years after the date on which the
SDRT was paid.
After the
Merger
General
Subject to any available exemptions or other forms of relief, a
U.K. resident company, such as Ensco UK, is subject to
corporation tax on its worldwide income profits and chargeable
gains. The current rate of corporation tax (except for small
companies and in respect of certain offshore oil and gas
extraction activities) is 28 percent.
Dividend
Exemption
A U.K. resident company, such as Ensco UK, is exempt from
corporation tax in respect of certain broad classes of dividend
or other distributions (except of a capital nature) received
from companies, whether they are resident in the U.K. or
overseas, including dividends or other distributions from
controlled companies and in respect of non-redeemable ordinary
shareholdings.
Substantial
Shareholding Exemption
A U.K. resident company, such as Ensco UK, which is a
shareholder of a trading group is also exempt from corporation
tax in respect of capital gains arising from the actual or
deemed disposal of qualifying shareholdings in qualifying
companies, whether they are resident in the U.K. or elsewhere.
For this purpose, a capital distribution is treated as deemed
disposal of the shares of the distributing company.
Controlled
Foreign Companies
Subject to certain exemptions and other forms of relief, a U.K.
resident company, such as Ensco UK, is liable to corporation tax
on the income profits (whether or not distributed) of any
controlled company which is resident in a foreign jurisdiction
and is subject to a lower level of taxation on those profits. A
controlled company will be regarded as being subject to a lower
level of taxation if the amount of foreign income tax on its
profits is less than three-quarters of the corresponding
corporation tax that would be payable in the U.K. if the company
were resident in the U.K. Any such foreign income tax on the
profits of the controlled company is generally creditable for
U.K. corporation tax purposes.
HMRC has, subject to certain conditions and limitations based on
our facts and circumstances, granted exemption from the CFC
regime in respect of all material subsidiaries of Ensco UK under
the motive test exclusion for a period after the
merger ending December 31, 2012, which period may be
reduced or altered by subsequent legislation. The present U.K.
Government is consulting on a potentially major reform of the
CFC regime and has stated its intention to legislate in 2011.
However, the U.K. Government has not yet put forward any reform
proposals and there can be no certainty about the nature and
extent of any future changes to the current CFC regime.
52
DESCRIPTION
OF CLASS A ORDINARY SHARES OF ENSCO UK
General
The following information is a summary of the material terms of
the Class A Ordinary Shares, nominal value $0.10 per share,
as specified in the form of Ensco UKs articles of
association and which are proposed to be adopted immediately
prior to the consummation of the merger, which we refer to as
the New Articles. You are encouraged to read the New
Articles, which are included as Annex B to this proxy
statement/prospectus. See also Description of American
Depositary Shares of Ensco UK and Comparison of
Rights of Stockholders/Shareholders.
Pursuant to the merger agreement, each issued and outstanding
share of common stock of Ensco Delaware will be converted into
the right to receive one ADS. Each ADS represents one
Class A Ordinary Share. The deposit agreement among Ensco
UK, Citibank and you governs the rights of holders of the ADSs
as described in Description of American Depositary Shares
of Ensco UK.
All of the issued Class A Ordinary Shares are fully paid
and not subject to any further calls or assessments by Ensco UK.
There are no conversion rights, redemption provisions or sinking
fund provisions relating to any Class A Ordinary Shares.
All Class A Ordinary Shares, including those underlying the
ADSs to be delivered in the merger, are to be represented by
certificates in registered form issued (subject to the terms of
issue of the shares) by Ensco UKs registrar.
Under English law, persons who are neither residents nor
nationals of the U.K. may freely hold, vote and transfer the
Ensco UK shares in the same manner and under the same terms as
U.K. residents or nationals.
Share
Capital
As of the date of this proxy statement/prospectus and on the
date of adoption of the New Articles there are, and will be:
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(a)
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50,000 Class B Ordinary Shares in issue; and
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(b)
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150,000,000 Class A Ordinary Shares in issue (all of which
are and will continue to be represented by ADSs).
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As of the date of this proxy statement/prospectus and
immediately prior to the consummation of the merger, the Ensco
UK Board is or will be authorized to allot a total of an
additional number of shares as follows:
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(a)
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100,000,000 Class A Ordinary Shares; and
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(b)
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20,000,000 Unclassified Shares of $1.00 per share, or
Unclassified Shares, which Unclassified Shares are a
class of shares of Ensco UK that may be issued by the Ensco UK
Board pursuant to a shareholder resolution that is intended to
be passed prior to the consummation of the merger. The
Unclassified Shares will have such rights as the Ensco UK Board
shall determine at the time of allotment and issuance.
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The Class A Ordinary Shares and the Class B Ordinary
Shares, or together the Ordinary Shares, will have
the same rights and privileges in all respects. The outstanding
Class B Ordinary Shares will remain outstanding after the
merger, but will have no voting rights or rights to dividends or
distributions to the extent that they are held by Ensco
Delaware. If issued, the rights of holders of Unclassified
Shares will be determined by the Ensco UK Board in accordance
with Ensco UKs articles of association.
Dividends
Subject to the Companies Act, the Ensco UK Board may declare a
dividend to be paid to the shareholders according to their
respective rights and interests in Ensco UK, and may fix the
time for payment of such dividend. The Ensco UK Board may from
time to time declare and pay (on any class of shares of any
amounts) such dividends as appear to them to be justified by the
profits of Ensco UK that are available for distribution. There
are no fixed dates on which entitlement to dividends arise on
any of the Ordinary Shares. The Ensco UK Board may direct the
53
payment of all or any part of a dividend to be satisfied by
distributing specific assets, in particular paid up shares or
debentures of any other company. The New Articles also permit a
scrip dividend scheme under which shareholders may be given the
opportunity to elect to receive fully paid Ordinary Shares
instead of cash, with respect to all or part of future
dividends. Shares held by or for the benefit of an Ensco UK
subsidiary will have no voting rights and will not be entitled
to any dividends or distributions, including any scrip
dividends, bonus shares or dividends or distributions of
property or debentures of any other company.
To the extent that as a result of the merger any Class A
Ordinary Shares held by the custodian are represented by ADSs
held by or for the benefit of any of Ensco UKs
subsidiaries, such as Ensco Delaware, then the New Articles
provide that such Class A Ordinary Shares will not be
entitled to receive dividends or distributions, including any
scrip dividends, bonus shares or dividends or distributions of
property or debentures of any other company, and therefore the
holder of such ADSs shall not be entitled to any such dividends
or distributions while such ADSs representing those Class A
Ordinary Shares are held by or for the benefit of such
subsidiaries.
If a shareholder owes any money to Ensco UK relating in any way
to any class of Ensco UK shares, the Ensco UK Board may deduct
any of this money from any dividend on any shares held by the
shareholder, or from other money payable by Ensco UK in respect
of the shares. Money deducted in this way may be used to pay the
amount owed to Ensco UK.
Unclaimed dividends and other amounts payable by Ensco UK in
respect of an Ordinary Share can be invested or otherwise used
by directors for the benefit of Ensco UK until they are claimed
under English law. A dividend or other money remaining unclaimed
for a period of twelve years after it first became due for
payment will be forfeited and cease to remain owed by Ensco UK.
Voting
Rights
At a general meeting any resolutions put to a vote must be
decided on a poll.
Subject to any rights or restrictions as to voting attached to
any class of shares in accordance with the articles of
association of Ensco UK and subject to disenfranchisement
(i) in the event of non-payment of any call or other sum
due and payable in respect of any shares not fully paid,
(ii) in the event of any non-compliance with any statutory
notice requiring disclosure of an interest in shares or
(iii) with respect to any shares held by any subsidiary of
Ensco UK, every shareholder (other than Ensco Delaware or any
other subsidiary of Ensco UK) who (being an individual) is
present in person or (being a corporation) is present by a duly
authorized corporate representative at a general meeting of
Ensco UK will have one vote for every share of which he or she
is the holder, and every person present who has been appointed
as a proxy shall have one vote for every share in respect of
which he or she is the proxy, except that any proxy who has been
appointed by the depositary shall have such number of votes as
equals the number of shares in relation to which such proxy has
been appointed.
In the case of joint holders, the vote of the person whose name
stands first in the register of shareholders and who tenders a
vote, whether in person or by proxy, is accepted to the
exclusion of any votes tendered by any other joint holders.
The necessary quorum for a general shareholder meeting is the
shareholders who together represent at least the majority of the
voting rights of all the shareholders entitled to vote present
in person or by proxy (i.e., any shares whose voting
rights have been disenfranchised (whether pursuant to the
Companies Act
and/or under
the New Articles) shall be disregarded for the purposes of
determining a quorum).
An annual general meeting shall be called by not less than 21
clear days notice and no more than 60 days
notice. For all other general meetings except general meetings
properly requisitioned by shareholders, such meetings shall be
called by not less than 14 clear days notice and no more
than 60 days notice. The notice of meeting must also
specify a time (which shall not be more than 60 days nor
less than 10 days before the date of the meeting) by which
a person must be entered on the register in order to have the
right to attend or vote at the meeting. The number of shares
then registered in their respective names shall determine the
number of votes a person is entitled to cast at that meeting.
54
An appointment of proxy (whether in hard copy form or electronic
form) must be received by Ensco UK before the time for holding
the meeting or adjourned meeting at which the person named in
the appointment of proxy proposes to vote; in the case of a poll
taken more than 48 hours after the meeting at which the
relevant vote was to be taken, an appointment of proxy must be
received after such meeting and not less than 24 hours (or
such shorter time as the Ensco UK Board may determine) before
the time appointed for taking the poll; or in the case of a poll
not taken immediately but taken not more than 48 hours
after the meeting, the appointment of proxy must be delivered at
the meeting at which the poll is to be taken. An appointment of
proxy not received or delivered in accordance with the New
Articles is invalid under English law.
To the extent that as a result of the merger any Class A
Ordinary Shares held by the custodian are represented by ADSs
held by or for the benefit of any of Ensco UKs
subsidiaries, including Ensco Delaware, then under the Companies
Act such Class A Ordinary Shares will not have voting
rights.
Return of
Capital
In the event of a voluntary
winding-up
of Ensco UK, the liquidator may, on obtaining any sanction
required by law, divide among the shareholders the whole or any
part of the assets of Ensco UK, whether or not the assets
consist of property of one kind or of different kinds.
The liquidator may also, with the same authority, transfer the
whole or any part of the assets to trustees upon any trusts for
the benefit of the shareholders as the liquidator decides. No
past or present shareholder can be compelled to accept any asset
which could subject him or her to a liability.
Preemptive
Rights and New Issues of Shares
Under Section 549 of the Companies Act, directors are, with
certain exceptions, unable to allot securities without being
authorized either by the shareholders in a general meeting or by
Ensco UKs articles of association pursuant to
Section 551 of the Companies Act. In addition, under the
Companies Act, the issuance of equity securities that are to be
paid for wholly in cash (except shares held under an
employees share scheme) must be offered first to the
existing equity shareholders in proportion to the respective
nominal (i.e., par) values of their holdings on the same
or more favorable terms, unless a special resolution
(i.e., 75 percent of votes cast) to the contrary has
been passed in a general meeting of shareholders or the articles
of association otherwise provide an exclusion from this
requirement (which exclusion can be for a maximum of five years
after which shareholders approval would be required to renew the
exclusion). In this context, equity securities generally means
in relation to Ensco UK, Ordinary Shares (being shares other
than shares which with respect to dividends or capital, carry a
right to participate only up to a specified amount in a
distribution) and all rights to subscribe for or convert
securities into such shares.
A shareholder resolution proposed to be passed immediately prior
to the consummation of the merger will authorize the directors
(generally and unconditionally), for a period up to five years
from the date on which the resolution is passed to allot equity
securities, or to grant rights to subscribe for or to convert or
exchange any security into shares of the Company, up to an
aggregate nominal amount of $10,000,000 Class A Ordinary
Shares and $20,000,000 Unclassified Shares and exclude
preemptive rights in respect of such issuances for the same
period of time. Such authority will continue for five years and
thereafter it must be renewed, but we may seek renewal for
additional five year terms more frequently. Ensco UK may, before
the expiration of any such authority, make an offer or agreement
which would or might require Ensco UK shares to be allotted (or
rights to be granted) after such expiration, and the directors
may allot shares or grant rights in pursuance of such an offer
or agreement as if the authority to allot had not expired.
Subject to the provisions of the Companies Act and to any rights
attached to any existing shares, any Ensco UK shares may be
issued with, or have attached to them, such rights or
restrictions as the shareholders of Ensco UK may by ordinary
resolution determine, or, where the above authorizations are in
place, the Ensco UK Board may determine such rights or
restrictions.
The Companies Act prohibits an English company from issuing
shares for no consideration, including with respect to grants of
restricted stock made pursuant to equity incentive plans.
Accordingly, the nominal value of the
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shares issued upon the lapse of restrictions or the vesting of
any restricted stock award or any other share-based grant
underlying any ADS must be paid pursuant to the Companies Act.
Disclosure
of Interests in Shares
Section 793 of the Companies Act gives Ensco UK the power
to require persons whom it knows has, or whom it has reasonable
cause to believe has, or within the previous three years has
had, any ownership interest in any shares (which we refer to as
the default shares) to disclose prescribed
particulars of those shares. For this purpose default
shares includes any shares allotted or issued after the
date of the Section 793 notice in respect of those shares.
Failure to provide the information requested within the
prescribed period after the date of sending the notice will
result in sanctions being imposed against the holder of the
default shares as provided within the Companies Act.
Under Ensco UKs articles of association, Ensco UK will
also withdraw voting and certain other rights, place
restrictions on the rights to receive dividends and transfer
default shares if the relevant holder of
default shares has failed to provide the information
requested within 14 days after the date of sending the
notice, depending on the level of the relevant shareholding (and
unless the Ensco UK Board decides otherwise).
Alteration
of Share Capital/Repurchase of Shares
Ensco UK may from time to time by ordinary resolution of its
shareholders:
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increase its share capital by allotting new shares in accordance
with the authority contained in the shareholder resolution
referred to above and the articles of association;
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consolidate and divide all or any of its share capital into
shares of a larger nominal amount than the existing
shares; and
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subdivide any of its shares into shares of a smaller nominal
amount than its existing shares.
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Subject to the Companies Act and to any rights the holders of
any Ensco UK shares may have, Ensco UK may purchase any of its
own shares of any class (including any redeemable shares, if the
Ensco UK Board should decide to issue any) by way of off
market purchases with the prior approval of
75 percent of shareholders by special resolution. Such
approval lasts for up to five years from the date of the special
resolution, and renewal of such approval for additional five
year terms may be sought more frequently. A special resolution,
which would authorize the repurchase of up to 30 percent
per annum of the share capital outstanding as of the beginning
of each fiscal year, is anticipated to be adopted prior to the
effective time of the merger. However, shares may only be
repurchased out of distributable profits or the proceeds of a
fresh issue of shares made for that purpose, and, if a premium
is paid, it must be paid out of distributable profits.
Transfer
of Shares
Ensco UKs New Articles allow shareholders to transfer all
or any of their shares by instrument of transfer in writing in
any usual form or in any other form which is permitted by the
Companies Act and is approved by the Ensco UK Board. The
instrument of transfer must be executed by or on behalf of the
transferor and (in the case of a transfer of a share which is
not fully paid) by or on behalf of the transferee and must be
delivered to the registered office or any other place the
directors decide.
The Ensco UK Board may refuse to register a transfer:
(1) if the shares in question are not fully paid;
(2) if it is with respect to more than one class of shares;
(3) if it is with respect to shares on which Ensco UK has a
lien;
(4) if it is in favor of more than four persons jointly;
(5) if it is not duly stamped (if such a stamp is required);
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(6)
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if it is not presented for registration together with the share
certificate and evidence of title as the Ensco UK Board
reasonably requires; or
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(7)
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in certain circumstances, if the holder has failed to provide
the required particulars to Ensco UK as described under
Disclosure of Interests in Shares above.
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If the Ensco UK Board refuses to register a transfer of a share,
it shall, within two months after the date on which the transfer
was lodged with Ensco UK, send to the transferee notice of the
refusal, together with its reasons for refusal.
General
Meetings and Notices
The notice of a general meeting shall be given to the
shareholders (other than any who, under the provisions of the
New Articles or the terms of allotment or issue of shares, are
not entitled to receive notice), to the Ensco UK Board and to
the auditors. Holders of ADSs are entitled to receive notices
under the terms of the deposit agreement relating to ADSs. See
Description of American Depositary Shares of Ensco
UK Voting Rights.
Under English law, Ensco UK is required to hold an annual
general meeting of shareholders within 6 months from the
day following the end of its fiscal year and, subject to the
foregoing, the meeting may be held at a time and place
determined by the Ensco UK Board.
Liability
of Ensco UK and its Directors and Officers
The New Articles provide that English courts have exclusive
jurisdiction with respect to any suits brought by shareholders
against Ensco UK or its directors. See Comparison of
Rights of Stockholders/Shareholders Liability of
Directors and Officers for a discussion of the inability
of an English company to exempt directors and officers from
certain liabilities.
Anti-takeover
Provisions
The level of anti-takeover provisions with respect to Ensco UK
differs from that with respect to Ensco Delaware by virtue of
the differences between the DGCL and the Companies Act, the
differences between the certificate of incorporation and bylaws
of Ensco Delaware and the New Articles of Ensco UK and the
differences between the rights of holders of Ensco Delaware
common stock and the terms and conditions related to the ADSs as
described in the deposit agreement. The provisions summarized
below do not include those provisions required by the Companies
Act. The provisions of the New Articles summarized below may
have the effect of discouraging, delaying or preventing hostile
takeovers, including those that might result in a premium being
paid over the market price of Class A Ordinary Shares or
ADSs, as applicable, and discouraging, delaying or preventing
changes in control or management of Ensco UK.
Takeover offers and certain other transactions in respect of
certain public companies are regulated by the U.K. City Code on
Takeovers and Mergers, or Takeover Code, which is
administered by the Takeover Panel, a body consisting of
representatives of the City of London financial and professional
institutions which oversees the conduct of takeovers. An English
public limited company is potentially subject to the Takeover
Code if, among other factors, its central place of management
and control are within the U.K., the Channel Islands or the Isle
of Man. The Takeover Panel will generally look to the residency
of a companys directors to determine where it is centrally
managed and controlled. The Takeover Panel has confirmed that,
based upon Ensco UKs current and intended plans for its
directors and management, for purposes of the Takeover Code,
Ensco UK will be considered to have its place of central
management and control outside the U.K., the Channel Islands or
the Isle of Man and, therefore, that the Takeover Code will not
apply to Ensco UK. It is possible that in the future
circumstances could change that may cause the Takeover Code to
apply to Ensco UK.
Classified
Board of Directors
The Ensco UK Board, like our Board, will be divided into three
classes, with the members of each class serving for staggered
three-year terms. As a result, only one class of directors will
be elected at each annual general meeting of shareholders, with
the other classes continuing for the remainder of their
respective three-year terms. Under English law, shareholders
have no cumulative voting rights. In addition, Ensco UKs
articles of association incorporate similar provisions to those
contained in Ensco Delawares bylaws and certificate of
incorporation,
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which regulate shareholders ability to nominate directors
for election subject to a 5 percent share ownership
requirement. Although shareholders have the ability to remove a
director without cause under English law, the classification of
the directors, the lack of cumulative voting and the limitations
on shareholders powers to nominate directors will have the
effect of making it more difficult not only for any party to
obtain control of Ensco UK by replacing the majority of the
Ensco UK Board but also to force an immediate change in the
composition of the Ensco UK Board. However, under the New
Articles, if the shareholders remove the entire board, a
shareholder may then convene a general meeting for the purpose
of appointing directors. It should be noted that holders of ADSs
may have to surrender their ADSs and withdraw their Class A
Ordinary Shares in order to exercise their rights to nominate
and remove directors.
Issuance
of Unclassified Shares
The Ensco UK Board will have the authority, without further
action of its shareholders for a period of five years, but
subject to its statutory and fiduciary duties, to issue up to
20,000,000 Unclassified Shares, par value $1.00 per share, in
one or more series and to fix the powers, preferences, rights
and qualifications, limitations or restrictions thereof. Such
authority will continue for five years and thereafter it must be
renewed, but we may seek renewal for additional five year terms
more frequently. The issuance of Unclassified Shares on various
terms could adversely affect the holders of Class A
Ordinary Shares or ADSs. The potential issuance of Unclassified
Shares may discourage bids for Class A Ordinary Shares or
ADSs at a premium over the market price, may adversely affect
the market price of ADSs and may discourage, delay or prevent a
change of control of Ensco UK.
Shareholder
Rights Plan
The Ensco UK Board will have the necessary corporate authority,
without further action of its shareholders for a period of five
years, but subject to its statutory and fiduciary duties, to
give effect to a shareholder rights plan and to fix the terms
thereof. Such a plan could make it more difficult for another
party to obtain control of Ensco UK by threatening to dilute a
potential acquirers ownership interest in the company
under certain circumstances. The Ensco UK Board may adopt a
shareholder rights plan at any time, including in conjunction
with the consummation of the merger or sometime thereafter.
Ensco Delaware currently has the authority to adopt a
shareholder rights plan under Delaware law. See Comparison
of Rights of Stockholders/Shareholders Anti-takeover
Matters.
The anti-takeover and other provisions of the New Articles, as
well as the adoption of a shareholder rights plan, could
discourage potential acquisition proposals and could delay or
prevent a change in control. These provisions are intended to
enhance shareholder value by discouraging certain types of
abusive takeover tactics. However, these provisions could have
the effect of discouraging others from making tender offers for
Class A Ordinary Shares or ADSs and, as a consequence, also
may inhibit fluctuations in the market price of ADSs that could
result from actual or rumored takeover attempts.
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DESCRIPTION
OF AMERICAN DEPOSITARY SHARES OF ENSCO UK
Citibank has agreed to act as the depositary for the ADSs
evidencing the Class A Ordinary Shares. Citibanks
depositary offices are located at 388 Greenwich Street, New
York, New York 10013. ADSs represent ownership interests in
securities that are on deposit with the depositary. ADSs are
normally evidenced by ADRs. The depositary typically appoints a
custodian to safekeep the securities on deposit. In this case,
the custodian is Citibank, N.A. (London Branch), located at 25
Molesworth Street Lewisham, London SE137EX.
We have appointed Citibank as depositary pursuant to a deposit
agreement. A copy of the deposit agreement is on file with the
SEC under cover of a Registration Statement on
Form F-6.
You may obtain a copy of the deposit agreement from the
SECs Public Reference Room at 100 F Street,
N.E., Washington, D.C. 20549 and from the SECs
website (www.sec.gov).
We are providing a summary description of the material terms of
the ADSs and of your material rights as an owner of ADSs. Please
remember that summaries by their nature lack the precision of
the information summarized and that the rights and obligations
of an owner of ADSs will be determined by reference to the terms
of the deposit agreement and not by this summary. We urge you to
review the deposit agreement in its entirety.
Each ADS represents the right to receive one Class A
Ordinary Share of Ensco UK on deposit with the custodian. An ADS
also represents the right to receive any other property received
by the depositary or the custodian on behalf of the owner of the
ADS but that has not been distributed to the owners of ADSs
because of legal restrictions or practical considerations.
If you become an owner of ADSs, you will become a party to the
deposit agreement and therefore will be bound by its terms and
by the terms of any ADR that evidences your ADSs. The deposit
agreement and the ADR specify our rights and obligations as well
as your rights and obligations as owner of ADSs and those of the
depositary. As an ADS holder you appoint the depositary to act
on your behalf in certain circumstances. The deposit agreement
and the ADRs are governed by New York law. However, our
obligations to the holders of Class A Ordinary Shares will
continue to be governed by English law.
As an owner of ADSs, you may hold your ADSs either by means of
one or more ADRs registered in your name, through a brokerage or
safekeeping account, or through an account established by the
depositary in your name reflecting the registration of
uncertificated ADSs directly on the books of the depositary
(commonly referred to as the direct registration
system or DRS). The direct registration system
reflects the uncertificated (book-entry) registration of
ownership of ADSs by the depositary. Under the direct
registration system, ownership of ADSs is evidenced by periodic
statements issued by the depositary to the holders of the ADSs.
The direct registration system includes automated transfers
between the depositary and The Depository Trust Company, or
DTC, the central book-entry clearing and settlement
system for equity securities in the U.S.
If you decide to hold your ADSs through your brokerage or
safekeeping account, you must rely on the procedures of your
broker or bank to assert your rights as ADS owner. Banks and
brokers typically hold securities such as the ADSs through
clearing and settlement systems such as DTC. The procedures of
such clearing and settlement systems may limit your ability to
exercise your rights as an owner of ADSs. Please consult with
your broker or bank if you have any questions concerning these
limitations and procedures. All ADSs held through DTC will be
registered in the name of a nominee of DTC. This summary
description assumes you have opted to own the ADSs directly by
means of an ADS registered in your name and, as such, we will
refer to you as the holder. When we refer to
you, we assume the reader owns ADSs and will own
ADSs at the relevant time.
Dividends
and Distributions
As a holder, you generally have the right to receive the
distributions we make on the securities deposited with the
custodian. Your receipt of these distributions may be limited,
however, by practical considerations and legal limitations.
Holders will receive such distributions under the terms of the
deposit agreement in proportion to the number of ADSs held as of
a specified record date.
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Distributions
of Cash
Whenever we make a cash distribution for the securities on
deposit with the custodian, we will deposit the funds with the
custodian. Upon receipt of confirmation of the deposit of the
requisite funds, the depositary will arrange for the funds to be
converted into U.S. dollars, if necessary, and for the
distribution of the U.S. dollars to the holders, subject to
English law.
The conversion into U.S. dollars will take place only if
practicable and if the U.S. dollars are transferable to the
U.S., which we expect them to be. The amounts distributed to
holders will be net of the fees, expenses, taxes and
governmental charges payable by holders under the terms of the
deposit agreement. The depositary will apply the same method for
distributing the proceeds of the sale of any property (such as
undistributed rights) held by the custodian in respect of
securities on deposit.
Distributions
of Class A Ordinary Shares
If we elect to make a free distribution of Class A Ordinary
Shares for the securities on deposit with the custodian, we will
deposit the applicable number of Class A Ordinary Shares
with the custodian. Upon receipt of confirmation of such
deposit, the depositary will either distribute to holders new
ADSs representing the Class A Ordinary Shares deposited or
modify the ADS-to-Class A Ordinary Shares ratio, in which
case each ADS you hold will represent rights and interests in
the additional Class A Ordinary Shares so deposited. Only
whole new ADSs will be distributed. Fractional entitlements will
be sold and the proceeds of such sale will be distributed as in
the case of a cash distribution.
The distribution of new ADSs or the modification of the
ADS-to-Class A Ordinary Shares ratio upon a distribution of
Class A Ordinary Shares will be made net of the fees,
expenses, taxes and governmental charges payable by holders
under the terms of the deposit agreement. In order to pay such
taxes or governmental charges, the depositary may sell all or a
portion of the new Class A Ordinary Shares so distributed.
No such distribution of new ADSs will be made if it would
violate a law (i.e., the U.S. securities laws) or if
it is not operationally practicable. If the depositary does not
distribute new ADSs as described above, it may sell the
Class A Ordinary Shares received upon the terms described
in the deposit agreement and will distribute the proceeds of the
sale as in the case of a distribution of cash.
Distributions
of Rights
Whenever we intend to distribute rights to purchase additional
Class A Ordinary Shares, we will give prior notice to the
depositary and we will assist the depositary in determining
whether it is lawful and reasonably practicable to distribute
rights to purchase additional ADSs to holders.
The depositary will establish procedures to distribute rights to
purchase additional ADSs to holders and to enable such holders
to exercise such rights if it is lawful and reasonably
practicable to make the rights available to holders of ADSs, and
if we provide all of the documentation contemplated in the
deposit agreement (such as opinions to address the lawfulness of
the transaction). You may have to pay fees, expenses, taxes and
other governmental charges to subscribe for the new ADSs upon
the exercise of your rights. The depositary is not obligated to
establish procedures to facilitate the distribution and exercise
by holders of rights to purchase new Class A Ordinary
Shares other than in the form of ADSs.
The depositary will not distribute the rights to you if:
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We do not timely request that the rights be distributed to you
or we request that the rights not be distributed to you;
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We fail to deliver satisfactory documents to the
depositary; or
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It is not reasonably practicable to distribute the rights.
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The depositary will sell the rights that are not exercised or
not distributed if such sale is lawful and reasonably
practicable. The proceeds of such sale will be distributed to
holders as in the case of a cash distribution. If the depositary
is unable to sell the rights, it will allow the rights to lapse.
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Elective
Distributions
Whenever we intend to distribute a dividend payable at the
election of shareholders either in cash or in additional shares,
we will give prior notice thereof to the depositary and will
indicate whether we wish the elective distribution to be made
available to you. In such case, we will assist the depositary in
determining whether such distribution is lawful and reasonably
practicable.
The depositary will make the election available to you only if
it is reasonably practicable and if we have provided all of the
documentation contemplated in the deposit agreement. In such
case, the depositary will establish procedures to enable you to
elect to receive either cash or additional ADSs, in each case as
described in the deposit agreement.
If the election is not made available to you, you will receive
either cash or additional ADSs, depending on what a shareholder
under English law would receive upon failing to make an
election, as more fully described in the deposit agreement.
Other
Distributions
Whenever we intend to distribute property other than cash,
Class A Ordinary Shares or rights to purchase additional
Class A Ordinary Shares, we will notify the depositary in
advance and will indicate whether we wish such distribution to
be made to you. If so, we will assist the depositary in
determining whether such distribution to holders is lawful and
reasonably practicable.
If it is reasonably practicable to distribute such property to
you and if we provide all of the documentation contemplated in
the deposit agreement, the depositary will distribute the
property to the holders in a manner it deems practicable.
The distribution will be made net of fees, expenses, taxes and
governmental charges payable by holders under the terms of the
deposit agreement. In order to pay such taxes and governmental
charges, the depositary may sell all or a portion of the
property received.
The depositary will not distribute the property to you
and will sell the property if:
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We do not request that the property be distributed to you or if
we ask that the property not be distributed to you;
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We do not deliver satisfactory documents to the
depositary; or
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The depositary determines that all or a portion of the
distribution to you is not reasonably practicable. The proceeds
of such a sale will be distributed to holders as in the case of
a cash distribution.
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Redemption
Whenever we decide to redeem any of the securities on deposit
with the custodian, we will notify the depositary in advance. If
it is practicable and if we provide all of the documentation
contemplated in the deposit agreement, the depositary will
provide notice of the redemption to the holders.
The custodian will be instructed to surrender the Class A
Ordinary Shares being redeemed against payment of the applicable
redemption price. The depositary will convert the redemption
funds received into U.S. dollars, if necessary, upon the
terms of the deposit agreement and will establish procedures to
enable holders to receive the net proceeds from the redemption
upon surrender of their ADSs to the depositary. You may have to
pay fees, expenses, taxes and other governmental charges upon
the redemption of your ADSs. If less than all ADSs are being
redeemed, the ADSs to be retired will be selected by lot or on a
pro rata basis, as the depositary may determine.
Changes
Affecting Class A Ordinary Shares
The Class A Ordinary Shares held on deposit for your ADSs
may change from time to time. For example, there may be a change
in nominal or par value, a
split-up,
cancellation, consolidation or reclassification of such
Class A Ordinary Shares or a recapitalization,
reorganization, merger, consolidation or sale of assets.
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If any such change were to occur, your ADSs would, to the extent
permitted by law, represent the right to receive the property
received or exchanged in respect of the Class A Ordinary
Shares held on deposit. The depositary may in such circumstances
deliver new ADSs to you, amend the deposit agreement, the ADRs
and the applicable Registration Statement(s) on
Form F-6,
call for the exchange of your existing ADSs for new ADSs and
take any other actions that are appropriate to reflect as to the
ADSs the change affecting the Class A Ordinary Shares. If
the depositary may not lawfully distribute such property to you,
the depositary may sell such property and distribute the net
proceeds to you as in the case of a cash distribution.
Issuance
of ADSs upon Deposit of Class A Ordinary Shares
The depositary may create ADSs on your behalf if you or your
broker deposit Class A Ordinary Shares with the custodian.
The depositary will deliver these ADSs to the person you
indicate only after you pay any applicable issuance fees and any
charges and taxes payable for the transfer of the Class A
Ordinary Shares to the custodian. Your ability to deposit
Class A Ordinary Shares and receive ADSs may be limited by
U.S. and English law considerations applicable at the time
of deposit.
The issuance of ADSs may be delayed until the depositary or the
custodian receives confirmation that all required approvals have
been given and that the Class A Ordinary Shares have been
duly transferred to the custodian. The depositary will only
issue ADSs in whole numbers.
When you make a deposit of Class A Ordinary Shares, you
will be responsible for transferring good and valid title to the
depositary. As such, you will be deemed to represent and warrant
that:
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The Class A Ordinary Shares are duly authorized, validly
issued, fully paid, non-assessable and legally obtained.
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All preemptive (and similar) rights, if any, with respect to
such Class A Ordinary Shares have been validly waived or
exercised.
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You are duly authorized to deposit the Class A Ordinary
Shares.
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The Class A Ordinary Shares presented for deposit are free
and clear of any lien, encumbrance, security interest, charge,
mortgage or adverse claim, and are not, and the ADSs issuable
upon such deposit will not be, restricted securities
(as defined in the deposit agreement).
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The Class A Ordinary Shares presented for deposit have not
been stripped of any rights or entitlements.
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If any of the representations or warranties are incorrect in any
way, we and the depositary may, at your cost and expense, take
any and all actions necessary to correct the consequences of the
misrepresentations.
Transfer,
Combination and Split Up of ADRs
As an ADR Holder, you will be entitled to transfer, combine or
split up your ADRs and the ADSs evidenced thereby. For transfers
of ADRs, you will have to surrender the ADRs to be transferred
to the depositary and also must:
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ensure that the surrendered ADR certificate is properly endorsed
or otherwise in proper form for transfer;
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provide such proof of identity and genuineness of signatures as
the depositary deems appropriate;
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provide any transfer stamps required by the State of New York or
the U.S.; and
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pay all applicable fees, charges, expenses, taxes and other
government charges payable by ADR Holders pursuant to the terms
of the deposit agreement, upon the transfer of ADRs.
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To have your ADRs either combined or split up, you must
surrender the ADRs in question to the depositary with your
request to have them combined or split up, and you must pay all
applicable fees, charges and expenses payable by ADR Holders,
pursuant to the terms of the deposit agreement, upon a
combination or split up of ADRs.
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Withdrawal
of Class A Ordinary Shares Upon Cancellation of
ADSs
As a holder, you will be entitled to present your ADSs to the
depositary for cancellation and then receive the corresponding
number of underlying Class A Ordinary Shares at the
custodians offices. Your ability to withdraw the
Class A Ordinary Shares may be limited by U.S. and
English legal considerations applicable at the time of
withdrawal. You assume the risk for delivery of all funds and
securities upon withdrawal. Once canceled, the ADSs will not
have any rights under the deposit agreement.
If you hold ADSs registered in your name, the depositary may ask
you to provide proof of identity and genuineness of any
signature and such other documents as the depositary may deem
appropriate before it will cancel your ADSs. The withdrawal of
the Class A Ordinary Shares represented by your ADSs may be
delayed until the depositary receives satisfactory evidence of
compliance with all applicable laws and regulations. Please keep
in mind that the depositary will only accept ADSs for
cancellation that represent a whole number of securities on
deposit.
You will have the right to withdraw the securities represented
by your ADSs at any time except for:
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Temporary delays that may arise because (i) the transfer
books for the Class A Ordinary Shares or ADSs are closed,
or (ii) Class A Ordinary Shares are immobilized on
account of a shareholders meeting or a payment of
dividends.
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Obligations to pay fees, taxes and similar charges.
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Restrictions imposed because of laws or regulations applicable
to ADSs or the withdrawal of securities on deposit.
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The deposit agreement may not be modified to impair your right
to withdraw the securities represented by your ADSs except to
comply with mandatory provisions of law.
Voting
Rights
As a holder of ADSs (or ADRs evidencing ADSs), you generally
have the right under the deposit agreement to instruct the
depositary to exercise the voting rights for the Class A
Ordinary Shares represented by your ADSs. The voting rights of
holders of Class A Ordinary Shares are described in
Description of Class A Ordinary Shares of Ensco
UK Voting Rights.
At our request, the depositary will distribute to you any notice
of shareholders meeting received from us together with
information explaining how to instruct the depositary to
exercise the voting rights of the Class A Ordinary Shares
of Ensco UK represented by ADSs.
If the depositary timely receives voting instructions from a
holder of ADSs, it will endeavor to vote Class A Ordinary
Shares represented by the holders ADSs in accordance with
such voting instructions.
Please note that the ability of the depositary to carry out
voting instructions may be limited by practical and legal
limitations and the terms of the Class A Ordinary Shares on
deposit. We cannot assure you that you will receive voting
materials in time to enable you to return voting instructions to
the depositary in a timely manner. Class A Ordinary Shares
for which no voting instructions have been received will not be
voted.
Fees and
Charges
The Company has agreed to pay certain fees to the Depositary and
to reimburse the Depositary for certain expenses.
As an ADS holder you will be responsible to pay certain fees and
expenses incurred by the depositary and certain taxes and
governmental charges such as:
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Fees for the transfer and registration of Class A Ordinary
Shares charged by the registrar and transfer agent for the
Class A Ordinary Shares in England (i.e., upon
deposit and withdrawal of Class A Ordinary Shares).
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Expenses incurred for converting foreign currency into
U.S. dollars.
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Expenses for cable, telex and fax transmissions and for delivery
of securities.
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Taxes and duties upon the transfer of securities (i.e.,
when Class A Ordinary Shares are deposited or withdrawn from
deposit).
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Fees and expenses incurred in connection with the delivery or
servicing of Class A Ordinary Shares on deposit.
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The Company shall pay to the Depositary such fees and charges
and reimburse the Depositary for such out-of-pocket expenses as
the Depositary and the Company may agree from time to time.
Amendments
and Termination
We may agree with the depositary to modify the deposit agreement
at any time without your consent. We undertake to give holders
30 days prior notice of any modifications that would
materially prejudice any of their substantial rights under the
deposit agreement. We will not consider to be materially
prejudicial to your substantial rights any modifications or
supplements that are reasonably necessary for the ADSs to be
registered under the Securities Act or to be eligible for
book-entry settlement, in each case without imposing or
increasing the fees and charges you are required to pay. In
addition, we may not be able to provide you with prior notice of
any modifications or supplements that are required to
accommodate compliance with applicable provisions of law.
You will be bound by the modifications to the deposit agreement
if you continue to hold your ADSs after the modifications to the
deposit agreement become effective. The deposit agreement cannot
be amended to prevent you from withdrawing the Class A
Ordinary Shares represented by your ADSs (except as permitted by
law).
We have the right to direct the depositary to terminate the
deposit agreement. Similarly, the depositary may in certain
circumstances on its own initiative terminate the deposit
agreement. In either case, the depositary must give notice to
the holders at least 30 days before termination. Until
termination, your rights under the deposit agreement will be
unaffected during such notice period.
After termination, the depositary will continue to collect
distributions received (but will not distribute any such
property until you request the cancellation of your ADSs) and
may sell the securities held on deposit. After the sale, the
depositary will hold the proceeds from such sale and any other
funds then held for the holders of ADSs in a non-interest
bearing account. At that point, the depositary will have no
further obligations to holders other than to account for the
funds then held for the holders of ADSs still outstanding (after
deduction of applicable fees, taxes and expenses).
Books of
Depositary
The depositary will maintain ADS holder records at its
depositary office. You may inspect such records at such office
during regular business hours but solely for the purpose of
communicating with other holders in the interest of business
matters relating to the ADSs and the deposit agreement.
The depositary will maintain in New York facilities to record
and process the issuance, cancellation, combination,
split-up and
transfer of ADSs. These facilities may be closed from time to
time, to the extent not prohibited by law.
Limitations
on Obligations and Liabilities
The deposit agreement limits our obligations and the
depositarys obligations to you. Please note the following:
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We and the depositary are obligated only to take the actions
specifically stated in the deposit agreement without negligence
or bad faith.
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The depositary disclaims any liability for any failure to carry
out voting instructions, for any manner in which a vote is cast
or for the effect of any vote, provided it acts in good faith
and in accordance with the terms of the deposit agreement.
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The depositary disclaims any liability for any failure to
determine the lawfulness or practicality of any action, for the
content of any document forwarded to you on our behalf or for
the accuracy of any translation of such a document, for the
investment risks associated with investing in Class A
Ordinary Shares, for the validity or worth of the Class A
Ordinary Shares, for any tax consequences that result from the
ownership of ADSs, for the credit-worthiness of any third party,
for allowing any rights to lapse under the terms of the deposit
agreement, for the timeliness of any of our notices or for our
failure to give notice.
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We and the depositary will not be obligated to perform any act
that is inconsistent with the terms of the deposit agreement.
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We and the depositary disclaim any liability if we or the
depositary are prevented or forbidden from or subject to any
civil or criminal penalty or restraint on account of, or delayed
in, doing or performing any act or thing required by the terms
of the deposit agreement, by reason of any provision, present or
future of any law or regulation, or by reason of present or
future provision of any provision of our articles of
association, as amended from time to time, or any provision of
or governing the securities on deposit, or by reason of any act
of God or war or other circumstances beyond our control.
