As Filed with the Securities and Exchange Commission on June 4, 2002
Registration No. 333-88580
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
Amendment No. 1
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Ingersoll-Rand Company Limited Bermuda N/A
Ingersoll-Rand Company New Jersey 13-5156640
(Exact Name of Registrant (State or Other Jurisdiction of
as Specified in its Charter) Incorporation or Organization) (I.R.S. Employer Identification Number)
Ingersoll-Rand Company Limited
Clarendon House
2 Church Street
Hamilton, HM 11 Bermuda
(441) 295-2838 Patricia Nachtigal, Esq.
Senior Vice President and General Counsel,
Ingersoll-Rand Company Ingersoll-Rand Company
200 Chestnut Ridge Road 200 Chestnut Ridge Road
Woodcliff Lake, New Jersey 07677 Woodcliff Lake, New Jersey 07677
(201) 573-0123 (201) 573-0123
(Address, Including Zip Code, and Telephone Number, (Name, Address, Including Zip Code, and Telephone
Including Area Code, of Registrant's Principal Executive Offices) Number, Including Area Code, of Agent for Service)
--------------------------------------
Copy to:
John B. Tehan, Esq.
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
(212) 455-2000
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Approximate date of commencement of proposed sale of the securities to the
public: From time to time after this registration statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. / /
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities being offered only in connection with dividend or
interest reinvestment plans, please check the following box. /x/
If this form is filed to register additional securities for an offering
pursuant to Rule 426(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If the delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. / /
The Registrants hereby amend this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrants
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933, as amended, or until the
Registration Statement shall become effective on such date as the Commission,
acting pursuant to said Section 8(a), may determine.
===============================================================================
The information in this prospectus is not complete and may be changed. We
may not sell these securities until the Registration Statement filed with the
Securities and Exchange Commission is effective. This Prospectus is not an
offer to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED MAY 17, 2002
PROSPECTUS
[LOGO]
$1,800,000,000
Ingersoll-Rand Company Limited
Debt Securities
Preference Shares
Depositary Shares
Class A Common Shares
Share Purchase Contracts
Share Purchase Units
Warrants
--------------------
Ingersoll-Rand Company
Guarantees of Debt Securities
--------------------
We will provide the specific terms of these securities in supplements to
this prospectus. We can only use this prospectus to offer and sell any
specific security by also including a prospectus supplement for that security.
You should read this prospectus and the prospectus supplements carefully
before you invest.
See "Risk Factors Relating to the Reorganization" beginning on page 6 to
read about risks relating to our corporate reorganization as a Bermuda
company, which was completed on December 31, 2001, that you should consider
before you invest in any of our securities.
These securities have not been approved or disapproved by the SEC or any
state securities commission, nor have these organizations determined that this
prospectus is accurate or complete. Any representation to the contrary is a
criminal offense.
, 2002
Table of Contents
Available Information.........................................................3
Incorporation of Certain Documents by Reference...............................3
About Us......................................................................4
About Ingersoll-Rand Company..................................................5
Risk Factors Relating to the Reorganization...................................6
Ratio of Earnings to Fixed Charges............................................9
Use of Proceeds...............................................................9
Description of the Debt Securities...........................................10
Description of Securities Warrants...........................................20
Description of Authorized Share Capital......................................21
Description of Depositary Shares.............................................31
Description of Share Purchase Contracts and Share Purchase Units.............34
Certain Tax Considerations...................................................35
Plan of Distribution.........................................................44
Legal Matters................................................................44
Experts......................................................................44
Cautionary Statement Regarding Forward-Looking Statements....................45
Service of Process and Enforcement of Liabilities............................46
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We have not authorized anyone to tell you anything about us or the
securities covered by this prospectus except what is included or incorporated
in this prospectus or any accompanying prospectus supplement. Do not assume
that there has been no change in our affairs since the date of this
prospectus. Finally, even though you may have this prospectus or any
accompanying prospectus supplement, we are not making any offer or encouraging
your interest in any securities if it is not legal and proper for us to do so.
As used in this prospectus and any prospectus supplement, "we", "our"
and "us" generally means Ingersoll-Rand Company Limited, together with its
consolidated subsidiaries unless the context otherwise requires. However, in
the descriptions of the securities offered in this prospectus, "we", "our" and
"us" means Ingersoll-Rand Company Limited and not any of its subsidiaries.
2
Available Information
This prospectus is part of a registration statement on Form S-3
relating to the securities covered by this prospectus. The prospectus does not
include all of the information in the registration statement. You should refer
to the registration statement and its exhibits for further information about
us and the securities.
We, Ingersoll-Rand Company Limited, are, and prior to our corporate
reorganization, Ingersoll-Rand Company, a New Jersey corporation ("IR-New
Jersey"), was, subject to the Securities Exchange Act of 1934, and we will,
and prior to the Reorganization, IR-New Jersey did, file reports and other
information with the SEC as required by the Securities Exchange Act of 1934.
You can inspect and copy our reports and filings at prescribed rates by
contacting the SEC's public reference room at Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330
for further information on the public reference room. You can also get copies
of these materials from the SEC's web site (http://www.sec.gov), or view them
at the offices of the New York Stock Exchange, 20 Broad Street, New York, NY
10005.
Incorporation of Certain Documents by Reference
The following documents filed by us are incorporated by reference in
this prospectus:
o Annual Report on Form 10-K for the fiscal year ended December 31,
2001; and
o Quarterly Report on Form 10-Q for the quarterly period ended
March 31, 2002.
All future filings that we make under Sections 13(a), 13(c), 14 or 15(d) of
the Exchange Act until we sell all of the securities we are offering are
deemed incorporated into and part of this prospectus once filed. Any statement
in this prospectus, in any prospectus supplement, or in any document
incorporated by reference that is different from any statement contained in
any later-filed document should be regarded as changed by that later
statement. Once so changed, the earlier statement is no longer considered part
of this prospectus or any prospectus supplement.
If you ask us by phone or in writing, we will give you a copy of any
of the materials incorporated (other than exhibits, unless the exhibits are
themselves specifically incorporated). Please make your request to R.G.
Heller, Secretary, Ingersoll-Rand Company, P.O. Box 8738, Woodcliff Lake, New
Jersey 07677, telephone (201) 573-0123.
3
About Us
General
We are a leading provider of security and safety, climate control,
industrial solutions and infrastructure products. In each of these markets, we
offer a diverse product portfolio that includes well-recognized industrial and
commercial brands.
SECURITY AND SAFETY--We market architectural hardware and
access-control products and services for residential, commercial and
institutional buildings. Led by the familiar Schlage brand, products include
locks and locksets, door closers, exit devices, steel doors and frames,
power-operated doors, architectural columns and biometric and electronic
access control technologies.
CLIMATE CONTROL--We offer a wide range of temperature-control
products for protecting food and other perishables. Products include: Thermo
King transport temperature control units for truck trailers, small trucks,
seagoing containers and air conditioning for buses; and Hussmann refrigerated
display cases for supermarkets, delicatessens and other commercial and
institutional refrigeration applications.
INDUSTRIAL SOLUTIONS--We have a diverse group of businesses offering
products and services to enhance industrial efficiency. These products and
services include: Ingersoll-Rand air compressors and components for
compressed-air systems, tools and material handling equipment, and fluid
handling products; Torrington bearings, components and motion-control
technologies; and Dresser-Rand turbo compressors, reciprocating compressors
and steam turbines.
INFRASTRUCTURE--We are a major supplier of products and services for
all types of construction projects and industrial and commercial development,
including Bobcat compact equipment, Club Car golf cars and utility vehicles,
and Ingersoll-Rand road pavers, compactors, portable-power products and
drilling equipment.
We have approximately 130 manufacturing locations, roughly 40% of
which are outside North America. Approximately 37% of our revenues are derived
from outside the United States and due to our diverse businesses, no end
market represents more than 15% of our revenues.
Over the past five years we have pursued an aggressive acquisition
and divestiture program focused on: building and maintaining leadership in our
four major global markets; enhancing revenue growth and profitability; and
reducing the effect of economic cycles on our financial performance.
IR-New Jersey, our predecessor issuer, was organized in 1905 under
the laws of the State of New Jersey as a consolidation of Ingersoll-Sergeant
Drill Company and the Rand Drill Company, whose businesses were established in
the early 1870s. Over the years, additional products which have been developed
internally or obtained through acquisition have supplemented the original
business. On December 31, 2001, IR-New Jersey completed a corporate
reorganization pursuant to which it became an indirect, wholly owned
subsidiary of us, a Bermuda company. See "--Reorganization as a Bermuda
Company."
Our principal executive office is located at Clarendon House, 2
Church Street, Hamilton, HM11 Bermuda, telephone (441) 295-2838.
Reorganization as a Bermuda Company
On December 31, 2001, IR-New Jersey was effectively reorganized as
Ingersoll-Rand Company Limited, a Bermuda company (the "Reorganization"). We
believe that our Reorganization as a Bermuda company will enable us to realize
a variety of potential, financial and strategic benefits, including to:
o help enhance business growth;
4
o create a more favorable corporate structure for expansion of
our current business;
o improve expected cash flow for use in investing in the
development of higher-growth product lines and higher-growth
businesses;
o improve expected cash flow for use in reducing the amount of
our debt;
o reduce our worldwide effective tax rate;
o enable us to implement our business strategy more effectively;
and
o expand our investor base as our shares may become more
attractive to non-U.S. investors.
To consummate the Reorganization, IR Merger Corporation, a New Jersey
corporation, merged into IR-New Jersey, with IR-New Jersey as the surviving
company. Upon the merger, IR-New Jersey became a wholly owned, indirect
subsidiary of ours, and the outstanding shares of IR-New Jersey common stock
were automatically cancelled in exchange for the issue of our Class A common
shares. In addition, as part of the Reorganization, IR-New Jersey and certain
of its subsidiaries transferred shares of certain existing subsidiaries and
issued certain debt to us in exchange for 135,250,003 shares of our Class B
common shares, such amount of shares being subject to adjustment based on the
results of final valuation of the transferred subsidiaries. The number of
Class B common shares issued had an aggregate value equal to the fair market
value of the shares of the subsidiaries transferred and the amount of debt
issued to us based on the market value of IR-New Jersey common stock at the
effective time of the merger. Prior to the Reorganization, neither we nor
IR-Merger Corporation had any significant assets or capitalization or engaged
in any business or other activities other than in connection with formation
and the merger and related reorganization transactions.
We and our subsidiaries, including IR-New Jersey, conduct the same
business that IR-New Jersey and its subsidiaries conducted prior to the
Reorganization. All of IR-New Jersey's existing debt remained at the IR-New
Jersey level. Upon consummation of the reorganization on December 31, 2001, on
an unconsolidated basis and excluding debt to affiliates, IR-New Jersey had
$3.1 billion of indebtedness, of which we guarantee $2.8 billion.
The Reorganization will expose us and you to some risks. For a
discussion of risk factors associated with the Reorganization that you should
consider before investing in any of our securities, please see the discussion
under "Risk Factors Relating to the Reorganization". In addition, we cannot
assure you that the anticipated benefits of the Reorganization will be
realized.
About Ingersoll-Rand Company
Following the Reorganization, IR-New Jersey became our primary U.S.
operating subsidiary, and, as such, conducts operations in the same
businesses, primarily in the United States, as those described above under
"About Us".
The principal executive offices of IR-New Jersey are located at 200
Chestnut Ridge Road, Woodcliff Lake, New Jersey 07677, telephone (201)
573-0123.
5
Risk Factors Relating to the Reorganization
The risk factors described in this section relate only to the
Reorganization and may not be the only risk factors that you should consider
before investing in our securities. For each offering of securities made using
this prospectus, we will include additional risk factors, if appropriate, in
the prospectus supplement relating to that issuance of securities.
The Reorganization and related transfers of assets could result in a taxable
gain.
In connection with the Reorganization, IR-New Jersey and certain of
its subsidiaries transferred shares of certain of existing subsidiaries, which
we refer to as the transferred shares, and issued certain debt to us in
exchange for which we issued our Class B common shares to IR-New Jersey and
those subsidiaries. There is a possibility of U.S. withholding tax if the
Internal Revenue Service successfully disputes the value of the transferred
shares. Therefore, while we believe that IR-New Jersey (and we) will not incur
significant U.S. federal income or withholding taxes as a result of the
transfer of the transferred shares, our projections will not be binding on the
Internal Revenue Service. We cannot assure you that our anticipated tax costs
with respect to the transferred shares will be borne out, that the Internal
Revenue Service will not contest our determination, or that the Internal
Revenue Service will not succeed in any such contest.
Certain of our shareholders may be subject to additional tax if we or any of
our non-U.S. subsidiaries are considered a "controlled foreign corporation" or
"CFC" under current U.S. tax laws.
A non-U.S. corporation (a "foreign corporation"), such as us, will
constitute a "controlled foreign corporation" or "CFC" for U.S. federal income
tax purposes if U.S. shareholders owning (directly, indirectly, or
constructively) 10% or more of the foreign corporation's total combined voting
power collectively own (directly, indirectly, or constructively) more than 50%
of the total combined voting power or total value of the foreign corporation's
shares. Following the merger and as of December 31, 2001, IR-New Jersey,
through its ownership of the non-voting Class B common shares, owned
approximately 45% of the total value of our shares. As a consequence, any
Class A common shareholder who is considered to own 10% of the voting power in
us could cause our foreign subsidiaries or (if the Internal Revenue Service
successfully takes the position that the Class B common shares held by IR-New
Jersey in us are voting shares) us, ourselves, to be treated as a CFC.
If we or any of our foreign subsidiaries are treated as a CFC, this
status should have no adverse effect on any of our shareholders who do not own
(directly, indirectly, or constructively) 10% or more of the total combined
voting power of all classes of our shares or the shares of any of our foreign
subsidiaries. If, however, we or any of our foreign subsidiaries are treated
as a CFC for an uninterrupted period of 30 days or more during any taxable
year, any U.S. shareholder who owns (directly, indirectly, or constructively)
10% or more of the total combined voting power of all classes of our shares or
all classes of the shares of the subsidiary on any day during the taxable year
and who directly or indirectly owns any shares in the corporation on the last
day of such year in which it is a CFC will have to include in its gross income
for U.S. federal income tax purposes its pro rata share of the corporation's
"subpart F income" relating to the period during which the corporation is a
CFC.
In addition, the gain on the sale of our shares, if treated as a CFC,
realized by such a shareholder would be treated as ordinary income to the
extent of the shareholder's proportionate share of our and our CFC
subsidiaries' undistributed earnings and profits accumulated during the
shareholder's holding period of the shares while we are a CFC.
If the U.S. shareholder is a corporation, however, it may be eligible
to credit against its U.S. tax liability with respect to these potential
inclusions foreign taxes paid on the earnings and profits associated with the
included income. A disposition of shares by a U.S. shareholder may result in
termination of our CFC status or the CFC status of our foreign subsidiaries.
See "Certain Tax Considerations--United States Federal Income Tax
Considerations--Common Shares, Preference Shares and Depositary
Shares--Controlled Foreign Corporations".
6
The Internal Revenue Service and non-U.S. taxing authorities may not agree
with our tax treatment of various items relating to the Reorganization.
We believe that the Reorganization will help enhance our business
growth and cash flow and reduce our worldwide effective tax rate. However, we
cannot give any assurance as to the amount of taxes we will pay as a result of
or after the Reorganization. The amount of taxes we will pay will depend in
part on our treatment by the taxing authorities in the jurisdictions in which
we operate.
We may become subject to U.S. corporate income tax, which would reduce our net
income.
Prior to the Reorganization, IR-New Jersey was subject to U.S.
corporate income tax on its worldwide income. After the Reorganization, the
earnings of IR-New Jersey and its U.S. subsidiaries continue to be subject to
U.S. corporate income tax. We believe that after the Reorganization our
non-U.S. operations will generally not be subject to U.S. tax other than
withholding taxes. However, if the Internal Revenue Service successfully
contends that we or any of our non-U.S. affiliates are engaged in a trade or
business in the U.S., we or that non-U.S. affiliate would, subject to possible
income tax treaty exemptions, be required to pay U.S. corporate income tax
and/or branch profits tax on income that is effectively connected with such
trade or business.
Tax law changes could adversely affect us and our subsidiaries.
Changes in tax laws, treaties or regulations or the interpretation or
enforcement thereof could adversely affect the tax consequences of the
Reorganization to us and our subsidiaries. In this connection, bills have been
introduced in the United States Congress which, if enacted, could
substantially reduce or eliminate the tax benefits resulting from the
Reorganization.
The Treasury Department has recently announced that it intends to
study transactions similar to the Reorganization. Scrutiny of such
transactions may lead to changes in the tax laws, tax treaties or tax
regulations, with prospective or retroactive effect, which could substantially
reduce or eliminate the tax benefits resulting from the Reorganization. In
addition, if the Internal Revenue Service or other taxing authorities do not
agree with our assessment of the effects of such laws, treaties and
regulations, this could substantially reduce or eliminate the tax benefits
resulting from the Reorganization.
Anti-takeover provisions in our bye-laws and our shareholder rights plan
mirror certain anti-takeover provisions that were in effect with respect to
IR-New Jersey prior to the Reorganization.
Provisions in our bye-laws and shareholder rights plan, which mirror
certain provisions that were in IR-New Jersey's certificate of incorporation,
by-laws and shareholder rights plan and certain provisions of the New Jersey
Business Corporation Act (the "NJBCA"), could discourage unsolicited takeover
bids from third parties or the removal of incumbent management. As a result,
it may be less likely that you will receive premium prices for your shares in
an unsolicited takeover by another party. These provisions include:
o a staggered board of directors;
o the possible dilution of a potential acquiror's interest in us
as a result of the operation of our shareholder rights plan;
and
o a requirement that 80% of all shareholders approve a business
combination with any interested shareholder (generally, a 10%
or greater shareholder) if a majority of our board of directors
has not previously approved the transaction.
Similar to the authority of IR-New Jersey's board of directors prior
to the Reorganization, our board of directors also may issue preference shares
and determine their rights and qualifications. The issuance of preference
shares may delay, defer or prevent a merger (referred to under Bermuda law as
an "amalgamation"), tender offer or proxy contest involving us. This may cause
the market price of our Class A common shares to significantly decrease. See
"Description of Authorized Share Capital--Preference Shares", "--Voting
Requirements--Greater Voting Requirements", "--Directors" and "--Shareholder
Rights Plan".
