TEXT OF THE PROPOSED AMENDMENT IN FULL
TO THE ARTICLES OF INCORPORATION
OF STATIA TERMINALS GROUP N.V.
Smeets Thesseling van Bokhorst Spigt
draft dated April 20, 1999
ARTICLES OF INCORPORATION
OF
STATIA TERMINALS GROUP N.V.
NAME, SEAT AND DURATION
ARTICLE 1
1.1 Name. The name of the company is: Statia Terminals Group N.V.
1.2 Statutory seat, branches and branch offices. The company has its
statutory seat at Curacao, Netherlands Antilles. The company may have
one or more branches and/or branch offices outside of Curacao,
Netherlands Antilles.
1.3 Transfer of statutory seat. The company may transfer its statutory
seat to another country and assume the status of a legal entity
formed under the laws of that country in accordance with the
Netherlands Antilles Ordinance on transfer of seat to third
countries, pursuant to a resolution to that effect adopted by the
Board of Directors (as defined in of article 10.1 hereof), but only
if it deems such transfer of seat in the best interests of the
company.
1.4 Duration. The company has been constituted for an indefinite period of
time.
OBJECTS
ARTICLE 2
2.1 Objects. The objects of the company are to incorporate, participate
in, hold, manage, operate and finance entities, legal or otherwise,
directly or indirectly, belonging to the Statia group of companies
engaged in the business of marine terminaling in St. Eustatius, and
Point Tupper, Nova Scotia, Canada, as well as (a) to participate in
any other venture or company, (b) to invest its assets in securities,
including shares and other certificates of participation and bonds,
as well as other claims for interest bearing debts however
denominated, and (c) to guarantee or otherwise secure, and to
transfer in ownership, to mortgage, pledge or otherwise to encumber
assets as security for the obligations of the company and for the
obligations of third parties, with or without consideration.
2.2 Related activities. The company is entitled to do all that may be
useful or necessary for the attainment of its objects or that is
connected therewith in the widest sense.
CAPITAL AND SHARES
ARTICLE 3
3.1 Authorized capital (amount). The authorized capital of the company
amounts to Three Hundred Thousand United States Dollars (US
$300,000.00).
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3.2 Authorized capital (shares). The authorized capital consists of
thirty million (30,000,000) shares, each with a par value of One
United States Cent (US $0.01), and is divided into twenty million
(20,000,000) class A common shares (the "class A shares" or the
"common shares"), seven million eight hundred thousand (7,800,000)
class B subordinated shares (the "class B shares" or the
"subordinated shares"), and two million two hundred thousand
(2,200,000) class C shares (the "class C shares" or the "incentive
shares"). The class A shares shall be numbered A1 through
A20.000.000, the class B shares shall be numbered B1 through
B7.800.000, and the class C shares shall be numbered C1 through
C2.200.000. The class A shares and the class B shares have full
voting rights, whilst the class C shares shall be non-voting. At the
date of this amendment (the "Initial Issue Date"), at least twenty
percent of the authorized capital is issued and outstanding in the
form of voting shares with third parties, consisting of at least
7,600,000 common shares issued in connection with the initial public
offering of such shares at the Initial Issue Date and 3,800,000
subordinated shares.
3.3 Definitions of "shares", "shareholders". In these articles of
incorporation, unless specifically stated otherwise herein, the term
"shares" means class A shares, class B shares and class C shares, and
the term "shareholders" means holders of shares of class A shares,
class B shares and class C shares.
3.4 Repurchase of shares. The company is entitled to repurchase fully
paid up shares in its own capital for valuable consideration,
provided that at all times at least twenty percent of the authorized
capital of the company in the form of voting shares remains
outstanding with third parties.
3.5 Treatment of treasury shares. The company may not derive any rights
from its treasury shares. For the purpose of determining its issued
and outstanding capital, such shares shall not be included as part of
such capital.
3.6 Cancellation of shares. The Board of Directors may, without
instruction or authorization of the General Meeting (as defined in
article 13.1 hereof), cancel shares which are in the possession of
the company.
FORM OF SHARES; ISSUANCE OF SHARES
ARTICLE 4
4.1 Registered form. The shares shall be issued in registered form only.
4.2 Consideration; fractional shares. Shares shall be issued at or above
par. Fractional shares may be issued. Payments on shares may be made
in cash and/or in kind, and in such currency as the Board of
Directors deems fit.
4.3 Terms and conditions of issuance. Subject to the terms of these
articles of incorporation, shares may be issued at such times, for
such considerations and on such terms as may be
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established from time to time by the Board of Directors in its sole
discretion without the approval of the shareholders, except as set
forth in the next sentence. During the Subordination Period (as
defined in article 5) with respect to the subordinated shares, the
Board of Directors may not issue (i) more than 4,000,000 common
shares, in addition to the common shares issued on the Initial Issue
Date, excluding any common shares issued upon any exercise of the
overallotment option by one or more underwriters of the common
shares, or (ii) any equity securities ranking senior to the common
shares on distribution of dividends (as set out in article 17) or on
any distribution upon dissolution and liquidation of the company (as
set forth in article 18), without the approval of the holders of a
majority of the outstanding common shares, not including those common
shares held by the holder(s) of incentive shares and their
affiliates, if any. For purposes of the foregoing, an "affiliate"
shall mean a holder of shares of the company that is (i) directly, or
indirectly, through one or more intermediaries controlled by or under
control or "common control" (as such terms are further described in
the United States Securities Exchange Act of 1934) with, the company
including but not limited to, any holder of the subordinated shares
and/or incentive shares at the Initial Issue Date, or (ii) an officer
or director of the company or of an affiliate of the company.
4.4 Exception to restriction on issuance. The restriction set forth in
article 4.3 on issuance of additional common shares shall, however,
not apply to the following issuances: (a) upon exercise of the
over-allotment option by any underwriter of common shares, (b) upon
conversion of any subordinated shares, (c) pursuant to one or more
employee benefit plans of the company, (d) in the event of a
combination or subdivision of any common shares, or (e) in connection
with an acquisition or capital improvement by or of the company that
would have resulted in an increase in Adjusted Operating Surplus (as
defined in article 17) on a per common share and subordinated share,
pro forma basis for the preceding four-quarter period (or within 365
days of the closing of such an acquisition or the completion of such
a capital improvement and the net proceeds from such issuance are
used to repay debt, if any, incurred in connection therewith).
4.5 Company may not subscribe for shares. When issuing shares, the
company shall not be entitled to subscribe for its own shares.
4.6 Pre-emption. No shareholder shall have any right of pre-emption in
connection with any issuance of shares in the capital of the company
or other equity securities that may be issued by the company.
CLASS B CONVERSION
ARTICLE 5
5.1 Class B shares conversion - general. If, at any time during or after
the Subordination Period (as defined below), any subordinated shares
are outstanding, all of such subordinated shares will convert into
common shares in the manner set forth in this article: (i) if the
tests for ending subordination (as set out below) have been met for
any quarter ending on or after
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June 30, 2002, one quarter of the aggregate number of subordinated
shares outstanding on the Initial Issue Date (being 950,000
subordinated shares) will convert into common shares and (ii) if the
tests for ending subordination have been met for any quarter ending
on or after June 30, 2003, an additional quarter of the aggregate
number of subordinated shares outstanding on the Initial Issue Date
(being 950,000 subordinated shares) will convert into common shares,
provided that such conversion of the second one-quarter of the
subordinated shares may not occur until at least one calendar year
following the conversion of the first one-quarter of the subordinated
shares as described above. The Board of Directors shall for the
purpose of such conversion be authorized in its sole discretion to
take any and all necessary steps in connection therewith, including,
without limitation, the determination of the applicable shares,
numbered from B1 onwards representing a quarter of all outstanding
subordinated shares, at each time of a conversion. For the purpose
hereof, the "Subordination Period" shall mean the period from the
Initial Issue Date until the tests set forth below in (a) through
(c), inclusive, have been met for any quarter ending on or after June
30, 2004 for which:
(a) distributions (in the form of dividends or otherwise) of
Available Cash from Operating Surplus (as such terms are
defined in article 17) on the common and subordinated shares
with respect to each of the three consecutive non-overlapping
four-quarter periods immediately preceding the date of
determination that equaled or exceeded the sum of the Target
Quarterly Distribution (as defined in article 17) on all of
the outstanding common and subordinated shares during such
periods;
(b) the Adjusted Operating Surplus generated by the company
during each of the three consecutive non-overlapping
four-quarter periods immediately preceding the date of
determination equaled or exceeded the sum of the Target
Quarterly Distribution on all of the common and subordinated
shares that were outstanding on a fully diluted basis (i.e.
after assuming the exercise of all warrants, vested stock
options and conversion of subordinated shares) during those
periods; and
(c) there are no outstanding Common Share Arrearages (as defined
in article 17).