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We and the depositary disclaim any liability by reason of any
exercise of, or failure to exercise, any discretion provided for
the deposit agreement or in our articles of association, as
amended from time to time, or in any provisions of or governing
the securities on deposit.
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We and the depositary further disclaim any liability for any
action or inaction in reliance on the advice or information
received from legal counsel, accountants, any person presenting
Class A Ordinary Shares for deposit, any holder of ADSs or
authorized representatives thereof, or any other person believed
by either of us in good faith to be competent to give such
advice or information.
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We and the depositary also disclaim liability for the inability
by a holder to benefit from any distribution, offering, right or
other benefit that is made available to holders of Class A
Ordinary Shares but is not, under the terms of the deposit
agreement, made available to you.
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We and the depositary may rely without any liability upon any
written notice, request or other document believed to be genuine
and to have been signed or presented by the proper parties.
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We and the depositary also disclaim liability for any
consequential or punitive damages for any breach of the terms of
the deposit agreement.
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Pre-Release
Transactions
The depositary may, in certain circumstances, issue ADSs before
receiving a deposit of Class A Ordinary Shares or release
Class A Ordinary Shares before receiving ADSs for
cancellation. These transactions are commonly referred to as
pre-release transactions. The deposit agreement
limits the aggregate size of pre-release transactions and
imposes a number of conditions on such transactions
(i.e., the need to receive collateral, the type of
collateral required, the representations required from brokers,
etc.). The depositary may retain the compensation received from
the pre-release transactions.
Taxes
You will be responsible for the taxes and other governmental
charges payable on the ADSs and the securities represented by
the ADSs. We, the depositary and the custodian may deduct from
any distribution the taxes and governmental charges payable by
holders and may sell any and all property on deposit to pay the
taxes and governmental charges payable by holders. You will be
liable for any deficiency if the sale proceeds do not cover the
taxes that are due.
The depositary may refuse to issue ADSs, to deliver, transfer,
split and combine ADRs or to release securities on deposit until
all taxes and charges are paid by the applicable holder. The
depositary and the custodian may take reasonable administrative
actions to obtain tax refunds and reduced tax withholding for
any distributions on your behalf. However, you may be required
to provide to the depositary and to the custodian proof of
taxpayer status and residence and such other information as the
depositary and the custodian may require to fulfill legal
obligations.
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You are required to indemnify us, the depositary and the
custodian for any claims with respect to taxes based on any tax
benefit obtained for you.
Foreign
Currency Conversion
We intend to make distributions in U.S. dollars. To the
extent any distributions are made in currencies other than
U.S. dollars, the depositary will arrange for the
conversion of all
non-U.S. currency
received into U.S. dollars if such conversion is practical,
and it will distribute the U.S. dollars in accordance with
the terms of the deposit agreement. You may have to pay fees and
expenses incurred in converting foreign currency, such as fees
and expenses incurred in complying with currency exchange
controls and other governmental requirements.
If the conversion of foreign currency is not practical or
lawful, or if any required approvals are denied or not
obtainable at a reasonable cost or within a reasonable period,
the depositary may take the following actions in its discretion:
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Convert the foreign currency to the extent practical and lawful
and distribute the U.S. dollars to the holders for whom the
conversion and distribution is lawful and practical.
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Distribute the foreign currency to holders for whom the
distribution is lawful and practical.
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Hold the foreign currency (without liability for interest) for
the applicable holders.
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COMPARISON
OF RIGHTS OF STOCKHOLDERS/SHAREHOLDERS
Your rights as a stockholder of Ensco Delaware are governed by
the DGCL and Ensco Delawares certificate of incorporation
and bylaws. After the merger, you, through your ownership of
ADSs and subject to the terms of the deposit agreement, will
have the rights of a shareholder of Ensco UK, and your rights
will generally be governed by English law and Ensco UKs
articles of association.
The economic and voting rights of Ensco Delaware common stock
and the ADSs representing Class A Ordinary Shares are
similar. However, there are differences between your rights
under the DGCL and under applicable English law. In addition,
there are differences between Ensco Delawares certificate
of incorporation and bylaws and Ensco UKs articles of
association.
The following discussion is a summary of the material
differences in your rights that would result from the merger and
assuming you hold Class A Ordinary Shares. As such, this
summary does not cover all the differences between applicable
English law and the DGCL affecting corporations and their
stockholders or all of the differences between Ensco
Delawares certificate of incorporation and bylaws and
Ensco UKs articles of association. While we believe this
summary is accurate in all material respects, the following
descriptions are qualified in their entirety by reference to the
complete text of the relevant provisions of applicable English
law, the DGCL, Ensco Delawares certificate of
incorporation and bylaws and Ensco UKs articles of
association. We encourage you to read those laws and documents.
A copy of Ensco UKs articles of association is attached to
this proxy statement/prospectus as Annex B. For information
as to how you can obtain a copy of Ensco Delawares
certificate of incorporation and bylaws, see Where You Can
Find More Information. Further, to exercise some of the
rights reserved to registered holders of Class A Ordinary
Shares, you would need to surrender your ADSs and withdraw the
underlying Class A Ordinary Shares. See Description
of American Depositary Shares of Ensco UKWithdrawal of
Class A Ordinary Shares Upon Cancellation of
ADSs.
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Provisions Currently Applicable
to
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Provisions Applicable to
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Ensco Delaware
Stockholders
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Ensco UK Shareholders
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Voting Rights
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Voting, Generally
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§ Each
stockholder is entitled to one vote for each share of capital
stock held by the stockholder, unless the certificate of
incorporation provides otherwise.
§ If
issued, the voting rights of holders of preferred stock will be
determined by the certificate of incorporation or the
certificate of designation with respect to such preferred stock.
§ Ensco
Delawares bylaws also provide that, as a general matter,
when a quorum is present, action on a matter will be approved if
the votes cast in favor of the matter exceed the votes cast
opposing the matter.
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§ Each
shareholder of Ensco UK is entitled to one vote for each Class A
Ordinary Share held by such shareholder.
§ If
issued, the voting rights of holders of Unclassified Shares will
be determined by the Ensco UK Board in accordance with the
articles of association.
§ Under
English law and Ensco UKs articles, certain matters
require ordinary resolutions, which must be approved
by at least a majority of the votes cast by shareholders, and
certain other matters require special resolutions,
which require the affirmative vote of at least 75 percent
of the votes cast at the meeting.
§ An
ordinary resolution is needed to (among other things): remove a
director; provide, vary or renew a directors authority to
allot shares; and appoint directors (where appointment is by
shareholders).
§ A
special resolution is needed to (amongst other things): alter a
companys articles of association,
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Provisions Currently Applicable
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Provisions Applicable to
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Ensco Delaware
Stockholders
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Ensco UK Shareholders
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change the companys name, exclude statutory preemptive
rights on allotment of securities for cash; reduce a
companys share capital; re-register a public company as a
private company (or vice versa); approve a scheme of
arrangement.
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§ The
Ensco UK board will also have the authority under the articles
of association to change the companys name.
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Quorum
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§ Holders
of at least a majority of the stock issued and outstanding and
entitled to vote, present at a meeting, shall constitute a
quorum.
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§ Holders
of at least a majority of the shares issued and outstanding and
entitled to vote, present at a general meeting, shall constitute
a quorum.
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Cumulative Voting
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§ Ensco
Delawares certificate of incorporation and bylaws
specifically exclude cumulative voting of common stock and
preferred stock.
§ Ensco
Delawares certificate of incorporation provides that at
each election of directors, every stockholder entitled to vote
at any meeting shall have the right to vote, in person or by
proxy, the number of shares owned by him or her for as many
persons as there are directors to be elected.
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§ Cumulative
voting is not recognized under English law.
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Action by Written Consent
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§ Ensco
Delawares bylaws and certificate of incorporation provides
that subject to the rights, if any, of the holders of any then
outstanding class or series of preferred stock or indebtedness
of the corporation with special rights to elect directors, any
action required or permitted to be taken by the stockholders of
the corporation must be effected at a duly called annual or
special meeting of the stockholders or by unanimous written
consent of stockholders, and stockholders may not otherwise act
by written consent.
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§ Under
English law, a public limited companys shareholders cannot
pass a resolution by written consent; they can only pass
resolutions taken at shareholder meetings.
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Shareholder Proposals and Shareholder Nominations of
Directors
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Shareholders Ability to Call a Special
Meeting
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§ Ensco
Delawares bylaws provide that the companys
stockholders may not call a special meeting of stockholders.
Under Delaware law, any stockholder may petition the Court of
Chancery to order a meeting to elect directors if such meeting,
or action to elect directors by written consent in lieu of a
meeting, has not been held within thirteen months.
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§ Under
English law, the ownership of shares (by one or more
shareholders) representing 5 percent of the paid-up capital
of Ensco UK carrying voting rights gives the right to
requisition the holding of a general meeting of shareholders.
§ See
Meetings of Shareholders below.
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Provisions Currently Applicable
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Provisions Applicable to
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Ensco Delaware
Stockholders
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Ensco UK Shareholders
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Shareholder Proposals: Director Nominations,
Generally
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§ Under
Ensco Delawares bylaws, stockholders have an express right
to nominate candidates for election to the Board and bring other
business before an annual meeting, provided the shareholder was
a stockholder of record at the time notice was given of the
meeting and is a stockholder at the time of the meeting, is
entitled to vote at the meeting and complies with the notice
procedures set forth below as to such business or nomination.
The shareholder must give timely notice and the notice must:
(A) set forth, as to the
stockholder giving the notice and the beneficial owner, if any,
on whose behalf the nomination or proposal is made (i) the
name and address of such stockholder (ii) the class or
series and number of shares of the corporation owned, any option
or convertible security and certain other information regarding
shareholder ownership of shares and (iii) any other
information relating to such stockholder and beneficial owner
that would be required to be disclosed in a proxy;
(B) if the notice relates to
any business other than a nomination of a director(s), set forth
(i) a brief description of the business desired to be
brought before the meeting, the reasons for conducting such
business at the meeting and any material interest of such
stockholder and beneficial owner in such business and
(ii) a description of all agreements, between such
stockholder and beneficial owner, and any other person in
connection with the proposal of such business by such
stockholder;
(C) set forth, for each
nominee (i) information relating to such person that would
be required to be disclosed in a proxy statement and (ii) a
description of all direct and indirect compensation during the
past three years, and any other material relationships, between
or among such stockholder and beneficial owner on the one hand,
and each proposed nominee, on the other hand; and
(D) include a completed and
signed questionnaire, representation and agreement for each
nominee.
§ To
be timely, a stockholders notice must be delivered to the
secretary of the corporation not earlier than the close of
business on the 75th day and not later than the close of
business on the
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§ One
or more shareholders holding at least 5 percent of the
paid-up capital of Ensco UK carrying voting rights can require
resolutions to be put before the annual general meeting. The
request must be received at least 6 weeks before the
relevant annual general meeting. If so requested, the company is
required to give notice of a resolution in the same manner and
at the same time (or as soon as reasonably practical thereafter)
as the notice of the annual general meeting.
§ All
shareholder resolutions thus proposed must not be:
(A) if passed, ineffective
(whether by reason of inconsistency with any enactment or Ensco
UKs articles of association);
(B) defamatory of any person;
or
(C) frivolous or vexatious.
§ One
or more shareholders holding at least 5 percent of the
paid-up capital of Ensco UK carrying voting rights, or at least
100 shareholders who have a right to vote and hold (on
average) at least £100 per shareholder of paid-up share
capital, can require the company to circulate to shareholders a
statement of up to 1,000 words relating to a matter referred to
in a proposed resolution or any other business matter to be
dealt with in any type of general meeting. The request must be
received at least 1 week before the meeting to which it
relates. If so requested, the company is required to circulate a
statement in the same manner and at the same time (or as soon as
reasonably practical thereafter) as the notice of the relevant
general meeting.
§ Shareholders,
whether individually or collectively, who do not meet the
5 percent threshold will not be entitled to nominate a
director or propose a shareholder resolution for consideration
at a meeting of the shareholders except for shareholder
proposals required by SEC Rule 14a-8 under the Exchange Act.
§ Directors
of Ensco UK that are proposed to be elected at a shareholder
meeting generally must be elected individually pursuant to
separate proposals at the meeting; more than one director cannot
be elected under the same shareholder proposal.
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Provisions Currently Applicable
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Provisions Applicable to
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Ensco Delaware
Stockholders
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Ensco UK Shareholders
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50th day prior to the first anniversary of the preceding
years annual meeting, subject to any other requirements of
law; provided, however, that in the event that the date of the
annual meeting is more than 30 days before or more than
60 days after such anniversary date, notice by the
stockholder to be timely must be so delivered not earlier than
the close of business on the 75th day prior to the date of
such annual meeting and not later than the close of business on
the later of the 50th day prior to the date of such annual
meeting or, if the first public announcement of the date of such
annual meeting is less than 65 days prior to the date of
such annual meeting, the 15th day following the day on
which public announcement of the date of such meeting is first
made by the corporation.
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§ The
New Articles continue Ensco Delawares current mechanism
for nominating directors, subject to the 5 percent
shareholding requirement set forth above.
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§ Under
Ensco Delawares bylaws and except as otherwise provided by
law, the certificate of incorporation or the bylaws, the
Chairman of the meeting shall determine whether a nomination or
any business proposed to be brought before the meeting was
properly made and if not, to declare that such defective
proposal or nomination shall be disregarded.
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Sources and Payment of Dividends
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Sources of Dividends
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§ Under
Delaware law, subject to any restriction in the
corporations certificate of incorporation, the Board may
declare and pay dividends out of
(1) surplus of the
corporation, which is defined as net assets less statutory
capital; or
(2) if no surplus exists, out
of the net profits of the corporation for the year in which the
dividend is declared and/or the preceding year;
provided, however, that if the capital of the corporation have
been diminished to an amount less than the aggregate amount of
capital represented by the issued and outstanding stock of all
classes having preference upon the distribution of assets, the
Board may not declare and pay dividends out of the
corporations net profits until the deficiency in the
capital has been repaired.
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§ Ensco
UK may pay dividends on its ordinary shares only out of its
distributable profits, defined as accumulated, realized profits
less accumulated, realized losses, and not out of share capital,
which includes share premiums (which are equal to the excess of
the consideration for the issue of shares over the aggregate
nominal amount of such shares).
§ In
addition, under English law, Ensco UK will not be permitted to
make a distribution if, at the time, the amount of its net
assets is less than the aggregate of its issued and paid-up
share capital and undistributable reserves or to the extent that
the distribution will reduce the net assets below such amount.
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Declaration of Dividends
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§ Ensco
Delawares certificate of incorporation provides that
dividends (payable in cash, stock
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§ Ensco
UKs articles of association authorize the directors to
declare dividends if the Ensco UK
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Provisions Currently Applicable
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Provisions Applicable to
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Ensco Delaware
Stockholders
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Ensco UK Shareholders
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or otherwise) may be declared by the Board from time to time
out of any funds legally available therefor.
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Board consider that the financial position of Ensco UK
justifies such payment.
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§ Ensco
Delawares bylaws provide that dividends may be declared by
the Board at any regular or special meeting, and may be paid in
cash, property or in shares of the companys capital stock.
Before payment of any dividend, there may be set aside out of
the funds of the corporation available for dividends such sums
as the directors think proper as a reserve to meet
contingencies, to equalize dividends or to repair or maintain
company property or for any other purpose.
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§ Ensco
UKs articles of association provide that dividends may be
paid in cash or in property, paid-up shares, or debentures of
another company.
§ Ensco
UKs articles of association provide that shares held by or
for the benefit of subsidiaries of Ensco UK will not be entitled
to dividends, including any scrip dividends, bonus shares or
dividends or distributions of property or debentures of any
other company.
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Record
Date
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§ Ensco
Delawares bylaws provide that for dividends and other
matters, the record date must be set not more than 60 days
prior to such action.
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§ Ensco
UKs articles of association provide that, subject to
certain restrictions, the Ensco UK Board may set the record date
for a dividend or other distribution, provided the date is not
more than 60 days before the date of declaration of the
dividend.
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Purchase and Redemption of Stock
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Purchase
and Redemption of Stock, Generally
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§ Under
Delaware law, a corporation may purchase, redeem, receive, take
or otherwise acquire, own and hold, sell, lend, exchange,
transfer or otherwise dispose of, pledge, use and otherwise deal
in and with its own shares; provided, however, that no
corporation shall:
(1) Purchase or redeem its
own shares of capital stock for cash or other property when the
capital of the corporation is impaired or when such purchase or
redemption would cause any impairment of the capital of the
corporation, except that a corporation may purchase or redeem
out of capital any of its own shares which are entitled upon any
distribution of its assets, whether by dividend or in
liquidation, to a preference over another class or series of its
stock, or, if no shares entitled to such a preference are
outstanding, any of its own shares, if such shares will be
retired upon their acquisition and the capital of the
corporation reduced;
(2) Purchase, for more than
the price at which they may then be redeemed, any of its shares
which are redeemable at the option of the corporation; or
(3) Redeem any of its shares
unless their redemption is authorized by a subsection of the
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§ Ensco
UKs articles of association provide that it may purchase
its own shares, which, if purchased off market, requires
approval of the shareholders by special resolution, and redeem
outstanding redeemable shares, which, if requiring shareholder
approval, requires an ordinary resolution. A special
resolution, which would authorize the repurchase of up to
30 percent per annum of the share capital outstanding as of
the beginning of each fiscal year, is anticipated to be adopted
prior to the effective time of the merger. See
Description of Class A Ordinary Shares of Ensco
UKAlteration of Share Capital/Repurchase of Shares.
§ Ensco
UK may redeem or purchase shares only if the shares are fully
paid and only out of
(1) distributable profits; or
(2) the proceeds of a new
issue of shares made for the purpose of the purchase or
redemption.
§ Under
English law, any shares (including redeemable shares) purchased
by Ensco UK must then be cancelled and cannot be resold by the
company.
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Provisions Currently Applicable
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Provisions Applicable to
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Ensco Delaware
Stockholders
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Ensco UK Shareholders
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Delaware Code and then only in accordance with such section and
the certificate of incorporation.
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§ Under
Delaware law, a corporation has a right to resell any of its
shares theretofore purchased or redeemed out of surplus and
which have not been retired, for such consideration as shall be
fixed by the Board.
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Voting
Treasury Stock
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§ Under
Delaware law, shares of its own capital stock belonging to the
corporation or to another corporation, if a majority of the
shares entitled to vote in the election of directors of such
other corporation is held, directly or indirectly, by the
corporation, are neither entitled to vote nor counted for quorum
purposes; however, a corporation has a right to vote stock,
including but not limited to its own stock, held by it in a
fiduciary capacity
§ Under
Delaware law, shares which have been called for redemption shall
not be deemed to be outstanding shares for the purpose of voting
or determining the total number of shares entitled to vote on
any matter on and after the date on which written notice of
redemption has been sent to holders thereof and a sum sufficient
to redeem such shares has been irrevocably deposited or set
aside to pay the redemption price to the holders of the shares
upon surrender of certificates therefor.
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§ Under
English law, because Ensco UK will not be quoted on certain
exchanges in the European Economic Area (i.e., it will be
listed only on the NYSE), it may not hold treasury
shares.
§ Any
redeemable shares which are redeemed by Ensco UK must be
cancelled, but pending redemption could be voted and deemed
outstanding for the purpose of determining the total number of
shares entitled to vote on any such matter unless the terms of
issue provide otherwise.
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Meetings of Shareholders
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§ Ensco
Delawares bylaws provide that all meetings of stockholders
are to be held at any place designated by the Board. Also,
written notice of the annual meeting stating the place, date and
hour of the meeting shall be given to each stockholder entitled
to vote at such meeting not less than 10 nor more than
60 days before the date of the meeting.
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§ Ensco
UKs articles of association provide that the Ensco UK
Board, chairman, or chief executive officer may convene general
meetings of the shareholders at any place they so designate.
§ The
notice of the general meeting must state the time, date and
place of the meeting and the general nature of the business to
be dealt with. The general meeting may be within or outside the
U.K.
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§ Ensco
UK must hold its annual general meeting within 6 months
from the day following the end of its fiscal year.
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§ Under
English law, an annual general meeting must be called by at
least 21 clear days notice. It is possible to extend this
notice period in the companys articles of association.
This notice period can be shortened if all shareholders who are
permitted to attend and vote agree to the shorter notice. A
meeting other than the annual general meeting must be called by
not less than 14 clear
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Provisions Currently Applicable
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Provisions Applicable to
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Ensco Delaware
Stockholders
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Ensco UK Shareholders
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days notice, but this too can be longer or shortened by
agreement. The maximum notice in Ensco UKs articles is
60 days for both types of meeting.
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§ Clear
days means calendar days and excludes (1) the date of
receipt or deemed receipt of the notice; and (2) the date of the
meeting itself.
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Special Meetings of Shareholders
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Calling
a Special Meeting
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§ Ensco
Delawares certificate of incorporation and bylaws provide
that special meetings of stockholders may be called only on the
order of
(1) the Board; or
(2) the chairman of the
Board; or
(3) the chief executive
officer.
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§ Ensco
UKs articles of association provide that general meetings
of shareholders may be called on the order of
(1) the Ensco UK Board; or
(2) the chairman of the Ensco
UK Board; or
(3) the chief executive
officer.
§ Under
English law, one or more shareholders representing at least
5 percent of the paid up capital of Ensco UK carrying
voting rights have the right to requisition the holding of a
general meeting.
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Notice
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§ Ensco
Delawares bylaws provide that stockholders entitled to
vote at such special meeting must receive notice of the meeting
not less than 10 days and not more than 60 days prior
to the meeting. This notice must state the place, date and hour
of the meeting and the purpose or purposes for which the meeting
is called. Business transacted at any special meeting of
stockholders shall be limited to the purposes stated in the
notice.
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§ English
law requires that notice of a general meeting of shareholders
(other than the annual meeting convened by the officers, which
requires at least 21 clear days) must be delivered to the
shareholders at least 14 clear days prior to the meeting.
Under Ensco UKs articles of association the notice must be
delivered not more than 60 days prior to the meeting. This
notice must state the place, date and hour of the meeting and
the purpose or purposes for which the meeting is called.
Business transacted at any general meeting of shareholders shall
be limited to the purposes stated in the notice.
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§ Where
the meeting is properly requisitioned by the shareholders of
Ensco UK, the Ensco UK Board must call the general meeting
within 21 days, and the meeting itself should be held not
more than 28 days, after the date of the notice convening
the meeting. The 28 day requirement may not be
lengthened. It can, however, be shortened with
shareholder consent.
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§ Notice
periods for general meetings can be shortened for public
companies if shareholders holding 95 percent of the voting
rights agree to hold the meeting at short notice. In the case
of
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Provisions Currently Applicable
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Provisions Applicable to
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Stockholders
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Ensco UK Shareholders
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annual general meetings, all shareholders entitled to attend
and vote must agree to short notice.
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Appraisal Rights
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To Whom are Appraisal Rights Available
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§ Under
Delaware law, stockholders of a corporation involved in a merger
who hold shares of stock on the date a demand is made with
respect to such shares, who continuously holds such shares
through the effective date of the merger or consolidation, and
who has neither voted in favor of the merger or consolidation
nor consented thereto in writing generally have the right to
demand and receive payment in cash of the fair value of their
stock as determined by the Delaware Court of Chancery, in lieu
of receiving the merger consideration. However, appraisal rights
are not available to holders of shares
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§ English
law does not provide for appraisal rights similar to
those rights under Delaware law. However, English law will
provide for dissenters rights which permit a shareholder
to object to a Court in the context of the compulsory
acquisition of minority shares. See Shareholders
Votes on Certain Transactions below.
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(1) listed on a national
securities exchange; or
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(2) held of record by more
than 2,000 stockholders.
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Exceptions
to Appraisal Rights
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§ Appraisal
rights shall be available for the shares of any class or series
of stock of a constituent corporation if the holders are
required by the terms of an agreement of merger or consolidation
to accept for such stock anything except:
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(1) shares of stock of the
corporation surviving or
resulting from such merger or
consolidation, or depositary receipts in respect thereof;
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(2) shares of stock or
depositary receipts of another corporation that, at the
effective date of the merger, will be either(a) listed on a
national securities exchange; or (b) held of record by more
than 2,000 holders; or
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(3) cash in lieu of
fractional shares of the stock or depositary receipts received;
or
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(4) any combination of the
shares of stock, depositary receipts and cash in lieu of
fractional shares or fractional depositary receipts described in
the foregoing (1) (3)
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In
addition, appraisal rights are not available to the holders of
shares of the surviving corporation in the merger, if the merger
does not require the approval of the stockholders of that
corporation.
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Provisions Currently Applicable
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Provisions Applicable to
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Ensco Delaware
Stockholders
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Ensco UK Shareholders
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Preemptive Rights
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§ Under
Delaware law, a stockholder is not entitled to preemptive rights
to subscribe for additional issuances of stock or any security
convertible into stock unless they are specifically granted in
the certificate of incorporation.
§ Ensco
Delawares certificate of incorporation provides that the
Board may issue authorized but unissued shares for such
consideration as it may determine, and holders of common stock
and preferred stock shall have no preemptive rights to purchase
any shares or securities of any class, including treasury
shares, which may at any time be issued or sold or offered for
sale by the corporation.
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§ Under
English law, unless either a special resolution to the contrary
has been passed by the shareholders or there is a provision in
the articles of association conferring a corresponding right,
the issuance for cash of:
(1) equity securities,
(i.e., ordinary shares, which are shares other than
shares which, with respect to dividends or capital, carry a
right to participate only up to a specified amount in a
distribution); or
(2) rights to subscribe for
or convert securities into, ordinary shares,
must
be offered first to the existing ordinary shareholders in
proportion to their respective nominal values of their
holdings. English law permits a companys shareholders by
special resolution or a provision in a companys articles
of association to exclude preemptive rights for a period of up
to five years.
§ Preemptive
rights do not generally apply to a companys issuance of
shares in exchange for consideration other than cash.
§ A
special resolution is anticipated to be passed immediately prior
to the effective time of the merger to exclude preemptive rights
for a period of five years. See Description of Class A
Ordinary shares of Ensco UKPreemptive Rights and New
Issues of Shares.
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Amendment of Governing Instruments
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Amending the Certificate of Incorporation
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§ Under
Delaware law, unless the certificate of incorporation requires a
greater vote, an amendment to the certificate of incorporation
requires
(1) recommendation of the
Board;
(2) the affirmative vote of a
majority of the outstanding stock entitled to vote; and
(3) the affirmative vote of a
majority of the outstanding stock of each class entitled to
vote.
§ Under
Delaware law, stockholders have the power to adopt, amend or
repeal bylaws by the affirmative vote of a majority of the stock
present and entitled to vote at a meeting at which a quorum is
present,
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§ The
provisions in the articles of association of an English public
limited company are generally equivalent to the collective
provisions in a certificate of incorporation and bylaws of a
Delaware corporation.
§ Under
English law, a special resolution of the shareholders is
required to amend any provision of Ensco UKs articles of
association. The Ensco UK Board does not have the power to
amend the New Articles without shareholder approval.
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75
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Provisions Currently Applicable
to
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Provisions Applicable to
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Ensco Delaware
Stockholders
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Ensco UK Shareholders
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unless the certificate of incorporation or the bylaws specify a
greater vote.
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§ Ensco
Delawares certificate of incorporation requires a vote of
stockholders holding two-thirds of the companys shares for
the stockholders to amend or repeal the following provisions in
the certificate of incorporation:
(1) provisions regarding the
numbers of directors, staggered board, filling vacancies and
certain other provisions regarding the directors
(Articles 6);
(2) provisions regarding the
Boards power to alter, amend or repeal the
corporations bylaws, and to adopt new bylaws
(Article 9);
(3) provisions regarding
removal of directors (Article 13); and
(4) provisions regarding
action at a shareholders meeting (Article 16).
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Amending
the Bylaws
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§ The
bylaws provide that the bylaws may be altered, amended or
repealed by a vote of the stockholders holding two-thirds of the
companys shares.
§ Under
Delaware law, if provided by the certificate of incorporation,
the board of directors has the power to adopt, amend or repeal
the bylaws of a company. Ensco Delawares certificate of
incorporation authorizes the Board to alter, amend, repeal or
adopt new bylaws.
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Preferred Stock/Unclassified Shares
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§ Ensco
Delawares certificate of incorporation authorizes the
Board
(1) to provide for the
issuance of one or more series of preferred stock;
(2) to establish from time to
time the number of shares to be included in such series; and
(3) to fix the powers,
designations, preferences, and relative participating, optional,
or other special rights, and qualifications, limitations and
restrictions thereof.
§ Ensco
Delawares bylaws provide that the voting rights of holders
of preferred stock shall be determined by the certificate of
incorporation or the certificate of designation with respect to
such preferred stock.
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§ Preferred
shares can be issued by English companies, giving the holders
rights of priority over ordinary shareholders.
§ Subject
to there being an unexpired authority to allot shares, Ensco
UKs articles of association permit the directors to issue
shares with rights to be determined by the directors at the time
of issuance, which may include preferred rights.
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76
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Provisions Currently Applicable
to
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Provisions Applicable to
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Ensco Delaware
Stockholders
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Ensco UK Shareholders
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Ensco Delaware currently does not have any shares of preferred
stock outstanding.
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Stock Class Rights
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§ Under
Delaware law, any change to the rights of holders of Ensco
Delawares common or preferred stock would require an
amendment to Ensco Delawares certificate of incorporation.
Holders of shares of a class are entitled to vote as a class
upon a proposed amendment to the certificate of incorporation if
the amendment will
(1) increase or decrease the
authorized shares of the class;
(2) increase or decrease the
par value of the shares of the class; or
(3) alter or change the
powers, preferences or special rights of the shares of the class
so as to affect them adversely.
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§ Amendments
affecting the rights of the holders of any class of shares may,
depending on the rights attached to the class and the nature of
the amendments, also require approval of the class affected at a
separate class meeting.
§ Ensco
UKs articles of association provide that shareholders of
the relevant class of shares can approve any amendment to their
rights either by
(1) consent in writing of
shareholders holding at least 75 percent of the issued
shares of that class by amount; or
(2) a special resolution
passed at a class meeting of the relevant class.
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Shareholders Votes on Certain Transactions
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Approval of Mergers and Acquisitions Generally
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§ Generally,
under Delaware law, unless the certificate of incorporation
provides for the vote of a larger portion of the stock,
completion of a merger or consolidation or substantially all of
a corporations assets or dissolution requires:
(1) the approval of the board
of directors; and
(2) approvals by the vote of
the holders of a majority of the outstanding stock or, if the
certificate of incorporation provides for more or less than one
vote per share, a majority of the votes of the outstanding stock
of a corporation entitled to vote on the matter.
§ Ensco
Delawares certificate of incorporation does not provide
for a higher vote for certain transactions than a majority vote
of the stockholders.
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§ As
noted above, ordinary resolutions must be approved
by at least a majority of the votes cast by shareholders.
Special resolutions require the affirmative vote of
at least 75 percent of the votes cast at the meeting to be
approved.
§ There
is no concept of a statutory merger under English law (except
where an English company merges with another company based in
the European Economic Area).
§ Under
English law and subject to applicable U.S. securities laws and
NYSE rules and regulations, where Ensco UK proposes to acquire
another company, approval of Ensco UKs shareholders is not
required.
§ Under
English law, where another company proposes to acquire Ensco UK,
the requirement for the approval of the shareholders of Ensco UK
depends on the method of acquisition.
§ Schemes
of arrangement are arrangements or compromises between a company
and any class of shareholders or creditors, and are used in
certain types of reconstructions, amalgamations, capital
reorganizations or takeovers (similar to a merger in the U.S.).
Such arrangements require the approval of: (i) a majority
in number of shareholders or creditors (as the case may be)
representing
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77
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Provisions Currently Applicable
to
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Provisions Applicable to
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Ensco Delaware
Stockholders
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Ensco UK Shareholders
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75 percent in value of the creditors or class of creditors
or shareholders or class of shareholders present and voting
either in person or by proxy at a special meeting convened by
order of the court; and (ii) the English court.
§ Once
approved, sanctioned and becoming effective, all shareholders
and creditors of the relevant class are bound by the terms of
the scheme, and a dissenting shareholder would have no rights
comparable to appraisal rights provided under Delaware law.
§ The
Companies Act also provides that where (i) a takeover offer is
made for shares, and (ii) following the offer, the offeror has
acquired or contracted to acquire not less than 90 percent
in value of the shares to which the takeover offer relates, and
not less than 90 percent of the voting rights carried by
the shares to which the offer relates, the offeror may require
the other shareholders who did not accept the offer to transfer
their shares on the terms of the offer.
§ A
dissenting shareholder may object to the transfer on the basis
that the bidder is not entitled to acquire shares or to specify
terms of acquisition different from those in the offer by
applying to the court within six weeks of the date on which
notice of the transfer was given. In the absence of fraud or
oppression, the court is unlikely to order that the acquisition
shall not take effect, but it may specify terms of the transfer
that it finds appropriate.
§ A
minority shareholder is also entitled in similar circumstances
to require the offeror to acquire his or her shares on the terms
of the offer.
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Related
Party Transactions
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§ Under
the rules of the NYSE, shareholder approval is required prior to
the issuance of common stock, or of securities convertible into
or exercisable for common stock, in any transaction or series of
related transactions, to:
(1) a director, officer or
substantial security holder of the company (each a Related
Party);
(2) a subsidiary, affiliate
or other closely-related person of a Related Party; or
(3) any company or entity in
which a Related Party has a substantial direct or indirect
interest;
if
the number of shares of common stock to be issued, or if the
number of shares of common stock into which the securities may
be convertible or exercisable, exceeds either one percent of
the
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§ Ensco
UK will be subject to the rules of the NYSE regarding related
party transactions.
§ Under
English law, certain transactions between a director and a
related company of which he or she is a director are
prohibited unless approved by the shareholders, such as loans,
credit transactions and substantial property transactions.
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78
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Provisions Currently Applicable
to
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Provisions Applicable to
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Ensco Delaware
Stockholders
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Ensco UK Shareholders
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number of shares of common stock or one percent of the voting
power outstanding before the issuance.
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However, if the Related Party involved in the transaction is
classified as such solely because such person is a substantial
security holder, and if the issuance relates to a sale of stock
for cash at a price at least as great as each of the book and
market value of the issuers common stock, then shareholder
approval will not be required unless the number of shares of
common stock to be issued, or unless the number of shares of
common stock into which the securities may be convertible or
exercisable, exceeds either five percent of the number of shares
of common stock or five percent of the voting power outstanding
before the issuance.
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Greater
than 20 Percent Change in Common Shares or Voting
Power
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§ Under
the rules of the NYSE, stockholder approval is required prior to
the issuance of common stock, or of securities convertible into
or exercisable for common stock, in any transaction or series of
related transactions if:
(1) the common stock has, or
will have upon issuance, voting power equal to or in excess of
20 percent of the voting power outstanding before the
issuance of such stock or of securities convertible into or
exercisable for common stock; or
(2) the number of shares of
common stock to be issued is, or will be upon issuance, equal to
or in excess of 20 percent of the number of shares of
common stock outstanding before the issuance of the common stock
or of securities convertible into or exercisable for common
stock.
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§ Ensco
UK will continue to be subject to the rules of the NYSE
regarding the issuances of shares representing 20 percent
or more of its outstanding share capital.
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Rights of Inspection
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Rights of Inspection Generally
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§ Delaware
law allows any stockholder in person or by attorney or other
agent, upon written demand under oath stating the purpose
thereof, during the usual hours for business to inspect for any
proper purpose, and to make copies and extracts from:
(1) The corporations
stock ledger, a list of its stockholders, and its other books
and records; and
(2) A subsidiarys books
and records, to the extent that:
a. The
corporation has actual possession and control of such records of
such subsidiary; or
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§ Generally,
the register and index of names of shareholders of Ensco UK may
be inspected at any time (1) for free, by its shareholders,
and (2) for a fee by any other person.
§ The
inspecting shareholder has to show he or she has a proper
purpose in inspecting the register. Documents may be copied for
a fee.
§ The
service contracts, if any, of Ensco UKs directors can be
inspected without charge and during business hours. In this and
certain other contexts under applicable English law, a
director includes certain executive officers and a
service
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79
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Provisions Currently Applicable
to
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Provisions Applicable to
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Ensco Delaware
Stockholders
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Ensco UK Shareholders
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b. The
corporation could obtain such records through the exercise of
control over such subsidiary, provided that as of the date of
the making of the demand:
(1) The stockholder
inspection of such books and records of the subsidiary would not
constitute a breach of an agreement between the corporation or
the subsidiary and a person or persons not affiliated with the
corporation; and
(2) The subsidiary would not
have the right under the law applicable to it to deny the
corporation access to such books and records upon demand by the
corporation.
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contract includes any contract under which such a
director or executive officer undertakes personally to provide
services to the company or a subsidiary company, whether in that
persons capacity as a director, an executive officer or
otherwise.
§ The
shareholders of Ensco UK may also inspect, without charge and
during business hours, the minutes of meetings of the
shareholders for the previous 10 years and obtain copies of
the minutes for a fee.
§ In
addition, the published annual accounts of Ensco UK are required
to be available for shareholders at a general meeting and a
shareholder is entitled to a copy of these accounts. The
accounts must also be made available on Ensco UKs website
and remain available until the accounts for the next financial
year are placed on the website.
§ Under
English law, the shareholders of a company do not have the right
to inspect the corporate books of a subsidiary of that company.
§ Ensco
UKs articles of association continue the current practice
in relation to permitting shareholders to examine a complete
list of shareholders prior to, and at, a shareholder meeting.
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Stockholder
List
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§ Ensco
Delawares bylaws state that a complete list of the
stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each stockholder
and the number of shares registered in the name of each
stockholder shall be open to the examination of any stockholder,
for any purpose germane to the shareholder meeting, during
ordinary business hours, for a period of at least ten days prior
to the meeting. The list shall also be produced and kept at the
time and place of the meeting and may be inspected by any
stockholder who is present.
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Standard of Conduct for Directors
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§ Delaware
law does not contain any specific provisions setting forth the
standard of conduct of a director. The scope of the fiduciary
duties of the Board is thus determined by the courts of the
State of Delaware. In general, directors have a duty to act in
good faith, on an informed basis and in a manner they reasonably
believe to be in the best interests of the stockholders.
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§ English
law imposes certain specific obligations on the directors of
Ensco UK. In addition to certain common law and equitable
principles, there are statutory director duties, including seven
codified duties as follows:
(1) To act in a way he or she
considers, in good faith, would be most likely to promote the
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80
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Provisions Currently Applicable
to
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Provisions Applicable to
|
Ensco Delaware
Stockholders
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Ensco UK Shareholders
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§ The
Board currently consists of 9 directors, one of whom is an
executive officer of Ensco Delaware.
§ Ensco
Delawares bylaws provide that a majority of the directors
shall be independent of the corporation and its management.
§ Ensco
Delawares certificate of incorporation states that the
number of directors of the corporation shall be not less than
three nor more than 15, with the number fixed within the
foregoing limits from time to time by resolution adopted by the
Board.
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success of the company for the benefit of its shareholders as a
whole;
(2) To act in accordance with
the companys constitution and exercise powers only for the
purposes for which they are conferred;
(3) To exercise independent
judgment;
(4) To exercise reasonable
care, skill and diligence;
(5) To avoid conflicts of
interest;
(6) Not to accept benefits
from third parties; and
(7) To declare an interest in
a proposed transaction with the company.
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Classification of the Board of Directors
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§ Delaware
law permits the certificate of incorporation or a
stockholder-adopted bylaw to provide that directors be divided
into one, two or three classes, with the term of office of one
class of directors to expire each year.
§ Ensco
Delawares bylaws provide that the Board will be divided
into three classes of directors, each class is elected to serve
for a term of three years, with the term of only one class
expiring every year.
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§ English
law permits a company to provide for terms of different length
for its directors. However, it also requires, in the case of
officers who are also considered directors under English law,
that employment agreements with a guaranteed term of more than
two years be subject to a prior approval of shareholders at a
general meeting.
§ Ensco
UKs articles of association incorporate the board of
director classifications from the Ensco Delaware bylaws.
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Removal of Directors
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§ Delaware
law provides that a director or the entire board may be removed
with or without cause by the holders of a majority of the shares
entitled to vote at an election of directors, except that
(1) shareholders of a
classified board of directors may be removed only for cause,
unless the certificate of incorporation provides otherwise; and
(2) directors may not be
removed in certain situations in the case of a corporation
having cumulative voting.
§ Under
Ensco Delawares certificate of incorporation, a director
of the company may be removed only with cause and only by the
affirmative vote of holders of a majority of the
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§ Under
English law, shareholders may remove a director without cause by
ordinary resolution, irrespective of any provisions in the
companys articles of association, provided that 28 clear
days notice of the resolution is given to the company.
§ Unless
otherwise provided in the articles of association, the director
has a right to make written representations, which the company
must circulate to shareholders, as to why he or she should not
be removed. This right is not excluded by Ensco UKs
articles of association.
