AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 29, 2002
REGISTRATION NO. 333-76198
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
PRE-EFFECTIVE AMENDMENT NO. 3
TO
FORM S-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
---------------------
NABORS INDUSTRIES LTD.
(Exact Name of Registrant as Specified in its Charter)
BERMUDA 1381 NOT APPLICABLE
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification No.)
KATHERINE P. ELLIS
C/O THE CORPORATE SECRETARY LIMITED GENERAL COUNSEL
WHITEPARK HOUSE NABORS CORPORATE SERVICES, INC.
WHITE PARK ROAD 515 WEST GREENS ROAD, SUITE 1200
BRIDGETOWN, BARBADOS HOUSTON, TEXAS 77067
(246) 427-8617 TELEPHONE: (281) 874-0035
(Address, Including Zip Code, and Telephone Number, (Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Principal Including Area Code of Agent for Service)
Executive Offices)
---------------------
WITH COPIES TO:
MICHAEL P. ROGAN, ESQ.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
1440 NEW YORK AVENUE, N.W.
WASHINGTON, D.C. 20005-2111
(202) 371-7000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective and all other
conditions to the merger contemplated by the Agreement and Plan of Merger
described in the enclosed proxy statement/prospectus have been satisfied or
waived.
If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) 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 this form is a post-effective amendment filed pursuant to Rule 462(d)
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. [ ]
---------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT 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 SECURITIES AND EXCHANGE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
[NABORS INDUSTRIES LOGO]
[Month Day], 2002
Dear Nabors Stockholder:
We are pleased to present for your approval a proposal for reorganizing
your company and changing its place of incorporation from Delaware to Bermuda.
If the reorganization is completed, the shares you own of Nabors Industries,
Inc. (which we refer to as Nabors Delaware) will automatically be converted into
the right to receive common shares of Nabors Industries Ltd., a Bermuda exempted
company that we recently formed (which we refer to as Nabors Bermuda). The
number of Nabors Bermuda shares you will own will be the same as the number of
Nabors Delaware shares you own immediately prior to the completion of the
reorganization, and your relative economic ownership in the company will remain
unchanged. After completion of the reorganization, Nabors Bermuda and its
subsidiaries will continue to conduct the business now conducted by Nabors
Delaware and its subsidiaries.
We believe this reorganization will facilitate the growth of your company
by enabling it to gain business, financial and strategic advantages that are not
available under our current corporate structure. The reorganization should
enhance our access to international capital markets and our competitiveness
regarding international opportunities. It should also increase our operational
flexibility and improve our global tax position and cash flow. Additionally, the
company should be a more attractive investment alternative to a wider range of
investors.
Nabors Delaware common stock is currently traded on the American Stock
Exchange under the symbol "NBR" and, immediately following the reorganization,
Nabors Bermuda common shares will be traded on the American Stock Exchange under
the same symbol.
Generally, for U.S. federal income tax purposes, stockholders of Nabors
Delaware who are U.S. persons, will recognize gain, if any, but not loss, on the
receipt of Nabors Bermuda common shares in exchange for Nabors Delaware common
stock pursuant to the reorganization. Further, the holding period for any Nabors
Bermuda common shares received by a U.S. holder recognizing gain with respect to
the reorganization should begin the day after the effective date of the
reorganization. WE STRONGLY URGE YOU TO CONSULT YOUR OWN TAX ADVISORS REGARDING
YOUR PARTICULAR TAX CONSEQUENCES OF THE REORGANIZATION.
This proxy statement/prospectus provides you with detailed information
regarding the reorganization. We encourage you to read this entire document
carefully. PLEASE CONSIDER THE RISK FACTORS BEGINNING ON PAGE 13.
The reorganization cannot be completed unless the holders of a majority of
our outstanding shares of common stock on April 17, 2002 approve it. The
reorganization will be accomplished through a merger of a newly formed
acquisition company into Nabors Delaware, which will be the surviving company
and continue to exist. Nabors Bermuda will become the indirect parent holding
company of Nabors Delaware. Your Board of Directors has unanimously approved the
Agreement and Plan of Merger to facilitate the reorganization, and it recommends
that you vote "FOR" its adoption.
Whether or not you plan on attending the special meeting in person, it is
important that your shares be represented and voted. After reading the enclosed
notice of special meeting and proxy statement, please sign, date and return the
enclosed proxy card. We urge you to join us in supporting this important
opportunity.
Sincerely yours,
EUGENE M. ISENBERG
Chairman of the Board
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROXY STATEMENT/PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
This proxy statement/prospectus is dated [Month Day], 2002 and is first
being mailed to stockholders on or about [Month Day], 2002.
[NABORS INDUSTRIES LOGO]
NABORS INDUSTRIES, INC.
---------------------
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON MONDAY, JUNE 3, 2002
---------------------
To the Stockholders of Nabors Industries, Inc.:
NOTICE IS HEREBY GIVEN that a Special Meeting of the Stockholders of Nabors
Industries, Inc. will be held at The Wyndham Greenspoint Hotel, 12400
Greenspoint Drive, Houston, Texas 77060 on Monday, June 3, 2002, at 11:00 a.m.
for the following purposes:
1. To adopt the Agreement and Plan of Merger, substantially in the
form attached to the accompanying proxy statement/prospectus as annex I,
among Nabors Industries, Inc., Nabors Acquisition Corp. VIII, Nabors
Industries Ltd., a Bermuda exempted company, and Nabors US Holdings Inc.,
whereby the company will effectively change its place of incorporation from
Delaware to Bermuda by merging Nabors Acquisition Corp. VIII with Nabors
Industries, Inc., which will be the surviving entity and become a
wholly-owned, indirect subsidiary of Nabors Industries Ltd., and pursuant
to which each share of Nabors Industries, Inc. will automatically be
converted into the right to receive a share of Nabors Industries Ltd. and
all current stockholders of Nabors Industries, Inc. will become
shareholders of Nabors Industries Ltd.; and
2. To transact such other business as may properly come before the
special meeting.
The board of directors has fixed the close of business on April 17, 2002,
as the record date for determination of stockholders entitled to notice of, and
to vote at, the special meeting and any adjournments or postponements thereof.
YOUR VOTE IS VERY IMPORTANT. TO ENSURE THAT YOUR SHARES ARE REPRESENTED,
YOU SHOULD VOTE YOUR PROXY BY COMPLETING, SIGNING AND DATING THE ENCLOSED PROXY
CARD AND RETURNING IT PROMPTLY IN THE ENCLOSED ENVELOPE, WHETHER OR NOT YOU
EXPECT TO ATTEND THE SPECIAL MEETING. YOU MAY REVOKE YOUR PROXY AND VOTE IN
PERSON IF YOU DECIDE TO ATTEND THE MEETING.
BY ORDER OF THE BOARD OF DIRECTORS,
DANIEL MCLACHLIN
Corporate Secretary
[Month Day], 2002
TABLE OF CONTENTS
PAGE
-------
ADDITIONAL INFORMATION...................................... iv
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS... iv
QUESTIONS AND ANSWERS ABOUT THE REORGANIZATION.............. 1
SUMMARY..................................................... 5
Parties to the Merger..................................... 5
Recent Developments....................................... 6
The Reorganization........................................ 6
Reasons for the Reorganization............................ 7
Conditions to Consummation of the Merger.................. 7
Regulatory Approvals...................................... 7
Credit Facilities......................................... 8
U.S. Federal Income Tax Consequences to Stockholders...... 8
Rights of Stockholders.................................... 9
Stock Exchange Listing; Recent Stock Prices............... 9
No Rights of Dissenting Stockholders...................... 9
Accounting Treatment of the Reorganization................ 9
Special Meeting........................................... 9
Recommendation of the Board of Directors.................. 9
Vote Required............................................. 9
Proxies................................................... 10
SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA............. 11
SUMMARY PRO FORMA FINANCIAL INFORMATION..................... 12
RISK FACTORS................................................ 13
Certain Nabors Delaware stockholders will recognize a
taxable gain as a result of the reorganization......... 13
Nabors Bermuda and its subsidiaries could incur a material
amount of taxes if there are unfavorable changes in, or
interpretations of, tax laws........................... 13
The reorganization could result in a material amount of
taxes to Nabors Delaware............................... 13
Nabors Bermuda may become subject to U.S. corporate income
tax.................................................... 14
The enforcement of judgments in stockholder suits against
Nabors Bermuda may be more difficult................... 14
Anti-takeover provisions in Nabors Bermuda's bye-laws will
maintain certain existing anti-takeover provisions of
Nabors Delaware which could discourage or make more
difficult unsolicited takeover bids from third parties
or the removal of incumbent management of Nabors
Bermuda................................................ 14
Your rights as a stockholder will change as a result of
the reorganization..................................... 15
THE REORGANIZATION.......................................... 15
Structure of the Reorganization........................... 15
Background and Reasons for the Reorganization............. 15
The Merger Agreement...................................... 17
Conditions to Consummation of the Merger.................. 17
Regulatory Approvals...................................... 18
Effective Time............................................ 18
Amendment or Termination.................................. 19
i
PAGE
-------
Share Conversion; Exchange of Shares...................... 19
Management of Nabors Bermuda.............................. 20
Required Vote for the Reorganization...................... 20
No Rights of Dissenting Stockholders...................... 20
Dividends................................................. 20
Stock Compensation Plans and Employment Agreements........ 20
Stock Exchange Listing.................................... 21
Accounting Treatment of the Reorganization................ 21
Credit Facilities......................................... 21
RECENT DEVELOPMENTS......................................... 21
THE SPECIAL MEETING......................................... 22
When and Where the Special Meeting Will Be Held........... 22
What Will Be Voted Upon................................... 22
Only Nabors Delaware Stockholders of Record on April 17,
2002
Are Entitled to Vote................................. 23
Majority of Outstanding Shares Must Be Represented for a
Vote to Be Taken....................................... 23
Vote Required for Approval................................ 23
Voting Your Shares and Changing Your Vote................. 23
How Proxies Are Counted................................... 24
Cost of Solicitation...................................... 24
DESCRIPTION OF AUTHORIZED SHARES OF NABORS INDUSTRIES
LTD. ..................................................... 24
Authorized Share Capital.................................. 24
Voting.................................................... 24
Dividend Rights........................................... 25
Redemption and Conversion................................. 25
Stock Exchange Listing.................................... 25
Changes to Rights of a Class or Series.................... 25
Quorum for General Meetings............................... 25
Rights upon Liquidation................................... 25
Sinking Fund.............................................. 26
Liability for Further Calls or Assessments................ 26
Preemptive Rights......................................... 26
Repurchase Rights......................................... 26
Compulsory Acquisition of Shares Held by Minority
Holders................................................ 26
Transfer Agent............................................ 27
Preferred Shares.......................................... 27
Anti-takeover Provisions.................................. 27
COMPARISON OF RIGHTS OF STOCKHOLDERS........................ 28
Comparison of Corporate Governance Provisions............. 30
INCOME TAX CONSEQUENCES OF THE REORGANIZATION............... 40
U.S. Federal Income Tax Consequences to Stockholders...... 40
ii
PAGE
-------
Bermuda Income Tax Consequences of the Reorganization..... 43
Barbados Income Tax Consequences of the Reorganization.... 44
EXPERTS..................................................... 44
LEGAL MATTERS............................................... 44
SHAREHOLDER PROPOSALS AND NOMINATIONS....................... 44
WHERE YOU CAN FIND MORE INFORMATION......................... 45
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE............. 46
ANNEX I -- AGREEMENT AND PLAN OF MERGER................ A-I-1
ANNEX II -- MEMORANDUM OF ASSOCIATION.................. A-II-1
ANNEX III -- AMENDED AND RESTATED BYE-LAWS............. A-III-1
iii
ADDITIONAL INFORMATION
THIS PROXY STATEMENT/PROSPECTUS INCORPORATES BY REFERENCE IMPORTANT
BUSINESS AND FINANCIAL INFORMATION ABOUT NABORS WHICH IS NOT INCLUDED IN OR
DELIVERED WITH THIS DOCUMENT. COPIES OF THE INCORPORATED DOCUMENTS (OTHER THAN
EXHIBITS TO SUCH DOCUMENTS, UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED
BY REFERENCE THEREIN) WILL BE FURNISHED UPON WRITTEN OR ORAL REQUEST WITHOUT
CHARGE TO EACH PERSON TO WHOM THIS PROXY STATEMENT/PROSPECTUS IS DELIVERED.
REQUESTS SHOULD BE MADE BY MAY 24, 2002 AND SHOULD BE DIRECTED TO NABORS
INDUSTRIES, INC., 515 WEST GREENS ROAD, SUITE 1200, HOUSTON, TEXAS 77067,
ATTENTION: INVESTOR RELATIONS, OR YOU MAY TELEPHONE (281) 874-0035, OR VISIT OUR
WEBSITE "HTTP://WWW.NABORS.COM". WEBSITE MATERIALS ARE NOT PART OF THIS PROXY
STATEMENT/PROSPECTUS.
See "Where You Can Find More Information" on page 45.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This document 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. This Act protects public companies from liability for
forward-looking statements in private securities actions 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. Forward-looking statements by their nature involve a degree of
uncertainty. 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 document or in the documents
incorporated by reference. Any forward-looking statements, including statements
regarding the intent, belief or current expectations of Nabors or its
management, are not guarantees of future performance and involve uncertainties
and assumptions about us, the reorganization and the industry in which we
operate, including, among other things:
- an inability to realize expected benefits of the reorganization within
the anticipated time frame, or at all;
- changes in tax laws, tax treaties or tax regulations and the
interpretation or enforcement thereof or differing interpretation or
enforcement of applicable law by the U.S. Internal Revenue Service (the
"IRS") or other taxing authority;
- an inability to execute our business strategy;
- costs or difficulties related to the reorganization and related
transactions, which could be greater than expected;
- fluctuations in worldwide prices and demand for oil and gas;
- fluctuations in levels of oil and gas exploration and development
activities;
- fluctuations in the demand for contract drilling and workover services;
- the existence of operating risks inherent in the industry;
- changes in the rate of economic growth in the United States and other
major international economies;
- changes in trade, monetary and fiscal policies worldwide;
- currency fluctuations;
- outcomes of pending and future litigation;
- the existence of competitors, technological changes and developments in
the industry;
- changes in capital needs;
iv
- the existence of regulatory uncertainties and the possibility of
political instability in any of the countries in which Nabors does or
will do business; and
- changing rates of inflation and other economic or business conditions.
Actual results may differ materially from those expressed or implied by
forward-looking statements. As you make your decision how to vote, please take
into account that forward-looking statements speak only as of the date of this
document or, in the case of documents incorporated by reference, the date of any
such document and we do not intend to update or revise any of such
forward-looking statements, whether as a result of new information, future
events or otherwise.
v
QUESTIONS AND ANSWERS ABOUT THE REORGANIZATION
WHAT AM I BEING ASKED TO VOTE ON?
You are being asked to vote in favor of a merger by which Nabors Delaware
will become a wholly-owned, indirect subsidiary of a new holding company, Nabors
Bermuda. Your shares of Nabors Delaware common stock will automatically be
converted into the right to receive an identical number of Nabors Bermuda common
shares.
HOW WILL THE REORGANIZATION BE ACCOMPLISHED?
A new Delaware company, Nabors Acquisition Corp. VIII, which has been
formed specifically for the merger, will merge into Nabors Delaware. Nabors
Delaware will be the surviving company in the merger and become a wholly-owned,
indirect subsidiary of Nabors Bermuda. As a result of the merger, each share of
Nabors Delaware outstanding immediately prior to the effective time of the
merger will automatically convert into the right to receive a common share of
Nabors Bermuda. This procedure allows you to become a shareholder in Nabors
Industries Ltd., the new Bermuda parent company of the entire Nabors Industries
group of companies. After this merger, you will own an interest in a Bermuda
holding company which, together with its subsidiaries, will continue to be
engaged in the same business that Nabors Delaware and its subsidiaries were
engaged in before the merger. The additional steps in the reorganization are
more fully described in "The Reorganization -- Structure of the Reorganization"
on page 15.
WHAT ARE THE BENEFITS TO THE COMPANY OF COMPLETING THIS REORGANIZATION?
We believe that a significant portion of our business is currently
generated from non-U.S. markets. We believe the reorganization will allow us to
take advantage of financial and other business opportunities that are not
available under our current corporate structure, including:
- Maximization of our potential business growth and cash flow;
- Expansion of our international businesses as a result of greater
flexibility in financing arrangements, transaction structuring and access
to global capital;
- Increased competitiveness regarding domestic and international
acquisition opportunities;
- Potential improvement of our global tax position and global cash
management;
- Use of the greater cash flow to invest for further earnings growth; and
- Expansion of our investor base as our company's shares may become more
attractive to non-U.S. investors.
We believe these benefits should enhance stockholder value. However, we
cannot predict what impact, if any, the reorganization will have in the
long-term in light of the fact that the achievement of our objectives depends on
many things, including our ability to react to any changes in the tax laws and
treaties of the various jurisdictions where we operate. See "The
Reorganization -- Background and Reasons for the Reorganization" on page 15.
It is important to note that several senior members of the United States
Congress have introduced legislation that, if enacted, would have the effect of
eliminating the anticipated tax benefits of the transaction. In addition,
several other members of the United States Congress and the Treasury Department
have recently announced the intent to investigate transactions such as the
reorganization. As a result of the increased scrutiny of such transactions,
changes in the tax laws, tax treaties or tax regulations may occur, with
prospective or retroactive effect, which could eliminate or substantially reduce
the anticipated tax benefits of the reorganization or have a material adverse
effect on the tax consequences of the reorganization to the company. If in
response to any such changes the reorganized company or its subsidiaries
undertake a corporate restructuring, such restructuring could result in
additional material adverse tax consequences to the company or its shareholders.
WILL THE REORGANIZATION DILUTE MY OWNERSHIP INTEREST?
No. The reorganization will not dilute your ownership interest. Immediately
after the reorganization is consummated you will own the same percentage of
Nabors Bermuda common shares as you own of Nabors Delaware common stock
immediately prior to the completion of the reorganization. After completion of
the reorganization, the total number of outstanding common shares of Nabors
Bermuda will be equal to the number of shares of common stock of Nabors Delaware
that were outstanding immediately prior to the effective time of the merger. As
of April 17, 2002, Nabors Delaware had 141,099,335 shares of common stock
outstanding.
WILL NABORS DELAWARE STOCKHOLDERS BE TAXED AS A RESULT OF THE REORGANIZATION?
Generally, for U.S. federal income tax purposes, stockholders who are U.S.
persons will recognize gain, if any, but not loss, on the receipt of Nabors
Bermuda common shares in exchange for Nabors Delaware common stock pursuant to
the reorganization. Such a holder will generally recognize gain equal to the
excess, if any, of the fair market value of the Nabors Bermuda common shares
received in exchange for Nabors Delaware common stock in the reorganization over
the holder's adjusted tax basis in the shares of Nabors Delaware common stock
exchanged therefor. Generally, any such gain will be capital gain. Further, the
holding period for any Nabors Bermuda common shares received by a U.S. holder
recognizing gain with respect to the reorganization should begin the day after
the effective date of the reorganization. Stockholders will not be permitted to
recognize any loss realized on the exchange of their shares of Nabors Delaware
common stock in the reorganization. In such case, the aggregate adjusted tax
basis in the Nabors Bermuda common shares received would equal the aggregate
adjusted tax basis of their shares of Nabors Delaware common stock. Thus,
subject to any subsequent changes in the fair market value of the Nabors Bermuda
common shares, any loss would be preserved.
WE STRONGLY URGE YOU TO CONSULT YOUR TAX ADVISORS REGARDING YOUR PARTICULAR
TAX CONSEQUENCES OF THE REORGANIZATION.
WILL NABORS DELAWARE BE TAXED AS A RESULT OF THE REORGANIZATION?
We believe that Nabors Delaware should not incur a material amount of U.S.
federal income or withholding tax as a result of the reorganization. It should
be noted, however, that the IRS may not agree with this conclusion. If the IRS
were to successfully challenge the tax treatment of the reorganization, this
could have a material adverse effect on the company.
It is important to note that several senior members of the United States
Congress have introduced legislation that, if enacted, would have the effect of
eliminating the anticipated tax benefits of the transaction. In addition,
several other members of the United States Congress and the Treasury Department
have recently announced the intent to investigate transactions such as the
reorganization. As a result of the increased scrutiny of such transactions,
changes in the tax laws, tax treaties or tax regulations may occur, with
prospective or retroactive effect, which could eliminate or substantially reduce
the anticipated tax benefits of the reorganization or have a material adverse
effect on the tax consequences of the reorganization to the company. If in
response to any such changes the reorganized company or its subsidiaries
undertake a corporate restructuring, such restructuring could result in
additional material adverse tax consequences to the company or its shareholders.
WHEN DO YOU EXPECT TO COMPLETE THE REORGANIZATION?
We hope to complete the reorganization shortly after the special meeting of
Nabors Delaware stockholders, assuming that the merger agreement is adopted by
stockholders at that meeting.
WHY WAS BERMUDA SELECTED AS THE DOMICILE OF THE NEW PARENT COMPANY?
We chose Bermuda for its political stability, legal framework and business
friendly environment. The first international (i.e., not locally owned) company
was incorporated in Bermuda in the 1930s, and there are
2
currently many companies domiciled there which are publicly traded on U.S. and
European markets. We also chose Bermuda because of our familiarity with Bermuda
and its corporate legal system through our experience with certain subsidiaries
of Nabors Delaware which have been incorporated in Bermuda since 1992. Under
current Bermuda law, a Bermuda company is not required to pay taxes in Bermuda
on either income or capital gains. In addition, despite certain differences, the
corporate legal system, based on English law, is such that your rights as a
Nabors Bermuda shareholder will be substantially unchanged from your rights as a
stockholder in Nabors Delaware. We encourage you to read the section "Comparison
of Rights of Stockholders" beginning on page 28 for a more detailed description
of the differences between your rights under Delaware law and under Bermuda law.
Although Nabors Bermuda will be incorporated under Bermuda law, Nabors
Bermuda will be legally managed and controlled through an executive office
located in Barbados. Therefore, in order to conduct business in Barbados, Nabors
Bermuda will be registered as an external company in Barbados under the Barbados
Companies Act, Cap. 308 of the laws of Barbados and licensed to operate as an
"International Business Corporation" or "IBC". As a resident of Barbados, Nabors
Bermuda should be entitled to the benefits under the income tax treaty entered
into between the United States and Barbados. Under current Barbados law, an IBC
will be required to pay a maximum rate of 2.5% income tax, which is gradually
reduced to a minimum of 1% as income increases, on its non-Barbados source
income.
WILL THE PROPOSAL AFFECT CURRENT OPERATIONS? WHAT ABOUT THE FUTURE?
The reorganization, which will move the company's domicile from Delaware to
Bermuda, will have no immediate major impact on how we conduct day-to-day
operations. The location of future operations will depend on the needs of our
business, independent of our place of incorporation.
WHAT VOTE IS REQUIRED TO APPROVE THE TRANSACTION?
In order for us to effect the reorganization, we need affirmative votes
from holders of a majority of the shares of Nabors Delaware common stock
outstanding on April 17, 2002. SHARES FOR WHICH NO VOTES ARE CAST EFFECTIVELY
WILL BE TREATED AS THOUGH THEY WERE VOTED AGAINST THE AGREEMENT AND PLAN OF
MERGER, SO IT IS VERY IMPORTANT FOR ALL STOCKHOLDERS TO VOTE. See "The Special
Meeting -- Vote Required for Approval" on page 23.
WILL I BE ABLE TO TRADE MY SHARES DURING THE TIME IT TAKES TO COMPLETE THE
REORGANIZATION?
Yes.
HOW DO I VOTE IF MY SHARES ARE REGISTERED IN MY NAME?
You may vote by marking, signing and mailing your proxy card in the
enclosed postage-prepaid envelope.
Please vote as soon as possible even if you currently plan to attend the
meeting in person, so that your shares may be represented and voted at the
special meeting.
HOW DO I VOTE IF MY BROKER HOLDS MY SHARES IN "STREET NAME"?
You should follow the voting instructions provided by your broker.
IF MY BROKER HOLDS MY SHARES IN "STREET NAME," WILL MY BROKER VOTE MY SHARES FOR
ME?
No. If you do not provide your broker with instructions on how to vote your
"street name" shares, your broker will not be permitted to vote them. You should
complete and return the enclosed form of proxy or be sure to provide your broker
with instructions on how to vote your shares.
3
WHAT DO I DO IF I WANT TO CHANGE MY VOTE?
There are three ways in which you may revoke your proxy and change your
vote:
- First, you may send a written notice to our proxy solicitor, Georgeson
Shareholder Communications Inc., stating that you would like to revoke
your proxy. This notice must be received prior to the special meeting.
- Second, you may complete and submit a new, later-dated proxy as described
above. The latest dated proxy actually received by the company prior to
the special meeting will be the one that is counted, and all earlier
proxies will be revoked.
- Third, you may attend the special meeting and vote in person. Simply
attending the meeting, however, will not revoke your proxy. At the
special meeting, the chairman of the meeting will announce instructions
for you to follow if you wish to revoke your proxy and vote in person at
the meeting.
If you have instructed a broker to vote your shares, you must follow
directions received from your broker to change or revoke your proxy.
DO I HAVE TO CHANGE MY STOCK CERTIFICATES?
Yes. At the effective time of the merger, two subsidiaries of Nabors
Bermuda who are parties to the Agreement and Plan of Merger, Nabors US Holdings
Inc. and Nabors Acquisition Corp. VIII, will cause a sufficient number of Nabors
Bermuda common shares to be deposited with an exchange agent for the purpose of
enabling stockholders to exchange their Nabors Delaware common stock
certificates for certificates representing an equal number of Nabors Bermuda
common shares. PLEASE DO NOT SEND ANY STOCK CERTIFICATES AT THIS TIME. After the
merger occurs, the exchange agent previously appointed by Nabors US Holdings
Inc. and Nabors Acquisition Corp. VIII in connection with the merger will send a
letter of transmittal to shareholders that will provide instructions on these
exchange procedures.
For further information, please see "The Reorganization -- Share
Conversion; Exchange of Shares" on page 19.
WHO DO I CONTACT WITH FURTHER QUESTIONS?
You should contact:
Nabors Delaware: Nabors Industries, Inc.
515 West Greens Road, Suite 1200
Houston, Texas 77067
Attention: Secretary
(281) 874-0035
the Proxy Solicitor: Georgeson Shareholder Communications Inc.
17 State Street
New York, New York 10004
(800) 223-2064
4
SUMMARY
This summary highlights selected information from this document and may not
contain all of the information that is important to you. To understand the
reorganization, the merger and other transactions more fully and for a more
complete description of the legal terms of the merger, you should read carefully
this entire document, including the annexes, and the other documents we have
referred you to. See "Where You Can Find More Information" on page 45. The
Agreement and Plan of Merger is attached as annex I to this document. The
Memorandum of Association and Bye-laws that will govern our company once we are
domiciled in Bermuda are attached as annexes II and III.
PARTIES TO THE MERGER
NABORS INDUSTRIES, INC.
Nabors Delaware is the largest land drilling contractor in the world, with
over 580 land drilling rigs as of April 29, 2002. Nabors Delaware conducts oil,
gas and geothermal land drilling operations in the US lower 48 states, Alaska
and Canada, and internationally, primarily in South and Central America, the
Middle East and Africa. As of April 29, 2002, 142 of Nabors Delaware's
approximately 596 land drilling rigs were located in certain international
markets. Nabors Delaware also is one of the largest land well-servicing and
workover contractors in the United States. Nabors Delaware owns approximately
745 land workover and well-servicing rigs in the southwestern and western United
States, and approximately 233 well-servicing and workover rigs in certain
international markets, including approximately 193 rigs in Canada. Nabors
Delaware also is a leading provider of offshore platform workover and drilling
rigs. Nabors Delaware markets 42 platform, 16 jackup and three barge rigs in the
Gulf of Mexico and international markets. These rigs provide well-servicing,
workover and drilling services. Nabors Delaware also owns and operates a net of
nine rigs through an international joint venture in Saudi Arabia (giving effect
to Nabors Delaware's 50% interest in the venture's 18 rigs).