For purpose of the determination of any conversion as set out above
for any quarter (as further described above), the tests for ending
subordination shall be met for any quarter for which:
(d) distributions (in the form of dividends or otherwise) of
Available Cash from Operating Surplus on the common and
subordinated shares with respect to each of the three
consecutive non-overlapping four-quarter periods immediately
preceding the date of determination equaled or exceeded the
sum of the Target Quarterly Distribution on all the
outstanding common and subordinated shares during such
periods;
(e) the Adjusted Operating Surplus generated by the company
during each of the three
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consecutive non-overlapping four-quarter periods immediately
preceding the date of determination equaled or exceeded the
sum of the Target Quarterly Distribution on all of the common
and subordinated shares that were outstanding on a fully
diluted basis during those periods; and
(f) there are no outstanding Common Share Arrearages.
5.2 Conversion of subordinated shares on expiration of the Subordination
Period. Upon the expiration of the Subordination Period all
outstanding subordinated shares will convert into common shares.
Subject to paragraph 1 of this article, in each conversion, the
relevant subordinated shares outstanding will convert on a
one-for-one basis, into common shares, and will thereafter
participate, among other things, pro rata with the other common
shares then outstanding in distributions (in the form of dividends or
otherwise) of Available Cash with due observance of the dividend and
other distribution rights of the holders of incentive shares (as
described in article 17) in Available Cash.
5.3 Effect of surrender and conversion. Upon conversion of the
appropriate number of subordinated shares in accordance with the
foregoing provisions, the Board of Directors may upon request, issue
one or more share certificates representing the common shares upon
conversion of the subordinated shares, all in accordance with the
provisions of article 6 of these articles of incorporation. All
rights relating to the subordinated shares converted into common
shares shall cease and such subordinated shares shall no longer be
outstanding.
SHARE CERTIFICATES FOR SHARES
ARTICLE 6
6.1 Share certificates. Share certificates may be issued for shares.
6.2 Number of shares represented by certificates. Share certificates may
be issued to represent more than one share, or, in the event of the
issuance of a (temporary) global share certificate representing all
common shares issued and outstanding at the Initial Issue Date. If
shares held by a shareholder are represented by one share
certificate, and if such shareholder disposes of part of his or her
shares, such shareholder shall be entitled to request the issuance of
a share certificate representing such shareholder's remaining shares.
6.3 Form and manner of issuance. Share certificates, if any, which shall
include duplicates of share certificates as referred to in article 7
hereof, shall be issued and signed on behalf of the company by or on
behalf of the Board of Directors or by one or more persons or
entities appointed as transfer agent and/or registrar. All costs and
expenses of the company associated with the issuance of share
certificates (including any duplicates) at the request of a
shareholder, may be charged to such requesting shareholder, unless
provided otherwise in these articles of incorporation. Share
certificates shall bear such legend or legends as the Board of
Directors deems fit and appropriate in connection with the issuance
of shares or
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restrictions on transfer of shares. The reverse side of any
certificates issued shall contain a printed form of an instrument of
transfer that can be used by the holders of the shares represented by
such certificates to transfer such shares, or a portion thereof, to a
transferee, which may include the company in accordance with the
provisions of these articles of incorporation.
LOST AND MUTILATED CERTIFICATES
ARTICLE 7
Lost and mutilated share certificates. If any shareholder can prove
to the satisfaction of the Board of Directors or any transfer agent
or registrar of the company, that any share certificate has been
mutilated, mislaid or destroyed, then, at such shareholder's written
request, a duplicate may be issued by the Board of Directors or any
transfer agent or registrar of the company on such terms and
conditions as the Board of Directors may deem fit. Upon the issuance
of the duplicate share certificate (on which it shall be noted that
such certificate is a duplicate), the original share certificate
shall be null and void vis-a-vis the company. A mutilated share
certificate may be exchanged for a duplicate certificate upon
delivery of the mutilated certificate to the Board of Directors or
any transfer agent or registrar of the company.
SHAREHOLDERS REGISTER; TRANSFER OF SHARES; NOTICES
ARTICLE 8
8.1 Shareholders register. The Board of Directors, or registrar or
transfer agent designated pursuant to article 8.5, shall keep a
shareholders register (the "Register") in which the names and
addresses of all shareholders shall be registered, along with the
shares issued to, and the payment thereon by, the shareholders. The
Board of Directors shall regularly maintain the Register, including
the registration in the Register of any issue, transfer and
cancellation of shares.
8.2 Registration of other persons. The Board of Directors shall also
register in the Register the names and addresses of those persons who
have a right of usufruct (vruchtgebruik) or pledge (pand) on the
shares.
8.3 Addresses to be furnished, etc. Each shareholder, and holder of a
right of usufruct or pledge on shares is required to provide his or
her address to the company. The company shall be entitled for all
purposes to rely on the name and address of the aforementioned
persons as entered in the Register. Such person may at any time
change his or her address as entered in the Register by means of a
written notification to the company at its principal office, or any
transfer agent or registrar of the company.
8.4 Access to register. At the request of a shareholder, or a holder of a
right of usufruct or pledge on shares, the Board of Directors shall
furnish an extract of the Register, free of charge, insofar as it
relates to such person's interest in a share.
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8.5 Location of register. The Register shall be kept by the Board of
Directors at the company's principal office, or by a registrar or
transfer agent designated thereto by the Board of Directors at such
other location as it may deem fit. In case the Register is kept at
any location other than the company's principal office, then the
registrar or transfer agent shall be obligated to send to the
principal office of the company a copy thereof from time to time. In
case a registrar or transfer agent is appointed by the Board of
Directors, then such registrar or transfer agent shall be authorized
and, as the case may be, obligated to exercise the rights and fulfill
the obligations set out in this article with respect to the Register.
8.6 Transfer of shares--general. With due observance of the provisions of
article 9 hereof, the transfer of shares, including any limited
rights thereon, shall be effected (i) by serving upon the company in
the manner prescribed by law, an instrument of transfer, or (ii) by
written acknowledgment by the company of the transfer, which
acknowledgment shall be signed on behalf of the company by or on
behalf of the Board of Directors or by the registrar or transfer
agent of the company. In case a share certificate is outstanding, the
written acknowledgment by the company of the transfer of a share,
including any limited rights thereon, can only be made by an
endorsement of the transfer on such share certificate. In that case,
the transferor or transferee of a share shall present such share
certificate to the company, or its registrar or transfer agent, for
acknowledgment of the transfer on behalf of the company to be made
thereon. In case no share certificate has been issued, the
registration of the transfer of a share in the Register shall have
the effect of a written acknowledgment by the company of such
transfer of a share. This paragraph shall also apply in the case of
an allocation of shares resulting from a division and partition of
any community property.
8.7 Certain repurchase procedures. With due observance of article 3.4
hereof, in case of any repurchase of shares by the company, the
holder shall surrender each certificate or certificates representing
such shares, if any, to the company in the manner and at a place
designated therefor by the company, with the reverse side of the
certificate or certificates duly executed for the purpose of the
transfer of such shares to the company. Such manner shall include
personal delivery, registered mail or overnight delivery service of
recognized standing.
8.8 Effect of surrender and repurchase. Upon surrender of the shares for
repurchase by the company, each surrendered certificate shall be
canceled, all rights of the holders of such shares as such shall
cease with respect to such shares, and such shares shall no longer be
deemed to be outstanding for any purpose whatsoever.
8.9 Transfer of shares--assignment of voting rights of common shares. If
a common share is encumbered with a right of usufruct or pledge, then
the voting right of such common share, can not be assigned to the
holder of the right of usufruct or pledge.
PROHIBITED OWNERSHIP/RESTRICTION ON TRANSFER
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ARTICLE 9
9.1 Prohibition on percentage of ownership - general. Primarily to
prevent the company from becoming, or minimize the duration of its
classification as, a "controlled foreign corporation" or "CFC" (as
defined below) and also to prevent any ownership or transfer of the
common shares which may result in such a classification, the
ownership by a holder of common shares, directly, indirectly,
actually or constructively (within the meaning of section 958 of the
United States Internal Revenue Code of 1986, as amended (the
"Code")), of more than 9.9% of all of the common and subordinated
shares issued and outstanding (the "Ownership Limit") is prohibited,
except as otherwise provided in this article 9 below. For the purpose
of the foregoing Ownership Limit, ownership of common shares and/or
subordinated shares shall be understood to include the holding of
voting rights or voting power relating to such shares by law,
agreement or otherwise, in whatever form.