7
The enforcement of judgments in shareholder suits against us may be more
difficult than it would have been to enforce shareholder suits against IR-New
Jersey.
We are a Bermuda company. We have been advised by our Bermuda
counsel, Conyers Dill & Pearman, that a judgment for the payment of money
rendered by a court in the United States based on civil liability would not be
automatically enforceable in Bermuda. We have also been advised by Conyers
Dill & Pearman that with respect to a final and conclusive judgment obtained
in a court of competent jurisdiction in the United States under which a sum of
money is payable (other than a sum of money payable in respect of multiple
damages, taxes or other charges of a like nature or in respect of a fine or
other penalty), a Bermuda court would be expected to enforce a judgment based
thereon, provided that (a) such courts had proper jurisdiction over the
parties subject to such judgment, (b) such courts did not contravene the rules
of natural justice of Bermuda, (c) such judgment was not obtained by fraud,
(d) the enforcement of the judgment would not be contrary to the public policy
of Bermuda, (e) no new admissible evidence relevant to the action is submitted
prior to the rendering of the judgment by the courts of Bermuda and (f) there
is due compliance with the correct procedures under the laws of Bermuda.
As a result, it may be difficult for a holder of our securities to
effect service of process within the United States or to enforce judgments
obtained against us in U.S. courts. We will irrevocably agree that we may be
served with process with respect to actions based on offers and sales of
securities made in the United States by having Ingersoll-Rand Company, 200
Chestnut Ridge Road, Woodcliff Lake, New Jersey 07677, be our U.S. agent
appointed for that purpose.
A Bermuda court may impose civil liability on us or our directors or
officers in a suit brought in the Supreme Court of Bermuda against us or such
persons with respect to a violation of U.S. federal securities laws, provided
that the facts surrounding such violation would constitute or give rise to a
cause of action under Bermuda law.
8
Ratio of Earnings to Fixed Charges
The following table sets forth our ratio of earnings to fixed charges for
the three month period ended March 31, 2002. We have not included our ratio of
earnings to fixed charges for the years in the five year period ended December
31, 2001 because we did not conduct business during any of those periods.
The following table also sets forth IR-New Jersey's ratio of earnings to
fixed charges, prior to the Reorganization, for each of the years in the five
year period ended December 31, 2001. We are the successor to IR-New Jersey
following the Reorganization. The Reorganization was accounted for as a
reorganization of entities under common control, and accordingly it did not
result in any changes to consolidated amounts of assets, liabilities and
shareholders' equity. We do not presently have (and IR-New Jersey did not
have) any preference shares outstanding during the five year period ended
December 31, 2001. For the purpose of computing the ratios of earnings to
fixed charges, earnings consist of earnings from continuing operations before
income taxes and fixed charges, excluding our or IR-New Jersey's, as the case
may be, proportionate share in the undistributed earnings (losses) of less
than fifty-percent-owned affiliates (accounted for using the equity method),
minority interests and capitalized interest. Fixed charges consist of interest
(including capitalized interest), equity-linked securities charges,
amortization of debt discount and expense and that portion (one-third) of
rental expense deemed to be representative of an interest factor included
therein.
Three Month
Period Ended
March 31, Years Ended December 31,
------------ --------------------------------------------------
2002 2001 2000 1999 1998 1997
---- ---- ---- ---- ---- ----
Ratio of earnings to fixed charges 2.38 1.83 3.44 4.28 3.59 4.44
Use of Proceeds
We plan to add the proceeds we receive from sales of securities to
our general funds and to use them for general corporate purposes. These could
include capital expenditures, repayment or purchase of our already issued
long-term debt, investment in subsidiaries, additions to working capital,
repayment of short-term commercial paper notes or other short term debt,
acquisitions and other business opportunities.
9
Description of the Debt Securities
The following description of debt securities sets forth certain
general terms and provisions of debt securities. The particular terms of the
debt securities offered will be described in the prospectus supplement
relating to the securities.
We may issue debt securities either separately, or together with, or
upon the conversion of or in exchange for, other securities. The debt
securities may be:
o senior unsecured obligations issued in one or more series under
a senior indenture to be entered into between us and Wells
Fargo Bank Minnesota, N.A., as trustee; or
o subordinated unsecured obligations issued in one or more series
under a subordinated indenture to be entered into between us
and Wells Fargo Bank Minnesota, N.A., as trustee.
The trustee for each series of debt securities will be Wells Fargo
Bank Minnesota, N.A., unless otherwise specified in the applicable prospectus
supplement.
The following description only summarizes the terms of the indentures
and the debt securities. For more information you should read the indentures.
In addition, the following description is qualified in all respects by
reference to the actual text of the indentures and the forms of the debt
securities.
General
The indentures do not limit the amount of debt securities which we
may issue and provide that debt securities may be issued thereunder from time
to time in one or more series up to the aggregate principal amount which we
may authorize from time to time.
You should review the prospectus supplement for the following terms
of the debt securities being offered:
o the designation, aggregate principal amount and authorized
denominations of the debt securities;
o the purchase price of the debt securities;
o the date or dates on which the debt securities will mature;
o the rate or rates per annum, if any (which may be fixed or
variable), at which the debt securities will bear interest or
the method by which such rate or rates will be determined;
o the dates on which the interest will be payable and the record
dates for payment of interest, if any;
o the coin or currency in which payment of the principal of (and
premium, if any) or interest, if any, on the debt securities
will be payable;
o the terms of any mandatory or optional redemption (including
any sinking fund) or any obligation of us to repurchase the
debt securities;
o whether the debt securities are to be issued in whole or in
part in the form of one or more temporary or permanent global
debt securities and, if so, the identity of the depositary, if
any, for such note or notes;
o whether the debt securities will be senior debt securities or
subordinated debt securities;
o the terms, if any, upon which such debt securities may be
convertible into or exchangeable for other securities;
o whether the debt securities will be guaranteed by IR-New Jersey
as described under "--Guarantee" below;
o any special tax implications of the debt securities;
10
o any addition to or change or deletion of any event of default
or any covenant specified in the applicable indenture; and
o any other additional provisions or specific terms which may be
applicable to that series of debt securities.
Unless otherwise indicated in the prospectus supplement, the debt
securities will be issued only in fully registered form without coupons in
denominations of $1,000 or multiples of $1,000.
The debt securities may be issued as discounted debt securities
(bearing no interest or interest at a rate which at the time of issuance is
below market rates) to be sold at a substantial discount below their stated
principal amount. Federal income tax consequences and other special
considerations applicable to any of these discounted debt securities will be
described in the applicable prospectus supplement.
Ranking of Debt Securities
The senior debt securities will be unsecured unsubordinated
obligations and will rank equally in right of payment with all of our existing
and future unsecured and unsubordinated indebtedness. The subordinated debt
securities will be unsecured subordinated obligations and will be subordinated
in right of payment to all of our existing and future senior indebtedness (as
defined in the related prospectus supplement), including the senior debt
securities. See "--Subordination of Subordinated Debt Securities." Because the
debt securities will not be secured, they will be effectively subordinated to
our existing and future secured indebtedness to the extent of the value of the
collateral securing that indebtedness.
We currently conduct substantially all of our operations through our
subsidiaries and our subsidiaries generate substantially all of our operating
income and cash flow. As a result, distributions and advances from our
subsidiaries are the principal source of funds necessary to meet our debt
service obligations. Contractual provisions or laws, as well as our
subsidiaries' financial and operating requirements, may limit our ability to
obtain cash from our subsidiaries that we require to pay our debt service
obligations, including cash payments on the debt securities. In addition,
because we are a holding company, holders of our debt securities will have a
junior position to the claims of creditors of our non-guarantor subsidiaries
on their assets and earnings. The prospectus supplement relating to a series
of debt securities will state whether those debt securities will be guaranteed
by IR-New Jersey. For a description of that guarantee, see "--Guarantee".
Guarantee
If the applicable prospectus supplement relating to a series of
senior debt securities provides that those senior debt securities will have
the benefit of the guarantee by IR-New Jersey, payment of the principal,
premium, if any, and interest on those senior debt securities will be
unconditionally guaranteed on an unsecured, unsubordinated basis by IR-New
Jersey. The guarantee of senior debt securities will rank equally in right of
payment with all of the unsecured and unsubordinated indebtedness of IR-New
Jersey.
If the applicable prospectus supplement relating to a series of
subordinated debt securities provides that those subordinated debt securities
will have the benefit of the guarantee by IR-New Jersey, payment of the
principal, premium, if any, and interest on those subordinated debt securities
will be unconditionally guaranteed on an unsecured, subordinated basis by
IR-New Jersey. The guarantee of the subordinated debt securities will be
subordinated in right of payment to all of IR-New Jersey's existing and future
senior indebtedness (as defined in the related prospectus supplement),
including any guarantee of the senior debt securities, to the same extent and
in the same manner as the subordinated debt securities are subordinated to our
senior indebtedness (as defined in the related prospectus supplement). See
"--Subordination of Subordinated Debt Securities."
The obligations of IR-New Jersey under the guarantee will be limited
as necessary to prevent the guarantee from constituting a fraudulent
conveyance or fraudulent transfer under applicable law.
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Conversion and Exchange
The terms, if any, on which debt securities of any series are
convertible into or exchangeable for common shares, preference shares or other
debt securities will be set forth in the related prospectus supplement. The
terms may include provisions for conversion or exchange, either mandatory, at
the option of the holders or at our option.
Registration of Transfer and Exchange
Subject to the terms of the applicable indenture and the limitations
applicable to global securities, debt securities may be transferred or
exchanged at the corporate trust office of the trustee or at any other office
or agency maintained by us for that purpose. No service charge will be made
for any registration of transfer or exchange of the debt securities, but we
may require a payment by the holder to cover any tax or other governmental
charge. We will not be required to register the transfer of or exchange debt
securities of any series:
o during a period beginning at the opening of business 15 days
before the day of mailing of a notice of redemption of
securities of that series selected for redemption; or
o selected for redemption in whole or in part, except the
unredeemed portion of any debt security being redeemed in part.
Payment
Unless otherwise indicated in the applicable prospectus supplement,
principal, interest and any premium on the debt securities will be paid at the
place or places that we will designate for such purposes. However, at our
option, we may make interest payments by check mailed to persons in whose
names our debt securities are registered. Unless otherwise indicated in the
applicable prospectus supplement, payment of interest on a debt security which
is payable and is punctually paid or duly provided for on any interest payment
date will be made to the person in whose name that debt security is registered
at the close of business on the regular record date for that interest payment.
We will pay the principal of and any premium on registered debt securities
only against surrender of those debt securities.
Global Notes
The debt securities of a series may be issued in whole or in part in
the form of one or more global notes that will be deposited with or on behalf
of a depositary located in the United States identified in the prospectus
supplement relating to the applicable series.
The specific terms of the depositary arrangement with respect to any
debt securities of a series will be described in the prospectus supplement
relating to the series. We anticipate that the following provisions will apply
to all depositary arrangements.
Unless otherwise specified in an applicable prospectus supplement,
debt securities which are to be represented by a global note to be deposited
with or on behalf of a depositary will be represented by a global note
registered in the name of such depositary or its nominee. Upon the issuance of
a global note in registered form, the depositary for the global note will
credit, on its book-entry registration and transfer system, the principal
amounts of the debt securities represented by the global note to the accounts
of institutions that have accounts with the depositary or its nominee
("participants"). The accounts to be credited shall be designated by the
underwriters or agents of the debt securities or by us, if the debt securities
are offered and sold directly by us. Ownership of beneficial interests in the
global notes will be limited to participants or persons that may hold
interests through participants. Ownership of beneficial interests by
participants in the global notes will be shown on, and the transfer of that
ownership interest will be effected only through, records maintained by the
depositary or its nominee for the global notes. Ownership of beneficial
interests in global notes by persons that hold the beneficial interests
through participants will be shown on, and the transfer of that ownership
interest within such participant will be effected only through, records
maintained by the participant.
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So long as the depositary for a global note in registered form, or
its nominee, is the registered owner of the global note, the depositary or the
nominee, as the case may be, will be considered the sole owner or holder of
the debt securities represented by the global note for all purposes under the
applicable indenture governing the debt securities. Except as described below,
owners of beneficial interests in the global notes will not be entitled to
have debt securities of the series represented by the global notes registered
in their names, will not receive or be entitled to receive physical delivery
of debt securities of the series in definitive form and will not be considered
the owners or holders thereof under the applicable indenture.
Payment of principal of, premium, if any, and any interest on debt
securities registered in the name of or held by a depositary or its nominee
will be made to the depositary or its nominee, as the case may be, as the
registered owner or the holder of the global note representing the debt
securities. We will not, nor will IR-New Jersey, the trustee, any paying agent
or the security registrar for the debt securities have any responsibility or
liability for any aspect of the records relating to or payments made on
account of beneficial ownership interests in a global note for the debt
securities or for maintaining, supervising or reviewing any records relating
to the beneficial ownership interests.
We expect that the depositary for debt securities of a series, upon
receipt of any payment of principal, premium or interest in respect of a
permanent global note, will credit immediately participants' accounts with
payments in amounts proportionate to their respective beneficial interests in
the principal amount of the global note as shown on the records of the
depositary. We also expect that payments by participants to owners of
beneficial interests in the global note held through the participants will be
governed by customary practices, as is now the case with securities held for
the accounts of customers in bearer form or registered in "street name", and
will be the responsibility of the participants.
A global note may not be transferred except as a whole by the
depositary for the global note to a nominee of the depositary or by a nominee
of the depositary to the depositary or another nominee of the depositary or by
the depositary or any nominee to a successor of the depositary or a nominee of
the successor. If a depositary for debt securities of a series is at any time
unwilling or unable to continue as a depositary and a successor depositary is
not appointed by us within ninety days, we will issue debt securities in
definitive registered form in exchange for the global note or notes
representing the debt securities. In addition, we may at any time and in our
sole discretion determine not to have any debt securities in registered form
represented by one or more global notes and, in that event, we will issue debt
securities in definitive form in exchange for the global note or notes
representing the debt securities.
Certain Covenants of the Debt Securities
Senior Debt Securities. The senior debt securities will include the
following covenants:
Limitation on Liens. Unless otherwise indicated in the prospectus
supplement relating to a series of senior debt securities, we will not, and
will not permit any restricted subsidiary to, create, assume or guarantee any
indebtedness for money borrowed, secured by any mortgage, lien, pledge, charge
or other security interest or encumbrance of any kind (hereinafter referred to
as a "mortgage" or "mortgages") on any principal property of ours or a
restricted subsidiary or on any shares or funded indebtedness of a restricted
subsidiary (whether such principal property, shares or funded indebtedness are
now owned or hereafter acquired) without, in any such case, effectively
providing concurrently with the creation, assumption or guaranteeing of such
indebtedness that the senior debt securities (together, if we shall so
determine, with any other indebtedness then or thereafter existing, created,
assumed or guaranteed by us or such restricted subsidiary ranking equally with
the senior debt securities) shall be secured equally and ratably with or prior
to such indebtedness. The senior indenture excludes, however, from the
foregoing any indebtedness secured by a mortgage (including any extension,
renewal or replacement of any mortgage hereinafter specified or any
indebtedness secured thereby, without increase of the principal of such
indebtedness):
o on property, shares or funded indebtedness of any corporation
existing at the time such corporation becomes a restricted
subsidiary;
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o on property existing at the time of acquisition of such
property, or to secure indebtedness incurred for the purpose of
financing the purchase price of such property or improvements
or construction thereon which indebtedness is incurred prior to
or within 180 days after the later of such acquisition,
completion of such construction or the commencement of
commercial operation of such property;
o on property, shares or funded indebtedness of a corporation
existing at the time such corporation is merged into or
consolidated with us or a restricted subsidiary, or at the time
of a sale, lease or other disposition of the properties of a
corporation as an entirety or substantially as an entirety to
us or a restricted subsidiary;
o on property of a restricted subsidiary to secure indebtedness
of such restricted subsidiary to us or another restricted
subsidiary;
o on our property or property of a restricted subsidiary in favor
of the United States or any State thereof or Bermuda, or any
department, agency or instrumentality or political subdivision
of the United States or any State thereof or Bermuda, to secure
partial, progress, advance or other payments pursuant to any
contract or statute or to secure any indebtedness incurred for
the purpose of financing all or any part of the purchase price
or the cost of constructing or improving the property subject
to such mortgage; or
o existing at the date of the senior indenture.
Limitation on Sale and Leaseback Transactions. Unless otherwise
indicated in the prospectus supplement relating to a series of senior debt
securities, sale and leaseback transactions (which are defined in the senior
indenture to exclude leases expiring within three years of making, leases
between us and a restricted subsidiary or between restricted subsidiaries and
any lease of part of a principal property, which has been sold, for use in
connection with the winding up or termination of the business conducted on
such principal property) by us or any restricted subsidiary of any principal
property are prohibited, unless (a) we would be entitled to incur indebtedness
secured by a mortgage on such principal property (see "Limitations on Liens"
above) or (b) an amount equal to the fair value of the principal property so
leased (as determined by our board of directors) is applied within 180 days to
the retirement (otherwise than by payment at maturity or pursuant to mandatory
sinking funds) of our senior debt securities or funded indebtedness of any
restricted subsidiary on a parity with the senior debt securities or to
purchase, improve or construct principal properties.
Exempted Indebtedness. Notwithstanding the limitations on mortgages
and sale and leaseback transactions described above, we or any restricted
subsidiary may, in addition to amounts permitted under such restrictions,
create, assume or guarantee secured indebtedness or enter into sale and
leaseback transactions which would otherwise be prohibited, provided that at
the time of such event, and after giving effect thereto, the sum of such
outstanding secured indebtedness plus the attributable debt in respect of such
sale and leaseback transactions (other than sale and leaseback transactions
entered into prior to the date of the senior indenture and sale and leaseback
transactions whose proceeds have been applied in accordance with clause (b)
under "Limitation on Sale and Leaseback Transactions") does not exceed 10% of
our and our consolidated subsidiaries shareholders' equity. "Attributable
debt" means, as of any particular time, the then present value of the total
net amount of rent required to be paid under such leases during the remaining
terms thereof (excluding any renewal term unless the renewal is at the option
of the lessor), computed by discounting from the actual respective due dates
to such date such total net amount of rent at the actual interest factor
included in such rent, or, if such interest factor is not readily
determinable, at the rate per annum borne by the initial series of debt
securities issued under the senior indenture, except that if no interest is
payable in respect of the initial series of debt securities issued under the
senior indenture or if such rate is not fixed, then at the rate of 8-3/8% per
annum. "Our and our consolidated shareholders' equity" means the share
capital, share premium, contributed surplus and retained earnings of us and
our consolidated subsidiaries, excluding the cost of our shares held by our
affiliates, all as determined in accordance with U.S. generally accepted
accounting principles.