To further supplement our primary business, we offer a number of ancillary
well-site services, including oilfield management, engineering, transportation,
construction, maintenance, well logging and other support services, in selected
domestic and international markets. Our land transportation and hauling fleet
includes approximately 240 rig and oilfield equipment hauling tractor-trailers
and a number of cranes, loaders and light-duty vehicles. We also maintain over
290 fluid hauling trucks, approximately 700 fluid storage tanks, eight salt
water disposal wells and other auxiliary equipment used in domestic drilling and
well-servicing operations. In addition, we market a fleet of 30 marine
transportation and support vessels, primarily in the Gulf of Mexico, that
provides transportation of drilling materials, supplies and crews for offshore
rig operations and support for other offshore operations. And we manufacture and
lease or sell top drives for a broad range of drilling rig applications, rig
instrumentation and data collection equipment, and rig reporting software.
NABORS INDUSTRIES LTD.
Nabors Bermuda is a newly formed Bermuda exempted company and is a
wholly-owned subsidiary of Nabors Delaware. Nabors Bermuda has no significant
assets or capitalization and has not engaged in any business or other activities
other than in connection with its formation and the reorganization and related
transactions. As a result of the reorganization, it will become the indirect
parent holding company of Nabors Delaware.
NABORS US HOLDINGS INC.
Nabors US Holdings Inc. is a newly formed Delaware corporation and a
wholly-owned, direct subsidiary of Nabors Bermuda. Nabors US Holdings was formed
to accomplish the proposed merger and to hold all of the stock of Nabors
Delaware subsequent to the merger. It has no significant assets or
capitalization unrelated to the merger and has not engaged in any business or
other activities except in connection with its formation and the reorganization
and related transactions.
5
NABORS ACQUISITION CORP. VIII
Nabors Acquisition Corp. VIII is a newly formed Delaware corporation and a
wholly-owned, indirect subsidiary of Nabors Bermuda. Nabors Acquisition was
formed to accomplish the proposed merger. Nabors Acquisition will merge with
Nabors Delaware to facilitate the reorganization. See "The Reorganization --
Structure of the Reorganization" on page 15. It has no significant assets or
capitalization unrelated to the merger and has not engaged in any business or
other activities except in connection with its formation and the reorganization
and related transactions.
The principal executive offices of Nabors Delaware, Nabors US Holdings and
Nabors Acquisition are located at 515 West Greens Road, Suite 1200, Houston,
Texas 77067. The telephone number of each such party at that address is (281)
874-0035. The registered office of Nabors Bermuda is located at Cedar House, 41
Cedar Avenue, Hamilton HM 12, Bermuda. The principal executive offices of Nabors
Bermuda are currently located at c/o The Corporate Secretary Limited, Whitepark
House, White Park Road, Bridgetown, Barbados and its telephone number at that
address is (246) 427-8617.
RECENT DEVELOPMENTS (SEE PAGE 21)
On April 26, 2002, Nabors Delaware announced that it had completed the
previously announced acquisition of Enserco Energy Service Company Inc., a
Canadian corporation. Under the terms of the acquisition, Nabors Exchangeco
(Canada) Inc., a Canadian subsidiary of Nabors Delaware, acquired all of the
outstanding common shares of Enserco pursuant to a plan of arrangement under the
Canada Business Corporation Act in exchange for approximately Cdn. $184 million
in cash and approximately 3.55 million exchangeable shares of Nabors Exchangeco
(Canada) Inc. which are exchangeable into Nabors Delaware common stock on a 1:1
basis. Approximately 2.64 million of the issued exchangeable shares were
immediately exchanged for shares of Nabors Delaware common stock in accordance
with the instructions of the holders of such exchangeable shares. The
exchangeable shares of Nabors Exchangeco (Canada) Inc. have provisions which
effectively confer on the holders of the exchangeable shares the same voting and
economic rights in Nabors Delaware as the holders of Nabors Delaware common
stock. The exchangeable shares will be listed on The Toronto Stock Exchange
under the symbol "NBX". If the reorganization is completed, the exchangeable
shares will, after the effective time of the reorganization, become exchangeable
for Nabors Bermuda common shares.
On March 18, 2002, Nabors Delaware also separately acquired from two
Enserco shareholders Enserco common shares representing approximately 20.5% of
the issued and outstanding Enserco shares for Cdn. $15.50 per share.
Enserco is an integrated energy services company providing production and
drilling services to the North American oil and gas industry. Through its
subsidiaries, Bonus Well Servicing and H&R Drilling, Enserco operates over 200
Canadian well-servicing rigs and 30 drilling rigs. See "Recent Developments" on
page 21.
THE REORGANIZATION (SEE PAGE 15)
Our Board of Directors has unanimously approved and recommends that you
adopt the Agreement and Plan of Merger which effectively changes your company's
place of incorporation from Delaware to Bermuda. The reorganization will be
accomplished through the merger of Nabors Acquisition into Nabors Delaware.
Nabors Delaware will be the surviving company in the merger and will become a
wholly-owned, indirect subsidiary of Nabors Bermuda. The terms of the merger are
set forth in the Agreement and Plan of Merger attached as annex I to this proxy
statement/prospectus. As a result of the merger, your shares of Nabors Delaware
common stock will automatically convert into the right to receive Nabors Bermuda
common shares so that you will own shares in a Bermuda corporation rather than a
Delaware corporation. For a more detailed description of the differences between
your rights under Delaware law and under Bermuda law, please see "Comparison of
Rights of Stockholders" on page 28. After completion of the reorganization,
Nabors Bermuda and its subsidiaries will continue to conduct the business that
Nabors Delaware and its subsidiaries now conduct.
6
The reorganization involves the following steps:
1. Nabors Acquisition will merge into Nabors Delaware. Nabors Delaware
will be the surviving entity and become a wholly-owned, indirect subsidiary
of Nabors Bermuda.
2. In the merger, each outstanding share of common stock of Nabors
Delaware will automatically convert by operation of law into the right to
receive one common share of Nabors Bermuda, and the current stockholders of
Nabors Delaware will own exactly the same number of Nabors Bermuda common
shares as they currently own in Nabors Delaware. For a description of the
terms of the Nabors Bermuda common shares, please see the discussion under
"Description of Authorized Shares of Nabors Industries Ltd." on page 24.
Stockholders will be required to exchange their stock certificate(s) as a
result of the merger. Each outstanding certificate representing shares of Nabors
Delaware shall automatically represent the right to receive the same number of
Nabors Bermuda common shares. Following the merger, certificates bearing the
name of Nabors Bermuda will be issued upon surrender of certificates bearing the
name of Nabors Delaware for exchange or transfer to an exchange agent appointed
by Nabors US Holdings and Nabors Acquisition.
REASONS FOR THE REORGANIZATION (SEE PAGE 15)
International activities are an important part of our current business and
we believe that international operations will account for a greater percentage
of our total revenues in the future. Expansion of our international business is
an important part of our current business strategy and significant growth
opportunities exist in the international marketplace. We believe that
reorganizing as a Bermuda corporation will allow us to implement our business
strategy more effectively.
We believe that the reorganization should increase our access to
international capital markets and acquisition opportunities, increase our
attractiveness to non-U.S. investors, improve global cash management, improve
global tax position and result in a more favorable corporate structure for
expansion of our current business. We anticipate that the reorganization may
result in significant tax savings net of tax costs. However, we cannot give any
assurance as to what our tax savings net of tax costs will be after the
reorganization. In addition, a number of our competitors have reincorporated
outside of the United States to achieve these competitive advantages. We believe
the reorganization will allow us to compete more effectively on a global scale.
For a discussion of the risk factors associated with the reorganization,
please see the discussion under "Risk Factors" on page 13.
CONDITIONS TO CONSUMMATION OF THE MERGER (SEE PAGE 17)
The consummation of the reorganization is conditioned on several factors,
including the affirmative vote of the holders of a majority of the outstanding
shares of common stock of Nabors Delaware entitled to vote at the special
meeting and that none of the parties to the Agreement and Plan of Merger is
subject to any governmental authority which prohibits the consummation of the
reorganization.
For additional factors, please see "The Reorganization -- Conditions to
Consummation of the Merger" on page 17.
REGULATORY APPROVALS (SEE PAGE 18)
Through various subsidiaries, Nabors Delaware owns a fleet of approximately
30 vessels which provide transportation of drilling materials, supplies and
crews for offshore rig operations and support for other offshore operations to
third parties, principally through time charter contracts. Under United States
laws and regulations of the United States Coast Guard, these vessels are
considered to be operating in the "coastwise trades" and accordingly must be
owned by an entity which is a United States citizen for these purposes as
determined by the Coast Guard. After the reorganization is completed, Nabors
Bermuda will be deemed to be the ultimate owner of the vessels and will not
qualify as a United States citizen for the purposes of these
7
regulations. If the merger agreement is adopted by stockholders, Nabors Delaware
anticipates it will undertake transactions with respect to the vessels to
satisfy United States law and the Coast Guard regulations while retaining legal
title and an economic participation in the utilization of the vessels. By letter
dated March 20, 2002, the Coast Guard granted preliminary approval for the
structure Nabors Delaware will utilize for these transactions. Formal
application will be made to the Coast Guard for final approval to document the
vessels in the name of a Nabors Delaware subsidiary and approve such
transactions. While Nabors Delaware expects that such applications will be
approved, there can be no assurance that the Coast Guard will approve such
applications. If the Coast Guard does not approve such applications, Nabors
Delaware will consider alternative methods to satisfy the citizenship
requirements. For further discussion of the vessel transactions and the Coast
Guard approval see "The Reorganization -- Regulatory Approvals" on page 18.
CREDIT FACILITIES (SEE PAGE 21)
As a result of the merger, we may fail to comply with certain covenants
contained in a credit agreement, dated as of September 5, 1997, as amended,
among Nabors Delaware, its subsidiaries, Bank of America National Trust and
Savings Association, Wells Fargo Bank (Texas), National Association and some
other financial institutions. Currently, there is no indebtedness outstanding
under this $200 million credit agreement. Due to its current cash position,
Nabors Delaware does not anticipate having to borrow under this facility for the
foreseeable future. Nabors Delaware presently intends to seek a waiver in
connection with this potential default, although there can be no assurance that
Nabors Delaware will obtain such a waiver. If no waiver is obtained, we cannot
borrow under the credit agreement. In addition, this default would cause a
cross-default under a $30 million letter of credit facility with Bank of
America, N.A., dated January 7, 2002. As of March 20, 2002, there is
approximately $25 million outstanding under such letter of credit facility.
Nabors Delaware presently intends to seek a waiver in connection with this
potential cross-default, although there can be no assurance that Nabors Delaware
will obtain such a waiver. If no waiver is obtained, we will have to replace
this letter of credit facility or cash collateralize such letters of credit.
Nabors Delaware does not believe such potential defaults will adversely affect
it, its operations or its stockholders or Nabors Bermuda or its shareholders if
the merger is completed. The credit agreement and letter of credit facility are
currently scheduled to expire in September 2002. It is currently anticipated
that Nabors Delaware (or Nabors Bermuda if the merger is completed) would seek
to obtain a replacement credit facility and letter of credit facility beginning
in the second quarter of 2002.
U.S. FEDERAL INCOME TAX CONSEQUENCES TO STOCKHOLDERS (SEE PAGE 40)
Generally, for U.S. federal income tax purposes, stockholders who are U.S.
persons will recognize gain, if any, but not loss, on the receipt of Nabors
Bermuda common shares in exchange for Nabors Delaware common stock pursuant to
the reorganization. Such a holder will generally recognize gain equal to the
excess, if any, of the fair market value of the Nabors Bermuda common shares
received in exchange for Nabors Delaware common stock in the reorganization over
the holder's adjusted tax basis in the shares of Nabors Delaware common stock
exchanged therefor. Generally, any such gain will be capital gain. Further, the
holding period for any Nabors Bermuda common shares received by a U.S. holder
recognizing gain with respect to the reorganization should begin the day after
the effective date of the reorganization. Stockholders will not be permitted to
recognize any loss realized on the exchange of their shares of Nabors Delaware
common stock in the reorganization. In such case, the aggregate adjusted tax
basis in the Nabors Bermuda common shares received would equal the aggregate
adjusted tax basis of their shares of Nabors Delaware common stock. Thus,
subject to any subsequent changes in the fair market value of Nabors Bermuda
common shares, any loss would be preserved. The holding period for any Nabors
Bermuda common shares received by U.S. holders with a loss on their Nabors
Delaware common stock will include the holding period of the Nabors Delaware
common stock exchanged therefor.
WE STRONGLY URGE YOU TO CONSULT YOUR TAX ADVISORS REGARDING YOUR PARTICULAR
TAX CONSEQUENCES OF THE REORGANIZATION.
8
A more detailed discussion of the material U.S. federal income tax
consequences of the reorganization to the stockholders of Nabors Delaware is set
forth under the heading "Income Tax Consequences of the Reorganization -- U.S.
Federal Income Tax Consequences to Stockholders" on page 40.
RIGHTS OF STOCKHOLDERS (SEE PAGE 28)
The principal attributes of the Nabors Delaware common stock and the Nabors
Bermuda common shares will be substantially similar. There are differences,
however, between the rights of stockholders under Delaware law and shareholders
under Bermuda law. In addition, there are differences between our current
certificate of incorporation and by-laws and Nabors Bermuda's memorandum of
association and bye-laws. We encourage you to read the section titled
"Comparison of Rights of Stockholders" on page 28 for a more detailed discussion
of these differences.
STOCK EXCHANGE LISTING; RECENT STOCK PRICES (SEE PAGE 21)
Immediately following the merger, Nabors Bermuda's common shares will be
listed on the American Stock Exchange under the symbol "NBR", the same symbol
under which Nabors Delaware's common stock is currently listed. Based on prior
transactions similar to the reorganization by member companies of the S&P 500
Index, we believe that the pending change of domicile to Bermuda should not
affect the company's status as a member of the S&P 500 Index.
The closing price per share of our shares on the American Stock Exchange
was $[ ] on [Month Day], 2002. The high and low sales prices of Nabors
Delaware's common stock on the American Stock Exchange were $35.49 and $34.30 on
December 31, 2001, the last trading day before the public announcement of the
reorganization.
NO RIGHTS OF DISSENTING STOCKHOLDERS (SEE PAGE 20)
Under the Delaware General Corporation Law, you will not have "dissenters"
or appraisal rights in connection with the merger and the reorganization.
ACCOUNTING TREATMENT OF THE REORGANIZATION (SEE PAGE 21)
The reorganization will be accounted for as a reorganization of entities
under common control which will not result in changes in our historical
consolidated carrying amount of assets, liabilities and stockholders' equity.
SPECIAL MEETING (SEE PAGE 22)
Time, Date, Place. The special meeting of stockholders will be held at
11:00 a.m., local time, on Monday, June 3, 2002 at The Wyndham Greenspoint
Hotel, 12400 Greenspoint Drive, Houston, Texas 77060.
Record Date. Only stockholders of record at the close of business on April
17, 2002, as shown in our records, will be entitled to vote, or to grant proxies
to vote, at the special meeting.
Quorum. The presence, in person or by proxy, of stockholders holding a
majority of the shares of Nabors Delaware entitled to vote will constitute a
quorum.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS OF NABORS DELAWARE UNANIMOUSLY APPROVED THE
AGREEMENT AND PLAN OF MERGER AND DECLARED ITS ADVISABILITY AND RECOMMENDS THAT
YOU VOTE "FOR" ITS ADOPTION.
VOTE REQUIRED (SEE PAGE 23)
ADOPTION OF THE AGREEMENT AND PLAN OF MERGER REQUIRES THE AFFIRMATIVE VOTE
OF HOLDERS OF A MAJORITY OF THE SHARES OF NABORS DELAWARE
9
COMMON STOCK OUTSTANDING ON APRIL 17, 2002. ABSTENTIONS AND BROKER NON-VOTES
WILL THEREFORE EFFECTIVELY BE COUNTED AS VOTES AGAINST ADOPTION OF THE MERGER
AGREEMENT. As of the April 17, 2002 record date, there were 141,099,335 Nabors
Delaware shares outstanding and entitled to vote. As of the record date, our
directors and executive officers and their affiliates directly owned or are
entitled to vote, in the aggregate, approximately 1,846,378 shares of Nabors
Delaware common stock, which represents approximately 1.3% of the outstanding
shares of Nabors Delaware common stock. These persons have informed us that they
intend to vote their shares in favor of the proposal to adopt the Agreement and
Plan of Merger. Like other Nabors Delaware stockholders, for U.S. federal income
tax purposes, certain of such directors and executive officers, including the
Chairman of the board of Nabors Delaware, will recognize gain on the receipt of
Nabors Bermuda common shares in exchange for their Nabors Delaware common stock
pursuant to the reorganization.
PROXIES (SEE PAGE 23)
GENERAL
Stockholders of record may vote by marking, signing and mailing your proxy
card in the enclosed postage-prepaid envelope.
If you hold your Nabors Delaware shares in the name of a bank, broker or
other nominee, you should follow the instructions provided by your bank, broker
or nominee when voting your shares. To be effective, a form of proxy must be
received by us prior to the beginning of voting at the special meeting.
REVOCATION
There are three ways in which you may revoke your proxy and change your
vote:
- First, you may send a written notice to our proxy solicitor, Georgeson
Shareholder Communications Inc., stating that you would like to revoke
your proxy. This notice must be received prior to the special meeting.
- Second, you may complete and submit a new later-dated proxy as described
above. The latest dated proxy actually received by the company prior to
the special meeting will be the one that is counted, and all earlier
proxies will be revoked.
- Third, you may attend the special meeting and vote in person. Simply
attending the meeting, however, will not revoke your proxy. At the
special meeting, the chairman of the meeting will announce instructions
for you to follow if you wish to revoke your proxy and vote in person at
the meeting.
If you have instructed a broker to vote your shares, you must follow
directions received from your broker to change or revoke your proxy.
10
SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA
The selected historical consolidated financial data of Nabors Delaware in
the table below were derived from Nabors Delaware's audited consolidated
financial statements as of and for the four years ended December 31, 2001, as of
and for the year ended September 30, 1997 and a transition period for the three
months ended December 31, 1997. Nabors Delaware changed its fiscal year end from
September 30 to December 31, effective for the fiscal year beginning January 1,
1998. A three-month transition period from October 1, 1997 through December 31,
1997 preceded the start of Nabors Delaware's new fiscal year. Nabors Delaware
has recast its financial data to conform to the presentation of the twelve
months ended December 31, 1997 by adjusting its audited results for the year
ended September 30, 1997 to exclude the unaudited results for the quarter ended
December 31, 1996 and to include the audited results for the quarter ended
December 31, 1997. This data should be read in conjunction with the audited
consolidated financial statements of Nabors Delaware, including the notes to the
financial statements, incorporated by reference into this proxy
statement/prospectus.
We have not included data for Nabors Bermuda, Nabors Acquisition or Nabors
US Holdings because they did not conduct business during any of the periods
discussed below.
THREE TWELVE
MONTHS MONTHS
YEAR ENDED ENDED ENDED YEAR ENDED DECEMBER 31,
SEPTEMBER 30, DECEMBER 31, DECEMBER 31, -------------------------------------------------
1997 1997 1997 1998 1999 2000 2001
(IN THOUSANDS, EXCEPT ------------- ------------ ------------ ---------- ---------- ---------- ----------
PER SHARE AMOUNTS) (UNAUDITED)
Operating revenues..... $1,028,853 $302,831 $1,114,758 $ 968,462 $ 638,507 $1,327,124 $2,121,157
---------- -------- ---------- ---------- ---------- ---------- ----------
Income before
extraordinary gain... 114,808 41,327 136,020 124,988 27,704 135,474 347,792
Extraordinary gain,
net.................. -- -- -- -- -- 1,882 9,658
---------- -------- ---------- ---------- ---------- ---------- ----------
Net income............. $ 114,808 $ 41,327 $ 136,020 $ 124,988 $ 27,704 $ 137,356 $ 357,450
---------- -------- ---------- ---------- ---------- ---------- ----------
Net income per diluted
share:
Net income before
extraordinary
gain............... $ 1.08 $ .37 $ 1.24 $ 1.16 $ .23 $ .89 $ 2.18
Extraordinary gain,
net................ -- -- -- -- -- .01 .06
---------- -------- ---------- ---------- ---------- ---------- ----------
Net income........... $ 1.08 $ .37 $ 1.24 $ 1.16 $ .23 $ .90 $ 2.24
---------- -------- ---------- ---------- ---------- ---------- ----------
Dividends per common
share................ -- -- -- -- -- -- --
Total assets........... $1,234,232 $1,281,306 $1,465,907 $2,398,003 $3,136,868 $4,151,915
Long-term
obligations.......... 229,507 226,299 217,034 482,600 854,777 1,567,616
Stockholders' equity... $ 727,843 $ 767,340 $ 867,469 $1,470,074 $1,806,468 $1,857,866
11
SUMMARY PRO FORMA FINANCIAL INFORMATION
A pro forma condensed consolidated balance sheet for Nabors Bermuda is not
presented in this proxy statement/prospectus because there would be no
significant pro forma adjustments required to be made to the historical
consolidated balance sheet of Nabors Delaware as of December 31, 2001. That
balance sheet is included in Nabors Delaware's Annual Report on Form 10-K for
the year ended December 31, 2001.
A pro forma condensed consolidated income statement for Nabors Bermuda is
not presented in this proxy statement/prospectus because there would be no
significant pro forma adjustments required to be made to income from operations
in the historical consolidated income statement of Nabors Delaware for the year
ended December 31, 2001. That income statement is included as an exhibit to
Nabors Delaware's Annual Report on Form 10-K for the fiscal year ended December
31, 2001.
Costs incurred in connection with the reorganization are not expected to be
material and are expensed as incurred.
12
RISK FACTORS
CERTAIN NABORS DELAWARE STOCKHOLDERS WILL RECOGNIZE A TAXABLE GAIN AS A RESULT
OF THE REORGANIZATION.
Generally, for U.S. federal income tax purposes, stockholders who are U.S.
persons will recognize gain, if any, but not loss, on the receipt of Nabors
Bermuda common shares in exchange for Nabors Delaware common stock pursuant to
the reorganization. Such a holder will generally recognize gain equal to the
excess, if any, of the fair market value of the Nabors Bermuda common shares
received in exchange for Nabors Delaware common stock in the reorganization over
the holder's adjusted tax basis in the shares of Nabors Delaware common stock
exchanged therefor. Generally, any such gain will be capital gain. Further, the
holding period for any Nabors Bermuda common shares received by a U.S. holder
recognizing gain with respect to the reorganization should begin the day after
the effective date of the reorganization. Stockholders will not be permitted to
recognize any loss realized on the exchange of their shares of Nabors Delaware
common stock in the reorganization. In such case, the aggregate adjusted tax
basis in the Nabors Bermuda common shares received would equal the aggregate
adjusted tax basis of their shares of Nabors Delaware common stock. Thus,
subject to any subsequent changes in the fair market value of Nabors Bermuda
common shares, any loss would be preserved.
WE STRONGLY URGE YOU TO CONSULT YOUR TAX ADVISORS REGARDING YOUR PARTICULAR
TAX CONSEQUENCES OF THE REORGANIZATION.
NABORS BERMUDA AND ITS SUBSIDIARIES COULD INCUR A MATERIAL AMOUNT OF TAXES IF
THERE ARE UNFAVORABLE CHANGES IN, OR INTERPRETATIONS OF, TAX LAWS.
Several senior members of the United States Congress have introduced
legislation that, if enacted, would have the effect of eliminating the
anticipated tax benefits of the transaction. Each of the proposed bills, for
U.S. federal tax purposes, would treat a foreign corporation, such as Nabors
Bermuda, that undertakes a corporate expatriation transaction such as the
reorganization as a domestic corporation and, thus, such foreign corporation
would be subject to U.S. federal tax. Each of the proposed bills would have
retroactive effect to inversion transactions occurring after specified dates in
2001 or 2002. If any of the proposed legislation were enacted in their present
forms and with their proposed effective dates, the anticipated tax savings from
the reorganization would not be realized.
In addition, several other members of the United States Congress and the
Treasury Department have recently announced the intent to investigate
transactions such as the reorganization. As a result of the increased scrutiny
of such transactions, changes in the tax laws, tax treaties or tax regulations
may occur, with prospective or retroactive effect, which could eliminate or
substantially reduce the anticipated tax benefits of the reorganization or
subject the company to material tax liability as a result of the reorganization.
If in response to any such changes the reorganized company or its subsidiaries
undertake a corporate restructuring, such restructuring could result in
additional material adverse tax consequences to the company or its shareholders.
In addition, the IRS or other taxing authority could disagree with our
assessment of the effects or interpretation of existing laws, regulations and
treaties, which could have a material adverse effect on the tax consequences of
the reorganization, the tax consequences of the future operations of the
reorganized company and its subsidiaries or otherwise have a material adverse
effect on the tax consequences to the company or its shareholders.
THE REORGANIZATION COULD RESULT IN A MATERIAL AMOUNT OF TAXES TO NABORS
DELAWARE.
Although we believe that Nabors Delaware should not incur a material amount
of U.S. federal income or withholding tax as a result of the reorganization, the
IRS may not agree with this conclusion. If the IRS were to successfully
challenge the tax treatment of the reorganization, Nabors Delaware could incur a
material amount of U.S. federal income or withholding tax as a result of the
reorganization.
13
NABORS BERMUDA MAY BECOME SUBJECT TO U.S. CORPORATE INCOME TAX.
Although Nabors Delaware and its subsidiaries will continue to be subject
to U.S. corporate income tax on their operations after the reorganization,
Nabors Bermuda anticipates that its non-U.S. operations will not be subject to
U.S. corporate income tax, other than withholding taxes imposed on certain U.S.
source income. If, however, Nabors Bermuda becomes subject to U.S. corporate
income tax, Nabors Bermuda's net income could be reduced.
Nabors Bermuda and other non-U.S. Nabors affiliates will conduct their
operations in a manner intended to ensure that Nabors Bermuda and its non-U.S.
affiliates do not engage in the conduct of a U.S. trade or business and, thus,
Nabors Bermuda and its non-U.S. affiliates believe that they should not be
required to pay U.S. corporate income tax, other than withholding tax on certain
U.S. source income. However, if the IRS successfully contends that Nabors
Bermuda or any of its non-U.S. affiliates are engaged in a trade or business in
the U.S., Nabors Bermuda or that non-U.S. affiliate would be required to pay
U.S. corporate income tax on income that is subject to the taxing jurisdiction
of the U.S., and possibly the U.S. branch profits tax.
THE ENFORCEMENT OF JUDGMENTS IN STOCKHOLDER SUITS AGAINST NABORS BERMUDA MAY BE
MORE DIFFICULT.
Nabors Bermuda is a Bermuda exempted company. As a result, it may be
difficult for you to effect service of process within the United States or to
enforce judgments obtained against Nabors Bermuda in United States courts. This
difficulty may adversely affect your rights in this regard as a shareholder of
Nabors Bermuda when compared to your rights as a stockholder of Nabors Delaware.
Nabors Bermuda will irrevocably agree that it may be served with process with
respect to actions based on offers and sales of securities made in the United
States and other violations of U.S. securities laws by having Nabors Industries,
Inc. (Nabors Delaware) located at 515 West Greens Road, Suite 1200, Houston,
Texas 77067, be its United States agent appointed for that purpose.