9.2 Restriction on transfer. In order to further the purposes set forth
in article 9.1, any sale, transfer, or other disposition of any
common shares by a holder of common shares (a "Sale") or any other
event relating to any common shares held by such a holder that would
result in a Violation of the Ownership Limit (as defined below) is
null and void to the extent it causes a Violation of the Ownership
Limit. The restriction in the preceding sentence shall not apply to
and the definition of the term "Sale" does not include (i) the
conversion of subordinated shares into common shares, (ii) any
subsequent transfer of the common shares resulting from such
conversion, (iii) any pledge, encumbrance, transfer by operation of
law, gift, inheritance or marital law of any interest in or right to
any common shares, as well as any sale, transfer, or other
disposition (other than a Sale) of any beneficial, as opposed to
legal (registered) interest in or right to any common shares, or (iv)
acquisition of any common shares pursuant to the exercise of
compensatory stock options or to an employee benefit plan of the
company or its subsidiaries or affiliates or any subsequent transfer
of any such common shares.
9.3 Definition CFC - ownership limit. For purposes of this article, a
non-United States corporation will be classified as a "controlled
foreign corporation" or "CFC" for United States federal income tax
purposes in any taxable year of such corporation in which more than
50% of either (i) the total combined voting power of all of its
classes of stock entitled to vote or (ii) the total value of its
stock is owned or considered owned (after applying certain
attribution rules), on any day during a taxable year, by United
States persons (as such term is defined in Section 7701 (a) (30) of
the Code) who own or are considered to own 10% or more of the total
combined voting power of all of its classes of stock entitled to
vote. For purposes of this article, a "Violation of the Ownership
Limit" occurs when (1) any person would own or would be considered to
own by virtue of the attribution provisions of section 958 of the Code
and the United States Treasury Regulations issued thereunder, or (2)
any person together with its "affiliates" and "associates" (as defined
in Rule 12b-2 under the United States Securities Exchange Act of 1934)
and any group (within the meaning of Section 13(d)(3) of such
Securities Exchange Act) of which such person is a part would own
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or would be considered to own by virtue of the beneficial ownership
provisions of Rule 13d-3 under such Securities Exchange Act, in either
case more than the Ownership Limit.
9.4 Prohibition on ownership and/or transfers other than by Sale. With
due observance of the provisions of foregoing paragraphs of this
article, including the restrictions contained therein, any pledge,
encumbrance, transfer by operation of law, gift, inheritance or
marital law of any legal (registered) or beneficial interest in or
right to any common shares, as well as any sale, transfer, or other
disposition (other than a Sale) of any beneficial, as opposed to any
interest in or right to any common shares (other than the conversion
of subordinated shares into common shares, any subsequent transfer of
the common shares resulting from such conversion or the acquisition
of any common shares pursuant to the exercise of compensatory stock
options or to an employee benefit plan of the company or its
subsidiaries or affiliates or any subsequent transfer of any such
common shares) (a "Gift") that would result in a Violation of the
Ownership Limit is prohibited to the extent that such Gift causes a
Violation of the Ownership Limit.
9.5 Waiver/declaration of non-applicability. The restrictions on transfer
and ownership described in this article may be waived, or declared
not applicable, and an exemption may be granted from time to time by
the Board of Directors, in its sole discretion, provided the same is
irrevocable with respect to a Transfer (as defined in article 9.6
below) or any other event described in this article relating to
ownership by a holder of common shares above the Ownership Limit. The
Board of Directors may, in its sole discretion set the terms and
conditions for the issuance of such waiver, declaration of
non-applicability and/or exemption.
9.6 Restrictive measures for benefit of the company. In order for the
company to determine, or verify compliance with the restrictions set
out above in this article, the following shall apply: (a) any person
who acquires or attempts or intends to acquire ownership (direct,
indirect, actual or constructive ownership within the meaning of
section 958 of the Code) of common shares that will or may violate
the foregoing restrictions on transferability and ownership is
required to give notice immediately to the company thereof and to
provide the company and the Board of Directors with such other
reasonable information as it may request in order to determine the
effect of a Sale, Gift (a Sale and/or a Gift to be referred to as a
"Transfer") or event on the classification of the company as a CFC or
for any other related purpose, (b) the company shall not recognize a
person in the capacity as shareholder of common shares until its
common shares have been issued in the name of such person (or in the
case of a Transfer, until the common shares so transferred have been
registered by or on behalf of the Board of Directors in the name of
such transferee in the register); until such recognition by or on
behalf of the company in the manner as aforementioned, the voting
rights, dividend rights and/or other distribution rights relating to
such shares shall be suspended and may not be exercised by the
purported holder thereof, (c) upon the occurrence of a Gift resulting
in a Violation of the Ownership Limit, the acquiror or transferee
shall be required to dispose of the number of common shares that
exceeds the Ownership Limit (the "Excess Common Shares") to a person
whose ownership of any such
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shares would not violate the Ownership Limit (a "Qualified Person")
within 15 days of the date of the prohibited Gift. The acquiror or
transferee of Excess Common Shares pursuant to a prohibited Gift (the
"Prohibited Transferee") shall be required to notify the company in
writing of its compliance with the requirement in the preceding
sentence within 5 days of any such compliance (a "Compliance
Notice"). If the Prohibited Transferee fails to provide such a
Compliance Notice to the company within 20 days of the date of the
prohibited Gift, the company shall be irrevocably and exclusively
authorized to sell and transfer on behalf of the Prohibited
Transferee the Excess Common Shares to a Qualified Person, at a price
for such shares of no less than the fair market value and to take all
necessary steps in connection therewith. In the event of a Gift, the
acquiror or transferee shall by acceptance or receipt of the relevant
share certificate(s), if any, representing any Excess Common Shares
be deemed to have agreed to the foregoing provisions set out in (c)
above.
9.7 Notices, etc. Notices and other communications provided for herein
shall be in writing, shall be delivered by hand or overnight courier
services of recognized standing or sent by telecopy, shall be deemed
given when actually received and shall be addressed as follows: if to
a shareholder's address, as shown in the Register of the company; and
if to the company, to the company's principal office or its
registered agent, attention: Secretary.
9.8 Applicability on issue of common shares or subordinated shares. For
the purpose of this article, acquisition by holders of common shares
of common shares or subordinated shares by virtue of an issue or
distribution of such shares to a holder of common shares shall be
equated to a transfer; for the purposes of determining the amount of
the issued capital, the shares to be issued or distributed shall be
included therein.
MANAGEMENT
ARTICLE 10
10.1 Board of directors--general. The management of all the affairs,
property and business of the company shall be vested in a Board of
Directors (the "Board of Directors"), who shall have and may exercise
all powers except such as are exclusively conferred upon the
shareholders by law or by these articles of incorporation, as from
time to time amended.
10.2 Board of directors--number of members/class of members. The number of
persons constituting the Board of Directors shall be not less than
three or more than fifteen, as fixed from time to time by the General
Meeting. The number of persons constituting the Board of Directors
shall, until changed at any succeeding General Meeting, be the number
so fixed. The Board of Directors shall be divided into three classes,
being class A directors (the "A director(s)"), class B directors (the
"B director(s)") and class C directors (the "C director (s)"), the
designation of which shall be determined by the General Meeting. Each
director shall be so designated by the General Meeting upon
appointment or reappointment, as the case may be, in case of a
vacancy (as defined in article 10.4).
10.3 Board of directors--term. Each director shall serve, subject to the
provisions of this article
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10.6, as director, with due observance of the following terms: the A
directors shall initially serve - as of the Initial Issue Date - for
a period of two years, and thereafter for six-year periods; the B
directors shall initially serve - as of the Initial Issue Date - for
a period of four years, and thereafter for six-year periods; and the
C directors shall serve - as of the Initial Issue Date - for six-year
periods.
10.4 Board of directors--appointment. Each director shall be appointed by
the General Meeting, with due observance of the following provisions.
In case of a vacancy, upon the expiration of a director's term or
otherwise (each, a "vacancy"), the Board of Directors shall be
authorized pursuant to a duly adopted resolution to nominate for such
vacancy a director for appointment by the General Meeting. Such Board
of Directors' resolution shall list at least two names for each such
vacancy, which may include a former director whose term has lapsed.
The resolutions to nominate directors shall be non-binding on the
General Meeting; the General Meeting is free to appoint, by a duly
adopted shareholders resolution in accordance with the provisions of
article 14.8, the directors so nominated, or reject nomination. In
case the nominated director(s) are not appointed by the General
Meeting, the Board of Directors must convene within seven days of the
date of the General Meeting, a new meeting, with due observance of
the provision of article 14 below, at which the vacancy or vacancies
shall be filled. At such subsequent General Meeting, the Board of
Directors may, again, nominate - by non-binding resolution - two
directors for each such vacancy for appointment by the General
Meeting. Notwithstanding the foregoing sentence, at such subsequent
General Meeting, the shareholders shall be free to appoint any person
or entity for each vacancy as they deem fit upon rejection of the
persons nominated by the Board of Directors. In the event the Board
of Directors wishes to exercise its right to nominate directors, it
shall in the convening of a General Meeting to appoint directors
state the persons so nominated for each such vacancy by the Board of
Directors.