Restrictions Upon Merger and Sales of Assets. Upon any consolidation,
amalgamation or merger of us with or into any other corporation or any sale,
conveyance or lease of all or substantially all of our property to any other
corporation, the corporation (if other than us) formed by such consolidation
or amalgamation, or into which we shall have been merged, or the corporation
which shall have acquired or leased such property (which corporation shall be
a solvent corporation organized under the laws of the United States or a State
thereof or the District of Columbia or Bermuda) shall expressly assume the due
and punctual payment of the principal of and premium, if any, and interest, if
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any, on all of the senior debt securities. We will not consolidate, amalgamate
or merge, or make any such sale, lease or other disposition, and will not
permit any other corporation to merge into us, unless immediately after giving
effect thereto, we or such successor corporation, as the case may be, will not
be in default under the senior indenture.
If, upon any such consolidation, amalgamation, merger, sale,
conveyance or lease, or upon any consolidation, amalgamation or merger of any
restricted subsidiary, or upon the sale, conveyance or lease of all or
substantially all the property of any restricted subsidiary to any other
corporation, any principal property or any shares or funded indebtedness of
any restricted subsidiary would become subject to any mortgage, we will secure
the due and punctual payment of the principal of, premium, if any, and
interest, if any, on the senior debt securities (together with, if we shall so
determine, any other indebtedness of or guarantee by us or such restricted
subsidiary ranking equally with the senior debt securities) by a mortgage, the
lien of which will rank prior to the lien of such mortgage of such other
corporation on all assets owned by us or such restricted subsidiary.
If the senior debt securities are guaranteed by IR-New Jersey, then
upon any consolidation or merger of IR-New Jersey with or into any other
corporation or any sale, conveyance or lease of all or substantially all of
IR-New Jersey's property to any other corporation, the corporation (if other
than IR-New Jersey) formed by such consolidation, or into which IR-New Jersey
shall have been merged, or the corporation which shall have acquired or leased
such property (which corporation shall be a solvent corporation organized
under the laws of the United States or a State thereof or the District of
Columbia) shall expressly assume the guarantee of the senior debt securities.
If the senior debt securities are guaranteed by IR-New Jersey, IR-New Jersey
will not consolidate or merge, or make any such sale, lease or other
disposition, and will not permit any other corporation to merge into it,
unless immediately after giving effect thereto, IR-New Jersey or such
successor corporation, as the case may be, will not be in default under the
senior indenture or the guarantee. Notwithstanding the foregoing, IR-New
Jersey may consolidate or merge with or sell, convey or lease substantially
all of its assets to us without limitation.
Certain Definitions. The term "principal property" means any
manufacturing plant or other manufacturing facility of ours or any restricted
subsidiary, which plant or facility is located within the United States,
except any such plant or facility which the board of directors by resolution
declares is not of material importance to the total business conducted by us
and our restricted subsidiaries.
The term "funded indebtedness" means indebtedness created, assumed or
guaranteed by a person for money borrowed which matures by its terms, or is
renewable by the borrower to a date, more than one year after the date of its
original creation, assumption or guarantee.
The term "restricted subsidiary" means any subsidiary which owns a
principal property excluding, however, any corporation the greater part of the
operating assets of which are located or the principal business of which is
carried on outside the United States.
The term "subsidiary" means any corporation of which at least a
majority of the outstanding stock having voting power under ordinary
circumstances to elect a majority of the board of directors of the corporation
shall at the time be owned by us or by us and one or more subsidiaries or by
one or more subsidiaries.
Subordinated Debt Securities. The subordinated debt securities will
include those covenants which may be set forth in the prospectus supplement to
which such debt securities relate, including the following:
Restrictions Upon Merger and Sales of Assets. Upon any consolidation,
amalgamation or merger of us with or into any other corporation or any sale,
conveyance or lease of all or substantially all of our property to any other
corporation, the corporation (if other than us) formed by such consolidation
or amalgamation, or into which we shall have been merged, or the corporation
which shall have acquired or leased such property (which corporation shall be
a solvent corporation organized under the laws of the United States or a State
thereof or the District of Columbia or Bermuda) shall expressly assume the due
and punctual payment of the principal of and premium, if any, and interest, if
any, on all of the subordinated debt securities. We will not consolidate,
amalgamate or merge, or make any such sale, lease or other disposition, and
will not permit any other corporation to merge into us, unless immediately
after giving effect thereto, we or such successor corporation, as the case may
be, will not be in default under the subordinated indenture.
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If the subordinated debt securities are guaranteed by IR-New Jersey,
then upon any consolidation or merger of IR-New Jersey with or into any other
corporation or any sale, conveyance or lease of all or substantially all of
IR-New Jersey's property to any other corporation, the corporation (if other
than IR-New Jersey) formed by such consolidation, or into which IR-New Jersey
shall have been merged, or the corporation which shall have acquired or leased
such property (which corporation shall be a solvent corporation organized
under the laws of the United States or a State thereof or the District of
Columbia) shall expressly assume the guarantee of the subordinated debt
securities. If the subordinated debt securities are guaranteed by IR-New
Jersey, IR-New Jersey will not consolidate or merge, or make any such sale,
lease or other disposition, and will not permit any other corporation to merge
into it, unless immediately after giving effect thereto, IR-New Jersey or such
successor corporation, as the case may be, will not be in default under the
subordinated indenture or the guarantee. Notwithstanding the foregoing, IR-New
Jersey may consolidate or merge with or sell, convey or lease substantially
all of its assets to us without limitation.
Events of Default
As to each series of debt securities, an event of default is defined
in each indenture as being:
o default in payment of any interest or any sinking fund payment
on such series which continues for 30 days (subject to the
deferral of any interest payment in the case of an extension
period);
o default in payment of any principal or premium, if any, on such
series;
o default after written notice in performance of any other
covenant in such indenture (other than a covenant included
solely for the benefit of debt securities of another series)
which continues for 90 days;
o certain events in bankruptcy, insolvency or reorganization
relating to us or, if the debt securities of that series are
guaranteed by IR-New Jersey, certain events in bankruptcy,
insolvency or reorganization relating to IR-New Jersey; or
o other events of default specified in or pursuant to a board
resolution or in a supplemental indenture.
Each indenture provides that the trustee may withhold notice to the
holders of debt securities of such series of any default (except in payment of
principal, interest, if any, or premium, if any, on such series or in payment
of any sinking fund installment on such series) if the trustee considers it in
the interest of such holders to do so.
In case an event of default (other than a default resulting from
bankruptcy, insolvency or reorganization) shall occur and be continuing with
respect to the debt securities of any series, the trustee or the holders of
not less than 25% in aggregate principal amount of the debt securities then
outstanding of that series may declare the principal of the debt securities of
such series (or, if the debt securities of that series were issued as
discounted debt securities, such portion of the principal as may be specified
in the terms of that series) to be due and payable. If an event of default
results from bankruptcy, insolvency or reorganization, the principal amount of
all the debt securities of a series (or, if the debt securities of that series
were issued as discounted debt securities, such portion of the principal as
may be specified in the terms of that series) will automatically become due
and payable. Any event of default with respect to the debt securities of any
series (except defaults in payment of principal or premium, if any, or
interest, if any, on the debt securities of such series or a default in
respect of a covenant or provision that cannot be modified without the consent
of the holder of each outstanding security of such series) may be waived by
the holders of at least a majority in aggregate principal amount of the debt
securities of that series then outstanding.
Subject to the provisions of each indenture relating to the duties of
the trustee in case an event of default shall occur and be continuing, the
trustee is under no obligation to exercise any of the rights or powers under
such indenture at the request, order or direction of any of the holders of
debt securities, unless such holders shall have offered to the trustee
reasonable security or indemnity. Subject to such provisions for the
indemnification of the trustee and certain limitations contained in each
indenture, the holders of a majority in principal amount of the debt
securities of any series then outstanding shall have the right to direct the
time, method and place of conducting any proceeding for any remedy available
to the trustee, or exercising any trust or power conferred on the trustee,
with respect to the debt securities of such series. We are required annually
to deliver to the trustee an officers' certificate
16
stating whether or not the signers have knowledge of any default in
performance by us of the covenants described above.
Discharge
The applicable indenture with respect to the debt securities of any
series may be discharged (with the exception of specified provisions as
provided in the indentures) when either:
o all debt securities, with the exceptions provided for in the
applicable indenture, of that series have been delivered to the
trustee for cancellation; or
o all debt securities of that series not theretofore delivered to
the trustee for cancellation have (1) become due and payable,
(2) will become due and payable at their stated maturity within
one year, or (3) are to be called for redemption within one
year; and we have deposited or caused to be deposited with the
trustee in trust an amount of (a) money, or (b) in the case of
clauses (2) and (3), (A) U.S. government obligations which
through the payment of interest and principal in respect
thereof in accordance with their terms will provide not later
than one day before the stated maturity or redemption date, as
the case may be, money in an amount or (B) a combination of
money or U.S. government obligations as provided in (A) above,
in each case sufficient to pay and discharge the entire
indebtedness on such debt securities not theretofore delivered
to the trustee for cancellation, for principal, premium, if
any, and interest, if any, to the date of such deposit in the
case of debt securities which have become due and payable or to
the stated maturity or redemption date, as the case may be.
Defeasance
Both indentures provide that we may discharge the entire indebtedness
of all outstanding debt securities of a series and the provisions of the
indenture as they relate to such debt securities will no longer be in effect
(with the exception of specified provisions as provided in the indentures) if
we deposit or cause to deposited with the trustee, in trust, money, or U.S.
government obligations, or a combination thereof, which, through the payment
of interest thereon and principal thereof in accordance with their terms, will
provide money, in an amount sufficient to pay all the principal (including any
mandatory sinking fund payments, if any) of, and interest, if any, or premium,
if any, on the debt securities of such series on the dates such payments are
due in accordance with the terms of such debt securities to their stated
maturities or to and including a redemption date which has been irrevocably
designated by us for redemption of such debt securities. To exercise any such
option, we are required to meet specified conditions, including delivering to
the trustee an opinion of counsel to the effect that we have received from, or
there has been published by, the Internal Revenue Service a ruling to the
effect that holders of the debt securities will not recognize income, gain or
loss for federal income tax purposes as a result of such deposit, defeasance
or discharge.
Both indentures provide that we, at our option, need not comply with
certain restrictive covenants of such indenture as to any series of debt
securities (in the case of senior debt securities as described above under
"--Certain Covenants of the Debt Securities--Limitation on Liens",
"--Limitation on Sale and Leaseback Transactions" and the second paragraph of
"--Restrictions Upon Merger and Sales of Assets"), upon the deposit with the
trustee, in trust, of money, or U.S. government obligations, or a combination
thereof, which, through the payment of interest thereon and principal thereof
in accordance with their terms, will provide money, in an amount sufficient to
pay all the principal (including any mandatory sinking fund payments, if any)
of, and interest, if any, or premium, if any, on the debt securities of such
series on the dates such payments are due in accordance with the terms of such
debt securities to their stated maturities or to and including a redemption
date which has been irrevocably designated by us for redemption of such debt
securities. To exercise any such option, we are required to meet specified
conditions, including delivering to the trustee an opinion of counsel to the
effect that the deposit and related defeasance would not cause the holders of
the debt securities to recognize income, gain or loss for federal income tax
purposes.
Modification of the Indentures
Each indenture contains provisions permitting us and the trustee,
with the consent of the holders of not less than a majority in principal
amount of the outstanding debt securities of all series affected by such
modification
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(voting as one class), to modify such indenture or the rights of
the holders of the debt securities, except that no such modification shall,
without the consent of the holder of each debt security so affected:
o change the maturity of any debt security, or reduce the rate or
extend the time of payment of interest thereon, or reduce the
principal amount thereof (including, in the case of a
discounted debt security, the amount payable thereon in the
event of acceleration) or any redemption premium thereon, or
change the place or medium of payment of such debt security, or
impair the right of any holder to institute suit for payment
thereof, or, if the debt securities are guaranteed by IR-New
Jersey, release IR-New Jersey from any of its obligations under
the guarantee otherwise than in accordance with the terms of
the applicable indenture; or
o reduce the percentage of debt securities, the consent of the
holders of which is required for any such modification or for
certain waivers under such indenture.
Each indenture contains provisions permitting us and the trustee,
without the consent of any holders, to modify the indenture for any of the
following purposes:
o to evidence the succession of another corporation to us or
IR-New Jersey and the assumption by any such successor of our
covenants in the applicable indenture and the debt securities
or IR-New Jersey's covenants in the applicable indenture and
the guarantee;
o to add to our or IR-New Jersey's covenants for the benefit of
the holders of all or any series of debt securities or to
surrender any right or power conferred upon us or IR-New Jersey
in the applicable indenture;
o to add any additional events of defaults;
o to add or change any provisions of the applicable indenture to
such extent as may be necessary to permit or facilitate the
issuance of debt securities in bearer form;
o to change or eliminate any provision of the applicable
indenture, provided that any such change or elimination shall
become effective only when there is no debt security
outstanding of any series created prior to such modification
which is entitled to the benefit of such provision;
o to establish the form or terms of any debt securities of any
series as permitted by the applicable indenture;
o in the case of the senior debt securities, to secure those debt
securities;
o to evidence and provide for the acceptance of appointment under
the applicable indenture by a successor trustee with respect to
the debt securities of one or more series and to add or change
any of the provisions of the indenture as shall be necessary to
provide for or facilitate the administration of the trusts
under the applicable indenture by more than one trustee;
o to evidence and provide for the acceptance of appointment of a
trustee other than Wells Fargo Bank Minnesota, N.A. as trustee
for a series of debt securities and to add or change any of the
provisions of the applicable indenture as shall be necessary to
provide for or facilitate the administration of the trusts
under the applicable indenture by more than one trustee;
o to provide for any rights of the holder of debt securities of
any series to require the repurchase of debt securities of such
series from us;
o to continue its qualification under the Trust Indenture Act of
1939 or as may be necessary or desirable in accordance with
amendments to that Act;
o to cure any ambiguity, to correct or supplement any provision
of the indenture which may be inconsistent with any other
provision of the indenture, or to make any other provisions
with respect to matters or questions arising under the
indenture, provided such action shall not adversely affect the
interests of the holders of debt securities of any series in
any material respect; or
o for any other reason specified in the applicable prospectus
supplement.
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Subordination of Subordinated Debt Securities
The payment of the principal of, premium, if any, and interest, if
any, on the subordinated debt securities will be subordinated, to the extent
and in the manner set forth in the subordinated indenture, and as may be
further described in the applicable prospectus supplement, in right of payment
to the prior payment in full in cash or cash equivalents of all senior
indebtedness which may at any time and from time to time be outstanding.
Similarly, if the subordinated debt securities are guaranteed by IR-New
Jersey, the guarantees of the subordinated debt securities will be
subordinated, to the extent and in the manner set forth in the subordinated
indenture, and as may be further described in the applicable prospectus
supplement, to obligations in respect of all senior indebtedness of IR-New
Jersey to the same extent as the subordinated debt securities are subordinated
to our senior indebtedness.
Unless otherwise provided in the applicable prospectus supplement
with respect to an issue of subordinated debt securities, in the event of any
insolvency or bankruptcy case or proceeding, or any receivership, liquidation,
reorganization or other similar case or proceeding in connection therewith,
relating to our assets, or any liquidation, dissolution or other winding-up,
whether voluntary or involuntary, or any assignment for the benefit of
creditors or other marshalling of our assets or liabilities, all senior
indebtedness must be paid in full or such payment must be provided for before
any payment or distribution (excluding the distribution of certain permitted
equity or subordinated securities) is made on account of the principal,
premium, if any, sinking fund, if any, or interest, if any, on any
subordinated debt securities.
In addition, the applicable prospectus supplement may provide that no
payment on account of the subordinated debt securities offered thereby shall
be made during the continuance of certain defaults with respect to our senior
indebtedness or certain of our designated senior indebtedness.
In the event that, notwithstanding the foregoing, any payment or
distribution of our assets (excluding the distribution of certain permitted
equity or subordinated securities) is received by the subordinated trustee or
the holders of any of the subordinated debt securities, under the
circumstances described above and before all senior indebtedness is paid in
full, such payment or distribution will be paid over to the holders of such
senior indebtedness or on their behalf for application to the payment of all
such senior indebtedness remaining unpaid until all such senior indebtedness
has been paid in full or such payment provided for, after giving effect to any
concurrent payment or distribution to the holders of such senior indebtedness.
By reason of this subordination, in the event of a distribution of
assets upon insolvency, certain of our and IR-New Jersey's general creditors
may recover more, ratably, than holders of the subordinated debt securities.
If this prospectus is being delivered in connection with the offering
of a series of subordinated debt securities, the accompanying prospectus
supplement or the information incorporated by reference will set forth the
definitions of senior indebtedness and designated senior indebtedness
applicable to that series, any payment blockage provisions and the approximate
amount of such senior indebtedness with respect to us and, if the subordinated
debt securities are guaranteed by IR-New Jersey, IR-New Jersey, outstanding as
of a recent date.
Concerning the Trustee
The Company may from time to time maintain lines of credit and have
other customary banking relationships with each trustee and its affiliated
banks.
Governing Law
The indentures, the debt securities and the guarantee will be
governed by, and construed in accordance with, the law of the State of New
York.
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Description of Securities Warrants
General
We may issue warrants to purchase our securities or rights (including
rights to receive payment in cash or securities based on the value, rate or
price of one or more specified commodities, currencies or indices) or
securities of other issuers or any combination of the foregoing. Warrants may
be issued independently or together with any securities and may be attached to
or separate from such securities. Each series of warrants will be issued under
a separate warrant agreement to be entered into between us and a warrant agent
we select.