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81
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Provisions Currently Applicable
to
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Provisions Applicable to
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Ensco Delaware
Stockholders
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Ensco UK Shareholders
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outstanding shares entitled to vote upon the election of
directors.
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§ Under
Ensco Delawares bylaws, subject to the rights, if any, of
the holders of any then outstanding class or series of preferred
stock or indebtedness of the corporation with special rights to
elect directors, any or all of the directors of the corporation
may be removed from office at any time, but only with cause and
only by the affirmative vote of the holders of a majority of the
outstanding shares of the corporation then entitled to vote
generally in the election of directors, voting together as a
single class.
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Vacancies on the Board of Directors
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Vacancies, Generally
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§ Under
Delaware law, unless otherwise provided in the certificate of
incorporation or the bylaws,
(1) vacancies on a board of
directors; and
(2) newly created
directorships resulting from an increase in the number of
directors may be filled by a majority of the directors in
office, although less than a quorum, or by a sole remaining
director. In the case of a classified board, directors elected
to fill vacancies or newly created directorships will hold
office until the next election of the class for which the
directors have been chosen. If, at the time of filling any
vacancy or any newly created directorship, the directors then in
office shall constitute less than a majority of the whole board,
the Court of Chancery may, upon application of any stockholder
or stockholders holding at least 10 percent of the voting
stock at the time outstanding having the right to vote for such
directors, summarily order an election to be held to fill any
such vacancies or newly created directorships, or to replace the
directors chosen by the directors then in office.
§ Under
Delaware law, unless otherwise provided in the certificate of
incorporation or the bylaws, when one or more directors shall
resign from the board, effective at a future date, a majority of
the directors then in office, including those who have so
resigned, shall have power to fill such vacancy or vacancies,
the vote thereon to take effect when such resignation or
resignations shall become effective, and each director so chosen
shall hold office as provided in this section in the filling of
other vacancies.
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§ Ensco
UKs articles of association provide for a continuation of
the mechanism of filling director vacancies under Ensco
Delawares bylaws and certificate of incorporation. If
there are, however, no directors in office, a shareholder may
convene a general meeting for the purpose of appointing
directors.
§ Shareholders
also have a right to propose directors for appointment at a
general meeting convened by the Ensco Board for such purpose,
provided the shareholder(s) comply with the relevant procedural
requirements. See Shareholder Proposals and Shareholder
Nominations of Directors and Special Meetings of
Shareholders above.
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82
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Provisions Currently Applicable
to
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Provisions Applicable to
|
Ensco Delaware
Stockholders
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Ensco UK Shareholders
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§ Ensco
Delawares bylaws and certificate of incorporation both
provide that
(1) any vacancies on the
Board; or
(2) newly created
directorships, shall be filled by the majority vote of the
remaining directors of all classes, whether or not a quorum, or
by a sole remaining director. If there are no directors in
office, then an election of directors may be held in the manner
provided by statute.
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Term
of Service After Appointment to Fill a Vacancy
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§ Ensco
Delawares bylaws and certificate of incorporation further
provide that any director appointed to fill a vacancy shall
serve for the remainder of the then present term of office of
the class to which he or she was appointed. In the event such
term extends beyond the next annual meeting of stockholders for
which a definitive proxy statement has not been filed at the
time of the appointment, the director or directors so appointed
shall be named and described in the next definitive annual
meeting proxy statement and shall stand for election for the
remaining portion of the term of office at the annual meeting of
stockholders subject to said proxy statement.
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§ Ensco
UKs articles of association provide for the same
arrangements in relation to term of service.
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Impact
on Classification of the Board
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§ Ensco
Delawares bylaws and certificate of incorporation also
provide that in the event of any change in the authorized number
of directors, the newly created or eliminated directorships
resulting from such increase or decrease shall be apportioned by
the Board among the classes of directors so as to maintain such
classes as nearly equal as possible.
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§ Ensco
UKs articles of association provide for the same
apportionment among the classes of directors.
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Liability of Directors and Officers
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§ Delaware
law permits a corporations certificate of incorporation to
include a provision eliminating or limiting the personal
liability of a director to the corporation and its stockholders
for damages arising from a breach of fiduciary duty as a
director. However, no provision can limit the liability of a
director for
(1) any breach of his or her
duty of loyalty to the corporation or its stockholders;
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§ English
law does not permit a company to exempt any director or certain
officers from any liability arising from negligence, default,
breach of duty or breach of trust against the company. However,
despite this prohibition, an English company is permitted to
purchase and maintain insurance for a director or executive
officer of the company against any such liability.
§ Shareholders
can ratify by ordinary resolution a directors or certain
officers conduct amounting to
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83
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Provisions Currently Applicable
to
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Provisions Applicable to
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Ensco Delaware
Stockholders
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Ensco UK Shareholders
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(2) acts or omissions not in
good faith or which involve intentional misconduct or a knowing
violation of law;
(3) intentional or negligent
payment of unlawful dividends or stock purchases or redemptions;
or
(4) any transaction from
which he or she derives an improper personal benefit.
§ Ensco
Delawares certificate of incorporation provides that a
director of the company will not be personally liable to the
company or its stockholders for monetary damages for breach of
fiduciary duty as a director. However, a director will be liable
(i) for any breach of the directors duty of loyalty,
(ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law,
(iii) pursuant to Section 174 of the Delaware General
Corporation Law, or (iv) for any transaction from which
such director derived an improper personal benefit.
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negligence, default, breach of duty or breach of trust in
relation to the company.
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Indemnification of Directors and Officers
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§ Delaware
law provides that a corporation may indemnify a person who is
made a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding on
account of being a director, officer, employee or agent of the
corporation, or is or was serving at the request of the
corporation, against expenses (including attorneys fees),
judgments, fines and amounts paid in settlement actually and
reasonably incurred by the person in connection with such
action, suit or proceeding if the person
(1) acted in good faith and
in a manner he or she reasonably believed to be in or not
opposed to the best interests of the corporation; and
(2) in a criminal proceeding,
had no reasonable cause to believe his or her conduct was
unlawful.
§ Ensco
Delawares certificate of incorporation provides that Ensco
will indemnify, to the fullest extent permitted by Delaware law,
members of its board, officers of the company and all persons
whom the company will have the power to indemnify from and
against all expenses, liabilities or other matters. Further, the
company may purchase and maintain insurance or create a trust
fund, grant a security interest and/or use other means to effect
indemnification.
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§ Subject
to exceptions, English law does not permit a company to exempt a
director or certain officers from, or indemnify him or her
against, liability in connection with any negligence, default,
breach of duty or breach of trust by him or her in relation to
the company.
§ The
exceptions allow a company to:
(1) purchase and maintain
director and officer insurance, or D&O
Insurance against any liability attaching in connection
with any negligence, default, breach of duty or breach of trust
owed to the company. D&O Insurance generally covers costs
incurred in defending allegations and compensatory damages that
are awarded. However, D&O Insurance will not cover damages
awarded in relation to criminal acts, intentional malfeasance or
other forms of dishonesty, regulatory offences or excluded
matters such as environmental liabilities. In relation to these
matters, D&O Insurance generally only covers defense costs,
subject to the obligation of the director or officer to repay
the costs if an allegation of criminality, dishonesty or
intentional malfeasance is subsequently admitted or found to be
true; and
(2) provide a qualifying
third party indemnity provision, or QTPIP. This
permits a company to
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84
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Provisions Currently Applicable
to
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Provisions Applicable to
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Ensco Delaware
Stockholders
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Ensco UK Shareholders
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§ Ensco
Delawares bylaws provide that the company shall defend and
indemnify its officers, directors, employees and agents to the
full extent permitted by the General Corporation Law of
Delaware.
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indemnify its directors and certain officers (and directors and
certain officers of an associated company) in respect of
proceedings brought by third parties (covering both legal costs
and the amount of any adverse judgment, except for: the legal
costs of an unsuccessful defense of criminal proceedings or
civil proceedings brought by the company itself; fines imposed
in criminal proceedings; and penalties imposed by regulatory
bodies). Ensco UK can therefore indemnify directors and certain
officers against such third party actions as class actions or
actions following mergers and acquisitions or share issues; and
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(3) indemnify a director or
certain officers in respect of defense costs in relation to
civil and criminal proceedings against him or her (even if the
action is brought by the company itself). This is subject to the
requirement for the director or officer to reimburse the company
if the defense is unsuccessful. However, if the company has a
QTPIP in place whereby the director or officer is indemnified in
respect of legal costs in civil proceedings brought by third
parties, then the director or officer will not be required to
reimburse the company.
§ Ensco
UKs New Articles include a provision requiring the company
to indemnify to any extent permitted by law any person who is or
was a director or officer of any associated company, directly or
indirectly (including by funding any expenditure incurred or to
be incurred by him or her) against any loss or liability,
whether in connection with any negligence, default, breach of
duty or breach of trust by him or her or otherwise, in relation
to the company or any associated company. The articles go on to
state that where a person is so indemnified, such indemnity may
extend to all costs, losses, expenses and liabilities incurred
by him or her.
§ In
addition to the provisions of the articles of association, it is
common to set out the terms of the QTPIP in the form of a deed
of indemnity between the company and the relevant director or
executive officer which essentially indemnifies the director or
executive officer against claims brought by third parties to the
fullest extent permitted under English law. We expect to enter
into new indemnification agreements and deeds of indemnity with
directors, executive officers and certain other officers and
employees (including directors, officers and employees of
subsidiaries and other affiliates). See
Proposal 1 Approval
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85
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Provisions Currently Applicable
to
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Provisions Applicable to
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Ensco Delaware
Stockholders
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Ensco UK Shareholders
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of the Adoption of the Merger Agreement Additional
Agreements.
§ Ensco
UK will be required to disclose in its annual directors
report any QTPIP in force at any point during the relevant
financial year or in force when the directors report is
approved. A copy of the indemnity or, if it is not in writing, a
memorandum setting out its terms must be open to inspection
during the life of the indemnity and for a period of one year
from the date of its termination or expiration. Any shareholder
may inspect the indemnity, or memorandum, without charge or may
request a copy on payment of a fee.
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Shareholders Suits
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§ Under
Delaware law, a stockholder may initiate a derivative action to
enforce a right of a corporation if the corporation fails to
enforce the right itself. The complaint must
(1) state that the plaintiff
was a stockholder at the time of the transaction of which the
plaintiff complains or that the plaintiffs shares
thereafter devolved on the plaintiff by operation of law; and
(2)(a) allege with
particularity the efforts made by the plaintiff to obtain the
action the plaintiff desires from the directors; or
(b) state the reasons for the
plaintiffs failure to obtain the action or for not making
the effort.
§ Additionally,
the plaintiff must remain a stockholder through the duration of
the derivative suit. The action will not be dismissed or
compromised without the approval of the Delaware Court of
Chancery.
§ An
individual may also commence a class action suit on behalf of
himself or herself and other similarly situated stockholders
where the requirements for maintaining a class action under
Delaware law have been met.
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§ While
English law only permits a shareholder to initiate a lawsuit on
behalf of the company in limited circumstances, it does permit a
shareholder whose name is on the register of shareholders of
Ensco UK to apply for a court order:
(1) when Ensco UKs
affairs are being or have been conducted in a manner unfairly
prejudicial to the interests of all or some shareholders,
including the shareholder making the claim; or
(2) when any act or omission
of Ensco UK is or would be so prejudicial.
§ As
discussed in Description of Class A Ordinary Shares of
Ensco UKAnti-takeover Provisions, Ensco UK will not
be subject to the U.K. Takeover Panel (i.e., the
regulator of the Takeover Code).
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Share Acquisitions
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§ Section 203
of the Delaware General Corporation Law prohibits business
combinations. A corporation shall not engage in any
business combination with any interested stockholder for a
period of 3 years following the time that such stockholder
became an interested stockholder, unless:
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§ See
Description of Class A Ordinary Shares of Ensco
UKAnti-takeover Provisions.
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86
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Provisions Currently Applicable
to
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Provisions Applicable to
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Ensco Delaware
Stockholders
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Ensco UK Shareholders
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(1) Prior to such time the
board of directors of the corporation approved either the
business combination or the transaction which resulted in the
stockholder becoming an interested stockholder;
(2) Upon consummation of the
transaction which resulted in the stockholder becoming an
interested stockholder, the interested stockholder owned at
least 85 percent of the voting stock of the corporation
outstanding at the time the transaction commenced, excluding for
purposes of determining the voting stock outstanding (but not
the outstanding voting stock owned by the interested
stockholder) those shares owned (i) by persons who are
directors and also officers and (ii) employee stock plans
in which employee participants do not have the right to
determine confidentially whether shares held subject to the plan
will be tendered in a tender or exchange offer; or
(3) At or subsequent to such
time the business combination was approved by the board of
directors and authorized at an annual or special meeting of
stockholders, and not by written consent, by the affirmative
vote of at least
66 2/3 percent
of the outstanding voting stock which is not owned by the
interested stockholder.
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Anti-Takeover Matters
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§ A
Delaware court will generally uphold board of director decisions
to adopt anti-takeover measures in the face of a potential
takeover where the directors are able to show that
(1) they had reasonable
grounds for believing that there was a danger to corporate
policy and effectiveness from an acquisition proposal; and
(2) the board action taken
was reasonable in relation to the threat posed.
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§ English
law does not expressly prohibit anti-takeover measures, such as
shareholder rights plans. Similar to what is permitted under
Delaware law, the Ensco UK Board may adopt a shareholder rights
plan at any time, including in conjunction with the consummation
of the merger or sometime thereafter. See Description of
Class A Ordinary Shares of Ensco UKAnti-takeover
Provisions.
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Disclosure of Interests
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Short Form Disclosure
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§ Certain
acquisitions of Ensco Delaware stock may require disclosure
under the Exchange Act. Some acquisitions, however, may qualify
for a short-form disclosure on Schedule 13G. Generally, an
acquisition of more than a 5 percent interest in a U.S.
publicly-held issuer by
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§ The
Section 13D/G reporting regime will continue to apply to Ensco
UK as it will have its shares registered under Section 12
of the U.S. Securities Exchange Act of 1934.
§ In
addition, English law provides that a company may, by notice in
writing, require a person whom the company knows or reasonably
believes to be or
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87
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Provisions Currently Applicable
to
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Provisions Applicable to
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Ensco Delaware
Stockholders
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Ensco UK Shareholders
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(1) certain types of persons,
including a broker-dealer, a bank, an insurance company, an
investment company and an investment adviser, or
(2) a passive
investor who is not seeking to acquire or influence
control of the issuer, so long as the investor owns less than
20 percent of the class of stock it is acquiring, may be
disclosed on a Schedule 13G.
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to have been within the three preceding years, interested in
its issued voting share capital to:
(1) confirm whether this is
or is not the case; and
(2) if this is the case, to
give further information that it requires relating to his or her
interest and any other interest in the companys shares of
which he or she is aware.
The
disclosure must be made within a reasonable period as specified
in the relevant notice which may be as short as one or two days.
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Amendments
to Short Form Disclosure
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§ A
buyer who files a Schedule 13G must amend it periodically
(1) to report any change in
the information previously reported; or
(2) if it acquires more than
10 percent of the class of stock and, thereafter, if it
undergoes any change in ownership of 5 percent or more of
the class of stock.
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Limitation on Enforceability of Civil Liabilities Under U.S.
Federal Securities Laws
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Ability to Bring Suits, Enforce Judgments and Enforce U.S.
Law
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§ Ensco
Delaware is a U.S. company incorporated under the laws of
Delaware and has substantial assets located in the U.S. As a
result, investors generally can initiate lawsuits in the U.S.
against Ensco Delaware and its directors and officers and can
enforce lawsuits based on U.S. federal securities laws in U.S.
courts.
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§ As
a company listed on the NYSE, Ensco UK and its directors and
officers would be subject to U.S. Federal securities laws, and
investors could initiate civil lawsuits in the U.S. against
Ensco UK for breaches of the U.S. Federal securities laws.
§ Because
Ensco UK will be a public limited company incorporated under
English law after the effective time of the merger, investors
could experience more difficulty enforcing judgments obtained
against Ensco UK in U.S. courts than would currently be the case
for U.S. judgments obtained against Ensco Delaware. In addition,
it may be more difficult (or impossible) to bring some types of
claims against Ensco UK in courts sitting in England than it
would be to bring similar claims against a U.S. company in a
U.S. court. In addition, the Ensco UK articles of association
will provide that English courts have exclusive jurisdiction
with respect to any suits brought by shareholders against Ensco
UK or its directors.
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88
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|
Provisions Currently Applicable
to
|
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Provisions Applicable to
|
Ensco Delaware
Stockholders
|
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Ensco UK Shareholders
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§ A
judgment obtained against Ensco UK from a U.S. court will not be
recognized by the English courts but an action may be commenced
in the English courts for an amount due under a judgment given
by the U.S. courts if that judgment is (a) for a debt or
definite sum of money; (b) final and conclusive; and
(c) not of a penalty or revenue nature. A judgment may be
impeached by showing that: (i) the court in question did
not, in the circumstances of the case, and in accordance with
the English rules of private international law, have
jurisdiction to give that judgment; or (ii) the judgment
was obtained through fraud; or (iii) the enforcement of the
judgment would be contrary to the public policy of the U.K.; or
(iv) the proceedings in which the judgment was obtained
were opposed to the rules of natural justice.
§ Ensco
UK and its directors and officers may be subject to criminal
penalties in the U.S. arising from breaches of the U.S. federal
securities laws, but may not be subject to criminal penalties
unless the criminal laws of the U.K. were violated.
§ A
criminal judgment in a U.S. court under U.S. Federal securities
laws may not be enforceable in the English courts on public
policy grounds and a prosecution brought before the English
courts under U.S. federal securities laws might not be permitted
on public policy grounds.
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Short Swing Profits
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§ Directors
and officers of Ensco Delaware are governed by rules under the
Exchange Act that may require directors and officers to forfeit
to Ensco Delaware any short swing profits realized
from purchases and sales, as determined under the Exchange Act
and the rules thereunder, of Ensco Delaware equity securities.
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§ As
a company listed on the NYSE, directors and officers of Ensco UK
would be subject to the U.S. securities laws, including the
prohibitions on short swing trading.
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Proxy Statements and Reports
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Notices and Reports to Shareholders; Matters to Include
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Proxy Statements Generally
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§ Under
the Exchange Act proxy rules, Ensco Delaware must comply with
notice and disclosure requirements relating to the solicitation
of proxies for stockholder meetings.
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§ The
Exchange Act proxy rules will continue to apply to Ensco UK
(unless there are further changes in the Company as described in
Effect of the Reorganization on Potential Future Status as
a Foreign Private Issuer).
§ English
law does not have specific proxy solicitation legislation, but
approaches to
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89
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|
Provisions Currently Applicable
to
|
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Provisions Applicable to
|
Ensco Delaware
Stockholders
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Ensco UK Shareholders
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shareholders may need to comply with Financial Services and
Markets Act 2000.
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Voting by Proxy
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§ Ensco
Delawares bylaws provide that each stockholder is entitled
to vote in person or by proxy for each share of the capital
stock having voting power held by such stockholder, but no proxy
shall be voted on after three years from its date, unless the
proxy provides for a longer period.
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§ These
provisions are included in Ensco UKs articles of
association.
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Reports
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§ Ensco
Delawares bylaws provide that the Board, through the
chairman of the board, chief executive officer, or president,
shall present at each annual meeting, and at any special meeting
of the stockholders when called for by vote of the stockholders,
a full and clear statement of the business and condition of the
corporation.
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Approval
of Director Compensation
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§ Ensco
Delawares stockholders generally do not have the right to
approve directors compensation.
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§ Because
shares of Ensco UK will trade on the NYSE in ADS form only,
Ensco UK will not be required to prepare and submit for
shareholder approval a directors remuneration report.
Ensco UK will remain subject to SEC reporting requirements for
director and executive officer compensation.
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Approval
of Auditors
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§ Ensco
Delawares stockholders do not have the right to appoint
the Companys auditors; however, Ensco Delaware typically
includes in its proxy statement a shareholder proposal to ratify
the appointment of its auditors.
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§ Under
English law, Ensco UKs shareholders approve the
companys auditors each year. In addition, the
companys annual financial statements, which must, to the
satisfaction of the directors, give a true and fair
view of the assets, liabilities, financial position and
profit or loss of Ensco UK and the consolidated group, must be
presented to the shareholders at a general meeting but are not
required to be approved by the shareholders.
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Notice
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§ Ensco
Delawares bylaws provide that whenever notice is required
to be given to any stockholder, such notice may be given in
writing, by mail, addressed to such stockholder, at his or her
address as it appears on the records of the corporation, with
postage thereon prepaid, and such notice shall be deemed to be
given at the time when the same shall be deposited in the U.S.
mail.
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§ Ensco
UKs articles of association provide that whenever notice
is required to be given to any shareholder, such notice may be
given in writing
(1) personally;
(2) by mail, addressed to
such shareholder, at his or her address as it appears on the
records of the company, with postage thereon prepaid;
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90
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Provisions Currently Applicable
to
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Provisions Applicable to
|
Ensco Delaware
Stockholders
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Ensco UK Shareholders
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(3) by sending it in
electronic form (if the shareholder has so agreed); or
(4) in certain circumstances,
by making the notice available on a website.
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Reporting Requirements
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§ As
a U.S. public company, Ensco Delaware must file with the SEC,
among other reports and notices:
(1) an Annual Report on
Form 10-K
within 60 days after the end of a fiscal year;
(2) a Quarterly Report on
Form 10-Q
within 40 days after the end of a fiscal quarter ending;
and
(3) Current Reports on
Form 8-K
upon the occurrence of certain important corporate events.
Unless otherwise specified, a report is to be filed or furnished
within four business days after occurrence of the event.
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§ Since
Ensco UK would be considered a successor issuer to Ensco
Delaware and would be listed on the NYSE, Ensco UK would remain
subject to U.S. securities laws, but would not be subject to the
reporting obligations of companies listed on the London Stock
Exchange or on any other securities exchange.
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91
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table summarizes amounts and percentages of shares
of Ensco Delaware common stock owned beneficially as of
October 31, 2009 by each person or group known by us to own
more than 5 percent of the outstanding shares of Ensco
Delaware common stock (the only class of voting securities
outstanding):
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|
|
|
|
|
|
Name and Address
|
|
Amount of Beneficial
|
|
|
of Beneficial Owner
|
|
Ownership(1)
|
|
Percentage
|
|
FMR LLC
82 Devonshire Street
Boston, MA 02109
|
|
|
14,536,724
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(2)
|
|
|
10.20
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%
|
Barclays Global Investors, NA
400 Howard Street
San Francisco, CA 94105
|
|
|
11,571,212
|
(3)
|
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|
8.12
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%
|
State Street Bank and Trust Company
One Lincoln Street
Boston, MA 02111
|
|
|
7,936,965
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(4)
|
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|
5.57
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%
|
The Vanguard Group, Inc.
100 Vanguard Boulevard
Malvern, PA 19355
|
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|
7,355,236
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(5)
|
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|
5.16
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%
|
|
|
|
(1) |
|
As of October 31, 2009, there were 142,510,350 shares
of our common stock outstanding. Unless otherwise indicated,
each person or group has sole voting and dispositive power with
respect to all shares. |
|
(2) |
|
Based on the Schedule 13G filed on November 10, 2009,
FMR, LLC and/or certain related parties described in the
Schedule 13G may be deemed to be the beneficial owners of
14,536,724 shares of our common stock as of
October 31, 2009, for which they have sole voting power for
793,717 shares. |
|
(3) |
|
Based on the Schedule 13G filed on February 5, 2009,
Barclays Global Investors, NA and/or certain related parties
described in the Schedule 13G may be deemed to be the
beneficial owners of 11,571,212 shares of our common stock
as of December 31, 2008, for which they have sole voting
power for 9,981,783 shares. |
|
(4) |
|
Based on the Schedule 13G filed on February 13, 2009,
State Street Bank and Trust and/or certain related parties
described in the Schedule 13G may be deemed to be the
beneficial owners of 7,936,965 shares of our common stock
as of December 31, 2008, for which they have sole voting
power. |
|
(5) |
|
Based on the Schedule 13G filed on February 13, 2009,
The Vanguard Group, Inc. and/or certain related parties
described in the Schedule 13G may be deemed to be the
beneficial owners of 7,355,236 shares of our common stock
as of December 31, 2008, for which they have sole voting
power for 157,202 shares. |
92
SECURITY
OWNERSHIP OF MANAGEMENT
The following table sets forth, as of October 31, 2009,
information with respect to our shares of stock owned
beneficially by each director, by each of our executive officers
who are identified as named executive officers in
the proxy statement for our 2009 Annual Meeting of Stockholders,
and by all of our directors and executive officers as a group:
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|
|
|
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|
Executive Officers, Directors
and Director
|
|
Amount of Beneficial
|
|
|
Nominees
|
|
Ownership(1)
|
|
Percentage
|
|
Daniel W. Rabun
Chairman, President and Chief Executive Officer
|
|
|
305,898
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(1)
|
|
|
|
(7)
|
William S. Chadwick, Jr.
Executive Vice President and Chief Operating Officer
|
|
|
194,243
|
(1)(2)
|
|
|
|
(7)
|
James W. Swent III
Senior Vice President Chief Financial Officer
|
|
|
119,704
|
(1)
|
|
|
|
(7)
|
Phillip J. Saile
Senior Vice President Operations
|
|
|
94,898
|
(2)(3)
|
|
|
|
(7)
|
H. E. Malone, Jr.
Vice President Finance ENSCO Offshore
International Company
|
|
|
40,932
|
(1)
|
|
|
|
(7)
|
Paul E. Rowsey, III
Director
|
|
|
37,731
|
(4)
|
|
|
|
(7)
|
Gerald W. Haddock
Director
|
|
|
29,903
|
(4)(5)
|
|
|
|
(7)
|
Rita M. Rodriguez
Director
|
|
|
23,982
|
(4)
|
|
|
|
(7)
|
David M. Carmichael
Director
|
|
|
21,320
|
(4)
|
|
|
|
(7)
|
Thomas L. Kelly II
Director
|
|
|
20,719
|
(4)
|
|
|
|
(7)
|
C. Christopher Gaut
Director
|
|
|
20,570
|
(4)
|
|
|
|
(7)
|
Keith O. Rattie
Director
|
|
|
12,389
|
(4)(5)
|
|
|
|
(7)
|
J. Roderick Clark
Director
|
|
|
10,320
|
(4)
|
|
|
|
(7)
|
All Directors and executive officers as a Group
(20 persons, including those named above)
|
|
|
1,191,103
|
(6)
|
|
|
|
(7)
|
93
|
|
|
(1) |
|
Includes shares immediately issuable upon exercise of stock
options as of October 31, 2009 and shares issuable upon
exercise of stock options that vest within 60 days of
October 31, 2009, and shares of restricted stock that vest
at an annual rate as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted Stock
|
|
|
Options
|
|
Number of Shares
|
|
Annual Vesting
|
|
Daniel W. Rabun
|
|
|
112,500
|
|
|
|
10,000
|
|
|
|
5,000
|
|
|
|
|
|
|
|
|
35,000
|
|
|
|
5,000
|
|
|
|
|
|
|
|
|
24,999
|
|
|
|
8,333
|
|
|
|
|
|
|
|
|
61,332
|
|
|
|
15,333
|
|
|
|
|
|
|
|
|
27,030
|
|
|
|
9,010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
158,361
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
William S. Chadwick, Jr.
|
|
|
46,250
|
|
|
|
20,000
|
|
|
|
4,000
|
|
|
|
|
|
|
|
|
1,750
|
|
|
|
1,750
|
|
|
|
|
|
|
|
|
7,441
|
|
|
|
1,063
|
|
|
|
|
|
|
|
|
7,666
|
|
|
|
3,833
|
|
|
|
|
|
|
|
|
9,999
|
|
|
|
3,333
|
|
|
|
|
|
|
|
|
26,668
|
|
|
|
6,667
|
|
|
|
|
|
|
|
|
18,333
|
|
|
|
6,111
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
91,857
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James W. Swent III
|
|
|
36,250
|
|
|
|
20,000
|
|
|
|
5,000
|
|
|
|
|
|
|
|
|
1,500
|
|
|
|
1,500
|
|
|
|
|
|
|
|
|
4,666
|
|
|
|
2,333
|
|
|
|
|
|
|
|
|
8,001
|
|
|
|
2,667
|
|
|
|
|
|
|
|
|
18,668
|
|
|
|
4,667
|
|
|
|
|
|
|
|
|
9,849
|
|
|
|
3,283
|
|
|
|
|
|
|
|
|
6,000
|
|
|
|
3,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
68,684
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
H. E. Malone, Jr.
|
|
|
12,375
|
|
|
|
875
|
|
|
|
875
|
|
|
|
|
|
|
|
|
2,134
|
|
|
|
1,067
|
|
|
|
|
|
|
|
|
3,201
|
|
|
|
1,067
|
|
|
|
|
|
|
|
|
8,000
|
|
|
|
2,000
|
|
|
|
|
|
|
|
|
10,665
|
|
|
|
2,133
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24,875
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) |
|
Also includes the following shares held indirectly under the
ENSCO Savings Plan and the ENSCO Supplemental Executive
Retirement Plans (SERP), which is described in the
Compensation Discussion and Analysis section of the
proxy statement for our 2009 Annual Meeting of Stockholders: |
|
|
|
|
|
|
|
|
|
|
|
ENSCO
|
|
|
|
|
Savings Plan
|
|
SERP
|
|
William S. Chadwick, Jr.
|
|
|
9
|
|
|
|
2
|
|
Phillip J. Saile
|
|
|
4,201
|
|
|
|
1,176
|
|
|
|
|
(3) |
|
Mr. Saile retired from his position as Senior Vice
President Operations of Ensco Delaware on
July 31, 2009. |
94
|
|
|
(4) |
|
Includes shares immediately issuable upon exercise of stock
options (all outstanding non-employee director stock options
fully vested upon grant) and shares of restricted stock that
vest at an annual rate as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted Stock
|
|
|
Options
|
|
Number of Shares
|
|
Annual Vesting
|
|
Paul E. Rowsey, III
|
|
|
12,000
|
|
|
|
150
|
|
|
|
150
|
|
|
|
|
|
|
|
|
600
|
|
|
|
300
|
|
|
|
|
|
|
|
|
900
|
|
|
|
300
|
|
|
|
|
|
|
|
|
2,400
|
|
|
|
600
|
|
|
|
|
|
|
|
|
5,570
|
|
|
|
1,114
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,620
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rita M. Rodriguez
|
|
|
12,000
|
|
|
|
150
|
|
|
|
150
|
|
|
|
|
|
|
|
|
600
|
|
|
|
300
|
|
|
|
|
|
|
|
|
900
|
|
|
|
300
|
|
|
|
|
|
|
|
|
2,400
|
|
|
|
600
|
|
|
|
|
|
|
|
|
5,570
|
|
|
|
1,114
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,620
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David M. Carmichael
|
|
|
9,000
|
|
|
|
150
|
|
|
|
150
|
|
|
|
|
|
|
|
|
600
|
|
|
|
300
|
|
|
|
|
|
|
|
|
900
|
|
|
|
300
|
|
|
|
|
|
|
|
|
2,400
|
|
|
|
600
|
|
|
|
|
|
|
|
|
5,570
|
|
|
|
1,114
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,620
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gerald W. Haddock
|
|
|
9,000
|
|
|
|
150
|
|
|
|
150
|
|
|
|
|
|
|
|
|
600
|
|
|
|
300
|
|
|
|
|
|
|
|
|
900
|
|
|
|
300
|
|
|
|
|
|
|
|
|
2,400
|
|
|
|
600
|
|
|
|
|
|
|
|
|
5,570
|
|
|
|
1,114
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,620
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thomas L. Kelly II
|
|
|
9,000
|
|
|
|
150
|
|
|
|
150
|
|
|
|
|
|
|
|
|
600
|
|
|
|
300
|
|
|
|
|
|
|
|
|
900
|
|
|
|
300
|
|
|
|
|
|
|
|
|
2,400
|
|
|
|
600
|
|
|
|
|
|
|
|
|
5,570
|
|
|
|
1,114
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,620
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
C. Christopher Gaut
|
|
|
|
|
|
|
4,000
|
|
|
|
1,000
|
|
|
|
|
|
|
|
|
5,570
|
|
|
|
1,114
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,570
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Keith O. Rattie
|
|
|
|
|
|
|
4,000
|
|
|
|
1,000
|
|
|
|
|
|
|
|
|
5,570
|
|
|
|
1,114
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,570
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
J. Roderick Clark
|
|
|
|
|
|
|
4,000
|
|
|
|
1,000
|
|
|
|
|
|
|
|
|
5,570
|
|
|
|
1,114
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,570
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
95
|
|
|
(5) |
|
Also includes the following shares held indirectly under the
Non-Employee Director Deferred Compensation Plan, which is
described in the Compensation Discussion and
Analysis section of the proxy statement for our 2009
Annual Meeting of Stockholders: |
|
|
|
|
|
Gerald W. Haddock
|
|
|
8,583
|
|
Keith O. Rattie
|
|
|
1,319
|
|
|
|
|
(6) |
|
Denotes all shares owned by our executive officers and directors
and members of their immediate family sharing the same
household, including 632,384 shares of unvested restricted
stock, 289,540 shares issuable upon exercise of stock
options and 18,099 shares held indirectly under the ENSCO
Savings Plan, SERP and the Non-Employee Director Deferred
Compensation Plan. |
|
(7) |
|
Ownership is less than 1 percent of the shares of our
common stock outstanding. |
96
LEGAL
MATTERS
Baker & McKenzie LLP (U.S.) has advised us in
connection with certain U.S. legal matters with respect to
the reorganization and Baker & McKenzie LLP (U.K.) has
advised us in connection with certain U.K. legal matters with
respect to the reorganization, including legal matters with
respect to the validity of the Class A Ordinary Shares
represented by the ADSs to be issued pursuant to the merger.
INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
The consolidated financial statements of Ensco Delaware and
subsidiaries as of December 31, 2008 and 2007, and for each
of the years in the three-year period ended December 31,
2008, and managements assessment of the effectiveness of
internal control over financial reporting as of
December 31, 2008 have been incorporated by reference in
this proxy statement/prospectus in reliance upon the reports of
KPMG LLP, independent registered public accounting firm,
incorporated by reference in this proxy statement/prospectus,
and upon the authority of said firm as experts in accounting and
auditing.
The audit report covering the December 31, 2008
consolidated financial statements refers to the adoption,
effective January 1, 2008, of the provisions of Statement
of Financial Accounting Standards No. 157, Fair Value
Measurements, as it relates to financial assets and
liabilities and the adoption, effective January 1, 2007, of
the provisions of Financial Accounting Standards Board
Interpretation No. 48, Accounting for Uncertainty in
Income Taxes.
With respect to the unaudited interim financial information for
the periods ended September 30, 2009 and 2008, incorporated
by reference in this proxy statement/prospectus, the independent
registered public accounting firm has reported that they applied
limited procedures in accordance with professional standards for
a review of such information. However, their separate report
included in Ensco Delawares quarterly report on
Form 10-Q
for the quarter ended September 30, 2009, and incorporated
by reference in this proxy statement/prospectus, states that
they did not audit and they do not express an opinion on that
interim financial information. Accordingly, the degree of
reliance on their report on such information should be
restricted in light of the limited nature of the review
procedures applied. The independent registered public accounting
firm is not subject to the liability provisions of
Section 11 of the Securities Act for their report on the
unaudited interim financial information because that report is
not a report or a part of any
registration statement prepared or certified by the independent
registered public accounting firm within the meaning of
Sections 7 and 11 of the Securities Act.
WHERE YOU
CAN FIND MORE INFORMATION
Ensco Delaware is subject to the informational requirements of
the Exchange Act and in accordance therewith files annual,
quarterly and current reports, proxy statements and other
information with the SEC. You may read and copy any reports,
statements or other information we file at the SECs public
reference room 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. Ensco
Delawares SEC filings also are available to the public
from commercial document retrieval services and at the
SECs website at www.sec.gov. You may also inspect those
reports, proxy statements and other information concerning Ensco
Delaware at the offices of the NYSE, 20 Broad Street, New
York, New York 10005, on which the Ensco Delaware common stock
is currently listed.
Ensco UK has filed a Registration Statement on
Form S-4
with the SEC to register its Class A Ordinary Shares
underlying the ADSs in connection with the merger. This proxy
statement/prospectus is a part of that registration statement
and constitutes a prospectus of Ensco UK under applicable
U.S. securities laws in addition to being the proxy
statement of Ensco Delaware for the special meeting. This proxy
statement/prospectus is not intended to be and is not a
prospectus for purposes of the U.K. Financial Services
Authoritys Prospectus Rules. A registration statement on
Form F-6
in respect of the ADSs has also been filed with the SEC.
In addition to the information set forth in this proxy
statement/prospectus, SEC rules allow Ensco Delaware and Ensco
UK to incorporate by reference information into this
proxy statement/prospectus, which means that Ensco Delaware can
disclose important information to you by referring you to
another document filed separately
97
with the SEC. The information incorporated by reference is
deemed to be part of this proxy statement/prospectus, except for
any information therein that is superseded by information set
forth in this proxy statement/prospectus. We incorporate by
reference the documents listed below and any additional
documents that we will file 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 special meeting. These documents
contain important information about Ensco Delaware. The
documents incorporated by reference are:
|
|
|
|
1.
|
Annual Report on
Form 10-K
for the year ended December 31, 2008, filed with the SEC on
February 26, 2009;
|
|
|
2.
|
Proxy Statement on Schedule 14A, filed with the SEC on
April 14, 2009, as amended by Amendment No. 1 thereto,
filed with the SEC on April 14, 2009;
|
|
|
3.
|
Quarterly Report on
Form 10-Q
for the quarter ended March 31, 2009, filed with the SEC on
April 23, 2009;
|
|
|
4.
|
Quarterly Report on
Form 10-Q
for the quarter ended June 30, 2009, filed with the SEC on
July 23, 2009;
|
|
|
5.
|
Quarterly Report on
Form 10-Q
for the quarter ended September 30, 2009, filed with the
SEC on October 22, 2009; and
|
|
|
6.
|
Current Reports on
Form 8-K
(in each case, other than information and exhibits
furnished to and not filed with the SEC
in accordance with SEC rules and regulations) filed with the SEC
January 13, 2009, January 15, 2009, January 28,
2009, February 17, 2009, February 26, 2009,
March 16, 2009, April 15, 2009, April 23, 2009,
May 15, 2009, June 9, 2009, June 15, 2009,
June 30, 2009, July 15, 2009, July 16, 2009,
July 23, 2009, August 18, 2009, September 8,
2009, September 15, 2009, October 14, 2009,
October 15, 2009, October 22, 2009, November 6,
2009 and November 16, 2009.
|
If you are a stockholder of record or beneficial owner, we may
already have sent you some of the documents incorporated by
reference, but you can obtain any of them from us or the SEC.
Stockholders of record, beneficial owners, and any other person
to whom a proxy statement is delivered, may obtain without
charge a copy of documents that we incorporate by reference into
this proxy statement/prospectus (including exhibits, but only if
specifically requested) by requesting them by telephone at
(214) 397-3000
or in writing at the following address:
ENSCO
International Incorporated
500 North Akard Street, Suite 4300
Dallas, Texas
75201-3331
Attn: Investor Relations Department
If you would like to request documents from us, please do so
by December 11, 2009, to assure that you will receive them
before the special meeting.
You should rely only on the information contained or
incorporated by reference into this proxy statement/prospectus
to consider and vote upon the adoption of the merger agreement.
We have not authorized anyone to provide you with information
that is different from what is contained in this proxy
statement/prospectus. The date of this proxy
statement/prospectus can be found on the first page. You should
not assume that the information contained in this proxy
statement/prospectus is accurate as of any date other than that
date, and neither the mailing of this proxy statement/prospectus
to stockholders nor the issuance of ADSs representing
Class A Ordinary Shares in the merger shall create any
implication to the contrary.
98
OTHER
INFORMATION
Stockholder
Proposals for Next Annual Meeting
If the proposal to approve the adoption of merger agreement is
not approved by our stockholders, any of our stockholders
intending to present a proposal at the 2010 annual meeting of
ENSCO International Incorporated must deliver such proposal to
our principal executive offices, in writing and in accordance
with SEC
Rule 14a-8,
no later than December 14, 2009, for inclusion in the proxy
statement related to that meeting. The proposal should be
delivered to our Secretary by certified mail, return receipt
requested.
A stockholder whose proposal is not included in the proxy
statement related to the 2010 annual meeting, but who still
intends to submit a proposal at that meeting, is required by our
bylaws to deliver such proposal, in writing, to our Secretary at
our principal executive offices and to provide certain other
information, not less than 50 days nor more than
75 days prior to the first anniversary of our prior
years annual meeting, subject to any other requirements of
law; provided, however, that if the date of the annual meeting
is more than 30 days before or more than 60 days after
such anniversary date, notice by the stockholder to be timely
must be delivered not less than 50 days nor more than
75 days prior to the annual meeting, or, in the event that
less than 65 days prior public announcement of the date of
the meeting is given or made to stockholders, notice by the
stockholder to be timely must be received no later than the
close of business on the fifteenth day following the day on
which public announcement of the date of the meeting was first
made. The first anniversary of last years annual meeting
is May 28, 2010. Any such proposal must also comply with
the other provisions contained in our bylaws relating to
stockholder proposals.