10.5 Board of directors--vacancies in general. If one or more directors
are prevented from or are incapable of acting as a director, the
remaining directors may appoint one or more persons to fill such
vacancy or vacancies with the same qualifications, if any, as
determined by the General Meeting to serve until the immediately
following General Meeting.
10.6 Board of directors--removal. Directors may be removed or suspended at
any time by the General Meeting. At any General Meeting at which
action is taken to remove a director, or at any subsequent General
Meeting, any vacancy or vacancies created by such action may be
filled with due observance of article 10.2.
10.7 Board of directors--vacancies in connection with certain reductions.
If at any time the number of directors in office shall be reduced to
less than three, the remaining director(s) shall forthwith call and
convene a General Meeting for the purpose of filling the vacancies in
the Board of Directors, and in the event that all of the directors
are prevented from or are incapable of acting as directors, the
company shall be temporarily managed by any person or persons
previously appointed by the General Meeting to so act, who in turn
shall forthwith call and convene a General Meeting for the purpose of
appointing three or more directors.
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If no such General Meeting shall be called, or if no such person
shall have been appointed, any person or persons holding in the
aggregate at least ten percent of the issued and outstanding voting
shares may call and convene a General Meeting for the purpose of
appointing the directors.
10.8 Board of directors--meetings/notice. Meetings of the Board of
Directors shall be held regularly at such place and at such time as
the Board of Directors may from time to time determine. Special
meetings of the Board of Directors shall be held as often as any two
directors or the Chairman deems necessary, who shall be authorized to
call the same. Notice of the time and place of a meeting of the Board
of Directors shall be given:
(a) not less than ninety-six hours before such meeting, by
written notice mailed to each director, or
(b) not later than the day immediately preceding the date of
such meeting, by personal delivery, or by telephone call or
by sending a telegram or telefax or other means of written
notification to each director, receipt of which has been
confirmed.
A waiver of notice of any meeting of the Board of Directors signed by
all of the non attending directors, whether before, at, or after the
time of such meeting, shall be deemed equivalent to notice of the
meeting. If all the directors are present at the meeting, notice
shall be deemed to have been duly given.
10.9 Board of directors--quorum. A majority of the members of the Board of
Directors shall constitute a quorum. The resolution of the majority
of the directors present, in person or by proxy as hereinafter
provided, at a meeting at which a quorum is so present, shall
constitute the decision of the Board of Directors. In the absence of
a quorum, any director may adjourn any meeting from time to time
until a quorum shall be present.
10.10 Board of directors--adoption of resolutions. All resolutions to be
adopted at a meeting of the Board of Directors shall be adopted by
majority of the votes cast, provided that in the event of an equality
of votes, the vote(s) cast by the Chairman shall be decisive.
10.11 Board of directors--meetings by telephone, etc. Meetings of the Board
of Directors may be held through conference telephone calls or other
communication equipment allowing all persons participating in the
meeting to hear each other or through any other device permitted by
law, and participation in a meeting through any such lawful device or
arrangement shall constitute presence at such meeting.
10.12 Board of directors--action by written consent. When action by the
Board of Directors is required or permitted to be taken, action at a
meeting may be dispensed with if all the directors shall consent in
writing to such action taken or being taken.
10.13 Board of directors--proxies. Directors may by telegram, telefax or
other written instrument
13
appoint a proxy to act on their behalf at any designated meeting or
meetings of the Board of Directors. Such proxy can only be another
director of the company.
10.14 Committees of the Board of Directors. The Board of Directors shall
have the power and authority to create and disband committees of the
Board of Directors, and each such committee shall have the authority
and power as may from time to time be delegated to it by the Board of
Directors and shall operate under the ultimate responsibility of the
Board of Directors.
OFFICERS AND REPRESENTATIVES
ARTICLE 11
11.1 Chairman and other officers and agents. The Board of Directors may
designate a Chairman (the "Chairman") from among the directors. The
Board of Directors may further from time to time elect a president,
one or more vice-presidents (including executive or senior
vice-presidents), a controller, one or more assistant controllers, a
treasurer, one or more assistant treasurers, a secretary, one or more
assistant secretaries and any such other officers and agents as it
determines proper, all of whom shall hold office at the pleasure of
the Board of Directors. The same person may hold any two or more of
the aforesaid offices but no officer shall execute, acknowledge or
verify an instrument in more than one capacity if such instrument is
required by law or by these articles of incorporation to be executed,
acknowledged or verified by two or more officers. The Chairman must
be a director, but the other officers of the company need not be
members of the Board of Directors.
11.2 Representation of the company. The company shall be represented at
law and otherwise, and shall be bound with respect to third parties,
by (i) any two directors acting jointly, (ii) any director together
with any of the following persons listed in (i) through (vi) below,
acting jointly, or (iii) any two of the following persons acting
jointly, provided such persons are authorized by the Board of
Directors to represent the company with the following titles:
(i) Chairman;
(ii) president;
(iii) vice-presidents (including any executive vice-presidents or
senior vice-presidents);
(iv) treasurer or assistant treasurer;
(v) officer;
(vi) secretary or assistant secretary;
(vi) controller or assistant controller.
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The Board of Directors may also from time to time authorize other
persons, who may or may not be directors, to represent the company,
who shall have such other titles as the Board of Directors may
determine, provided that at all times any two of such persons can
only represent the company acting jointly.
11.3 Additional power and authority of representatives. The persons
holding the above mentioned titles which the Board of Directors may
from time to time authorize as herein provided, shall have such power
and authority as the Board of Directors may from time to time grant
each of them respectively.
11.4 Additional rules and regulations. The Board of Directors may adopt
and may amend and repeal such rules, regulations and resolutions as
it may deem appropriate for the conduct of the affairs and the
management of the company, including rules, regulations and
resolutions setting forth the specific powers and duties of the
holders of the above-mentioned titles (not being directors of the
company), other persons and committees of the Board of Directors
authorized by the Board of Directors to represent the company. Such
rules, regulations and resolutions must be consistent with these
articles of incorporation. Any restrictions of the powers of
representation of the holders of the above-mentioned titles (other
than any director) will take effect on the day after the resolutions,
rules or regulations containing such restrictions have been filed at
the Commercial Register of the Chamber of Commerce and Industry in
Curacao, and such other places in the Netherlands Antilles where the
company conducts its business.
11.5 Compensation of representatives. The directors, the holders of the
above-mentioned titles and any other persons authorized by the Board
of Directors to represent the company shall receive such compensation
as the General Meeting (in the case of the directors) may from time
to time determine or approve and the Board of Directors (in the case
of all other persons not being directors) may from time to time
determine.
INDEMNIFICATION, ADVANCEMENT OF EXPENSES AND INSURANCE
ARTICLE 12
12.1 Indemnification not in connection with actions by or in right of the
company. The company shall have the power to indemnify, and shall
indemnify to the fullest extent permitted by applicable law, any
person who was or is a party or is threatened to be made a party to
any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than
an action by or in the right of the company) by reason of the fact
that such person is or was a director, officer, employee or agent of
the company, or is or was serving at the request of the company as a
director, officer, employee or agent of another company, partnership,
joint venture, trust or other enterprise or entity, against expenses
(including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by such person in
connection with such action, suit or proceeding if he acted in good
faith and in a manner such person reasonably believed to be in or not
opposed to the best interests of the company and with respect to any
criminal
15
action or proceeding, had no reasonable cause to believe that its
conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction or upon a plea
of nolo contendere or its equivalent shall not, of itself, create a
presumption that the person did not act in good faith and in a manner
which was reasonably believed to be in or not opposed to the best
interests of the company.
12.2 Indemnification in connection with actions by or in right of the
company. The company shall have the power to indemnify, and shall
indemnify to the fullest extent permitted by applicable law, any
person who was or is a party or is threatened to be made a party to
any threatened, pending or completed action or suit by or in the
right of the company to procure a judgment in its favor by reason of
the fact that such person is or was a director, officer, employee or
agent of the company or is or was serving at the request of the
company as a director, officer, employee or agent of another company,
partnership, joint venture, trust or other enterprise or entity,
against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by such
person in connection with the defense or settlement of such action or
suit if such person acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the company
and except that no indemnification shall be made in respect of any
claim, issue or matters as to which such person shall have been
finally adjudged to be liable to the company for improper conduct
unless and only to the extent that the court in which such action or
suit was brought or any other court having appropriate jurisdiction
shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such
person is fairly and reasonably entitled to indemnity for such
expenses, judgments, fines and amounts paid in settlement which the
court in which the action or suit was brought or such other court
having appropriate jurisdiction shall deem proper.