You should review the applicable prospectus supplement for the
specific terms of any warrants that may be offered, including:
o the title of the warrants;
o the aggregate number of the warrants;
o the price or prices at which the warrants will be issued;
o the currency or currencies, including composite currencies, in
which the price of the warrants may be payable;
o our securities or rights (including rights to receive payment
in cash or securities based on the value, rate or price of one
or more specified commodities, currencies or indices) or
securities of other issuers or any combination of the foregoing
purchasable upon exercise of such warrants;
o the price at which and the currency or currencies, including
composite currencies, in which the securities purchasable upon
exercise of the warrants may be purchased;
o the date on which the right to exercise the warrants will
commence and the date on which that right will expire;
o if applicable, the minimum or maximum amount of the warrants
that may be exercised at any one time;
o if applicable, the designation and terms of the securities with
which the warrants are issued and the number of warrants issued
with each such security;
o if applicable, the date on and after which the warrants and the
related securities will be separately transferable;
o information with respect to book-entry procedures, if any;
o if applicable, a discussion of certain United States federal
income tax considerations; and
o any other terms of the warrants, including terms, procedures
and limitations relating to the exchange and exercise of the
warrants.
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Description of Authorized Share Capital
The following description of our authorized share capital summarizes
certain provisions of our memorandum of association, our amended and restated
bye-laws, the rights agreement, between us and The Bank of New York, as rights
agent, and the Companies Act 1981 of Bermuda (the "Companies Act"), and is
subject to and is qualified in its entirety by reference to such documents and
provisions. Under Bermuda law, shareholders are referred to as members,
although we refer to them as shareholders in this description for ease of
reference.
General
Our authorized share capital is US$1,175,010,000, consisting of (1)
1,175,000,000 common shares, par value US$1.00 per share, which common shares
consist of (a) 600,000,000 Class A common shares and (b) 575,000,000 Class B
common shares, and (2) 10,000,000 preference shares, par value US$0.001 per
share, which preference shares consist of 600,000 Series A preference shares
and such other series of preference shares as may be designated from time to
time with the respective rights and restrictions determined by the board of
directors. At April 30, 2002, 168,972,893 Class A common shares were issued
and outstanding and 135,250,003 Class B common shares were issued and held by
our subsidiaries. We also had outstanding, as of such date, 168,972,893 Series
A preference share purchase rights. No preference shares are currently issued
or outstanding. Pursuant to this prospectus, we may issue Class A common
shares or preference shares.
Class A Common Shares
Dividends. Subject to any rights and restrictions of any other class
or series of preference shares, the board of directors, in its discretion, may
from time to time declare dividends and other distributions on the issued
Class A common shares and Class B common shares and authorize payment of such
dividends and other distributions. Such dividends or other distributions may
be in cash, shares of other companies or other property out of assets or funds
legally available therefor.
If at any time a dividend or other distribution in cash, shares or
other property is declared or paid on Class A common shares, a like dividend
or other distribution in kind and amount shall also be declared and paid on
Class B common shares.
Liquidation, Dissolution and Winding Up. Upon the liquidation,
dissolution or winding up of our company, whether voluntary or involuntary,
after full amounts that holders of any other issued shares ranking senior to
the common shares as to distribution on liquidation, dissolution or winding up
are entitled to receive have been paid or set aside for the payment thereof,
the holders of our Class A common shares and our Class B common shares are
entitled to receive, pro rata, any and all of our remaining assets available
for distribution to the holders of common shares. The liquidator may deduct
from the amount payable in respect of those common shares any liabilities the
holder has to or with us. The assets received by the holders of our common
shares in a liquidation, dissolution or winding up may consist in whole or in
part of property. That property is not required to be of the same kind for all
shareholders.
Voting. Each holder of our Class A common shares will be entitled to
one vote per Class A common share held, subject to any required preference
share class votes, and directors will be elected in accordance with the
procedures described below. The Class A common shares will vote together as
one class with the holders of our Class B common shares and our preference
shares on any matter for which holders of our Class B common shares are
entitled to vote under the Companies Act and on any matter which the holders
of preference shares are entitled to vote under the Companies Act or the
applicable series of preference shares. Except as otherwise specifically
provided in our bye-laws or in the Companies Act, any action to be taken by
the shareholders at any general meeting at which a quorum is in attendance
shall be decided by the affirmative vote of a majority of the votes cast at
the general meeting. Two or more persons present in person and representing in
person or by proxy a majority of the shares entitled to vote shall constitute
a quorum at a general meeting of shareholders.
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Generally, the holders of our Class B common shares will not be
entitled to vote. However, under the Companies Act, each of our shares carries
the right to vote in respect of an amalgamation or merger, whether or not it
otherwise carries the right to vote. We and IR-New Jersey have entered into a
voting agreement which provides that in those limited instances where our
Class B common shares have the right to vote, IR-New Jersey or any of our
other subsidiaries holding our Class B common shares shall vote (or abstain
from voting) the shares in the same proportion as the holders of our Class A
common shares.
Subject to the interested shareholder provisions described below in
"Voting Requirements--Greater Voting Requirements," shareholders holding a
majority of the shares voting at a general meeting (including our Class B
common shares voting as a class with our Class A common shares), and each
class or series of shares present and voting at a general meeting, and
entitled to vote as a class or series, is required to approve an amalgamation
or merger.
Cumulative voting in the election of directors is permitted under our
bye-laws. As such, at all elections of directors, each holder of our Class A
common shares will be entitled to as many votes as shall equal the number of
votes that the holder would be entitled to cast at a general meeting,
multiplied by the number of directors to be elected. A holder may cast all
such votes for a single director, or may distribute them among two or more of
the nominated directors as the holder may see fit. For more information on the
election of directors, see "--Directors".
Redemption, Repurchase and Conversion. Class A common shares will not
be convertible into shares of any other class or series or be subject to
redemption either by us or the holders of Class A common shares, provided,
however, that subject to compliance with Bermuda law, we may repurchase shares
for cancellation with the consent of the holder of such shares.
Class B common shares will be convertible by the holder thereof into
Class A common shares on a one-for-one basis in the following circumstances:
o to satisfy our obligations or any of our subsidiaries or
affiliated companies to issue Class A common shares with regard
to the issuance of shares under any of our share or deferred
compensation plans or the share or deferred compensation plans
of any of our subsidiaries or affiliated companies; or
o as consideration for any acquisition of shares or assets of a
third party. See "--Restrictions on Transfer."
In addition, and subject to the Companies Act, holders of Class B
common shares will have the right at any time following the issuance thereof
upon notice to us to require us to purchase for cancellation any or all of the
Class B common shares for cash at the per share fair market value of the Class
A common shares as of the date of such notice. The purchased Class B common
shares will then be cancelled by us. The fair market value per share of the
Class A common shares, as of any date, means the average of the high and low
sales prices of a share of the Class A common shares as reported on the New
York Stock Exchange composite tape on the applicable date. If no sales of
Class A common shares were made on the New York Stock Exchange on that date,
the average of the high and low prices as reported on the composite tape for
the most recent preceding day on which sales of the Class A common shares were
made will be the fair market value. Payment will be made within 180 calendar
days of the date of the notice and will include interest at the prime rate of
JPMorgan Chase Bank or its successor from the date of the notice until the
date of payment.
Restrictions on Transfer. Class A common shares are not subject to
restrictions on transfer, other than as required to comply with applicable
Bermuda law and U.S. and other securities laws.
Class B common shares may only be held by IR-New Jersey and other of
our wholly-owned subsidiaries, and as such, may not be transferred out of the
Ingersoll-Rand Company Limited consolidated group prior to being converted to
Class A common shares as described above under "-- Redemption, Repurchase and
Conversion." Our bye-laws provide that in the event Class B common shares are
transferred to any person or entity other than our wholly-owned, direct or
indirect, subsidiary, the shares so transferred will convert automatically
into Class A common shares on a one-for-one basis subject to adjustment for
share divisions or other recapitalization events. Any
22
transfer of Class A common shares following conversion from Class B common
shares will only be made in accordance with the applicable securities laws and
rules of the New York Stock Exchange, including those rules relating to
required shareholder approvals.
Subject to the Companies Act, any shareholder may transfer any or all
of the holder's shares by an instrument of transfer in a usual common form or
in another form which the board of directors or our agent may approve. The
board of directors may also decline to register any transfer unless:
o it is accompanied by a duly executed instrument of transfer and
by the certificate in respect of the shares to which it
relates, if a certificate has been issued by us in respect of
the shares to be transferred, and by such other evidence as the
board of directors may reasonably require to show the right of
the transferor to make the transfer; and
o all applicable consents, authorizations and permissions of any
governmental body or agency in Bermuda have been obtained.
Preemptive Rights. Holders of our common shares shall have no
preemptive or preferential rights to subscribe to or purchase any of our
securities.
Compulsory Acquisition of Shares Held by Minority Holders. An
acquiring party is generally able to compulsorily acquire the common shares of
minority shareholders in one of the following ways:
o By a procedure under Section 99 of the Companies Act known as a
"scheme of arrangement". A scheme of arrangement is a
compromise or agreement made between us and our creditors or
shareholders, which is made by obtaining (1) the consent for
the arrangement of the holders of the Class A common shares and
Class B common shares by a majority in number representing 75%
in value of the shares voting at such meeting at which a quorum
is present in person or by proxy and (2) the consent of the
Bermuda Court. A scheme of arrangement is binding on all of our
members or creditors.
o By a procedure under Section 102 of the Companies Act for the
compulsory acquisition of the shares of shareholders who
dissent from a scheme or contract which involves the transfer
of shares in us to another company. Where such a scheme or
contract is approved by the holders of 90% in value of the
shares to be transferred, the transferee company can, within 2
months of such approval, serve notice requiring those
shareholders who dissent to transfer their shares to the
transferee company. If no application is made by a dissenting
shareholder to the Bermuda court within one month of receiving
such notice, the dissenting shareholder is obliged to transfer
his shares to the transferee on the terms of the scheme or
contract. There are additional requirements which the
transferee company has to satisfy in the event that it already
holds more than 10% in value of the shares in us when proposing
the scheme or contract.
o By a procedure under Section 103 of the Companies Act, under
which the holders of not less than 95% of the shares or a class
of shares in us may give notice to the remaining shareholders
or shareholders of the relevant class that they wish
compulsorily to acquire their shares, on the terms set out in
the notice. The shareholders receiving the notice can either
accept it, or apply to the Bermuda court within one month of
receiving such notice for the court to appraise the value of
their shares. The shareholder who gave the notice to acquire
has the option either to proceed to acquire the shares at the
price fixed by the court, or to discontinue the purchase.
If the procedures under Section 99 of the Companies Act are followed
correctly, the rights of the holders of the Class A common shares and Class B
common shares could be compulsorily varied or modified. If the procedures
under Sections 102 or 103 are followed correctly, holders of the Class A
common shares and Class B common shares could be compelled to sell their
shares under the terms of the scheme or contract proposed or at the fair value
of such shares as determined by the Bermuda court.
Liability for Further Calls or Assessments; No Sinking Fund. Our
outstanding Class A common shares are duly and validly issued, fully paid and
non-assessable. Our common shares have no sinking fund provisions.
23
Transfer Agent. The registrar and transfer agent for the Class A
common shares is The Bank of New York.
Listing. Our Class A common shares are listed on the New York Stock
Exchange under the trading symbol "IR".
Preference Shares
Our bye-laws provide for preference shares which may be issued, from
time to time, in one or more series with certain rights and limitations as may
be fixed by our board of directors. We have no present plan to issue any
preference shares other than in accordance with our rights plan. However, our
board of directors, without shareholder approval, may issue preference shares
that could adversely affect the voting power of holders of the common shares.
Issuance of preference shares could be utilized, under certain circumstances,
in an attempt to prevent a takeover of us.
The following description sets forth certain general terms and
provisions of the preference shares to which a prospectus supplement may
relate. Certain terms of a series of the preference shares offered by a
prospectus supplement will be described in such prospectus supplement. If so
indicated in the prospectus supplement and if permitted by our memorandum of
association and bye-laws, the terms of any such series may differ from the
terms set forth below. The following description of the preference shares
summarizes certain provisions of our bye-laws, and is subject to and qualified
in its entirety by reference to our bye-laws, and the board of directors
resolution designating the rights, which will be filed with the SEC promptly
after any offering of such series of preference shares. The following
description, together with any description of the terms of a series of
preference shares set forth in the related prospectus supplement, summarizes
all of the material terms of such series of preference shares.
General. The board of directors may from time to time authorize the
issuance of preference shares in one or more series of preference shares, and
in the resolution or resolutions providing for the issuance of such shares,
the board of directors is expressly authorized to fix for each such series:
o the distinctive designation of such series and the number of
shares which shall constitute such series, which number may be
increased (except as otherwise provided by the board or
directors in creating such series) or decreased (but not below
the number of shares thereof then in issue) from time to time
by resolution of the board of directors;
o the rate of dividends payable on shares of such series, whether
or not and upon what conditions dividends on shares of such
series shall be cumulative and, if cumulative, the date or
dates from which dividends shall accumulate;
o the terms, if any, on which shares of such series may be
redeemed, including without limitation, the redemption price or
prices for such series, which may consist of a redemption price
or scale of redemption prices applicable only to redemption in
connection with a sinking fund (which term as used herein shall
include any fund or requirement for the periodic purchase or
redemption of shares), and the same or a different redemption
price or scale of redemption prices applicable to any other
redemption;
o the terms and amount of any sinking fund provided for the
purchase or redemption of shares of such series;
o the amount or amounts which shall be paid to the holders of
shares of such series in case of liquidation, dissolution or
winding up of us, whether voluntary or involuntary;
o the terms, if any, upon which the holders of shares of such
series may convert shares thereof into shares of any other
class or classes or of any one or more series of the same class
or of another class or classes;
o the voting rights, full or limited, if any, of the shares of
such series; and whether or not and under what conditions the
shares of such series (alone or together with the shares of one
or more other series having similar provisions) shall be
entitled to vote separately as a single class, for the
24
election of one or more of our additional directors in case of
dividend arrearages or other specified events, or upon other
matters;
o whether or not the holders of shares of such series shall have
any preemptive or preferential rights to subscribe to or
purchase shares of any class or series, now or hereafter
authorized, or any securities convertible into, or warrants or
other evidences of optional rights to purchase or subscribe to,
shares of any class or series, now or hereafter authorized;
o whether or not the issuance of additional shares of such
series, or of any shares of any other series, shall be subject
to restrictions as to issuance, or as to the preferences,
rights and qualifications of any such other series; and
o such other rights, preferences and limitations as may be
permitted to be fixed by our board of directors under the laws
of Bermuda as in effect at the time of the creation of such
series.
Subject to these bye-laws and except to the extent otherwise provided
for in a series of preference shares in its designation, the preference
shares, irrespective of series, shall be of equal rank and be identical in all
respects. The board of directors is authorized to change the designations,
rights, preferences and limitations of any series of preference shares
theretofore established, no shares of which have been issued.
Dividends. The holders of preference shares shall be entitled to
receive, when, as and if declared by the board of directors out of funds
legally available for the payment of dividends, cumulative dividends in cash
at the annual rate for each particular series theretofore fixed by the board
of directors, payable in respect of each series on the date or dates which
shall be fixed by the board of directors with respect to each particular
series.
If at any time there are two or more series of preference shares
outstanding, any dividend paid upon preference shares in an amount less than
all dividends accrued and unpaid on all outstanding preference shares shall be
paid ratably among all series of preference shares in proportion to the full
amount of dividends accrued and unpaid on each such series.
So long as any preference share is outstanding, no dividend shall be
paid or declared, nor any distribution made, on the common shares or any of
our other shares ranking junior to the preference shares in the payment of
dividends (other than a dividend payable in shares of junior rank), nor shall
any shares of common shares or any other shares of junior rank be acquired for
consideration by us or by any subsidiary except in exchange for shares of
junior rank unless:
o full dividends on the preference shares for all past dividend
periods shall have been paid or shall have been declared and a
sufficient sum set apart for the payment thereof; and
o all of our obligations, if any, with respect to the redemption
or purchase of shares of preference shares in accordance with
the requirements of any sinking fund have been met.
Subject to the foregoing provisions, such dividends (payable in cash,
shares or otherwise) as may be determined from time to time by the board of
directors may be declared and paid on the common shares or any other shares of
junior rank out of our remaining funds legally available for the payment of
dividends; and the preference shares shall not be entitled to participate in
any such dividends, whether payable in cash, shares or otherwise.
Redemption. If so provided by the board of directors, we may, at the
option of the board of directors, or in accordance with the requirements of
any sinking fund for the preference shares or any series thereof, redeem the
whole or any part of the preference shares at any time outstanding, or the
whole or any part of any series thereof, at such time or times and from time
to time and at such redemption price or prices as may be fixed by the board of
directors pursuant to the memorandum of association and bye-laws, together in
each case with an amount equal to all unpaid dividends accrued thereon to the
date fixed for such redemption, and otherwise upon the terms and conditions
fixed by the board of directors for any such redemption; provided, however,
that no optional redemption of less than all of the preference shares shall
take place unless:
25
o full dividends on the preference shares for all past dividend
periods shall have been paid or declared and a sufficient sum
set apart for the payment thereof; and
o all of our obligations, if any, with respect to the redemption
or purchase of preference shares in accordance with the
requirements of any sinking fund have been met.
If at any time there are two or more series of preference shares
outstanding, any amount expended in purchasing or redeeming shares of
preference shares pursuant to the provisions of sinking funds therefore which
is less than the amount then required to be so expended under all such funds
shall be expended ratably among all series of preference shares in proportion
to the full amount of expenditures of such funds then required in respect of
each such series.
Voting Requirements
Majority Voting Requirements. Subject to the provisions described
below under "--Greater Voting Requirements" and except as otherwise expressly
provided in our memorandum of association, bye-laws, the Companies Act, or as
may otherwise be required by law, action to be taken by the shareholders at
any general meeting at which a quorum is in attendance shall be decided by the
affirmative vote of a majority of the votes cast at the general meeting
(including Class B common shares voting as a class with Class A common shares
in those circumstances where the Class B common shares are entitled to vote).