Nabors Bermuda has been advised by its Bermuda counsel, Appleby, Spurling &
Kempe, 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. Nabors Bermuda has also been advised by Appleby, Spurling & Kempe that
a final and conclusive judgment obtained in a court of competent jurisdiction in
the United States under which a sum of money is payable (not being a sum payable
in respect of taxes or other charges of a like nature, in respect of a fine or
other penalty, or in respect of multiple damages as defined in the Protection of
Trading Interests Act of 1981) may be the subject of an action in the Supreme
Court of Bermuda under the common law doctrine of obligation, by action on the
debt evidenced by the court's judgment. Such an action should be successful upon
proof that the sum of money is due and payable, and without having to prove the
facts supporting the underlying judgment, as long as:
- the court that gave the judgment was competent to hear the action in
accordance with private international law principles as applied by the
courts in Bermuda; and
- the judgment is not contrary to public policy in Bermuda, was not
obtained by fraud or in proceedings contrary to natural justice of
Bermuda and is not based on an error in Bermuda law.
A Bermuda court may impose civil liability on Nabors Bermuda or its
directors or officers in a suit brought by shareholders or others in the Supreme
Court of Bermuda against Nabors Bermuda or such persons with respect to facts
that constitute a violation of U.S. federal securities laws only if the facts
surrounding such violation would constitute or give rise to a cause of action
under Bermuda law.
ANTI-TAKEOVER PROVISIONS IN NABORS BERMUDA'S BYE-LAWS WILL MAINTAIN CERTAIN
EXISTING ANTI-TAKEOVER PROVISIONS OF NABORS DELAWARE WHICH COULD DISCOURAGE OR
MAKE MORE DIFFICULT UNSOLICITED TAKEOVER BIDS FROM THIRD PARTIES OR THE REMOVAL
OF INCUMBENT MANAGEMENT OF NABORS BERMUDA.
Similar to the current authority of Nabors Delaware's board of directors,
the board of directors of Nabors Bermuda may issue preferred shares and
determine their rights and qualifications. The issuance of preferred shares
might discourage or make more difficult unsolicited takeover bids from third
parties.
14
In addition, provisions in Nabors Bermuda's bye-laws, which replicate or
are similar to certain provisions of Nabors Delaware's restated certificate of
incorporation and by-laws, similarly could discourage or make more difficult
unsolicited takeover bids from third parties or the removal of incumbent
management. These provisions include:
- a classified board of directors; and
- the requirement that the written request of the holders of record of not
less than 10% of the Nabors Bermuda common shares then outstanding is
necessary for shareholders to validly call a special meeting.
YOUR RIGHTS AS A STOCKHOLDER WILL CHANGE AS A RESULT OF THE REORGANIZATION.
Because of differences in Bermuda law and Delaware law and differences in
the governing documents of Nabors Bermuda and Nabors Delaware, your rights as a
stockholder will change if the reorganization is completed. For example, in
general, it may be more difficult for you to bring a shareholder derivative suit
on behalf of the company under Bermuda law than it is to bring such a suit under
Delaware law. In addition, provisions in Nabors Bermuda's bye-laws will place
time limitations on your ability to submit shareholder proposals and nominations
for directors which are not included in Nabors Delaware's by-laws. For a
description of these and other differences, see "Comparison of Corporate
Governance Provisions" beginning on page 30.
THE REORGANIZATION
STRUCTURE OF THE REORGANIZATION
The Board of Directors has unanimously approved and recommends that you
adopt the Agreement and Plan of Merger whereby we will change our domicile from
Delaware to Bermuda. The reorganization will be accomplished through the merger
of Nabors Acquisition into Nabors Delaware. Nabors Delaware will be the
surviving company in the merger and become a wholly-owned, indirect subsidiary
of Nabors Bermuda. The terms of the merger are set forth in the Agreement and
Plan of Merger attached as annex I to this proxy statement/prospectus. As a
result of the merger your shares of Nabors Delaware common stock will
automatically convert into the right to receive the same number of Nabors
Bermuda common shares.
After completion of the reorganization, you will own an interest in a
Bermuda holding company which, through Nabors Delaware and its other
subsidiaries, will be engaged in the same business that Nabors Delaware and its
subsidiaries were engaged in prior to the reorganization.
The reorganization involves the following steps:
1. Nabors Acquisition will merge into Nabors Delaware. Nabors
Delaware will be the surviving entity and become a wholly-owned, indirect
subsidiary of Nabors Bermuda.
2. In the merger, each outstanding share of common stock of Nabors
Delaware will automatically convert by operation of law into the right to
receive one common share of Nabors Bermuda, and the current stockholders of
Nabors Delaware will own exactly the same number of Nabors Bermuda common
shares. For a description of the terms of the Nabors Bermuda common shares,
please see the discussion under "Description of Authorized Shares of Nabors
Industries Ltd." on page 24.
BACKGROUND AND REASONS FOR THE REORGANIZATION
INTERNATIONAL EXPANSION
International activities are an important part of our current business.
Internationally, operating revenues and earnings from unconsolidated affiliates
were approximately $279 million in 2000 and $344.5 million in 2001, accounting
for approximately 20% and 16%, respectively, of our total operating revenues and
earnings from unconsolidated affiliates in such years. Approximately 112 rigs of
our 566 land drilling rig fleet currently
15
are located outside of the United States and approximately 14 rigs of our 60
offshore rig fleet currently are positioned outside of United States waters. We
believe that a substantial portion of future opportunities for our services will
be outside of the United States and accordingly, we believe international
operations will account for a greater percentage of our total revenues in the
future. We believe that reorganizing Nabors Delaware as a Bermuda corporation
will give us competitive advantages not available to a U.S. company. As a
Bermuda company, we believe we will have greater access to international capital
markets and international acquisition opportunities, which will allow us to
implement our international expansion strategy more effectively. In addition, a
number of our competitors have reincorporated outside of the United States to
achieve these competitive advantages. We believe the reorganization will allow
us to compete more effectively on a global scale.
GLOBAL TAX POSITION
The board is recommending the reorganization in part because it believes
that the reorganization will improve our global tax position and should maximize
potential growth and cash flow. We anticipate that the reorganized structure may
enhance our ability to realize significant tax savings net of tax costs.
However, we cannot give any assurance as to what our tax savings net of tax
costs will be after the reorganization. After the reorganization our tax rate
will depend on, among other things, profitability and the relative mix of our
operations worldwide and our ability to react to any changes in tax laws,
treaties and policies and the interpretation of such laws, treaties and policies
in the jurisdictions where we operate. Our actual effective tax rate may vary
materially from our expectation.
As a result of an improvement in cash flow we believe we will be able to:
- maximize existing business growth and cash flow; and
- commit additional capital to international expansion.
Nabors Bermuda will be indirectly subject to U.S. tax on income earned from
its U.S. business much as we are now. However, we believe the reorganization:
- will potentially improve our global tax position;
- may facilitate foreign tax savings through a more flexible corporate
structure; and
- may provide future U.S. tax savings to the extent that new foreign
businesses may be held by Nabors Bermuda without any intervening U.S.
owners.
Thus the new corporate structure should give us greater flexibility in seeking
to lower our worldwide tax liability and effective tax rate.
In addition, Nabors Delaware's board believes that the reorganization will
result in a more favorable corporate structure for expansion of our current
business because it will facilitate the cost effective acquisition and operation
of non-U.S. businesses.
It is important to note that several senior members of the United States
Congress have introduced legislation that, if enacted, would have the effect of
eliminating the anticipated tax benefits of the transaction. In addition,
several other members of the United States Congress and the Treasury Department
have recently announced the intent to investigate transactions such as the
reorganization. As a result of the increased scrutiny of such transactions,
changes in the tax laws, tax treaties or tax regulations may occur, with
prospective or retroactive effect, which could eliminate or substantially reduce
the anticipated tax benefits of the reorganization or have a material adverse
effect on the tax consequences of the reorganization to the company. If in
response to any such changes the reorganized company or its subsidiaries
undertake a corporate restructuring, such restructuring could result in
additional material adverse tax consequences to the company or its shareholders.
16
POTENTIAL EXPANSION OF INVESTOR BASE
The board also believes that the reorganization may increase Nabors
Bermuda's attractiveness to non-U.S. investors. Estate taxes are payable in some
cases in respect of the value of shares in a U.S. corporation owned by a
non-U.S. investor. Although Nabors Delaware has not paid any dividends on its
common stock since 1982, distributions with respect to stock in a U.S.
corporation to nonresident aliens could be subject to withholding taxes under
the Internal Revenue Code of 1986, as amended (the "Code"). As we will be a non-
U.S. corporation following the reorganization, these taxes will generally no
longer be applicable to non-U.S. investors. Under existing Bermuda law, there
will be no Bermuda income or withholding tax on dividends, if any, paid by
Nabors Bermuda to its shareholders. Furthermore, no Bermuda tax or other levy is
payable on the sale or other transfer (including by gift or on the death of the
shareholder) of Nabors Bermuda common shares (other than by shareholders
resident in Bermuda). Likewise, under existing Barbados law, there will be no
Barbados income or withholding tax on dividends, if any, paid by Nabors Bermuda
to its shareholders. Furthermore, U.S. shareholders will not be subject to any
Barbados taxation on the sale or other transfer (including by gift or on the
death of the shareholder) of Nabors Bermuda common shares. Nabors Bermuda is not
aware of any other taxes that non-U.S. residents might incur that could
discourage an investment in Nabors Bermuda as compared to an investment in
Nabors Delaware. As a result, non-U.S. investors may be more receptive to an
investment in Nabors Bermuda common shares.
In addition to the potential benefits described above, the reorganization
will expose you to some risks. Please see the discussion under "Risk Factors" on
page 13. There are also differences between the Delaware and the Bermuda
corporate law and the organizational documents of Nabors Delaware and Nabors
Bermuda. For a discussion of these differences, please see "Comparison of Rights
of Stockholders" on page 28. The board of directors has determined that the
potential advantages of the reorganization substantially outweigh these risks
and differences. Accordingly, the board of directors of Nabors Delaware has
unanimously approved the Agreement and Plan of Merger and declared its
advisability and recommends that stockholders vote "FOR" its adoption. However,
no assurances can be given that the anticipated benefits of the reorganization
will be realized.
THE MERGER AGREEMENT
Nabors Delaware, Nabors Bermuda, Nabors Acquisition and Nabors US Holdings
have entered into the merger agreement, which is the legal document that governs
the merger. We recommend that you read carefully the complete merger agreement
for the precise legal terms of the merger and other information that may be
important to you. The merger agreement is included in this proxy
statement/prospectus as annex I and is incorporated in this document by
reference.
CONDITIONS TO CONSUMMATION OF THE MERGER
The merger will not be completed unless, among other things, the following
conditions are satisfied or, if allowed by law, waived:
- the merger agreement is adopted by the affirmative vote of holders of a
majority of the shares of Nabors Delaware common stock outstanding on the
record date;
- none of the parties to the merger agreement is subject to any
governmental decree, order or injunction that prohibits the consummation
of any of the steps in the reorganization;
- the registration statement of which this proxy statement/prospectus is a
part is declared effective by the Securities and Exchange Commission, and
no stop order is in effect;
- the Nabors Bermuda common shares to be issued pursuant to the merger are
approved for listing on the American Stock Exchange, subject to official
notice of issuance;
- all filings required by a governmental or regulatory agency are made; and
- all consents and approvals required by any governmental or regulatory
agency and all other material third-party consents are received.
17
We are parties to agreements that require the consent of third parties
prior to the implementation of the merger. We believe that we will obtain all
material consents required prior to the completion of the merger and that the
failure to obtain any other consents will not have a material impact on our
business or our ability to consummate the reorganization.
REGULATORY APPROVALS
Through various subsidiaries, Nabors Delaware owns a fleet of approximately
30 vessels which provide transportation of drilling materials, supplies and
crews for offshore rig operations and support for other offshore operations to
third parties, principally through time charter contracts. Under a time charter
contract, an operator, a subsidiary of Nabors Delaware, operates the vessels to
provide the transportation services required by the third parties. Annual
revenues generated by this vessel fleet for each of the years 2000 and 2001 were
less than 3.5% of Nabors Delaware's total consolidated revenues in such years.
Under United States laws and regulations of the United States Coast Guard, these
vessels are considered to be operating in the "coastwise trades" and accordingly
must be owned by an entity which is a United States citizen for these purposes
as determined by the Coast Guard. After the reorganization is completed, Nabors
Bermuda will be deemed to be the ultimate owner of the vessels and will not
qualify as a United States citizen for these purposes.
Accordingly, if stockholders of Nabors Delaware adopt the merger agreement,
Nabors Delaware will undertake actions to satisfy these citizenship
requirements. Specifically, Nabors Delaware anticipates that it will transfer
title of the vessels and assign charter contracts to Nabors US Finance LLC, an
indirect, Delaware subsidiary of Nabors Delaware. Nabors US Finance will enter
into a contract called a "bareboat charter" with an independent third party
which will "time charter" the vessels back to a subsidiary of Nabors Bermuda.
Under the terms of the bareboat charter, the independent third party will have
full possession, control and command of the vessels, will man, equip, maintain
and repair the vessels and will operate them as directed by the Nabors Bermuda
subsidiary under the time charter. The time charter contract will be between the
Nabors Bermuda subsidiary and the independent third party pursuant to which the
independent third party will operate the vessels to provide transportation
services to the Nabors Bermuda subsidiary at such subsidiary's direction. The
independent third party will qualify as a United States citizen under sections
2(a) and (c) of the Shipping Act, 1916, as amended, and for purposes of the
Coast Guard regulations. This transaction structure will allow the Nabors group
to retain legal title and an economic participation in the utilization of the
vessels through their employment under the time charter while satisfying the
Coast Guard's citizenship requirements. By letter dated March 20, 2002, the
Coast Guard granted preliminary approval for the structure Nabors Delaware will
utilize for these transactions. If shareholders adopt the merger agreement,
Nabors US Finance will submit formal applications to the Coast Guard to document
the vessels in its name and approve the transactions described above. While
Nabors Delaware expects that such applications will be approved, there can be no
assurance that the Coast Guard will approve such applications. If the Coast
Guard does not approve such applications, Nabors Delaware will consider
alternative methods to satisfy the citizenship requirements.
EFFECTIVE TIME
If the merger agreement is adopted by the requisite vote of our
stockholders, the merger will become effective upon the filing of a certificate
of merger with the Secretary of State of the State of Delaware in accordance
with Delaware law. If the merger agreement is adopted, Nabors Delaware expects
to file the certificate of merger and have the merger become effective promptly
following the special meeting.
In the event the conditions to the merger are not satisfied, the merger may
be abandoned or delayed even after the merger agreement has been adopted by our
stockholders. In addition, the merger may be abandoned or delayed for any reason
by the board of directors of Nabors Delaware at any time prior to its becoming
effective, even though the merger agreement has been adopted by our stockholders
and all conditions to the merger have been satisfied.
18
AMENDMENT OR TERMINATION
The merger agreement may be amended, modified or supplemented at any time
before or after its adoption by our stockholders. However, after adoption, no
amendment, modification or supplement may be made or effected that does any of
the following:
- alters or changes the amount or kind of shares to be received by
stockholders in the merger;
- alters or changes any term of the certificate of incorporation of the
surviving corporation; or
- alters or changes any other terms and conditions of the merger agreement
if any of the alterations or changes would adversely affect the holders
of Nabors Delaware common stock.
Our board of directors may terminate the merger agreement and abandon the
merger at any time prior to its effectiveness.
SHARE CONVERSION; EXCHANGE OF SHARES
Each share of Nabors Delaware common stock will automatically convert by
operation of law into the right to receive one common share of Nabors Bermuda
upon the consummation of the merger.
If you desire to sell some or all of your Nabors Bermuda common shares
after the effective date of the merger, delivery of the stock certificate(s)
which previously represented shares of Nabors Delaware common stock will be
sufficient. The holding period for any Nabors Bermuda common shares received by
a U.S. holder recognizing gain with respect to the reorganization should begin
the day after the effective date of the reorganization. The holding period for
any Nabors Bermuda common shares received by U.S. holders with a loss on their
Nabors Delaware common stock will include the holding period of the Nabors
Delaware common stock exchanged therefor. Your right to sell shares of Nabors
Delaware before the effective date of the merger will not be affected.
Prior to the merger, an exchange agent will be appointed by Nabors US
Holdings and Nabors Acquisition to handle the exchange of Nabors Delaware stock
certificates for Nabors Bermuda common share certificates. Prior to the merger,
Nabors US Holdings and Nabors Acquisition will cause a sufficient number of
Nabors Bermuda common shares to be deposited with the exchange agent for the
purpose of enabling stockholders to exchange their Nabors Delaware common stock
certificates for certificates representing an equal number of Nabors Bermuda
common shares. Soon after the closing of the merger, the exchange agent will
send a letter of transmittal, which is to be used to exchange Nabors Delaware
stock certificates for Nabors Bermuda share certificates, to each former Nabors
Delaware stockholder. The letter of transmittal will contain instructions
explaining the procedure for surrendering Nabors Delaware stock certificates.
YOU SHOULD NOT RETURN STOCK CERTIFICATES WITH THE ENCLOSED PROXY CARD.
Nabors Delaware stockholders who surrender their stock certificates,
together with a properly completed letter of transmittal, will receive share
certificates representing the common shares of Nabors Bermuda into which their
shares of Nabors Delaware have been converted in the merger. After the merger,
each certificate that previously represented shares of Nabors Delaware common
stock will represent only the right to receive the common shares of Nabors
Bermuda into which those shares of Nabors Delaware common stock have been
converted.
Although Nabors Bermuda anticipates that it will not pay any dividends on
its common shares for the foreseeable future, if it does pay any dividends it
will not pay dividends to holders of Nabors Delaware stock certificates in
respect of the common shares of Nabors Bermuda into which the Nabors Delaware
shares represented by those certificates have been converted until the Nabors
Delaware stock certificates are surrendered to the exchange agent.
After the merger becomes effective, Nabors Delaware will not register any
further transfers of shares of Nabors Delaware common stock. Any certificates
for Nabors Delaware shares that you present for registration after the effective
time of the merger will be exchanged for Nabors Bermuda common shares.
19
If you surrender a Nabors Delaware stock certificate and request the new
Nabors Bermuda certificate to be issued in a name other than the one appearing
on the surrendered certificate, you must endorse the stock certificate or
otherwise prepare it to be in proper form for transfer.
MANAGEMENT OF NABORS BERMUDA
When the reorganization is completed, all of the directors and all of the
executive officers of Nabors Delaware will become the directors and executive
officers of Nabors Bermuda. Assuming the merger agreement is adopted, the
current directors of Nabors Delaware will carry over their remaining terms of
office to Nabors Bermuda.
REQUIRED VOTE FOR THE REORGANIZATION
In order to complete the reorganization, the merger agreement must be
adopted by the affirmative vote of holders of a majority of the shares of Nabors
Delaware common stock outstanding on April 17, 2002. Because of this vote
requirement, ABSTENTIONS WILL HAVE THE SAME EFFECT AS VOTES AGAINST THE PROPOSAL
TO ADOPT THE MERGER AGREEMENT. THE FAILURE OF A STOCKHOLDER TO SUBMIT A FORM OF
PROXY OR TO VOTE IN PERSON AT THE MEETING WILL ALSO HAVE THE EFFECT OF A VOTE
AGAINST THE ADOPTION OF THE MERGER AGREEMENT. Under the rules of the American
Stock Exchange, brokers who hold shares in street name for customers have the
authority to vote on many "routine" proposals when they have not received
instructions from beneficial owners. Under these rules, brokers are precluded
from exercising their voting discretion with respect to proposals for
non-routine matters like the merger. THUS, ABSENT SPECIFIC INSTRUCTIONS FROM
YOU, YOUR BROKER IS NOT EMPOWERED TO VOTE YOUR SHARES WITH RESPECT TO THE
ADOPTION OF THE MERGER AGREEMENT (I.E., "BROKER NON-VOTES"). Since the
affirmative vote of holders of a majority of the shares of Nabors Delaware
common stock is required for adoption of the merger agreement, A BROKER NON-VOTE
WILL HAVE THE SAME EFFECT AS A VOTE AGAINST ADOPTION OF THE MERGER AGREEMENT.
As of the record date for the special meeting, there were 141,099,335
shares of Nabors Delaware common stock outstanding and entitled to vote. As of
the record date, our directors and executive officers owned or are entitled to
vote, in the aggregate, approximately 1,846,378 shares of our common stock,
which represents approximately 1.3% of the outstanding Nabors Delaware common
stock. These persons have informed us that they intend to vote their shares in
favor of the proposal to adopt the merger agreement.
NO RIGHTS OF DISSENTING STOCKHOLDERS
Under Delaware law, you will not have "dissenters" or appraisal rights in
connection with the merger or the reorganization because, among other reasons,
Nabors Delaware common stock is listed on the American Stock Exchange and Nabors
Bermuda common shares will be listed on the American Stock Exchange following
the effective time of the merger.
DIVIDENDS
Nabors Delaware has not declared or paid any cash dividends on its common
stock since 1982. We do not intend to pay any cash dividends on our common stock
for the foreseeable future. If the merger agreement is adopted and the
reorganization is completed, Nabors Bermuda anticipates that it will not pay any
dividends on its common shares for the foreseeable future.
STOCK COMPENSATION PLANS AND EMPLOYMENT AGREEMENTS
If the reorganization is completed, we will amend and revise our employee
and director stock option and other stock-based plans and arrangements to (1)
provide that Nabors Delaware will continue to sponsor the employee plans and
Nabors Bermuda will assume sponsorship of certain director plans, (2) provide
that common shares of Nabors Bermuda will be issued upon the exercise of any
options or the payment of any other stock-based awards under the plans and
arrangements, and (3) otherwise appropriately reflect the substitution of common
shares of Nabors Bermuda for common stock of Nabors Delaware under the plans and
arrangements and related agreements. Your approval of the merger will also
constitute approval of those
20
amendments and revisions to our stock option and other stock-based plans and
arrangements providing for future use of Nabors Bermuda common shares in lieu of
common stock of Nabors Delaware after the merger. In addition, Nabors Delaware
will amend or obtain waivers with respect to employment agreements with certain
executive officers to provide that the reorganization does not constitute a
"change in control" under such agreements, and Nabors Bermuda will agree to
assume the rights and obligations of Nabors Delaware under such agreements. Such
executive officers have agreed to such amendments and waivers in principle,
subject to mutual agreement on documentation.
STOCK EXCHANGE LISTING
Our common stock is currently listed on the American Stock Exchange. There
is currently no established public trading market for the common shares of
Nabors Bermuda. We have made an application so that, immediately following the
reorganization, the common shares of Nabors Bermuda will be listed on the
American Stock Exchange under the symbol "NBR", the same symbol under which
Nabors Delaware common stock is currently listed. Based on prior transactions
similar to the reorganization by member companies of the S&P 500 Index, we
believe that the pending change of domicile to Bermuda should not affect the
company's status as a member of the S&P 500 Index.
ACCOUNTING TREATMENT OF THE REORGANIZATION
The reorganization will be accounted for as a reorganization of entities
under common control which will not result in changes in our historical
consolidated carrying amounts of assets, liabilities and stockholders' equity.
CREDIT FACILITIES
As a result of the merger, we may fail to comply with certain covenants
contained in a credit agreement, dated as of September 5, 1997, as amended,
among Nabors Delaware, its subsidiaries, Bank of America National Trust and
Savings Association, Wells Fargo Bank (Texas), National Association and some
other financial institutions. Currently, there is no indebtedness outstanding
under this $200 million credit agreement. Due to its current cash position,
Nabors Delaware does not anticipate having to borrow under this facility for the
foreseeable future. Nabors Delaware presently intends to seek a waiver in
connection with this potential default, although there can be no assurance that
Nabors Delaware will obtain such a waiver. If no waiver is obtained, we cannot
borrow under the credit agreement. In addition, this default would cause a
cross-default under a $30 million letter of credit facility with Bank of
America, N.A., dated January 7, 2002. As of March 20, 2002, there is
approximately $25 million outstanding under such letter of credit facility.
Nabors Delaware presently intends to seek a waiver in connection with this
potential cross-default, although there can be no assurance that Nabors Delaware
will obtain such a waiver. If no waiver is obtained, we will have to replace
this letter of credit facility or cash collateralize such letters of credit.
Nabors Delaware does not believe such potential defaults will adversely affect
it, its operations or its stockholders or Nabors Bermuda or its shareholders if
the merger is completed. The credit agreement and letter of credit facility are
currently scheduled to expire in September 2002. It is currently anticipated
that Nabors Delaware (or Nabors Bermuda if the merger is completed) would seek
to obtain a replacement credit facility and letter of credit facility beginning
in the second quarter of 2002.
RECENT DEVELOPMENTS
On April 26, 2002, Nabors Delaware announced that it had completed the
previously announced acquisition of Enserco Energy Service Company Inc., a
Canadian corporation. Under the terms of the acquisition, Nabors Exchangeco
(Canada) Inc., a Canadian subsidiary of Nabors Delaware, acquired all of the
outstanding common shares of Enserco pursuant to a plan of arrangement under the
Canada Business Corporations Act in exchange for approximately Cdn. $1.84
million in cash and approximately 3.55 million exchangeable shares of Nabors
Exchangeco (Canada) Inc. which are exchangeable into Nabors Delaware common
stock on a 1:1 basis. Approximately 2.64 million of the issued exchangeable
shares were immediately
21
exchanged for shares of Nabors Delaware common stock in accordance with the
instructions of the holders of such exchangeable shares. The exchangeable shares
will be listed on The Toronto Stock Exchange under the symbol "NBX". The
exchangeable shares of Nabors Exchangeco (Canada) Inc. have provisions which
effectively confer on the holders of the exchangeable shares the same voting and
economic rights in Nabors Delaware as the holders of Nabors Delaware common
stock. Specificially, the exchangeable shares:
- will effectively have the same voting rights, dividend entitlements and
other attributes of Nabors Delaware common stock (or Nabors Bermuda
common shares if the reorganization is completed);
- will be exchangeable, at the holder's option, on a one-for-one basis into
Nabors Delaware common stock (or Nabors Bermuda common shares if the
reorganization is completed);
- subject to compliance with listing requirements, will be listed on the
Toronto Stock Exchange; and
- will automatically be exchanged five years after completion of the
Enserco acquisition or upon the occurrence of other specified events.
If the reorganization is completed, the exchangeable shares will, after the
effective time of the reorganization, become exchangeable for Nabors Bermuda
common shares.
On March 18, 2002, Nabors Delaware also separately acquired from two
Enserco shareholders Enserco common shares representing approximately 20.5% of
the issued and outstanding Enserco shares for Cdn. $15.50 per share.
Enserco is an integrated energy services company providing production and
drilling services to the North American oil and gas industry. Through its
subsidiaries, Bonus Well Servicing and H&R Drilling, Enserco operates over 200
Canadian well-servicing rigs and 30 drilling rigs.
THE SPECIAL MEETING
This proxy statement/prospectus is being furnished in connection with the
solicitation of proxies from the holders of Nabors Delaware common stock by the
Nabors Delaware board of directors relating to the merger and other matters to
be voted upon at the special meeting and at any adjournment or postponement of
the meeting. This proxy statement/prospectus is also a prospectus for Nabors
Bermuda common shares to be issued in the merger. Nabors Delaware mailed this
proxy statement/prospectus to stockholders beginning on or about [Month Day],
2002. You should read this proxy statement/prospectus carefully before voting
your shares.
WHEN AND WHERE THE SPECIAL MEETING WILL BE HELD
The special meeting of stockholders will be held at 11:00 a.m., local time,
on Monday, June 3, 2002, at The Wyndham Greenspoint Hotel, 12400 Greenspoint
Drive, Houston, Texas 77060.
WHAT WILL BE VOTED UPON
At the special meeting, you will be asked to consider and vote upon the
following items:
- To adopt the Agreement and Plan of Merger, substantially in the form
attached to this proxy statement/prospectus as annex I, among Nabors
Delaware, Nabors Acquisition, Nabors Bermuda and Nabors US Holdings
whereby the company will effectively change its place of incorporation
from Delaware to Bermuda by merging Nabors Acquisition with Nabors
Delaware, which will be the surviving entity and become a wholly-owned,
indirect subsidiary of Nabors Bermuda, and pursuant to which each share
of Nabors Delaware will automatically be converted into the right to
receive a share of Nabors Bermuda and all current stockholders of Nabors
Delaware will become shareholders of Nabors Bermuda; and
- To transact such other business as may properly come before the special
meeting.