Information
Concerning Stockholder Proposals Made at Special
Meeting
According to Section 8 of Ensco Delawares bylaws,
business transacted at any special meeting of stockholders will
be limited to the purposes stated in the notice of such special
meeting. Therefore, no stockholder may present a proposal at the
special meeting.
Shareholder
Proposals After Merger
If the merger is approved, Ensco UK will become the successor
issuer of Ensco Delaware for purposes of U.S. securities
laws. Shareholder proposals to be included in the proxy
materials for our annual general meeting to be held in 2010 must
be received by us by December 14, 2009, and must otherwise
comply with
Rule 14a-8
promulgated by the SEC to be considered for inclusion in our
proxy statement for that year. If you do not comply with
Rule 14a-8,
we will not be required to include the proposal in our proxy
statement and the proxy card mailed to our shareholders.
If you desire to bring a matter before a meeting of the
shareholders and the proposal is submitted outside the process
of
Rule 14a-8,
a shareholder must follow the procedures set out under the
Companies Act, the New Articles as set out in Annex B and
the deposit agreement, which may require you to surrender the
ADSs and withdraw the Class A Ordinary Shares.
Communications
to the Board
We have established a process by which stockholders and other
interested parties may communicate directly with our board of
directors, any committee of the board, the non-employee
directors as a group or any individual director. The established
process, which is published on our website:
(www.enscointernational.com/ENSCO/governance.asp),
provides a means for submission of such interested parties
communications via an independent, third party mail forwarding
service. Such communications may be submitted by mail, addressed
as follows: Ensco Stockholder Communications,
5600 W. Lovers Lane, Suite 116, Box #130,
Dallas, Texas
75209-4330.
Mail so addressed will be forwarded directly to the then
presiding Chairmen of our boards standing committees and
will not be screened by management.
99
Householding
of Proxy Materials
We participate, and some brokers, banks, trusts and other
nominee record holders may be participating, in the practice of
householding proxy materials. This procedure allows
multiple stockholders residing at the same address the
convenience of receiving a single proxy statement/prospectus and
any other proxy materials. You may request a separate copy of
the proxy statement/prospectus by calling
1-800-579-1639
or e-mailing
sendmaterial@proxyvote.com. You also may request paper
copies when prompted after you vote at www.proxyvote.com.
By Order of the Board of Directors,
Cary A. Moomjian, Jr.
Vice President, General Counsel and Secretary
November 20, 2009
100
ANNEX A
AGREEMENT
AND PLAN OF MERGER AND REORGANIZATION
This AGREEMENT AND PLAN OF MERGER AND REORGANIZATION (this
Agreement) is entered into as of
November 9, 2009, by and between ENSCO International
Incorporated, a Delaware corporation (Ensco
Delaware), and ENSCO Newcastle LLC, a Delaware limited
liability company and a wholly-owned indirect subsidiary of
Ensco Delaware (Mergeco).
RECITALS:
A. The Board of Directors of Ensco Delaware has
unanimously determined that it is advisable and in the best
interests of Ensco Delawares stockholders to reorganize so
that Mergeco will merge with and into Ensco Delaware with Ensco
Delaware as the surviving corporation (the
Merger).
B. The Board of Directors of Ensco Delaware has
unanimously approved the Merger, this Agreement and, to the
extent applicable to Ensco Delaware, the other transactions
described herein or contemplated hereby, pursuant to which Ensco
Delaware will be the surviving corporation in the Merger and
will become a wholly-owned subsidiary of ENSCO Global Limited, a
newly formed Cayman Islands exempted company (Ensco
Cayman), all upon the terms and subject to the
conditions set forth in this Agreement, and whereby each issued
share of common stock, par value US$0.10 per share, of Ensco
Delaware (Ensco Delaware Common Stock), other
than those shares of Ensco Delaware Common Stock held by Ensco
Delaware in treasury or by any subsidiaries of Ensco Delaware,
shall be converted into the right to receive one American
depositary share (each, an ADS, and,
collectively, the ADSs), which represents one
Class A Ordinary Share, par value US$0.10 per share
(collectively, the Class A Ordinary
Shares) of ENSCO International Limited, a newly formed
private limited company incorporated under English law, which,
prior to the Effective Time (defined below), will re-register as
a public limited company to be named Ensco International
plc (Ensco UK).
C. The sole member of Mergeco has approved the
Merger, this Agreement and, to the extent applicable, the other
transactions described herein or contemplated hereby.
D. The Merger requires, among other things, the
adoption of this Agreement by the affirmative vote of the
holders of a majority of the issued and outstanding shares of
Ensco Delaware Common Stock entitled to vote thereon.
E. Ensco Delaware and Mergeco intend for the Merger
to qualify as a reorganization under Section 368(a)(1)
and/or an exchange under Section 351 of the Internal
Revenue Code of 1986, as amended (the Code),
and the Treasury regulations promulgated thereunder (the
Treasury Regulations).
F. Ensco Delaware and Mergeco further intend for this
Agreement to constitute a plan of reorganization within the
meaning of Section 368 of the Code and the Treasury
Regulations.
AGREEMENT:
NOW THEREFORE, in consideration of the foregoing and of
the covenants and agreements contained herein, and of other good
and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto hereby agree as
follows:
ARTICLE I
THE MERGER
Section 1.1 The
Merger. Subject to the terms and conditions of
this Agreement, and in accordance with the Delaware General
Corporation Law (the DGCL), at the Effective
Time, Mergeco shall merge with and into Ensco Delaware in
accordance with this Agreement, and the separate corporate
existence of Mergeco shall thereupon cease. From and after the
Effective Time and in accordance with the DGCL, (a) Ensco
Delaware shall continue as the surviving corporation in the
Merger (sometimes hereinafter referred to as the
Surviving Corporation), becoming a
wholly-owned subsidiary of Ensco Cayman, (b) the corporate
identity, existence, powers, rights and immunities of Ensco
Delaware as the Surviving Corporation shall continue unimpaired
by the Merger, and
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(c) Ensco Delaware shall succeed to and shall possess all
the assets, properties, rights, privileges, powers, franchises,
immunities and purposes, and be subject to all the debts,
liabilities, obligations, restrictions and duties of Mergeco,
all without further act or deed.
Section 1.2 Filing Certificate of Merger;
Effective Time. As soon as practicable following
the satisfaction or, to the extent permitted by applicable law,
waiver of the conditions set forth in Article V, if
this Agreement shall not have been terminated as provided in
Section 6.1, Mergeco and Ensco Delaware shall cause
a certificate of merger (the Certificate of
Merger) meeting the requirements of
Section 264(c) of the DGCL to be properly executed and
filed in accordance with such section and otherwise make all
other filings or recordings as required by the DGCL in
connection with the Merger. Following the filing of the
certificate of merger as provided above, the Merger shall become
effective at 12:01 a.m., Eastern Time on the first business
day after the stockholders of Ensco Delaware approve the
adoption of this Agreement, or at such later date as the parties
hereto shall agree (the Effective Time).
ARTICLE II
CHARTER DOCUMENTS;
DIRECTORS AND OFFICERS OF
SURVIVING CORPORATION
Section 2.1 Name of the Surviving
Corporation. The name of the Surviving
Corporation shall be ENSCO International
Incorporated.
Section 2.2 Certificate of Incorporation of
the Surviving Corporation. From and after the
Effective Time, the Certificate of Incorporation of Ensco
Delaware in effect immediately prior to the Effective Time shall
be the Certificate of Incorporation of the Surviving
Corporation, until duly amended in accordance with applicable
law.
Section 2.3 Bylaws of Surviving
Corporation. From and after the Effective Time,
the Bylaws of Ensco Delaware in effect immediately prior to the
Effective Time shall be the Bylaws of the Surviving Corporation,
until duly amended in accordance with applicable law.
Section 2.4 Directors of Surviving
Corporation. From and after the Effective Time,
the directors of Ensco Delaware immediately prior to the
Effective Time shall be the directors of the Surviving
Corporation, each such director to serve in such capacity until
his or her earlier death, resignation or removal or until his or
her successor is duly elected or appointed.
Section 2.5 Officers of Surviving
Corporation. From and after the Effective Time,
the officers of Ensco Delaware immediately prior to the
Effective Time shall be the officers of the Surviving
Corporation, each such officer to serve in such capacity until
his or her earlier death, resignation or removal or until his or
her successor is duly elected or appointed.
ARTICLE III
CANCELLATION AND CONVERSION OF STOCK
Section 3.1 Effect on Capital
Stock. At the Effective Time, by virtue of the
Merger and without any action on the part of the holder of any
Ensco Delaware Common Stock, any membership interests in
Mergeco, any Class A Ordinary Shares of Ensco UK, any
Class B Ordinary Shares of Ensco UK or any ADSs or ADRs (as
defined below) of Ensco UK:
a. Cancellation of Ensco Delaware Common
Stock. Each issued share of Ensco Delaware Common
Stock that is owned by Ensco Delaware (as a treasury share or
otherwise) or by any subsidiaries of Ensco Delaware (excluding,
for the avoidance of doubt, any shares of Ensco Delaware Common
Stock held by T. Rowe Price Trust Company as trustee
pursuant to the Trust Agreement, as revised and restated
effective January 1, 2004, and the 2005 Benefit Reserve
Trust Agreement, dated January 1, 2005, in both cases
between the Company, such trustees and the other parties named
therein) immediately prior to the Effective Time shall
automatically be cancelled and retired and shall cease to exist,
and no consideration shall be delivered or deliverable hereunder
in connection with such cancellation.
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b. Conversion of Remaining Ensco Delaware
Shares. Subject to Section 3.2(l), each
issued and outstanding share of Ensco Delaware Common Stock
(other than the issued shares of Ensco Delaware Common Stock
referenced in Section 3.1(a)) shall be converted
into the right to receive one validly issued, fully paid and
nonassessable ADS, which, collectively, immediately after the
Effective Time shall be represented by one or more American
depositary receipts (each, an ADR, and,
collectively, the ADRs).
c. Conversion of Mergeco Membership
Interests. All issued and outstanding membership
interests in Mergeco shall be converted into one validly issued,
fully paid and nonassessable share of common stock, par value
US$0.10 per share, of the Surviving Corporation (the
Surviving Corporation Common Share).
d. Stock-Based Compensation
Plans. As of the Effective Time, Ensco Delaware
shall assign to Ensco UK, and shall cause Ensco UK to assume and
adopt, Ensco Delawares rights and obligations under those
equity incentive plans, compensation plans, and other plans,
agreements, awards and other arrangements outstanding that
provide for options, awards of restricted stock or other rights
to purchase or receive shares of Ensco Delaware (or the right to
receive benefits or amounts by reference to those shares)
(collectively, the Equity Plans), except that
Ensco Delaware shall remain the plan sponsor of those Equity
Plans listed on Exhibit A, in accordance with
Article IV of this Agreement (collectively, the
Unassumed Plans). To the extent an Equity
Plan provides for awards of incentive stock options pursuant to
Section 422 of the U.S. Internal Revenue Code of 1986,
as amended (the Code), approval of such plan
by Ensco Delaware, as the sole direct or indirect shareholder of
Ensco UK, shall be deemed, as of the Effective Time, to
constitute shareholder approval of such Equity Plan and the
issuance or delivery of ADSs by Ensco UK under the share
limitations set forth thereunder for purposes of
Section 422(b) of the Code.
e. Class B Ordinary Shares of Ensco
UK. Each issued and outstanding Class B
Ordinary Share, par value £1.00 per share, of Ensco UK that
is owned by Ensco Delaware immediately prior to the Effective
Time shall remain outstanding.
Section 3.2 Surrender and Exchange of
Shares.
a. Following the date of this Agreement and in any
event not less than three business days prior to the Effective
Time, Ensco Delaware shall select a bank or trust company to act
as exchange agent in connection with the Merger (the
Exchange Agent) for the purpose of exchanging
certificates representing Ensco Delaware Common Stock
(Certificates) for ADSs or ADRs evidencing
one or more ADSs.
b. The Exchange Agent shall act as the agent for each
holder of shares of Ensco Delaware Common Stock to receive the
ADSs to which such holder shall become entitled to receive with
respect to such holders shares of Ensco Delaware Common
Stock pursuant to this Article III.
c. Prior to the Effective Time Mergeco, or, after the
Effective Time, the Surviving Corporation, shall deposit with
the Exchange Agent, from time to time, (i) that number of
ADSs and/or
ADRs evidencing ADSs, in such denominations as the Exchange
Agent shall specify, as are deliverable pursuant to
Section 3.1, and (ii) the amount of cash that
is payable pursuant to this Article III, in each
case in respect of shares of Ensco Delaware Common Stock for
which Certificates are expected to be properly delivered to the
Exchange Agent.
d. Promptly after the Effective Time, the Surviving
Corporation shall cause to be mailed to each record holder,
immediately prior to the Effective Time, of shares of Ensco
Delaware Common Stock, a form of letter of transmittal, which
shall specify that delivery shall be effected, and risk of loss
and title to the Certificates held by such holder representing
such shares of Ensco Delaware Common Stock shall pass, only upon
actual and proper delivery of the Certificates to the Exchange
Agent.
e. Each holder of shares of Ensco Delaware Common
Stock shall be entitled to receive in exchange for such
holders shares of Ensco Delaware Common Stock, upon
surrender to the Exchange Agent of a Certificate, together with
a letter of transmittal, duly completed and validly executed in
accordance with the instructions thereto, and such other
documents as may be required pursuant to such instructions, the
number of whole ADSs into which such holders shares of
Ensco Delaware Common Stock represented by such holders
properly surrendered Certificates were converted in accordance
with Section 3.1 and any cash dividends or other
distributions that such holder has the right to receive pursuant
to Section 3.2(i) and Section 3.2(l).
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f. If delivery of the ADSs is to be made to a person
other than the person in whose name the surrendered Certificate
is registered, it shall be a condition of delivery that the
Certificate so surrendered shall be properly endorsed or shall
be otherwise in proper form for transfer and that the person
requesting such payment or delivery shall have paid to the
Exchange Agent any transfer and other taxes required by reason
of the delivery of the ADSs to a person other than the
registered holder of the Certificate surrendered or shall have
established to the satisfaction of the Exchange Agent that such
tax either has been paid or is not applicable. Until so
surrendered, each Certificate shall, after the Effective Time,
represent for all purposes only the right to receive upon such
surrender the applicable ADSs as contemplated by this
Article III.
g. At the Effective Time, the stock transfer books of
Ensco Delaware shall be closed and thereafter there shall be no
further registration of transfers of shares of Ensco Delaware
Common Stock that were outstanding prior to the Effective Time.
After the Effective Time, Certificates presented to the
Surviving Corporation for transfer shall be canceled and
exchanged for the consideration provided for, and in accordance
with the procedures set forth, in this Article III.
h. Any ADSs to be delivered plus any cash dividend or
other distribution that a former holder of shares of Ensco
Delaware Common Stock has the right to receive pursuant to this
Article III that remains unclaimed by any former
holder of shares of Ensco Delaware Common Stock after the
Effective Time shall be held by the Exchange Agent (or a
successor agent appointed by the Surviving Corporation). None of
the Surviving Corporation, Ensco UK or the Exchange Agent shall
be liable to any former holder of shares of Ensco Delaware
Common Stock for any securities properly delivered or any amount
properly paid by the Exchange Agent or its nominee, as the case
may be, to a public official pursuant to applicable abandoned
property, escheat or similar law nine months after the Effective
Time. If any Certificate has not been surrendered prior to two
years after the Effective Time (or immediately prior to an
earlier date on which the ADSs in respect of the Certificate
would otherwise escheat to or become the property of any
governmental entity) any cash, share dividends and distributions
otherwise payable in respect of the Certificate shall, to the
extent permitted by applicable law, become the property of the
Surviving Corporation, free and clear of all claims or interest
of any person previously entitled thereto.
i. No dividends or other distributions with respect
to ADSs deliverable with respect to the shares of Ensco Delaware
Common Stock shall be paid to the holder of any unsurrendered
Certificates until after those Certificates are surrendered as
provided in this Article III. After surrender, there
shall be delivered
and/or paid
to the holder of the ADSs delivered in exchange therefor,
without interest, (A) at the time of surrender, the
dividends or other distributions payable with respect to those
ADSs with a record date on or after the date of the Effective
Time and a payment date on or prior to the date of this
surrender and not previously paid and (B) at the
appropriate payment date, the dividends or other distributions
payable with respect to those ADSs with a record date on or
after the date of the Effective Time but with a payment date
subsequent to surrender.
j. No holder of Ensco Delaware Common Stock will be
entitled to exercise voting rights with respect to ADSs
deliverable with respect to such Ensco Delaware Common Stock
until after such holder has surrendered the Certificates
representing such Ensco Delaware Common Stock as provided in
this Article III.
k. In the event that any Certificate shall have been
lost, stolen or destroyed, upon the holders compliance
with the replacement requirements established by the Exchange
Agent, including, if necessary, the posting by the holder of a
bond in customary amount as indemnity against any claim that may
be made against it with respect to the Certificate, the Exchange
Agent shall deliver in exchange for the lost, stolen or
destroyed Certificate the applicable ADSs deliverable in respect
of the shares of Ensco Delaware Common Stock represented by the
Certificate pursuant to this Article III.
l. Each holder of shares of Ensco Delaware Common
Stock otherwise entitled to receive a fractional interest in an
ADS pursuant to the terms of this Article III, shall
be entitled to receive, in accordance with the provisions of
this Section 3.2(l), a cash payment (without
interest) in lieu of that fractional interest in an ADS
determined by multiplying the fractional interest to which such
holder would otherwise be entitled by the closing price for an
ADR as reported on the New York Stock Exchange
(NYSE) on the last trading day prior to the
date on which the Effective Time occurs. Any cash payment in
lieu of a fractional interest shall be made in U.S. dollars.
A-4
m. Notwithstanding anything in this Agreement to the
contrary, the Surviving Corporation and the Exchange Agent shall
be entitled to deduct and withhold from the consideration
otherwise payable to any former holder of shares of Ensco
Delaware Common Stock pursuant to this Agreement any amounts as
may be required to be deducted and withheld with respect to the
making of this payment under the U.S. Internal Revenue Code
of 1986, as amended, or under any provision of state, local or
foreign tax law. To the extent that amounts are so withheld and
paid over to the appropriate taxing authority, the Surviving
Corporation shall be treated as though it withheld an
appropriate amount of the type of consideration otherwise
payable pursuant to this Agreement to any former holder of
shares of Ensco Delaware Common Stock, sold this consideration
for an amount of cash equal to the fair market value of the
consideration at the time of the deemed sale and paid these cash
proceeds to the appropriate taxing authority.
Section 3.3 No Dissenters
Rights. There are no dissenters rights or
appraisal rights available to holders of Ensco Delaware Common
Stock under the DGCL in connection with the Merger.
ARTICLE IV
EMPLOYEE BENEFIT AND COMPENSATION PLANS AND AGREEMENTS
Section 4.1 Assignment and Assumption of
Assumed Equity Plans. At the Effective Time,
Ensco Delaware shall assign to Ensco UK, and shall cause Ensco
UK to adopt and assume, the rights and obligations of Ensco
Delaware under Equity Plans, except that Ensco Delaware shall
remain the plan sponsor of the Unassumed Plans.
Section 4.2 Application of Equity Plans to
ADSs. To the extent any Equity Plan provides for
the grant, issuance, delivery or purchase of, or otherwise
relates to, options, awards of restricted stock or other rights
to purchase or receive shares of Ensco Delaware Common Stock (or
the right to receive benefits or amounts by reference to those
shares), from and after the Effective Time, Ensco Delaware or
Ensco UK, as applicable, shall cause such Equity Plan to be
amended to provide for the grant, issuance, delivery or purchase
of, or otherwise relate to, ADSs and ADRs, as applicable, and
all options or awards issued, or benefits available or based
upon the value of a specified number of shares of Ensco Delaware
Common Stock, under such Equity Plans after the Effective Time
shall entitle the holder thereof to purchase or receive, or
receive payment based on, as applicable, an equal number of ADSs
in accordance with the terms of such Equity Plan. Except as
provided in this Section 4.2 and for certain
amendments to Equity Plans intended to clarify the meaning of
certain provisions in such Equity Plans, the outstanding
options, restricted stock awards or other equity-based awards or
benefits available under the terms of any Equity Plan at and
following the Effective Time shall, to the extent permitted by
law and otherwise reasonably practicable, be subject to the same
terms and conditions as under such Equity Plan and the
agreements relating thereto immediately prior to the Effective
Time (including, for greater certainty, having the same option
exercise or measurement price). Notwithstanding the foregoing,
the number of ADSs and ADRs, as applicable, issuable or
available upon the exercise, payment, issuance or availability
of such option, award or benefit immediately after the Effective
Time, and the option exercise or measurement price of each such
option, award or benefit, shall be subject to adjustment by
Ensco Delaware or Ensco UK, as applicable, only to the extent
necessary to comply with applicable law. The foregoing
adjustments shall be made in accordance with applicable law (and
administrative practice of applicable governmental authorities),
including but not limited to Section 409A of the Code and
the U.S. Treasury Regulations promulgated thereunder, to
the extent such provisions are applicable to an option, award,
or benefit. Other than as set forth above, the Merger shall
constitute a reorganization for purposes of the
Equity Plans, to the extent such term is applicable, and will
not affect the underlying terms or conditions of any outstanding
equity awards, which shall remain subject to their original
terms and conditions.
Section 4.3 Issuance of ADSs under Equity
Plans. To the extent any ADSs are held by Ensco
Delaware after the Effective Time, Ensco Delaware agrees to use
such ADSs for future issuances in connection with the Equity
Plans, as directed by Ensco UK.
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ARTICLE V
CONDITIONS PRECEDENT
Section 5.1 Conditions Precedent to the
Obligations of Each Party. The obligations of the
respective parties hereto to effect the Merger are subject to
the satisfaction or waiver of the following conditions:
a. Holders of a majority of the issued and
outstanding shares of Ensco Delaware Common Stock entitled to
vote thereon at the record date for such actions as set by the
Board of Directors of Ensco Delaware shall have approved the
adoption of this Agreement.
b. Ensco Delaware shall have contributed all ADRs to
Ensco Cayman, which shall, in turn, have contributed all such
ADRs to Mergeco.
c. Ensco UK shall have re-registered as a public
limited company.
d. Following the approval referenced in
Section 5.1(a), Ensco Delaware shall have
contributed all shares of Ensco Cayman to Ensco UK.
e. Neither of the parties hereto shall be subject to
any decree, order or injunction of any court of competent
jurisdiction, whether in the U.S., the U.K., the European Union
or any other country, that prohibits the consummation of the
Merger.
f. The registration statement on
Form S-4
filed with the Securities and Exchange Commission filed by Ensco
UK in connection with the offer of the Class A Ordinary
Shares represented by the ADSs to be delivered as consideration
pursuant to the Merger shall have become effective under the
U.S. Securities Act of 1933, as amended (the
Securities Act), and no stop order with
respect thereto shall be in effect.
g. The registration statement on
Form F-6
filed with the Securities and Exchange Commission in connection
with the offer and delivery of the ADSs, as evidenced by the
ADRs, to be delivered pursuant to the Merger shall have become
effective under the Securities Act, and no stop order with
respect thereto shall be in effect.
h. Ensco Delaware shall have received an opinion of
counsel as to certain tax matters in form and acceptable to
Ensco Delaware.
i. The ADSs shall have been authorized for listing on
the NYSE, subject to official notice of delivery and
satisfaction of other standard conditions.
j. Other than the filing of the Certificate of Merger
provided for under Article I, all material consents
and authorizations of, filings or registrations with, and
notices to, any governmental or regulatory authority required of
Ensco Delaware, Mergeco or any of their respective subsidiaries
to consummate the Merger and the other transactions contemplated
hereby, including without limitation any filings required under
(i) applicable U.S. state securities and Blue
Sky laws and (ii) applicable securities laws in the
U.K., shall have been obtained or made.
k. A special resolution shall have been passed to
alter the rights of the holders of the Class A Ordinary
Shares to have the same rights as holders of ordinary shares of
Class B Ordinary Shares, conditional upon the Merger
becoming unconditional.
ARTICLE VI
TERMINATION, AMENDMENT AND WAIVER
Section 6.1 Termination. This
Agreement may be terminated and the Merger abandoned by action
of the Board of Directors of Ensco Delaware at any time prior to
or after approval by the stockholders of Ensco Delaware of this
Agreement but before the Effective Time.
Section 6.2 Effect of
Termination. In the event this Agreement is
terminated as provided in Section 6.1, this
Agreement shall forthwith become void and have no effect,
without any liability or obligation on the part of Ensco
Delaware or Mergeco.
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Section 6.3 Amendment. This
Agreement may be amended by the parties hereto at any time
before or after the stockholders of Ensco Delaware approve the
adoption this Agreement; provided, however, that
after any such adoption by the Ensco Delaware stockholders, this
Agreement shall not be further amended without the approval of
the Ensco Delaware stockholders unless any such amendment shall
not require the approval of such stockholders under applicable
law or under the NYSE listing rules. This Agreement may not be
amended except by an instrument in writing signed on behalf of
each of the parties hereto.
Section 6.4 Waiver. At any
time prior to the Effective Time, the parties may waive
compliance with any of the agreements or covenants contained in
this Agreement, or may waive any of the conditions to
consummation of the Merger contained in this Agreement. Any
agreement on the part of a party to any such waiver shall be
valid only if set forth in an instrument in writing signed on
behalf of such party. The failure of any party to this Agreement
to assert any of its rights under this Agreement or otherwise
shall not constitute a waiver of such rights.
ARTICLE VII
COVENANTS
Section 7.1 Rule 16b-3
Approval. Ensco Delaware and Mergeco shall take,
and cause their respective subsidiaries to take, all such steps
as may reasonably be required to cause the transactions
contemplated by Section 3.1 and any other
dispositions of Ensco Delaware equity securities (including
derivative securities) or acquisitions of ADSs (including
derivative securities thereof) in connection with this Agreement
by each individual who (a) is a director or officer of
Ensco Delaware, or (b) at the Effective Time, is or will
become a director or officer of Ensco UK, to be exempt under
Rule 16b-3
promulgated under the Securities Exchange Act of 1934, as
amended.
ARTICLE VIII
GENERAL PROVISIONS
Section 8.1 Assignment; Binding Effect;
Benefit. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by
either of the parties hereto (whether by operation of law or
otherwise) without the prior written consent of the other party.
Subject to the preceding sentence, this Agreement shall be
binding upon and shall inure to the benefit of the parties
hereto and their respective successors and assigns.
Notwithstanding anything contained in this Agreement to the
contrary, nothing in this Agreement, expressed or implied, is
intended to confer on any person other than the parties hereto
or their respective successors and assigns any rights, remedies,
obligations or liabilities under or by reason of this Agreement.
Section 8.2 Entire
Agreement. This Agreement and any documents
delivered by the parties in connection herewith constitute the
entire agreement between the parties with respect to the subject
matter hereof and supersede all prior agreements and
understandings between the parties with respect thereto.
Section 8.3 Governing
Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware
without regard to its rules of conflict of laws that would apply
any other law.
Section 8.4 Counterparts. This
Agreement may be executed by the parties hereto in separate
counterparts, each of which when so executed and delivered shall
be an original, but all such counterparts shall together
constitute one and the same instrument. Each counterpart may
consist of a number of copies hereof, each signed by less than
all, but together signed by both of the parties hereto.
Section 8.5 Headings. Headings
of the Articles and Sections of this Agreement are for the
convenience of the parties only and shall be given no
substantive or interpretative effect whatsoever.
Section 8.6 Severability. If
any provision of this Agreement is determined by any court or
arbitrator of competent jurisdiction to be invalid, illegal or
unenforceable in any respect, such provision will be enforced to
the maximum extent possible given the intent of the parties
hereto. If such clause or provision cannot be so enforced, such
provision shall be stricken from this Agreement and the
remainder of this Agreement shall be enforced as if such
invalid, illegal or unenforceable clause or provision had (to
the extent not enforceable) never been contained in this
Agreement.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
A-7
IN WITNESS WHEREOF, Ensco Delaware and Mergeco have
executed this Agreement as of the date first written above.
ENSCO INTERNATIONAL INCORPORATED,
a Delaware corporation
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By:
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/s/ James W. Swent III
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James W. Swent III, Senior Vice President
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Chief Financial Officer
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ENSCO NEWCASTLE LLC,
a Delaware limited liability company
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By: ENSCO Global Limited,
a Cayman Islands exempted company,
its sole member
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By:
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/s/ David Armour
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David A. Armour, President
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[Signature
Page to Agreement and Plan of Merger]
A-8
Exhibit A
Unassumed
Plans
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ENSCO Savings Plan
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2005 Supplemental Executive Retirement Plan
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2005 Non-Employee Director Deferred Compensation Plan
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Supplemental Executive Retirement Plan
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Non-Employee Director Deferred Compensation Plan
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A-9
ANNEX B
FORM OF ARTICLES OF ASSOCIATION
OF
ENSCO INTERNATIONAL PLC
B-i
CONTENTS
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Clause
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Page
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PRELIMINARY
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B-1
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1.
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Articles of association
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B-1
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2.
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Interpretation
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B-1
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3.
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Liability of members
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B-4
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4.
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Change of name
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B-4
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SHARES
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B-4
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5.
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Share capital
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B-4
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6.
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Allotment
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B-5
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7.
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Power to attach rights
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B-5
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8.
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Variation of class rights
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B-5
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9.
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Redeemable shares
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B-6
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10.
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Commission and brokerage
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B-6
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11.
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Trusts not recognised
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B-6
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12.
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Alteration of share capital
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B-6
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13.
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Purchase of own Shares
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B-6
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14.
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Uncertificated shares
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B-6
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SHARE CERTIFICATES
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B-7
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15.
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Right to certificate
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B-7
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16.
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Replacement certificates
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B-8
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LIEN
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B-8
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17.
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Companys lien on shares not fully paid
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B-8
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18.
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Enforcement of lien by sale
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B-8
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19.
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Application of proceeds of sale
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B-9
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CALLS ON SHARES
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B-9
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20.
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Calls
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B-9
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21.
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Power to differentiate
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B-9
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22.
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Interest on calls
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B-9
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23.
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Payment in advance
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B-9
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24.
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Amounts due on allotment or issue treated as calls
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B-9
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FORFEITURE
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B-10
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25.
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Notice if call not paid
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B-10
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26.
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Forfeiture for non-compliance
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B-10
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27.
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Notice after forfeiture
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B-10
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28.
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Disposal of forfeited shares
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B-10
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29.
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Arrears to be paid notwithstanding forfeiture
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B-10
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30.
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Surrender
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B-11
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TRANSFER OF SHARES
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B-11
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31.
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Method of transfer
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B-11
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32.
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Right to refuse registration
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B-11
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33.
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No fees on registration
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B-12
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B-ii
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Clause
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Page
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TRANSMISSION OF SHARES
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B-12
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34.
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On death
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B-12
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35.
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Election of person entitled by transmission
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B-12
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36.
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Rights on transmission
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B-13
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UNTRACED SHAREHOLDERS
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B-13
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37.
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Power of sale
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B-13
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38.
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Application of proceeds of sale
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B-13
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FRACTIONS
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B-14
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39.
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Fractions
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B-14
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GENERAL MEETINGS
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B-14
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40.
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Annual general meetings
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B-14
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41.
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Convening of general meetings
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B-14
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42.
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Length and form of notice
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B-15
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43.
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Omission to send notice
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B-16
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44.
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Postponement of general meetings
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B-16
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45.
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Special business
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B-16
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46.
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Nominations and business proposals
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B-16
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47.
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List of shareholders
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B-20
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PROCEEDINGS AT GENERAL MEETINGS
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B-20
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48.
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Quorum
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B-20
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49.
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Procedure if quorum not present
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B-21
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50.
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Chairman
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B-21
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51.
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Right to attend and speak
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B-21
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52.
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Power to adjourn
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B-21
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53.
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|
Notice of adjourned meeting
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B-21
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54.
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|
Business at adjourned meeting
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B-22
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55.
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|
Satellite meetings
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B-22
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56.
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|
Accommodation of members at meeting
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B-22
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57.
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Security
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B-23
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VOTING
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B-23
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58.
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Method of voting
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B-23
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59.
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|
Procedure
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B-23
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60.
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Votes of members
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B-24
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61.
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|
Restriction on voting rights for unpaid calls etc.
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B-24
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62.
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|
Voting by proxy
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B-24
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63.
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|
Appointment of proxy
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B-25
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|
64.
|
|
When votes by proxy valid although authority terminated
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B-26
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ADR DEPOSITARY ARRANGEMENTS
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B-26
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65.
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|
ADR Depositary can appoint multiple proxies
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B-26
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|
66.
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|
The ADR Depositary shall keep a Proxy Register
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B-26
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67.
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|
Appointed Proxies and their proxies can only attend general
meetings if properly appointed
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B-26
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68.
|
|
Rights of Appointed Proxies and their proxies
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B-27
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69.
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Sending information to an Appointed Proxy
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B-27
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|
70.
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|
The Proxy Register may be fixed at a certain date
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B-27
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|
B-iii
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|
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Clause
|
|
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Page
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|
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71.
|
|
The nature of an Appointed Proxys interest
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|
|
B-27
|
|
72.
|
|
Validity of the appointment of Appointed Proxies
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|
|
B-28
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|
73.
|
|
Corporate representatives
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|
B-28
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|
74.
|
|
Objections to and error in voting
|
|
|
B-28
|
|
75.
|
|
Amendments to resolutions
|
|
|
B-28
|
|
76.
|
|
Failure to disclose interests in shares
|
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B-28
|
|
APPOINTMENT, RETIREMENT AND REMOVAL OF DIRECTORS
|
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B-30
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77.
|
|
Number of directors
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B-30
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|
78.
|
|
Appointment of executive directors
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B-30
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|
79.
|
|
No share qualification
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|
B-30
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|
80.
|
|
Voting on resolution for appointment
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B-30
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|
81.
|
|
Classification of the board
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B-31
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|
82.
|
|
Vacation of office by director
|
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B-31
|
|
ALTERNATE DIRECTORS
|
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B-32
|
|
83.
|
|
Appointment
|
|
|
B-32
|
|
84.
|
|
Revocation of appointment
|
|
|
B-32
|
|
85.
|
|
Participation in board meetings
|
|
|
B-32
|
|
86.
|
|
Responsibility
|
|
|
B-32
|
|
REMUNERATION, EXPENSES AND PENSIONS
|
|
|
B-32
|
|
87.
|
|
Remuneration and expenses of directors
|
|
|
B-32
|
|
88.
|
|
Remuneration and expenses of alternate directors
|
|
|
B-33
|
|
89.
|
|
Directors pensions and other benefits
|
|
|
B-33
|
|
90.
|
|
Remuneration of executive directors
|
|
|
B-33
|
|
91.
|
|
Insurance
|
|
|
B-33
|
|
POWERS AND DUTIES OF THE BOARD
|
|
|
B-33
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|
92.
|
|
Powers of the board
|
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|
B-33
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|
93.
|
|
Powers of directors being less than minimum required number
|
|
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B-34
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|
94.
|
|
Powers of executive directors
|
|
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B-34
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|
95.
|
|
Chairman of the board, chief executive officer and president
|
|
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B-34
|
|
96.
|
|
Vice presidents
|
|
|
B-34
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|
97.
|
|
Delegation to committees
|
|
|
B-34
|
|
98.
|
|
Officers
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|
B-35
|
|
99.
|
|
Agents
|
|
|
B-36
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|
100.
|
|
Exercise of voting powers
|
|
|
B-36
|
|
101.
|
|
Provision for employees
|
|
|
B-36
|
|
102.
|
|
Registers
|
|
|
B-36
|
|
103.
|
|
Register of charges
|
|
|
B-36
|
|
104.
|
|
Directors conflicts of interest other than in relation to
transactions or arrangements with the Company
|
|
|
B-36
|
|
105.
|
|
Declarations of interest by directors
|
|
|
B-38
|
|
106.
|
|
Directors interests and voting
|
|
|
B-39
|
|
PROCEEDINGS OF DIRECTORS AND COMMITTEES
|
|
|
B-40
|
|
107.
|
|
Board meetings
|
|
|
B-40
|
|
108.
|
|
Notice of board meetings
|
|
|
B-41
|
|
B-iv
|
|
|
|
|
|
|
Clause
|
|
|
|
Page
|
|
|
109.
|
|
Quorum
|
|
|
B-41
|
|
110.
|
|
Chairman of board
|
|
|
B-41
|
|
111.
|
|
Voting
|
|
|
B-41
|
|
112.
|
|
Participation by telephone
|
|
|
B-41
|
|
113.
|
|
Resolution in writing
|
|
|
B-41
|
|
114.
|
|
Proceedings of committees
|
|
|
B-42
|
|
115.
|
|
Minutes of proceedings
|
|
|
B-42
|
|
116.
|
|
Validity of proceedings of board or committee
|
|
|
B-42
|
|
SECRETARY AND AUTHENTICATION OF DOCUMENTS
|
|
|
B-43
|
|
117.
|
|
Secretary
|
|
|
B-43
|
|
118.
|
|
Authentication of documents
|
|
|
B-43
|
|
SEALS
|
|
|
B-43
|
|
119.
|
|
Safe custody
|
|
|
B-43
|
|
120.
|
|
Application of seals
|
|
|
B-43
|
|
DIVIDENDS AND OTHER PAYMENTS
|
|
|
B-44
|
|
121.
|
|
Reserves
|
|
|
B-44
|
|
122.
|
|
Payment of dividends
|
|
|
B-44
|
|
123.
|
|
Entitlement to dividends
|
|
|
B-44
|
|
124.
|
|
Method of payment
|
|
|
B-44
|
|
125.
|
|
Unclaimed dividends etc.
|
|
|
B-45
|
|
126.
|
|
Uncashed dividends
|
|
|
B-45
|
|
127.
|
|
Payment of dividends in specie
|
|
|
B-46
|
|
128.
|
|
Payment of scrip dividends
|
|
|
B-46
|
|
129.
|
|
Capitalisation of reserves
|
|
|
B-47
|
|
130.
|
|
Capitalisation of reserves employees share
schemes
|
|
|
B-48
|
|
131.
|
|
Record dates
|
|
|
B-48
|
|
ACCOUNTS
|
|
|
B-49
|
|
132.
|
|
Treasurer
|
|
|
B-49
|
|
133.
|
|
Keeping and inspection of accounting records
|
|
|
B-49
|
|
134.
|
|
Accounts to be sent to members etc.
|
|
|
B-49
|
|
135.
|
|
External auditor
|
|
|
B-50
|
|
NOTICES
|
|
|
B-50
|
|
136.
|
|
Notices to be in writing
|
|
|
B-50
|
|
137.
|
|
Service of notices, documents and information on members
|
|
|
B-50
|
|
138.
|
|
Evidence of service
|
|
|
B-51
|
|
139.
|
|
Notice binding on transferees etc.
|
|
|
B-51
|
|
140.
|
|
Notice in case of entitlement by transmission
|
|
|
B-51
|
|
141.
|
|
Validation of documents in electronic form
|
|
|
B-52
|
|
142.
|
|
Dispute resolution
|
|
|
B-52
|
|
MISCELLANEOUS
|
|
|
B-52
|
|
143.
|
|
Destruction of documents
|
|
|
B-52
|
|
144.
|
|
Winding up
|
|
|
B-53
|
|
145.