As a result, in the case of each of:
o a plan of amalgamation, merger or consolidation;
o a dissolution of us;
o an amendment to the memorandum of association or our bye-laws
(amendments to our bye-laws also require a resolution of our
board of directors); and
o a sale, lease, exchange or other disposition of all, or
substantially all, of our assets,
any such action shall be approved upon receiving the affirmative vote of a
majority of the votes cast by the holders of our shares entitled to vote
therein, and, in addition, if any class or series is entitled to vote thereon
as a class, the affirmative vote of a majority of the votes cast in each class
vote. Such voting requirements shall be subject to such greater requirements
as are provided in the Companies Act for specific amendments or as may be
provided in the memorandum of association or bye-laws. We and IR-New Jersey
have entered into a voting agreement which provides that in those limited
circumstances where our Class B common shares have the right to vote, IR-New
Jersey or any other of our subsidiaries holding our Class B common shares
shall vote (or abstain from voting) the shares in same proportion as the
holders of our Class A common shares. See "--Class A Common Shares--Voting".
Greater Voting Requirements. As provided in our bye-laws, the
affirmative vote of the holders of 80% of the shares then in issue of all
classes of shares entitled to vote considered for purposes of this provision
as one class, is required for us to engage in any "business combination" with
any interested shareholder (generally, a 10% or greater shareholder), provided
that the above vote requirement does not apply to:
o any business combination with an interested shareholder that
has been approved by the board of directors; or
o any agreement for the amalgamation, merger or consolidation of
any of our subsidiaries with us or with another of our
subsidiaries if (1) the relevant bye-law provisions will not be
changed or otherwise affected by or by virtue of the
amalgamation, merger or consolidation and (2) the holders of
greater than 50% of the voting power of us or the subsidiary,
as appropriate, immediately prior to the amalgamation, merger
or consolidation continue to hold greater than 50% of the
voting power of the amalgamated company immediately following
the amalgamation, merger or consolidation.
26
Our bye-laws provide that "business combination" means:
o any amalgamation, merger or consolidation of us or one of our
subsidiaries with an interested shareholder or with any person
that is, or would be after such amalgamation, merger or
consolidation, an affiliate or associate of an interested
shareholder;
o any transfer or other disposition to or with an interested
shareholder or any affiliate or associate of an interested
shareholder of all or any material part of the assets of us or
one of our subsidiaries; and
o any issuance or transfer of our shares upon conversion of or in
exchange for the securities or assets of any interested
shareholder, or with any company that is, or would be after
such merger or consolidation, an affiliate or associate of an
interested shareholder.
Subject to the interested shareholder provisions described above,
shareholders holding a majority of the shares voting at a general meeting
(including Class B common shares voting as a class with Class A common
shares), and each class or series of shares present and voting at a general
meeting, and entitled to vote as a class or series, is required to approve an
amalgamation or merger.
In addition, greater voting requirements also apply to certain
interested director transactions. Under the Companies Act, except for certain
limited circumstances, the consent of the holders of 90% of the shares then in
issue of all classes of shares entitled to vote, is required for us to make a
loan to or enter into any guarantee or provide security in respect of any loan
made to any person who is a director (or certain related persons or companies)
of our company (or of our holding company, if there is one). In addition, a
director who has an interest in any material contract or proposed material
contract (or in any person that is a party to the contract) with us or any of
our subsidiaries and who fails to disclose the interest shall be deemed not to
be acting honestly and in good faith.
Subject to the terms of any other class of shares in issue, any
action required or permitted to be taken by the holders of our common shares
must be taken at a duly called annual or special general meeting of
shareholders unless taken by written consent of all holders of common shares
required or permitted to take such action. Under our bye-laws, a special
general meeting may be called by the chairman of the board of directors, the
president, a majority of the board of directors, or upon the request of
shareholders holding at least 10% of our shares as provided in the Companies
Act. Our bye-laws provide that any matter to be voted upon at a meeting called
by shareholders requires the affirmative vote of at least 66 2/3% of the shares
entitled to vote.
Changes to Rights of a Class or Series. Any rights attached to any
class or series of our shares, unless otherwise provided by the terms of that
class or series, may be varied only with the consent in writing of the holders
of 75% of that class or series or by a resolution passed at a separate general
meeting of holders of the shares of that class or series. Each holder of
shares of the class or series present will have one vote for each share of the
class or series held to the extent such class or series has voting rights.
Outstanding shares will not be deemed to be varied by the creation or issue of
shares that rank in any respect prior to or equivalent with those shares.
Directors
Our bye-laws provide that the board of directors will consist of not
less than three nor more than twenty persons, with the exact number in that
range to be set from time to time by the board of directors. Accordingly, the
board of directors, and not the shareholders, has the authority to determine
the number of directors within the stated range and could delay any
shareholder from obtaining majority representation on the board of directors
by enlarging the board of directors and filling the new vacancies with its own
nominees.
Directors are also divided into three classes, with each class to
consist, as nearly as possible, of one-third of the total number of directors.
A staggered board makes it more difficult to replace a majority or all of the
board of directors. If the number of directors is changed, any increase or
decrease will be apportioned among the classes so as to maintain each class as
nearly equal as possible. No reduction shall have the effect of shortening the
term of any incumbent director.
27
Except for two classes of directors that shall initially hold terms
expiring at the annual general meetings in 2002 and 2003, respectively, the
term of office of each class shall be until the third annual general meeting
following a director's election and until the election and qualification of a
director's successor. Any vacancy among directors of any class, including a
vacancy that results from an increase in the number of directors within the
range stated in the bye-laws, may be filled by a vote of the majority of
remaining directors, regardless of class, provided that a quorum is present,
but any such director so elected shall hold office only until the next
succeeding annual meeting of shareholders and until his successor shall have
been elected and qualified. Directors may be removed without cause only upon
the affirmative vote of the holders of at least 80% of the shares entitled to
vote for the election of directors. Directors may be removed for cause upon
the affirmative vote of 66 2/3% of the shares entitled to vote for the election
of directors. Except as otherwise provided in our bye-laws, the shareholders
may remove a director at any special general meeting provided that the notice
of any such meeting convened for the purpose of removing a director shall
contain a statement of the intention to do so and be served on that director
not less than 14 days before the meeting, and at such meeting such director
shall be entitled to be heard on the motion for such director's removal. A
vacancy on the board of directors created by the removal of a director at a
special general meeting convened and held in accordance with our bye-laws may
be filled by the shareholders at the meeting at which such director is removed
and, in the absence of such election or appointment, the board of directors
may fill the vacancy.
Shareholder Rights Plan
Our board of directors has adopted a shareholder rights plan.
Issuance of Rights. In connection with the Reorganization, the
shareholder rights plan provided for the issuance of one right (a "right") to
purchase one one-thousandth of a Series A preference share for a purchase
price of $200 for each Class A common share in issue as of the effective time
of the Reorganization (the "record date").
Evidence of Rights. Under the shareholder rights plan, until the
earlier to occur of (1) 10 days following a public announcement that a person
or group of affiliated or associated persons (an "acquiring person") has
acquired beneficial ownership of 15% or more of the shares in issue of our
Class A common shares or (2) 10 business days (or such later date as may be
determined by action of our board of directors prior to such time as any
person or group of affiliated persons becomes an acquiring person) following
the commencement of, or announcement of an intention to make, a tender offer
or exchange offer the consummation of which would result in the beneficial
ownership by a person or group of 15% or more of the shares in issue of our
Class A common shares (the earlier of such dates being called the
"distribution date"), the rights will be evidenced, with respect to any of our
Class A common share certificates in issue as of the record date, by such
Class A common share certificates together with a summary of the rights.
The shareholder rights plan provides that, until the distribution
date (or earlier redemption or expiration of the rights), the rights will be
transferred with and only with Class A common shares. Until the distribution
date (or earlier redemption or expiration of the rights), new Class A common
share certificates issued after the record date upon transfer or new issuances
of Class A common shares will contain a notation incorporating the shareholder
rights plan by reference. Until the distribution date (or earlier redemption
or expiration of the rights), the surrender for transfer of any certificates
for Class A common shares in issue as of the record date, even without such
notation or a copy of the summary of rights, will also constitute the transfer
of the rights associated with Class A common shares represented by such
certificate. As soon as practicable following the distribution date, separate
certificates evidencing the rights will be mailed to holders of record of the
Class A common shares as of the close of business on the distribution date and
such separate certificates alone will evidence the rights.
Duration of Rights. The rights are not exercisable until the
distribution date. The rights will expire on December 22, 2008, unless this
date is extended or unless the rights are earlier redeemed or exchanged by us,
in each case as described below.
Adjustments. The purchase price payable, and the number of Series A
preference shares or other securities or property issuable, upon exercise of
the rights are subject to adjustment from time to time to prevent dilution (1)
in the event of a share dividend on, or a subdivision, combination or
reclassification of, the Series A preference shares, (2) upon the grant to
holders of the Series A preference shares of certain rights or warrants to
subscribe for or
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purchase Series A preference shares at a price, or securities convertible into
Series A preference shares, with a conversion price less than the then-current
market price of the Series A preference shares or (3) upon the distribution to
holders of the Series A preference shares of evidences of indebtedness or
assets (excluding regular periodic cash dividends or dividends payable in
Series A preference shares) or of subscription rights or warrants (other than
those referred to above).
The number of rights in issue is also subject to adjustment in the
event of a share division of our Class A common shares or a share dividend on
our Class A common shares payable in our Class A common shares or
subdivisions, consolidations or combinations of our Class A common shares
occurring, in any such case, prior to the distribution date.
Series A Preference Shares. Series A preference shares purchasable
upon exercise of the rights will not be redeemable. Each Series A preference
share will be entitled, when, as and if declared, to a minimum preferential
quarterly dividend payment of US$1.00 per share but will be entitled to an
aggregate dividend of 1000 times the dividend declared per Class A common
share. In the event of liquidation, the holders of the Series A preference
shares will be entitled to a minimum preferential liquidation payment of
US$100 per share (plus any accrued but unpaid dividends) and will be entitled
to an aggregate payment of 1000 times the payment made per Class A common
share. Each Series A preference share will have 1000 votes, voting together
with Class A common shares. Finally, in the event of any amalgamation, merger,
consolidation or other transaction in which our Class A common shares are
converted or exchanged, each Series A preference share will be entitled to
receive 1000 times the amount received per Class A common share. These rights
are protected by customary antidilution provisions.
Because of the nature of the Series A preference shares' dividend,
liquidation and voting rights, the value of the one one-thousandth interest in
a Series A preference share purchasable upon exercise of each right should
approximate the value of one Class A common share.
Exercise of Rights. In the event that any person or group of
affiliated or associated persons becomes an acquiring person, each holder of a
right, other than rights beneficially owned by the acquiring person (which
will thereupon become void), will thereafter have the right to receive upon
exercise of a right at the then-current exercise price of the right, that
number of Class A common shares having a market value of two times the
exercise price of the right.
In the event that, after a person or group has become an acquiring
person, we are acquired in an amalgamation, merger or other business
combination transaction or 50% or more of our consolidated assets or earning
power are sold, proper provision will be made so that each holder of a right
(other than rights beneficially owned by an acquiring person which will have
become void) will thereafter have the right to receive, upon the exercise
thereof at the then-current exercise price of the right, that number of common
shares of the person with whom we have engaged in the foregoing transaction
(or its parent), which number of shares at the time of such transaction will
have a market value of two times the exercise price of the right.
Exchange of Rights. At any time after any person or group becomes an
acquiring person and prior to the acquisition by such person or group of 50%
or more of the outstanding Class A common shares in issue or the occurrence of
an event described in the prior paragraph, our board of directors may exchange
the rights (other than rights owned by such person or group which will have
become void), in whole or in part, at an exchange ratio of one Class A common
share, or one one-thousandth of a Series A preference share (or of a share of
a class or series of our preference shares having equivalent rights,
preferences and privileges), per right (subject to adjustment).
No Fractional Shares. With certain exceptions, no adjustment in the
purchase price will be required until cumulative adjustments require an
adjustment of at least 1% in such purchase price. No fractional Series A
preference shares will be issued (other than fractions which are integral
multiples of one one-thousandth of a Series A preference share, which may, at
our election, be evidenced by depositary receipts) and in lieu thereof, an
adjustment in cash will be made based on the market price of the Series A
preference shares on the last trading day prior to the date of exercise.
Redemption. At any time prior to the time an acquiring person becomes
such, our board of directors may redeem the rights in whole, but not in part,
at a price of US$.01 per right (the "redemption price"). The redemption
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of the rights may be made effective at such time, on such basis and with such
conditions as the board of directors in its sole discretion may establish.
Immediately upon any redemption of the rights, the right to exercise the
rights will terminate and the only right of the holders of rights will be to
receive the redemption price.
Amendment of Rights. The terms of the rights may be amended by our
board of directors without the consent of the holders of the rights, including
an amendment to lower the 15% threshold for an acquiring person described
above to not less than the greater of (1) the sum of .001% and the largest
percentage of the Class A common shares in issue then known to us to be
beneficially owned by any person or group of affiliated or associated persons
and (2) 10%, except that from and after such time as any person or group of
affiliated or associated persons becomes an acquiring person no such amendment
may adversely affect the interests of the holders of the rights.
No Rights as a Shareholder. Until a right is exercised, the holder
thereof, as such, will have no rights as a shareholder of us including,
without limitation, the right to vote or to receive dividends.
Certain Anti-Takeover Effects. The rights have certain anti-takeover
effects. The rights will cause substantial dilution to a person or group that
attempts to acquire us on terms not approved by our board of directors, except
pursuant to an offer conditioned on a substantial number of rights being
acquired. The rights should not interfere with any amalgamation, merger or
other business combination approved by the board of directors since the rights
may be redeemed by us at the redemption price prior to the time that a person
or group has acquired beneficial ownership of 15% or more of the Class A
common shares.
Bringing Business Before an Annual Meeting
Our bye-laws provide that at any annual general meeting, only such
business shall be conducted as shall have been brought before the meeting by
or at the direction of the board of directors, by any shareholder who complies
with certain procedures set forth in the bye-laws or by any shareholder
pursuant to the valid exercise of the power granted under the Companies Act.
For business to be properly brought before an annual general meeting by a
shareholder, the shareholder must have given timely notice thereof in proper
written form to our secretary and satisfied all requirements under applicable
rules promulgated by the Securities and Exchange Commission and by the New
York Stock Exchange or any other exchange on which our securities are traded.
To be timely for consideration at the annual general meeting, a shareholder's
notice must be received by the secretary at our principal executive offices
not later than the date which is 90 days in advance of the anniversary of the
immediately preceding annual general meeting or, if the date of the annual
general meeting occurs more than 30 days before, or 60 days after, the
anniversary of such immediately preceding annual general meeting, not later
than the seventh day after the date on which notice of such annual general
meeting is given.
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Description of Depositary Shares
The description set forth below and in any prospectus supplement of
certain provisions of any deposit agreement and any related depositary shares
and depositary receipts summarizes the material terms of that deposit
agreement and of the depositary shares and depositary receipts. This summary
does not contain all of the information that you may find useful. For more
information, please review the form of deposit agreement and form of
depositary receipts relating to each series of the preference shares, which
will be filed with the SEC promptly after the offering of that series of
preference shares.
General
We may elect to have preference shares represented by depositary
shares. The preference shares of any series underlying the depositary shares
will be deposited under a separate deposit agreement between us and a bank or
trust company we select. The prospectus supplement relating to a series of
depositary shares will set forth the name and address of this preference share
depositary. Subject to the terms of the deposit agreement, each owner of a
depositary share will be entitled, proportionately, to all the rights,
preferences and privileges of the preference share represented by such
depositary share (including dividend, voting, redemption, conversion, exchange
and liquidation rights).
The depositary shares will be evidenced by depositary receipts issued
pursuant to the deposit agreement, each of which will represent the applicable
interest in a number of shares of a particular series of the preference shares
described in the applicable prospectus supplement.
A holder of depositary shares will be entitled to receive the
preference shares (but only in whole preference shares) underlying those
depositary shares. If the depositary receipts delivered by the holder evidence
a number of depositary shares in excess of the whole number of preference
shares to be withdrawn, the depositary will deliver to that holder at the same
time a new depositary receipt for the excess number of depositary shares.
Dividends and Other Distributions
The preference share depositary will distribute all cash dividends or
other cash distributions in respect of the preference shares to the record
holders of depositary receipts in proportion, insofar as possible, to the
number of depositary shares owned by those holders.
If there is a distribution other than in cash in respect of the
preference shares, the preference share depositary will distribute property
received by it to the record holders of depositary receipts in proportion,
insofar as possible, to the number of depositary shares owned by those
holders, unless the preference share depositary determines that it is not
feasible to make such a distribution. In that case, the preference share
depositary may, with our approval, adopt any method that it deems equitable
and practicable to effect the distribution, including a public or private sale
of the property and distribution of the net proceeds from the sale to the
holders.
The amount distributed in any of the above cases will be reduced by
any amount we or the preference share depositary are required to withhold on
account of taxes.
Conversion and Exchange
If any preference share underlying the depositary shares is subject
to provisions relating to its conversion or exchange as set forth in an
applicable prospectus supplement, each record holder of depositary shares will
have the right or obligation to convert or exchange those depositary shares
pursuant to those provisions.
Redemption of Depositary Shares
Whenever we redeem a preference share held by the preference share
depositary, the preference share depositary will redeem as of the same
redemption date a proportionate number of depositary shares representing the
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preference shares that were redeemed. The redemption price per depositary
share will be equal to the aggregate redemption price payable with respect to
the number of preference shares underlying the depositary shares. If fewer
than all the depositary shares are to be redeemed, the depositary shares to be
redeemed will be selected by lot or proportionately as we may determine.
After the date fixed for redemption, the depositary shares called for
redemption will no longer be deemed to be outstanding and all rights of the
holders of the depositary shares will cease, except the right to receive the
redemption price.
Voting
Upon receipt of notice of any meeting at which the holders of any
preference shares underlying the depositary shares are entitled to vote, the
preference share depositary will mail the information contained in the notice
to the record holders of the depositary receipts. Each record holder of the
depositary receipts on the record date (which will be the same date as the
record date for the preference shares) may then instruct the preference share
depositary as to the exercise of the voting rights pertaining to the number of
preference shares underlying that holder's depositary shares. The preference
share depositary will try to vote the number of preference shares underlying
the depositary shares in accordance with the instructions, and we will agree
to take all reasonable action which the preference share depositary deems
necessary to enable the preference share depositary to do so. The preference
share depositary will abstain from voting the preference shares to the extent
that it does not receive specific written instructions from holders of
depositary receipts representing the preference share.