22
ONLY NABORS DELAWARE STOCKHOLDERS OF RECORD ON APRIL 17, 2002 ARE ENTITLED TO
VOTE
Only stockholders of record at the close of business on April 17, 2002, as
shown in our records, will be entitled to vote, or to grant proxies to vote, at
the special meeting. On the record date, there were 141,099,335 million shares
of Nabors Delaware common stock outstanding and entitled to vote at the special
meeting.
MAJORITY OF OUTSTANDING SHARES MUST BE REPRESENTED FOR A VOTE TO BE TAKEN
In order to have a quorum, the holders of a majority of the shares of
Nabors Delaware common stock outstanding on the record date must be represented
in person or by proxy at the special meeting.
VOTE REQUIRED FOR APPROVAL
The Agreement and Plan of Merger must be adopted by the affirmative vote of
holders of a majority of the shares of Nabors Delaware common stock outstanding
on April 17, 2002. Each share of Nabors Delaware common stock is entitled to
cast one vote. As of the record date, directors and executive officers of Nabors
Delaware owned and were entitled to vote 1,846,378 shares (or approximately
1.3%) of Nabors Delaware common stock. These persons have advised us that they
intend to vote their shares in favor of the proposal. Like other Nabors Delaware
stockholders, for U.S. federal income tax purposes, certain of such directors
and executive officers, including the Chairman of the board of Nabors Delaware,
will recognize gain on the receipt of Nabors Bermuda common shares in exchange
for their Nabors Delaware common stock pursuant to the reorganization.
VOTING YOUR SHARES AND CHANGING YOUR VOTE
VOTING YOUR SHARES
The Nabors Delaware board of directors is soliciting proxies from the
Nabors Delaware stockholders. This will give you the opportunity to vote at the
special meeting. When you deliver a valid proxy, the shares represented by that
proxy will be voted in accordance with your instructions. If you do not vote by
marking, signing and mailing your proxy card or by attending the special meeting
and voting in person, it will have the same effect as voting against the
adoption of the merger agreement.
Stockholders of record may vote by marking, signing and mailing your proxy
card in the enclosed postage-prepaid envelope.
If you hold your Nabors Delaware shares in the name of a bank, broker or
other nominee, you should follow the instructions provided by your bank, broker
or nominee when voting your shares. To be effective, a form of proxy must be
received by us prior to the beginning of voting at the special meeting.
CHANGING YOUR VOTE BY REVOKING YOUR PROXY
There are three ways in which you may revoke your proxy and change your
vote:
- First, you may send a written notice to our proxy solicitor, Georgeson
Shareholder Communications Inc., stating that you would like to revoke
your proxy. This notice must be received prior to the special meeting.
- Second, you may complete and submit a new later-dated proxy by marking,
signing and mailing a new proxy card. The latest dated proxy actually
received by the company prior to the special meeting will be the one that
is counted, and all earlier proxies will be revoked.
- Third, you may attend the special meeting and vote in person. Simply
attending the meeting, however, will not revoke your proxy. At the
special meeting, the chairman of the meeting will announce instructions
for you to follow if you wish to revoke your proxy and vote in person at
the meeting.
If you have instructed a broker to vote your shares, you must follow the
directions you receive from your broker to change or revoke your proxy.
23
HOW PROXIES ARE COUNTED
If you return a signed and dated proxy card but do not indicate how the
shares are to be voted, those shares represented by your proxy card will be
voted as recommended by the Nabors Delaware board of directors. A valid proxy
also gives the individuals named as proxies authority to vote in their
discretion when voting the shares on any other matters that are properly
presented for action at the special meeting. A properly executed proxy marked
"ABSTAIN" will not be voted. However, it may be counted to determine whether
there is a quorum present at the special meeting. Accordingly, since the
affirmative vote of holders of a majority of the shares of Nabors Delaware
common stock entitled to vote at the special meeting is required to adopt the
merger agreement, a proxy marked "ABSTAIN" will have the effect of a vote
against this proposal. Broker non-votes (i.e., shares held by brokers or
nominees which are represented at a meeting but with respect to which the broker
or nominee is not empowered to vote on a particular proposal) will be counted
for purposes of determining whether there is a quorum at the special meeting.
The American Stock Exchange rules do not permit brokers and nominees to vote the
shares that they hold beneficially either for or against the adoption of the
merger agreement without specific instructions from the person who beneficially
owns those shares. Therefore, if your shares are held by a broker or other
nominee and you do not give them instructions on how to vote your shares, this
will have the same effect as voting against the merger.
COST OF SOLICITATION
Nabors Delaware will pay the cost of soliciting proxies. In addition to
solicitation by mail, telephone or other means, Nabors Delaware will make
arrangements with brokerage houses and other custodians, nominees and
fiduciaries to send proxy material to beneficial owners. Nabors Delaware will,
upon request, reimburse these institutions for their reasonable expenses. Nabors
Delaware has retained Georgeson Shareholder Communications Inc. to aid in the
solicitation of proxies. Nabors Delaware will pay Georgeson a fee of $15,000 and
reimburse Georgeson for its expenses in connection with such services.
NABORS DELAWARE STOCKHOLDERS SHOULD NOT SEND IN THEIR STOCK CERTIFICATES
WITH THEIR PROXY CARDS.
DESCRIPTION OF AUTHORIZED SHARES
OF NABORS INDUSTRIES LTD.
The memorandum of association and bye-laws of Nabors Bermuda and The
Companies Act 1981 (Bermuda), as amended (the "Companies Act"), govern the terms
of the share capital of Nabors Bermuda. The memorandum of association of Nabors
Bermuda is attached to this proxy statement/prospectus as annex II. The amended
and restated bye-laws of Nabors Bermuda which will be in effect upon
consummation of the merger are attached to this proxy statement/prospectus as
annex III. The following discussion is a summary of the terms of the share
capital of Nabors Bermuda that will be in effect immediately following the
merger. This summary is not complete and is subject to the complete text of
Nabors Bermuda's memorandum of association and its amended and restated bye-laws
which are attached as annex II and III, respectively, and incorporated by
reference. We encourage you to read those documents carefully.
AUTHORIZED SHARE CAPITAL
Immediately following the merger, Nabors Bermuda's authorized share capital
will be US$425,000, divided into 400,000,000 common shares, par value US$.001
per share and 25,000,000 preferred shares, par value US$.001 per share, which
preferred shares may be designated and created as shares of any other classes or
series of shares with the respective rights and restrictions determined by
action of the board of directors.
VOTING
The holders of Nabors Bermuda common shares will be entitled to one vote on
any question to be decided on a show of hands and one vote per share on a poll
on all matters submitted to a vote of the shareholders of Nabors Bermuda. Nabors
Bermuda's bye-laws do not provide for cumulative voting. Except as specifically
provided in Nabors Bermuda's bye-laws or in the Companies Act, any action to be
taken by the shareholders
24
at any meeting at which a quorum is in attendance shall be decided by a majority
of the issued shares present in person or represented by proxy and entitled to
vote thereat.
There are no limitations imposed by Bermuda law or Nabors Bermuda's
bye-laws on the right of shareholders who are not Bermuda residents to hold or
vote their Nabors Bermuda common shares.
DIVIDEND RIGHTS
Subject to any rights and restrictions of any other class or series of
shares, the board of directors may, from time to time, declare dividends and
other distributions on the issued Nabors Bermuda common shares and authorize
payment of such dividends and other distributions. Such dividends or other
distributions may be in cash, shares or property of Nabors Bermuda out of assets
or funds legally available therefor.
Nabors Bermuda does not anticipate that it will pay any dividends on its
common shares for the foreseeable future.
REDEMPTION AND CONVERSION
Nabors Bermuda common shares will not be convertible into shares of any
other class or series or be subject to redemption either by Nabors Bermuda or
the holder of the common shares.
STOCK EXCHANGE LISTING
Immediately following the merger, Nabors Bermuda's common shares will be
listed on the American Stock Exchange under the symbol "NBR", the same symbol
under which Nabors Delaware's common stock is currently listed.
CHANGES TO RIGHTS OF A CLASS OR SERIES
Subject to the Companies Act, the rights attached to any class or series of
shares of Nabors Bermuda, unless otherwise provided by the terms of that class
or series, may be altered or abrogated by a resolution passed at a separate
general meeting of the holders of shares of that class, voting in person or by
proxy and representing at least a majority of the issued shares of that class
entitled to vote. Every holder of shares of the relevant class shall be entitled
on a poll to one vote for each share held by such holder and any holder of
shares of the relevant class present in person or by proxy may demand a poll.
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.
QUORUM FOR GENERAL MEETINGS
The holders of shares present in person or by proxy entitling them to
exercise a majority of the voting power of Nabors Bermuda on the relevant record
date shall constitute a quorum to hold a general meeting of the shareholders.
RIGHTS UPON LIQUIDATION
Upon the liquidation of Nabors Bermuda, after the full amounts that holders
of any issued shares ranking senior to the common shares as to distribution on
liquidation or winding up are entitled to receive have been paid or set aside
for payment, the holders of Nabors Bermuda's common shares are entitled to
receive, pro rata, any remaining assets of Nabors Bermuda 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 Nabors Bermuda. The assets received by the holders of Nabors Bermuda
common shares in a liquidation may consist in whole or in part of property. That
property is not required to be of the same kind for all shareholders.
25
SINKING FUND
Nabors Bermuda's common shares have no sinking fund provisions.
LIABILITY FOR FURTHER CALLS OR ASSESSMENTS
Nabors Bermuda's common shares to be issued in the merger will be duly and
validly issued, fully paid and nonassessable.
PREEMPTIVE RIGHTS
Holders of Nabors Bermuda's common shares will have no preemptive or
preferential right to purchase any securities of Nabors Bermuda.
REPURCHASE RIGHTS
The board of directors may, at its discretion, authorize the purchase by
Nabors Bermuda of its own shares of any class, at any price (whether at par or
above or below par), as long as such purchase is made in accordance with the
provisions of the Companies Act.
COMPULSORY ACQUISITION OF SHARES HELD BY MINORITY HOLDERS
An acquiring party is generally able to acquire compulsorily the common
shares of minority holders in one of the following ways:
- By a procedure under the Companies Act known as a "scheme of
arrangement." A scheme of arrangement is made by obtaining the consent of
Nabors Bermuda, the consent of the court and approval of the arrangement
by holders of the common shares, (1) representing in the aggregate a
majority in number of the shareholders present at the meeting held to
consider the arrangement and (2) holding at least 75% of all the issued
common shares taken together as a class. If a scheme of arrangement
receives all necessary consents, all holders of common shares could be
compelled to sell their shares under the terms of the scheme of
arrangement.
- If the acquiring party is a company, by acquiring pursuant to a tender
offer 90% of the shares or class of shares not already owned by the
acquiring party (the "offeror"). If an offeror has, within four months
after the making of an offer for all the shares or class of shares not
owned by the offeror, obtained the approval of or acquired 90% or more of
all the shares to which the offer relates, the offeror may, at any time
within two months beginning with the date on which such approval was
obtained or such percentage of shares were acquired, require by a "Notice
of Acquisition" any nontendering shareholder to transfer its shares on
the same terms as the original offer. In those circumstances,
nontendering shareholders will be compelled to sell their shares.
Nontendering shareholders have a one-month period from the date of the
Notice of Acquisition in which to apply to a court to enjoin the company
acquisition.
- By acquiring, pursuant to a notice given to the remaining shareholders or
class of shareholders, where the acquiring party holds not less than 95%
of the shares or the class of shares of the company, the shares of such
remaining shareholders or class of shareholders. When such a notice is
given, the acquiring party is entitled and bound to acquire the shares of
the remaining shareholders on the terms set out in such notice, unless a
remaining shareholder, within one month of receiving such notice, applies
to the court for an appraisal of the value of their shares. This
provision only applies where the acquiring party offers the same terms to
all holders of shares whose shares are being acquired.
26
TRANSFER AGENT
The transfer agent and registrar for the Nabors Bermuda common shares will
be EquiServe.
PREFERRED SHARES
The board of directors of Nabors Bermuda may issue preferred shares in one
or more classes or series, and fix for each such class or series such voting
power, full or limited, or no voting power, and such designations, preferences
and relative, participating, optional or other special rights and such
qualifications, limitations or restrictions thereof, as are provided in the
resolutions adopted by the board of directors providing for the issuance of such
class or series. The Nabors Bermuda board of directors in authorizing such class
or series may provide that any such class or series may be:
- subject to redemption at the option of the company or the holders, or
both, at such time or times and at such price or prices;
- entitled to receive dividends (which may be cumulative or non-cumulative)
at such rates, on such conditions, and at such times, and payable in
preference to, or in relation to, the dividends payable on any other
class or classes or any other series;
- entitled to such rights upon the dissolution of, or upon any distribution
of the assets of, Nabors Bermuda; or
- convertible into, or exchangeable for, shares of any other class or
classes of shares, or of any other series of the same or any other class
or classes of shares, of Nabors Bermuda at such price or prices or at
such rates of exchange and with such adjustments;
in each case, as set forth in the resolutions authorizing the class or series of
preferred shares.
ANTI-TAKEOVER PROVISIONS
Nabors Bermuda's bye-laws have provisions that could have an anti-takeover
effect. Generally, these provisions are intended to substantively replicate
provisions currently in Nabors Delaware's certificate of incorporation and
by-laws. In addition, Nabors Bermuda's bye-laws include an "advance notice"
provision which places time limitations on shareholders' nominations of
directors and submission of proposals for consideration at an annual general
meeting. These provisions are intended to enhance the likelihood of continuity
and stability in the composition of the board of directors and in the policies
formulated by the board of directors and to encourage negotiations with the
board of directors in transactions that may involve an actual or potential
change of control of Nabors Bermuda.
The bye-laws provide that Nabors Bermuda's board of directors will be
divided into three classes serving staggered three-year terms. Directors can be
removed from office prior to the expiration of their term only for cause by the
affirmative vote of the holders of a majority of the voting power of Nabors
Bermuda on the relevant record date. The board of directors does not have the
power to remove directors. As long as a quorum of directors remains and is
present, vacancies on the board of directors may be filled by a majority vote of
the remaining directors. Any general meeting can authorize the board of
directors to fill any vacancy left unfilled at a general meeting. Each of these
provisions can delay a shareholder from obtaining majority representation on the
board of directors.
The bye-laws also provide that the board of directors will consist of not
less than five nor more than eighteen persons, the exact number to be set from
time to time by the affirmative vote of a majority of the directors then in
office. Accordingly, the board of directors, and not the shareholders, has the
authority to determine the number of directors 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.
The bye-laws of Nabors Bermuda 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
27
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 in accordance with the terms of the bye-laws the shareholder must
have given timely notice thereof in proper written form to the Secretary of
Nabors Bermuda and satisfied all requirements under applicable rules promulgated
by the Securities and Exchange Commission. To be timely for consideration at the
annual general meeting, a shareholder's notice must be received by the Secretary
at Nabors Bermuda's principal executive offices and its registered office in
Bermuda not less than 60 days nor more than 90 days prior to the anniversary
date of the immediately preceding annual general meeting, provided that in the
event that the annual general meeting is called for a date that is not within 30
days before or after such anniversary date, not later than the 10th day
following the day on which such notice of the date of the annual general meeting
was mailed or public disclosure of the date of the annual general meeting was
made, whichever occurs first. In order for a shareholder to nominate directors
in connection with an annual general meeting of shareholders, a shareholder's
notice of his intention to make such nominations must be received in proper
written form as specified in the bye-laws of Nabors Bermuda by the Secretary of
Nabors Bermuda within the time limits described above.
In addition, the Companies Act provides for a mechanism by which 100
shareholders acting together or shareholders holding at least 5% of the voting
power of a Bermuda company may properly propose a resolution for consideration
at a general meeting of the company. See "Comparison of Corporate Governance
Provisions -- Advance Notice Requirements for Matters to be Considered at a
General Meeting" on page 34.
Subject to the terms of any other class of shares in issue, any action
required or permitted to be taken by the holders of Nabors Bermuda's 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.
Under the bye-laws, special general meetings may be called at any time by the
board of directors or when requisitioned by shareholders pursuant to the
provisions of the Companies Act. The Companies Act currently permits
shareholders holding 10% of the shares of a company entitled to vote at general
meeting to requisition a special general meeting.
The board of directors is authorized, without obtaining any vote or consent
of the holders of any class or series of shares unless expressly provided by the
terms of issue of a class or series, to from time to time issue any authorized
and unissued shares on such terms and conditions as it may determine. For
example, the board of directors could authorize the issuance of preferred shares
with terms and conditions that could discourage a takeover or other transaction
that holders of some or a majority of the Nabors Bermuda common shares might
believe to be in their best interests or in which holders might receive a
premium for their shares over the then market price of the shares.
COMPARISON OF RIGHTS OF STOCKHOLDERS
Your rights as a stockholder of Nabors Delaware are governed by Delaware
law and Nabors Delaware's restated certificate of incorporation and by-laws.
After the merger, you will become a holder of Nabors Bermuda common shares and
your rights will be governed by the Companies Act and Nabors Bermuda's
memorandum of association and amended and restated bye-laws.
The principal attributes of the Nabors Delaware common stock and the Nabors
Bermuda common shares will be substantially similar; however, there are certain
differences between your rights as a stockholder under Delaware law and as a
shareholder under Bermuda law, which is modeled after the law of England. In
addition, there are certain differences between Nabors Delaware's restated
certificate of incorporation and by-laws and Nabors Bermuda's memorandum of
association and bye-laws. Other than the addition of the advance notice
provision in the bye-laws and an increase in the maximum number of directors the
company may have, it is our intention that your rights as a stockholder be
substantially the same before and after the merger and, accordingly, any
differences which may arise would be as a consequence of the difference between
Bermuda and Delaware law. In addition, there are similarities between those
actions that constitute violations of the
28
U.S. federal securities laws that would also constitute or give rise to a cause
of action under Bermuda law and would therefore result in civil liability on
Nabors Bermuda or its directors or officers in a suit brought in the Supreme
Court of Bermuda. For example, a fraudulent misstatement made by a Bermuda
company in a document filed as a prospectus for a public offering of securities
would give rise to a criminal offense under Bermuda law and would give rise to
civil liability on the Bermuda company and its directors or officers to
shareholders who purchased the shares in the offering. In addition, any use of
any deceptive or manipulative devices by the company or by its officers or
directors on behalf of the company in connection with the purchase or sale of
the company's securities would give rise to civil liability on the Bermuda
company and its directors or officers under Bermuda and U.S. securities laws.
The memorandum of association and the bye-laws of Nabors Bermuda, as they
will be in effect immediately following the merger, are included in this proxy
statement/prospectus as annexes II and III, respectively, and are incorporated
by reference herein. The restated certificate of incorporation of Nabors
Delaware is included as Exhibit 3.1 to Nabors Delaware's Quarterly Report on
Form 10-Q, for the quarter ended March 30, 1997, filed May 16, 1997, and an
amendment to the restated certificate of incorporation of Nabors Delaware is
included as Exhibit 3.1 to Nabors Delaware's Current Report on Form 8-K dated
June 22, 2000. The restated by-laws of Nabors Delaware are included as Exhibit
3.2 to Nabors Delaware's Annual Report on Form 10-K for the fiscal year ended
September 30, 1997, filed December 29, 1997. The restated certificate of
incorporation and the restated by-laws of Nabors Delaware are incorporated by
reference in this proxy statement/prospectus. See "Where You Can Find More
Information" on page 45.
29
The following is a comparison of the material rights of holders of Nabors
Delaware common stock and Nabors Bermuda common shares.
COMPARISON OF CORPORATE GOVERNANCE PROVISIONS
PROVISION NABORS BERMUDA NABORS DELAWARE
--------- -------------- ---------------
BOARD OF DIRECTORS
Size of Board Board must contain not less than The provisions of Nabors
five nor more than eighteen Delaware's organizational
directors, as determined by the documents are substantially
board pursuant to a resolution similar, except that the maximum
adopted by the affirmative vote number of directors is eleven.
of a majority of the directors
in office.
Classified Board Directors are divided into three The provisions of Nabors
classes, each class to consist, Delaware's organizational
as nearly as possible, of documents are substantially
one-third of the total number of similar.
directors constituting the
entire 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 decrease
in the number of directors shall
have the effect of shortening
the term of any incumbent
director.
Term of Office Except for two classes of The provisions of Nabors
directors which shall initially Delaware's organizational
hold one and two year terms documents are substantially
expiring at the annual general similar.
meetings in 2003 and 2004,
respectively, the term of office
of each director shall be until
the third annual general meeting
following his or her election
and until the election and
qualification of his or her
successor.
Vacancies Any vacancy among directors of The provisions of Nabors
any class, including a vacancy Delaware's organizational
that results from an increase in documents are substantially
the number of directors, may be similar, except vacancies on the
filled for the unexpired term by board may be filled by a vote of
a vote of the majority of the majority of remaining
remaining directors, regard- directors regardless of whether
less of class, provided, that a a quorum is present.
quorum is present. During any
vacancy the remaining directors
shall have full power to act as
the board of directors of Nabors
Bermuda. At a special general
meeting of shareholders
30
PROVISION NABORS BERMUDA NABORS DELAWARE
--------- -------------- ---------------
Vacancies - (continued) called to remove a director for
cause, a vacancy on the board
created by removal of a director
may be filled by the holders of
a majority of the outstanding
shares entitled to vote at the
same meeting.
Removal of Directors Directors can be removed from The provisions of Nabors
office prior to the expiration Delaware's organizational
of their term only for cause by documents and Delaware law are
the affirmative vote of the substantially similar.
holders of a majority of the
voting power of Nabors Bermuda
on the relevant record date.
Indemnification of Directors Nabors Bermuda shall indemnify Nabors Delaware's restated
and Officers and hold harmless to the fullest certificate of incorporation
extent permitted by law any makes indemnification of
current or former director, directors and officers and
officer, committee member or advancement of expenses to
resident representative, against defend claims against directors
expenses actually and reason- and officers mandatory on the
ably incurred in connection with part of Nabors Delaware to the
any threatened, pending or fullest extent permitted by the
completed action, suit or Delaware General Corporation
proceeding. Law.
Under the Companies Act, no in- Delaware law generally permits a
demnification is permitted if corporation to indemnify its
the individual is adjudged to be directors and officers against
liable for fraud or dishonesty expenses, judgments, fines and
in the performance of his or her amounts paid in settlement
duties to Nabors Bermuda (unless actually and reasonably incurred
a court determines otherwise). in connection with a third-
party action, other than a
The indemnification provided for derivative action, and against
in the bye-laws is not exclusive expenses actually and reasonably
of other rights to which a incurred in the defense or
director or officer may be settlement of a derivative
entitled, including rights pro- action, provided that there is a
vided pursuant to the memorandum determination that the
of association, bye-laws, any individual acted in good faith
agreement, any insurance and in a manner reasonably
purchased by Nabors Bermuda, believed to be in or not opposed
vote of stockholders or to the best interests of the
disinterested directors, or corporation. That determination
otherwise. must be made, in the case of an
individual who is a director or
If the reorganization is officer at the time of the
completed, Nabors Bermuda determination:
anticipates that it will enter
into indemnification agree- - by a majority of the
ments with its directors and disinterested directors, even
officers with terms and though less than a quorum;
conditions substantially similar
to the agreements Nabors - by a committee of
Delaware has entered into with disinterested directors,
its directors and officers designated by a majority vote
(subject always to Bermuda law of disinterested directors,
and any limitations on such even though less than a
agreements contained quorum;
31
PROVISION NABORS BERMUDA NABORS DELAWARE
--------- -------------- ---------------
Indemnification of Directors in the Companies Act). - by independent legal counsel,
and Officers - (continued) regardless of whether a quorum
of disinterested directors
exists; or
- by a majority vote of the
stockholders, at a meeting at
which a quorum is present.
Without court approval, however,
no indemnification may be made
in respect of any derivative
action in which an individual is
adjudged liable to the
corporation.
Delaware law requires
indemnification of directors and
officers for expenses relating
to a successful defense on the
merits or otherwise of a
derivative or third-party
action. Delaware law permits a
corporation to advance expenses
relating to the defense of any
proceeding to directors and
officers contingent upon those
individuals' commitment to repay
any advances, unless it is
determined ultimately that those
individuals are entitled to be
indemnified.
Nabors Delaware has entered into
agreements with each of its
directors and officers
indemnifying each of them
against expenses, settlements,
judgments and fines in
connection with any threatened,
pending or completed action,
suit, arbitration or pro-
ceeding where the individual's
involvement is by reason of the
fact that he is or was a
director or officer or served at
Nabors Delaware's request as a
director or officer of another
organization, except that
indemnification is not provided
against judgments or fines in a
derivative suit unless permitted
by Delaware law.
Limitations on Liability Subject to the Bye-laws, no Delaware law provides that the
current or former director, certificate of incorporation of
officer, resident representative a Delaware corporation may
or committee member shall be include a provision which limits
liable for the acts, receipts, or eliminates the liability of
neglects or defaults of any directors of the corporation or
other such person nor shall any its stockholders for monetary
such person be liable in respect damages for breach of a
of any negligence, fiduciary duty,
32
PROVISION NABORS BERMUDA NABORS DELAWARE
--------- -------------- ---------------
Limitations on Liability - default or breach of duty on his provided such liability does not
(continued) or her own part with respect to arise from prescribed conduct,
Nabors Bermuda, or for any including a breach of the duty
damages arising out of the of loyalty to the corporation or
actual or purported execution or its stockholders, acts or
discharge of his or her duties omissions not in good faith or
or the exercise or purported which involve intentional
exercise of his or her powers or misconduct or which involve a
otherwise in relation to or in knowing violation of the law,
connection with his or her the unlawful payment of
duties, powers or office. dividends, or any transaction
from which the director derived
Nabors Bermuda's bye-laws an improper personal benefit.
provide that, subject to Nabors Delaware's certificate of
applicable law, each shareholder incorporation contains such a
of Nabors Bermuda and Nabors provision.
Bermuda agree to waive any claim
or right of action, whether
individually or derivatively,
against any current or former
officer, director, resident
representative or committee
member on account of any action,
or failure to take any action,
of such person in his
performance of his duties with
or for Nabors Bermuda, provided
that such waiver shall not apply
to any claims or rights of
action arising out of the fraud
or dishonesty of such person or
to recover any gain, personal
profit or advantage to which
such person is not legally
entitled.
In addition to the terms of
Nabors Bermuda's bye-laws, in
order to maintain a derivative
action on behalf of the company,
a shareholder must satisfy the
requirements described under
"Shareholder Derivative Suits"
on page 38.
SHAREHOLDER MEETINGS
Calling a Special Meeting A special meeting of the May be called by the board or
shareholders may be called by the Chairman or Vice-Chairman of
the board of directors or the the board, the President, a Vice
shareholders when requisi- President or the Secretary at
tioned by the holders of 10% of the written request of the
the Nabors Bermuda common shares holders of record of not less
as provided by the Companies than 50% of the total number of
Act. shares of stock then issued and
outstanding and entitled to
vote.
Quorum Requirements; Holders of shares present in A majority of the shares
Adjournment person or by proxy entitling entitled to vote, represented in
them to exercise a majority of person or by proxy, constitutes
the voting power of Nabors a quorum at a meeting of
Bermuda on the relevant date stockholders. At any meeting
constitutes a quorum. At any duly called, whether or not a
meeting
33
PROVISION NABORS BERMUDA NABORS DELAWARE
--------- -------------- ---------------
Quorum Requirements;
Adjournment - duly called, holders of a quorum is present, holders of a
(continued) majority of the voting shares plurality of the shares
represented at the meeting may represented at the meeting may
adjourn the meeting. adjourn the meeting.
Voting Rights Each holder of Nabors Bermuda The provisions of Nabors
common shares will be entitled Delaware's organizational
to one vote on any question to documents are substantially
be decided on a show of hands similar.
and one vote per share on a poll
on all matters submitted to a
vote of shareholders.