|
|
Indemnity
|
|
|
B-53
|
|
B-v
COMPANY
NO. 7023598
THE
COMPANIES ACTS 1985 TO 2006
PUBLIC
COMPANY LIMITED BY SHARES
ARTICLES OF
ASSOCIATION
OF
ENSCO INTERNATIONAL PLC
PRELIMINARY
|
|
|
1. |
|
ARTICLES OF ASSOCIATION |
|
|
|
These Articles constitute the articles of association of the
Company. No regulations contained in any statute or subordinate
legislation, including the regulations contained in the Schedule
to The Companies (Tables A to F) Regulations 1985 (as
amended), apply to the Company. |
|
2. |
|
INTERPRETATION |
|
2.1 |
|
In these Articles, unless the context otherwise requires, the
following words and expressions have the following meanings: |
|
|
|
Acts means CA 2006 and every other enactment
from time to time in force concerning companies (including any
orders, regulations or other subordinate legislation made under
CA 2006 or any such other enactment), so far as they apply to or
affect the Company; |
|
|
|
ADR Depositary means a depositary or
custodian or other person approved by the board who holds shares
in the Company under arrangements where either the depositary or
some other person issues American Depositary Receipts which
evidence American Depositary Shares representing shares in the
Company; |
|
|
|
American Depositary Receipts means the
certificates issued by the ADR Depositary to evidence the
American Depositary Shares; |
|
|
|
American Depositary Shares means American
Depositary Shares which represent shares in the Company and are
evidenced by American Depositary Receipts; |
|
|
|
Articles means the articles of association of
the Company as altered from time to time; |
|
|
|
auditors or external
auditors means the auditors from time to time of the
Company or, in the case of joint auditors, any one of them; |
|
|
|
board means the board of directors from time
to time of the Company or the directors present at a duly
convened meeting of the directors at which a quorum is present; |
|
|
|
business day means a day (excluding Saturday)
on which banks generally are open in the City of London and New
York for the transaction of normal banking business; |
|
|
|
CA 2006 means the Companies Act 2006; |
|
|
|
certificated in relation to a share means a
share which is not in uncertificated form; |
B-1
|
|
|
|
|
Class A Ordinary Shareholders means the
holders for the time being of the allotted and issued
Class A Ordinary Shares; |
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Class B Ordinary Shareholders means the
holders for the time being of the allotted and issued
Class B Ordinary Shares; |
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Class A Ordinary Shares means the
class A ordinary shares of US$0.10 each in the share
capital of the Company; |
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Class B Ordinary Shares means the
class B ordinary shares of £1.00 each in the share
capital of the Company; |
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clear days in relation to a 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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Company means Ensco International plc; |
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|
company includes any body corporate (not
being a corporation sole) or association of persons, whether or
not a company within the meaning of the Acts; |
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director means a director of the Company; |
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electronic address means any number or
address used for the purposes of sending or receiving notices,
documents or information by electronic means; |
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electronic form has the same meaning as in
section 1168 of CA 2006; |
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electronic means has the same meaning as in
section 1168 of CA 2006; |
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entitled by transmission means, in relation
to a share, entitled as a consequence of the death or bankruptcy
of a member, or as a result of another event giving rise to a
transmission of entitlement by operation of law; |
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Exchange Act means the United States
Securities Exchange Act of 1934, as amended from time to time; |
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financial year in relation to a company is
determined as follows: |
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(a) |
|
its first financial year begins with the first day of its first
accounting reference period and ends with the last day of that
period or any other date, not more than seven days before or
after the end of that period, as the board may
determine; and |
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(b) |
|
subsequent financial years begin with the day immediately
following the end of the companys previous financial year
and end with the last day of its next accounting reference
period or any other date, not more than seven days before or
after the end of that period, as the board may determine; |
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hard copy form and hard
copy have the same meanings as in section 1168 of
CA 2006; |
|
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holder or shareholder in
relation to shares means the member whose name is entered in the
register as the holder of the shares; |
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|
independent or
independence in relation to a director or
proposed director means that such director or proposed director
is (a) independent as defined by
Rule 10A-3
promulgated by the Securities and Exchange Commission under the
Exchange Act (or any successor rule thereto) and
(b) independent as defined by the listing standards of the
New York Stock Exchange or, if the Company is not subject to the
listing standards of the New York Stock Exchange, as defined
from time to time by resolution of the board; |
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member means a member of the Company; |
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office means the registered office of the
Company; |
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paid, paid up and
paid-up
mean paid or credited as paid; |
B-2
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paid-up
amount means, in respect of any share, the amount paid
or credited as paid up on that share, including sums paid, or
credited as paid, by way of premium; |
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public announcement means disclosure in a
press release reported by a national news service or in a
document filed or furnished by the Company with or to the
Securities and Exchange Commission pursuant to Section 13,
14 or 15(d) of the Exchange Act and the rules and regulations
promulgated thereunder; |
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recognised financial institution means a
recognised clearing house acting in relation to a recognised
investment exchange or a nominee of a recognised clearing house
acting in that way or of a recognised investment exchange which
is designated for the purposes of section 778(2) of CA 2006; |
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register means the register of members of the
Company kept pursuant to section 113 of CA 2006 or the
issuer register of members and Operator register of members
maintained pursuant to Regulation 20 of the Uncertificated
Securities Regulations and, where the context requires, any
register maintained by the Company or the Operator of persons
holding any renounceable right of allotment of a share and
cognate expressions shall be construed accordingly; |
|
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seal means the common seal of the Company and
includes any official seal kept by the Company by virtue of
sections 49 or 50 of CA 2006; |
|
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|
secretary means the secretary of the Company
or any other person appointed by the board to perform the duties
of the secretary of the Company, including a joint, assistant or
deputy secretary; |
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|
share means any share (of whatever class or
denomination) in the share capital of the Company, and
shares shall be construed accordingly; |
|
|
|
uncertificated proxy instruction means an
instruction or notification sent by means of a relevant system
and received by such participant in that system acting on behalf
of the Company as the board may prescribe, in such form and
subject to such terms and conditions as may from time to time be
prescribed by the board (subject always to the facilities and
requirements of the relevant system concerned); |
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Uncertificated Securities Regulations means
the Uncertificated Securities Regulations 2001; |
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|
uncertificated means, in relation to a share,
a share title to which is recorded in the register as being held
in uncertificated form and title to which, by virtue of the
Uncertificated Securities Regulations, may be transferred by
means of a relevant system; |
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United Kingdom means Great Britain and
Northern Ireland; and |
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United States means the United States of
America. |
|
2.2 |
|
The expressions issuer register of members,
Operator,
Operator-instruction, Operator
register of members, participating
issuer, participating security and
relevant system have the same meanings as in
the Uncertificated Securities Regulations. |
|
2.3 |
|
All references in the Articles to the giving of instructions by
means of a relevant system shall be deemed to relate to a
properly authenticated dematerialised instruction given in
accordance with the Uncertificated Securities Regulations. The
giving of such instructions shall be subject to: |
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(a) |
|
the facilities and requirements of the relevant system; |
|
(b) |
|
the Uncertificated Securities Regulations; and |
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(c) |
|
the extent to which such instructions are permitted by or
practicable under the rules and practices from time to time of
the Operator of the relevant system. |
|
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2.4 |
|
Where an ordinary resolution of the Company is expressed to be
required for any purpose, a special resolution is also effective
for that purpose. |
|
2.5 |
|
References to a meeting shall not be taken as
requiring more than one person to be present if any quorum
requirement can be satisfied by one person. |
B-3
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2.6 |
|
References to a debenture include debenture
stock. |
|
2.7 |
|
The word directors in the context of the
exercise of any power contained in the Articles includes any
committee consisting of one or more directors, any director
holding executive office and any local or divisional board,
manager or agent of the Company to which or, as the case may be,
to whom the power in question has been delegated. |
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2.8 |
|
Powers of delegation shall not be restrictively construed but
the widest interpretation shall be given to them. |
|
2.9 |
|
No power of delegation shall be limited by the existence or,
except where expressly provided by the terms of delegation, the
exercise of that or any other power of delegation. |
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2.10 |
|
Except where expressly provided by the terms of delegation, the
delegation of a power shall not exclude the concurrent exercise
of that power by any other body or person who is for the time
being authorised to exercise it under the Articles or under
another delegation of the power. |
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2.11 |
|
Save as aforesaid and unless the context otherwise requires,
words or expressions contained in the Articles have the same
meanings as in the Acts but excluding any statutory modification
thereof not in force when the Articles become binding on the
Company. |
|
2.12 |
|
References to a document being executed include references to
its being executed under hand or under seal or by any other
method. |
|
2.13 |
|
Unless the context otherwise requires, any reference to
writing or written shall
include any method of reproducing words or text in a legible and
non-transitory form and documents or information sent or
supplied in electronic form or made available on a website are
in writing for the purposes of the Articles. |
|
2.14 |
|
Save where specifically required or indicated otherwise words
importing one gender shall be treated as importing any gender,
words importing individuals shall be treated as importing
corporations and vice versa, words importing the singular shall
be treated as importing the plural and vice versa, and words
importing the whole shall be treated as including a reference to
any part thereof. |
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2.15 |
|
Article headings are inserted for ease of reference only and
shall not affect construction. |
|
2.16 |
|
References to any statutory provision or statute include any
modification or re-enactment thereof for the time being in force
and all orders, regulations or other subordinate legislation
made thereunder. This Article does not affect the interpretation
of Article 2.11. |
|
3. |
|
LIABILITY OF MEMBERS |
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|
The liability of the members is limited to the amount, if any,
unpaid on the shares in the Company held by them. |
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4. |
|
CHANGE OF NAME |
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|
The Company may change its name by resolution of the board. |
SHARES
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5. |
|
SHARE CAPITAL |
|
5.1 |
|
The allotted and issued share capital of the Company at the date
of adoption of the Articles is US$15,000,000 and £50,000
divided into 150,000,000 Class A Ordinary Shares and 50,000
Class B Ordinary Shares. |
|
5.2 |
|
In the Articles, unless the context requires otherwise,
references to Class A Ordinary Shares and Class B
Ordinary Shares shall include shares of those respective classes
allotted
and/or
issued after the date of adoption of these Articles and ranking
pari passu in all respects (save only as to the date from which
such shares rank for dividend) with the shares of the relevant
class then in issue. |
B-4
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5.3 |
|
The Class A Ordinary Shares and the Class B Ordinary
Shares shall have such rights as are provided for by the
Articles and, save as otherwise expressly provided for by the
Articles, shall rank pari passu in all respects. |
|
6. |
|
ALLOTMENT |
|
6.1 |
|
Subject to the provisions of the Acts and any relevant authority
given by the Company in general meeting, the board may exercise
any power of the Company to allot shares of the Company in one
or more series, or to grant rights to subscribe for or to
convert or exchange any security into or for shares of the
Company or its successors in one or more series, to such persons
or excluding such persons, at such times and on such terms as
the board may decide. |
|
6.2 |
|
The board may at any time after the allotment of a share but
before a person has been entered in the register as the holder
of the share recognise a renunciation of the share by the
allottee in favour of another person and may grant to an
allottee a right to effect a renunciation on such terms and
conditions as the board thinks fit. |
|
7. |
|
POWER TO ATTACH RIGHTS |
|
|
|
Subject to the provisions of the Acts and to any rights attached
to any existing shares, any share may be issued with, or have
attached to it, such powers, designations, preferences and
relative participating, optional or other special rights and
qualifications, limitations and restrictions attaching thereto
as the board may determine. |
|
8. |
|
VARIATION OF CLASS RIGHTS |
|
8.1 |
|
Subject to the provisions of the Acts, the rights attached to a
class of shares may be varied or abrogated (whether or not the
Company is being wound up) either with the consent in writing of
the holders of at least three-fourths of the nominal amount of
the issued shares of that class or with the sanction of a
special resolution passed at a separate meeting of the holders
of the issued shares of that class validly held in accordance
with Article 8.3 and other relevant provisions of the
Articles. |
|
8.2 |
|
The rights attached to a class of shares are not, unless
otherwise expressly provided for in the rights attaching to
those shares, varied or deemed to be varied by: |
|
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|
(a) |
|
the allotment or issue of; or |
|
(b) |
|
the grant of rights to subscribe for or to convert or exchange
any security into or for |
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|
further shares ranking in priority to or pari passu with or
subsequent to them or by the purchase or redemption by the
Company of its own shares in accordance with the provisions of
the Acts. |
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8.3 |
|
All the Articles relating to general meetings will apply to any
class meeting, with any necessary changes. The following changes
will also apply: |
|
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(a) |
|
a quorum will be present at any class meeting or adjournment
thereof if one or more shareholders who are entitled to vote are
present in person or by proxy who own individually or in
aggregate at least 20% in nominal amount of the issued shares of
the relevant class; and |
|
(b) |
|
every shareholder who is present in person or by proxy and
entitled to vote is entitled to one vote for every share he has
of the class (but this is subject to any special rights or
restrictions which are attached to any class of shares). |
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8.4 |
|
The provisions of Articles 8.1, 8.2 and 8.3 will
apply to a variation or abrogation of rights of shares forming
part of a class. Each part of the class which is being treated
differently is treated as a separate class in applying this
Article. |
B-5
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9. |
|
REDEEMABLE SHARES |
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|
Subject to the provisions of the Acts and to any rights attached
to any existing shares, shares may be issued which are to be
redeemed or are liable to be redeemed at the option of the
Company or the holder, and the board may determine the terms,
conditions and manner of redemption of any shares so issued. |
|
10. |
|
COMMISSION AND BROKERAGE |
|
|
|
The Company may exercise all the powers conferred or permitted
by the provisions of the Acts of paying commission or brokerage.
Subject to the provisions of the Acts, any such commission or
brokerage may be satisfied by the payment of cash or by the
allotment of fully or partly paid shares or partly in one way
and partly in the other. |
|
11. |
|
TRUSTS NOT RECOGNISED |
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|
Except as ordered by a court of competent jurisdiction or as
required by law, no person shall be recognised by the Company as
holding any share on trust and (except as otherwise provided by
the Articles or by law) the Company shall not be bound by or
recognise any interest in any share except an absolute right in
the holder to the whole of the share, whether or not the Company
shall have notice thereof. |
|
12. |
|
ALTERATION OF SHARE CAPITAL |
|
12.1 |
|
The Company may: |
|
|
|
(a) |
|
increase its share capital by allotting new shares in accordance
with the Acts and the Articles; |
|
(b) |
|
subject to the provisions of the Acts, by ordinary resolution
consolidate and divide all or any of its share capital into
shares of a larger nominal amount than its existing shares; |
|
(c) |
|
subject to the provisions of the Acts, by ordinary resolution
sub-divide
its shares, or any of them, into shares of a smaller nominal
amount than its existing shares; and |
|
(d) |
|
subject to the provisions of the Acts, by special resolution
reduce its share capital, any capital redemption reserve and any
share premium account in any way. |
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|
12.2 |
|
Whenever as a result of a consolidation of shares any members
would become entitled to fractions of a share, the directors
may, on behalf of those members, sell the shares representing
the fractions for the best price reasonably obtainable to any
person (including, subject to the provisions of the Acts, the
Company) and distribute the net proceeds of sale in due
proportion among those members, and the directors may authorise
some 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. |
|
13. |
|
PURCHASE OF OWN SHARES |
|
|
|
Subject to the provisions of the Acts, the Company may purchase
its own shares (including any redeemable shares). |
|
14. |
|
UNCERTIFICATED SHARES |
|
14.1 |
|
Subject to the provisions of the Acts and to the Uncertificated
Securities Regulations, the board has the power to resolve that
a class of shares shall become a participating security
and/or that
a class of shares shall cease to be a participating security. |
|
14.2 |
|
Uncertificated shares of a class are not to be regarded as
forming a separate class from certificated shares of that class. |
|
14.3 |
|
A member may, in accordance with the Uncertificated Securities
Regulations, change a share of a class which is a participating
security from a certificated share to an uncertificated share
and from an uncertificated share to a certificated share. |
B-6
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14.4 |
|
The Company may give notice to a member requiring the member to
change uncertificated shares to certificated shares by the time
stated in the notice. The notice may also state that the member
may not change certificated shares to uncertificated shares. If
the member does not comply with the notice, the board may
authorise a person to change the uncertificated shares to
certificated shares in the name and on behalf of the member. |
|
14.5 |
|
While a class of shares is a participating security, the
Articles only apply to an uncertificated share of that class to
the extent that they are consistent with: |
|
|
|
(a) |
|
the holding of shares of that class in uncertificated form; |
|
(b) |
|
the transfer of title to shares of that class by means of a
relevant system; and |
|
(c) |
|
the Uncertificated Securities Regulations. |
SHARE
CERTIFICATES
|
|
|
15. |
|
RIGHT TO CERTIFICATE |
|
15.1 |
|
A person (except a person to whom the Company is not required by
law to issue a certificate) whose name is entered in the
register as a holder of a certificated share is entitled,
without charge, to receive within two months of allotment or
lodgement with the Company of a transfer to him of those shares
or within two months after the relevant Operator instruction is
received by the Company (or within any other period as the terms
of issue of the shares provide) one certificate for all the
certificated shares of a class registered in his name or, in the
case of certificated shares of more than one class being
registered in his name, to a separate certificate for each class
of shares. |
|
15.2 |
|
Where a member transfers part of his shares comprised in a
certificate he is entitled, without charge, to one certificate
for the balance of certificated shares retained by him. |
|
15.3 |
|
The Company is not bound to issue more than one certificate for
certificated shares held jointly by two or more persons and
delivery of a certificate to one joint holder is sufficient
delivery to all joint holders. |
|
15.4 |
|
A certificate shall specify the number and class and the
distinguishing numbers (if any) of the shares in respect of
which it is issued and the amount paid up on the shares. In
addition, it shall specify the powers, designations, preferences
and relative participating, optional or other special rights in
respect of such shares and the qualifications, limitations or
restrictions of such rights, set forth in full or summarised on
the face or back of the certificate. Alternatively, the Company
may set forth on the face or back of the certificate a statement
that the Company will furnish, without charge, to the
shareholder holding such certificate and who so requests it, the
powers, designations, preferences and relative participating,
optional or other special rights of such shares and the
qualifications, limitations or restrictions of such rights. |
|
15.5 |
|
A certificate shall be issued under the seal, which may be
affixed to or printed on it, or in such other manner as the
board may approve, having regard to the terms of allotment or
issue of the shares. |
|
15.6 |
|
The issued shares of a particular class which are fully paid up
and rank pari passu for all purposes shall not bear a
distinguishing number. All other shares shall bear a
distinguishing number. |
|
15.7 |
|
Notwithstanding anything in this Article 15, but subject to
the Acts, the board may from time to time determine, either
generally or in any particular case, the method by which any
share certificate issued by the Company in respect of the
Companys shares, stock, debentures or other securities
shall be authenticated or executed by or on behalf of the
Company and, in particular: |
|
|
|
(a) |
|
the board may dispense with the need to affix the common seal,
or any official seal, of the Company to such certificate; |
|
(b) |
|
the board may determine the manner, and by whom, any such
certificate is to be signed, and may dispense with the need for
such certificate to be signed or executed in any way; |
B-7
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(c) |
|
the board may permit the signature or a facsimile of the
signature of any person to be applied to such share certificate
by any mechanical or electronic means in place of that
persons actual signature |
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|
|
and any certificate issued in accordance with the requirements
of the board shall, as against the Company, be prima facie
evidence of the title of the person named in that
certificate to the shares comprised in it. |
|
16. |
|
REPLACEMENT CERTIFICATES |
|
16.1 |
|
Where a member holds two or more certificates for shares of one
class, the board may at his request, on surrender of the
original certificates and without charge, cancel the
certificates and issue a single replacement certificate for
certificated shares of that class. |
|
16.2 |
|
At the request of a member, the board may cancel a certificate
and issue two or more in its place (representing certificated
shares in such proportions as the member may specify), on
surrender of the original certificate and on payment of such
reasonable sum as the board may decide. |
|
16.3 |
|
Where a certificate is worn out or defaced the board may require
the certificate to be delivered to it before issuing a
replacement and cancelling the original. If a certificate is
lost or destroyed, the board may cancel it and issue a
replacement certificate on such terms as to provision of
evidence and indemnity and to payment of any exceptional
out-of-pocket
expenses incurred by the Company in the investigation of that
evidence and the preparation of that indemnity as the board may
decide. |
|
16.4 |
|
Any or all of the signatures on a certificate may be facsimile.
In case any officer, transfer agent or registrar who has signed
or whose facsimile signature has been placed upon a certificate
shall have ceased to be such officer, transfer agent or
registrar before such certificate is issued, it may be issued by
the Company with the same effect as if he or she were such
officer, transfer agent or registrar at the date of issue. |
LIEN
|
|
|
17. |
|
COMPANYS LIEN ON SHARES NOT FULLY PAID |
|
17.1 |
|
The Company has a first and paramount lien on all partly paid
shares for an amount payable in respect of the share, whether
the due date for payment has arrived or not. The lien applies to
all dividends from time to time declared or other amounts
payable in respect of the share. |
|
17.2 |
|
The board may either generally or in a particular case declare a
share to be wholly or partly exempt from the provisions of this
Article. Unless otherwise agreed with the transferee, the
registration of a transfer of a share operates as a waiver of
the Companys lien (if any) on that share. |
|
18. |
|
ENFORCEMENT OF LIEN BY SALE |
|
18.1 |
|
For the purpose of enforcing the lien referred to in
Article 17, the board may sell all or any of the shares
subject to the lien at such time or times and in such manner as
it may decide provided that: |
|
|
|
(a) |
|
the due date for payment of the relevant amounts has
arrived; and |
|
(b) |
|
the board has served a written notice on the member concerned
(or on any person who is entitled to the shares by transmission
or by operation of law) stating the amounts due, demanding
payment thereof and giving notice that if payment has not been
made within 14 clear days after the service of the notice that
the Company intends to sell the shares. |
|
|
|
18.2 |
|
To give effect to a sale, the board may authorise a person to
transfer the shares in the name and on behalf of the holder (or
any person who is entitled to the shares by transmission or by
operation of law), or to cause the transfer of such shares, to
the purchaser or his nominee. The purchaser is not bound to see
to the application of the purchase money and the title of the
transferee is not affected by an irregularity in or invalidity
of the proceedings connected with the sale. |
B-8
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|
19. |
|
APPLICATION OF PROCEEDS OF SALE |
|
|
|
The net proceeds of a sale effected under Article 18, after
payment of the Companys costs of the sale, shall be
applied in or towards satisfaction of the amount in respect of
which the lien exists. The balance (if any) shall (on surrender
to the Company for cancellation of any certificate for the
shares sold, or the provision of an indemnity as to any lost or
destroyed certificate required by the board and subject to a
like lien for any amounts not presently payable as existed on
the shares before the sale) be paid to the member (or any person
entitled to the shares by transmission or by operation of law)
immediately before the sale. |
CALLS ON
SHARES
|
|
|
20. |
|
CALLS |
|
|
|
The board may make calls on members in respect of amounts unpaid
on the shares held by them respectively (whether in respect of
the nominal value or a premium) and not, by the terms of issue
thereof, made payable on a fixed date. Each member shall (on
receiving at least 14 clear days notice specifying when
and where payment is to be made) pay to the Company, at the time
and place specified, the amount called as required by the
notice. A call may be made payable by instalments and may, at
any time before receipt by the Company of an amount due, be
revoked or postponed in whole or in part as the board may
decide. A call is deemed made at the time when the resolution of
the board authorising the call is passed. A person on whom a
call is made remains liable to pay the amount called despite the
subsequent transfer of the share in respect of which the call is
made. The joint holders of a share are jointly and severally
liable to pay all calls in respect of that share. |
|
21. |
|
POWER TO DIFFERENTIATE |
|
|
|
The board may make arrangements on the allotment or, subject to
the terms of the allotment, on the issue of shares for a
difference between the allottees or holders in the amounts or
times of payment of a call on their shares or both. |
|
22. |
|
INTEREST ON CALLS |
|
|
|
If a sum called is not paid on or before the date fixed for
payment, the person from whom it is payable shall pay interest
on the unpaid amount from the day the unpaid amount is due until
the day it has been paid. The interest rate may be fixed by the
terms of allotment or issue of the share or, if no rate is
fixed, at such rate (not exceeding eight per cent. per annum) as
the board may decide. The board may waive payment of the
interest in whole or in part. |
|
23. |
|
PAYMENT IN ADVANCE |
|
|
|
The board may, if it thinks fit, receive from a member all or
part of the amounts uncalled and unpaid on shares held by him. A
payment in advance of calls extinguishes to the extent of the
payment the liability of the member on the shares in respect of
which it is made. The Company may pay interest on the amount
paid in advance, or on so much of it as from time to time
exceeds the amount called on the shares in respect of which the
payment in advance has been made, at such rate (not exceeding
eight per cent. per annum) as the board may decide. |
|
24. |
|
AMOUNTS DUE ON ALLOTMENT OR ISSUE TREATED AS CALLS |
|
|
|
An amount (whether in respect of the nominal value or a premium)
which by the terms of issue of a share becomes payable on
allotment or issue or on a fixed date shall be deemed to be a
call. In case of non-payment, the provisions of the Articles as
to payment of interest, forfeiture or otherwise apply as if that
amount has become payable by virtue of a call. |
B-9
FORFEITURE
|
|
|
25. |
|
NOTICE IF CALL NOT PAID |
|
|
|
If a member fails to pay the whole of a call or an instalment of
a call by the date fixed for payment, the board may serve notice
on the member or on a person entitled automatically by law to
the share in respect of which the call was made demanding
payment of the unpaid amount, on a date not less than 14 clear
days from the date of the notice, together with any interest
that may have accrued on it and all costs, charges and expenses
incurred by the Company by reason of the non-payment. The notice
shall state: |
|
|
|
(a) |
|
the place where payment is to be made; and |
|
(b) |
|
that if the notice is not complied with the share in respect of
which the call was made will be liable to be forfeited. |
|
|
|
26. |
|
FORFEITURE FOR NON-COMPLIANCE |
|
|
|
If the notice referred to in Article 25 is not complied
with, any share in respect of which it is given may, at any time
before the payment required by the notice (including interest,
costs, charges and expenses) has been made, be forfeited by a
resolution of the board. All dividends declared or other amounts
due in respect of the forfeited share and not paid before the
forfeiture shall also be forfeited. |
|
27. |
|
NOTICE AFTER FORFEITURE |
|
|
|
When a share has been forfeited, the Company shall serve notice
of the forfeiture on the person who was before forfeiture the
holder of the share or the person entitled by transmission to
the share. An entry of the fact and date of forfeiture shall be
made in the register. No forfeiture shall be invalidated by any
omission to give such notice or to make such entry in the
register. |
|
28. |
|
DISPOSAL OF FORFEITED SHARES |
|
28.1 |
|
A forfeited share and all rights attaching to it shall become
the property of the Company and may be sold, re-allotted or
otherwise disposed of, either to the person who was before such
forfeiture the holder thereof or to another person, on such
terms and in such manner as the board may decide. The board may,
if necessary, authorise a person to transfer a forfeited share
to a new holder. The Company may receive the consideration (if
any) for the share on its disposal and may register or cause the
registration of the transferee as the holder of the share. |
|
28.2 |
|
The board may, before a forfeited share has been sold,
re-allotted or otherwise disposed of, annul the forfeiture on
such conditions as it thinks fit. |
|
28.3 |
|
A statutory declaration that the declarant is a director or the
secretary and that a share has been forfeited or sold to satisfy
a lien of the Company on the date stated in the declaration is
conclusive evidence of the facts stated in the declaration
against all persons claiming to be entitled to the share. The
declaration (subject if necessary to the transfer of the share)
constitutes good title to the share and the person to whom the
share is sold, re-allotted or disposed of is not bound to see to
the application of the consideration (if any). His title to the
share is not affected by an irregularity in or invalidity of the
proceedings connected with the forfeiture or disposal. |
|
29. |
|
ARREARS TO BE PAID NOTWITHSTANDING FORFEITURE |
|
|
|
A person whose share has been forfeited ceases on forfeiture to
be a member in respect thereof and if that share is in
certificated form shall surrender to the Company for
cancellation any certificate for the forfeited share. A person
remains liable to pay all calls, interest, costs, charges and
expenses owing in respect of such share at the time of
forfeiture, with interest, from the time of forfeiture until
payment, at such rate as may be fixed by the terms of allotment
or issue of such share or, if no rate is fixed, at such rate
(not exceeding eight per cent. per annum) as the board may
decide. The board may if it thinks fit enforce payment without
allowance for the value of such share at the time of forfeiture
or for any consideration received on its disposal. |
B-10
|
|
|
30. |
|
SURRENDER |
|
|
|
The board may accept the surrender of a share liable to be
forfeited and in that case references in the Articles to
forfeiture include surrender. |
TRANSFER
OF SHARES
|
|
|
31. |
|
METHOD OF TRANSFER |
|
31.1 |
|
A member may transfer all or any of his certificated shares by
instrument of transfer in writing in any usual form or in any
other form approved by the board, and the instrument shall be
executed by or on behalf of the transferor and (in the case of a
transfer of a share which is not fully paid) by or on behalf of
the transferee. |
|
31.2 |
|
A member may transfer all or any of his uncertificated shares in
accordance with the Uncertificated Securities Regulations. |
|
31.3 |
|
Subject to the provisions of the Uncertificated Securities
Regulations, the transferor of a share is deemed to remain the
holder of the share until the name of the transferee is entered
in the register in respect of it. |
|
32. |
|
RIGHT TO REFUSE REGISTRATION |
|
32.1 |
|
Subject to this Article and Article 76, shares of the
Company are free from any restriction on transfer. In
exceptional circumstances approved by the relevant regulatory
authority (if any), the board may refuse to register a transfer
of certificated shares provided that such refusal would not
disturb the market in those shares. Subject to the requirements
of the relevant listing rules (if applicable), the board may, in
its absolute discretion, refuse to register the transfer of a
certificated share which is not fully paid or the transfer of a
certificated share on which the Company has a lien. |
|
32.2 |
|
The board may also, in its absolute discretion, refuse to
register the transfer of a certificated share or a renunciation
of a renounceable letter of allotment unless all of the
following conditions are satisfied: |
|
|
|
(a) |
|
it is in respect of only one class of shares; |
|
(b) |
|
it is in favour of (as the case may be) a single transferee or
renouncee or not more than four joint transferees or renouncees; |
|
(c) |
|
it is duly stamped (if required); and |
|
(d) |
|
it is delivered for registration to the office or such other
place as the board may decide, accompanied by the certificate
for the shares to which it relates (except in the case of a
transfer by a recognised financial institution where a
certificate has not been issued, or in the case of a
renunciation) and such other evidence as the board may
reasonably require to prove the title of the transferor or
person renouncing and the due execution by him of the transfer
or renunciation or, if the transfer or renunciation is executed
by some other person on his behalf, the authority of that person
to do so. |
|
|
|
32.3 |
|
If the board refuses to register the transfer of a certificated
share it shall, within two months after the date on which the
transfer was lodged with the Company, send notice of the
refusal, together with its reasons for the refusal, to the
transferee. An instrument of transfer which the board refuses to
register shall (except in the case of suspected fraud) be
returned to the person depositing it. Subject to
Article 143, the Company may retain all instruments of
transfer which are registered. |
|
32.4 |
|
In accordance with and subject to the provisions of the
Uncertificated Securities Regulations, the Operator of the
relevant system shall register a transfer of title to any
uncertificated share or any renounceable right of allotment of a
share which is a participating security held in uncertificated
form unless the Uncertificated Securities Regulations permit the
Operator of the relevant system to refuse to register such a
transfer in certain circumstances in which case the said
Operator may refuse such registration. |
B-11
|
|
|
32.5 |
|
If the Operator of the relevant system refuses to register the
transfer of an uncertificated share or of any such
uncertificated renounceable right of allotment of a share it
shall, within the time period stipulated by the Uncertificated
Securities Regulations, send notice of the refusal to the
transferee. |
|
32.6 |
|
In accordance with and subject to the provisions of the
Uncertificated Securities Regulations, where title to an
uncertificated share is transferred by means of a relevant
system to a person who is to hold such share in certificated
form thereafter, the Company as participating issuer shall
register the transfer in accordance with the relevant
Operator-instruction, but so that the Company may refuse to
register such a transfer in any circumstance permitted by the
Uncertificated Securities Regulations. |
|
32.7 |
|
In accordance with the Uncertificated Securities Regulations, if
the Company as participating issuer refuses to register the
transfer of title to an uncertificated share transferred by
means of a relevant system to a person who is to hold such share
in certificated form thereafter, it shall, within two months
after the date on which the Operator-instruction was received by
the Company, send notice of the refusal, together with its
reasons for the refusal, to the transferee. |
|
33. |
|
NO FEES ON REGISTRATION |
|
|
|
No fee shall be charged for registering the transfer of a share
or the renunciation of a renounceable letter of allotment or
other document or instructions relating to or affecting the
title to a share or the right to transfer it or for making any
other entry in the register. |
TRANSMISSION
OF SHARES
|
|
|
34. |
|
ON DEATH |
|
34.1 |
|
The Company shall recognise only the personal representative or
representatives of a deceased member as having title to a share
held by that member alone or to which he alone was entitled. In
the case of a share held jointly by more than one person, the
Company may recognise only the survivor or survivors as being
entitled to it. |
|
34.2 |
|
Nothing in the Articles releases the estate of a deceased member
from liability in respect of a share which has been solely or
jointly held by him. |
|
35. |
|
ELECTION OF PERSON ENTITLED BY TRANSMISSION |
|
35.1 |
|
A person becoming entitled by transmission to a share may, on
production of such evidence as the board may require as to his
entitlement, elect either to be registered as a member or to
have a person nominated by him registered as a member. |
|
35.2 |
|
If he elects to be registered himself, he shall give notice to
the Company to that effect. If he elects to have another person
registered, he shall: |
|
|
|
(a) |
|
if it is a certificated share, execute an instrument of transfer
of the share to that person; or |
|
(b) |
|
if it is an uncertificated share: |
|
|
|
(i) |
|
procure that instructions are given by means of a relevant
system to effect transfer of the share to that person; or |
|
(ii) |
|
change the share to a certificated share and execute an
instrument of transfer of the share to that person. |
|
|
|
35.3 |
|
All the provisions of the Articles relating to the transfer of
certificated shares apply to the notice or instrument of
transfer (as the case may be) as if it were an instrument of
transfer executed by the member and his death, bankruptcy or
other event giving rise to a transmission of entitlement had not
occurred. |
|
35.4 |
|
The board may give notice requiring a person to make the
election referred to in Article 35.1. If that notice is not
complied with within 60 days, the board may withhold
payment of all dividends and other amounts payable in respect of
the share until notice of election has been made. |
B-12
|
|
|
36. |
|
RIGHTS ON TRANSMISSION |
|
|
|
Where a person becomes entitled by transmission to a share, the
rights of the holder in relation to that share cease. The person
entitled by transmission may, however, give a good discharge for
dividends and other amounts payable in respect of the share and,
subject to Articles 35 and 124, has the rights to which he
would be entitled if he were the holder of the share. The person
entitled by transmission is not, however, before he is
registered as the holder of the share entitled in respect of it
to receive notice of or exercise rights conferred by membership
in relation to meetings of the Company or a separate meeting of
the holders of a class of shares. |
UNTRACED
SHAREHOLDERS
|
|
|
37. |
|
POWER OF SALE |
|
37.1 |
|
Subject to the Uncertificated Securities Regulations, the
Company may sell the share of a member or of a person entitled
by transmission at the best price reasonably obtainable at the
time of sale, if: |
|
|
|
(a) |
|
during a period of not less than 12 years before the date
of publication of the advertisements referred to in
Article 37.1(c) (or, if published on two different dates,
the first date) (the relevant period) at
least three cash dividends have become payable in respect of the
share; |
|
(b) |
|
throughout the relevant period no cheque, warrant or money order
payable on the share has been presented by the holder of, or the
person entitled by transmission to, the share to the paying bank
of the relevant cheque, warrant or money order, no payment made
by the Company by any other means permitted by
Article 124.1 has been claimed or accepted and, so far as
any director of the Company at the end of the relevant period is
then aware, the Company has not at any time during the relevant
period received any communication from the holder of, or person
entitled by transmission to, the share; |
|
(c) |
|
on expiry of the relevant period the Company has given notice of
its intention to sell the share by advertisement in a newspaper
in general circulation in the area of the address of the holder
of, or person entitled by transmission to, the share shown in
the register; and |
|
(d) |
|
the Company has not, so far as the board is aware, during a
further period of three months after the date of the
advertisements referred to in Article 37.1(c) (or the later
advertisement if the advertisements are published on different
dates) and before the exercise of the power of sale received a
communication from the holder of, or person entitled by
transmission to, the share. |
|
|
|
37.2 |
|
Where a power of sale is exercisable over a share pursuant to
Article 37.1, the Company may at the same time also
sell any additional share issued in right of such share or in
right of such an additional share previously so issued provided
that the requirements of Articles 37.1(a) to 37.1(d) (as if the
words throughout the relevant period were omitted
from Article 37.1(b) and the words on expiry of the
relevant period were omitted from Article 37.1(c))
shall have been satisfied in relation to the additional share. |
|
37.3 |
|
To give effect to a sale pursuant to Articles 37.1 or 37.2,
the board may authorise a person to transfer the share in the
name and on behalf of the holder of, or the person entitled by
transmission to, the share, or to cause the transfer of such
share, to the purchaser or his nominee and in relation to an
uncertificated share may require the Operator to convert the
share into certificated form in accordance with the
Uncertificated Securities Regulations. The purchaser is not
bound to see to the application of the purchase money and the
title of the transferee is not affected by an irregularity or
invalidity in the proceedings connected with the sale of the
share. |
|
38. |
|
APPLICATION OF PROCEEDS OF SALE |
|
|
|
The Company shall be indebted to the member or other person
entitled by transmission to the share for the net proceeds of
sale and shall carry any amount received on sale to a separate
account. The Company is deemed to be a debtor and not a trustee
in respect of that amount for the member or other person. Any |
B-13
|
|
|
|
|
amount carried to the separate account may either be employed in
the business of the Company or invested as the board may think
fit. No interest is payable on that amount and the Company is
not required to account for money earned on it. |
FRACTIONS
|
|
|
39. |
|
FRACTIONS |
|
39.1 |
|
If, as the result of consolidation and division or
sub-division
of shares, members would become entitled to fractions of a
share, the board may on behalf of the members deal with the
fractions as it thinks fit. Subject to the provisions of the
Acts, the board may, in effecting divisions
and/or
consolidations, treat a members shares held in
certificated form and uncertificated form as separate holdings.
In particular, the board may: |
|
|
|
(a) |
|
sell any shares representing fractions to a person (including,
subject to the provisions of the Acts, to the Company) and
distribute the net proceeds of sale in due proportion amongst
the persons entitled or, if the board so decides, some or all of
the sum raised on a sale may be retained for the benefit of the
Company; or |
|
(b) |
|
subject to the provisions of the Acts, allot or issue to a
member credited as fully paid by way of capitalisation the
minimum number of shares required to round up his holding of
shares to a number which, following consolidation and division
or
sub-division,
leaves a whole number of shares (such allotment or issue being
deemed to have been effected immediately before consolidation or
sub-division,
as the case may be). |
|
|
|
39.2 |
|
To give effect to a sale pursuant to Article 39.1(a) the
board may arrange for the shares representing the fractions to
be entered in the register as certificated shares. The board may
also authorise a person to transfer the shares to, or to the
direction of, the purchaser. The purchaser is not bound to see
to the application of the purchase money and the title of the
transferee to the shares is not affected by an irregularity or
invalidity in the proceedings connected with the sale. |
|
39.3 |
|
If shares are allotted or issued pursuant to
Article 39.1(b), the amount required to pay up those shares
may be capitalised as the board thinks fit out of amounts
standing to the credit of reserves (including a share premium
account, capital redemption reserve and profit and loss
account), whether or not available for distribution, and applied
in paying up in full the appropriate number of shares. A
resolution of the board capitalising part of the reserves has
the same effect as if the capitalisation had been effected
pursuant to Article 129. In relation to the capitalisation
the board may exercise all the powers conferred on it by
Article 129. |
GENERAL
MEETINGS
|
|
|
40. |
|
ANNUAL GENERAL MEETINGS |
|
|
|
The Company shall hold annual general meetings in accordance
with the requirements of the Acts. Such meetings shall be
convened by the board at such times and, subject to
Article 59, places as it thinks fit. |
|
41. |
|
CONVENING OF GENERAL MEETINGS |
|
|
|
The board, the chairman or the chief executive officer may
convene a general meeting whenever and at any place it, he or
she thinks fit. A general meeting may also be convened in
accordance with Article 93. |
B-14
|
|
|
42. |
|
LENGTH AND FORM OF NOTICE |
|
42.1 |
|
Subject to the provisions of the Acts, an annual general meeting
shall be called by not less than 21 clear days notice and
not more than 60 clear days notice and all other general
meetings shall be called by not less than 14 clear days
notice and not more than 60 clear days notice. |
|
42.2 |
|
Subject to the provisions of the Acts, and although called by
shorter notice than that specified in Article 42.1, a
general meeting is deemed to have been duly called if it is so
agreed: |
|
|
|
(a) |
|
in the case of an annual general meeting, by all the members
entitled to attend and vote at the meeting; and |
|
(b) |
|
in the case of another meeting, by a majority in number of the
members having a right to attend and vote at the meeting, being
a majority who together hold not less than 95 per cent. in
nominal value of the shares giving that right. |
|
|
|
42.3 |
|
The notice of meeting shall: |
|
|
|
(a) |
|
if it is a notice calling an annual general meeting, state that
the meeting is an annual general meeting; |
|
(b) |
|
specify the time, the date and the place of the meeting
(including any satellite meeting place arranged for the purpose
of Article 55, which shall be identified as such in the
notice of meeting); |
|
(c) |
|
in the case of special business, specify the general nature of
that business; |
|
(d) |
|
if the meeting is convened to consider a special resolution,
include the text of the resolution and specify the intention to
propose the resolution as a special resolution; and |
|
(e) |
|
state, with reasonable prominence, that a member is entitled to
appoint another person as his proxy to exercise all or any of
his rights to attend and to speak and vote at the meeting and to
appoint more than one proxy in relation to the meeting (provided
that each proxy is appointed to exercise the rights attached to
a different share or shares held by him), and that a proxy need
not also be a member. |
|
|
|
42.4 |
|
The notice of meeting shall be given to the members (other than
any who, under the provisions of the Articles or the terms of
allotment or issue of shares, are not entitled to receive
notice), to the directors and to the auditors. |
|
42.5 |
|
The board may determine that persons entitled to receive notices
of meeting are those persons entered on the register at the
close of business on a day determined by the board (which shall
not be more than 60 days nor less than ten days before the
date for the holding of the meeting), provided that, if the
Company is a participating issuer, the day determined by the
board shall not be more than 21 clear days before the day that
the relevant notice of the meeting is being given. |
|
42.6 |
|
The notice of meeting must also specify a time (which shall not
be more than 60 days nor less than ten days before the date
for the holding of the meeting) by which a person must be
entered on the register in order to have the right to attend or
vote at the meeting. Changes to entries on the register after
the time so specified in the notice shall be disregarded in
determining the rights of any person to so attend or vote. In
calculating the period referred to in this Article 42.6 no
account shall be taken of any part of a day that is not a
working day. |
|
42.7 |
|
The notice of meeting shall include details of any arrangements
made for the purpose of Article 55 making it clear that
participation in those arrangements will amount to attendance at
the meeting to which the notice relates. |
|
42.8 |
|
Where the Company has given an electronic address in any notice
of meeting, any document or information relating to proceedings
at the meeting may be sent by electronic means to that address,
subject to any conditions or limitations specified in the
relevant notice of meeting. |
B-15
|
|
|
43. |
|
OMISSION TO SEND NOTICE |
|
|
|
Subject to the provisions of the Acts, the accidental omission
to give notice of a meeting or any resolution intended to be
moved at a meeting or any document relating to a meeting, or the
non-receipt of any such notice, resolution or document by a
person entitled to receive any such notice, resolution or
document, shall not invalidate the proceedings at that meeting. |
|
44. |
|
POSTPONEMENT OF GENERAL MEETINGS |
|
|
|
If the board, in its absolute discretion, considers that it is
impractical or unreasonable for any reason to hold a general
meeting at the time or place specified in the notice calling the
general meeting, it may move
and/or
postpone the general meeting to another time
and/or
place. When a meeting is so moved
and/or
postponed, notice of the time and place of the moved
and/or
postponed meeting shall (if practical) be placed in the Wall
Street Journal and the Financial Times or at least two other
newspapers in national circulation, one in each of the United
States and the United Kingdom, respectively. Notice of the
business to be transacted at such moved
and/or
postponed meeting is not required. The board must take
reasonable steps to ensure that members trying to attend the
general meeting at the original time
and/or place
are informed of the new arrangements for the general meeting.