12.3 Related expenses. To the extent that a director, officer, employee or
agent of the company has been successful on the merits or otherwise
in defense of any action, suit or proceeding referred to in article
12.1 and 12.2, or in defense of any claim, issue or matter therein,
such person shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by such person in
connection therewith.
12.4 Certain limitations on indemnification. Any indemnification under
article 12.1 and 12.2 (unless ordered by a court) shall be made by
the company only as authorized by contract approved, or resolution or
other action adopted or taken, by the Board of Directors or by the
shareholders.
12.5 Advancement of expenses. Expenses incurred in defending a civil or
criminal action, suit or proceeding may be paid by the company in
advance of the final disposition of such action, suit or proceeding
upon receipt of an undertaking by or on behalf of the applicable
director, officer, employee or agent to repay such amount if it shall
ultimately be determined that such person is not entitled to be
indemnified by the company as authorized by this article 12.
12.6 Indemnification and advancement of expenses not exclusive. The
indemnification and
16
advancement of expenses provided by or granted pursuant to the other
paragraphs of this article 12 shall not be deemed exclusive of any
other rights to which those seeking indemnification or advancement of
expenses may be entitled under any law, agreement, vote of
shareholders or disinterested directors, or otherwise, both as to
action in its official capacity and as to action in another capacity
while holding such office, and shall continue as to a person who has
ceased to be a director, officer, employee or agent and shall inure
to the benefit of the heirs, executors and administrators of such a
person.
12.7 Insurance. The company shall have power to purchase and maintain
insurance on behalf of any person who is or was a director, officer,
employee or agent of the company or is or was serving at the request
of the company as a director, officer, employee or agent of another
company, partnership, joint venture, trust or other enterprise
against any liability asserted against him or her and incurred by him
or her in any such capacity, or arising out of his or her status as
such, whether or not the company would have the power to indemnify
him or her against such liability under the provisions of this
article 12.
GENERAL MEETINGS OF SHAREHOLDERS
ARTICLE 13
13.1 General. All general meetings of shareholders (each, a "General
Meeting") shall be held on any one of the Islands of the Netherlands
Antilles.
13.2 Timing. The annual General Meeting shall be held as early as
reasonably practicable, and in any event not later than the first day
of June, after the close of the company's preceding financial year.
13.3 Actions to be taken. At the annual General Meeting:
a. the Board of Directors shall render a report on the
business of the company and the conduct of its affairs
during the preceding financial year;
b. the balance sheet and the profit and loss account shall be
determined, set and adopted after having been submitted
together with an explanatory statement (together, the
"annual accounts"), stating by which standards the movable
and immovable property of the company have been appraised;
c. the person or persons referred to in paragraph 5 of article
10 hereof shall be appointed;
d. the appropriation of profits shall be made; and
e. such other proposals included in the agenda specified in the
notice of the meeting shall be dealt with.
17
GENERAL MEETINGS--PLACE, CONVOCATION AND VOTING
ARTICLE 14
14.1 Timing of other General Meetings. Other than the annual General
Meeting, all General Meetings shall be held as often as the Board of
Directors shall deem necessary.
14.2 Convening by Board of Directors. With due observance of article 14.3,
all General Meetings shall be exclusively convened by the Board of
Directors.
14.3 Request by shareholders to convene. Shareholders representing in the
aggregate at least one tenth of the outstanding capital of the
company may request the Board of Directors to convene a General
Meeting, stating the subjects to be discussed. If the Board of
Directors has not convened a meeting within four weeks after the
request, the person(s) who requested the convening of the meeting
shall be authorized to petition the competent courts of the
Netherlands Antilles for authorization to convene such meeting, but
only in accordance with, and subject to, the provisions of Article 82
of the Commercial Code of the Netherlands Antilles. A copy of the
notice to convene such meeting shall be sent to the company at its
principal office, and shall be given to the Board of Directors.
14.4 Method of convocation and notification. All convocations of General
Meetings and all notifications to shareholders shall be made by
letter mailed to the addresses of shareholders appearing in the
Register.
14.5 Timing of convocation -record date. The convocation shall take place
no later than ten days prior to the date of the meeting, excluding
the date of the sending of the notice and the date of the meeting.
The Board of Directors may set a record date for any General Meeting
which shall be no less than seven days and no more than sixty days
prior to the date of the meeting, to verify the eligibility of
shareholders to vote, as well as to verify the ownership level of any
shareholders under the provisions of article 9 of these articles of
incorporation.
14.6 Agenda. The agenda for the meeting shall be specified in the
convocation of the meeting or it shall be stated that the
shareholders may take cognizance thereof at the principal office of
the company.
14.7 Person presiding. General meetings shall be presided over by the
Chairman or any other director, or, in their absence at such meeting,
by a person designated thereto by the meeting.
14.8 Majority votes - quorum. All resolutions of General Meetings shall be
taken by an absolute majority of votes, for which meeting a quorum
exists of at least one-third of the aggregate outstanding voting
shares in the capital of the company present or represented thereat,
except where otherwise provided in these articles of incorporation.
14.9 Proxies. Shareholders may be represented at the meeting by a proxy
authorized in writing, which shall include any message transmitted by
telegram or telefax or other means of written
18
communication.
14.10 Vote per share. At a General Meeting, one vote may be cast for each
class A share and one vote may be cast for each class B share.
Holders of class C shares shall not be entitled to vote, other than
in the case of, and subject to the provisions of, Article 93a of the
Commercial Code of the Netherlands Antilles, in which case one vote
may be cast for each class C share.
14.11 Interested votes; abstentions and invalidly cast votes. Valid votes
may also be cast for the shares of those who, other than as
shareholders of the company, would acquire any right or be discharged
from any obligation towards the company by the resolution to be
adopted. Abstentions and invalidly cast votes shall not be counted as
votes at a General Meeting.
14.12 Validity of certain resolutions as a result of unanimous actions.
Provided and as long as the entire issued share capital is
represented at any General Meeting, valid resolutions may be adopted,
even when the provisions of these articles of incorporation with
respect to convocation and specification of the agenda have not or
have only partially been observed, provided that such resolutions are
unanimously adopted.
14.13 Participations of directors. Each director shall in his or her
capacity be entitled to attend, address and advise the General
Meeting.
FINANCIAL YEAR
ARTICLE 15
Term of financial year. The financial year of the company shall run
from the first day of January of each year up to and including the
last day of December of such year.
ANNUAL ACCOUNTS; BOOKS AND RECORDS
ARTICLE 16
16.1 Annual accounts--timing and manner of submission. Within five (5)
months after the close of the company's financial year, the annual
accounts shall be submitted to the shareholders by the Board of
Directors. Each director shall sign the annual accounts; if the
signature of any director is lacking, then this shall be stated
therein together with the reason thereof.
16.2 Maintenance of books and records and annual accounts. The company
shall maintain its books and records, as well as the annual accounts
by which the profit is determined, on the basis of generally accepted
accounting principles in effect in the United States of America ("US
GAAP").
16.3 Annual accounts--adoption by annual General Meeting. The annual
accounts shall be adopted by the annual General Meeting.
19
DEFINITIONS/ GENERAL PROVISION ON PROFIT AND RESERVES;
PAYMENT OF MINIMUM QUARTERLY DISTRIBUTION
AND OTHER AMOUNTS TO SHAREHOLDERS
ARTICLE 17
17.1 Definitions. For the purpose of the payment by the company of
distributions on its shares by dividend or otherwise, the following
definitions are used. For purposes of this article 17, for accounting
purposes and otherwise, the term "company" shall be deemed to include
Statia Terminals Group N.V. and its subsidiaries on a consolidated
basis in accordance with U.S. GAAP.
(i) Acquisition: Acquisition manes any transaction in which the
company acquires (through an asset acquisition, merger, stock
acquisition or other form of investment) control over all or a
portion of the assets, properties or business of another person for
the purpose of increasing the operating capacity or revenues of the
company over the operating capacity or revenues of the company
existing immediately prior to such transaction.
(ii) Adjusted Operating Surplus: For any period, Adjusted Operating
Surplus means:
(1) the Operating Surplus generated during that period,
as adjusted to:
(a) decrease Operating Surplus by:
(1) any net increase in Working Capital Borrowings during that
period, and
(2) any net reduction in cash reserves for Operating
Expenditures during that period not relating to an Operating
Expenditure made during that period; and
(b) increase Operating Surplus by:
(1) any net decrease in Working Capital Borrowings during that
period, and
(2) any net increase in cash reserves for Operating Expenditures
during that period required by any debt instrument for the
repayment of principal, interest or premium.