Action by Written Consent The Companies Act provides that The provisions of Nabors
shareholders may take action by Delaware's organizational
unanimous written consent. documents are substantially
similar.
Advanced Notice Requirements The Companies Act provides that There are no similar provisions
for Matters to be Considered shareholders may, as set forth in Nabors Delaware's
at a General Meeting below and at their own expense organizational documents.
(unless a company otherwise
resolves), require a company to Nabors Delaware is subject to
give notice of any resolution the Securities Exchange Act of
that the shareholders can prop- 1934, as amended, which provides
erly propose at the next annual that a shareholder who
general meeting or to circulate continuously holds at least
a statement prepared by the US$2,000 in market value or 1%
shareholders in respect of any of a company's voting securities
matter referred to in a proposed for at least one year prior to
resolution or any business to be the submission of a proposal and
conducted at a general meeting. through the meeting date may,
The number of shareholders subject to certain conditions,
necessary for such a requisition include the proposal in the
of a resolution is either that company's proxy materials sent
number of shareholders to shareholders.
representing at least 5% of the
total voting rights of all
shareholders having a right to
vote at the meeting to which the
requisition relates or not less
than 100 shareholders.
Nabors Bermuda's bye-laws
provide that all nominees for
election to the board of
directors must be made fol-
lowing written notice to the
secretary of Nabors Bermuda
accompanied by certain
background and other infor-
mation specified in the
bye-laws. In connection with any
annual general meeting, written
notice of a shareholder's
intention to make such
nominations must be given to the
secretary of Nabors Bermuda not
less than 60 days nor more than
90 days
34
PROVISION NABORS BERMUDA NABORS DELAWARE
--------- -------------- ---------------
Advanced Notice Require- prior to the anniversary date of
ments for Matters to be the immediately preceding annual
Considered at a General general meeting, provided that
Meeting - (continued) in the event the annual general
meeting is called for a date
that is not within 30 days
before or after such anniver-
sary date, not later than the
10th day following the day on
which such notice of the date of
the annual general meeting was
mailed or public disclosure of
the date of the annual general
meeting was made, whichever
occurs first. In order for a
shareholder to bring other
business before a shareholder
meeting, timely notice must be
received by the secretary of
Nabors Bermuda within the time
limits described above. The
notice must include a
description of the proposed
item, the reasons the share-
holder believes support its
position concerning the item,
and other specified matters.
Nabors Bermuda will be subject
to the Securities Exchange Act
of 1934, as amended, which
provides that a shareholder who
continuously holds at least
US$2,000 in market value or 1%
of a company's voting securities
for at least one year prior to
the submission of a proposal and
through the meeting date may,
subject to certain conditions,
include the proposal in the
company's proxy materials sent
to shareholders.
Annual Meeting The annual meeting of The annual meeting of
shareholders of Nabors Bermuda stockholders of Nabors Delaware
shall be held in each calendar shall be held on the first
year at such time and place as Tuesday of June in each year if
the board of directors shall not a legal holiday, and if a
appoint. legal holiday, then on the next
succeeding day which is not a
legal holiday at such place and
time as the board of directors
may designate.
AMENDMENTS TO ORGANIZATIONAL
DOCUMENTS
Memorandum of Nabors Bermuda's memorandum of Nabors Delaware's certificate of
Association/Certificate association may be amended in incorporation may be amended if:
of Incorporation accordance with the Companies
Act by
35
PROVISION NABORS BERMUDA NABORS DELAWARE
--------- -------------- ---------------
Memorandum of
Association/Certificate
of Incorporation - the affirmative vote of a simple - the Nabors Delaware board sets
(continued) majority of the shareholders forth the proposed amendment
voting on the amendment. in a resolution, declares the
advisability of the amendment
and directs that it be
submitted to a vote at a
meeting of stockholders; and
- the holders of at least a
majority of shares of stock
entitled to vote on the matter
approve the amendment.
In addition, under Delaware law,
class voting rights exist with
respect to any amendments to the
restated certificate of
incorporation that adversely
affect the terms of the shares
of such class.
Bye-laws/By-laws The bye-laws may be restated or Nabors Delaware's by-laws may be
amended only by the board of amended by:
directors, but no such
revocation or amendment shall be - the stockholders by the
operative unless and until it is affirmative vote of the holders
approved by a resolution of the of a majority of the stock
holders of a majority of the entitled to vote at any annual
issued shares entitled to vote. or special meeting of stock-
holders if notice of the
If the amendment would affect proposed amendment is
any of the special rights contained in the notice of the
attached to any class of shares special meeting; or
there must also be a resolution
passed by a majority at a - the board of directors by the
separate general meeting of the affirmative vote of the majority
holders of shares of that class. of the board at any regular
meeting of the board or at any
special meeting of the board
if notice of the proposed
amendment is contained in the
notice of the special meeting.
VOTING REQUIREMENT FOR Except as otherwise specifically Except as specifically provided
STOCKHOLDER ACTION provided in the bye-laws or the in the restated certificate of
Companies Act, any action to be incorporation or the Delaware
taken by the shareholders may be General Corporation Law, any
taken by the affirmative vote of action, other than the elec-
a simple majority of the shares tion of directors, to be taken
voting at a general meeting of by stockholders may be taken by
Nabors Bermuda. the affirmative vote of the
holders of a majority of the
shares of Nabors Delaware
present in person or repre-
sented by proxy at a meeting (at
which a quorum is present) and
entitled to vote.
PURCHASE OF SHARES The bye-laws provide that the Under Delaware law, Nabors Dela-
board of directors, at its ware's board has substantially
discretion, may authorize the similar authority so long as
purchase of Nabors such purchases
36
PROVISION NABORS BERMUDA NABORS DELAWARE
--------- -------------- ---------------
PURCHASE OF SHARES - Bermuda's shares of any class at comply with the Delaware General
(CONTINUED) any price (whether at par or Corporation Law.
below par) provided such
purchases are in accordance with
the Companies Act.
OPTIONS AND WARRANTS Directors may, in their Under Delaware law, Nabors Dela-
discretion, grant options for ware's board has substantially
any class or series of class, to similar authority.
any persons for any period and
upon such terms as the board may
deem advisable, and cause ap-
propriate instruments evidencing
such options to be issued.
ISSUANCE OF PREFERRED SHARES The bye-laws provide that the The provisions of Nabors
board of directors of Nabors Delaware's organizational
Bermuda may from time to time documents are substantially
authorize by means of a board similar.
resolution the issuance of
preferred shares in one or more
class or series, and in the
resolution or resolutions
providing for the issue of such
shares, the board of directors
is expressly authorized to fix
for each such class or series
the number of shares which shall
constitute such class or series,
voting power, (full or limited,
or no voting power) and des-
ignations, preferences and
relative, participating,
optional or other special rights
and qualifications, limita-
tions or restrictions thereof.
Such a "blank check" preferred
share provision could have
certain "anti-takeover" effects.
See "Description of Authorized
Shares of Nabors Industries
Ltd. -- Anti-takeover Provi-
sions" on page 27.
APPROVAL OF MERGER/SALE OF The Companies Act permits an In general, under Delaware law,
ASSETS amalgamation or merger between a plan of merger or
two or more Bermuda companies, consolidation must be approved
or between one or more Bermuda by the affirmative vote of
"exempted companies" and one or holders of a majority of shares
more foreign companies. Under of each such corporation
Bermuda law, Nabors Bermuda will entitled to vote thereon.
be considered an "exempted
company." Similarly, a sale of all or
substantially all of such
Nabors Bermuda's bye-laws corporation's assets other than
provide that shareholders in the ordinary course of busi-
holding a majority of the shares ness, or a voluntary dissolution
present and voting at a meeting of such corporation, requires
(and, in the event of a re- the approval of such
sulting variation in class corporation's board of directors
rights, a majority of each class and the affirmative vote of
of shares present holders of a majority of the
shares
37
PROVISION NABORS BERMUDA NABORS DELAWARE
--------- -------------- ---------------
APPROVAL OF MERGER/SALE OF and voting at a meeting), is entitled to vote thereon.
ASSETS - (CONTINUED) required to approve a merger or
amalgamation.
See "Description of Authorized
Shares of Nabors Industries
Ltd. -- Compulsory Acquisition
of Shares Held by Minority
Holders" on page 26.
SHAREHOLDER DERIVATIVE SUITS Bermuda courts ordinarily follow Delaware law requires that a
English law precedent, which stockholder bringing a
permits a shareholder action: derivative suit against a
Delaware corporation have been a
- where the act complained of is stockholder at the time of the
alleged to be beyond the disputed transaction, or its
corporate power of Nabors shares thereafter passed to the
Bermuda or to be illegal; stockholder by operation of law
from a person who was a holder
- where an act requires approval at that time.
by a greater percentage of
Nabors Bermuda's shareholders Under Delaware law, a complaint
than actually approved it; or in a derivative suit must:
- to restrain a violation of - state the plaintiff was a
Nabors Bermuda's organizational stockholder at the time of the
documents. transaction with respect to
which the plaintiff com-
A shareholder may also bring a plains or that the plaintiff's
derivative suit to enforce a shares thereafter became the
right of the company. In order plaintiff's by operation of
to bring a derivative suit the law; and
shareholder must establish two
things. First, the shareholder - (1) allege with particularity
must establish that there is a the efforts plaintiff has made
"fraud on the minority." This to obtain the action the
concept includes any act that plaintiff desires from the
amounts to an unconscionable act directors of the corporation,
of majority power likely to or (2) state the reasons for
result in either financial loss the plaintiff's failure to
or unfair discriminatory obtain the action or for not
treatment of the minority making the effort to obtain
shareholders. Second, the the action.
shareholder must establish that
the alleged wrongdoers, or those
who are taking advantage of the
fraud, control the company.
Control for this purpose means
sufficient influence such that
it would be futile to call a
meeting of shareholders, because
the wrongdoers would exercise a
decisive influence over the
result.
In general, it may be more
difficult for you to bring a
shareholder derivative suit on
behalf of the company
38
PROVISION NABORS BERMUDA NABORS DELAWARE
--------- -------------- ---------------
SHAREHOLDER DERIVATIVE under Bermuda law than it is to
SUITS - (CONTINUED) bring such a suit under Delaware
law.
ALTERATION OF CAPITAL Nabors Bermuda may, by Substantially similar rights are
resolution of the shareholders provided under Delaware law.
or where required, of a separate
class of shareholders:
- increase its authorized share
capital and par value;
- divide its shares into several
classes and attach thereto
respectively any preferential,
deferred, qualified or special
rights, privileges or condi-
tions;
- consolidate and divide its
share capital into shares of
larger par value than any of
its existing shares;
- subdivide its shares into
shares of smaller par value than
is fixed by the memorandum of
association;
- make provision for the issue
and allotment of shares which do
not carry any voting rights;
- cancel shares which, at the
date of the passing of the
resolution in that behalf,
have not been taken or agreed
to be taken by any person, and
diminish the amount of its
share capital by the amount of
the shares cancelled; and
- change the currency
denomination of its share
capital.
39
INCOME TAX CONSEQUENCES OF THE REORGANIZATION
U.S. FEDERAL INCOME TAX CONSEQUENCES TO STOCKHOLDERS
In the opinion of Skadden, Arps, Slate, Meagher & Flom LLP, the following
general discussion constitutes a fair and accurate summary of the anticipated
principal U.S. federal income tax consequences of the receipt of Nabors Bermuda
common shares by certain holders of Nabors Delaware common stock pursuant to the
reorganization. This discussion does not address all of the U.S. federal income
tax consequences that may be relevant to particular Nabors Delaware stockholders
in light of their individual circumstances or to stockholders who, for U.S.
federal income tax purposes, are subject to special rules, such as:
- dealers or traders in securities or currencies;
- tax-exempt entities;
- banks, financial institutions, or insurance companies;
- grantor trusts;
- real estate investment trusts or regulated investment companies;
- holders who hold Nabors Delaware common stock as part of a position in a
straddle or as part of a hedging or conversion transaction for U.S.
federal income tax purposes;
- investors whose functional currency is not the U.S. dollar;
- holders who acquired their Nabors Delaware common stock within twelve
months of the effective date of the merger pursuant to the exercise of
employee stock options or otherwise as compensation;
- holders that, for U.S. federal income tax purposes, are nonresident alien
individuals, foreign corporations, foreign partnerships, foreign trusts,
or foreign estates; and
- holders who own, or are deemed to own, 10% or more, determined by voting
power or value, of Nabors Delaware common stock or Nabors Bermuda common
shares.
Further, this discussion does not address any U.S. federal estate and gift
or alternative minimum tax consequences or any state, local, or foreign tax
consequences relating to the reorganization or the ownership and disposition of
Nabors Bermuda common shares. Nor does this discussion address the tax
consequences of the reorganization to Nabors Delaware or Nabors Bermuda.
EACH NABORS DELAWARE STOCKHOLDER IS STRONGLY URGED TO CONSULT HIS OR HER
TAX ADVISOR AS TO THE PARTICULAR TAX CONSEQUENCES TO HIM OR HER OF THE RECEIPT
OF NABORS BERMUDA COMMON SHARES PURSUANT TO THE REORGANIZATION CONTEMPLATED BY
THIS PROXY STATEMENT/PROSPECTUS AND THE OWNERSHIP AND DISPOSITION OF NABORS
BERMUDA COMMON SHARES, INCLUDING THE APPLICABILITY AND EFFECT OF FEDERAL, STATE,
LOCAL, AND FOREIGN INCOME AND OTHER TAX LAWS IN HIS OR HER PARTICULAR
CIRCUMSTANCES.
This discussion is based on the Code, the Treasury regulations promulgated
thereunder, and judicial and administrative interpretations thereof, in each
case as in effect and available on the date of this proxy statement/prospectus.
All of the foregoing are subject to change, which change could apply with
retroactive effect and could affect the tax consequences described below.
Neither Nabors Delaware nor Nabors Bermuda will request any ruling from the IRS
as to the U.S. federal income tax consequences of the reorganization.
This discussion assumes that Nabors Delaware stockholders hold their Nabors
Delaware common stock and will hold Nabors Bermuda common shares as capital
assets. In addition, this discussion is based on certain customary assumptions
and representations made or to be made by Nabors Delaware and Nabors Bermuda,
including (1) that the facts set forth in this registration statement are true,
accurate, and complete and (2) that the reorganization will be consummated as
described in this registration statement. Any change in the truth, accuracy or
completeness of any of the facts, assumptions or representations on which this
discussion is based could affect the tax consequences described below.
40
For purposes of this discussion, a U.S. holder is a beneficial owner of
Nabors Delaware common stock that, for U.S. federal income tax purposes, is:
- a citizen or resident of the U.S.;
- a corporation or partnership created or organized in or under the laws of
the U.S. or any State thereof, including the District of Columbia;
- an estate, the income of which is subject to U.S. federal income taxation
regardless of its source;
- a trust, if such trust validly has elected to be treated as a U.S. person
for U.S. federal income tax purposes or if (1) a U.S. court can exercise
primary supervision over its administration and (2) one or more U.S.
persons have the authority to control all of the substantial decisions of
such trust; or
- otherwise subject to U.S. federal income taxation on a net income basis
on their shares of Nabors Delaware common stock.
THE REORGANIZATION
Receipt of Nabors Bermuda Common Shares. Because Nabors Bermuda is not a
U.S. corporation, U.S. holders will recognize gain, but not loss, on the receipt
of Nabors Bermuda common shares in exchange for Nabors Delaware common stock
pursuant to the reorganization. Each U.S. holder will recognize gain on the
receipt of Nabors Bermuda common shares in exchange for Nabors Delaware common
stock pursuant to the reorganization in an amount equal to the excess, if any,
of (1) the fair market value on the effective date of the reorganization of the
Nabors Bermuda common shares received by such U.S. holder (which generally may
be determined by reference to the trading price of the Nabors Bermuda common
shares on the American Stock Exchange) over (2) such U.S. holder's adjusted tax
basis in its Nabors Delaware common stock surrendered in exchange therefor. Any
gain recognized will be capital gain and will be long-term capital gain if the
Nabors Delaware common stock has been held for more than 12 months at the time
of the reorganization. A U.S. holder that recognizes gain with respect to the
reorganization will have an aggregate adjusted tax basis in its Nabors Bermuda
common shares equal to the aggregate adjusted tax basis in the Nabors Delaware
common stock exchanged therefor, increased by the amount of gain recognized. A
U.S. holder will not be permitted to recognize any loss realized on the exchange
of his or her shares of Nabors Delaware common stock in the reorganization. In
such case, the aggregate adjusted tax basis of the Nabors Bermuda common shares
received by a U.S. holder with a loss on its Nabors Delaware common stock will
be equal to such U.S. holder's aggregate adjusted tax basis in its Nabors
Delaware common stock surrendered in exchange therefor. Thus, subject to any
subsequent changes in the fair market value of Nabors Bermuda common shares, any
loss would be preserved. The holding period for any Nabors Bermuda common shares
received by a U.S. holder recognizing gain with respect to the reorganization
should begin the day after the effective date of the reorganization. A U.S.
holder who has a gain with respect to some shares of Nabors Delaware common
stock, but a loss with respect to other shares of Nabors Delaware common stock
which cannot be recognized pursuant to the foregoing, will recognize the full
amount of the gain without any reduction for the loss. The holding period for
any Nabors Bermuda common shares received by U.S. holders with a loss on their
Nabors Delaware common stock will include the holding period of the Nabors
Delaware common stock exchanged therefor.
Reporting Requirements. In addition to the return and reporting
requirements imposed on taxpayers generally, additional requirements may be
applicable to U.S. holders. A U.S. holder will be subject to penalties if that
holder fails to report the gain recognized in the reorganization on that
holder's U.S. federal income tax return for the taxable year of the
reorganization.
NABORS BERMUDA COMMON SHARES
Distributions. Nabors Bermuda does not anticipate that it will pay any
dividends on its common shares for the foreseeable future. Subject to this and
the discussion below under "-- Passive Foreign Investment Company
Considerations," the gross amount of any distribution by Nabors Bermuda of cash
or property (other than certain distributions, if any, of common shares
distributed pro rata to all shareholders of Nabors
41
Bermuda) with respect to common shares would be includible in income by a U.S.
holder as dividend income to the extent such distributions are paid out of the
current or accumulated earnings and profits of Nabors Bermuda as determined
under U.S. federal income tax principles. Such dividends would not be eligible
for the dividends received deduction generally allowed to U.S. holders that are
corporations. Subject to the discussion below under "-- Passive Foreign
Investment Company Considerations," to the extent, if any, that the amount of
any distribution by Nabors Bermuda exceeds Nabors Bermuda's current and
accumulated earnings and profits as determined under U.S. federal income tax
principles, it would be treated first as a tax-free return of the U.S. holder's
adjusted tax basis in the common shares and thereafter as capital gain. Nabors
Bermuda will maintain calculations of its earnings and profits under U.S.
federal income tax principles.
The amount of any distribution of property other than cash would be the
fair market value of such property on the date of distribution.
It is anticipated that only a portion of any dividends received by a U.S.
holder with respect to Nabors Bermuda common shares would be treated as foreign
source income for purposes of calculating such holder's foreign tax credit
limitation. This is because it is anticipated that (1) U.S. persons will own a
majority of the Nabors Bermuda common shares after the reorganization and (2) a
portion of the income derived by Nabors Bermuda will be U.S. source income. To
the extent that dividends distributed by Nabors Bermuda are treated as foreign
source income, they generally would constitute passive income, or, in the case
of certain U.S. holders, financial services income.
Sale or Exchange of Common Shares. Subject to the discussion below under
"-- Passive Foreign Investment Company Considerations," a U.S. holder generally
will recognize gain or loss on the sale or exchange of Nabors Bermuda common
shares equal to the difference between the amount realized on such sale or
exchange and the U.S. holder's adjusted tax basis in such Nabors Bermuda common
shares. Such gain or loss will be capital gain or loss. In the case of a
noncorporate U.S. holder, the maximum marginal U.S. federal income tax rate
applicable to such gain will be lower than the maximum marginal U.S. federal
income tax rate applicable to ordinary income if such U.S. holder's holding
period for such common shares exceeds 12 months. Gain or loss, if any,
recognized by a U.S. holder generally will be treated as U.S. source income or
loss for U.S. foreign tax credit purposes. The deductibility of capital losses
is subject to limitations.
Passive Foreign Investment Company Considerations. A non-U.S. corporation
will be classified as a passive foreign investment company (a "PFIC") for U.S.
federal income tax purposes in any taxable year in which, after applying certain
look-through rules, either (1) at least 75 percent of its gross income is
passive income or (2) at least 50 percent of the gross value of its assets is
attributable to assets that produce passive income or are held for the
production of passive income. Passive income for this purpose generally includes
dividends, interest, royalties, rents, and gains from commodities and securities
transactions.
Based on certain estimates of its gross income and gross assets and the
nature of its business, Nabors Bermuda believes that it will not be classified
as a PFIC for its current taxable year. Nabors Bermuda's status in future years
will depend on its assets and activities in those years. Nabors Bermuda has no
reason to believe that its assets or activities will change in a manner that
would cause it to be classified as a PFIC. However, the tests for determining
PFIC status are applied annually, and it is difficult to predict accurately
future income and assets, which are relevant to this determination. Accordingly,
Nabors Bermuda cannot assure that it will not become a PFIC. If Nabors Bermuda
were a PFIC, a U.S. holder of common shares generally would be subject to
imputed interest charges and other disadvantageous tax treatment with respect to
any gain from the sale or exchange of, and certain distributions with respect
to, the Nabors Bermuda common shares.
Alternatively, a U.S. holder generally could elect, subject to certain
limitations, to annually take into gross income the appreciation or depreciation
in its Nabors Bermuda common shares' value during the tax year (the
"mark-to-market election"). If a U.S. holder makes the mark-to-market election,
the U.S. holder will not be subject to the above-described rule. If a U.S.
holder makes the mark-to-market election, the U.S. holder recognizes each year
an amount equal to the difference as of the close of the taxable year between
the U.S. holder's fair market value of the common shares and the adjusted basis
in the common shares. Losses would be allowed only to the extent of net gain
previously included by the U.S. holder under the mark-to-market election for
prior taxable years. Amounts included in or deducted from income under the
mark-to-
42
market election and actual gains and losses realized upon the sale or
disposition of the common shares, subject to certain limitations, will be
treated as ordinary gains or losses. Another alternative election which would
allow a U.S. holder to elect to take its pro rata share of Nabors Bermuda's
undistributed income into gross income as it is earned by Nabors Bermuda (the
"QEF election") would only be available to a U.S. holder if Nabors Bermuda
provided certain information to the IRS. Because Nabors Bermuda generally will
not satisfy the IRS's record keeping requirements, a U.S. holder may only be
able to make the mark-to-market election and not the QEF election if Nabors
Bermuda were a PFIC.
U.S. holders are strongly urged to consult their tax advisors regarding the
tax consequences that would arise if Nabors Bermuda were treated as a PFIC.
Backup Withholding Tax and Information Reporting Requirements. Currently,
any distributions with respect to Nabors Delaware common stock and proceeds from
the sale or redemption of Nabors Delaware common stock would be subject to U.S.
backup withholding tax and information reporting rules. After the
reorganization, it is anticipated that the same rules would apply to
distributions with respect to Nabors Bermuda common shares and to proceeds from
the sale or redemption of Nabors Bermuda common shares.
In general, information reporting requirements will apply to dividends with
respect to the Nabors Bermuda common shares or the proceeds received on the sale
or redemption of the Nabors Bermuda common shares paid within the U.S., and in
some cases, outside of the U.S., to holders other than certain exempt
recipients, such as corporations. In addition, backup withholding at the then
applicable rate will apply to these payments unless the holder or beneficial
owner provides an accurate taxpayer identification number in the manner required
by U.S. law and applicable regulations, certifies that the holder or beneficial
owner is not subject to backup withholding, and the holder or beneficial owner
otherwise complies with applicable requirements of the backup withholding rules.
Amounts withheld under the backup withholding rules may be credited against a
U.S. holder's U.S. federal income tax liability, and a holder may obtain a
refund of any excess amounts withheld under the backup withholding rules by
filing the appropriate claim for refund with the IRS.
BERMUDA INCOME TAX CONSEQUENCES OF THE REORGANIZATION
Under current Bermuda law, Nabors Bermuda is not subject to tax on income
or capital gains. Furthermore, Nabors Bermuda has obtained from the Minister of
Finance of Bermuda under the Exempted Undertakings Tax Protection Act 1966 (as
amended), an undertaking that, in the event that Bermuda enacts any legislation
imposing tax computed on profits, income, any capital asset, gain or
appreciation, or any tax in the nature of estate duty or inheritance tax, then
the imposition of such tax will not be applicable to Nabors Bermuda or to any of
its operations, or the shares, capital or common shares of Nabors Bermuda, until
March 28, 2016. This undertaking does not, however, prevent the imposition of
property taxes on Nabors Bermuda to the extent that it owns real property or
leasehold interests in Bermuda or certain other taxes on Nabors Bermuda if it
were to employ persons in Bermuda.
Nabors Bermuda believes that no significant portion of its income or
capital gains will be subject to tax in Bermuda, which currently has no
corporate income tax. However, this belief is based upon the anticipated nature
and conduct of the business of Nabors Bermuda, which may change, and upon Nabors
Bermuda's understanding of its position under the tax laws of Bermuda and other
countries, which position is subject to review and possible challenge by taxing
authorities and to possible changes in law (which may have retroactive effect).
The extent to which certain taxing jurisdictions may require Nabors Bermuda to
pay tax or to make payments in lieu of tax cannot be determined in advance.
There can be no assurance that these factors will not have a material adverse
effect on Nabors Bermuda.
Under existing Bermuda law, there will be no Bermuda income or withholding
tax on dividends, if any, paid by Nabors Bermuda to its shareholders.
Furthermore, no Bermuda tax or other levy is payable on the sale or other
transfer (including by gift or on the death of the shareholder) of Nabors
Bermuda common stock (other than by shareholders resident in Bermuda).
43
BARBADOS INCOME TAX CONSEQUENCES OF THE REORGANIZATION
Nabors Bermuda will be registered to operate as an IBC for Barbados tax
purposes and Nabors Bermuda will be legally managed and controlled through an
executive office located in Barbados.
In the opinion of David King & Co., the following general discussion
constitutes a fair and accurate summary of the anticipated principal Barbados
income tax consequences of the reorganization. Under current Barbados law, an
IBC is subject to tax on its international business profits generated outside of
Barbados at a maximum rate of 2.5%. This tax rate gradually decreases to 1% as
taxable income increases. The benefits of these lower tax rates for companies
registered as IBCs can be guaranteed by the Minister for up to fifteen (15)
years. Barbados imposes no income tax on capital gains. In addition to Barbados
income tax, Nabors Bermuda will be subject to Barbados property transfer tax to
the extent that it transfers real property owned in Barbados and certain other
taxes to the extent that it employs persons in Barbados.
Under existing Barbados law, there will be no Barbados income or
withholding tax imposed on any dividends, interest, royalties or other income
amounts paid by Nabors Bermuda to any person resident outside of Barbados.
Furthermore, U.S. shareholders will not be subject to any Barbados taxation on
the sale or other transfer (including by gift or on the death of the
shareholder) of Nabors Bermuda common stock.
EXPERTS
The consolidated financial statements incorporated in this proxy
statement/prospectus by reference to the Annual Report on Form 10-K of Nabors
Industries, Inc. for the year ended December 31, 2001 have been so incorporated
in reliance on the reports of PricewaterhouseCoopers LLP, independent
accountants, given on the authority of said firm as experts in auditing and
accounting.
LEGAL MATTERS
Certain legal matters in connection with the Nabors Bermuda common shares
have been passed upon for Nabors Bermuda by its Bermuda counsel, Appleby,
Spurling & Kempe. Appleby, Spurling & Kempe has also rendered an opinion to
Nabors Bermuda regarding Bermuda income tax consequences of the reorganization
described in "Income Tax Consequences of the Reorganization -- Bermuda Income
Tax Consequences of the Reorganization." Skadden, Arps, Slate, Meagher & Flom
LLP has rendered an opinion to Nabors Bermuda regarding U.S. federal income tax
consequences of the reorganization to stockholders of Nabors Delaware described
in "Income Tax Consequences of the Reorganization -- U.S. Federal Income Tax
Consequences to Stockholders." David King & Co. has rendered an opinion to
Nabors Bermuda regarding Barbados income tax consequences of the reorganization
described in "Income Tax Consequences of the Reorganization -- Barbados Income
Tax Consequences of the Reorganization."