Record Date
Whenever
o any cash dividend or other cash distribution becomes payable,
any distribution other than cash is made, or any rights,
preferences or privileges are offered with respect to the
preference shares; or
o the preference share depositary receives notice of any meeting
at which holders of preference shares are entitled to vote or
of which holders of preference shares are entitled to notice,
or of the mandatory conversion of or any election by us to call
for the redemption of any preference share,
the preference share depositary will in each instance fix a record date (which
will be the same as the record date for the preferred shares) for the
determination of the holders of depositary receipts:
o who will be entitled to receive dividend, distribution, rights,
preferences or privileges or the net proceeds of any sale; or
o who will be entitled to give instructions for the exercise of
voting rights at any such meeting or to receive notice of the
meeting or the redemption or conversion, subject to the
provisions of the deposit agreement.
Amendment and Termination of the Deposit Agreement
We and the preference share depositary may at any time agree to amend
the form of depositary receipt and any provision of the deposit agreement.
However, any amendment that materially and adversely alters the rights of
holders of depositary shares will not be effective unless the amendment has
been approved by the holders of at least a majority of the depositary shares
then outstanding. The deposit agreement may be terminated by us or by the
preference share depositary only if all outstanding shares have been redeemed
or if a final distribution in respect of the underlying preference shares has
been made to the holders of the depositary shares in connection with the
liquidation, dissolution or winding up of us.
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Charges of Preference Share Depositary
We will pay all charges of the preference share depositary including
charges in connection with the initial deposit of the preference shares, the
initial issuance of the depositary receipts, the distribution of information
to the holders of depositary receipts with respect to matters on which the
preference share is entitled to vote, withdrawals of the preference share by
the holders of depositary receipts or redemption or conversion of the
preference share, except for taxes (including transfer taxes, if any) and
other governmental charges and any other charges expressly provided in the
deposit agreement to be at the expense of holders of depositary receipts or
persons depositing preference shares.
Miscellaneous
Neither we nor the preference share depositary will be liable if
either of us is prevented or delayed by law or any circumstance beyond our
control in performing any obligations under the deposit agreement. The
obligations of the preference share depositary under the deposit agreement are
limited to performing its duties under the agreement without negligence or bad
faith. Our obligations under the deposit agreement are limited to performing
our duties in good faith. Neither we nor the preference share depositary is
obligated to prosecute or defend any legal proceeding in respect of any
depositary shares or preference shares unless satisfactory indemnity is
furnished. We and the preference share depositary may rely on advice of or
information from counsel, accountants or other persons that they believe to be
competent and on documents that they believe to be genuine.
The preference share depositary may resign at any time or be removed
by us, effective upon the acceptance by its successor of its appointment. If
we have not appointed a successor preference share depositary and the
successor depositary has not accepted its appointment within 60 days after the
preference share depositary delivered a resignation notice to us, the
preference share depositary may terminate the deposit agreement. See
"Amendment and Termination of the Deposit Agreement" above.
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Description of Share Purchase Contracts
and Share Purchase Units
We may issue share purchase contracts representing contracts
obligating holders to purchase from us and us to sell to the holders a
specified number of common shares or preference shares at a future date or
dates. The price per share of common share or preference share may be fixed at
the time the share purchase contracts are issued or may be determined by
reference to a specific formula set forth in the share purchase contracts.
The share purchase contracts may be issued separately or as a part of
units, often known as share purchase units, consisting of a share purchase
contract and either
o senior debt securities;
o subordinated debt securities; or
o debt obligations of third parties, including U.S. Treasury
securities,
securing the holder's obligations to purchase the common shares or preference
shares under the share purchase contracts. The share purchase contracts may
require us to make periodic payments to the holders of the share purchase
units or vice versa, and such payments may be unsecured or prefunded on some
basis. The share purchase contracts may require holders to secure their
obligations in a specified manner and in certain circumstances we may deliver
newly issued prepaid share purchase contracts, often known as prepaid
securities, upon release to a holder of any collateral securing each holder's
obligations under the original share purchase contract.
The applicable prospectus supplement will describe the terms of any
share purchase contracts or share purchase units and, if applicable, prepaid
securities. The description in the prospectus supplement will not contain all
of the information that you may find useful. For more information, you should
review the share purchase contracts, the collateral arrangements and
depositary arrangements, if applicable, relating to such share purchase
contracts or share purchase units and, if applicable, the prepaid securities
and the document pursuant to which the prepaid securities will be issued,
which will be filed with the SEC promptly after the offering of such share
purchase contracts or share purchase units and, if applicable, prepaid
securities.
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Certain Tax Considerations
Bermuda Tax Considerations
Under current law, no income or withholding taxes are imposed in
Bermuda upon the issue, transfer or sale, or payments made in respect of the
debt securities, common shares, preference shares, depositary shares or
warrants of a Bermuda exempted company to persons non-resident in Bermuda. We
have received from the Minister of Finance of Bermuda under the Exempted
Undertakings Tax Protection Act of 1966 an undertaking that, in the event of
there being enacted in Bermuda any legislation imposing any tax computed on
profits or income, including any dividend or capital gains withholding tax, or
computed on any capital assets, gain or appreciation or any tax in the nature
of an estate or inheritance tax or duty, the imposition of such tax shall not
be applicable to us or any of our operations, nor to our common shares nor to
our obligations until March 28, 2016. This undertaking does not, however,
prevent the application of Bermuda taxes to persons ordinarily resident in
Bermuda.
United States Federal Income Tax Considerations
The following is a summary of certain United States federal income
tax consequences, as of the date of this document, of the ownership of our
debt securities, common shares, preference shares, depositary shares or
warrants by beneficial owners that purchase the debt securities, shares or
warrants in connection with their initial issuance, that hold the debt
securities, shares or warrants as capital assets and that are "United States
holders" under the Internal Revenue Code. Under the Internal Revenue Code, you
are a "United States holder" if you are:
o a citizen or resident of the United States;
o a corporation or partnership created or organized in or under
the laws of the United States or any political subdivision
thereof;
o an estate the income of which is subject to United States
federal income taxation regardless of its source;
o a trust if it (1) is subject to the primary supervision of a
court within the United States and one or more United States
holders have the authority to control all substantial decisions
of the trust or (2) has a valid election in effect under
applicable United States Treasury regulations to be treated as
a United States holder.
This summary is based on current law, which is subject to change,
perhaps retroactively, is for general purposes only and should not be
considered tax advice. This summary does not represent a detailed description
of the United States federal income tax consequences to you in light of your
particular circumstances. In addition, it does not present a description of
the United States federal income tax consequences applicable to you if you are
subject to special treatment under the United States federal income tax laws,
including if you are:
o a dealer in securities or currencies;
o a trader in securities if you elect to use a mark-to-market
method of accounting for your securities holdings;
o a financial institution;
o an insurance company;
o a tax-exempt organization;
o a person liable for alternative minimum tax;
o a person holding debt securities, common shares, preference
shares, depositary shares or warrants as part of a hedging,
integrated or conversion transaction, constructive sale or
straddle;
35
o a person owning, actually or constructively, 10% or more of our
voting shares or 10% or more of the voting shares of any of our
non-United States subsidiaries;
o a United States holder whose "functional currency" is not the
United States dollar;
o a regulated investment company; or
o a real estate investment trust.
We cannot assure you that a later change in law will not alter
significantly the tax considerations that we describe in this summary. The
discussion below assumes that all debt securities issued hereunder will be
classified as debt for United States federal income tax purposes, and holders
should note that in the event of an alternative characterization, the tax
consequences would differ from those discussed below.
If a partnership holds our debt securities, common shares, preference
shares, depositary shares or warrants, the tax treatment of a partner will
generally depend upon the status of the partner and the activities of the
partnership. If you are a partner of a partnership holding our debt
securities, common shares, preference shares, depositary shares or warrants,
you should consult your tax advisor.
You should consult your own tax advisor concerning the particular
United States federal income tax consequences to you of the ownership and
disposition of debt securities, common shares, preference shares, depositary
shares or warrants, as well as the consequences to you arising under the laws
of any other taxing jurisdiction.
Debt Securities
This summary is not intended to include all of the possible types of
debt securities that we may issue under this prospectus, including, for
example, short-term debt securities, floating rate debt securities, foreign
currency debt securities, extendible, reset or renewable debt securities or
securities providing for contingent payments. We will describe any additional
United States federal income tax consequences resulting from a specific
issuance of debt securities in the applicable prospectus supplement.
Payment of Interest
Except as provided below, interest on a debt security will generally
be taxable to you as ordinary income at the time it is paid or accrued in
accordance with your method of accounting for tax purposes.
Original Issue Discount
If you own debt securities issued with original issue discount, which
we refer to as "OID", you will be subject to special tax accounting rules, as
described in greater detail below. In that case, you should be aware that you
generally must include OID in gross income in advance of the receipt of cash
attributable to that income. However, you generally will not be required to
include separately in income cash payments received on the debt securities,
even if denominated as interest, to the extent those payments do not
constitute qualified stated interest, as defined below. Notice will be given
in the applicable prospectus supplement when we determine that a particular
debt security will be an original issue discount debt security.
A debt security with an issue price that is less than its "stated
redemption price at maturity" (the sum of all payments to be made on the debt
security other than "qualified stated interest") generally will be issued with
OID if that difference is at least 0.25% of the stated redemption price at
maturity multiplied by the number of complete years to maturity. The "issue
price" of each debt security in a particular offering will be the first price
at which a substantial amount of that particular offering is sold to the
public. The term "qualified stated interest" means stated interest that is
unconditionally payable in cash or in property, other than debt instruments of
the issuer, and meets all of the following conditions:
o it is payable at least once per year;
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o it is payable over the entire term of the debt security; and
o it is payable at a single fixed rate or, subject to certain
conditions, based on one or more interest indices.
We will give you notice in the applicable prospectus supplement when
we determine that a particular debt security will bear interest that is not
qualified stated interest.
If you own a debt security issued with de minimis OID, i.e., discount
that is not OID because it is less than 0.25% of the stated redemption price
at maturity multiplied by the number of complete years to maturity, you
generally must include the de minimis OID in income at the time payments,
other than qualified stated interest, on the debt securities are made in
proportion to the amount paid. Any amount of de minimis OID that you have
included in income will be treated as capital gain.
Certain of the debt securities may contain provisions permitting them
to be redeemed prior to their stated maturity at our option and/or your
option. Original issue discount debt securities containing those features may
be subject to rules that differ from the general rules discussed herein. If
you are considering the purchase of original issue discount debt securities
with those features, you should carefully examine the applicable prospectus
supplement and should consult your own tax advisors with respect to those
features since the tax consequences to you with respect to OID will depend, in
part, on the particular terms and features of the debt securities.
If you own original issue discount debt securities with a maturity
upon issuance of more than one year you generally must include OID in income
in advance of the receipt of some or all of the related cash payments using
the "constant yield method" described in the following paragraph.
The amount of OID that you must include in income if you are the
initial United States holder of an original issue discount debt security is
the sum of the "daily portions" of OID with respect to the debt security for
each day during the taxable year or portion of the taxable year in which you
held that debt security ("accrued OID"). The daily portion is determined by
allocating to each day in any "accrual period" a pro rata portion of the OID
allocable to that accrual period. The "accrual period" for an original issue
discount debt security may be of any length and may vary in length over the
term of the debt security, provided that each accrual period is no longer than
one year and each scheduled payment of principal or interest occurs on the
first day or the final day of an accrual period. The amount of OID allocable
to any accrual period is an amount equal to the excess, if any, of:
o the debt security's adjusted issue price at the beginning of
the accrual period times its yield to maturity, determined on
the basis of compounding at the close of each accrual period
and properly adjusted for the length of the accrual period,
over
o the aggregate of all qualified stated interest allocable to the
accrual period.
OID allocable to a final accrual period is the difference between the
amount payable at maturity, other than a payment of qualified stated interest,
and the adjusted issue price at the beginning of the final accrual period. The
"adjusted issue price" of a debt security at the beginning of any accrual
period is equal to its issue price increased by the accrued OID for each prior
accrual period, determined without regard to the amortization of any
acquisition or bond premium, as described below, and reduced by any payments
made on the debt security (other than qualified stated interest) on or before
the first day of the accrual period. Under these rules, you will have to
include in income increasingly greater amounts of OID in successive accrual
periods. We are required to provide information returns stating the amount of
OID accrued on debt securities held of record by holders other than
corporations and other exempt holders.
You may elect to treat all interest on any debt security as OID and
calculate the amount includible in gross income under the constant yield
method described above. For purposes of this election, interest includes
stated interest, acquisition discount, OID, de minimis OID, market discount,
de minimis market discount and unstated interest, as adjusted by any
amortizable bond premium or acquisition premium. You must make this election
for the taxable year in which you acquired the debt security, and you may not
revoke the election without the consent of the Internal Revenue Service. You
should consult with your own tax advisors about this election.
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Market Discount
If you purchase a debt security, other than an original issue
discount debt security, for an amount that is less than its stated redemption
price at maturity, or, in the case of an original issue discount debt
security, its adjusted issue price, the amount of the difference will be
treated as "market discount" for United States federal income tax purposes,
unless that difference is less than a specified de minimis amount. Under the
market discount rules, you will be required to treat any payment, other than
qualified stated interest, on, or any gain on the sale, exchange, retirement
or other disposition of, a debt security as ordinary income to the extent of
the market discount that you have not previously included in income and are
treated as having accrued on the debt security at the time of its payment or
disposition. In addition, you may be required to defer, until the maturity of
the debt security or its earlier disposition in a taxable transaction, the
deduction of all or a portion of the interest expense on any indebtedness
attributable to the debt security.
Any market discount will be considered to accrue ratably during the
period from the date of acquisition to the maturity date of the debt security,
unless you elect to accrue on a constant interest method. Your election to
accrue market discount on a constant interest method is to be made for the
taxable year in which you acquired the debt security, applies only to that
debt security and may not be revoked without the consent of the Internal
Revenue Service. You may elect to include market discount in income currently
as it accrues, on either a ratable or constant interest method, in which case
the rule described above regarding deferral of interest deductions will not
apply. Your election to include market discount in income currently, once
made, applies to all market discount obligations acquired by you on or after
the first taxable year to which your election applies and may not be revoked
without the consent of the Internal Revenue Service. You should consult your
own tax advisor before making either election described in this paragraph.
Acquisition Premium; Amortizable Bond Premium
If you purchase an original issue discount debt security for an
amount that is greater than its adjusted issue price but equal to or less than
the sum of all amounts payable on the debt security after the purchase date
other than payments of qualified stated interest, you will be considered to
have purchased that debt security at an "acquisition premium." Under the
acquisition premium rules, the amount of OID that you must include in gross
income with respect to the debt security for any taxable year will be reduced
by the portion of the acquisition premium properly allocable to that year.
If you purchase a debt security, including an original issue discount
debt security, for an amount in excess of the sum of all amounts payable on
the debt security after the purchase date other than qualified stated
interest, you will be considered to have purchased the debt security at a
"premium" and, if it is an original issue discount debt security, you will not
be required to include any OID in income. You generally may elect to amortize
the premium over the remaining term of the debt security on a constant yield
method as an offset to interest when includible in income under your regular
accounting method. If you do not elect to amortize bond premium, that premium
will decrease the gain or increase the loss you would otherwise recognize on
disposition of the debt security. Your election to amortize premium on a
constant yield method will also apply to all debt obligations held or
subsequently acquired by you on or after the first day of the first taxable
year to which the election applies. You may not revoke the election without
the consent of the Internal Revenue Service. You should consult your own tax
advisor before making this election.
Sale, Exchange and Retirement of Debt Securities
Your tax basis in a debt security will, in general, be your cost for
that debt security, increased by OID, market discount or any discount with
respect to a short-term debt security that you previously included in income,
and reduced by any amortized premium and any cash payments on the debt
security other than qualified stated interest. Upon the sale, exchange,
retirement or other disposition of a debt security, you will recognize gain or
loss equal to the difference between the amount you realize upon the sale,
exchange, retirement or other disposition (less an amount equal to any accrued
qualified stated interest previously includible in income, which will be
treated as a payment of interest for federal income tax purposes), and the
adjusted tax basis of the debt security. Except as described above with
respect to market discount or with respect to contingent payment debt
instruments, short term debt securities or foreign currency debt securities,
which this summary does not generally discuss, that gain or loss
38
will be United States source capital gain or loss. Capital gains of individuals
derived in respect of capital assets held for more than one year are eligible
for reduced rates of taxation. The deductibility of capital losses is subject
to limitations.
Information Reporting and Backup Withholding
In general, information reporting will apply to certain payments of
principal, interest, OID and premium paid on debt securities and to the
proceeds of sale of a debt security made to you (unless you are an exempt
recipient such as a corporation). A backup withholding tax will apply to such
payments if you fail to provide a taxpayer identification number, a
certification of exempt status, or fail to report in full dividend and
interest income.
Any amounts withheld under the backup withholding rules will be
allowed as a refund or a credit against your United States federal income tax
liability, provided you furnish the required information to the Internal
Revenue Service.
Common Shares, Preference Shares and Depositary Shares
The consequences of the purchase, ownership or disposition of our
shares depend on a number of factors including:
o the term of the shares;
o any put or call or redemption provisions with respect to the
shares;
o any conversion or exchange features with respect to the shares;
and
o the price at which the shares are sold.
You should carefully examine the applicable prospectus supplement
regarding the material federal income tax consequences, if any of the holding
and disposition of shares with such terms.
In general for United States federal income tax purposes, United
States holders of depositary shares will be treated as the owners of the
underlying preference shares that are represented by such depositary shares.
Deposits or withdrawals of preference shares by United States holders for
depositary shares will not be subject to United States federal income tax.
Taxation of Dividends
Subject to the passive foreign investment company rules discussed
below, the gross amount of distributions you receive on your common shares,
preference shares or depositary shares, will generally be treated as dividend
income to you if the distributions are made from our current and accumulated
earnings and profits, calculated according to United States federal income tax
principles. Such income will be includible in your gross income as ordinary
income on the day you receive it. You will not be entitled to claim a
dividends received deduction with respect to distributions you receive from
us.