Adjusted Operating Surplus does not include that portion of Operating
Surplus included in clause (a) (1) of the definition of Operating
Surplus.
(iii) Available Cash: For any calendar quarter prior to the
dissolution and liquidation of the company, Available Cash means:
(a) the sum of:
20
(1) all of the company's cash and cash equivalents
on hand at the end of that quarter, and
(2) all of the company's additional cash and cash
equivalents on hand on the date of determination
of Available Cash for that quarter resulting from
Working Capital Borrowings made after the end of
that quarter;
less
(b) the amount of any cash reserves necessary or appropriate in
the reasonable discretion of the Board of Directors to:
(1) provide for the proper conduct of the company's
business, including reserves for future capital
expenditures and for the company's anticipated
future credit needs, after that quarter,
(2) provide funds for Target Quarterly
Distributions and cumulative Common Share
Arrearages (as defined below) for any one or more
of the next four quarters, or
(3) comply with applicable law or any loan
agreement, security agreement, mortgage, debt
instrument or other agreement or obligation to
which the company is a party or by which the
company or any of its subsidiaries is bound or to
which any of their respective assets are subject.
With respect to Available Cash, the Board of Directors may not
establish cash reserves pursuant to (b) (2) above if the effect of
those reserves would be that the company is unable to distribute the
Target Quarterly Distribution on all common shares, plus any
cumulative Common Share Arrearage for that quarter; and disbursements
made by the company or cash reserves established, increased or
reduced after the end of that quarter but on or before the date of
determination of Available Cash for that quarter shall be deemed to
have been made, established, increased or reduced for purposes of
determining Available Cash within that quarter if the Board of
Directors so determines. However, Available Cash for the quarter in
which the dissolution and liquidation of the company occurs and any
quarter after that will equal zero.
(iv) Capital Improvements: Additions or improvements to the capital
assets owned by the company or the acquisition of existing, or the
construction of new, capital assets (including terminaling and
storage facilities and related assets), in each case made to increase
the operating capacity or revenue of the Company existing immediately
prior to such addition, improvement, acquisition or construction.
(v) Common Share Arrearages: Common Share Arrearages means the amount
by which the Target Quarterly Distribution in any quarter during the
Subordination Period exceeds the
21
distribution of Available Cash from Operating Surplus actually made
for that quarter on all common shares issued and outstanding on or
after the Initial Issue Date, cumulative for that quarter and all
prior quarters during the Subordination Period; provided that the
Common Share Arrearages will not accrue interest.
(vi) Interim Capital Transactions: The following transactions, if
they occur prior to the dissolution and liquidation of the company,
are Interim Capital Transactions:
(i) any of the company's borrowings, refinancings of
indebtedness and sales of debt securities (other than
Working Capital Borrowings and other than for items
purchased on open account in the ordinary course of
business);
(ii) sales by the company of equity interests (other than any
common shares issued and sold to any of the company's
underwriters of the initial public offering of the common
shares for the exercise of their over-allotment option at
the time of the company's initial public offering); and
(iii) sales or other voluntary or involuntary dispositions of the
company's assets, except for sales or other dispositions of:
(a) inventory in the ordinary course of business,
(b) accounts receivable and other assets in the ordinary
course of business, and
(c) assets as a part of normal retirements or
replacements.
(vii) Operating Expenditures: All expenditures, including but not
limited to, taxes, debt service payments and capital expenditures,
are Operating Expenditures, except the following:
(a) payments or prepayments of principal and premium on
indebtedness:
(1) required in connection with the sale or other
disposition of assets; or
(2) made in connection with the refinancing or
refunding of indebtedness with the proceeds from
new indebtedness or from the sale of equity
interests.
For the purpose hereof, at the election and in the reasonable
discretion of the Board of Directors, any payment of principal or
premium will be deemed to be refunded or refinanced by any
indebtedness incurred or to be incurred by the company within 180
days before or after that payment to the extent of the principal
amount of that indebtedness.
(b) (1) capital expenditures made for Acquisitions or for
Capital Improvements;
22
(2) payment of transaction expenses relating to Interim
Capital Transactions; or
(3) distribution(s) to shareholders, in the form of
dividend or otherwise.
For the purpose hereof, where capital expenditures are made partially
for Acquisitions or Capital Improvements and partially for other
purposes, the Board of Directors' allocation as made in good faith
between the amounts paid for each will be deemed conclusive.
(viii) Operating Surplus: For any period prior to the date of
dissolution and liquidation of the company on a cumulative basis,
Operating Surplus is:
(a) the sum of:
(1) US$7.5 million,
(2) any net positive working capital on hand as of the
close of business on the Initial Issue Date,
(3) all cash receipts for the period beginning on the
Initial Issue Date and ending on the last day of
that period, other than cash receipts from Interim
Capital Transactions, and
(4) all cash receipts after the end of that period but
on or before the date of determination of Operating
Surplus for that period resulting from Working
Capital Borrowings;
less
(b) the sum of:
(1) Operating Expenditures for the period beginning on
the Initial Issue Date and ending with the last day
of that period, and
(2) the amount of cash reserves that is necessary or
advisable to be kept in the reasonable discretion
of the Board of Directors to provide funds for
future Operating Expenditures.
For the purposes hereof, disbursements made or cash reserves
established, increased or reduced after the end of this period but on
or before the date of determination of Available Cash for this period
will be deemed to have been made, established, increased or reduced
for purposes of determining Operating Surplus within this period if
the Board of Directors so determines. However, Operating Surplus for
the quarter in which the company's dissolution and liquidation occurs
and any subsequent quarter will be equal to zero.
23
(ix) Unrecovered Initial Price: At any time, the Unrecovered Initial
Price is the initial public offering price per common share issued on
the Initial Issue Date (the "Initial Price"), after:
(1) subtracting all distributions on or after the Initial Issue
Date to shareholders, in the form of dividend or otherwise,
from Interim Capital Transactions;
(2) subtracting any distributions of cash on or after the
Initial Issue Date in connection with the company's
dissolution and liquidation; and
(3) adjusting this price as the Board of Directors determined is
needed to reflect any distribution, subdivision or
combination of the common and/or subordinated shares on or
after the Initial Issue Date.
(x) Working Capital Borrowings: Working Capital Borrowings are
borrowings made by the company exclusively for working capital
purposes and made pursuant to a credit facility or other arrangement
that requires all borrowings under that arrangement to be reduced to
a relatively small amount each year for an economically meaningful
period of time, all in the reasonable judgment of the Board of
Directors.
17.2 Definition and determination of profit. The profit of any financial
year, by which term is meant the net profit according to the adopted
annual accounts of the company for such year, shall be determined by
the annual General Meeting.
17.3 Authority - distribution dividend/reserves. The Board of Directors is
the corporate body authorized to distribute and/or reserve profit of
the company, as established, from time to time in the form of
dividends by the General Meeting. In addition, the Board of Directors
may set up, cancel, and distribute from time to time from one or more
reserves to, or for the benefit of, its shareholders. Distributions
shall be paid in cash unless the Board of Directors has authorized a
distribution in kind.
17.4 Authority - distribution interim-dividend. If and to the extent that
the Board of Directors has the reasonable expectation that sufficient
profit shall be made for the relevant financial year, it may declare
and pay from time to time during a calendar quarter one or more
interim distributions on any class of shares in the form of
interim-dividend. At the time of a declaration and payment of interim
dividends, the Board of Directors may, by a duly adopted resolution
thereto, qualify any amounts payable or paid, which cannot ultimately
be covered by the profit for the relevant financial year, as payment
out of freely distributable reserves, including, but not limited to,
capital surplus reserves, insofar as available.
17.5 Certain effects of losses. In the event that the profit and loss
account shows a loss for any given year, which loss cannot be covered
by the reserves or compensated in another manner, no profit can be
distributed in any subsequent year, until such loss has been
recovered or otherwise offset by reserves.
24
17.6 Payment of Available Cash/Target Quarterly Distribution.
17.6.1 General. The company shall pay, from legally available funds
therefore, on a quarterly basis, all of its Available Cash, in the
manner as set out in this article 17.6. For the purpose of this
article 17.6, whenever reference is made to a distribution of
Available Cash, out of Operating Surplus or Interim Capital
Transactions, such distributions shall be, with due observance of the
provisions of article 17.6.2 through 17.6.5, made by or on behalf of
the company in cash as a distribution from profit, as a dividend or
interim-dividend, as the case may be, or from freely distributable
reserves, including capital surplus reserves, to and for the benefit
of its shareholders.