SHAREHOLDER PROPOSALS AND NOMINATIONS
The board of directors of Nabors Delaware is not aware of any matters that
are expected to come before the special meeting other than those referred to in
this proxy statement/prospectus. If other matters should properly come before
the meeting, the persons named in the proxy intend to vote the proxies in
accordance with their best judgment.
The deadline for submitting shareholder proposals pursuant to Rule 14a-8
under the Securities Exchange Act of 1934, as amended, to be considered for
inclusion in Nabors Delaware's proxy statement and form of proxy for the 2002
annual meeting was January 7, 2002.
Nabors Bermuda's bye-laws provide that all shareholder nominations for
nominees for election to the board of directors must be made following written
notice to the Secretary of Nabors Bermuda accompanied by certain background and
other information specified in the bye-laws. In connection with any annual
general meeting, written notice of a shareholder's intention to make such
nominations must be received by the Secretary at Nabors Bermuda's principal
executive offices and its registered office in Bermuda not less than
44
60 days nor more than 90 days prior to the anniversary date of the immediately
preceding annual general meeting, provided that in the event that the annual
general meeting is called for a date that is not within 30 days before or after
such anniversary date, not later than the 10th day following the day on which
such notice of the date of the annual general meeting was mailed or public
disclosure of the date of the annual general meeting was made, whichever occurs
first.
In order for a shareholder to bring other business before a general meeting
of shareholders, timely notice must be received by the secretary of Nabors
Bermuda within the time limits described above. The notice must include a
description of the proposed item and other specified matters. These requirements
are separate from and in addition to the requirements you must meet to have a
proposal included in Nabors Bermuda's proxy statement. The foregoing time limits
also apply in determining whether notice is timely for purposes of rules adopted
by the Securities and Exchange Commission relating to the exercise of
discretionary voting authority.
WHERE YOU CAN FIND MORE INFORMATION
Nabors Bermuda has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-4 (herein, together with all
amendments and exhibits, referred to as the "Registration Statement") under the
Securities Act of 1933, as amended (the "Securities Act"). This proxy
statement/prospectus, which constitutes a part of the Registration Statement,
does not contain all of the information set forth in the Registration Statement,
certain parts of which are omitted as permitted by the rules and regulations of
the Commission. For further information, reference is hereby made to the
Registration Statement. Statements made in this proxy statement/prospectus as to
the contents of any contract, agreement or other document are not necessarily
complete. With respect to each such contract, agreement or other document filed
as an exhibit to the Registration Statement or otherwise filed with the
Commission, reference is made to the copy so filed, and each such statement
shall be deemed qualified in its entirety by such reference.
Nabors Delaware is, and after the reorganization Nabors Bermuda will be,
subject to the informational requirements of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and in accordance therewith files and
will file reports, proxy and information statements, and other information with
the Commission. Such reports, proxy and information statements, and other
information filed with the Commission, can be inspected and copied at the SEC's
Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. You may
obtain information on the operation of the Public Reference Room by calling the
Commission at 1-800-SEC-0330. Copies of reports, proxy and information
statements and other information regarding registrants that file electronically
(including Nabors Industries, Inc.) are available on the Commission's website at
http://www.sec.gov.
Upon completion of the reorganization, Nabors Bermuda common shares will be
traded on the American Stock Exchange. At the time of commencement of such
trading, Nabors Delaware common stock will be delisted and will no longer be
registered pursuant to Section 12 of the Exchange Act. At such time, your shares
will have automatically converted into the right to receive shares of Nabors
Bermuda and Nabors Bermuda will be registered pursuant to Section 12 of the
Exchange Act.
45
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by Nabors Delaware with the Commission
pursuant to the Exchange Act are hereby incorporated by reference in this proxy
statement/prospectus:
REPORT DATE(S) FILED
------ -------------
Annual Report on Form 10-K for the fiscal March 19, 2002
year ended December 31, 2001 (File No.
1-09245)
Current Reports on Form 8-K January 3, 2002, January 25, 2002 and April
18, 2002
Each document filed by Nabors Delaware pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act subsequent to the date of this proxy
statement/prospectus and prior to the date of the special meeting shall be
deemed to be incorporated by reference in this proxy statement/prospectus and to
be a part of this proxy statement/prospectus from the date of filing of such
document. Any statement contained in this proxy statement/prospectus or in a
document incorporated or deemed to be incorporated by reference in this proxy
statement/prospectus shall be deemed to be modified or superseded for purposes
of the Registration Statement and this proxy statement/prospectus to the extent
that a statement contained in this proxy statement/prospectus or in any
subsequently filed document that also is or is deemed to be incorporated by
reference in this proxy statement/prospectus modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of the Registration
Statement or this proxy statement/prospectus.
THIS PROXY STATEMENT/PROSPECTUS INCORPORATES BY REFERENCE IMPORTANT
BUSINESS AND FINANCIAL INFORMATION ABOUT NABORS WHICH IS NOT INCLUDED IN OR
DELIVERED WITH THIS DOCUMENT. COPIES OF THE INCORPORATED DOCUMENTS (OTHER THAN
EXHIBITS TO SUCH DOCUMENTS, UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED
BY REFERENCE THEREIN) WILL BE FURNISHED UPON WRITTEN OR ORAL REQUEST WITHOUT
CHARGE TO EACH PERSON TO WHOM THIS PROXY STATEMENT/PROSPECTUS IS DELIVERED.
REQUESTS SHOULD BE MADE BY MAY 24, 2002 AND SHOULD BE DIRECTED TO NABORS
INDUSTRIES, INC., 515 WEST GREENS ROAD, SUITE 1200, HOUSTON, TEXAS 77067,
ATTENTION: INVESTOR RELATIONS, OR YOU MAY TELEPHONE (281) 874-0035, OR VISIT OUR
WEBSITE "HTTP://WWW.NABORS.COM". WEBSITE MATERIALS ARE NOT PART OF THIS PROXY
STATEMENT/PROSPECTUS.
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROXY STATEMENT/PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.
THIS PROXY STATEMENT/PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF ANY OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY
JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE SUCH AN OFFER OR SOLICITATION.
NABORS BERMUDA IS PROHIBITED FROM MAKING ANY INVITATION TO THE PUBLIC IN BERMUDA
TO SUBSCRIBE FOR ANY OF ITS SHARES.
46
ANNEX I
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of January 2,
2002, among Nabors Industries Ltd., a Bermuda exempted company ("Nabors
Bermuda"), Nabors Industries, Inc., a Delaware corporation ("Nabors Delaware"),
Nabors US Holdings Inc., a Delaware corporation ("US Holdings") and Nabors
Acquisition Corp. VIII, a Delaware corporation ("Merger Sub") and a newly
formed, indirect wholly-owned subsidiary of Nabors Bermuda and a direct
wholly-owned subsidiary of US Holdings.
WHEREAS, the respective Boards of Directors of Nabors Bermuda, Nabors
Delaware, US Holdings and Merger Sub deem it advisable and in the best interests
of their respective stockholders to reorganize such that the ultimate parent of
the Nabors group will effectively change its place of incorporation from
Delaware to Bermuda by merging Merger Sub with and into Nabors Delaware;
WHEREAS, subject to the approval of the stockholders of Nabors Delaware,
the respective Boards of Directors of Nabors Bermuda, Nabors Delaware, US
Holdings and Merger Sub (and the stockholders of Nabors Bermuda, US Holdings and
Merger Sub) have each unanimously approved the merger of Merger Sub with and
into Nabors Delaware, pursuant to which Nabors Delaware will be the surviving
company in the merger and become a wholly-owned, indirect subsidiary of Nabors
Bermuda (and a wholly-owned, direct subsidiary of US Holdings), upon the terms
and subject to the conditions set forth in this Agreement (the "Merger"), and
whereby each outstanding share of common stock, par value US$.10 per share, of
Nabors Delaware ("Nabors Delaware Common Stock"), other than those shares of
Nabors Delaware Common Stock held by Nabors Delaware or any direct or indirect
wholly-owned subsidiary of Nabors Delaware, shall be automatically converted
into the right to receive one common share, par value US$.001 per share, of
Nabors Bermuda ("Nabors Bermuda Common Shares"); and
WHEREAS, the consummation of the Merger requires, among other things, the
adoption of this Agreement by the affirmative vote of the holders of a majority
of the outstanding Nabors Delaware Common Stock entitled to vote on such
adoption (the "Nabors Delaware Stockholder Approval");
NOW, THEREFORE, the parties agree as follows:
ARTICLE I
MERGER
1.1 Merger. Upon the terms and subject to the conditions set forth in
this Agreement, and in accordance with the Delaware General Corporation Law (the
"DGCL"), Merger Sub shall be merged with and into Nabors Delaware at the
Effective Time of the Merger. Following the Effective Time of the Merger, the
separate corporate existence of Merger Sub shall cease and Nabors Delaware shall
continue as the surviving corporation (the "Surviving Corporation"), becoming a
wholly-owned, indirect subsidiary of Nabors Bermuda (and a wholly-owned, direct
subsidiary of US Holdings), and shall succeed to and assume all the rights and
obligations of Merger Sub in accordance with the DGCL.
1.2 Effective Time. Subject to the provisions of this Agreement, as soon
as practicable following the satisfaction or waiver of the conditions set forth
in Section 5.1, the parties shall duly prepare, execute and file a certificate
of merger (the "Certificate of Merger") in accordance with Section 251 of the
DGCL with the Secretary of State of Delaware. The Merger shall become effective
upon the filing of the Certificate of Merger (or at such later time reflected in
such Certificate of Merger as shall be agreed to by Nabors Bermuda, US Holdings,
Nabors Delaware and Merger Sub). The date and time when the Merger shall become
effective is referred to as the "Effective Time."
1.3 Effects of the Merger. The Merger shall have the effects as provided
in the DGCL. The Surviving Corporation specifically assumes any obligation of
Merger Sub which requires that such obligation is specifically assumed by the
Surviving Corporation.
A-I-1
ARTICLE II
NAME, CERTIFICATE OF INCORPORATION,
DIRECTORS AND OFFICERS
2.1 Name of Surviving Corporation. The name of the Surviving Corporation
shall be "Nabors Industries, Inc."
2.2 Certificate of Incorporation; By-laws.
(a) The Certificate of Incorporation of the Surviving Corporation shall be
amended as of the Effective Time pursuant to the Certificate of Merger to
contain the provisions in the Certificate of Incorporation of Merger Sub in
effect immediately prior to the Effective Time, except that Article FIRST of
such Certificate shall provide that the name of the Surviving Corporation shall
be "Nabors Industries, Inc."
(b) The By-laws of Merger Sub in effect immediately prior to the Effective
Time shall be the by-laws of the Surviving Corporation until amended in
accordance with applicable law.
2.3 Directors. The directors of Merger Sub immediately prior to the
Effective Time shall be the directors of the Surviving Corporation, until his or
her successor shall be elected and qualify, subject to prior death, resignation
or removal in accordance with the Certificate of Incorporation and By-laws of
the Surviving Corporation, or as otherwise provided by applicable law.
2.4 Officers. Each officer of Nabors Delaware immediately prior to the
Effective Time shall be an officer of the Surviving Corporation, until his or
her successor shall be elected and qualify, subject to prior death, resignation
or removal in accordance with the Certificate of Incorporation and By-laws of
the Surviving Corporation, or as otherwise provided by applicable law.
ARTICLE III
CONVERSION AND EXCHANGE OF STOCK
3.1 Nabors Delaware Common Stock. At the Effective Time, by virtue of the
Merger and without any action on the part of the holder of any shares:
(a) Each issued and outstanding share of Nabors Delaware Common Stock,
other than shares cancelled in accordance with 3.1(b), shall be converted
into and become the right to receive one fully paid and nonassessable
Nabors Bermuda Common Share.
(b) Each issued share of Nabors Delaware Common Stock that is owned by
Nabors Delaware or by any direct or indirect wholly-owned subsidiary of
Nabors Delaware prior to the Effective Time shall automatically be canceled
and retired and shall cease to exist, and no Nabors Bermuda Common Shares
or other consideration shall be delivered or deliverable in exchange for
such shares of Nabors Delaware Common Stock.
3.2 Merger Sub Common Stock. Each issued and outstanding share of common
stock, par value $.01 per share, of Merger Sub, shall be converted into and
become one share of common stock of the Surviving Corporation with the same
rights, power and privileges as the shares so converted and shall constitute the
only outstanding shares of capital stock of the Surviving Corporation.
3.3 Stock Option and Award Plans. Nabors Delaware currently maintains and
sponsors the 1994 Executive Officer's Stock Plan, the 1996 Employee Stock Plan,
the 1996 Executive Officers Stock Plan, the 1996 Executive Officers Incentive
Stock Plan, the 1998 Employee Stock Plan, the 1998 Chairman's Executive Stock
Plan, the 1996 Chairman's Executive Stock Plan, the 1997 Executive Officers
Incentive Stock Plan, the 1999 Pool Employee/Director Option Exchange Plan,
Options Originally Granted by Bayard Drilling Technologies, Inc. and Assumed by
Nabors Industries, Inc. and certain other plans and agreements providing for the
grant or award to its officers and employees of options or other rights to
purchase or receive Nabors Delaware Common Stock (the "Employee Stock Plans").
Nabors Delaware also maintains and sponsors the 1993 Stock Option Plan for
Non-Employee Directors and the 1999 Stock Option Plan for Non-Employee
A-I-2
Directors and certain other plans and agreements providing for the grant or
award to its directors of options or other rights to purchase or receive Nabors
Delaware Common Stock (the "Director Stock Plans"). Nabors Delaware shall
continue to maintain and sponsor the Employee Stock Plans and Nabors Bermuda
shall assume the rights and obligations of Nabors Delaware under the Director
Stock Plans. The outstanding options and other awards under the Employee Stock
Plans and Director Stock Plans shall be exercisable or issuable upon the same
terms and conditions as under such plans and the agreements relating thereto
immediately prior to the Effective Time of the Merger, except that upon the
exercise or issuance of such options or awards, Nabors Bermuda Common Shares
shall be issuable in lieu of shares of Nabors Delaware Common Stock. The number
of Nabors Bermuda Common Shares issuable upon the exercise or issuance of such
an option or award immediately after the Effective Time and the option price of
each such option or award shall be the number of shares and option price in
effect immediately prior to the Effective Time. All options or awards issued
under the Employee Stock Plans and Director Stock Plans after the Effective Time
shall entitle the holder thereof to purchase Nabors Bermuda Common Shares in
accordance with the terms of the Employee Stock Plans and Director Stock Plans.
3.4 Exchange Agent; Exchange of Shares.
(a) Exchange Agent. As soon as reasonably practicable, US Holdings and
Merger Sub shall designate a bank or trust company reasonably acceptable to
Nabors Delaware (the "Exchange Agent") for the purpose of exchanging
certificates representing shares of Nabors Bermuda Common Shares (the "Bermuda
Certificates") upon surrender of certificates representing shares of Nabors
Delaware Common Stock (the "Delaware Certificates"). Not later than the
Effective Time, US Holdings and Merger Sub will cause to be deposited with the
Exchange Agent, for the benefit of the holders of shares of Nabors Delaware
Common Stock, certificates representing Nabors Bermuda Common Shares issuable
upon consummation of the Merger as set forth in Section 3.1(a) (the "Exchange
Fund").
(b) Exchange Procedure. As soon as reasonably practicable after the
Effective Time, the Exchange Agent shall mail to each holder of record of a
Delaware Certificate(s) that immediately prior to the Effective Time represented
outstanding shares of Nabors Delaware Common Stock whose shares were converted
into and became the right to receive Nabors Bermuda Common Shares pursuant to
Section 3.1(a), (i) a letter of transmittal (which shall specify that delivery
shall be effected, and risk of loss and title to the Delaware Certificates shall
pass, only upon delivery of the Delaware Certificates to the Exchange Agent and
shall be in such form and have such other provisions as Nabors Bermuda may
reasonably specify) and (ii) instructions for use in effecting the surrender of
the Delaware Certificates in exchange for Nabors Bermuda Common Shares. Upon
surrender of a Delaware Certificate for cancellation to the Exchange Agent,
together with such letter of transmittal, properly completed and duly executed,
and such other documents as may be reasonably required by the Exchange Agent,
the holder of such Delaware Certificate shall be entitled to receive in exchange
therefor a Bermuda Certificate or Bermuda Certificates representing the number
of Nabors Bermuda Common Shares which such holder has the right to receive
pursuant to the provisions of this Article III, and the Delaware Certificate so
surrendered shall be canceled. In the event of a transfer of ownership of a
Delaware Certificate after the Effective Time, exchange may be made to a person
other than the person in whose name the Delaware Certificate so surrendered is
registered, if such Delaware Certificate shall be properly endorsed or otherwise
in proper form for transfer and shall be accompanied by evidence satisfactory to
the Exchange Agent that any transfer or other taxes required by reason of such
exchange in the name other than that of the registered holder of such Delaware
Certificate or instrument either has been paid or is not payable. Until
surrendered as contemplated by this Section 3.4, each Delaware Certificate shall
be deemed at any time after the Effective Time to represent only the right to
receive upon such surrender Nabors Bermuda Common Shares in accordance with
Section 3.1(a).
(c) No Further Ownership Rights in Nabors Delaware Common Stock. All
Nabors Bermuda Common Shares issued upon the Merger, including any Bermuda
Certificates issued upon the surrender for exchange of Delaware Certificates in
accordance with the terms of this Article III, shall be deemed to have been
issued (and paid) in full satisfaction of all rights pertaining to the shares of
Nabors Delaware Common Stock theretofore represented by such certificates,
subject, however, to the Surviving Corporation's obligation (if any) to pay any
dividends or make any other distributions with a record date prior to the
Effective Time which
A-I-3
may have been declared or made by Nabors Delaware on such shares of Nabors
Delaware Common Stock in accordance with the terms of this Agreement or prior to
the date of this Agreement and which remain unpaid at the Effective Time, and
there shall be no further registration of transfers on the stock transfer books
of the Surviving Corporation of the shares of Nabors Delaware Common Stock which
were outstanding immediately prior to the Effective Time. If, after the
Effective Time, Delaware Certificates are presented to the Surviving Corporation
or Exchange Agent they shall be canceled and exchanged as provided in this
Article III, except as otherwise provided by law.
(d) Termination of Exchange Fund; No Liability. At any time following the
first anniversary of the Effective Time, the Surviving Corporation shall be
entitled to require the Exchange Agent to deliver to it any remaining portion of
the Exchange Fund, and holders shall be entitled to look only to the Surviving
Corporation (subject to abandoned property, escheat or other similar laws) with
respect to the Nabors Bermuda Common Shares and any dividends or other
distributions with respect thereto payable upon due surrender of their Delaware
Certificates, without any interest thereon. Notwithstanding the foregoing,
neither the Surviving Corporation nor the Exchange Agent shall be liable to any
holder of a Delaware Certificate for Nabors Bermuda Common Shares (or dividends
or distributions with respect thereto) from the Exchange Fund in each case
delivered to a public official pursuant to any applicable abandoned property,
escheat or similar law.
(e) Lost, Stolen or Destroyed Certificates. In the event any Delaware
Certificates shall have been lost, stolen or destroyed, upon the making of an
affidavit of that fact by the person claiming such Delaware Certificate(s) to be
lost, stolen or destroyed and, if required by Nabors Bermuda, the posting by
such person of a bond in such sum as Nabors Bermuda may reasonably direct as
indemnity against any claim that may be made against it or the Surviving
Corporation with respect to such Delaware Certificate(s), the Exchange Agent
will issue the Nabors Bermuda Common Shares pursuant to Section 3.1(a)
deliverable in respect of the shares of Nabors Delaware Common Stock represented
by such lost, stolen or destroyed Delaware Certificates.
(f) Dividends; Distributions. No dividends or other distributions with
respect to Nabors Bermuda Common Shares with a record date after the Effective
Time shall be paid to the holder of any unsurrendered Delaware Certificate with
respect to the Nabors Bermuda Common Shares represented thereby, and all such
dividends, other distributions, if any, shall be paid by Nabors Bermuda to the
Exchange Agent and shall be included in the Exchange Fund, in each case until
the surrender of such Delaware Certificate in accordance with this Article III.
Subject to the effect of applicable abandoned property, escheat or similar laws,
following surrender of any such Delaware Certificate there shall be paid to the
holder of a Delaware Certificate representing the right to receive Nabors
Bermuda Common Shares issued in exchange therefor, without interest, (i) at the
time of such surrender, the amount of dividends or other distributions with a
record date after the Effective Time theretofore paid with respect to such
Nabors Bermuda Common Shares and (ii) at the appropriate payment date, the
amount of dividends or other distributions with a record date after the
Effective Time but prior to such surrender and with a payment date subsequent to
such surrender payable with respect to such Nabors Bermuda Common Shares. Nabors
Bermuda shall make available to the Exchange Agent cash for these purposes, if
necessary.
3.5 Warrants. Effective at the Effective Time, the outstanding warrants
of Nabors Delaware to acquire Nabors Delaware Common Stock shall be thereafter
exercisable, in accordance with their terms, for the number of Nabors Bermuda
Common Shares to which a holder of the shares of Nabors Delaware Common Stock
issuable at the time of the Merger upon the exercise of such warrants would have
been entitled to receive as a result of the Merger, in accordance with this
Article III, if such exercise had taken place immediately prior to the Merger.
3.6 Withholding Taxes. US Holdings shall be entitled to deduct and
withhold, or cause the Exchange Agent to deduct and withhold, from the
consideration otherwise payable to any person pursuant to this Article III any
such amounts as are required under the Internal Revenue Code of 1986, as
amended, or any applicable provision of state, local or foreign tax law;
provided, however, that if such withholding may be eliminated or reduced through
the delivery of any certificate or other documentation, US Holdings shall
A-I-4
provide each holder of Nabors Delaware Common Stock with a reasonable
opportunity to deliver such certificate or other documentation. To the extent
that amounts are so withheld by US Holdings, such withheld amounts shall be
treated for all purposes of this Agreement as having been paid to the holder of
shares of Nabors Delaware Common Stock in respect of which such deduction and
withholding was made by US Holdings.
ARTICLE IV
BENEFIT AND COMPENSATION PLANS
4.1 At the Effective Time, (i) Nabors Delaware shall continue to sponsor
and maintain each employee benefit and program to which Nabors Delaware is then
a party (the "Employee Benefit Plans"), and (ii) Nabors Bermuda shall assume the
rights and obligations of Nabors Delaware under each director benefit plan and
program to which Nabors Delaware is then a party (the "Director Benefit Plans").
To the extent any Employee Benefit Plan or Director Benefit Plan provides for
the issuance or purchase of, or otherwise relates to, Nabors Delaware Common
Stock, after the Effective Time, such plan shall be deemed to provide for the
issuance or purchase of, or otherwise relate to, Nabors Bermuda Common Shares.
Nabors Delaware shall assign to Nabors Bermuda and Nabors Bermuda shall agree to
assume, on substantially similar terms and conditions, each employment agreement
with each executive officer and key employee of Nabors Delaware who, immediately
prior to the Effective Time, is a party to an employment agreement with Nabors
Delaware, subject to any required consent of any such executive officer or key
employee.
ARTICLE V
CONDITIONS PRECEDENT
5.1 The respective obligation of each party to effect the Merger is
subject to the satisfaction or waiver of the following conditions:
(a) Stockholder Approval. The Nabors Delaware Stockholder Approval
shall have been obtained.
(b) Form S-4. The registration statement on Form S-4 filed with the
Securities and Exchange Commission by Nabors in connection with the
issuance of the Nabors Bermuda Common Shares in the Merger shall have
become effective under the Securities Act of 1933, as amended, and shall
not be the subject of any stop order or proceedings seeking a stop order.
(c) AMEX Approval. The American Stock Exchange (the "AMEX") shall
have confirmed that the Nabors Bermuda Common Shares have been approved for
listing on the AMEX, subject to notice of issuance, and may trade on the
AMEX and succeed to the ticker symbol "NBR."
(d) Governmental, Regulatory and Other Material Third-Party
Consents. All filings required to be made prior to the Effective Time of
the Merger with, and all material consents, approvals, permits and
authorizations required to be obtained prior to the Effective Time from,
any court or governmental or regulatory authority or agency, domestic or
foreign, or other person in connection with the execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby
will have been made or obtained (as the case may be).
(e) No Injunctions or Restraints. No temporary restraining order,
preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition preventing
the consummation of the Merger or any of the other transactions
contemplated hereby shall be in effect.
(f) Waivers. The executive officers of the Company shall have agreed
not to treat any of the transactions contemplated by this Agreement as a
"Change in Control" within the meaning of their employment agreements with
Nabors Delaware, if any, to the extent such concept is included in such
agreements.
A-I-5
ARTICLE VI
TERMINATION, AMENDMENT AND WAIVER
6.1 Termination. This Agreement may be terminated at any time prior to
the Effective Time, whether before or after the Nabors Delaware Stockholder
Approval, by action of the Board of Directors of Nabors Bermuda, Nabors
Delaware, US Holdings or Merger Sub.
6.2 Effect of Termination. In the event of termination of this Agreement
as provided in Section 6.1, this Agreement shall forthwith become void and have
no effect, without any liability or obligation on the part of Nabors Delaware,
US Holdings, Merger Sub or Nabors Bermuda, other than the provisions of this
Article VI and Article VII.
6.3 Amendment. This Agreement may be amended by the parties at any time
before or after the Nabors Delaware Stockholder Approval; provided, however,
that after any such approval, there shall not be made any amendment that alters
or changes the amount or kind of shares to be received by stockholders in the
Merger; alters or changes any term of the certificate of incorporation of the
Surviving Corporation; or alters or changes any other terms and conditions of
this Agreement if any of the alterations or changes, alone or in the aggregate,
would adversely affect the holders of shares of Nabors Delaware Common Stock.
This Agreement may not be amended except by an instrument in writing signed on
behalf of each of the parties.
6.4 Waiver. At any time prior to the Effective Time, the parties may
waive compliance by the other parties with any of the agreements or conditions
contained in this Agreement. Any agreement on the part of a party to any such
waiver shall be valid only if set forth in an instrument in writing signed on
behalf of such party. The failure of any party to this Agreement to assert any
of its rights under this Agreement or otherwise shall not constitute a waiver of
such rights.
6.5 Procedure for Termination, Amendment, Extension or Waiver. A
termination of this Agreement pursuant to Section 6.1, an amendment of this
Agreement pursuant to Section 6.3 or a waiver pursuant to Section 6.4 shall, in
order to be effective, require action by the Board of Directors of Nabors
Delaware, Nabors Bermuda, US Holdings and Merger Sub.
ARTICLE VII
GENERAL PROVISIONS
7.1 Notices. All notices, requests, claims, demands and other
communications under this Agreement shall be in writing and shall be deemed
given if delivered personally, telecopied (which is confirmed) or sent by
overnight courier (providing proof of delivery) to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):
(a) if to Nabors Bermuda:
Nabors Industries Ltd.
c/o The Corporate Secretary Limited
Whitepark House
White Park Road
Bridgetown, Barbados
Attention: Office of the Secretary
(b) if to Nabors Delaware:
Nabors Industries, Inc.
515 West Greens Road, Suite 1200
Houston, Texas 77067
Attention: Senior Counsel
A-I-6
(c) if to Merger Sub:
Nabors Acquisition Corp. VIII
c/o Nabors US Holdings Inc.
515 West Greens Road, Suite 1200
Houston, Texas 77067
Attention: Senior Counsel
(d) if to US Holdings:
Nabors US Holdings Inc.