Proxy forms can be delivered as specified in Article 63
until the time for holding the rearranged meeting. Any moved
and/or
postponed meeting may also be moved
and/or
postponed under this Article. |
|
45. |
|
SPECIAL BUSINESS |
|
45.1 |
|
All business transacted at a general meeting is deemed special
except the following business transacted at an annual general
meeting: |
|
|
|
(a) |
|
the receipt and consideration of the annual accounts, the
directors report and the auditors report on those
accounts and the directors report; |
|
(b) |
|
the appointment or reappointment of directors and other officers
in place of those retiring or otherwise ceasing to hold
office; and |
|
(c) |
|
the appointment or reappointment of the auditors (when special
notice of the resolution for appointment is not required by the
provisions of the Acts) and determining or authorising the
manner of determining the remuneration of the auditors. |
|
|
|
45.2 |
|
All business transacted at a general meeting shall be limited to
the purposes stated in the notice of the meeting. |
|
46. |
|
NOMINATIONS AND BUSINESS PROPOSALS |
|
46.1 |
|
Subject to the provisions of the Articles, nominations of
persons for appointment to the board and the proposal of other
business to be considered by the members at an annual general
meeting may be made only: |
|
|
|
(a) |
|
by or at the direction of the board; or |
|
(b) |
|
by any shareholder or shareholders of the Company who: |
|
|
|
(i) |
|
is or are shareholder(s) of record, whose interest in shares,
individually or in aggregate, represent(s) at least five per
cent of such of the
paid-up
share capital of the Company as carries the right of voting at
general meetings of the Company, at the time of giving of notice
provided for in this Article 46 and at the time of the
annual general meeting; |
|
(ii) |
|
is or are entitled to vote at the meeting; and |
|
(iii) |
|
complies or comply with the notice procedures set forth in this
Article 46 as to such nomination or business; this
paragraph (b) shall be the exclusive means for a
shareholder to make nominations or propose other business (other
than matters properly brought |
B-16
|
|
|
|
|
under
Rule 14a-8
under the Exchange Act, and included in the Companys
notice of meeting) for consideration at an annual general
meeting. |
|
|
|
46.2 |
|
Without qualification, for any nominations or any other business
to be properly brought before an annual general meeting by a
shareholder pursuant to Article 46.1(b), the shareholder
must have given timely notice thereof in writing to the
secretary and such other business must otherwise be a proper
matter for shareholder action. To be timely, a
shareholders notice must be delivered to or mailed and
received by the secretary at the office not earlier than the
close of business on the 75th day and not later than the
close of business on the 50th day prior to the first
anniversary of the preceding years annual general meeting,
subject to any other requirements of law; provided, however,
that (i) in the event that the date of the annual general
meeting is more than 30 days before or more than
60 days after such anniversary date, notice by the
shareholder to be timely must be so delivered not earlier than
the close of business on the 75th day prior to the date of
such annual general meeting and not later than the close of
business on the later of the 50th day prior to the date of
such annual general meeting or, if the first public announcement
of the date of such annual general meeting is less than
65 days prior to the date of such annual general meeting,
the 15th day following the day on which public announcement
of the date of such meeting is first made by the Company, and
(ii) in relation to the first annual general meeting of the
Company occurring after January 1, 2010, references to the
anniversary date of the preceding years annual general
meeting shall be to May 28, 2010. In no event shall any
adjournment or postponement of an annual general meeting or the
announcement thereof commence a new time period for the giving
of a shareholders notice as described above. To be in
proper form, a shareholders notice (whether given pursuant
to this Article 46.2 or Article 46.8) to the secretary
must: |
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(a) |
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set forth, as to the shareholder giving the notice and the
beneficial owner, if any, on whose behalf the nomination or
proposal is made: |
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(i) |
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the name and address of such shareholder, as they appear in the
register, and of such beneficial owner, if any; |
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(ii) |
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(A) the class or series and number of shares of the Company
which are, directly or indirectly, owned beneficially and of
record by such shareholder and such beneficial owner; |
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(B) any option, warrant, convertible security, share
appreciation right, or similar right with an exercise or
conversion privilege or a settlement payment or mechanism at a
price related to any class or series of shares of the Company or
with a value derived in whole or in part from the value of any
class or series of shares of the Company, whether or not such
instrument or right shall be subject to settlement in the
underlying class or series of shares of the Company or otherwise
(a Derivative Instrument) directly or
indirectly owned beneficially by such shareholder and any other
direct or indirect opportunity to profit or share in any profit
derived from any increase or decrease in the value of shares of
the Company; |
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(C) any proxy, contract, arrangement, understanding, or
relationship pursuant to which such shareholder has a right to
vote any shares or any security of the Company; |
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(D) any short interest in any security of the Company (for
purposes of this Article a person shall be deemed to have a
short interest in a security if such person directly or
indirectly, through any contract, arrangement, understanding,
relationship or otherwise, has the opportunity to profit or
share in any profit derived from any decrease in the value of
the subject security); |
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(E) any rights to dividends on the shares of the Company
owned beneficially by such shareholder that are separated or
separable from the underlying shares of the Company; |
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(F) any proportionate interest in shares of the Company or
Derivative Instruments held, directly or indirectly, by a
general or limited partnership in which such shareholder is a |
B-17
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general partner or, directly or indirectly, beneficially owns an
interest in a general partner; and |
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(G) any performance-related fees (other than an asset-based
fee) that such shareholder is entitled to based on any increase
or decrease in the value of shares of the Company or Derivative
Instruments, if any, as of the date of such notice, including
without limitation any such interests held by members of such
shareholders immediate family sharing the same household
(which information shall be supplemented by such shareholder and
beneficial owner, if any, not later than ten days after the
record date for the meeting to disclose such ownership as of the
record date); and |
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(iii) |
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any other information relating to such shareholder and
beneficial owner, if any, 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, as applicable, the
proposal
and/or for
the election of directors in a contested election pursuant to
Section 14 of the Exchange Act and the rules and
regulations promulgated thereunder; |
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(b) |
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if the notice relates to any business other than a nomination of
a director or directors that the shareholder proposes to bring
before the meeting, set forth: |
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(i) |
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a brief description of the business desired to be brought before
the meeting, the reasons for conducting such business at the
meeting and any material interest of such shareholder and
beneficial owner, if any, in such business; and |
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(ii) |
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a description of all agreements, arrangements and understandings
between such shareholder and beneficial owner, if any, and any
other person or persons (including their names) in connection
with the proposal of such business by such shareholder; |
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(c) |
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set forth, as to each person, if any, whom the shareholder
proposes to nominate for appointment or reappointment to the
board: |
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(i) |
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all information relating to such 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 in a contested election pursuant to
Section 14 of the Exchange Act and the rules and
regulations promulgated thereunder (including such persons
written consent to being named in the proxy statement as a
nominee and to serving as a director if elected); and |
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(ii) |
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a description of all direct and indirect compensation and other
material monetary agreements, arrangements and understandings
during the past three years, and any other material
relationships, between or among such shareholder and beneficial
owner, if any, and their respective affiliates and associates,
or others acting in concert therewith, on the one hand, and each
proposed nominee, and his or her respective affiliates and
associates, or others acting in concert therewith, on the other
hand, including, without limitation, all information that would
be required to be disclosed pursuant to Item 404 of
Regulation S-K
promulgated by the U.S. Securities Exchange Commission
under the Exchange Act if the shareholder making the nomination
and any beneficial owner on whose behalf the nomination is made,
if any, or any affiliate or associate thereof or person acting
in concert therewith, were the registrant for
purposes of such rule and the nominee were a director or
executive officer of such registrant; and |
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(d) |
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with respect to each nominee for appointment or reappointment to
the board, include a completed and signed questionnaire,
representation and agreement required by Article 46.7. The
Company may require any proposed nominee to furnish such other
information as may reasonably be required by the Company to
determine the eligibility of such proposed nominee to serve as
an independent director of the Company or that could be material
to a reasonable shareholders understanding of the
independence, or lack thereof, of such nominee. |
B-18
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46.3 |
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Subject to the provisions of the Articles, only such persons who
are nominated in accordance with the procedures set forth in
this Article 46 shall be eligible to serve as directors and
only such business shall be conducted at a general meeting as
shall have been brought before the meeting in accordance with
the procedures set forth in this Article 46. |
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46.4 |
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Except as otherwise provided by law or the Articles, the
chairman of the meeting shall have the power and duty to
determine whether a nomination or any business proposed to be
brought before the meeting was made or proposed, as the case may
be, in accordance with the procedures set forth in this
Article 46 and, if any proposed nomination or business is
not in compliance with this Article 46, to declare that
such defective proposal or nomination shall be disregarded. |
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46.5 |
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Notwithstanding any other provisions of this Article 46, a
shareholder shall also comply with all applicable requirements
of the Exchange Act and the rules and regulations thereunder
with respect to the matters set forth in this Article 46;
provided, however, that any references in the Articles to the
Exchange Act or the rules promulgated thereunder are not
intended to and shall not limit the requirements applicable to
nominations or proposals as to any other business to be
considered pursuant to Article 46.1(b) or Article 46.8. |
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46.6 |
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Nothing in this Article 46 shall be deemed to affect any
rights (i) of shareholders to request inclusion of
proposals in the Companys proxy statement pursuant to
Rule 14a-8
under the Exchange Act or (ii) of the holders of any series
of preferred shares if and to the extent provided for under law
or the Articles. |
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46.7 |
|
To be eligible to be a nominee for appointment or reappointment
as a director of the Company, a person must deliver (in
accordance with the time periods prescribed for delivery of
notice set forth in this Article 46) to the secretary
at the office a written questionnaire with respect to the
background and qualification of such person and the background
of any other person or entity on whose behalf the nomination is
being made (which questionnaire shall be provided by the
secretary upon written request) and a written representation and
agreement (in the form provided by the secretary upon written
request) that such person: |
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(a) |
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is not and will not become a party to: |
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(i) |
|
any agreement, arrangement or understanding with, and has not
given any commitment or assurance to, any person or entity as to
how such person, if appointed as a director of the Company, will
act or vote on any issue or question (a Voting
Commitment) that has not been disclosed to the
Company; or |
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(ii) |
|
any Voting Commitment that could limit or interfere with such
persons ability to comply, if appointed as a director of
the Company, with such persons fiduciary duties under
applicable law; |
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(b) |
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is not and will not become a party to any agreement, arrangement
or understanding with any person or entity other than the
Company with respect to any direct or indirect compensation,
reimbursement or indemnification in connection with service or
action as a director that has not been disclosed
therein; and |
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(c) |
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in such persons individual capacity and on behalf of any
person or entity on whose behalf the nomination is being made,
would be in compliance, if appointed as a director of the
Company, and will comply with all applicable publicly disclosed
corporate governance, conflict of interest, confidentiality and
share ownership and trading policies and guidelines of the
Company. |
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46.8 |
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Subject to the provisions of the Articles, if the board has
convened a general meeting (other than an annual general
meeting) for the purpose of appointing to the board one or more
directors nominated by or at the direction of the board, as
specified in the notice of meeting, nominations of alternative
persons for appointment to the board may only be made by any
shareholder or shareholders of the Company who: |
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(i) |
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is or are shareholder(s) of record, whose interest in shares,
individually or in aggregate, represent(s) at least five per
cent of such of the
paid-up
share capital of the |
B-19
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Company as carries the right of voting at general meetings of
the Company, at the time of giving of notice provided for in
this Article 46 and at the time of the general meeting; |
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(ii) |
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is or are entitled to vote at the meeting; and |
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(iii) |
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complies or comply with the shareholders notice
requirements set forth in Article 46.2(a), (c) and (d) with
respect to any nomination (including the completed and signed
questionnaire, representation and agreement required by
Article 46.7) provided that such notice (and accompanying
documentation) is delivered or mailed to and received by the
secretary at the office not earlier than the close of business
on the 75th day prior to the date of such general meeting
and not later than the close of business on the 50th day
prior to the date of such general meeting, subject to any other
requirements of law; provided, however, that, if the first
public announcement of the date of such general meeting is less
than 65 days prior to the date of such general meeting,
notice by the shareholder to be timely must be so delivered no
later than the 15th day following the day on which public
announcement of the date of such meeting is first made by the
Company. In no event shall any adjournment or postponement of a
general meeting or the announcement thereof commence a new time
period for the giving of a shareholders notice as
described above. |
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46.9 |
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For the purpose of this Article 46, where nominations of
persons for appointment to the board
and/or
proposals of other business to be considered by the members at a
general meeting (as the case may be) are made by more than one
shareholder, references to a shareholder in relation to notice
and other information requirements shall apply to each
shareholder, respectively, as the context requires. |
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47. |
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LIST OF SHAREHOLDERS |
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47.1 |
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At least ten days before every general meeting, the secretary
shall prepare a complete list of the shareholders entitled to
vote at the meeting. |
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47.2 |
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The list of shareholders shall: |
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(a) |
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be arranged in alphabetical order; |
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(b) |
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show the address of each shareholder; and |
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(c) |
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show the number of shares registered in the name of each
shareholder. |
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47.3 |
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The list of shareholders shall be available during ordinary
business hours for a period of at least ten days before the
meeting for inspection by any shareholder for any purpose
relevant to the shareholder meeting. The notice of the meeting
may specify the place where the list of shareholders may be
inspected. If the notice of the meeting does not specify the
place where shareholders may inspect the list of shareholders,
the list of shareholders shall be available for inspection at
the place where the meeting is to be held. |
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47.4 |
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The list of shareholders shall be available for inspection by
any shareholder who is present at the meeting, at the place, and
for the duration, of the meeting. |
PROCEEDINGS
AT GENERAL MEETINGS
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48. |
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QUORUM |
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48.1 |
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No business may be transacted at a general meeting unless a
quorum is present. The absence of a quorum does not prevent the
appointment of a chairman in accordance with the Articles, which
shall not be treated as part of the business of the meeting. |
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48.2 |
|
The quorum for a general meeting is a member or members present
in person or by proxy who represent(s) at least the majority of
the voting rights of all the members entitled to attend and vote
at the meeting. |
B-20
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49. |
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PROCEDURE IF QUORUM NOT PRESENT |
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49.1 |
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If a quorum is not present within ten minutes (or such longer
time not exceeding 30 minutes as the chairman decides to wait)
after the time fixed for the start of the meeting or if there is
no longer a quorum present at any time during the meeting, the
meeting stands adjourned to such other day (being not less than
14 nor more than 28 days later) and at such other time
and/or place
as the chairman (or, in default, the board) decides. If at the
adjourned meeting a quorum is not present within five minutes
after the time fixed for the start of the meeting, the meeting
is dissolved. |
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49.2 |
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The Company shall give not less than seven clear days
notice of any meeting adjourned for the lack of a quorum and the
notice shall state the quorum requirement. No business may be
dealt with at any meeting adjourned for the lack of a quorum the
general nature of which was not stated in the notice convening
the original meeting. |
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50. |
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CHAIRMAN |
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50.1 |
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The chairman (if any) of the board or, in his absence, the
deputy chairman (if any) shall preside as chairman at a general
meeting. If there is no chairman or deputy chairman, or if at a
meeting neither is present and willing and able to act within
five minutes after the time fixed for the start of the meeting
or neither is willing and able to act, the directors present
shall select one of their number to be chairman. If only one
director is present and willing and able to act, he shall be
chairman. In default, the members present in person and entitled
to vote shall choose one of their number to be chairman. |
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50.2 |
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Without prejudice to any other power which he may have under the
provisions of the Articles or at common law, the chairman may
take such action as he thinks fit to promote the orderly conduct
of the business of the meeting as specified in the notice of
meeting. The chairmans decision on matters of procedure or
arising incidentally from the business of the meeting shall be
final, as shall be his determination as to whether any matter is
of such a nature. |
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51. |
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RIGHT TO ATTEND AND SPEAK |
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51.1 |
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Each director shall be entitled to attend and speak at a general
meeting and at a separate meeting of the holders of a class of
shares or debentures whether or not he is a member. |
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51.2 |
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The chairman may invite any person to attend and speak at any
general meeting of the Company where he considers that this will
assist in the deliberations of the meeting. |
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52. |
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POWER TO ADJOURN |
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52.1 |
|
The chairman or the holder or holders of shares representing the
majority of the voting rights present at any general meeting
shall have power to adjourn the meeting from time to time,
without notice other than announcement at the meeting. |
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52.2 |
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Without prejudice to any other power which he may have under the
provisions of the Articles or at common law, the chairman may
interrupt or adjourn a meeting from time to time and from place
to place or for an indefinite period if he decides that it has
become necessary to do so in order to: |
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(a) |
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secure the proper and orderly conduct of the meeting; |
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(b) |
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give all persons entitled to do so a reasonable opportunity of
speaking and voting at the meeting; or |
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(c) |
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ensure that the business of the meeting is properly disposed of. |
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53. |
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NOTICE OF ADJOURNED MEETING |
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53.1 |
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Whenever a meeting is adjourned pursuant to Article 52,
regardless of the adjournment period, the board may (but need
not) make a fresh determination of persons entitled to receive
notice of such adjourned meeting (provided any record date shall
not be more than 60 days nor less than ten days before the
date for the holding of the meeting), in which case at least
seven clear days notice specifying the place, date and
time of the adjourned meeting and the general nature of the
business to be transacted shall be given to the |
B-21
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members (other than any who, under the provisions of the
Articles or the terms of allotment or issue of the shares, are
not entitled to receive notice), the directors and the auditors.
Except in these circumstances, and those expressed in
Article 53.2 below, it is not necessary to give notice of a
meeting adjourned pursuant to Article 52 or of the business
to be transacted at the adjourned meeting. |
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53.2 |
|
Whenever a meeting is adjourned for more than 30 days or
for an indefinite period pursuant to Article 52, at least
seven clear days notice specifying the place, date and
time of the adjourned meeting and the general nature of the
business to be transacted shall be given to the members (other
than any who, under the provisions of the Articles or the terms
of allotment or issue of the shares, are not entitled to receive
notice), the directors and the auditors. Except in these
circumstances, and those expressed in Article 53.1 above,
it is not necessary to give notice of a meeting adjourned
pursuant to Article 52 or of the business to be transacted
at the adjourned meeting. |
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53.3 |
|
The notice of an adjourned meeting given in accordance with this
Article must, if the adjournment is for more than 30 days,
and may, in all other cases, also specify a date and time (which
shall not be more than 60 days nor less than ten days
before the date for the holding of the meeting) by which a
person must be entered on the register in order to have the
right to attend or vote at the meeting. Changes to entries on
the register after the time so specified in the notice shall be
disregarded in determining the rights of any person to so attend
or vote. In calculating the period referred to in this
Article 53.3 no account shall be taken of any part of a day
that is not a working day. |
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54. |
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BUSINESS AT ADJOURNED MEETING |
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Subject to Article 53.2 at an adjourned meeting at which a
quorum shall be present or represented any business may be
transacted which might have been transacted at the meeting as
originally notified. |
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55. |
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SATELLITE MEETINGS |
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55.1 |
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The board may resolve to enable persons entitled to attend a
general meeting to do so by simultaneous attendance and
participation at a satellite meeting place anywhere in the
world. The members present in person or by proxy at satellite
meeting places shall be counted in the quorum for, and entitled
to vote at, the general meeting in question, and that meeting
shall be duly constituted and its proceedings valid provided
that the chairman of the general meeting is satisfied that
adequate facilities are available throughout the general meeting
to ensure that members attending at all the meeting places are
able to: |
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(a) |
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participate in the business for which the meeting has been
convened; |
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(b) |
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hear and see all persons present who speak (whether by the use
of microphones, loud-speakers, audio-visual communications
equipment or otherwise) in the principal meeting place and any
satellite meeting place; and |
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(c) |
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be heard and seen by all other persons present in the same way. |
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55.2 |
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The chairman of the general meeting shall be present at, and the
meeting shall be deemed to take place at, the principal meeting
place. |
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56. |
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ACCOMMODATION OF MEMBERS AT MEETING |
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If it appears to the chairman that the principal meeting place
or any satellite meeting place is inadequate to accommodate all
members entitled and wishing to attend, the meeting shall be
duly constituted and its proceedings valid if the chairman is
satisfied that adequate facilities are available to ensure that
a member who is unable to be accommodated is able to: |
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(a) |
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participate in the business for which the meeting has been
convened; |
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(b) |
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hear and see all persons present who speak (whether by the use
of microphones, loud-speakers, audio-visual communications
equipment or otherwise) whether in the principal meeting place,
any satellite meeting place or elsewhere; and |
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(c) |
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be heard and seen by all other persons present in the same way. |
B-22
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57. |
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SECURITY |
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The board may make any arrangement and impose any restriction it
considers appropriate to ensure the security of a meeting
including, without limitation, the searching of a person
attending the meeting and the restriction of the items of
personal property that may be taken into the meeting place. The
board may authorise one or more persons, who shall include a
director, an officer or the secretary or the chairman of the
meeting, to: |
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(a) |
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refuse entry to a meeting to a person who refuses to comply with
these arrangements or restrictions; and |
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(b) |
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eject from a meeting any person who causes the proceedings to
become disorderly. |
VOTING
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58. |
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METHOD OF VOTING |
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58.1 |
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Any resolution put to the vote at a general meeting shall be
decided on a poll and, for the avoidance of doubt, no resolution
shall be decided on a show of hands. |
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58.2 |
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Cumulative voting of shares of the Company, regardless of the
class of shares, is prohibited. |
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59. |
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PROCEDURE |
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59.1 |
|
Each poll shall be conducted in such a manner as the chairman
directs. In advance of any meeting, the chairman shall appoint
scrutineers, who need not be members, to act at the meeting. The
chairman may appoint one or more persons as alternate
scrutineers to replace any scrutineer who fails to act. If no
scrutineer or alternate scrutineer is willing or able to act at
a meeting, the chairman shall appoint one or more scrutineers to
act at the meeting. The result of the poll shall be deemed to be
the resolution of the meeting at which the poll was conducted. |
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59.2 |
|
Each scrutineer appointed in accordance with this Article shall,
prior to acting, be required to provide an undertaking to the
Company, in a form determined by the board, that he or she will
execute the duties of a scrutineer with strict impartiality and
according to the best of his or her ability. |
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59.3 |
|
A poll conducted on the election of a chairman or on any
question of adjournment shall be taken at the meeting and
without adjournment. A poll conducted on another question shall
be taken at such time and place as the chairman decides, either
at once or after an interval or adjournment (but not more than
30 clear days after the date of the meeting at which such
question arose). |
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59.4 |
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The date and time of the opening and the closing of a poll for
each matter upon which the shareholders will vote at a meeting
shall be announced at the meeting. No ballot, proxies or votes,
nor any revocations thereof or changes thereto, shall be
accepted by the scrutineers after the closing of the poll unless
a court with relevant jurisdiction upon application by a
shareholder shall determine otherwise. |
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59.5 |
|
The conduct of a poll (other than on the election of a chairman
or on a question of adjournment) does not prevent the meeting
continuing for the transaction of business other than the
question on which a poll is to be conducted. |
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59.6 |
|
On a poll a member entitled to more than one vote need not, if
he votes, use all his votes or cast all the votes he uses in the
same way. |
|
60. |
|
VOTES OF MEMBERS |
|
60.1 |
|
Subject to any rights or restrictions as to voting attached to
any class of shares by or in accordance with the Articles and
subject to Article 73 and the Acts, at a general meeting on
a vote on a resolution every member (whether present in person
or by proxy) has one vote for every share of which he is the
holder. |
B-23
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60.2 |
|
In the case of joint holders of a share, the vote of the senior
who tenders a vote, whether in person or by proxy, shall be
accepted to the exclusion of the vote or votes of the other
joint holder or holders, and seniority shall be determined by
the order in which the names of the holders stand in the
register. |
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60.3 |
|
A member in respect of whom an order has been made by any court
or official having jurisdiction (whether in the United Kingdom,
the United States or elsewhere) that he is or may be suffering
from mental disorder or is otherwise incapable of running his
affairs may vote by his guardian, receiver, curator bonis or
other person authorised for that purpose and appointed by the
court. A guardian, receiver, curator bonis or other authorised
and appointed person may vote by proxy if evidence (to the
satisfaction of the board) of the authority of the person
claiming to exercise the right to vote is received at the office
(or at another place specified in accordance with the Articles
for the delivery or receipt of forms of appointment of a proxy)
or in any other manner specified in the Articles for the
appointment of a proxy within the time limits prescribed by the
Articles for the appointment of a proxy for use at the meeting,
adjourned meeting or poll at which the right to vote is to be
exercised. |
|
61. |
|
RESTRICTION ON VOTING RIGHTS FOR UNPAID CALLS ETC. |
|
|
|
Unless the board otherwise decides, no member is entitled in
respect of a share held by him to be present or to vote, either
in person or by proxy, at a general meeting or at a separate
meeting of the holders of a class of shares or on a poll, or to
exercise other rights conferred by membership in relation to the
meeting or poll, if a call or other amount due and payable in
respect of the share is unpaid. This restriction ceases on
payment of the amount outstanding and all costs, charges and
expenses incurred by the Company by reason of the non-payment. |
|
62. |
|
VOTING BY PROXY |
|
62.1 |
|
A member is entitled to appoint another person as his proxy to
exercise all or any of his rights to attend and to speak and
vote at a meeting of the Company. Such a proxy can himself
appoint another person to be his proxy in relation to the number
of shares held by him, and such proxy can himself appoint
another person to be his proxy in relation to the number of
shares held by him and so on ad infinitum, and the provisions of
Articles 62 to 64 shall apply to all such appointments as
if the appointee was the registered holder of such shares and
the appointment was made by him in that capacity. |
|
62.2 |
|
A proxy need not be a member. |
|
62.3 |
|
Subject to Article 62.4, an instrument appointing a proxy
shall be in hard copy in any usual form (or in another form
approved by the board) executed under the hand of the appointor
or his duly constituted attorney or, if the appointor is a
corporation, under its seal or under the hand of its duly
authorised officer or attorney or other person authorised to
sign. |
|
62.4 |
|
The Company may provide an electronic address for the receipt of
any document or information relating to proxies for a general
meeting (including any instrument of proxy or invitation to
appoint a proxy, any document necessary to show the validity of,
or otherwise relating to, an appointment of proxy and notice of
the termination of the authority of a proxy). The Company shall
be deemed to have agreed that any such document or information
may be sent by electronic means to that address (subject to any
conditions or limitations specified by the Company when
providing the address). |
|
62.5 |
|
A member may appoint more than one proxy in relation to a
meeting provided that each proxy is appointed to exercise the
rights attached to a different share or shares held by him.
References in the Articles to an appointment of proxy include
references to an appointment of multiple proxies. |
|
62.6 |
|
Where two or more valid but conflicting appointments of proxy
are delivered or received for the same share or shares for use
at the same meeting, the one which is last validly delivered or
received (regardless of its date or the date of its execution)
shall be treated as replacing and revoking the other or others
as regards that share or those shares. If the Company is unable
to determine which appointment was last validly delivered or
received, none of them shall be treated as valid in respect of
that share or those shares. |
B-24
|
|
|
62.7 |
|
Delivery or receipt of an appointment of proxy does not prevent
a member attending and voting in person at the meeting or an
adjournment of the meeting. |
|
62.8 |
|
The appointment of a proxy shall (unless the contrary is stated
in it) be valid for an adjournment of the meeting as well as for
the meeting or meetings to which it relates. A proxy given in
the form of a power of attorney or similar authorisation
granting power to a person to vote on behalf of a member at
forthcoming meetings in general shall not be treated as valid
for a period of more than three years, unless the contrary is
stated in it. |
|
62.9 |
|
Subject to the provisions of the Acts and the requirements of
any relevant listing rules (if applicable), the board may at the
expense of the Company send or make available appointments of
proxy or invitations to appoint a proxy to the members by post
or by electronic means or otherwise (with or without provision
for their return prepaid) for use at any general meeting or at
any separate meeting of the holders of any class of shares,
either in blank or nominating in the alternative any one or more
of the directors or any other person. If for the purpose of any
meeting appointments of proxy or invitations to appoint as proxy
a person or one of a number of persons specified in the
invitation are issued at the Companys expense, they shall
be issued to all (and not to some only) of the members entitled
to be sent a notice of the meeting and to vote at it. The
accidental omission or the failure, due to circumstances beyond
the Companys control, to send or make available such an
appointment of proxy or give such an invitation to, or the
non-receipt thereof by, any member entitled to attend and vote
at a meeting shall not invalidate the proceedings at that
meeting. |
|
63. |
|
APPOINTMENT OF PROXY |
|
63.1 |
|
An appointment of proxy (and, where such proxy is himself
appointed by a proxy, such appointor(s) proxies), and (if
required by the board) a power of attorney or other authority
under which it is, or they are, as applicable, executed or a
copy of it notarially certified or certified in some other way
approved by the board, shall: |
|
|
|
(a) |
|
in the case of an appointment of proxy in hard copy form, be
received at the office, or another place specified in the notice
convening the meeting or in any appointment of proxy or any
invitation to appoint a proxy sent out or made available by the
Company in relation to the meeting, before the time for holding
the meeting or adjourned meeting at which the person named in
the appointment of proxy proposes to vote; |
|
(b) |
|
in the case of an appointment of proxy in electronic form, be
received at the electronic address specified in the notice
convening the meeting or in any appointment of proxy or any
invitation to appoint a proxy sent out or made available by the
Company in relation to the meeting, before the time for holding
the meeting or adjourned meeting at which the person named in
the appointment of proxy proposes to vote; |
|
(c) |
|
in the case of a poll taken more than 48 hours after the
meeting at which the relevant vote was to be taken, be received
as aforesaid after such meeting and not less than 24 hours
(or such shorter time as the board may determine) before the
time appointed for the taking of the poll; or |
|
(d) |
|
in the case of a poll not taken immediately but taken not more
than 48 hours after the meeting at which the relevant vote
was to be taken, be delivered at such meeting to the chairman or
to the secretary or to any director. |
|
|
|
|
|
An appointment of proxy not received or delivered in accordance
with this Article is invalid. |
|
|
|
The board may at its discretion determine that, in calculating
the periods mentioned in this Article 63.1, no account
shall be taken of any part of any day that is not a working day. |
|
63.2 |
|
Without limiting the foregoing, in relation to any shares which
are held in uncertificated form, the board may from time to time
permit appointments of proxy to be made by electronic means in
the form of an uncertificated proxy instruction and may in a
similar manner permit supplements to, or amendments or
revocations of, any such uncertificated proxy instruction to be
made by like means. The board may in addition prescribe the
method of determining the time at which any such uncertificated
proxy instruction |
B-25
|
|
|
|
|
(and/or other instruction or notification) is to be treated as
received by the Company or a participant acting on its behalf.
The board may treat any such uncertificated proxy instruction
which purports to be or is expressed to be sent on behalf of a
holder of a share as sufficient evidence of the authority of the
person sending that instruction to send it on behalf of that
holder. |
|
64. |
|
WHEN VOTES BY PROXY VALID ALTHOUGH AUTHORITY TERMINATED |
|
|
|
A vote cast by a proxy is valid despite the previous termination
of the authority of a person to act as a proxy unless notice of
such termination shall have been received by the Company at the
office, or at such other place or address at which an
appointment of proxy may be duly received or delivered, not
later than the time at which an appointment of proxy should have
been received or delivered in order for it to be valid for use
at the meeting or adjourned meeting at which the vote is cast or
(in the case of a poll taken otherwise than at or on the same
day as the meeting or adjourned meeting) for use in relation to
the poll at which the vote is cast. |
ADR
DEPOSITARY ARRANGEMENTS
|
|
|
65. |
|
ADR DEPOSITARY CAN APPOINT MULTIPLE PROXIES |
|
65.1 |
|
The ADR Depositary can appoint more than one person to be its
proxy (each person validly so appointed being referred to as an
Appointed Proxy) and the provisions of
Articles 62 to 64 shall apply to any such appointment(s). |
|
65.2 |
|
Appointments of all proxies shall set out the number of shares
in relation to which an Appointed Proxy, Sub Proxy or Appointee
(as defined in Articles 68.1 and 68.2 respectively), as the
case may be, is appointed (the Appointed
Number). The Appointed Number of shares of all
Appointed Proxies, when added together, must not be more than
the total number of shares registered in the name of the ADR
Depositary. The Appointed Proxy, Sub Proxy and Appointee(s)
together being the ADS Proxies and
individually an ADS Proxy. |
|
66. |
|
THE ADR DEPOSITARY SHALL KEEP A PROXY REGISTER |
|
66.1 |
|
The ADR Depositary shall keep a register of the names and
addresses of all the Appointed Proxies (the Proxy
Register). The Proxy Register shall set out the
Appointed Number of shares of each Appointed Proxy. This may be
shown by setting out the number of American Depositary Receipts
which each Appointed Proxy holds and stating that the Appointed
Number of shares can be ascertained by multiplying the said
number of American Depositary Receipts by such number which for
the time being is equal to the number of shares which any one
American Depositary Receipt represents. |
|
66.2 |
|
The ADR Depositary shall allow anyone whom the board nominates
to inspect the Proxy Register during usual business hours on any
business day at the registered office of the ADR Depositary. The
ADR Depositary shall also provide, as soon as possible, any
information contained in the Proxy Register which may be
requested by the Company or its agents. |
|
67. |
|
APPOINTED PROXIES AND THEIR PROXIES CAN ONLY ATTEND GENERAL
MEETINGS IF PROPERLY APPOINTED |
|
|
|
An Appointed Proxy, Sub Proxy or an Appointee may only attend a
general meeting if he provides the Company with written evidence
of his appointment and, in the case of Sub Proxies and
Appointees, written evidence of their appointor(s) appointment,
for that general meeting. Such written evidence shall be in a
form agreed between the board and the ADR Depositary. |
|
68. |
|
RIGHTS OF APPOINTED PROXIES AND THEIR PROXIES |
|
|
|
Subject to the Acts and providing the total number of shares
registered in the name of the ADR Depositary is sufficient to
include an Appointed Proxys Appointed Number: |
|
68.1 |
|
an Appointed Proxy can himself appoint another person to be his
proxy (each person validly so appointed being referred to as a
Sub Proxy) in relation to his Appointed
Number of shares and the provisions of |
B-26
|
|
|
|
|
Articles 62 to 64 shall apply to such appointment as if the
Appointed Proxy was the registered holder of such shares and the
appointment was made by him in that capacity; |
|
68.2 |
|
a Sub Proxy can himself appoint another person to be his proxy
in relation to his Appointed Number of shares, and such
appointee shall be entitled to appoint another person to be his
proxy in relation to his Appointed Number of shares and so on ad
infinitum (each such person validly so appointed being referred
to as an Appointee), and the provisions of
Articles 62 to 64 shall apply to all such appointments as
if the Sub Proxy or the Appointee, as the case may be, was the
registered holder of such shares and the appointment was made by
him in that capacity; and |
|
68.3 |
|
at a general meeting which an Appointed Proxy, Sub Proxy or an
Appointee is entitled to attend, he is entitled to the same
rights and has the same obligations in relation to his Appointed
Number of shares as if such shares were registered in his name. |
|
69. |
|
SENDING INFORMATION TO AN APPOINTED PROXY |
|
|
|
The Company may send to an Appointed Proxy at his address in the
Proxy Register all or any of the documents which are sent to
members. |
|
70. |
|
THE PROXY REGISTER MAY BE FIXED AT A CERTAIN DATE |
|
70.1 |
|
In order to determine which persons are entitled as Appointed
Proxies to: |
|
|
|
(a) |
|
exercise the rights conferred by Article 68; and |
|
(b) |
|
receive documents sent pursuant to Article 69 |
and the Appointed Number of shares in respect of which a person
is to be treated as Appointed Proxy for such purpose, the ADR
Depositary may determine that the persons who are entitled are
those persons entered in the Proxy Register at the close of
business on a date (a Record Date) determined
by the ADR Depositary in consultation with the Company.
|
|
|
70.2 |
|
When a Record Date is determined for a particular purpose: |
|
|
|
(a) |
|
the Appointed Number of shares of an Appointed Proxy will be
treated as the number appearing against his name in the Proxy
Register as at the close of business on the Record Date (this
may be shown by setting out the number of American Depositary
Receipts which each Appointed Proxy holds and stating that the
number of shares can be ascertained by multiplying the said
number of American Depositary Receipts by such number which for
the time being is equal to the number of shares which each
American Depositary Receipt represents); and |
|
(b) |
|
changes to entries in the Proxy Register after the close of
business on the Record Date will be ignored in determining the
entitlement of any person for the purpose concerned. |
|
|
|
71. |
|
THE NATURE OF AN APPOINTED PROXYS INTEREST |
|
|
|
Except as required by the Acts, no ADS Proxy will be recognised
by the Company as holding any interest in shares upon any trust.