17.6.2 Target Quarterly Distribution - common shares. The company shall, out
of Available Cash, pay an amount equal to US$0.45 per common share
per calendar quarter (hereinafter referred to as the "Target
Quarterly Distribution") or US$1.80 per common share on an annual
basis, plus any Common Share Arrearages from any prior quarters,
prior to any distributions on the subordinated shares in the manner
set forth below in this article.
17.6.3 Target Quarterly Distribution - subordinated shares. Only after the
common shares have received the Target Quarterly Distribution plus
any Common Share Arrearages thereon, the company shall, out of
Available Cash, pay on each subordinated share an amount equal to the
Target Quarterly Distribution per calendar quarter, provided however,
that no subordinated share shall be entitled to any arrearages.
17.6.4 Sources of funds. For the purpose of a distribution by the company to
pay the Target Quarterly Distribution and such other amounts as set
out in this article to its shareholders, the company shall use as
source of funds for payment of Available Cash funds from Operating
Surplus and/or from Interim Capital Transactions, with due observance
of the limitation set out in this article and article 17.6.8 in
particular. In this respect, for accounting purposes or otherwise,
all Available Cash paid as a distribution to shareholders from any
source will be treated as a distribution from Operating Surplus until
the sum of all Available Cash paid as a distribution since the
Initial Issue Date equals the Operating Surplus as of the end of the
quarter prior to that distribution. Any Available Cash in excess of
that amount (regardless of its source) will be deemed to be from
Interim Capital Transactions and paid accordingly. If Available Cash
from Interim Capital Transactions is paid as a distribution for each
common share in an aggregate amount per common share equal to the
Initial Price of that common share, plus any Common Share Arrearages,
the distinction between Operating Surplus and Interim Capital
Transactions will cease, and all distributions of Available Cash will
be treated as if they were made from Operating Surplus.
17.6.5 Dividend and other distributions. With due observance of the
foregoing article 17.6.1 through 17.6.4, the company shall pay on
each common share, each subordinated share and each incentive share
the following amounts out of Available Cash:
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17.6.5.1 Distributions from Operating Surplus during Subordination Period.
Distributions of Available Cash from Operating Surplus, if any, for
any quarter during the Subordination Period will be made in the
following manner:
(a) First, 100% to the common shares, pro rata, until each
outstanding common share has been paid an amount equal to the Target
Quarterly Distribution for that quarter;
(b) Second, 100% to the common shares, pro rata, until each
outstanding common share has been paid an amount equal to any Common
Share Arrearages accrued and unpaid for any prior quarters during the
Subordination Period;
(c) Third, 100% to the subordinated shares, pro rata, until each
outstanding subordinated share has been paid an amount equal to the
Target Quarterly Distribution for that quarter; and
(d) Thereafter, any Available Cash from Operating Surplus for that
quarter will be paid among the holders of common shares and
subordinated shares and the holders of incentive shares in the
following manner:
(1) First, 85% to all common and subordinated shares, pro rata, and
15% to the incentive shares, pro rata, until the common shares and
subordinated shares have received (including the Target Quarterly
Distribution) a total of $0.495 for that quarter to each outstanding
common share and subordinated share (the "first additional
distribution");
(2) Second, 75% to all common shares and subordinated shares, pro
rata, and 25% to the incentive shares, until the common and
subordinated shares have received (including the Target Quarterly
Distribution) a total of $0.675 for that quarter to each outstanding
common share and subordinated share (the "second additional
distribution");
(3) Thereafter, 50% to all common shares and subordinated shares, pro
rata, and 50% to the incentive shares, pro rata.
17.6.5.2 Distribution from Operating Surplus after Subordination Period.
Distributions paid out Available Cash from Operating Surplus, if any,
for any quarter after the Subordination Period will be made in the
following manner:
(a) First, 100% to all common shares, pro rata, until each share has
been paid an amount equal to the Target Quarterly Distribution for
that quarter; and
(b) Thereafter, in the manner set forth in article 17.6.5.1, section
(d) (1) through (3) set forth above, with due observance of the fact
that no subordinated shares shall be outstanding after the
Subordination Period.
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17.6.5.3 Distributions from Interim Capital Transactions. Distributions of
Available Cash from Interim Capital Transactions for any quarter
during or after the Subordination Period will be made in the
following manner:
(a) First, 100% to the common shares and subordinated shares, if any,
pro rata until each outstanding common share has been paid Available
Cash from Interim Capital Transactions in an aggregate amount per
common share equal to the Initial Price;
(b) Second, 100% to the common shares until each outstanding common
share has been paid Available Cash from Interim Capital Transactions
in an aggregate amount equal to any unpaid Common Share Arrearages;
and
(c) Thereafter, all distributions of Available Cash from Interim
Capital Transactions will be made as if they were from Operating
Surplus, in the manner of article 17.6.5.1 and 17.6.5.2, as
applicable.
17.6.6.1 Adjustment of Target Quarterly Distribution - additional distribution
levels. Upon a distribution of Available Cash from Interim Capital
Transactions, the Target Quarterly Distribution and the additional
distribution levels as referred to in article 17.6.2 and 17.6.5.1 (d)
(1) through (3), respectively, will be adjusted by the Board of
Directors downward by multiplying each such amount by a fraction
equal to:
(1) the Unrecovered Initial Price;
divided by
(2) the Initial Price, or the Unrecovered Initial Price, as the case
may be, of the common shares immediately prior to that distribution
of Available Cash from Interim Capital Transactions.
17.6.6.2 Additional adjustments. In addition to the provisions of article
17.6.6.1 above, in the event of any combination or subdivision of
common shares (whether effected by a distribution by way of dividend
or otherwise payable in common shares or otherwise) but not by reason
of the issuance of additional common shares for cash or property, the
following amounts will be proportionately adjusted upward or
downward, as appropriate, by the Board of Directors:
(a) the Target Quarterly Distribution;
(b) the additional distribution levels;
(c) the Unrecovered Initial Price;
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(d) the number of additional common shares issuable during the
Subordination Period without a shareholder vote pursuant to the
provision of article 4.3 of these articles of incorporation;
(e) the number of common shares outstanding upon conversion of
subordinated shares; and
(f) other amounts calculated on a per common share and/or
subordinated share basis.
17.6.7 Payment of Available Cash; holders of record entitled thereto. Each
distribution from Available Cash shall be made by the company to the
holders of record as they appear in the Register on such record date,
approximately forty-five days after the end of each calendar quarter,
commencing with the calendar quarter ending June 30, 1999, as shall
be fixed by the Board of Directors from time to time. Any
distribution of the Target Quarterly Distribution or of amounts of
the additional distribution levels as referred to in article 17.6.2
and 17.6.5.1, respectively, for the period from the Initial Issue
Date through June 30, 1999 will be adjusted downward by the Board of
Directors based on the actual length of such period.
17.6.8 Amount of distributable Available Cash as dividends or otherwise -
indenture limitation - senior notes indenture. If on any distribution
date, being a date as set by the Board of Directors to pay the Target
Quarterly Distribution out of Available Cash and/or such or other
amounts on the shares as set out in this article, during or after the
Subordinated Period, an Indenture Limitation (as defined below) is in
effect, the Board of Directors shall determine the amount, if any, of
dividends or other distributions out of Available Cash on the shares
that the company shall be permitted to pay in cash to its
shareholders consistent with the Indenture Limitation. For the
purpose hereof, an "Indenture Limitation" shall be deemed to be in
effect on any date to the extent that on such date any section of the
Indenture shall prohibit or make impossible the payment of cash
dividends by the company's subsidiaries to the company on such date.
The "Indenture" means (i) that certain indenture dated as of November
27, 1996, as amended, pursuant to which the 113/4Mortgage Notes Due
2003 have been issued by Statia Terminals International N.V., a
Netherlands Antilles company, and Statia Terminals Canada,
Incorporated, a Nova Scotia, Canada company and as subsidiaries of
the company, as in effect from time to time and (ii) any successor
indenture pursuant to which debt obligations have been issued
refinancing the debt obligation referred to in clause (i) above.
17.6.9 Deferral of payment on subordinated shares. The company shall with
respect to any payment of Available Cash on the subordinated shares,
defer the payment of the first US$ 6.8 million (being the amount
equal to the aggregate Target Quarterly Distribution on the
subordinated shares for one year) in the form of cash distributions,
by dividend or otherwise, until the end of the Deferral Period (as
defined below), but the same will be deemed paid for purposes of
determining Available Cash, Operating Surplus, Adjusted Operating
Surplus, additional distribution levels, early conversion rights and
the expiration of the Subordinated Period. For the purpose hereof,
the Deferral Period shall mean the period from the Initial
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Issue Date until the tests set forth below have been met for any
quarter ending on or after June 30, 2001 for which:
1) distributions (by dividend or otherwise) of Available Cash
from Operating Surplus on the common shares and subordinated
shares (including deferred distributions) for each of the
two consecutive non-overlapping four-quarter periods
immediately preceding the date of determination that equaled
or exceeded the sum of the Target Quarterly Distribution on
all of the outstanding common shares and subordinated shares
during such periods;
2) the Adjusted Operating Surplus generated during each of the
two consecutive non-overlapping four-quarter periods
immediately preceding the date of determination that equaled
or exceeded the sum of the Target Quarterly Distribution on
all of the common and subordinated shares that were
outstanding on a fully diluted basis during those periods;
and
3) there are no outstanding Common Share Arrearages.