515 West Greens Road, Suite 1200
Houston, Texas 77067
Attention: Senior Counsel
7.2 Entire Agreement; No Third-party Beneficiaries. This Agreement
(including the documents and instruments referred to herein) (a) constitutes the
entire agreement and supersedes all prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter of this
Agreement and (b) except for the provisions of Article III, is not intended to
confer upon any person other than the parties any rights or remedies.
7.3 Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware regardless of the laws that
might otherwise govern under applicable principles of conflicts of laws thereof.
[SIGNATURE PAGE FOLLOWS]
A-I-7
IN WITNESS WHEREOF, Nabors Delaware, Nabors Bermuda, US Holdings and Merger
Sub have caused this Agreement to be signed by their respective officers
thereunto duly authorized, all as of the date first written above.
NABORS INDUSTRIES LTD.
By: /s/ STEPHEN S JAMES
------------------------------------
Stephen S James
Director
NABORS INDUSTRIES, INC.
By: /s/ ANTHONY G. PETRELLO
------------------------------------
Anthony G. Petrello
President and Chief Operating
Officer
NABORS ACQUISITION CORP. VIII
By: /s/ DANIEL MCLACHLIN
------------------------------------
Daniel McLachlin
Vice President and Secretary
NABORS US HOLDINGS INC.
By: /s/ DANIEL MCLACHLIN
------------------------------------
Daniel McLachlin
Vice President and Secretary
A-I-8
ANNEX II
[LOGO]
BERMUDA
THE COMPANIES ACT 1981
MEMORANDUM OF ASSOCIATION OF COMPANY LIMITED BY SHARES
SECTION 7(1) AND (2)
MEMORANDUM OF ASSOCIATION
OF
NABORS INDUSTRIES LTD.
(hereinafter referred to as "the Company")
1. The liability of the members of the Company is limited to the amount (if
any) for the time being unpaid on the shares respectively held by them.
2. We, the undersigned, namely,
BERMUDIAN STATUS NUMBER OF SHARES
NAME AND ADDRESS (YES OR NO) NATIONALITY SUBSCRIBED
---------------- ---------------- ----------- ----------------
Timothy J. Counsell................................ Yes British 1
Cedar House, 41 Cedar Avenue
Hamilton HM 12, Bermuda
Ruby L. Rawlins.................................... Yes British 1
Cedar House, 41 Cedar Avenue
Hamilton HM 12, Bermuda
Rachael M. Lathan.................................. Yes British 1
Cedar House, 41 Cedar Avenue
Hamilton HM 12, Bermuda
Angela R. B. Browne................................ Yes British 1
Cedar House, 41 Cedar Avenue
Hamilton HM 12, Bermuda
do hereby respectively agree to take such number of shares of the Company as may
be allotted to us respectively by the provisional directors of the Company, not
exceeding the number of shares for which we have respectively subscribed, and to
satisfy such calls as may be made by the directors, provisional directors or
promoters of the Company in respect of the shares allotted to us respectively.
3. The Company is to be an Exempted Company as defined by the Companies Act
1981.
4. The Company, with the consent of the Minister of Finance, has power to
hold land situate in Bermuda not exceeding in all, including the following
parcels:
Not applicable.
5. The authorised share capital of the Company is US$12,000.00 divided into
12,000 shares of US$1.00 each. The minimum subscribed share capital of the
Company is $12,000.00 in United States currency.
A-II-1
6. The objects for which the Company is formed and incorporated are:
As set forth in paragraphs (b) to (n) and (p) to (u) inclusive of the
Second Schedule to The Companies Act 1981.
7. The Company has the powers set out in The Schedule annexed hereto.
A-II-2
THE COMPANIES ACT
SECOND SCHEDULE
(SECTION 11(2))
Subject to Section 4A, a company may by reference include in its memorandum
any of the following objects, that is to say the business of --
(a) insurance and re-insurance of all kinds;
(b) packaging of goods of all kinds;
(c) buying, selling and dealing in goods of all kinds;
(d) designing and manufacturing of goods of all kinds;
(e) mining and quarrying and exploration for metals, minerals, fossil fuels and
precious stones of all kinds and their preparation for sale or use;
(f) exploring for, the drilling for, the moving, transporting and refining
petroleum and hydro carbon products including oil and oil products;
(g) scientific research including the improvement, discovery and development of
processes, inventions, patents and designs and the construction,
maintenance and operation of laboratories and research centres;
(h) land, sea and air undertakings including the land, ship and air carriage of
passengers, mails and goods of all kinds;
(i) ships and aircraft owners, managers, operators, agents, builders and
repairers;
(j) acquiring, owning, selling, chartering, repairing or dealing in ships and
aircraft;
(k) travel agents, freight contractors and forwarding agents;
(1) dock owners, wharfingers, warehousemen;
(m) ship chandlers and dealing in rope, canvas oil and ship stores of all
kinds;
(n) all forms of engineering;
(o) developing, operating, advising or acting as technical consultants to any
other enterprise or business;
(p) farmers, livestock breeders and keepers, graziers, butchers, tanners and
processors of and dealers in all kinds of live and dead stock, wool, hides,
tallow, grain, vegetables and other produce;
(q) acquiring by purchase or otherwise and holding as an investment inventions,
patents, trade marks, trade names, trade secrets, designs and the like;
(r) buying, selling, hiring, letting and dealing in conveyances of any sort;
and
(s) employing, providing, hiring out and acting as agent for artists, actors,
entertainers of all sorts, authors, composers, producers, directors,
engineers and experts or specialists of any kind;
(t) to acquire by purchase or otherwise and hold, sell, dispose of and deal in
real property situated outside Bermuda and in personal property of all
kinds wheresoever situated;
(u) to enter into any guarantee, contract of indemnity or suretyship and to
assure, support or secure with or without consideration or benefit the
performance of any obligations of any person or persons and to guarantee
the fidelity of individuals filling or about to fill situations of trust or
confidence;
(v) to be and carry on business of a mutual fund within the meaning of section
156A.
Provided that none of these objects shall enable the company to carry on
restricted business activity as set out in the Ninth Schedule except with
the consent of the Minister.
A-II-3
Signed by each subscriber in. the presence of at least one witness
attesting the signature thereof:
-s- TIMOTHY J. COUNSELL -s- DIONNE HACKETT
----------------------------------------------------- -----------------------------------------------------
Timothy J. Counsell Dionne Hackett
-s- RUBY L. RAWLINS -s- DIONNE HACKETT
----------------------------------------------------- -----------------------------------------------------
Ruby L. Rawlins Dionne Hackett
-s- RACHAEL M. LATHAN -s- DIONNE HACKETT
----------------------------------------------------- -----------------------------------------------------
Rachael M. Lathan Dionne Hackett
-s- ANGELA R. B. BROWNE -s- DIONNE HACKETT
----------------------------------------------------- -----------------------------------------------------
Angela R. B. Browne Dionne Hackett
(Subscribers) (Witnesses)
SUBSCRIBED this 10th day of December 2001
A-II-4
STAMP DUTY (To be affixed)
NOT APPLICABLE
A-II-5
THE SCHEDULE
(REFERRED TO IN CLAUSE 7 OF THE MEMORANDUM OF ASSOCIATION)
(a) to borrow and raise money in any currency or currencies and to secure or
discharge any debt or obligation in any manner and in particular (without
prejudice to the generality of the foregoing) by mortgages of or charges
upon all or any part of the undertaking, property and assets (present and
future) and uncalled capital of the company or by the creation and issue of
securities;
(b) to enter into any guarantee, contract of indemnity or suretyship and in
particular (without prejudice to the generality of the foregoing) to
guarantee, support or secure, with or without consideration, whether by
personal obligation or by mortgaging or charging all or any part of the
undertaking, property and assets (present and future) and uncalled capital
of the company or by both such methods or in any other manner, the
performance of any obligations or commitments of, and the repayment or
payment of the principal amounts of and any premiums, interest, dividends
and other moneys payable on or in respect of any securities or liabilities
of, any person, including (without prejudice to the generality of the
foregoing) any company which is for the time being a subsidiary or a
holding company of the company or another subsidiary of a holding company
of the company or otherwise associated with the company;
(c) to accept, draw, make, create, issue, execute, discount, endorse, negotiate
and deal in bills of exchange, promissory notes, and other instruments and
securities, whether negotiable or otherwise;
(d) to sell, exchange, mortgage, charge, let on rent, share of profit, royalty
or otherwise, grant licences, easements, options, servitudes and other
rights over, and in any other manner deal with or dispose of, all or any
part of the undertaking, property and assets (present and future) of the
company for any consideration and in particular (without prejudice to the
generality of the foregoing) for any securities;
(e) to issue and allot securities of the company for cash or in payment or part
payment for any real or personal property purchased or otherwise acquired
by the company or any services rendered to the company or as security for
any obligation or amount (even if less than the nominal amount of such
securities) or for any other purpose;
(f) to grant pensions, annuities, or other allowances, including allowances on
death, to any directors, officers or employees or former directors,
officers or employees of the company or any company which at any time is or
was a subsidiary or a holding company or another subsidiary of a holding
company of the company or otherwise associated with the company or of any
predecessor in business of any of them, and to the relations, connections
or dependants of any such persons, and to other persons whose service or
services have directly or indirectly been of benefit to the company or whom
the company considers have any moral claim on the company or to their
relations, connections or dependants, and to establish or support any
associations, institutions, clubs, schools, building and housing schemes,
funds and trusts, and to make payment towards insurance or other
arrangements likely to benefit any such persons or otherwise advance the
interests of the company or of its members or for any national, charitable,
benevolent, educational, social, public, general or useful object;
(g) subject to the provisions of Section 42 of the Companies Act 1981, to issue
preference shares which at the option of the holders thereof are to be
liable to be redeemed;
(h) to purchase its own shares in accordance with the provisions of Section 42A
of the Companies Act 1981.
A-II-6
THE COMPANIES ACT 1981
FIRST SCHEDULE
(SECTION 11(1))
A company limited by shares, or other company having a share capital, may
exercise all or any of the following powers subject to any provision of law or
its memorandum --
(1) [repealed by 1992:51]
(2) to acquire or undertake the whole or any part of the business, property and
liabilities of any person carrying on any business that the company is
authorised to carry on;
(3) to apply for, register, purchase, lease, acquire, hold, use, control,
licence, sell, assign or dispose of patents, patent rights, copyrights,
trade marks, formulae, licences, inventions, processes, distinctive marks
and similar rights;
(4) to enter into partnership or into any arrangement for sharing of profits,
union of interests, co-operation, joint venture, reciprocal concession or
otherwise with any person carrying on or engaged in or about to carry on or
engage in any business or transaction that the company is authorised to
carry on or engage in or any business or transaction capable of being
conducted so as to benefit the company;
(5) to take or otherwise acquire and hold securities in any other body
corporate having objects altogether or in part similar to those of the
company or carrying on any business capable of being conducted so as to
benefit the company;
(6) subject to section 96 to lend money to any employee or to any person having
dealings with the company or with whom the company proposes to have
dealings or to any other body corporate any of whose shares are held by the
company;
(7) to apply for, secure or acquire by grant, legislative enactment,
assignment, transfer, purchase or otherwise and to exercise, carry out and
enjoy any charter, licence, power, authority, franchise, concession, right
or privilege, that any government or authority or any body corporate or
other public body may be empowered to grant, and to pay for, aid in and
contribute toward carrying it into effect and to assume any liabilities or
obligations incidental thereto;
(8) to establish and support or aid in the establishment and support of
associations, institutions, funds or trusts for the benefit of employees or
former employees of the company or its predecessors, or the dependants or
connections of such employees or former employees, and grant pensions and
allowances, and make payments towards insurance or for any object similar
to those set forth in this paragraph, and to subscribe or guarantee money
for charitable, benevolent, educational or religious objects or for any
exhibition or for any public, general or useful objects;
(9) to promote any company for the purpose of acquiring or taking over any of
the property and liabilities of the company or for any other purpose that
may benefit the company;
(10) to purchase, lease, take in exchange, hire or otherwise acquire any
personal property and any rights or privileges that the company considers
necessary or convenient for the purposes of its business;
(11) to construct, maintain, alter, renovate and demolish any buildings or works
necessary or convenient for its objects;
(12) to take land in Bermuda by way of lease or letting agreement for a term not
exceeding fifty years, being land bona fide required for the purposes of
the business of the company and with the consent of the Minister granted in
his discretion to take land in Bermuda by way of lease or letting agreement
for a term not exceeding twenty-one years in order to provide accommodation
or recreational facilities for its officers and employees and when no
longer necessary for any of the above purposes to terminate or transfer the
lease or letting agreement;
A-II-7
(13) except to the extent, if any, as may be otherwise expressly provided in its
incorporating Act or memorandum and subject to this Act every company shall
have power to invest the moneys of the Company by way of mortgage of real
or personal property of every description in Bermuda or elsewhere and to
sell, exchange, vary, or dispose of such mortgage as the company shall from
time to time determine;
(14) to construct, improve, maintain, work, manage, carry out or control any
roads, ways, tramways, branches or sidings, bridges, reservoirs,
watercourses, wharves, factories, warehouses, electric works, shops, stores
and other works and conveniences that may advance the interests of the
company and contribute to, subsidise or otherwise assist or take part in
the construction, improvement, maintenance, working, management, carrying
out or control thereof;
(15) to raise and assist in raising money for, and aid by way of bonus, loan,
promise, endorsement, guarantee or otherwise, any person and guarantee the
performance or fulfilment of any contracts or obligations of any person,
and in particular guarantee the payment of the principal of and interest on
the debt obligations of any such person;
(16) to borrow or raise or secure the payment of money in such manner as the
company may think fit;
(17) to draw, make, accept, endorse, discount, execute and issue bills of
exchange, promissory notes, bills of lading, warrants and other negotiable
or transferable instruments;
(18) when properly authorised to do so, to sell, lease, exchange or otherwise
dispose of the undertaking of the company or any part thereof as an
entirety or substantially as an entirety for such consideration as the
company thinks fit;
(19) to sell, improve, manage, develop, exchange, lease, dispose of, turn to
account or otherwise deal with the property of the company in the ordinary
course of its business;
(20) to adopt such means of making known the products of the company as may seem
expedient, and in particular by advertising, by purchase and exhibition of
works of art or interest, by publication of books and periodicals and by
granting prizes and rewards and making donations;
(21) to cause the company to be registered and recognised in any foreign
jurisdiction, and designate persons therein according to the laws of that
foreign jurisdiction or to represent the company and to accept service for
and on behalf of the company of any process or suit;
(22) to allot and issue fully-paid shares of the company in payment or part
payment of any property purchased or otherwise acquired by the company or
for any past services performed for the company;
(23) to distribute among the members of the company in cash, kind, specie or
otherwise as may be resolved, by way of dividend, bonus or in any other
manner considered advisable, any property of the company, but not so as to
decrease the capital of the company unless the distribution is made for the
purpose of enabling the company to be dissolved or the distribution, apart
from this paragraph, would be otherwise lawful;
(24) to establish agencies and branches;
(25) to take or hold mortgages, hypothecs, liens and charges to secure payment
of the purchase price, or of any unpaid balance of the purchase price, of
any part of the property of the company of whatsoever kind sold by the
company, or for any money due to the company from purchasers and others and
to sell or otherwise dispose of any such mortgage, hypothec, lien or
charge;
(26) to pay all costs and expenses of or incidental to the incorporation and
organization of the company;
(27) to invest and deal with the moneys of the company not immediately required
for the objects of the company in such manner as may be determined;
(28) to do any of the things authorised by this Schedule and all things
authorised by its memorandum as principals, agents, contractors, trustees
or otherwise, and either alone or in conjunction with others;
A-II-8
(29) to do all such other things as are incidental or conducive to the
attainment of the objects and the exercise of the powers of the company.
Every company may exercise its powers beyond the boundaries of Bermuda to
the extent to which the laws in force where the powers are sought to be
exercised permit.
A-II-9
ANNEX III
AMENDED AND RESTATED
BYE-LAWS
OF
NABORS INDUSTRIES LTD.
(THE "COMPANY")
---------------------
INTERPRETATION
1. (1) In these Bye-laws, unless the context otherwise requires:
"Applicable Law" means all applicable laws, regulations or rules of any
statutory or non-statutory body, whether foreign or domestic, governing the
Company, the securities of the Company or the issue of, or the trading therein,
including the Companies Acts;
"Bermuda" means the Islands of Bermuda;
"Board" means the board of directors of the Company;
"Bye-laws" means these Bye-laws in their present form or as from time to
time amended;
"Clear Days" means, in relation to the period of a notice, that period
excluding the day on which the notice is given or served, or deemed to be given
or served, and the day for which it is given or on which it is to take effect;
"Companies Acts" means every Bermuda statute, regulation and order from
time to time in force concerning companies insofar as the same apply to the
Company;
"Company" means Nabors Industries Ltd., an exempted company incorporated in
Bermuda with registration number 31431;
"Director" means a director for the time being of the Company;
"Officer" means a Director, Secretary, or other officer of the Company
appointed pursuant to these Bye-laws, but does not include any person holding
the office of auditor in relation to the Company;
"Paid Up" means paid up or credited as paid up;
"Person Entitled by Transmission" means a person whose entitlement to a
Share in consequence of the death or bankruptcy of a Shareholder or of any other
event giving rise to its transmission by operation of law has been noted in the
Register pursuant to Bye-law 68.1;
"Register" means the register of Shareholders of the Company and includes
any branch register;
"Registered Office" means the registered office for the time being of the
Company;
"Resident Representative" means the person or, if permitted by the
Companies Acts, the company appointed to perform the duties of resident
representative of the Company as set out in the Companies Acts (and includes any
assistant or deputy resident representative appointed by the Board);
"Resolution" means a resolution of the Shareholders or, where required, of
a separate class or separate classes of Shareholders, adopted in general meeting
or passed in accordance with the provisions of these Bye-laws;
"Seal" means the common seal of the Company and includes any duplicate
seal;
"Secretary" means the Secretary of the Company or, if there are joint
Secretaries, any of the joint Secretaries and includes a deputy or assistant
Secretary and any person appointed by the Board to perform any of the duties of
the Secretary;
A-III-1
"Shareholder" means a holder of a Share (of any class);
"Share" means any share in the capital of the Company;
"Subsidiary" and "Holding Company" have the same meanings as in section 86
of the Companies Act 1981, except that references in that section to a company
shall include any body corporate or other legal entity, whether incorporated or
established in Bermuda or elsewhere; and
"US dollars" or "US$" means United States dollars.
2. For the purposes of these Bye-laws, unless the context otherwise requires:
(1) a company shall be deemed to be present in person at a meeting if its
representative, duly authorised pursuant to these Bye-laws, is present;
(2) words importing only the singular number include the plural number and
vice versa;
(3) words importing only one gender include the other gender;
(4) references to a company include any body corporate or other legal
entity, whether incorporated or established in Bermuda or elsewhere;
(5) references to a person include any company, partnership or other body
of persons, whether corporate or not, any trust and any government, governmental
body or agency or public authority, whether of Bermuda or elsewhere;
(6) references to writing include typewriting, printing, lithography,
photography, electronic mail and other modes of representing or reproducing
words in a legible and non-transitory form;
(7) references to anything being done by electronic means includes its
being done by means of any electronic or other communications equipment or
facilities and references to any communication being delivered or received, or
being delivered or received at a particular place, include the transmission of
an electronic or similar communication, to a recipient identified in such manner
or by such means, as the Board may from time to time approve or prescribe,
either generally or for a particular purpose;
(8) references to a signature or to anything being signed or executed
include such forms of electronic signature or other means of verifying the
authenticity of an electronic or similar communication as the Board may from
time to time approve or prescribe, either generally or for a particular purpose;
(9) references to a dividend include a distribution paid in respect of
Shares to Shareholders out of contributed surplus or any other distributable
reserve;
(10) any words or expressions defined in the Companies Acts, if not
otherwise defined in or given a particular meaning by these Bye-laws, have the
same meaning in these Bye-laws, except that the definition of "attorney" shall
not apply;
(11) (a) powers of delegation shall not be restrictively construed but the
widest interpretation shall be given thereto; (b) the word "Board" in the
context of the exercise of any power contained in these Bye-laws includes any
committee consisting of one or more Directors and any local or divisional Board,
manager or agent of the Company to which or, as the case may be, to whom the
power in question has been delegated; (c) no power of delegation shall be
limited by the existence or, except where expressly provided by the terms of
delegation, the exercise of any other power of delegation; and (d) except where
expressly provided by the terms of delegation, the delegation of a power shall
not exclude the concurrent exercise of that power by any other body or person
who is for the time being authorised to exercise it under these Bye-laws or
under another delegation of the powers;
(12) references to any statute or statutory provision (whether of Bermuda
or elsewhere) includes a reference to any modification or re-enactment of it for
the time being in force and to every rule, regulation or order made under it (or
under any such modification or re-enactment) and for the time being in force and
any reference to any rule, regulation or order made under any such statute or
statutory provision includes a reference to any modification or replacement of
such rule, regulation or order for the time being in force;
A-III-2
(13) references to Shares with the general right to vote at general
meetings of the Company are to those Shares (of any class or series) with the
right to vote, other than Shares which entitle the holders to vote only in
limited circumstances or upon the occurrence of a specified event or condition
(whether or not those circumstances have arisen or that event or condition has
occurred); and
(14) reference to "days" in these Bye-laws when in relation to notice or
limitation periods, deemed delivery, adjournments or Record Dates shall mean
"Clear Days".
REGISTERED OFFICE
3. The Registered Office. The Registered Office of the Company shall be at such
place within Bermuda as the Board may from time to time determine, but as at the
date of adoption of these Bye-laws and until a change is effected, such
Registered Office shall be at Cedar House, 41 Cedar Avenue, Hamilton, Bermuda HM
12. The Company may establish such other principal places of business as the
Board may determine from time to time.
SHARE CAPITAL, SHARE RIGHTS
4. Authorised Share Capital. Subject to any special rights conferred on the
holders of any Share or class of Shares, any Share in the Company may be issued
with or have attached thereto such preference, deferred, qualified or other
special rights or such restrictions, whether in regard to dividend, voting,
return of capital or otherwise, as the Shareholders may by Resolution determine
or, if there has not been any such determination or so far as the same shall not
make specific provision, as the Board may determine. As at the date of adoption
of these Bye-laws, the authorised share capital of the Company is US$425,000
divided into 400,000,000 Common Shares par value US$0.001 per Share (the "Common
Shares") and 25,000,000 Preferred Shares par value US$0.001 per Share (the
"Preferred Shares").
4.1 Subject to these Bye-laws, holders of the Common Shares shall:
(a) be entitled to one vote for each Common Share held by such holder
on the relevant record date on all matters submitted to a vote of the
Shareholders;
(b) be entitled to such dividends and other distributions in cash,
Shares or property of the Company out of assets or funds of the Company
legally available therefor, as the Board may from time to time declare; and
(c) generally be entitled to enjoy all of the rights attaching to
Shares under the Companies Acts.
4.2 For the purposes of these Bye-laws, the rights attaching to any of the
Common Shares shall be deemed not to be altered by the allotment or issue by the
Company of other Shares ranking in priority for payment of dividends or with
respect to capital, or which confer on the holders voting rights more favourable
than those conferred on the Common Shares, and shall not otherwise be deemed to
be altered by the creation or issue of further Shares ranking pari passu with
such Shares, or by the purchase or redemption by the Company of any of its own
Shares.
4.3 The Board is hereby expressly authorised to provide for the issuance of
all or any of the Preferred Shares in one or more classes or series, and to fix,
for each such class or series, the number of Shares which shall constitute such
class or series, full, limited or no voting power, designations, preferences,
special rights, qualifications, limitations and restrictions thereof, as shall
be stated and expressed in the resolution or resolutions adopted by the Board (a
copy of which shall be attached as an appendix to, but shall not form a part of,
these Bye-laws) providing for the issuance of such class or series, including,
without limitation, the authority to provide that any such class or series may
be: (a) subject to redemption at the option of the Company or the holders, or
both, at such time or times and at such price or prices; (b) entitled to receive
dividends (which may be cumulative or non-cumulative) at such rates, on such
conditions, and at such times, and payable in preference to, or in such relation
to, the dividends payable on any other class or classes or any other series; (c)
entitled to such rights upon the dissolution of, or upon any distribution of the
assets of, the
A-III-3
Company; or (d) convertible into, or exchangeable for, any other class or
classes of Shares, or of any other series of the same or any other class or
classes of Shares, of the Company at such price or prices or at such rates of
exchange and with such adjustments; all as may be stated in such resolution or
resolutions.
MODIFICATION OF RIGHTS
5. Share Rights May Be Altered. Subject to the Companies Acts, all or any of
the special rights for the time being attached to any class of Shares issued
may, unless otherwise expressly provided in the rights attaching to or by the
terms of issue of the Shares of that class, from time to time (whether or not
the Company is being wound up) be altered or abrogated by a Resolution passed at
a separate general meeting of the holders of Shares of that class, voting in
person or by proxy and representing at least a majority of the issued Shares of
that class entitled to vote. To any such separate general meeting, all the
provisions of these Bye-laws as to general meetings of the Company shall apply,
except that every holder of Shares of the relevant class shall be entitled on a
poll to one vote for every such Share held by such holder and any holder of
Shares of the relevant class present in person or by proxy may demand a poll.
5.1 For the purposes of this Bye-law, unless otherwise expressly provided
by the rights attached to any class of Shares, the rights attaching to any class
of Shares shall be deemed not to be altered by the allotment or issue by the
Company of other Shares ranking in priority of payment of dividends or with
respect to capital, or which confer on the holders voting rights more favourable
than those conferred on such class, and shall not otherwise be deemed to be
altered by the creation or issue of further Shares ranking pari passu with such
class, or by the purchase or redemption by the Company of any of its own Shares.
SHARES
6. Shares at the Disposal of the Board. Subject to the other provisions of
these Bye-laws, the unissued Shares of the Company (whether forming part of the
original Share capital or any increased capital) shall be at the disposal of the
Board, which may offer, allot, grant options, warrants or other rights over or
otherwise deal with or dispose of them to such persons, at such times and for
such consideration and generally on such terms and conditions as the Board may
from time to time determine. Shares may be issued in fractional denominations
and in such event the Company shall deal with such fractions to the same extent
as its whole Shares, so that a Share in a fractional denomination shall have, in
proportion to the fraction of a whole Share that it represents, all the rights
of a whole Share, including (but without limiting the generality of the
foregoing) the right to vote, to receive dividends and distributions and to
participate in a winding up.
7. Board May Pay Commissions. The Board may, in connection with the issue of
any Shares, exercise all powers of paying commissions and brokerages conferred
or permitted by Applicable Law.
8. Board May Repurchase Shares. Subject to the Companies Acts, the Company may
purchase its own Shares and the Board may (without the sanction of a Resolution)
authorise any exercise of the Company's power to purchase its own Shares,
whether in the market, by tender or by private agreement, at such prices
(whether at par or above or below par) and otherwise on such terms and
conditions as the Board may from time to time determine. The whole or any part
of the amount payable on any such purchase may be paid or satisfied otherwise
than in cash, to the extent permitted by the Companies Acts.
INCREASE OF CAPITAL
9. Shareholder Approval to Increase of Capital. The Shareholders may from time
to time increase the Company's capital by such sum to be divided into Shares of
such par value as the Shareholders by Resolution shall prescribe.
10. No Pre-emptive Rights. No holder of Shares of any class or other securities
of the Company shall as such holder have any pre-emptive right to purchase
Shares of any class or other securities of the Company or Shares or other
securities convertible into or exchangeable for or carrying rights or options to
purchase Shares of any class of the Company, whether such Shares or other
securities are now or hereafter authorised, which at
A-III-4
any time may be proposed to be issued by the Company or subjected to rights or
options to purchase granted by the Company.
11. Shares Subject to Bye-laws. All existing Shares and any new Shares shall be
subject to all the provisions of these Bye-laws.