To the extent that the amount of any distribution exceeds our current
and accumulated earnings and profits for a taxable year, the distribution will
first be treated as a tax-free return of capital, causing a reduction in your
adjusted basis in the common shares, preference shares or depositary shares,
thereby increasing the amount of gain, or decreasing the amount of loss, you
will recognize on a subsequent disposition of the shares, and the balance in
excess of adjusted basis will be taxed as capital gain recognized on a sale or
exchange.
If, for United States federal income tax purposes, we are classified
as a "United States-owned foreign corporation", distributions made to you with
respect to your common shares, preference shares or depositary shares that are
taxable as dividends generally will be treated for United States foreign tax
credit purposes as (1) foreign source "passive income" or, in the case of some
holders, foreign source "financial services income" and (2) United States
source income, in proportion to our earnings and profits in the year of such
distribution allocable to foreign and United States sources, respectively. For
this purpose, we will be treated as a United States-owned foreign
39
corporation so long as shares representing 50% or more of the voting power or
value of our shares are owned, directly or indirectly, by United States
holders and it is our belief that as of the date of this prospectus, United
States holders own 50% or more of the voting power and value of our Class A
common shares. Thus, it is anticipated that only a portion of the dividends
received by a United States holder with respect to IR-Limited Class A common
shares will be treated as foreign source income for purposes of calculating
such holder's foreign tax credit limitation.
Preference Shares Redemption Premium
Under Section 305(c) of the Internal Revenue Code and the applicable
regulations thereunder, if in certain circumstances the redemption price of
the preference shares exceeds its issue price by more than a de minimis
amount, the difference--which we refer to as "redemption premium"--will be
taxable as a constructive distribution to you over time of additional
preference shares. These constructive distributions would be treated first as
a dividend to the extent of our current and accumulated earnings and profits
and otherwise would be subject to the treatment described above for dividends
not paid out of current and accumulated earnings and profits. If the
preference shares provide for optional rights of redemption by us at prices in
excess of the issue price, you could be required to recognize such excess if,
based on all of the facts and circumstances, the optional redemptions are more
likely than not to occur. Applicable regulations provide a "safe harbor" under
which a right to redeem will not be treated as more likely than not to occur
if (1) you are not related to us within the meaning of the regulations; (2)
there are no plans, arrangements, or agreements that effectively require or
are intended to compel us to redeem the shares and (3) exercise of the right
to redeem would not reduce the yield of the shares, as determined under the
regulations. Regardless of whether the optional redemptions are more likely
than not to occur, constructive dividend treatment will not result if the
redemption premium does not exceed a de minimis amount or is in the nature of
a penalty for premature redemption. You should also consult the applicable
prospectus supplement for information regarding any additional consequences
under Section 305(c) in light of the particular terms of an issuance of
preference shares.
Disposition of the Common Shares, Preference Shares or Depositary Shares
Subject to the passive foreign investment company rules and
redemption rules discussed below, when you sell or otherwise dispose of your
common shares, preference shares or depositary shares you will recognize
capital gain or loss in an amount equal to the difference between the amount
you realize for the shares and your adjusted tax basis in them. In general,
your adjusted tax basis in the common shares will be your cost of obtaining
the shares reduced by any previous distributions that are not characterized as
dividends. In general, your adjusted tax basis in the preference shares or
depositary shares will be your cost of obtaining those shares increased by any
redemption premium previously included in income by you and reduced by any
previous distributions that are not characterized as dividends. For foreign
tax credit limitation purposes, such gain or loss will generally be treated as
United States source. If you are an individual, and the shares being sold or
otherwise disposed of are capital assets that you have held for more than one
year, your gain recognized will be taxed at a maximum tax rate of 20%. Your
ability to deduct capital losses is subject to limitations. A redemption of
our common shares, preference shares or depositary shares by us may be
treated, depending upon the circumstances, as a sale or a dividend. You should
consult your tax advisor regarding the application of these rules to your
particular circumstances.
Passive Foreign Investment Company
We do not believe that we are, for United States federal tax
purposes, a passive foreign investment company (a "PFIC"), and expect to
continue our operations in such a manner that we will not become a PFIC. If,
however, we are or we become a PFIC, you could be subject to additional
federal income taxes on gain recognized with respect to the common shares,
preference shares or depositary shares and on certain distributions, plus an
interest charge on certain taxes treated as having been deferred by you under
the PFIC rules.
You should consult your own tax advisors concerning the United States
federal income tax consequences of holding our common shares, preference
shares, depositary shares or warrants if we are considered a passive foreign
investment company in any taxable year, including the advisability and
availability of making certain elections that may alleviate the tax
consequences referred to above.
40
Controlled Foreign Corporations
For the purposes of this paragraph, we will refer to United States
holders that own--or are deemed for United States federal income tax purposes
to own, pursuant to complex attribution and constructive ownership rules--10%
or more of our voting shares or the voting shares of any of our non-United
States subsidiaries as "10% Shareholders". If 10% Shareholders own, in the
aggregate, more than 50%, measured by voting power or value, of our shares or
the shares of any of our non-United States subsidiaries, directly, indirectly,
or by attribution, we or any such non-United States subsidiary would be a
controlled foreign corporation (a "CFC").
IR-New Jersey, a United States corporation, owns through its
ownership of the non-voting Class B common shares, approximately 45% of the
total value of our shares. As a consequence, any Class A common shareholder
who is considered to own 10% of the voting power in us could cause our foreign
subsidiaries or (if the Internal Revenue Service successfully takes the
position that the Class B common shares held by IR-New Jersey in us are voting
shares) us, ourselves, to be treated as a CFC.
We do not believe that for United States federal income tax purposes
we or any of our foreign subsidiaries are CFCs, although there can be no
assurance in this regard. However, if we or any of our foreign subsidiaries
are or were characterized to become CFCs, then, for the period of time that
the entity is a CFC, a portion of our undistributed income may be includible
in the taxable income of our 10% Shareholders, and all or a portion of the
gain recognized by such 10% Shareholders on the disposition of their shares,
which could otherwise qualify for capital gains treatment, may be converted
into ordinary dividend income.
Information Reporting and Backup Withholding
In general, unless you are an exempt recipient such as a corporation,
information reporting will apply to dividends in respect of the common shares,
preference shares or depositary shares or the proceeds received on the sale,
exchange, or redemption of those common shares, preference shares, depositary
shares or warrants paid to you within the United States and, in some cases,
outside of the United States. Additionally, if you fail to provide your
taxpayer identification number, or fail either to report in full dividend and
interest income or to make certain certifications, you will be subject to
backup withholding. Any amounts withheld under the backup withholding rules
will be allowed as a refund or a credit against your United States federal
income tax liability, provided you furnish the required information to the
United States Internal Revenue Service.
Warrants
You will generally not recognize any gain or loss upon the exercise
of warrants to purchase our common shares or preference shares except with
respect to cash received in lieu of a fractional share of common shares or
preference shares. You will have an initial tax basis in the common shares or
preference shares received on exercise of the warrants equal to the sum of
your tax basis in the warrants and the aggregate cash exercise price paid in
respect of such exercise less any basis attributable to the receipt of
fractional shares. Your holding period in the common shares or preference
shares received on exercise of the warrants will commence on the date after
the warrants are exercised.
Subject to the passive foreign investment company rules discussed
above, (1) if a warrant expires without being exercised, you will recognize a
capital loss in an amount equal to your tax basis in the warrant and (2) upon
the sale or exchange of a warrant, you will generally recognize a capital gain
or loss equal to the difference, if any between the amount realized on such
sale or exchange and your tax basis in such warrant.
Under Section 305 of the Code, you may be deemed to have received a
constructive distribution from us, which may result in the inclusion of
ordinary dividend income, in the event of certain adjustments, or the failure
to make certain adjustments, to the number of common shares or preference
shares to be issued upon exercise of a warrant.
If a decision is made to issue warrants exercisable into securities
other than our common shares or preference shares, we will discuss the
relevant income tax consequences in the applicable prospectus supplement.
41
Share Purchase Contracts and Share Purchase Units
If a decision is made to issue share purchase contracts or share
purchase units, we will discuss the relevant income tax consequences in the
applicable prospectus supplement.
Consequences to Non-United States Holders
The following is a summary of certain United States federal income
tax consequences that will apply to you if you are a non-United States holder
of our debt securities, common shares, preference shares, depositary shares or
warrants.
United States Federal Income Tax
Under current United States federal income tax law, interest payments
or dividends received by a non-United States holder generally will be exempt
from United States federal income tax. However, to receive this exemption you
may be required to satisfy certain certification requirements to establish
that you are a non-United States holder. You may still be subject to United
States federal income tax on interest payments or dividends you receive if:
o you are an insurance company carrying on a United States
insurance business, within the meaning of the Code; or
o you are engaged in a trade or business in the United States and
interest, including OID, on the debt securities or dividends on
common shares, preference shares or depositary shares, in each
case, are effectively connected with the conduct of that trade
or business.
In addition, if you are a foreign corporation, you may be subject to
a branch profits tax equal to 30% (or lower applicable treaty rate) of your
earnings and profits for the taxable year, subject to adjustments.
You will generally not be subject to United States federal income tax
on the disposition of a debt security or common shares, preference shares,
depositary shares or warrants unless:
o the gain is effectively connected with your conduct of a trade
or business in the United States; or
o you are an individual who is present in the United States for
183 days or more in the taxable year of that disposition, and
certain other conditions are met.
Information Reporting and Backup Withholding
In general, information reporting and backup withholding will not
apply to payments of interest or dividends that we make to you although you
may have to comply with certain certification requirements to establish that
you are not a United States person.
Payment of the proceeds from the disposition of debt securities,
common shares, preference shares, depositary shares or warrants effected at a
United States office of a broker generally will not be subject to information
reporting or backup withholding if the payor or broker does not have actual
knowledge or reason to know that you are a United States person, you comply
with certain certification requirements to establish that you are not a United
States person, and the sale does not have a connection with the United States
as specified in U.S. Treasury Regulations.
Payment of the proceeds from the disposition of debt securities,
common shares, preference shares, depositary shares or warrants effected at
foreign office of a broker generally will not be subject to information
reporting or backup withholding provided that such broker is not for United
States federal income tax purposes (1) a United States person, (2) a
controlled foreign corporation, (3) a foreign person that derives 50% or more
of its gross income for certain periods from the conduct of a trade or
business in the United States, or (4) a foreign partnership in which one or
more United States persons, in the aggregate, own more than 50% of the income
or capital interests in the partnership or which is engaged in a trade or
business in the United States. If you receive payments of such amounts outside
the United States from a foreign office of any other broker, the payment will
not be subject to
42
backup withholding tax, but will be subject to information reporting
requirements unless (1) you are the beneficial owner and the broker has
documentary evidence in its records that you are not a United States person
and certain other conditions are met or (2) you otherwise establish an
exemption, and provided that the broker does not have actual knowledge that
you are a United States person.
Any amounts withheld under the backup withholding rules will be
allowed as a refund or a credit against your United States federal income tax
liability provided the required information is furnished to the IRS.
The foregoing discussion is intended only as a summary and does not
purport to be a complete analysis or listing of all potential tax effects
relevant to a decision whether to invest in our debt securities, common
shares, preference shares, depositary shares or warrants. Potential investors
are urged to consult their tax advisors concerning the United States federal,
state and local, Bermuda, and other non-United States tax consequences of such
investment to them. If a decision is made to issue share purchase contracts or
share purchase units, we will discuss the relevant income tax consequences in
the applicable prospectus supplement.
43
Plan of Distribution
We may sell the securities offered in this prospectus in any of, or
any combination of, the following ways:
o directly to purchasers;
o through agents;
o through underwriters; and
o through dealers.
We or any of our agents may directly solicit offers to purchase these
securities. The applicable prospectus supplement will name any agent, who may
be deemed to be an underwriter as that term is defined in the Securities Act
of 1933, involved in the offer or sale of the securities in respect of which
this prospectus is delivered, and will set forth any commissions payable by us
to that agent. Unless otherwise indicated in the prospectus supplement, any
such agency will be acting in a best efforts basis for the period of its
appointment (ordinarily five business days or less). Agents, dealers and
underwriters may be customers of, engage in transactions with, or perform
services for us in the ordinary course of business.
If we utilize an underwriter or underwriters in the sale, we will
execute an underwriting agreement with such underwriters at the time of sale
to them and will set forth in the applicable prospectus supplement the names
of the underwriters and the terms of the transaction. The underwriters will
use the prospectus supplement to make releases of the securities in respect of
which this prospectus is delivered to the public.
If we utilize a dealer in the sale of the securities in respect of
which this prospectus is delivered, we will sell the securities to the dealer,
as principal. The dealer may then resell the securities to the public at
varying prices to be determined by the dealer at the time of resale. The
prospectus supplement will set forth the name of the dealer and the terms of
the transaction.
Agents, underwriters, and dealers may be entitled under the relevant
agreements to indemnification by us against certain liabilities, including
liabilities under the Securities Act of 1933.
The applicable prospectus supplement will set forth the place and
time of delivery for the securities in respect of which this prospectus is
delivered.
Legal Matters
Certain U.S. legal matters in connection with the securities will be
passed upon by Patricia Nachtigal, Esq., our Senior Vice President and General
Counsel. Certain Bermuda legal matters in connection with the securities will
be passed upon for us by our Bermuda counsel, Conyers Dill & Pearman.
Experts
The financial statements incorporated in this prospectus by reference
to our Annual Report on Form 10-K for the year ended December 31, 2001 have
been so incorporated in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
44
Cautionary Statement Regarding Forward-Looking Statements
This prospectus contains or incorporates by reference forward-looking
statements within the meaning of the Private Securities Litigation Reform Act
of 1995 with respect to the Reorganization and our financial condition,
results of operations and business. The Private Securities Litigation Reform
Act of 1995 protects public companies from liability for forward-looking
statements in private securities litigation if the forward-looking statement
is identified and is accompanied by meaningful cautionary statements
identifying important factors that could cause actual results to differ
materially from the forward-looking statements. Forward-looking statements by
their nature involve a degree of risk and uncertainty, including, but not
limited to, the risks and uncertainties referred to in this prospectus or in
the documents incorporated by reference. All statements regarding the expected
benefits of the Reorganization are forward-looking statements. The
forward-looking statements may include statements for the period following
completion of the Reorganization. You can find many of these statements by
looking for words such as "believes," "expects," "anticipates," "estimates,"
"continues," "may," "intends," "plans" or similar expressions in this
prospectus or in the documents incorporated by reference. You should be aware
that any forward-looking statements in this prospectus or the documents
incorporated by reference in this prospectus only reflect current expectations
and are not guarantees of performance. Actual results may differ materially
from those expressed or implied by forward-looking statements. As you make
your investment decision, please take into account that forward-looking
statements speak only as of the date of this prospectus or, in the case of
documents incorporated by reference, the date of any such document. We have
identified factors that could cause actual plans or results to differ
materially from those included in any forward-looking statements. These
factors include, but are not limited to, the following:
o an inability to realize expected benefits of the Reorganization
within the anticipated time frame, or at all;
o changes in tax laws, tax treaties or tax regulations or the
interpretation or enforcement thereof, including taxing
authorities not agreeing with our assessment of the effects of
such laws, treaties and regulations;
o an inability to execute our business strategy;
o costs or difficulties related to the merger and related
Reorganization transactions, which could be greater than
expected;
o changes in the rate of economic growth in the U.S. or in other
major international economies;
o significant changes in trade, monetary or fiscal policies
worldwide, including changes in interest rates;
o currency fluctuations between the U.S. dollar and other
currencies;
o demand for products and services;
o distributor inventory levels;
o performance issues with key suppliers or subcontractors;
o failure to achieve our productivity targets;
o costs and effects of unanticipated legal and administrative
proceedings; and
o competitive actions, such as unanticipated pricing actions or
cost reduction strategies and entry into direct product line
competition.
45
Service of Process and Enforcement of Liabilities
We are a Bermuda company. We have been advised by our Bermuda
counsel, Conyers Dill & Pearman, that a judgment for the payment of money
rendered by a court in the U.S. based on civil liability would not be
automatically enforceable in Bermuda. We have also been advised by Conyers
Dill & Pearman that with respect to a final and conclusive judgment obtained
in a court of competent jurisdiction in the U.S. under which a sum of money is
payable (other than a sum of money payable in respect of multiple damages,
taxes or other charges of a like nature or in respect of a fine or other
penalty), a Bermuda court would be expected to enforce a judgment based
thereon, provided that (a) such courts had proper jurisdiction over the
parties subject to such judgment, (b) such courts did not contravene the rules
of natural justice of Bermuda, (c) such judgment was not obtained by fraud,
(d) the enforcement of the judgment would not be contrary to the public policy
of Bermuda, (e) no new admissible evidence relevant to the action is submitted
prior to the rendering of the judgment by the courts of Bermuda and (f) there
is due compliance with the correct procedures under the laws of Bermuda.
As a result, it may be difficult for a securityholder to effect
service of process within the U.S. or to enforce judgments obtained against us
in U.S. courts. We will irrevocably agree that we may be served with process
with respect to actions based on offers and sales of securities made in the
U.S. by having Ingersoll-Rand Company, 200 Chestnut Ridge Road, Woodcliff
Lake, New Jersey 07677, be our U.S. agent appointed for that purpose.
A Bermuda court may impose civil liability on us or our directors or
officers in a suit brought in the Supreme Court of Bermuda against us or such
persons with respect to a violation of U.S. federal securities laws, provided
that the facts surrounding such violation would constitute or give rise to a
cause of action under Bermuda law.
46
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. Other Expenses of Issuance and Distribution
The expenses in connection with the issuance and distribution of the
securities being registered, other than underwriting discounts and
commissions, are as follows:
SEC registration fee.................................... $165,600
Printing and engraving expenses......................... 50,000
Accounting fees and expenses............................ 50,000
Legal fees and expenses................................. 100,000
Blue Sky fees and expenses.............................. 20,000
Trustee's expenses...................................... 10,000
Fees of rating agencies................................. 475,000
Miscellaneous........................................... 14,400
----------
Total*........................................... $885,000
==========
-----------
* All of the above expenses are estimated except for the SEC filing
fee. The Registrants have offset against the full amount of the
$165,600 filing fee required in connection with this registration
statement, filing fees paid in connection with prior registration
statements as described in Note 6 to the Calculation of
Registration Fee table in this registration statement.