17.6.10 Payment after deferral period. After the Deferral Period, the company
will pay on the subordinated shares until the deferred distributions
have been paid in full all Available Cash from Operating Surplus
remaining after all Common Share Arrearages and the Target Quarterly
Distributions have been paid on all common shares and subordinated
shares prior to any further distribution under the provisions of this
article.
AMENDMENT OF THE ARTICLES OF INCORPORATION; DISSOLUTION
AND LIQUIDATION OF THE COMPANY/DISTRIBUTION OF LIQUIDATION
PROCEEDS/PROHIBITION AGAINST CERTAIN ACTIONS ADVERSE TO
CERTAIN CLASSES OF SHARES
ARTICLE 18
18.1 Resolutions to amend the articles of incorporation, to dissolve the
company or to sell its assets. Resolutions to amend the articles of
incorporation, to dissolve the company or to sell all or
substantially all of the assets of the company, may only be taken in
a General Meeting by at least a sixty-six and two thirds percent
majority of votes cast at which meeting at least one-half of the
outstanding voting capital is represented.
18.2 Second meeting in certain circumstances. If the required capital is
not represented at the meeting referred to in article 18.1, a second
meeting shall be convened, to be held within one month after the
first meeting, at which (second) meeting valid resolutions may then
be taken with an absolute majority of votes cast, irrespective of the
issued and outstanding voting capital represented.
18.3 Prohibition against certain actions adverse to incentive shares. In
accordance with the provisions of Article 93a of the Commercial Code
of the Netherlands Antilles, the General
29
Meeting shall not, without the vote of the absolute majority of
holders of incentive shares then outstanding, amend, alter or repeal
any of the provisions of these articles of incorporation so as to
affect adversely the rights or powers of such incentive shares.
18.4 Procedures for liquidation. In the event of a dissolution of the
company, the liquidation shall take place under such provisions as
the General Meeting shall determine with due observance of (i) the
remaining paragraphs of this article 18, and (ii) the provisions of
applicable law on dissolution and liquidation of Netherlands Antilles
companies.
18.5 Allocation of profits. If the profit and loss account covering the
financial year closing per the date of the dissolution of the company
shows a profit, this profit shall be allocated in conformity with the
provisions of article 17 hereof.
18.6 Liquidation Event--definition and allocation to shares. In case of
any dissolution, liquidation or winding up of the affairs of the
company, whether voluntary or otherwise (a "Liquidation Event"),
after satisfaction of all the company's creditors in the order of
priority as set out by or under applicable law, proceeds of such
liquidation will be distributed to the holders of common and
subordinated shares and the holders of incentive shares in accordance
with their respective priorities as described below, provided
however, that the holders of common shares shall be entitled to
receive, out of the assets of the company available for distribution
to its shareholders, in cash, (i) their Unrecovered Initial Price,
(ii) the amount of the Target Quarterly Distribution due on each such
share, plus (iii) any arrearages, before any distribution shall be
made to the holders of any other class of shares, as further
described below. If the company is dissolved and liquidated before
the end of the Subordination Period, any distribution will be made as
follows:
(a) First, 100% to the common shares, pro rata, until each common
share receives an amount equal to the sum of:
(1) the Unrecovered Initial Price of such common share;
(2) the amount of the Target Quarterly Distribution for the
quarter(s) during which the company's liquidation occurs;
and
(3) any Unpaid Common Share Arrearages on that common share;
(b) Second, 100% to the subordinated shares, pro rata, until each
subordinated share receives an amount equal to the sum of:
(1) the Unrecovered Initial Price of that subordinated share;
(2) the amount of the Target Quarterly Distribution for the
quarter(s) during which the company's liquidation occurs;
and
30
(3) any unpaid deferred distributions on that subordinated share;
(c) Third, 85% to the common shares and subordinated shares, pro
rata, and 15% to the incentive shares, pro rata, until there has been
allocated under this paragraph (c) an amount per common share and
subordinated share equal to:
(1) the cumulative excess of the first additional distribution
over the Target Quarterly Distribution for all common shares
and subordinated shares for each quarter of the company's
existence as from the Initial Issue Date,
less
(2) the cumulative amount per share of any prior distributions
(by dividend or otherwise) of Available Cash from Operating
Surplus in excess of the Target Quarterly Distribution that
the company paid 85% to the common shares and subordinated
shares, pro rata, and 15% to the incentive shares, pro rata,
for each quarter of the company's existence as from the
Initial Issue Date;
(d) Fourth, 75% to the common shares and subordinated shares, pro
rata, and 25% to the incentive shares, pro rata, until there has been
allocated under this paragraph (d) an amount per common share and
subordinated share equal to:
(1) the cumulative excess of the second additional distribution
over the first additional distribution for each quarter of
the company's existence as from the Initial Issue Date,
less
(2) the cumulative amount per share of any distributions of
Available Cash from Operating Surplus in excess of the first
target distribution that the company paid 75% to the common
shares and subordinated shares, pro rata, and 15% to the
incentive shares, pro rata, for each quarter of the
company's existence as from the Initial Issue Date; and
(e) Thereafter, 50% to all common shares and subordinated shares, pro
rata, and 50% to the incentive shares, pro rata.
18.7 If the dissolution and liquidation of the company occurs after the
Subordination Period so as a result of which only common shares and
incentive shares, if any, are outstanding, all of paragraph (b) above
will no longer be applicable, and any reference to distribution on
subordinated shares need no longer be followed.
18.8 Liquidation event--maintenance of books and records. During a period
of ten years after the end of the liquidation relating to any
Liquidation Event, the books and records of the
31
company shall remain in the custody of the person designated for that
purpose by the General Meeting.
SEPARATE MEETINGS OF CLASSES OF SHARES/
ACTION BY WRITTEN CONSENT
ARTICLE 19
19.1 General. Separate meetings of the holders of any class of shares
shall be held and may be convened by the Board of Directors at the
request of the holders of the respective classes of shares, being the
holders of common shares, subordinated shares or incentive shares, by
the holders of ten percent of any shares of such class issued and
outstanding (each a "class meeting").
19.2 Convocation. A convocation of such class meeting shall be given by
means of a written notice mailed not fewer than ten days and no more
than thirty days prior to the date of the meeting to the address of
each holder of a class of shares, appearing in the Register.
19.3 Agenda. The notice shall contain the agenda of the meeting or shall
state that it may be examined by the holders of such class of shares
for inspection at the registered office of the company.
19.4 Separate meeting as determined by board of directors. Separate
meetings may also be held as often as the Board of Directors deems
necessary.
19.5 Resolutions outside meetings by written consent for a class of shares
only; records. Resolutions of holders of a class of shares may also
be adopted by written consent (without recourse to a separate meeting
of holders of a class as provided herein), provided (i) all holders
of shares of such class have had an opportunity to express themselves
in connection with such action by written consent and (ii) such
expression is made in writing. The Board of Directors shall keep a
record of the resolutions thus made by written consent.
19.6 Application of provisions of articles of incorporation and laws. All
the provisions of these articles of incorporation and the laws of the
Netherlands Antilles as to General Meetings, in as far as possible,
apply to separate meetings, except as otherwise specifically provided
in this article 19.
Final declaration
At the time of the execution of the notarial deed of amendment, containing the
aforementioned amendment to the articles of incorporation, the following
actions shall, among others, take place and shall be deemed to take place
simultaneously: (a) the company will issue at least 7,600,000 Common Shares
and with the proceeds therefrom redeem all outstanding shares of Preferred
Stock, (b) the company will reclassify the 47,119 shares of its outstanding
Common Stock as 471,190 subordinated shares, (c) the company will issue an
additional 3,328,810 subordinated shares plus
32
38,000 incentive rights, and (d) each of Messrs. Jonathan R. Spicehandler, and
Ernest Voges shall be classified as a Class A director, each of Messrs. Justin
B. Wender, Francis Jungers, and James L. Holloway III shall be classified as a
Class B director and each of Messrs. John K. Castle, James G. Cameron and
David B. Pittaway shall be classified as a Class C director.