Except for recognising the rights given in relation to general
meetings by appointments made by ADS Proxies pursuant to
Article 68, the Company is entitled to treat any person
entered in the Proxy Register as an Appointed Proxy as the only
person (other than the ADR Depositary) who has any interest in
the shares in respect of which the Appointed Proxy has been
appointed. |
|
72. |
|
VALIDITY OF THE APPOINTMENT OF APPOINTED PROXIES |
|
72.1 |
|
If any question arises at or in relation to a general meeting as
to whether any particular person has been validly appointed as
an ADS Proxy to vote (or exercise any other right) in respect of
any shares, the question will be determined by the chairman of
the general meeting. His decision (which may include declining
to recognise a particular appointment as valid) will, if made in
good faith, be final and binding on all persons interested. |
B-27
|
|
|
72.2 |
|
If a question of the type described in Article 72.1 arises
in any circumstances other than at or in relation to a general
meeting, the question will be determined by the board. Its
decision (which can include declining to recognise a particular
appointment as valid) will also, if made in good faith, be final
and binding on all persons interested. |
|
73. |
|
CORPORATE REPRESENTATIVES |
|
73.1 |
|
A corporation which is a member may, by resolution of its
directors or other governing body, authorise a person or persons
to act as its representative or representatives at any meeting
of the Company, or at any separate meeting of the holders of any
class of shares (a representative). |
|
73.2 |
|
Subject to Article 73.3, a representative is entitled to
exercise (on behalf of the corporation) the same powers as the
corporation could exercise if it were an individual member of
the Company. |
|
73.3 |
|
Where a corporation authorises more than one representative and
more than one representative purport to exercise a power under
Article 73.2 in respect of the same shares: |
|
|
|
(a) |
|
if they purport to exercise the power in the same way as each
other, the power is treated as exercised in that way; |
|
(b) |
|
if they do not purport to exercise the power in the same way as
each other, the power is treated as not exercised. |
|
|
|
73.4 |
|
A director, the secretary or other person authorised for the
purpose by the secretary may require a representative to produce
a certified copy of the resolution of authorisation before
permitting him to exercise his powers. |
|
74. |
|
OBJECTIONS TO AND ERROR IN VOTING |
|
|
|
No objection may be made to the qualification of any person
voting at a general meeting or to the counting of, or failure to
count, any vote, except at the meeting, adjourned meeting or
poll at which the vote objected to is tendered or at which the
error occurs. An objection properly made shall be referred to
the chairman whose decision on such matter shall be final and
conclusive. |
|
75. |
|
AMENDMENTS TO RESOLUTIONS |
|
|
|
No amendment to a resolution duly proposed as a special
resolution (other than an amendment to correct a patent error)
may be considered or voted on. No amendment to a resolution duly
proposed as an ordinary resolution (other than an amendment to
correct a patent error) may be considered or voted on unless
either: |
|
|
|
(a) |
|
at least 48 hours before the time appointed for holding the
meeting or adjourned meeting at which the ordinary resolution is
to be considered, notice of the terms of the amendment and
intention to move it has been lodged at the office; or |
|
(b) |
|
the chairman in his absolute discretion decides that the
amendment may be considered or voted on. |
|
|
|
|
|
If an amendment proposed to a resolution under consideration is
ruled out of order by the chairman the proceedings on the
substantive resolution are not invalidated by an error in his
ruling. |
|
76. |
|
FAILURE TO DISCLOSE INTERESTS IN SHARES |
|
76.1 |
|
Where notice is served by the Company under section 793 of
CA 2006 (a section 793 notice) on a
member, or another person appearing to be interested in shares
held by that member, and the member or other person has failed
in relation to any shares (the default
shares, which expression includes any shares allotted
or issued after the date of the section 793 notice in
respect of those shares) to give the |
B-28
|
|
|
|
|
Company the information required within the prescribed period
from the date of service of the section 793 notice, the
following sanctions apply, unless the board otherwise decides: |
|
|
|
(a) |
|
the member shall not be entitled in respect of the default
shares to be present or to vote (either in person or by proxy)
at a general meeting or at a separate meeting of the holders of
a class of shares or on a poll; and |
|
(b) |
|
where the default shares represent at least 0.25 per cent.
in nominal value of the issued shares of their class: |
|
|
|
(i) |
|
a dividend (or any part of a dividend) or other amount payable
in respect of the default shares shall be withheld by the
Company, which has no obligation to pay interest on it, and the
member shall not be entitled to elect, pursuant to
Article 128, to receive shares instead of a
dividend; and |
|
(ii) |
|
no transfer of any certificated default shares shall be
registered unless the transfer is an excepted transfer or: |
|
|
|
(A) the member is not himself in default in supplying the
information required; and |
|
|
|
(B) the member proves to the satisfaction of the board that
no person in default in supplying the information required is
interested in any of the shares the subject of the transfer. |
|
|
|
76.2 |
|
For the purpose of enforcing the sanction in
Article 76.1(b)(ii), the board may give notice to the
member requiring the member to change default shares held in
uncertificated form to certificated form by the time stated in
the notice. The notice may also state that the member may not
change any default shares held in certificated form to
uncertificated form. If the member does not comply with the
notice, the board may require the Operator to convert default
shares held in uncertificated form into certificated form in the
name and on behalf of the member in accordance with the
Uncertificated Securities Regulations. |
|
76.3 |
|
The sanctions under Article 76.1 cease to apply seven days
after the earlier of: |
|
|
|
(a) |
|
receipt by the Company of notice of an excepted transfer, but
only in relation to the shares thereby transferred; and |
|
(b) |
|
receipt by the Company, in a form satisfactory to the board, of
all the information required by the section 793 notice. |
|
|
|
76.4 |
|
Where, on the basis of information obtained from a member in
respect of a share held by him, the Company issues a
section 793 notice to another person, it shall at the same
time send a copy of the section 793 notice to the member,
but the accidental omission to do so, or the non-receipt by the
member of the copy, does not invalidate or otherwise affect the
application of Articles 76.1 or 76.2. |
|
76.5 |
|
Where any person appearing to be interested in the default
shares has been duly served with a section 793 notice and
the default shares which are the subject of such
section 793 notice are held by the ADR Depositary, the
provisions of this Article shall be treated as applying only to
such default shares held by the ADR Depositary and not (insofar
as such persons apparent interest is concerned) to any
other shares held by the ADR Depositary. |
|
76.6 |
|
For the purposes of this Article 76: |
|
|
|
(a) |
|
a person, other than the member holding a share, shall be
treated as appearing to be interested in that share if the
member has informed the Company that the person is or may be
interested, or if the Company (after taking account of
information obtained from the member or, pursuant to a
section 793 notice, from anyone else) knows or has
reasonable cause to believe that the person is or may be so
interested; |
|
(b) |
|
interested shall be construed as it is for
the purpose of section 793 of CA 2006; |
B-29
|
|
|
(c) |
|
reference to a person having failed to give the Company the
information required by a section 793 notice, or being in
default in supplying such information, includes
(a) reference to his having failed or refused to give all
or any part of it, and (b) reference to his having given
information which he knows to be false in a material particular
or having recklessly given information which is false in a
material particular; |
|
(d) |
|
the prescribed period means 14 days; |
|
(e) |
|
an excepted transfer means, in relation to
shares held by a member: |
|
|
|
(i) |
|
a transfer pursuant to acceptance of a takeover offer for the
Company (within the meaning of Chapter 3 of Part 28 of
CA 2006); or |
|
(ii) |
|
a transfer in consequence of a sale made through a recognised
investment exchange (as defined in the Financial Services and
Markets Act 2000) or another stock exchange outside the
United Kingdom on which shares in the capital of the Company are
normally traded; or |
|
(iii) |
|
a transfer which is shown to the satisfaction of the board to be
made in consequence of a sale of the whole of the beneficial
interest in the shares to a person who is unconnected with the
member and with any other person appearing to be interested in
the shares. |
|
|
|
76.7 |
|
The provisions of this Article are in addition and without
prejudice to the provisions of the Acts. |
APPOINTMENT,
RETIREMENT AND REMOVAL OF DIRECTORS
|
|
|
77. |
|
NUMBER OF DIRECTORS |
|
77.1 |
|
The number of directors must not be less than three and must not
be more than fifteen. The number of directors may be fixed
within the foregoing limits from time to time by resolution of
the board. |
|
77.2 |
|
A majority of the directors shall be independent. |
|
78. |
|
APPOINTMENT OF EXECUTIVE DIRECTORS |
|
78.1 |
|
Subject to the provisions of the Acts, the board may appoint one
or more of its body to hold an executive office with the Company
for such term and on such other terms and conditions as the
board thinks fit. The board may revoke or terminate an
appointment, without prejudice to a claim for damages for breach
of the contract of service between the director and the Company
or otherwise. |
|
78.2 |
|
Subject to the provisions of the Acts, the board may enter into
an agreement or arrangement with any director for the provision
of any services outside the scope of the ordinary duties of a
director. Any such agreement or arrangement may be made on such
terms and conditions as the board thinks fit and (without
prejudice to any other provision of the Articles) it may
remunerate any such director for such services as it thinks fit
and provide for the payment of expenses properly incurred by the
director. |
|
79. |
|
NO SHARE QUALIFICATION |
|
|
|
A director is not required to hold any shares in the capital of
the Company. |
|
80. |
|
VOTING ON RESOLUTION FOR APPOINTMENT |
|
|
|
At a general meeting a motion for the appointment of two or more
persons as directors by a single resolution shall not be made
unless an ordinary resolution that it should be so made has
first been agreed to by the meeting without any vote being given
against it, and for the purposes of this Article a motion for
approving a persons appointment or for nominating a person
for appointment shall be treated as a motion for his
appointment. A resolution moved in contravention of this Article
is void (whether or not its being so moved was objected to at
the time). |
B-30
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|
81. |
|
CLASSIFICATION OF THE BOARD |
|
81.1 |
|
The directors of the Company shall be classified with respect to
the time for which they severally hold office into three classes
(Class I,
Class II and
Class III), as nearly equal in number as
possible and as provided in the Articles. The initial term of: |
|
|
|
(a) |
|
Class I shall expire at the annual general meeting to be
held in 2012; |
|
(b) |
|
Class II shall expire at the annual general meeting to be
held in 2010; and |
|
(c) |
|
Class III shall expire at the annual general meeting to be
held in 2011, |
|
|
|
|
|
with each class to hold office until its successors are duly
elected. |
|
81.2 |
|
At each annual general meeting the number of directors equal to
the number of the Class whose term expires at such meeting shall
be appointed to hold office until the third succeeding annual
general meeting. Except as provided in Article 81.3,
directors of the Class whose term is expiring at an annual
general meeting shall be appointed at such meeting, and each
director elected shall hold office until his or her successor is
appointed or until his or her death, retirement, resignation or
removal. |
|
81.3 |
|
In the event of any change in the authorised number of
directors, the newly created or eliminated directorships
resulting from such increase or decrease shall be apportioned by
the board among the Classes of directors so as to maintain such
Classes as nearly equal as possible. |
|
81.4 |
|
Should a vacancy on the board of directors occur or be created,
whether arising through death, retirement, resignation or
removal of a director, or through an increase in the number of
directors of any Class, such vacancy shall be filled by the
majority vote of the remaining directors of all Classes, whether
or not a quorum, or by a sole remaining director. Subject to the
provisions hereof, any director appointed to fill a vacancy
shall serve for the remainder of the then present term of office
of the Class to which he or she was appointed. In the event such
term extends beyond the next annual general meeting for which a
notice of the meeting has not been sent at the time of the
appointment, the director or directors so appointed shall be
named and described in the notice of the next annual general
meeting and shall stand for election for the remaining portion
of the term of office at such annual general meeting. |
|
82. |
|
VACATION OF OFFICE BY DIRECTOR |
|
82.1 |
|
Without prejudice to the provisions for retirement contained in
the Articles, the office of a director is vacated if: |
|
|
|
(a) |
|
he resigns by notice delivered to the secretary at the office or
tendered at a board meeting; |
|
(b) |
|
where he has been appointed for a fixed term, the term expires; |
|
(c) |
|
he ceases to be a director by virtue of a provision of the Acts,
is removed from office pursuant to the Articles or becomes
prohibited by law from being a director; |
|
(d) |
|
he becomes bankrupt or compounds with his creditors generally or
he applies to the court for an interim order under
section 253 of the Insolvency Act 1986 in connection with a
voluntary arrangement under that statute; |
|
(e) |
|
he is or has been suffering from mental ill health or becomes a
patient for the purpose of any statute relating to mental health
or any court claiming jurisdiction on the ground of mental
disorder (however stated) makes an order for his detention or
for the appointment of a guardian, receiver or other person
(howsoever designated) to exercise powers with respect to his
property or affairs, and in any such case the board resolves
that his office be vacated. |
|
|
|
82.2 |
|
A resolution of the board declaring a director to have vacated
office under the terms of this Article is conclusive as to the
fact and grounds of vacation stated in the resolution. |
|
82.3 |
|
If the office of a director is vacated for any reason, he shall
cease to be a member of any committee of the board. |
B-31
ALTERNATE
DIRECTORS
|
|
|
83. |
|
APPOINTMENT |
|
83.1 |
|
A director (other than an alternate director) may by notice
delivered to the secretary at the office or tabled at a meeting
of the board, or in any other manner approved by the board,
appoint as his alternate director: |
|
|
|
(a) |
|
another director; or |
|
(b) |
|
another person approved by the board and willing to act. |
|
|
|
|
|
No appointment of an alternate director who is not already a
director shall be effective until his consent to act as a
director in the form prescribed by the provisions of the Acts
has been received at the office or tabled at a meeting of the
board. |
|
83.2 |
|
An alternate director is not required to hold any shares in the
capital of the Company and shall not be counted in reckoning the
number of directors for the purpose of Article 77. |
|
84. |
|
REVOCATION OF APPOINTMENT |
|
|
|
A director may by notice delivered to the secretary at the
office or tabled at a meeting of the board revoke the
appointment of his alternate director and, subject to the
provisions of Article 83, appoint another person in his
place. If a director ceases to hold the office of director or if
he dies, the appointment of his alternate director automatically
ceases. If a director retires but is reappointed or deemed
reappointed at the meeting at which his retirement takes effect,
a valid appointment of an alternate director which was in force
immediately before his retirement continues to operate after his
reappointment as if he had not retired. The appointment of an
alternate director ceases on the happening of an event which, if
he were a director otherwise appointed, would cause him to
vacate office. |
|
85. |
|
PARTICIPATION IN BOARD MEETINGS |
|
|
|
An alternate director shall, if he gives the Company an address
at which notices may be served on him or an address at which
notices may be served on him by electronic means, be entitled to
receive notice of all meetings of the board and all committees
of the board of which his appointor is a member and, in the
absence from those meetings of his appointor, to attend and vote
at the meetings and to exercise all the powers, rights, duties
and authorities of his appointor. A director acting as alternate
director has a separate vote at meetings of the board and
committees of the board for each director for whom he acts as
alternate director but he counts as only one for the purpose of
determining whether a quorum is present. |
|
86. |
|
RESPONSIBILITY |
|
|
|
A person acting as an alternate director shall be an officer of
the Company, shall alone be responsible to the Company for his
acts and defaults, and shall not be deemed to be the agent of
his appointor. |
REMUNERATION,
EXPENSES AND PENSIONS
|
|
|
87. |
|
REMUNERATION AND EXPENSES OF DIRECTORS |
|
87.1 |
|
Subject to the provisions of the Articles, the board shall have
the authority to determine the compensation of directors who are
not officers or employees of the Company or a subsidiary of the
Company. Such directors may be paid their expenses, if any, of
attendance at each meeting of the board or committee of the
board and may be paid a fixed sum for attendance at or
participation in each meeting of the board or committee of the
board, which may be in addition to stated director compensation
in cash or equity (shares or options) or other benefits, or any
combination thereof. |
|
87.2 |
|
No such compensation under Article 87.1 shall preclude any
director from serving the Company in any other capacity and
receiving compensation therefor. Members of any special or
standing committees may be allowed like compensation for
attending or participating in committee meetings. A
non-executive chairman of the board and the chairman of a
special or standing committee may be paid a supplemental fixed
sum for serving as chairman of each meeting of the board or the
special or standing committee. |
B-32
|
|
|
87.3 |
|
Subject to the provisions of the Acts, the Company may also fund
a directors expenditure on defending proceedings
(including investigations by or action proposed to be taken by
any regulatory authority) or in connection with any application
under the Acts and may do anything to enable a director to avoid
incurring such expenditure. |
|
88. |
|
REMUNERATION AND EXPENSES OF ALTERNATE DIRECTORS |
|
|
|
An alternate director is not entitled to compensation from the
Company for his services as an alternate director. The
compensation payable to an alternate director is payable out of
the compensation payable to his appointor and consists of such
portion (if any) of the compensation as he agrees with his
appointor. The Company shall, however, repay to an alternate
director expenses incurred by him in the performance of his
duties if the Company would have been required to repay the
expenses to him under Article 87 had he been a director. |
|
89. |
|
DIRECTORS PENSIONS AND OTHER BENEFITS |
|
89.1 |
|
The board may exercise all the powers of the Company to provide
pensions or other retirement or superannuation benefits and to
provide death or disability benefits or other allowances or
gratuities (by insurance or otherwise) for a person who is or
has at any time been a director of: |
|
|
|
(a) |
|
the Company; |
|
(b) |
|
a company which is or was a subsidiary undertaking of the
Company; |
|
(c) |
|
a company which is or was allied to or associated with the
Company or a subsidiary undertaking of the Company; or |
|
(d) |
|
a predecessor in business of the Company or of a subsidiary
undertaking of the Company, |
|
|
|
|
|
(or, in each case, for any member of his family, including a
spouse or former spouse, a civil partner or a former civil
partner, or a person who is or was dependent on him). For this
purpose the board may establish, maintain, subscribe and
contribute to any scheme, trust or fund and pay premiums. The
board may arrange for this to be done by the Company alone or in
conjunction with another person. |
|
89.2 |
|
A director or former director is entitled to receive and retain
for his own benefit a pension or other benefit provided under
Article 89.1 and is not obliged to account for it to the
Company. |
|
90. |
|
REMUNERATION OF EXECUTIVE DIRECTORS |
|
|
|
The salary or other remuneration of a director appointed to hold
employment or executive office in accordance with the Articles
may be a fixed sum of money, or wholly or in part governed by
business done or profits made, or as otherwise decided by the
board, and may be in addition to or instead of compensation
payable to him for his services as director pursuant to the
Articles. |
|
91. |
|
INSURANCE |
|
|
|
Subject to the provisions of the Acts, the board may exercise
all the powers of the Company to purchase and maintain insurance
for the benefit of a person who is or was a director, alternate
director or officer of the Company or of any associated company
against any liability attaching to him in connection with any
negligence, default, breach of duty or breach of trust or any
other liability which may lawfully be insured against by the
Company. |
POWERS
AND DUTIES OF THE BOARD
|
|
|
92. |
|
POWERS OF THE BOARD |
|
|
|
Subject to the provisions of the Acts and the Articles and to
directions given by special resolution of the Company, the
business and affairs of the Company shall be managed by the
board which may exercise all the powers of the Company whether
relating to the management of the business or not. No alteration
of the Articles and no direction given by the Company shall
invalidate a prior act of the board which would have |
B-33
|
|
|
|
|
been valid if the alteration had not been made or the direction
had not been given. The provisions of the Articles giving
specific powers to the board do not limit the general powers
given by this Article. |
|
93. |
|
POWERS OF DIRECTORS BEING LESS THAN MINIMUM REQUIRED
NUMBER |
|
|
|
If the number of directors is less than the minimum prescribed
by the Articles, the remaining director or directors may act
only for the purposes of appointing an additional director or
directors to make up that minimum or convening a general meeting
of the Company for the purpose of making such appointment. If no
director or directors is or are able or willing to act,
notwithstanding any other provisions of the Articles, a member
may convene a general meeting for the purpose of appointing
directors. An additional director appointed in this way holds
office (subject to the Articles) only until the dissolution of
the next annual general meeting after his appointment unless he
is reappointed during the meeting. |
|
94. |
|
POWERS OF EXECUTIVE DIRECTORS |
|
|
|
The board may delegate to a director holding executive office
any of its powers, authorities and discretions for such time and
on such terms and conditions as it thinks fit. In particular,
without limitation, the board may grant the power to
sub-delegate,
and may retain or exclude the right of the board to exercise the
delegated powers, authorities or discretions collaterally with
the director. The board may at any time revoke the delegation or
alter its terms and conditions. |
|
95. |
|
CHAIRMAN OF THE BOARD, CHIEF EXECUTIVE OFFICER AND
PRESIDENT |
|
95.1 |
|
The chairman of the board, if one has been appointed, shall
perform such duties as may be delegated by the board. The board
may designate whether the chairman of the board, or the
president, if such an officer shall have been appointed, shall
be the chief executive officer of the Company. The chairman of
the board, the chief executive officer, or the president, if one
has been appointed, shall preside at all general meetings and
meetings of the board. |
|
95.2 |
|
Unless the board shall otherwise delegate such duties, the chief
executive officer shall have general and active management of
the business of the Company, and shall see that all orders and
resolutions of the board are carried into effect. The chief
executive officer shall execute bonds, mortgages and other
contracts requiring a seal, under the seal of the Company,
except where required or permitted by law to be otherwise signed
and executed, including designation of authority by power of
attorney, or where the signing and execution thereof shall be
expressly delegated by the board to some other officer or agent
of the Company. The chief executive officer or such other
officer as shall be authorised by him or her shall have such
powers and duties as usually pertain to the office of chief
executive officer, except as the same may be modified by the
board. |
|
96. |
|
VICE PRESIDENTS |
|
|
|
The president, executive vice president, senior vice president,
or vice president, in the order of their seniority, unless
otherwise determined by the board, shall, in the event of
absence or disability of the chief executive officer or the
president, as the case may be, perform the duties and exercise
the powers of the absent or disabled chief executive officer or
president. They shall perform such other duties and have such
other powers as the board may from time to time prescribe during
the period of the absence or disability. |
|
97. |
|
DELEGATION TO COMMITTEES |
|
97.1 |
|
The board may by a majority of the whole board delegate any of
its powers, authorities and discretions (with power to
sub-delegate)
to a committee consisting of one or more persons (whether a
member or members of the board or not) as it thinks fit. A
committee may exercise its power to
sub-delegate
by
sub-delegating
to any person or persons (whether or not a member or members of
the board or of the committee). The board may retain or exclude
its right to exercise the delegated powers, authorities or
discretions collaterally with the committee. The board may at
any time revoke the delegation or alter any terms and conditions
or discharge the committee in whole or in part. Where a
provision of the Articles refers to the exercise of a power,
authority or discretion by the board (including, without
limitation, the power to pay fees, remuneration, additional
remuneration, expenses and pensions and other benefits |
B-34
|
|
|
|
|
pursuant to Articles 78 and 87 to 91 and that power,
authority or discretion has been delegated by the board to a
committee, the provision shall be construed as permitting the
exercise of the power, authority or discretion by the committee. |
|
97.2 |
|
Committee membership designations shall be subject to provisions
regarding independence or other qualifications for committee
service which may be imposed by applicable laws, rules or
regulations. |
|
97.3 |
|
The board may designate one or more directors as alternate
members of any committee, who may replace any absent or
disqualified member at any meeting of the committee. |
|
97.4 |
|
Standing committee functions, one or more of which may be
performed by a single committee, shall include audit,
compensation, governance and nominating. Any committee of the
board, to the extent provided in the resolution of the board or
the board approved committee charter, shall have and may
exercise all the powers and authority of the board in the
management of the business and affairs of the Company, including: |
|
|
|
(a) |
|
authorising the seal of the Company to be affixed to all papers
which may require it; |
|
(b) |
|
in relation to the allotment or issue of shares approved by the
board, fix any of the preferences or rights of such shares
relating to voting, dividends, redemption, dissolution, any
distribution of assets of the Company or the conversion into, or
the exchange of such shares for, shares of any other class or
classes or any other series of the same or any other class or
classes of shares of the Company; |
|
|
|
|
|
but no such committee shall have the power or authority in
reference to: |
|
|
|
(a) |
|
adopting an agreement of merger, consolidation, scheme of
arrangement or similar arrangement; |
|
(b) |
|
recommending to the shareholders the sale, lease or exchange of
all or substantially all of the Companys property and
assets; |
|
(c) |
|
recommending to the shareholders a dissolution of the Company or
a revocation of a dissolution, |
|
|
|
|
|
provided further that, unless the resolution or the Articles
expressly so provide, no such committee shall have the power or
authority to declare a dividend or to authorise the allotment or
issue of shares. |
|
|
|
Such committee or committees shall have such name or names as
may be determined from time to time by resolution of the board. |
|
98. |
|
OFFICERS |
|
98.1 |
|
The officers of the Company shall be chosen in such a manner,
shall hold their offices for such terms and shall carry out such
duties as are prescribed herein or determined solely by the
board, subject to the right of the board to remove any officer
or officers at any time with or without cause. The board may
determine that all of the officers of the Company shall be
appointed or reappointed by the board on an annual basis. |
|
98.2 |
|
The officers of the Company shall include a secretary and may
include a chairman of the board, a chief executive officer, a
president, one or more executive vice presidents, senior vice
presidents, vice presidents, and a treasurer, each of whom shall
be elected by the board. Any number of offices may be held by
the same person unless the Acts or the Articles otherwise
provide. |
|
98.3 |
|
Such other officers and assistant officers and agents as may be
deemed necessary may be elected or appointed by the board. |
|
98.4 |
|
Any officer of the Company may be removed at any time, with or
without cause, by the board. |
|
98.5 |
|
The salaries of all officers and agents of the Company shall be
fixed by the board or a duly constituted committee thereof. |
|
98.6 |
|
Each officer of the Company shall hold office until his or her
successor is appointed or until his or her earlier resignation
or removal. Any vacancy occurring in any office of the Company
by death, resignation, removal or otherwise shall be filled by
the board or other governing body. |
B-35
|
|
|
99. |
|
AGENTS |
|
|
|
The board may by power of attorney or otherwise appoint a person
to be the agent of the Company and may delegate to that person
any of its powers, authorities and discretions for such
purposes, for such time and on such terms and conditions
(including as to remuneration) as it thinks fit. In particular,
without limitation, the board may grant the power to
sub-delegate
and may retain or exclude the right of the board to exercise the
delegated powers, authorities or discretions collaterally with
the agent. The board may at any time revoke or alter the terms
and conditions of the appointment or delegation with or without
cause. |
|
100. |
|
EXERCISE OF VOTING POWERS |
|
|
|
The board may exercise or cause to be exercised the voting
powers conferred by shares in the capital of another company
held or owned by the Company, or a power of appointment to be
exercised by the Company, in any manner it thinks fit (including
the exercise of the voting power or power of appointment in
favour of the appointment of a director as an officer or
employee of that company or in favour of the payment of
remuneration to the officers or employees of that company). |
|
101. |
|
PROVISION FOR EMPLOYEES |
|
|
|
The board may exercise the powers conferred on the Company by
the Acts to make provision for the benefit of a person employed
or formerly employed by the Company or any of its subsidiaries
(other than a director or former director or shadow director) in
connection with the cessation or the transfer to a person of the
whole or part of the undertaking of the Company or the
subsidiary. |
|
102. |
|
REGISTERS |
|
|
|
Subject to the provisions of the Acts, the board may exercise
the powers conferred on the Company with regard to the keeping
of an overseas branch, local or other register and may make and
vary regulations as it thinks fit concerning the keeping of a
register. |
|
103. |
|
REGISTER OF CHARGES |
|
|
|
The Company shall keep a register of charges in accordance with
the provisions of the Acts and the fee to be paid by a person
other than a creditor or member for each inspection of the
register of charges is the maximum sum prescribed by the
provisions of the Acts or, failing which, decided by the board. |
|
104. |
|
DIRECTORS CONFLICTS OF INTEREST OTHER THAN IN RELATION
TO TRANSACTIONS OR ARRANGEMENTS WITH THE COMPANY |
|
104.1 |
|
If a situation (a relevant situation) arises
in which a director has, or can have, a direct or indirect
interest that conflicts, or possibly may conflict, with the
interests of the Company (including, without limitation, in
relation to the exploitation of any property, information or
opportunity, whether or not the Company could take advantage of
any such property, information or opportunity, but excluding any
situation which cannot reasonably be regarded as likely to give
rise to a conflict of interest) the following provisions shall
apply if the conflict of interest does not arise in relation to
a transaction or arrangement with the Company: |
|
|
|
(a) |
|
if the relevant situation arises from the appointment or
proposed appointment of a person as a director of the Company,
the board may resolve to authorise the appointment of the
director and the relevant situation; |
|
(b) |
|
if the relevant situation arises in circumstances other than
those in Article 104.1(a), the board may resolve to authorise
the relevant situation and the continuing performance by the
director of his duties, |
|
|
|
|
|
in each case on such terms as the board may determine and such
determination shall be notified in writing to the relevant
directors. |
B-36
|
|
|
104.2 |
|
Any authorisation under Article 104.1 shall be effective
only if: |
|
|
|
(a) |
|
the matter in question shall have been proposed in writing for
consideration at a meeting of the board, in accordance with the
boards normal procedures or in such other manner as the
board may approve; |
|
(b) |
|
any requirement as to the quorum at the meeting of the board for
that part of the meeting at which the matter is considered is
met without counting the director in question and any other
interested director (together the interested
directors); and |
|
(c) |
|
the matter was agreed to without the interested directors voting
or would have been agreed to if the votes of the interested
directors had not been counted |
|
|
|
|
|
and may be terminated by the board at any time after prior
consultation with the interested directors, reasonable account
being taken of their representations. |
|
104.3 |
|
Any reference in Article 104.1 to a conflict of interest
includes a conflict of interest and duty and a conflict of
duties. |
|
104.4 |
|
Any terms determined by the board under Article 104.1(a) or
Article 104.1(b) may be imposed at the time of the
authorisation or may be imposed or varied subsequently after
prior consultation with the interested directors, reasonable
account being taken of their representations, and may include
(without limitation): |
|
|
|
(a) |
|
whether the interested director(s) may vote (or be counted in
the quorum at a meeting) in relation to any resolution relating
to the relevant situation; |
|
(b) |
|
the exclusion of the interested director(s) from all information
and discussion by the board or any committee of the board of the
relevant situation; and |
|
(c) |
|
(without prejudice to the general obligations of
confidentiality) the application to the interested director(s)
of a strict duty of confidentiality to the Company for any
confidential information of the Company in relation to the
relevant situation. |
|
|
|
104.5 |
|
A director must act in accordance with any terms determined by
the board under Article 104.1(a) or Article 104.1(b) and
shall be entitled to rely on any such determination in the
absence of fraud. |
|
104.6 |
|
Except as specified in Article 104.2, any proposal made to
the board and any authorisation by the board in relation to a
relevant situation shall be dealt with in the same way as any
other matter that may be proposed to and resolved upon by the
board in accordance with the provisions of the Articles. |
|
104.7 |
|
If a relevant situation has been authorised by the board under
Article 104.1 then (subject, in any case, to any terms
determined by the board under Article 104.1(a) or
Article 104.1(b)): |
|
|
|
(a) |
|
where the director obtains (other than through his position as a
director of the Company) information relating to that relevant
situation which is confidential to a third party, he will not be
obliged to disclose it to the board or to any director or other
officer or employee of the Company or to use it in relation to
the Companys affairs in circumstances where to do so would
amount to a breach of that confidence; |
|
(b) |
|
the director may absent himself from meetings of the board or
any committee of the board at which anything relating to that
relevant situation will or may be discussed; and |
|
(c) |
|
the director may make such arrangements as he thinks fit for
board and committee papers to be received and read by a
professional adviser on his behalf |
|
|
|
|
|
and the general duties which any director owes to the Company
under CA 2006 will not be infringed by anything done (or omitted
to be done) in accordance with the provisions of this
Article 104.7. |
|
104.8 |
|
A director shall not be liable to account to the Company for any
profit, remuneration or other benefit which he (or any person
connected with him within the meaning of section 252 of CA
2006) may derive from any relevant situation authorised
under Article 104.1 (subject, in any case, to any terms
determined by the |
B-37
|
|
|
|
|
board in connection with such authorisation that are notified as
aforesaid) and no contract, arrangement, transaction or proposal
is liable to be avoided on the grounds of any director (or any
person connected with him as aforesaid) having any type of
interest authorised under Article 104.1 (subject as
aforesaid). |
|
105. |
|
DECLARATIONS OF INTEREST BY DIRECTORS |
|
105.1 |
|
A director must declare the nature and extent of his interest in
a relevant situation within Article 104.1 to the other
directors. |
|
105.2 |
|
If a director is in any way, directly or indirectly, interested
in a proposed transaction or arrangement with the Company, he
must declare the nature and extent of his interest to the other
directors. |
|
105.3 |
|
Where a director is in any way, directly or indirectly,
interested in a transaction or arrangement that has been entered
into by the Company, he must declare the nature and extent of
his interest to the other directors, unless the interest has
already been declared under Article 105.2. |
|
105.4 |
|
The declaration of interest must (in the case of
Article 105.3 and may, but need not (in the case of
Article 105.1 or Article 105.2) be made: |
|
|
|
(a) |
|
at a meeting of the board; or |
|
(b) |
|
by notice to the other directors in accordance with: |
|
|
|
(i) |
|
section 184 of CA 2006 (notice in writing); or |
|
(ii) |
|
section 185 of CA 2006 (general notice). |
|
|
|
105.5 |
|
If a declaration of interest proves to be, or becomes,
inaccurate or incomplete, a further declaration must be made. |
|
105.6 |
|
Any declaration of interest required by Article 105.1 must
be made as soon as is reasonably practicable. Failure to comply
with this requirement does not affect the underlying duty to
make the declaration of interest. |
|
105.7 |
|
Any declaration of interest required by Article 105.2 must
be made before the Company enters into the transaction or
arrangement. |
|
105.8 |
|
Any declaration of interest required by Article 105.3 must
be made as soon as is reasonably practicable. Failure to comply
with this requirement does not affect the underlying duty to
make the declaration of interest. |
|
105.9 |
|
A declaration in relation to an interest of which the director
is not aware, or where the director is not aware of the
transaction or arrangement in question, is not required. |
|
|
|
For this purpose a director is treated as being aware of matters
of which he ought reasonably to be aware. |
|
105.10 |
|
A director need not declare an interest: |
|
|
|
(a) |
|
if it cannot be reasonably be regarded as likely to give rise to
a conflict of interest; |
|
(b) |
|
if, or to the extent that, the other directors are already aware
of it (and for this purpose the other directors are treated as
being aware of anything of which they ought reasonably to be
aware); or |
|
(c) |
|
if, or to the extent that, it concerns terms of his service
contract that have been or are to be considered: |
|
|
|
(i) |
|
by a meeting of the board; or |
|
(ii) |
|
by a committee of the board appointed for the purpose under the
Articles. |
B-38
|
|
|
106. |
|
DIRECTORS INTERESTS AND VOTING |
|
106.1 |
|
Subject to the provisions of the Acts and provided he has
declared his interest in accordance with Article 105, a
director, notwithstanding his office: |
|
|
|
(a) |
|
may enter into or otherwise be interested in a contract,
arrangement, transaction or proposal with the Company or in
which the Company is otherwise interested either in connection
with his tenure of an office or place of profit or as seller,
buyer or otherwise; |
|
(b) |
|
may hold another office or place of profit with the Company
(except that of auditor or auditor of a subsidiary of the
Company) in conjunction with the office of director and may act
by himself or through his firm in a professional capacity to the
Company, and in that case on such terms as to remuneration and
otherwise as the board may decide either in addition to or
instead of remuneration provided for by another Article; and |
|
(c) |
|
may be or become a director or other officer of, or employed by,
or a party to a contract, transaction, arrangement or proposal
with or otherwise interested in, a company promoted by the
Company or in which the Company is otherwise interested or as
regards which the Company has a power of appointment. |
|
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106.2 |
|
A director shall not be liable to account to the Company for any
profit, remuneration or other benefit resulting from any
interests permitted under Article 106.1 and no contract,
arrangement, transaction or proposal is liable to be avoided on
the grounds of any director having any type of interest
permitted under Article 106.1. |
|
106.3 |
|
A director may not vote on or be counted in the quorum in
relation to a resolution of the board or of a committee of the
board concerning any contract, arrangement, transaction or
proposal with the Company or in which the Company is otherwise
interested and in which he has an interest which may reasonably
be regarded as likely to give rise to a conflict of interest,
but this prohibition does not apply to a resolution concerning
any of the following matters: |
|
|
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(a) |
|
any contract, arrangement, transaction or proposal in which he
is interested by virtue of an interest in shares, debentures or
other securities of the Company, or otherwise in or through the
Company; |
|
(b) |
|
the giving of a guarantee, security or indemnity in respect of
money lent or obligations incurred by him or any other person at
the request of or for the benefit of the Company or any of its
subsidiary undertakings; |
|
(c) |
|
the giving of a guarantee, security or indemnity in respect of a
debt or obligation of the Company or any of its subsidiary
undertakings for which he himself has assumed responsibility in
whole or in part, either alone or jointly with others, under a
guarantee or indemnity or by the giving of security; |
|
(d) |
|
a contract, arrangement, transaction or proposal concerning an
offer of shares, debentures or other securities of the Company
or any of its subsidiary undertakings for subscription or
purchase, in which offer he is or may be entitled to participate
as a holder of securities or in the underwriting or
sub-underwriting
of which he is to participate; |
|
(e) |
|
a contract, arrangement, transaction or proposal to which the
Company is or is to be a party concerning another company
(including a subsidiary undertaking of the Company) in which he
is interested (directly or indirectly) whether as an officer,
shareholder, creditor or otherwise (a relevant
company), if he does not to his knowledge hold an
interest in shares (as that term is used in sections 820 to
825 of CA 2006) representing one per cent. or more of
either any class of the equity share capital of or the voting
rights in the relevant company; |
(f) a contract, arrangement, transaction or proposal for
the benefit of the employees of the Company or any of its
subsidiary undertakings (including any pension fund or
retirement, death or disability scheme) which does not award him
a privilege or benefit not generally awarded to the employees to
whom it relates; and
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(g) a contract, arrangement, transaction or proposal
concerning:
|
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(i) |
|
indemnification (including loans made in connection with it) by
the Company in relation to the performance of his duties on
behalf of the Company or any of its subsidiary
undertakings; or |
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(ii) |
|
the purchase or maintenance of any insurance policy for the
benefit of directors or for the benefit of persons including
directors. |
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106.4 |
|
A director may not vote on or be counted in the quorum in
relation to a resolution of the board or committee of the board
concerning his own appointment (including, without limitation,
fixing or varying the terms of his appointment or its
termination) as the holder of an office or place of profit with
the Company or any company in which the Company is interested.
Where proposals are under consideration concerning the
appointment (including, without limitation, fixing or varying
the terms of appointment or its termination) of two or more
directors to offices or places of profit with the Company or a
company in which the Company is interested, such proposals shall
be divided and a separate resolution considered in relation to
each director. In that case each of the directors concerned (if
not otherwise debarred from voting under this Article) is
entitled to vote (and be counted in the quorum) in respect of
each resolution except that concerning his own appointment. |
|
106.5 |
|
If a question arises at a meeting as to whether the interest of
a director (other than the interest of the chairman of the
meeting) may reasonably be regarded as likely to give rise to a
conflict of interest or as to the entitlement of a director
(other than the chairman) to vote or be counted in a quorum and
the question is not resolved by his voluntarily agreeing to
abstain from voting or being counted in the quorum, the question
shall be referred to the chairman and his ruling in relation to
the director concerned is conclusive and binding on all
concerned. |
|
106.6 |
|
If a question arises at a meeting as to whether the interest of
the chairman of the meeting may reasonably be regarded as likely
to give rise to a conflict of interest or as to the entitlement
of the chairman to vote or be counted in a quorum and the
question is not resolved by his voluntarily agreeing to abstain
from voting or being counted in the quorum, the question shall
be decided by resolution of the directors or committee members
present at the meeting (excluding the chairman) whose majority
vote is conclusive and binding on all concerned. |
|
106.7 |
|
For the purposes of this Article, the interest of a person who
is connected with (within the meaning of section 252 of CA
2006) a director is treated as the interest of the director
and, in relation to an alternate director, the interest of his
appointor is treated as the interest of the alternate director
in addition to an interest which the alternate director
otherwise has. This Article applies to an alternate director as
if he were a director otherwise appointed. |
|
106.8 |
|
Subject to the provisions of the Acts, the Company may by
ordinary resolution suspend or relax the provisions of this
Article to any extent or ratify any contract, arrangement,
transaction or proposal not properly authorised by reason of a
contravention of this Article. |
PROCEEDINGS
OF DIRECTORS AND COMMITTEES
|
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107. |
|
BOARD MEETINGS |
|
107.1 |
|
Subject to the Articles, the board may meet for the despatch of
business, adjourn and otherwise regulate its proceedings as it
thinks fit. |
|
107.2 |
|
The first board meeting following the election of directors at
an annual general meeting shall ordinarily be held immediately
following the annual general meeting but may be held at such
other time and place as shall be specified in a notice given to
the directors in accordance with Article 108. |
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|
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108. |
|
NOTICE OF BOARD MEETINGS |
|
108.1 |
|
Regular meetings of the board may be held without notice at such
time and at such place as shall from time to time be determined
by the board. |
|
108.2 |
|
Special meetings of the board may be called by the chairman of
the board or the chief executive officer on not less than
24 hours advance notice to each director, given
personally by telephone, in hard copy form or by electronic
means; special meetings shall be called by the chief executive
officer or secretary, in like manner and on like notice, on the
written request of two directors. |
|
108.3 |
|
A director may waive the requirement that notice be given to him
of a board meeting, either prospectively or retrospectively. |
|
109. |
|
QUORUM |
|
109.1 |
|
The quorum necessary for the transaction of business is a
majority of the directors, present in person or by alternate
director. A duly convened meeting of the board at which a quorum
is present is competent to exercise all or any of the
authorities, powers and discretions vested in or exercisable by
the board. |
|
109.2 |
|
If a quorum shall not be present at any board meeting, the
directors present thereat may adjourn the meeting from time to
time, without notice other than announcement at the meeting,
until a quorum shall be present. |
|
110. |
|
CHAIRMAN OF BOARD |
|
|
|
The board may appoint one of its body as chairman to preside at
every board meeting at which he is present and one or more
deputy chairman or chairmen and decide the period for which he
is or they are to hold office (and may at any time remove him or
them from office). If no chairman or deputy chairman is elected,
or if at a meeting neither the chairman nor a deputy chairman is
present within five minutes of the time fixed for the start of
the meeting, the directors and alternate directors (in the
absence of their appointors) present shall choose one of their
number to be chairman. If two or more deputy chairmen are
present, the senior of them shall act as chairman, seniority
being determined by length of office since their last
appointment or reappointment or deemed reappointment. As between
two or more who have held office for an equal length of time,
the deputy chairman to act as chairman shall be decided by those
directors and alternate directors (in the absence of their
appointors) present. A chairman or deputy chairman may hold
executive office or employment with the Company. |
|
111. |
|
VOTING |
|
|
|
Questions arising at a meeting of the board are determined by a
majority of votes. |
|
112. |
|
PARTICIPATION BY TELEPHONE |
|
|
|
A director or his alternate director may participate in a
meeting of the board or a committee of the board through the
medium of conference telephone, video teleconference or similar
form of communication equipment if all persons participating in
the meeting are able to hear and speak to each other throughout
the meeting. A person participating in this way is deemed to be
present in person at the meeting and is counted in a quorum and
entitled to vote. Subject to the provisions of the Acts, all
business transacted in this way by the board or a committee of
the board is for the purposes of the Articles deemed to be
validly and effectively transacted at a meeting of the board or
a committee of the board although fewer than two directors or
alternate directors are physically present at the same place.