ITEM 15. Indemnification of Directors and Officers
Section 98 of the Companies Act 1981 of Bermuda (the "Companies Act")
provides generally that a Bermuda company may indemnify its directors and
officers against any liability that by virtue of Bermuda law otherwise would
be imposed on them, except in cases where such liability arises from fraud or
dishonesty of which such director or officer may be guilty in relation to the
company. Section 98 further provides that a Bermuda company may indemnify its
directors and officers against any liability incurred by them in defending any
proceedings, whether civil or criminal, in which a judgment is awarded in
their favor or they are acquitted or in which they are acquitted or granted
relief by the Supreme Court of Bermuda in certain proceedings arising under
Section 281 of the Companies Act.
Bye-law 26 of the Amended and Restated Bye-laws of Ingersoll-Rand
Company Limited provides that Ingersoll-Rand Company Limited shall indemnify
any current or former director or officer or any person serving or who has
served at the request of Ingersoll-Rand Company Limited as a director,
officer, partner, venturer, proprietor, trustee, employee, agent or similar
functionary of another foreign or domestic corporation, general or limited
partnership, firm, association, trust, estate, company (including a limited
liability company) or other enterprise to the fullest extent permitted under
Bermuda law. Ingersoll-Rand Company Limited may also indemnify any employee or
agent of Ingersoll-Rand Company Limited to the fullest extent provided by
Bermuda law.
Bye-law 26 further provides that the right to indemnification
thereunder is a contract right and gives claimants certain rights with respect
to claims for indemnification not paid by Ingersoll-Rand Company Limited after
60 days following a written request. The indemnification provisions in Bye-law
26 are not exclusive of other rights to which a director or officer may be
entitled.
We have a liability insurance policy in effect that covers certain
claims against any of our officers or directors by reason of certain breaches
of duty, neglect, errors or omissions committed by such person in his or her
capacity as an officer or director. This liability insurance policy also
covers the officers and directors of IR-New Jersey.
II-1
Article Seventh of the IR-New Jersey's Restated Certificate of
Incorporation, as amended, provides that, to the fullest extent permitted by
the laws of the State of New Jersey, directors and officers of IR-New Jersey
shall not be personally liable to IR-New Jersey or its shareholders for
damages for breach of any duty owed to IR-New Jersey or its shareholders,
except that no such director or officer shall be relieved from liability for
any breach of duty based upon an act or omission (i) in breach of such
person's duty of loyalty to IR-New Jersey or its shareholders, (ii) not in
good faith or involving a knowing violation of law or (iii) resulting in
receipt by such person of an improper personal benefit.
Article Seventh also provides that each person who was or is made a
party or is threatened to be made a party to or is involved in any pending,
threatened or completed civil, criminal, administrative or arbitrative action,
suit or proceeding, by reason of his or her being or having been a director or
officer of IR-New Jersey, or by reason of his or her being or having been a
director, officer, trustee, employee or agent of any other corporation or of
any partnership, joint venture, employee benefit plan or other entity or
enterprise, serving as such at the request of IR-New Jersey, shall be
indemnified and held harmless by IR-New Jersey to the fullest extent permitted
by the New Jersey Business Corporation Act (the "NJBCA"), from and against all
reasonable costs, disbursements and attorneys' fees, and all amounts paid or
incurred in satisfaction of settlements, judgments, fines and penalties,
incurred or suffered in connection with any such proceeding, and such
indemnification shall continue as to a person who has ceased to be a director,
officer, trustee, employee or agent and shall inure to the benefit of his or
her heirs, executors, administrators and assigns; provided, however, that
there shall be no indemnification with respect to any settlement of any
proceeding unless IR-New Jersey has given its prior consent to such settlement
or disposition. This right to indemnification includes the right to be paid by
IR-New Jersey the expenses incurred in connection with any proceeding in
advance of the final disposition of such proceeding as authorized by the Board
of Directors; provided, however, that, if the NJBCA so requires, the payment
of such expenses shall be made only upon receipt by IR-New Jersey of an
undertaking to repay all amounts so advanced unless it shall ultimately be
determined that such director or officer is entitled to be indemnified.
Article Seventh also provides that the right to indemnification
thereunder is a contract right and gives claimants certain rights with respect
to claims for indemnification not paid by IR-New Jersey after 30 days
following a written request. Finally, Article Seventh provides that the right
to indemnification and advancement of expenses provided thereby shall not
exclude or be exclusive of any other rights to which any person may be
entitled under a certificate of incorporation, by-law, agreement, vote of
shareholders or otherwise. Sections 1 and 2 of Article IX of the IR-New
Jersey's By-Laws also provide directors and officers with certain rights to
indemnity that are substantially similar to the foregoing provisions of
Article Seventh.
Section 14A: 3-5 of the NJBCA provides that no indemnification shall
be made if such person shall have been adjudged liable for negligence or
misconduct unless the court in which such proceeding was brought determines
upon application that the defendant, officers or directors are fairly and
reasonably entitled to indemnity for such expenses despite such adjudication
of liability. In any case, a corporation must indemnify an officer or a
director against expenses (including attorney's fees) to the extent that he
has been successful on the merits or otherwise or in defense of any claim or
issue.
ITEM 16. Exhibits
See Exhibit Index.
ITEM 17. Undertakings
The undersigned Registrants hereby undertake:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of
the Securities Act;
II-2
(ii) to reflect in the prospectus any facts or events arising
after the effective date of this Registration Statement (or the
most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in this Registration Statement.
Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated
maximum offering price range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if,
in the aggregate, the changes in volume and price represent no
more than a 20% change in the maximum aggregate offering price
set forth in the "Calculation of Registration Fee" table in the
effective registration statement; and
(iii) to include any material information with respect to the
plan of distribution not previously disclosed in this
Registration Statement or any material change to such
information in this Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) of this section do
not apply if this Registration Statement is on Form S-3, Form S-8 or Form F-3,
and the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or furnished to
the Securities and Exchange Commission by Ingersoll-Rand Company Limited
pursuant to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in this Registration Statement.
(2) That, for the purposes of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the Securities
Act, each filing of Ingersoll-Rand Company Limited's annual report
pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and,
where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in this Registration Statement shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(5) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and
controlling persons of the Registrants pursuant to the foregoing
provisions, or otherwise, the Registrants have been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the
payment by the Registrants of expenses incurred or paid by a
director, officer or controlling person of the Registrants in the
successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the Registrants will, unless in the
opinion of their counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question
whether such indemnification by them is against public policy as
expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
Ingersoll-Rand Company Limited certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form S-3 and has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Woodcliff Lake, New Jersey on
June 3, 2002.
INGERSOLL-RAND COMPANY LIMITED
By: /s/ PATRICIA NACHTIGAL
-----------------------------------
(Patricia Nachtigal)
Senior Vice President,
General Counsel and Director
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated on June 3, 2002.
Signature Title
--------- -----
Chairman, President,
* HERBERT L. HENKEL Chief Executive Officer and Director
- ------------------------------------- (Principal Executive Officer)
Herbert L. Henkel
* TIMOTHY R. MCLEVISH Senior Vice President and Chief
- ------------------------------------- Financial Officer (Principal
Timothy R. McLevish Financial Officer)
* STEVEN R. SHAWLEY Vice President and Controller
- ------------------------------------- (Principal Accounting Officer)
Steven R. Shawley
* ANN C. BERZIN Director
- -------------------------------------
Ann C. Berzin
* PETER C. GODSOE Director
- -------------------------------------
Peter C. Godsoe
* CONSTANCE J. HORNER Director
- -------------------------------------
Constance J. Horner
* H. WILLIAM LICHTENBERGER Director
- --------------------------------------
H. William Lichtenberger
* THEODORE E. MARTIN Director
- --------------------------------------
Theodore E. Martin
/s/ PATRICIA NACHTIGAL Director
- --------------------------------------
Patricia Nachtigal
II-4
Signature Title
--------- -----
* ORIN R. SMITH Director
- --------------------------------------
Orin R. Smith
* RICHARD J. SWIFT Director
- --------------------------------------
Richard J. Swift
* TONY L. WHITE Director
- --------------------------------------
Tony L. White
*By: /s/ PATRICIA NACHTIGAL
----------------------------------
Patricia Nachtigal, Attorney-in-Fact
II-5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
Ingersoll-Rand Company certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-3 and has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Woodcliff Lake, New Jersey on
June 3, 2002.
INGERSOLL-RAND COMPANY
By: /s/ PATRICIA NACHTIGAL
---------------------------------------
(Patricia Nachtigal)
Senior Vice President,
General Counsel and Director
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated on June 3, 2002.
Signature Title
--------- -----
President and Chief Executive
* HERBERT L. HENKEL Officer (Principal Executive
- ------------------------------------------ Officer)
Herbert L. Henkel
* TIMOTHY R. MCLEVISH Senior Vice President and Chief
- ------------------------------------------ Financial Officer (Principal
Timothy R. McLevish Financial Officer)
* STEVEN R. SHAWLEY Vice President and Controller
- ------------------------------------------ (Principal Accounting Officer)
Steven R. Shawley
* RONALD G. HELLER Director
- ------------------------------------------
Ronald G. Heller
/s/ PATRICIA NACHTIGAL Director
- ------------------------------------------
Patricia Nachtigal
* GERALD E. SWIMMER Director
- ------------------------------------------
Gerald E. Swimmer
*By: /s/ PATRICIA NACHTIGAL
--------------------------------------
Patricia Nachtigal, Attorney-in-Fact
II-6
INDEX TO EXHIBITS
1.1+ -- Form of Underwriting Agreement (Debt).
1.2* -- Form of Underwriting Agreement (Equity).
1.3* -- Form of Underwriting Agreement (Share Purchase Contracts).
1.4* -- Form of Underwriting Agreement (Share Purchase Units).
1.5* -- Form of Underwriting Agreement (Warrants).
2 -- Agreement and Plan of Merger, dated as of October 31, 2001,
among Ingersoll-Rand Company Limited, Ingersoll-Rand Company
and IR-Merger Corporation (incorporated by reference to Annex
I to the proxy statement/prospectus included as part of
Amendment No. 1 to Ingersoll-Rand Company Limited's
Registration Statement on Form S-4, Registration Statement
No. 333-71642).
3.1 -- Memorandum of Association of Ingersoll-Rand Company Limited
(incorporated by reference to Exhibit 3.1 to Amendment No. 1
to Ingersoll-Rand Company Limited's Registration Statement on
Form S-4, Registration Statement No. 333-71642).
3.2 -- Amended and Restated Bye-laws of Ingersoll-Rand Company Limited
(incorporated by reference to Exhibit 3.2 to Amendment No. 1 to
Ingersoll-Rand Company Limited's Registration Statement on
Form S-4, Registration Statement No. 333-71642).
3.3* -- Certificate of Designation, Preferences and Rights for
Preference Shares.
3.4 -- Rights Agreement between Ingersoll-Rand Company Limited and
The Bank of New York, as Rights Agent (incorporated by
reference to Exhibit 4.2 to Amendment No. 1 to Ingersoll-Rand
Company Limited's Registration Statement on Form S-4,
Registration Statement No. 333-71642).
3.5 -- Certificate of Designation, Preferences and Rights of Series A
Preference Shares of Ingersoll-Rand Company Limited
(incorporated by reference to Exhibit 4.1 to Amendment No. 1 to
Ingersoll-Rand Company Limited's Registration Statement on
Form S-4, Registration Statement No. 333-71642).
3.6 -- Voting Agreement between Ingersoll-Rand Company Limited and
Ingersoll-Rand Company (incorporated by reference to Exhibit
4.3 to Amendment No. 1 to Ingersoll-Rand Company Limited's
Registration Statement on Form S-4, Registration Statement
No. 333-71642).
4.1+ -- Form of Senior Indenture.
4.2+ -- Form of Subordinated Indenture.
4.3 -- Form of Senior Debt Security (included in Exhibit 4.1).
4.4 -- Form of Subordinated Debt Security (included in Exhibit 4.2).
4.5* -- Form of Rights (included in Exhibit 3.4).
4.6* -- Form of Deposit Agreement for Depository Shares.
4.7 -- Form of Class A Common Share Certificate (incorporated by
reference to Exhibit 4.4 to Ingersoll-Rand Company Limited's
Registration Statement on Form S-4, Registration
No. 333-71642).
4.8* -- Form of Preference Share Certificate.
4.9* -- Form of Purchase Contract Agreement relating to Share Purchase
Contracts and Share Purchase Units.
4.10* -- Form of Pledge Agreement for Share Purchase Contracts and Share
Purchase Units.
4.11* -- Form of Warrant Agreement.
4.12* -- Form of Warrant Unit Agreement.
4.13 -- Form of Senior Guarantee by Ingersoll-Rand Company (included
in Exhibit 4.1).
4.14 -- Form of Subordinated Guarantee by Ingersoll-Rand Company
(included in Exhibit 4.2).
4.15 -- Indenture, dated as of March 23, 1998, between Ingersoll-Rand
Company and The Bank of New York, as trustee (incorporated by
reference to Exhibit 4 to the Annual Report on Form 10-K of
Ingersoll-Rand Company filed on March 30, 1999).
4.16 -- First Supplemental Indenture, dated as of March 23, 1998,
between Ingersoll-Rand Company and The Bank of New York, as
trustee (incorporated by reference to
Exhibit 4 to the Annual Report on Form 10-K of Ingersoll-Rand
Company filed on March 30, 1999).
4.17 -- Second Supplemental Indenture, dated December 31, 2001, among
Ingersoll-Rand Company Limited, Ingersoll-Rand Company and The
Bank of New York, as trustee (incorporated by reference to
Exhibit 4.8 to the Annual Report on Form 10-K of Ingersoll-
Rand Company Limited filed on March 13, 2002).
4.18 -- Amended and Restated Declaration of Trust for Ingersoll-Rand
Financing I, a Delaware statutory business trust, dated March
23, 1998 (incorporated by reference to Exhibit 4 to the Annual
Report on Form 10-K of Ingersoll-Rand Company filed on March
30, 1999).
4.19 -- Guarantee Agreement, dated as of March 23, 1998, between
Ingersoll-Rand Company and The First National Bank of Chicago,
as trustee (incorporated by reference to Exhibit 4 to the
Annual Report on Form 10-K of Ingersoll-Rand Company filed on
March 30, 1999).
4.20 -- Five Year Credit Agreement dated as of July 2, 2001, among
Ingersoll-Rand Company, the banks listed therein, The Chase
Manhattan Bank, as Administrative Agent, Citibank N.A., and
Deutsche Banc Alex. Brown Inc., as Co-Syndication Agents, and
The Bank of Nova Scotia and Bank of Tokyo-Mitsubishi Trust
Company, as Co-Documentation Agents (incorporated by reference
to Exhibit 10(i)(a) to the Quarterly Report on Form 10-Q of
Ingersoll-Rand Company filed August 2, 2001).
4.21 -- Amendment and Waiver, dated as of November 28, 2001, among
Ingersoll-Rand Company Limited, Ingersoll-Rand Company, JP
Morgan Chase Bank, as Administrative Agent, Citibank N.A., and
Deutsche Banc Alex. Brown Inc., as Co-Syndication Agents, and
The Bank of Nova Scotia and Bank of Tokyo-Mitsubishi Trust
Company, as Co-Documentation Agents (incorporated by reference
to Exhibit 4.12 to the Annual Report on Form 10-K of
Ingersoll-Rand Company Limited filed on March 13, 2002).
4.22 -- 364-Day Credit Agreement dated as of July 2, 2001, among
Ingersoll-Rand Company, the banks listed therein, The Chase
Manhattan Bank, as Administrative Agent, Citibank N.A., and
Deutsche Banc Alex. Brown Inc., as Co-Syndication Agents, and
The Bank of Nova Scotia and Bank of Tokyo-Mitsubishi Trust
Company, as Co-Documentation Agents (incorporated by reference
to Exhibit 10(i)(b) to the Quarterly Report on Form 10-Q of
Ingersoll-Rand Company filed August 2, 2001).
4.23 -- Amendment and Waiver, dated as of November 28, 2001, among
Ingersoll-Rand Company Limited, Ingersoll-Rand Company, JP
Morgan Chase Bank, as Administrative Agent, Citibank N.A., and
Deutsche Banc Alex. Brown Inc., as Co-Syndication Agents, and
The Bank of Nova Scotia and Bank of Tokyo-Mitsubishi Trust
Company, as Co-Documentation Agents (incorporated by reference
to Exhibit 4.14 to the Annual Report on Form 10-K of
Ingersoll-Rand Company Limited filed on March 13, 2002).
4.24 -- Indenture, dated as of August 1, 1986, between
Ingersoll-Rand Company and The Bank of New York, as trustee,
as supplemented by first, second and third supplemental
indentures (incorporated by reference to Exhibits 4.1, 4.2
and 4.3 to Ingersoll-Rand Company's Registration Statement
on Form S-3, Registration Statement No. 33-39474, and to
Exhibit 4.2 to Ingersoll-Rand Company's Registration
Statement on Form S-3, Registration Statement No.
333-50902).
4.25 -- Fourth Supplemental Indenture, dated as of December 31,
2001, among Ingersoll-Rand Company Limited, Ingersoll-Rand
Company and The Bank of New York, as trustee (incorporated
by reference to Exhibit 4.5 to the Annual Report on Form
10-K of Ingersoll-Rand Company Limited filed March 13,
2002).
5.1+ -- Opinion of Patricia Nachtigal, Esq., Senior Vice President
and General Counsel.
5.2+ -- Opinion of Conyers Dill & Pearman.
12 -- Computation of Ratio of Earnings to Fixed Charges of Ingersoll
-Rand Company (incorporated by reference to Exhibit 12 to the
Quarterly Report on Form 10-Q of Ingersoll-Rand Company
Limited filed May 15, 2002).
23.1 -- Consent of Patricia Nachtigal, Esq. (included in Exhibit 5.1).
23.2 -- Consent of Conyers Dill & Pearman (included in Exhibit 5.2).
23.3+ -- Consent of Independent Accountants.
24.1+ -- Powers of Attorney (Ingersoll-Rand Company Limited).
24.2+ -- Powers of Attorney (Ingersoll Rand Company).
25.1+ -- Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of Wells Fargo Bank Minnesota, N.A. as Trustee
under the Senior Indenture.
25.2+ -- Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of Wells Fargo Bank Minnesota, N.A., as Trustee
under the Subordinated Indenture.
- --------------
* To be filed with Subsequent Current Report on Form 8-K
+ Previously filed with this Registration Statement