The meeting is deemed to take place where the largest group of
those participating is assembled or, if there is no such group,
where the chairman of the meeting then is. |
|
113. |
|
RESOLUTION IN WRITING |
|
|
|
A resolution in writing executed by all directors for the time
being entitled to receive notice of a board meeting and not
being less than a quorum or by all members of a committee of the
board for the time being entitled to receive notice of a
committee meeting and not being less than a quorum is as valid
and effective for all purposes as a resolution passed at a
meeting of the board (or committee, as the case may be). The |
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|
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resolution in writing may consist of several documents in the
same form each executed by one or more of the directors or
members of the relevant committee. The resolution in writing
need not be executed by an alternate director if it is executed
by his appointor and a resolution executed by an alternate
director need not be executed by his appointor. Any resolution
in writing is to be kept with the minutes of the proceedings of
the board (or committee, as the case may be). |
|
114. |
|
PROCEEDINGS OF COMMITTEES |
|
114.1 |
|
At all meetings of committees of the board a majority of the
directors who are members of the committee shall constitute a
quorum for the transaction of business and the act of a majority
of the committee members present at any meeting at which there
is a quorum shall be the act of the committee, except as may be
otherwise specifically provided by the Acts or the Articles. If
a quorum shall not be present at any meeting of a committee of
the board, the committee members present thereat may adjourn the
meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present. |
|
114.2 |
|
Regular committee meetings may be held without notice at such
time and at such place as shall from time to time be determined
by the committee. |
|
114.3 |
|
Special committee meetings may be called by the chairman of a
committee on not less than 24 hours advance notice to
each committee member, given personally by telephone, in hard
copy form or by electronic means; special meetings shall be
called by the chief executive officer or secretary, in like
manner and on like notice on the written request of two
committee members unless the committee consists of only one
member, in which case special meetings shall be called by the
chief executive officer or secretary in like manner and on like
notice on the written request of the sole committee member. |
|
114.4 |
|
Subject to the Articles, proceedings of any committee of the
board shall be conducted in accordance with applicable
provisions of the Articles regulating the proceedings of the
board. |
|
115. |
|
MINUTES OF PROCEEDINGS |
|
115.1 |
|
The board shall cause minutes to be made in books kept for the
purpose of: |
|
|
|
(a) |
|
all appointments of officers and committees made by the board
and of any remuneration fixed by the board; and |
|
(b) |
|
the names of directors present at every meeting of the board,
committees of the board, meetings of the Company or meetings of
the holders of a class of shares or debentures, and all orders,
resolutions and proceedings of such meetings. |
|
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|
115.2 |
|
If purporting to be signed by the chairman of the meeting at
which the proceedings were held or by the chairman of the next
succeeding meeting, minutes are receivable as prima facie
evidence of the matters stated in them. |
|
115.3 |
|
Minutes of every meeting of a committee of the board shall be
distributed to all of the directors of the Company. |
|
116. |
|
VALIDITY OF PROCEEDINGS OF BOARD OR COMMITTEE |
|
|
|
All acts done by a meeting of the board, or of a committee of
the board, or by a person acting as a director, alternate
director or member of a committee are, notwithstanding that it
is afterwards discovered that there was a defect in the
appointment of a person or persons acting, or that they or any
of them were or was disqualified from holding office or not
entitled to vote, or had in any way vacated their or his office,
as valid as if every such person had been duly appointed, and
was duly qualified and had continued to be a director, alternate
director or member of a committee and entitled to vote. |
B-42
SECRETARY
AND AUTHENTICATION OF DOCUMENTS
|
|
|
117. |
|
SECRETARY |
|
117.1 |
|
Subject to the provisions of the Acts, the board shall appoint a
secretary or joint secretaries and may appoint one or more
persons to be an assistant or deputy secretary on such terms and
conditions (including, without limitation, remuneration) as it
thinks fit. The board may remove a person appointed pursuant to
this Article from office and appoint another or others in his
place. |
|
117.2 |
|
The secretary or other officer appointed by the board shall
attend meetings of the board and general meetings, and record
all the proceedings of the general meetings and of the board in
a book to be kept for that purpose. The secretary shall give, or
cause to be given, notice of all general meetings and meetings
of the board, and shall perform such other duties as may be
prescribed by the board or the chief executive officer, under
whose supervision he or she shall act. |
|
117.3 |
|
The assistant secretaries, in the order of their seniority,
unless otherwise determined by the board, shall, in the event of
absence or disability of the secretary, perform the duties and
exercise the powers of the secretary. They shall perform such
other duties and have such other powers as the board may from
time to time prescribe or as the chief executive officer may
from time to time delegate. |
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117.4 |
|
Any provision of the Acts or of the Articles requiring or
authorising a thing to be done by or to a director and the
secretary is not satisfied by its being done by or to the same
person acting both as director and as, or in the place of, the
secretary. |
|
118. |
|
AUTHENTICATION OF DOCUMENTS |
|
|
|
A director or the secretary or another person appointed by the
board for the purpose may authenticate documents affecting the
constitution of the Company (including, without limitation the
Articles) and resolutions passed by the Company or holders of a
class of shares or the board or a committee of the board and
books, records, documents and accounts relating to the business
of the Company, and certify copies or extracts as true copies or
extracts; and where any books, records, documents or accounts
are elsewhere than the office, the local manager or other
officer of the Company having their custody shall be deemed to
be a person appointed by the board for this purpose. A document
purporting to be a copy of a resolution, or an extract from the
minutes of a meeting, of the Company, the board or any committee
which is so certified shall be conclusive evidence in favour of
all persons dealing with the Company that such resolution has
been duly passed or, as the case may be, that any minute so
extracted is a true and accurate record of the proceedings at a
duly constituted meeting. |
SEALS
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119. |
|
SAFE CUSTODY |
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|
The secretary shall provide for the safe custody of every seal. |
|
120. |
|
APPLICATION OF SEALS |
|
120.1 |
|
A seal shall have the Companys name engraved in legible
characters. |
|
120.2 |
|
Subject to the provisions of the Articles in relation to share
certificates issued by the Company in respect of the
Companys shares, stock, debentures or other securities, a
seal may be used only by the secretary with the authority of a
resolution of the board. The secretary, treasurer, an assistant
secretary, or an assistant treasurer shall sign an instrument
(other than such share certificates) to which a seal is affixed.
The board may decide, either generally or in a particular case,
that a signature may be dispensed with or affixed by mechanical
means. |
B-43
DIVIDENDS
AND OTHER PAYMENTS
|
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|
121. |
|
RESERVES |
|
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|
The board may, before paying any dividend (whether preferential
or otherwise), carry to reserve out of the profits of the
Company such sums as it thinks fit. All sums standing to reserve
may be applied from time to time, at the discretion of the
board, for any purpose to which the profits of the Company may
properly be 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 board thinks
fit. The board may divide the reserve into such special reserves
as it thinks fit, and may consolidate into one fund any special
funds or any parts of any special funds into which the reserve
may have been divided as it thinks fit. Any sum which the board
may carry to reserve out of the unrealised profits of the
Company shall not be mixed with any reserve to which profits
available for distribution have been carried. The board may
also, without placing the same to reserve, carry forward any
profits which it may think prudent not to distribute. |
|
122. |
|
PAYMENT OF DIVIDENDS |
|
|
|
Subject to the provisions of the Acts, if the board considers
that the financial position of the Company justifies such
payments, it can pay interim, final or other dividends on any
class of shares of any amounts and on any dates and for any
periods which it decides. |
|
123. |
|
ENTITLEMENT TO DIVIDENDS |
|
123.1 |
|
All dividends will be divided and paid in proportions based on
the amounts paid up on the shares during any period for which
the dividend is paid, provided that no dividend (nor, for the
avoidance of doubt, any dividend in specie or any scrip dividend
payable in accordance with Articles 127 or 128,
respectively) shall be payable in respect of any share which, or
the American Depositary Share, representing which, is for the
time being held by or for the benefit of any entity which is a
subsidiary or subsidiary undertaking of the Company. Sums which
have been paid up in advance of calls will not count as paid up
for this purpose. If the terms of any share provide that it will
be entitled to a dividend as if it were a fully paid up, or
partly paid up, share from a particular date (in the past or
future), it will be entitled to a dividend on this basis. This
Article applies unless the Articles, the rights attached to any
shares, or the terms of any shares, provide otherwise. |
|
123.2 |
|
Unless the rights attached to any shares, the terms of any
shares or the Articles provide otherwise, a dividend or any
other money payable in respect of a share can be declared and
paid in any currency the board decides using an exchange rate
selected by the board for any currency conversions required. The
board can also decide how any costs relating to the choice of
currency will be met. |
|
123.3 |
|
The board can offer shareholders the choice to receive dividends
and other money payable in respect of their shares in a currency
other than that in which the dividend or other money payable is
declared on such terms and conditions as the board may prescribe
from time to time. |
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123.4 |
|
If a shareholder owes the Company any money for calls on shares
or money in any other way relating to his shares, the board can
deduct any of this money from any dividend or other money
payable to the shareholder on or in respect of any share held by
him. Money deducted in this way can be used to pay amounts owed
to the Company. |
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123.5 |
|
Unless the rights attached to any shares, or the terms of any
shares, provide otherwise, no dividend or other sum payable by
the Company on or in respect of its shares carries a right to
interest from the Company. |
|
124. |
|
METHOD OF PAYMENT |
|
124.1 |
|
The Company may pay any dividend, interest or other amount
payable in respect of a share: |
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(a) |
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in cash; |
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(b) |
|
by cheque, warrant or money order made payable to or to the
order of the person entitled to the payment (and which may, at
the Companys option, be crossed account payee
where appropriate); |
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(c) |
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by a bank or other funds transfer system to an account
designated in writing by the person entitled to the payment; |
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(d) |
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if the board so decides, by means of a relevant system in
respect of an uncertificated share, subject to any procedures
established by the board to enable a holder of uncertificated
shares to elect not to receive dividends by means of a relevant
system and to vary or revoke any such election; or |
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(e) |
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by such other method as the person entitled to the payment may
in writing direct and the board may agree. |
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124.2 |
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The Company may send a cheque, warrant or money order by post: |
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(a) |
|
in the case of a sole holder, to his registered address; |
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(b) |
|
in the case of joint holders, to the registered address of the
person whose name stands first in the register; |
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(c) |
|
in the case of a person or persons entitled by transmission to a
share, as if it were a notice given in accordance with
Article 140 or |
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(d) |
|
in any case, to a person and address that the person or persons
entitled to the payment may in writing direct. |
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124.3 |
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Where a share is held jointly or two or more persons are jointly
entitled by transmission to a share: |
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(a) |
|
the Company may pay any dividend, interest or other amount
payable in respect of that share to any one joint holder, or any
one person entitled by transmission to the share, and in either
case that holder or person may give an effective receipt for the
payment; and |
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(b) |
|
for any of the purposes of this Article 124, the Company
may rely in relation to a share on the written direction or
designation of any one joint holder of the share, or any one
person entitled by transmission to the share. |
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124.4 |
|
Every cheque, warrant or money order sent by post is sent at the
risk of the person entitled to the payment. If payment is made
by bank or other funds transfer, by means of a relevant system
or by another method at the direction of the person entitled to
payment, the Company is not responsible for amounts lost or
delayed in the course of making that payment. |
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124.5 |
|
Without prejudice to Article 76, the board may withhold
payment of a dividend (or part of a dividend) payable to a
person entitled by transmission to a share until he has provided
such evidence of his right as the board may reasonably require. |
|
125. |
|
UNCLAIMED DIVIDENDS ETC. |
|
|
|
Any unclaimed dividend, interest or other amount payable by the
Company in respect of a share may be invested or otherwise made
use of by the board for the benefit of the Company until
claimed. A dividend unclaimed for a period of 12 years from
the date it was declared or became due for payment is forfeited
and ceases to remain owing by the Company. The payment of an
unclaimed dividend, interest or other amount payable by the
Company in respect of a share into a separate account does not
constitute the Company a trustee in respect of it. |
|
126. |
|
UNCASHED DIVIDENDS |
|
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|
If, in respect of a dividend or other amount payable in respect
of a share, on any one occasion: |
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(a) |
|
a cheque, warrant or money order is returned undelivered or left
uncashed; or |
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(b) |
|
a transfer made by a bank or other funds transfer system is not
accepted, |
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and reasonable enquiries have failed to establish another
address or account of the person entitled to the payment, the
Company is not obliged to send or transfer a dividend or other
amount payable in respect of that share to that person until he
notifies the Company of an address or account to be used for
that purpose. |
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If the cheque, warrant or money order is returned undelivered or
left uncashed or transfer not accepted on two consecutive
occasions, the Company may exercise this power without making
any such enquiries. |
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127. |
|
PAYMENT OF DIVIDENDS IN SPECIE |
|
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|
Without prejudice to Article 76, the board may direct that
payment of a dividend may be satisfied wholly or in part by the
distribution of specific assets and in particular of
paid-up
shares or debentures of another company. Where a difficulty
arises in connection with the distribution, the board may settle
it as it thinks fit and in particular, without limitation, may: |
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(a) |
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issue fractional certificates (or ignore fractions); |
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(b) |
|
fix the value for distribution of the specific assets (or any
part of them); |
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(c) |
|
decide that a cash payment be made to a member on the basis of
the value so fixed, in order to secure equality of
distribution; and |
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(d) |
|
vest assets in trustees on trust for the persons entitled to the
dividend as seems expedient to the board. |
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128. |
|
PAYMENT OF SCRIP DIVIDENDS |
|
128.1 |
|
Subject to the provisions of the Acts, but without prejudice to
Article 76, the board may allot to those holders of a
particular class of shares who have elected to receive them
further shares of that class or shares of any other class in
either case credited as fully paid (new
shares) instead of cash in respect of all or part of
any dividend or dividends, subject to any exclusions,
restrictions or other arrangements the board may in its absolute
discretion deem necessary or expedient to deal with legal or
practical problems under the laws of, or the requirements of a
recognised regulatory body or a stock exchange in, any territory. |
|
128.2 |
|
The board shall determine the basis of allotment of new shares
so that, as nearly as may be considered convenient without
involving rounding up of fractions, the value of the new shares
(including a fractional entitlement) to be allotted (calculated
by reference to the average quotation, or the nominal value of
the new shares, if greater) equals (disregarding an associated
tax credit) the amount of the dividend which would otherwise
have been received by the holder (the relevant
dividend). For this purpose the average
quotation of each of the new shares is the average of
the middle-market quotations for a fully-paid share of the
Company of that class derived from such source as the board may
deem appropriate for the business day on which the relevant
class of shares is first quoted ex the relevant
dividend (or such other date as the board may deem appropriate)
and the four subsequent business day(s). A certificate or report
by the auditors as to the value of the new shares to be allotted
in respect of any dividend shall be conclusive evidence of that
amount. |
|
128.3 |
|
The board may make any provision it considers appropriate in
relation to an allotment made or to be made pursuant to this
Article including, without limitation: |
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(a) |
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the giving of notice to holders of the right of election offered
to them; |
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(b) |
|
the provision of forms of election (whether in respect of a
particular dividend or dividends generally); |
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(c) |
|
determination of the procedure for making and revoking elections; |
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(d) |
|
the place at which, and the latest time by which, forms of
election and other relevant documents must be lodged in order to
be effective; and |
|
(e) |
|
the disregarding or rounding up or down or carrying forward of
fractional entitlements, in whole or in part, or the accrual of
the benefit of fractional entitlements to the Company (rather
than to the holders concerned). |
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128.4 |
|
The dividend (or that part of the dividend in respect of which a
right of election has been offered) is not declared or payable
on shares in respect of which an election has been duly made
(the elected shares); instead new shares are
allotted to the holders of the elected shares on the basis of
allotment calculated as in |
B-46
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Article 128.2. For that purpose, the board may resolve to
capitalise out of amounts standing to the credit of reserves
(including a share premium account, capital redemption reserve
and profit and loss account), whether or not available for
distribution, a sum equal to the aggregate nominal amount of the
new shares to be allotted and apply it in paying up in full the
appropriate number of new shares for allotment and distribution
to the holders of the elected shares. A resolution of the board
capitalising part of the reserves has the same effect as if the
board had resolved to effect the capitalisation pursuant to
Article 129. In relation to the capitalisation the board
may exercise all the powers conferred on it by Article 129. |
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128.5 |
|
The new shares rank pari passu in all respects with each other
and with the fully-paid shares of the same class in issue on the
record date for the dividend in respect of which the right of
election has been offered, but they will not rank for a dividend
or other distribution or entitlement which has been declared or
paid by reference to that record date. |
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128.6 |
|
In relation to any particular proposed dividend, the board may
in its absolute discretion decide: |
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(a) |
|
that shareholders shall not be entitled to make any election in
respect thereof and that any election previously made shall not
extend to such dividend; or |
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(b) |
|
at any time prior to the allotment of the new shares which would
otherwise be allotted in lieu thereof, that all elections to
take ordinary shares in lieu of such dividend shall be treated
as not applying to that dividend, and if so the dividend shall
be paid in cash as if no elections had been made in respect
of it. |
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129. |
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CAPITALISATION OF RESERVES |
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Subject to the provisions of the Acts, the board may: |
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(a) |
|
resolve to capitalise an amount standing to the credit of
reserves (including a share premium account, capital redemption
reserve and profit and loss account), whether or not available
for distribution; |
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(b) |
|
appropriate the sum resolved to be capitalised to the members in
proportion to the nominal amount of shares (whether or not fully
paid) held by them respectively and apply that sum on their
behalf in or towards: |
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(i) |
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paying up the amounts (if any) for the time being unpaid on
shares held by them respectively; or |
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(ii) |
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paying up in full unissued shares or debentures of a nominal
amount equal to that sum, |
and allot the shares or debentures, credited as fully paid, to
the members (or as they may direct) in those proportions, or
partly in one way and partly in the other, but the share premium
account, the capital redemption reserve and profits which are
not available for distribution may, for the purposes of this
article, only be applied in paying up unissued shares to be
allotted to members credited as fully paid;
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(c) |
|
make any arrangements it thinks fit to resolve a difficulty
arising in the distribution of a capitalised reserve and in
particular, without limitation, where shares or debentures
become distributable in fractions the board may deal with the
fractions as it thinks fit, including issuing fractional
certificates, disregarding fractions or selling shares or
debentures representing the fractions to a person for the best
price reasonably obtainable and distributing the net proceeds of
the sale in due proportion amongst the members (except that if
the amount due to a member is less than US$5, or such other sum
as the board may decide, the sum may be retained for the benefit
of the Company); |
|
(d) |
|
authorise a person to enter (on behalf of all the members
concerned) into an agreement with the Company providing for
either: |
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(i) |
|
the allotment to the members respectively, credited as fully
paid, of shares or debentures to which they may be entitled on
the capitalisation, or |
B-47
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(ii) |
|
the payment by the Company on behalf of the members (by the
application of their respective proportions of the reserves
resolved to be capitalised) of the amounts or part of the
amounts remaining unpaid on their existing shares, an agreement
made under the authority being effective and binding on all
those members; and |
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(e) |
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generally do all acts and things required to give effect to the
resolution. |
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130. |
|
CAPITALISATION OF RESERVES EMPLOYEES SHARE
SCHEMES |
|
130.1 |
|
This Article (which is without prejudice to the generality of
the provisions of the immediately preceding
Article 129) applies where: |
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(a) |
|
a person is granted pursuant to an employees share scheme
a right to subscribe for shares in the capital of the Company in
cash at a subscription price less than their nominal
value; and |
|
(b) |
|
pursuant to an employees share scheme, the terms on which
any person is entitled to subscribe for shares in the capital of
the Company are adjusted as a result of a capitalisation issue,
rights issue or other variation of capital so that the
subscription price is less than their nominal value. |
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130.2 |
|
In any such case the board shall: |
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(a) |
|
transfer to a reserve account a sum equal to the deficiency
between the subscription price and the nominal value of the
shares (the cash deficiency) from the profits
or reserves of the Company which are available for distribution
and not required for the payment of any preferential
dividend; and |
|
(b) |
|
subject to Article 130.4, not apply that reserve account
for any purpose other than paying up the cash deficiency on the
allotment of those shares. |
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130.3 |
|
Whenever the Company is required to allot shares pursuant to
such a right to subscribe, the board shall, subject to the
provisions of the Acts: |
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(a) |
|
appropriate to capital out of the reserve account an amount
equal to the cash deficiency applicable to those shares; |
|
(b) |
|
apply that amount in paying up the deficiency on the nominal
value of those shares; and |
|
(c) |
|
allot those shares credited as fully paid to the person entitled
to them. |
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130.4 |
|
If any person ceases to be entitled to subscribe for shares as
described, the restrictions on the reserve account shall cease
to apply in relation to such part of the account as is equal to
the amount of the cash deficiency applicable to those shares. |
|
130.5 |
|
No right shall be granted under any employees share scheme
under Article 130.1(a) and no adjustment shall be made as
mentioned in Article 130.1(b) unless there are sufficient
profits or reserves of the Company available for distribution
and not required for the payment of any preferential dividend to
permit the transfer to a reserve account in accordance with this
Article of an amount sufficient to pay up the cash deficiency
applicable to the shares concerned. |
|
131. |
|
RECORD DATES |
|
|
|
Notwithstanding any other provision of the Articles, but subject
to the provisions of the Acts and rights attached to shares, the
board may fix any date (which shall not be more than
60 days before the date on which a dividend, distribution,
allotment or issue is declared, made or paid) as the record date
for a dividend, distribution, allotment or issue. |
B-48
ACCOUNTS
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132. |
|
TREASURER |
|
132.1 |
|
The treasurer shall have the custody of the corporate funds and
securities, and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the Company,
and shall deposit all moneys and other valuable effects in the
name and to the credit of the Company in such depositories as
may be designated by the board. |
|
132.2 |
|
The treasurer shall disburse the funds of the Company as may be
ordered by the board, taking proper vouchers for such
disbursements, and shall render to the chief executive officer
and the board at its meetings, or when the board so requires, an
account of all his or her transactions as treasurer, and of the
financial condition of the Company, which account may be
submitted directly or through the chief financial officer. The
treasurer shall perform such other duties and have such other
authority and powers as the board may from time to time
prescribe or as the chief executive officer may from time to
time delegate. |
|
132.3 |
|
If required by the board, the treasurer shall give the Company a
bond in such sum, and with such surety or sureties, as shall be
satisfactory to the board for the faithful execution of the
duties of his or her office, in case of his or her death,
resignation, retirement or removal from office, of all books,
papers, vouchers, money and other property of whatever kind in
his or her possession or under his or her control belonging to
the Company. |
|
132.4 |
|
The assistant treasurers, in the order of their seniority,
unless otherwise determined by the board, shall, in the event of
absence or disability of the treasurer, perform the duties and
exercise the powers of the treasurer. They shall perform such
other duties and have such other powers as the board may from
time to time prescribe or the chief executive officer may from
time to time delegate. |
|
133. |
|
KEEPING AND INSPECTION OF ACCOUNTING RECORDS |
|
133.1 |
|
The board shall ensure that accounting records are kept in
accordance with the provisions of the Acts. |
|
133.2 |
|
The accounting records shall be kept at the office or, subject
to the provisions of the Acts, at another place decided by the
board and shall be available at all times for the inspection of
the directors and other officers. No member (other than a
director or other officer) has the right to inspect an
accounting record or other document except if that right is
conferred by the Acts or he is authorised by the board or by an
ordinary resolution of the Company. |
|
134. |
|
ACCOUNTS TO BE SENT TO MEMBERS ETC. |
|
134.1 |
|
In respect of each financial year, a copy of the Companys
annual accounts, the directors report and the
auditors report on those accounts and on the
directors report shall be sent to: |
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(a) |
|
every member (whether or not entitled to receive notices of
general meetings); |
|
(b) |
|
every holder of debentures (whether or not entitled to receive
notices of general meetings); and |
|
(c) |
|
every other person who is entitled to receive notices of general
meetings |
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|
not less than 21 clear days before the date of the meeting at
which copies of those documents are to be laid in accordance
with the Acts. |
|
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|
This Article does not require copies of the documents to which
it applies to be sent to: |
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(d) |
|
a person for whom the Company does not have a current
address; or |
|
(e) |
|
more than one of the joint holders of shares or debentures. |
|
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134.2 |
|
The board may determine that persons entitled to receive a copy
of the Companys annual accounts, the directors
report and the auditors report on those accounts and on
the directors report are those persons entered on the
register at the close of business on a day determined by the
board, provided that, if the Company is a participating issuer,
the day determined by the board may not be more than
21 days before the day that the relevant copies are being
sent. |
B-49
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134.3 |
|
Where permitted by the Acts, a summary financial statement
derived from the Companys annual accounts and the
directors report in the form and containing the
information prescribed by the Acts may be sent to a person so
electing in place of the documents required to be sent by
Article 134.1. |
|
135. |
|
EXTERNAL AUDITOR |
|
|
|
The audit committee of the board shall have exclusive authority
and responsibility to recommend, approve the compensation of,
and oversee the Companys external audit firm. The external
auditor shall be recommended by the audit committee on an annual
basis, and such auditor recommendation shall be submitted for
shareholder approval at each annual general meeting. |
NOTICES
|
|
|
136. |
|
NOTICES TO BE IN WRITING |
|
136.1 |
|
A notice to be given to or by any person pursuant to the
Articles shall be in writing. |
|
136.2 |
|
Where any notice is required to be given under the Acts or the
Articles, to the extent permitted by the Acts, a waiver thereof
in writing and signed by the persons entitled to such notice,
whether before or after the time stated therein, shall be deemed
equivalent thereto. |
|
137. |
|
SERVICE OF NOTICES, DOCUMENTS AND INFORMATION ON MEMBERS |
|
137.1 |
|
Any notice, document or information may be given, sent or
supplied by the Company to any member: |
|
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|
(a) |
|
personally; |
|
(b) |
|
by sending it by post in a pre-paid envelope addressed to the
member at his registered address, or by leaving it at that
address; |
|
(c) |
|
by sending it in electronic form to the electronic address
specified for the purpose by the member (generally or
specifically), provided that the member has agreed (generally or
specifically) that the notice, document or information may be
sent or supplied in that form (and has not revoked that
agreement); or |
|
(d) |
|
subject to the provisions of the Acts, by making it available on
a website, provided that the requirements in Article 137.2
are satisfied. |
|
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|
137.2 |
|
The requirements referred to in Article 137.1(d) are that: |
|
|
|
(a) |
|
the member has agreed (generally or specifically) that the
notice, document or information may be sent or supplied to him
by being made available on a website (and has not revoked that
agreement), or the member has been asked by the Company to agree
that the Company may send or supply notices, documents and
information generally, or the notice, document or information in
question, to him by making it available on a website and the
Company has not received a response within the period of
28 days beginning with the date on which the Companys
request was sent and the member is therefore taken to have so
agreed (and has not revoked that agreement); |
|
(b) |
|
the member is sent a notification of the presence of the notice,
document or information on a website, the address of that
website, the place on that website where it may be accessed, and
how it may be accessed (notification of
availability); |
|
(c) |
|
in the case of a notice of meeting, the notification of
availability states that it concerns a notice of a company
meeting, specifies the place, date and time of the meeting, and
states whether it will be an annual general meeting; and |
|
(d) |
|
the notice, document or information continues to be published on
that website, in the case of a notice of meeting, throughout the
period beginning with the date of the notification of
availability and ending with the conclusion of the meeting and,
in all other cases, throughout the period |
B-50
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specified by any applicable provision of the Acts or, if no such
period is specified, throughout the period of 28 days
beginning with the date on which the notification of
availability is sent to the member, save that if the notice,
document or information is made available for part only of that
period then failure to make it available throughout that period
shall be disregarded where such failure is wholly attributable
to circumstances which it would not be reasonable to have
expected the Company to prevent or avoid. |
|
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|
137.3 |
|
In the case of joint holders of shares: |
|
|
|
(a) |
|
it shall be sufficient for all notices, documents and other
information to be given, sent or supplied to the joint holder
whose name stands first in the register in respect of the joint
holding (the first named holder)
only; and |
|
(b) |
|
anything to be agreed or specified in relation to any notice,
document or information to be sent or supplied to them may be
agreed or specified by the first named holder and any such
agreement or specification shall be binding on all the joint
holders. |
|
|
|
137.4 |
|
For the avoidance of doubt, the provisions of this
Article 137 are subject to Article 43. |
|
137.5 |
|
The Company may at any time and at its sole discretion choose to
give, send or supply notices, documents and information only in
hard copy form to some or all members. |
|
138. |
|
EVIDENCE OF SERVICE |
|
138.1 |
|
Any notice, document or information given, sent or supplied by
the Company to the members or any of them: |
|
|
|
(a) |
|
by post, shall be deemed to have been received 24 hours
after the time at which the envelope containing the notice,
document or information was posted unless it was sent by second
class post or there is only one class of post in which case it
shall be deemed to have been received 48 hours after it was
posted. Proof that the envelope was properly addressed, prepaid
and posted shall be conclusive evidence that the notice,
document or information was sent; |
|
(b) |
|
by electronic means, shall be deemed to have been received
6 hours after it was sent provided that the Company is able
to show that it was properly addressed; |
|
(c) |
|
by making it available on a website, shall be deemed to have
been received on the date on which notification of availability
on the website is deemed to have been received in accordance
with this Article or, if later, the date on which it is first
made available on the website. |
|
|
|
138.2 |
|
Any notice, document or information given, sent or supplied by
the Company by any other means authorised in writing by the
member concerned is deemed to be received when the Company has
taken the action it has been authorised to take for that purpose. |
|
138.3 |
|
A member present in person or by proxy at a meeting or at a
meeting of the holders of a class of shares is deemed to have
received due notice of the meeting and, where required, of the
purposes for which it was called. |
|
139. |
|
NOTICE BINDING ON TRANSFEREES ETC. |
|
|
|
A person who becomes entitled to a share by transmission,
transfer or otherwise is bound by a notice in respect of that
share (other than a notice served by the Company under section
793 of CA 2006) which, before his name is entered in the
register, has been properly served on a person from whom he
derives his title. |
|
140. |
|
NOTICE IN CASE OF ENTITLEMENT BY TRANSMISSION |
|
|
|
Where a person is entitled by transmission to a share, any
notice, document or information may be given, sent or supplied
by the Company to that person as if he were the holder of a
share by sending or delivering it in any manner authorised by
the Articles for the giving of notice to a member addressed to
that person by name, or by the title of representative of the
deceased or trustee of the bankrupt member (or by similar |
B-51
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|
designation), at the address supplied for that purpose by the
person claiming to be entitled by transmission. Until such an
address has been supplied, any notice, document or information
may be given, sent or supplied in any manner in which it might
have been given if the death or bankruptcy or other event had
not occurred. The giving of notice in accordance with this
Article is sufficient notice to any other person interested in
the share. |
|
141. |
|
VALIDATION OF DOCUMENTS IN ELECTRONIC FORM |
|
141.1 |
|
Where a document is required under the Articles to be signed by
a member or any other person, if the document is in electronic
form, then in order to be valid the document must either: |
|
|
|
(a) |
|
incorporate the electronic signature, or personal identification
details (which may be details previously allocated by the
Company), of that member or other person, in such form as the
board may approve; or |
|
(b) |
|
be accompanied by such other evidence as the board may require
in order to be satisfied that the document is genuine. |
|
|
|
141.2 |
|
The Company may designate mechanisms for validating any document
in electronic form and a document not validated by the use of
any such mechanisms shall be deemed as having not been received
by the Company. In the case of any document or information
relating to a meeting, an instrument of proxy or invitation to
appoint a proxy, any validation requirements shall be specified
in the relevant notice of meeting in accordance with
Articles 42 and 62 |
|
142. |
|
DISPUTE RESOLUTION |
|
142.1 |
|
The courts of England and Wales shall have exclusive
jurisdiction to determine any dispute brought by a member in
that members capacity as such against the Company
and/or the
board and/or
any of the directors individually, arising out of or in
connection with the Articles or (to the maximum extent permitted
by applicable law) otherwise. |
|
142.2 |
|
Damages alone may not be an adequate remedy for any breach of
this Article 142, so that, in the event of a breach or
anticipated breach, the remedies of injunction
and/or an
order for specific performance would in appropriate
circumstances be available. |
|
142.3 |
|
The governing law of the Articles is the substantive law of
England. |
|
142.4 |
|
For the purposes of this Article 142: |
|
|
|
(a) |
|
a dispute shall mean any dispute, controversy
or claim; |
|
(b) |
|
references to Company shall be read so as to
include each and any of the Companys subsidiary
undertakings from time to time; and |
|
(c) |
|
director shall be read so as to include each
and any director of the Company from time to time in his
capacity as such or as an employee of the Company and shall
include any former director of the Company. |
MISCELLANEOUS
|
|
|
143. |
|
DESTRUCTION OF DOCUMENTS |
|
143.1 |
|
The Company may destroy: |
|
|
|
(a) |
|
a share certificate which has been cancelled at any time after
one year from the date of cancellation; |
|
(b) |
|
a mandate for the payment of dividends or other amounts or a
variation or cancellation of a mandate or a notification of
change of name or address at any time after two years from the
date the mandate, variation, cancellation or notification was
recorded by the Company; |
B-52
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|
|
(c) |
|
an instrument of transfer of shares (including a document
constituting the renunciation of an allotment of shares) which
has been registered at any time after six years from the date of
registration; and |
|
(d) |
|
any other document on the basis of which any entry in the
register is made at any time after six years from the date an
entry in the register was first made in respect of it. |
|
|
|
143.2 |
|
It is presumed conclusively in favour of the Company that every
share certificate destroyed was a valid certificate validly
cancelled, that every instrument of transfer destroyed was a
valid and effective instrument duly and properly registered and
that every other document destroyed was a valid and effective
document in accordance with the recorded particulars in the
books or records of the Company, but: |
|
|
|
(a) |
|
the provisions of this Article apply only to the destruction of
a document in good faith and without express notice to the
Company that the preservation of the document is relevant to a
claim; |
|
(b) |
|
nothing contained in this Article imposes on the Company
liability in respect of the destruction of a document earlier
than provided for in this Article or in any case where the
conditions of this Article are not fulfilled; and |
|
(c) |
|
references in this Article to the destruction of a document
include reference to its disposal in any manner. |
|
|
|
144. |
|
WINDING UP |
|
|
|
Subject to the provisions of the Articles, on a voluntary
winding up of the Company the liquidator may, on obtaining any
sanction required by law, divide among the members in kind the
whole or any part of the assets of the Company, whether or not
the assets consist of property of one kind or of different
kinds, and vest the whole or any part of the assets in trustees
upon such trusts for the benefit of the members as he, with the
like sanction, shall determine. For this purpose the liquidator
may set the value he deems fair on a class or classes of
property, and may determine on the basis of that valuation and
in accordance with the then existing rights of members how the
division is to be carried out between members or classes of
members. The liquidator may not, however, distribute to a member
without his consent an asset to which there is attached a
liability or potential liability for the owner. |
|
145. |
|
INDEMNITY |
|
145.1 |
|
To the extent permitted by the Acts and without prejudice to any
indemnity to which any person may otherwise be entitled, the
Company shall: |
|
|
|
(a) |
|
indemnify to any extent any person who is or was a director or
officer of the Company, or a director or officer of any
associated company, directly or indirectly (including by funding
any expenditure incurred or to be incurred by him) against any
loss or liability, whether in connection with any negligence,
default, breach of duty or breach of trust by him or otherwise,
in relation to the Company or any associated company; |
|
(b) |
|
indemnify to any extent any person who is or was a director or
officer of an associated company that is a trustee of an
occupational pension scheme, directly or indirectly (including
by funding any expenditure incurred or to be incurred by him)
against any liability incurred by him in connection with the
companys activities as trustee of an occupational pension
scheme; |
|
(c) |
|
create a trust fund, grant a security interest
and/or use
other means (including, without limitation, letters of credit,
surety bonds
and/or other
similar arrangements), as well as enter into contracts providing
indemnification to the full extent authorised or permitted by
law and including as part thereof provisions with respect to any
or all of the foregoing paragraphs of this Article 145.1 to
ensure the payment of such amounts as may become necessary to
effect indemnification as provided therein, or elsewhere. |
|
|
|
145.2 |
|
Where a person is indemnified against any liability in
accordance with Article 145.1, such indemnity shall extend
to all costs, charges, losses, expenses and liabilities incurred
by him in relation thereto. |
B-53
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|
ATTN: INVESTOR RELATIONS
500 NORTH AKARD STREET
SUITE 4300
DALLAS, TX 75201
|
|
VOTE BY INTERNET www.proxyvote.com |
|
Use the Internet to vote these shares up until 11:59 P.M. Eastern Standard Time the day before the special meeting date. Have the Proxy Card in hand when
accessing the website and follow the instructions. |
|
|
|
|
|
VOTE BY PHONE 1-800-690-6903
Use any touch-tone telephone to vote these shares up
until 11:59 P.M. Eastern Standard Time the day before
the special meeting date. Have the Proxy Card in hand
when calling and then follow the instructions. |
|
|
|
|
|
VOTE BY MAIL
Mark, sign and date the Proxy Card and return it in the
postage-paid envelope provided or return it to ENSCO
International Incorporated, c/o Broadridge, 51 Mercedes
Way, Edgewood, NY 11717. |
|
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|
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|
VOTE IN PERSON
Review the proxy materials for special requirements for
voting at the special meeting. You will need to request
a ballot to vote at the special meeting.
ELECTRONIC DELIVERY OF FUTURE
STOCKHOLDER COMMUNICATIONS
If you would like to reduce the costs incurred by ENSCO
International Incorporated in printing and delivering
proxy materials, you can consent to receiving all
future proxy materials electronically via e-mail. To
sign up for electronic delivery, please follow the
instructions above to vote using the Internet and, when
prompted, indicate that you agree to receive or access
stockholder communications electronically in future
years. |
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TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
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ý ENSCO1
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KEEP THIS PORTION FOR YOUR RECORDS |
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THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
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DETACH AND RETURN THIS PORTION ONLY |
ENSCO INTERNATIONAL INCORPORATED
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The Board of Directors recommends you vote FOR the following proposals:
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For
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Against
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Abstain
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For
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Against
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Abstain |
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1. Approval of the proposal to
adopt the Agreement and Plan of
Merger and Reorganization,
entered into as of November
9, 2009, by and between ENSCO
International Incorporated, a
Delaware corporation, and ENSCO
Newcastle LLC, a Delaware
limited liability company:
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o
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o
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o
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2. Approval of the adjournment of the special
meeting to a later date to solicit
additional proxies if there are
insufficient votes at the time of the
special meeting to approve the adoption of
the Agreement and Plan of Merger and
Reorganization:
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o
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o
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o |
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And on any other business that may properly come before the special meeting, in the discretion of the proxies.
Note: Please sign exactly as the name or names appear(s) on this Proxy Card. When shares are held
jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or
guardian, please give full title as such. If the signer is a corporation, please sign full
corporate name by duly authorized officer, giving full title as such. If signer is a partnership,
please sign in partnership name by authorized person.
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For address changes and/or comments, please check this box and write them on the o
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reverse side where indicated. |
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Yes
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No |
Please indicate if you plan to attend this Meeting.
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o
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o |
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Signature [PLEASE SIGN WITHIN BOX]
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Date
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Signature (Joint Owners)
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Date
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SPECIAL MEETING OF STOCKHOLDERS OF
ENSCO INTERNATIONAL INCORPORATED
December 22, 2009
Please date, sign and mail
the Proxy Card in the
envelope provided as soon
as possible.
Important Notice Regarding Internet Availability of Proxy Materials for the Special Meeting:
The Notice and Proxy Statement are available at www.proxyvote.com.
If voting by mail, please detach along perforated line and mail in the envelope provided.
PROXY
ENSCO INTERNATIONAL INCORPORATED
Board of Directors Proxy for the Special Meeting
of Stockholders at 10:00 a.m. Central Standard Time,
Tuesday, December 22, 2009
5-Star Worldwide Conference Center at Lincoln Plaza
Suite B30 Lower Level
500 N. Akard Street
Dallas, Texas 75201
The undersigned stockholder of ENSCO International Incorporated (the Company) hereby revokes
all previous proxies and appoints James W. Swent III and David A. Armour, or any of them, each with
full power of substitution, to vote the shares of the undersigned at the above-stated special
meeting and any adjournment(s) thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND WILL BE VOTED IN ACCORDANCE
WITH THE SPECIFICATIONS MADE HEREIN. IF A CHOICE IS NOT INDICATED WITH RESPECT TO ITEM (1) OR (2),
THIS PROXY WILL BE VOTED FOR EACH ITEM. THE PROXIES ARE AUTHORIZED TO USE THEIR DISCRETION WITH
RESPECT TO ANY OTHER MATTER THAT MAY PROPERLY COME BEFORE THE MEETING. THIS PROXY IS REVOCABLE AT
ANY TIME BEFORE IT IS EXERCISED.
Your Board of Directors recommends a vote FOR the proposal to approve the adoption of the
Agreement and Plan of Merger and Reorganization and FOR the proposal to adjourn the special
meeting to a later date to solicit additional proxies if there are insufficient votes at the time
of the special meeting to approve the adoption of the Agreement and Plan of Merger and
Reorganization.
Address Changes/Comments:
(If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.)