ALTERATION OF CAPITAL
12. Shareholder Approval to Alteration of Capital. The Shareholders may
(subject to Bye-law 12.1) from time to time by Resolution:
(1) divide the Company's Shares into several classes and attach to them
respectively any preferential, deferred, qualified or special rights, privileges
or conditions;
(2) consolidate and divide all or any of the Company's share capital into
Shares of larger par value than any of its existing Shares;
(3) sub-divide the Company's Shares or any of them into Shares of smaller
par value than is fixed by its memorandum, provided, however, that in the
sub-division the proportion between the amount paid and the amount, if any,
unpaid on each reduced Share shall be the same as it was in the case of the
Share from which the reduced Share is derived;
(4) make provision for the issue and allotment of Shares which do not carry
any voting rights;
(5) cancel Shares which, at the date of the passing of the relevant
Resolution, have not been taken or agreed to be taken by any person, and
diminish the amount of the Company's authorised share capital by the amount of
the Shares so cancelled; and
(6) change the currency denomination of the Company's share capital.
12.1 Where any disagreement arises in regard to any division, consolidation
or sub-division under this Bye-law 12, the Board may settle the same as it
thinks expedient and, in particular, may arrange for the sale of the Shares
representing fractions, and the distribution of the net proceeds of sale in due
proportion among the Shareholders who would have been entitled to the fractions,
except that any proceeds in respect of any holding which are less than a sum
fixed by the Board may be retained for the benefit of the Company. For the
purpose of any such sale, the Board may authorise some person to transfer the
Shares representing fractions to the purchaser, who shall not be bound to see to
the application of the purchase money, nor shall such purchaser's title to the
Shares be affected by any irregularity or invalidity in the proceedings relating
to the sale.
13. Conversion of Preferred Shares. Subject to the Companies Acts and to any
confirmation or consent required by Applicable Law or these Bye-laws, the
Shareholders may from time to time by Resolution convert any Preferred Shares in
the Company (unless otherwise expressly provided by the rights attaching to or
by the terms of issue of the Preferred Shares in question) into redeemable
Preferred Shares.
REDUCTION OF CAPITAL
14. Shareholder Approval to Reduction of Capital. Subject to the Companies Acts
and to any confirmation or consent required by Applicable Law or these Bye-laws,
the Shareholders may from time to time by Resolution authorise the reduction in
any manner of the Company's issued share capital (but not to a sum less than the
minimum share capital prescribed by its memorandum) or any share premium
account.
14.1 In relation to any such reduction, the Shareholders may by Resolution
determine the terms upon which the reduction is to be effected, including, in
the case of a reduction of part only of a class of Shares, those Shares to be
affected.
A-III-5
MEETINGS OF SHAREHOLDERS
15. Annual General Meeting. The Annual General Meeting of Shareholders shall be
held in each calendar year on such date and at such time as shall be designated
from time to time by the Board and stated in the notice of the meeting, at which
meeting the Shareholders shall elect directors, appoint auditors and transact
such other business as may properly be brought before the meeting. All other
general meetings of the Shareholders called pursuant to the requirements of the
Companies Act or these Bye-laws shall be referred to as Special General
Meetings.
16. Special General Meetings. Special General Meetings of the Shareholders, may
be called at any time for any purpose or purposes by the Board or as otherwise
provided for by Applicable Law, and shall be held at such place, and at such
hour as may be designated by the Board in the notice of the meeting; provided,
however, that the time so fixed shall permit the giving of notice as provided in
Bye-law 17, unless such notice is waived as provided by Applicable Law or by
these Bye-laws. Special General Meetings shall also be called and held in such
cases and in such manner as may be specifically required by the Companies Acts.
17. Notice of Meetings. Written notice of each meeting of the Shareholders,
which shall state the place, date and hour of the meeting and, in the case of a
Special General Meeting or where otherwise required by Applicable Law, the
purpose or purposes for which it is called, shall be given, unless a different
period is required by Applicable Law, not less than ten (10) nor more than sixty
(60) days before the date of such meeting, by or at the direction of the person
calling the meeting, to each Shareholder entitled to vote at such meeting by
mail or by e-mail or any other electronic means at the Shareholder's address as
it appears on the Register of Shareholders or at any other address given in
writing by such Shareholder to the Company for such purpose. Notice of each
Annual or Special General Meeting shall also be given in the same manner as
described above to any Director or Resident Representative of the Company who
has delivered a written notice to the Company's registered office requiring that
such notice be sent to such person. Any notice given in the manner set forth in
this Bye-law 17 shall be deemed duly given and shall be deemed to have been
served five days after dispatch if sent by post or twenty-four (24) hours after
its dispatch by any other means. Except as otherwise provided by these Bye-laws
and the Companies Acts, no business other than that stated in the notice shall
be transacted at any meeting without the unanimous consent of all the
Shareholders entitled to vote thereat. When a meeting is adjourned to another
time or place, notice need not be given if the time and place thereof are
announced at the meeting at which the adjournment is taken. If the adjournment
is for more than thirty (30) days after the date of the original meeting, or if
after the adjournment a new record date is fixed for the adjourned meeting, a
notice of the adjourned meeting shall be given to each Shareholder of record
entitled to vote at the meeting. The accidental omission to give notice of a
meeting, or (in cases where instruments of proxy are sent out with the notice)
the accidental omission to send such instrument of proxy to, or the non-receipt
of notice of a meeting or such instrument of proxy by, any person entitled to
receive such notice shall not invalidate the proceedings at that meeting.
18. Nature of Business at Meetings of Shareholders. Subject to the terms of
these Bye-laws and the Companies Acts, no business may be transacted at an
Annual General Meeting of the Shareholders, other than business that is either
(a) specified in the notice of meeting (or any supplement thereto) given by or
at the direction of the Board (or any duly authorized committee thereof), (b)
otherwise properly brought before the Annual General Meeting by or at the
direction of the Board (or any duly authorized committee thereof) or (c)
otherwise properly brought before the Annual General Meeting by any Shareholder
of the Company (i) who is a Shareholder of record on the date of the giving of
the notice provided for in this Bye-law 18 and on the record date for the
determination of Shareholders entitled to vote at such Annual General Meeting
and (ii) who complies with the notice procedures set forth in this Bye-law 18.
18.1 In addition to any other applicable requirements, for business to be
properly brought before an Annual General Meeting by a Shareholder, such
Shareholder must have given timely notice thereof in proper written form to the
Secretary of the Company as provided below.
18.2 With regard to an Annual General Meeting, to be timely, a
Shareholder's notice to the Secretary must be delivered to or mailed and
received at the Registered Office and the principal executive offices of the
Company as set forth in the Company's filings with the Securities and Exchange
Commission not less than
A-III-6
sixty (60) days nor more than ninety (90) days prior to the anniversary date of
the immediately preceding Annual General Meeting of Shareholders; provided,
however, that in the event that the Annual General Meeting is called for a date
that is not within thirty (30) days before or after such anniversary date,
notice by the Shareholder in order to be timely must be so received not later
than the close of business on the tenth (10th) day following the day on which
such notice of the date of the Annual General Meeting was mailed or such public
disclosure of the date of the Annual General Meeting was made, whichever first
occurs.
18.3 To be in proper written form, a Shareholder's notice to the Secretary
must set forth as to each matter such Shareholder proposes to bring before the
Annual General Meeting (i) a brief description of the business desired to be
brought before the Annual General Meeting and the reasons for conducting such
business at the Annual General Meeting, (ii) the name and record address of such
Shareholder, (iii) the class or series and number of Shares of the Company which
are owned beneficially or of record by such Shareholder, (iv) a description of
all arrangements or understandings between such Shareholder and any other person
or persons (including their names) in connection with the proposal of such
business by such Shareholder and any material interest of such Shareholder in
such business and (v) a representation that such Shareholder intends to appear
in person or by proxy at the Annual General Meeting to bring such business
before the meeting.
18.4 No business shall be conducted at the Annual General Meeting of
Shareholders except business brought before the Annual General Meeting in
accordance with the procedures set forth in this Bye-law; provided, however,
that, once business has been properly brought before the Annual General Meeting
in accordance with such procedures, nothing in this Bye-law shall be deemed to
preclude discussion by any Shareholder of any such business. If the Chairman of
an Annual General Meeting determines that business was not properly brought
before the Annual General Meeting in accordance with the foregoing procedures,
the Chairman shall declare to the meeting that the business was not properly
brought before the meeting and such business shall not be transacted.
19. Quorum. Except as otherwise required by Applicable Law, or these Bye-laws,
at all meetings of the Shareholders, the holders of a majority of the Shares
issued and outstanding and entitled to vote shall be present in person or
represented by proxy in order to constitute a quorum for the transaction of any
business. The Chairman or a majority vote of the Board or the affirmative vote
of the holders of a majority of the Shares present in person or represented by
proxy at the meeting and entitled to vote thereat, whether or not a quorum shall
be present, may adjourn the meeting from time to time, to a specified date or
place. At any such adjourned meeting at which a quorum may be present, the
Company may transact any business which might have been transacted at the
original meeting.
19.1 As to any matter with respect to which a separate class vote is
required by the terms of the Companies Acts, the holders of a majority of the
Shares of such class which are then outstanding and entitled to vote shall be
present in person or represented by proxy in order to constitute a quorum for
the purpose of any separate vote required by such class.
19.2 The absence from any meeting of the number of Shares required by
Applicable Law or these Bye-laws for action upon one matter shall not prevent
action at such meeting upon any other matter or matters which may properly come
before the meeting, if the number of Shares required in respect of such other
matters shall be present.
20. Organization. At each meeting of the Shareholders, the Chairman of the
Board or, in his absence or inability to act, the most senior present Vice
Chairman or, in the absence or inability to act of any Vice Chairman, the
President or, in his absence or inability to act, a Vice President or, in his
absence or inability to act, any person as may be designated by the Board or, in
the absence of such designation, a chairman to be chosen at the meeting by the
majority of those Shareholders present in person or represented by proxy shall
act as chairman of the meeting. The Secretary or, in his absence or inability to
act, an Assistant Secretary, or in his absence or inability to act, any person
as may be designated from time to time by the Board shall act as secretary of
each meeting of Shareholders and keep the minutes thereof; if no such person is
present or has been chosen, the holders of record of a majority of Shares
present in person or represented by proxy and entitled to vote at the meeting
shall choose any person present to act as secretary of the meeting.
A-III-7
21. Order of Business. The order of business at all meetings of the
Shareholders shall be as determined by the chairman of the meeting.
22. Voting and Required Vote. At each meeting of Shareholders, each Shareholder
shall be entitled to one vote for each Share held by such Shareholder except as
otherwise provided for by the rights attaching to such Share or these Bye-laws.
Except as may otherwise be provided for in these Bye-laws, and subject to
Applicable Law, at each meeting of Shareholders if there shall be a quorum, the
affirmative vote of the holders of a majority of Shares present in person or
represented by proxy and entitled to vote thereat, shall decide all matters
brought before such meeting.
23. Proxies. Each Shareholder entitled to vote at any meeting of Shareholders
or to express consent or dissent to corporate action in writing without a
meeting may authorize another person or persons to act for him by proxy. Any
such proxy shall be delivered to the secretary of such meeting at or prior to
the time designated in the order of business for so delivering such proxies.
Each such proxy shall be in writing in any common form or in such other form as
the Board may approve and, executed by the Shareholder or his duly authorized
attorney-in-fact, but no such proxy shall be voted after three years from its
date unless such proxy provides for a longer period. A duly executed proxy shall
be irrevocable if it states that it is irrevocable and if, and only as long as,
it is coupled with an interest sufficient in law to support an irrevocable
power. A proxy may be made irrevocable regardless of whether the interest with
which it is coupled is an interest in the Share itself or an interest in the
Company generally.
23.1 The appointment of a proxy in relation to a particular meeting shall,
unless the contrary is stated, be valid for any adjournment of the meeting and
the appointment of a proxy in relation to a particular meeting or adjourned
meeting shall unless the contrary is stated, be valid for any poll demanded at
the meeting or adjourned meeting.
23.2 Subject to the Companies Act, the Board may also at its discretion
waive any of the provisions of these Bye-laws relating to the execution and
deposit of an instrument or other form of communication appointing or evidencing
the appointment of a proxy or any ancillary matter (including, without
limitation, any requirement for the production or delivery of any instrument or
other communication to any particular place or by any particular time or in any
particular way) and, in any case in which it considers it appropriate, may
accept such instrument or other form of communication evidencing the appointment
of a proxy or such verbal or other assurances as it thinks fit as to the right
of any person to attend and vote on behalf of any Shareholder at any general
meeting.
24. List of Shareholders. A complete list of the Shareholders entitled to vote
at any meeting, arranged in alphabetical order, with the address of each, and
the number of Shares held by each, shall be prepared, or shall be caused to be
prepared, by the Secretary and shall be open to examination of any Shareholder,
for any purpose germane to the meeting, during ordinary business hours, for a
period of at least ten (10) days prior to the meeting, either at a place within
the city in which the meeting is to be held, which place shall be specified in
the notice of the meeting, or, if not so specified, at the place where the
meeting is to be held. The list shall also be produced and kept at the place of
the meeting during the whole time thereof, and may be inspected by any
Shareholder who is present. The Share ledger shall be the only evidence as to
the Shareholders entitled to examine the Share ledger, the list required by
these Bye-laws or the books of the Company, or to vote in person or by proxy at
any meeting of the Shareholders.
25. Voting by Fiduciaries, Pledgors and Joint Owners. Persons holding Shares in
a fiduciary capacity shall be entitled to vote the Shares so held. Persons whose
Shares are pledged shall be entitled to vote, unless in the transfer by the
pledgor on the books of the Company he has expressly empowered the pledgee to
vote thereon, in which case only the pledgee, or his proxy, may represent such
Shares and vote thereon.
25.1 If Shares or other securities having voting power stand of record in
the names of two or more persons, whether fiduciaries, members of a partnership,
joint tenants, tenants-in-common, tenants by the entirety or otherwise, or if
two or more persons have the same fiduciary relationship respecting the same
Shares, unless the Secretary is given written notice to the contrary and is
furnished with a copy of the
A-III-8
instrument or order appointing them or creating the relationship wherein it is
so provided, their acts with respect to voting shall have the following effect:
(a) if only one votes, his act binds all;
(b) if more than one votes, the act of the majority so voting binds
all; and
(c) if more than one votes, but the vote is evenly split on any
particular matter, each faction may vote the securities in question
proportionally, or any person voting the Shares, or a beneficiary, if any,
may apply to such court as may have jurisdiction to appoint an additional
person to act with the persons so voting the Shares, which shall then be
voted as determined by a majority of such persons and the person appointed
by a court of competent jurisdiction. If the instrument so filed shows that
any such tenancy is held in unequal interest, a majority or even-split for
the purpose of this paragraph shall be a majority or even-split in
interest.
26. Consent of Shareholders in Lieu of Meeting. Except in the case of the
removal of auditors and Directors, anything which may be done by Resolution in
general meeting may, without a meeting and without any previous notice being
required, be done by Resolution in writing, signed by all of the Shareholders or
their proxies, or in the case of a Shareholder that is a corporation (whether or
not a company within the meaning of the Companies Acts) on behalf of such
Shareholder, being all of the Shareholders of the Company who at the date of the
Resolution in writing would be entitled to attend a meeting and vote on the
Resolution. Such Resolution in writing may be signed in as many counterparts as
may be necessary.
ELECTION OF DIRECTORS
27. Nomination of Directors. Only persons who are nominated in accordance with
the following procedures shall be eligible for election as directors of the
Company. Nominations of persons for election to the Board may be made at any
Annual General Meeting of Shareholders, or at any Special General Meeting of
Shareholders called for the purpose of electing directors, (a) by or at the
direction of the Board (or any duly authorized committee thereof), (b) by any
Shareholders of the Company pursuant to the valid exercise of the power granted
under the Companies Act, or (c) by any Shareholder of the Company (i) who is a
Shareholder of record on the date of the giving of the notice provided for in
this Bye-law 2 and on the record date for the determination of Shareholders
entitled to vote at such meeting and (ii) who complies with the notice
procedures set forth in this Bye-law 27.
27.1 In addition to any other applicable requirements, for a nomination to
be made by a Shareholder, such Shareholder must have given timely notice thereof
in proper written form to the Secretary of the Company. To be timely, a
Shareholder's notice to the Secretary must be delivered to or mailed and
received at the Registered Office and the principal executive offices of the
Company as set forth in the Company's filings with the Securities and Exchange
Commission (a) in the case of an Annual General Meeting, not less than sixty
(60) days nor more than ninety (90) days prior to the anniversary date of the
immediately preceding Annual General Meeting; provided, however, that in the
event that the Annual General Meeting is called for a date that is not within
thirty (30) days before or after such anniversary date, notice by the
Shareholder in order to be timely must be so received not later than the close
of business on the tenth (10th) day following the day on which such notice of
the date of the Annual General Meeting was mailed or such public disclosure of
the date of the Annual General Meeting was made, whichever first occurs; and (b)
in the case of a Special General Meeting called for the purpose of electing
directors, not later than the close of business on the tenth (10th) day
following the day on which notice of the date of the Special General Meeting was
mailed or public disclosure of the date of the Special General Meeting was made,
whichever first occurs.
27.2 To be in proper written form, a Shareholder's notice to the Secretary
must set forth (a) as to each person whom the Shareholder proposes to nominate
for election as a Director (i) the name, age, business address and residential
address of the person, (ii) the principal occupation or employment of the
person, (iii) the class or series and number of Shares which are owned
beneficially or of record by the person, and (iv) any other information relating
to the person that would be required to be disclosed in a proxy statement or
other filings required to be made in connection with solicitations of proxies
for election of directors pursuant to Section 14 of the U.S. Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and the rules
A-III-9
and regulations promulgated thereunder; and (b) as to the Shareholder giving the
notice (i) the name and record address of such Shareholder, (ii) the class or
series and number of Shares which are owned beneficially or of record by such
Shareholder, (iii) a description of all arrangements or understandings between
such Shareholder and each proposed nominee and any other person or persons
(including their names) pursuant to which the nomination(s) are to be made by
such shareholder, (iv) a representation that such shareholder intends to appear
in person or by proxy at the meeting to nominate the persons named, in its
notice, and (v) any other information relating to such shareholder that would be
required to be disclosed in a proxy statement or other filings required to be
made in connection with solicitations of proxies for election of directors
pursuant to Section 14 of the Exchange Act and the rules and regulations
promulgated thereunder. Such notice must be accompanied by a written consent of
each proposed nominee to being named as a nominee and to serve as a Director if
elected.
27.3 No person shall be eligible for election as a Director of the Company
unless nominated in accordance with the procedures set forth in this Bye-law 27.
If the Chairman of the meeting determines that a nomination was not made in
accordance with the foregoing procedures, the Chairman shall declare to the
meeting that the nomination was defective and such defective nomination shall be
disregarded.
BOARD OF DIRECTORS
28. General Powers. The business and affairs of the Company shall be managed by
or under the direction of a Board, which may exercise all such authority and
powers of the Company and do all such lawful acts and things as are not by
Applicable Law, or by these Bye-laws, directed or required to be exercised or
done by the Shareholders or such other persons as provided therein.
29. Number, Election and Term of Directors. The Board shall consist of not less
than five (5) and not more than eighteen (18) Directors. Directors shall be
elected or appointed at the Annual General Meeting or at any Special General
Meeting called for that purpose by a plurality of votes of the Shareholders,
except that any vacancies which result from the death, resignation, retirement,
disqualification or removal of a Director may be filled by a majority of the
Board then in office provided that any Director elected to fill such a vacancy
shall be subject to the same term of office as the director being replaced. Any
general meeting may authorise the Board to fill any vacancy left unfilled at a
general meeting. The number of Directors to be elected at any time within the
minimum and maximum limitations specified herein shall be determined from time
to time by the Board pursuant to a resolution adopted by the vote of a majority
of the Board then in office provided always that there are at least two
Directors to manage the affairs of the Company and provide a quorum for a
meeting of the Board. Subject to the quorum requirements set forth in Bye-law
36, during the existence of a vacancy on the Board the remaining Directors shall
have full power to act. No Director may appoint any other person as an alternate
director to replace himself or herself.
29.1 The Board shall be divided as equally as may be practical into three
classes. Each Director of the first class shall (unless his or her office is
vacated in accordance with these Bye-laws) serve initially until the conclusion
of the Annual General Meeting of the Shareholders held in the calendar year
2003, and subsequently shall (unless his or her office is vacated in accordance
with these Bye-laws) serve for three-year terms, each concluding at the third
Annual General Meeting after such class of Directors was last appointed or
reappointed. Each Director of the second class shall (unless his or her office
is vacated in accordance with these Bye-laws) serve initially until the
conclusion of the annual general meeting of the Shareholders held in the
calendar year 2004, and subsequently shall (unless his or her office is vacated
in accordance with these Bye-laws) serve for three-year terms, each concluding
at the third Annual General Meeting after such class of Directors was last
appointed or reappointed. Each Director of the third class shall (unless his or
her office is vacated in accordance with these Bye-laws) serve initially until
the conclusion of the Annual General Meeting of the Shareholders held in the
calendar year 2005, and subsequently shall (unless his or her office is vacated
in accordance with these Bye-laws) serve for three-year terms, each concluding
at the third annual general meeting after such class of Directors together was
last appointed or reappointed. At each annual election thereafter, the
successors of the Directors of the class whose term expires in that year shall
be elected to hold office for a term of three years, so that the term of office
of one class of Directors shall expire each year. All
A-III-10
Directors upon election or appointment (but not on reappointment) must provide
written acceptance of their appointment, in such form as the Board may think
fit, by notice in writing to the Registered Office within thirty (30) days of
their appointment.
29.2 If the number of Directors is changed, any increase in directorships
or decrease in directorships shall be apportioned among the classes so as to
make all classes as nearly equal in number as practical. In case of any increase
in the number of Directors within the minimum and maximum limitations specified
in this Bye-law, additional Directors may be appointed by the Board to fill such
vacancy. Any such Director so appointed shall hold office for a term that shall
coincide with the remaining term of that class to which he is elected and until
his or her successor shall have been elected and qualified. No decrease in the
number of Directors shall shorten the term of any incumbent Director.
29.3 The Shareholders may remove a Director prior to the expiration of his
or her term, only for cause, at a Special General Meeting called for that
purpose by the affirmative vote of a majority of the outstanding Shares entitled
to vote at such meeting, provided notice of any such meeting shall be served
upon the Director concerned not less than fourteen (14) days before the meeting
and he or she shall be entitled to be heard at that meeting. Any vacancy created
by the removal of a Director may be filled by the affirmative vote of a majority
of the outstanding shares entitled to vote at the same meeting by the election
of another Director in his or her place or, in the absence of any such election,
by the Board.
30. Resignations. In addition to those circumstances in which a Director may be
removed from office pursuant to these Bye-laws, the office of a Director shall
be vacated:
(1) if the Director resigns from office, on the date on which notice of his
or her resignation is delivered to the Registered Office or tendered at a
meeting of the Board or on such later date as may be specified in such notice;
or
(2) if the Director dies, becomes physically incapable of discharging his
or her duty to the Company in accordance with Applicable Laws or becomes of
unsound mind or a patient for any purpose of any statute or applicable law
relating to mental health, on the date of death or the date on which the Board
resolves that his or her office is vacated; or
(3) on his or her becoming bankrupt; or
(4) on his or her being prohibited by Applicable Law from being a Director;
or
(5) on his or her ceasing to be a Director by virtue of any provision of
the Companies Acts.
31. Annual Board Meetings. The annual meeting of the Board for the purpose of
organizing the Board, appointing officers and members of committees and
transacting other business, shall be held immediately following the Annual
General Meeting of the Shareholders at the same place where such meeting of
Shareholders shall be held or at such place and time as may be determined by the
Board; provided, however, that the time so fixed shall permit the giving of
notice as provided in these Bye-laws.
32. Regular Board Meetings. Additional regular meetings of the Board may be
held at such time and place as shall from time to time be determined by the
Board; provided, however, that the time so fixed shall permit the giving of
notice as provided in these Bye-laws.
33. Special Board Meetings. Special meetings of the Board may be called at any
time by the Chairman of the Board, the Vice Chairman, the President or any Vice
President or by two or more Directors and shall be held at such time and place
as may be fixed by the person or persons calling the meeting; provided, however,
that the time so fixed shall permit the giving of notice as provided in these
Bye-laws.
34. Notice of Board Meetings. Notice of a meeting of the Board shall be deemed
to be duly given to a Director if it is given to the Director personally or by
word of mouth or sent to the Director by post, facsimile or other electronic
means at his or her last known address or any other address given by him or her
to the Company for this purpose. A Director may retrospectively waive the
requirement for notice of any meeting by consenting in writing to the business
conducted at the meeting.
A-III-11
35. Organization of Board Meetings. The Chairman of the Board shall preside
over all meetings of the Board at which he or she is present. In his or her
absence or inability to act, the most senior Vice Chairman present at the
meeting shall preside. In the absence or inability to act of the Chairman or any
Vice Chairmen, the Board shall select a chairman of the meeting from among the
Directors present. The Secretary or, in his or her absence or inability to act,
an Assistant Secretary, or in his or her absence or inability to act, another
Director selected by the Board shall act as secretary of the meeting and keep
the minutes thereof.
36. Quorum and Voting at Board Meetings. At all meetings of the Board the
presence in person of the greater of two Directors, and one-third of the total
number of Directors constituting the entire Board then in office, shall be
necessary and sufficient to constitute a quorum for the transaction of any
business by the Board at such meeting, except as otherwise provided by these
Bye-laws or Applicable Law. At any meeting of the Board, no action shall be
taken (except adjournment, in the manner provided below) until after a quorum
has been established.
36.1 Except as otherwise provided by Applicable Law or these Bye-laws, the
act of a majority of Directors who are present at a meeting at which a quorum
previously has been established (or at any adjournment of such meeting, provided
that a quorum shall have previously been established at such adjourned meeting)
shall be the act of the Board, regardless of whether or not a quorum is present
at the time such action is taken. In determining the number of directors who are
present at the time any such action is taken, any Director who is in attendance
at such meeting but who, for just cause, is disqualified to vote on such matter,
shall not be considered as being present at the time of such action for the
purpose of establishing the number of votes required to take action on any
matter submitted to the Board, but shall be considered as being present for
purposes of determining the existence of a quorum.
36.2 In the event a quorum cannot be established at the beginning of a
meeting, a majority of the Directors present at the meeting, or the Secretary of
the Company, if there be no Director present, may adjourn the meeting from time
to time until a quorum be present. Only such notice of such adjournment need be
given as the Board may from time to time prescribe.
37. Regulations of the Board. The Board may adopt such rules and regulations
for the conduct of its meetings and or the management of the business and
affairs of the Company as it may deem proper and not inconsistent with
Applicable Law and these Bye-laws.
38. Written Consent in Lieu of Board Meetings. A resolution in writing signed
or approved by all the Directors shall be as valid and effectual as a resolution
passed at a meeting of the Board duly called and constituted. Such a resolution
may be contained in one document or in several documents in like form, each
signed or approved by one or more of the Directors and shall take effect as of
the time of the last signature is affixed.
39. Telephonic Participation in Board Meetings. Any and all members of the
Board may participate in a meeting of the Board by means of a conference
telephone, satellite, video-conference or similar communications equipment by
means of which all persons participating in such meeting shall hear each other;
participation in a meeting pursuant to this Bye-law 39 shall constitute presence
in person at such meeting.
40. Compensation of Directors. Directors shall be entitled to such compensation
for their services as Directors and to such reimbursement for any reasonable
expense incurred in attending meetings of the Board as may from time to time be
fixed by the Board. The compensation may be on such basis as is determined by
the Board. Any Director may waive compensation for any meeting. Any Director
receiving compensation under these provisions shall not be barred from serving
the Company in any other capacity and receiving compensation and reimbursement
for reasonable expenses for such other services.
41. Delegation of Board Powers. The Board may by power of attorney or otherwise
appoint any person, whether nominated directly or indirectly by the Board, to be
the attorney or agent of the Company and may delegate to such person any of the
Board's powers, authorities and discretions (with power to sub-delegate) for
such period and subject to such conditions as it may think fit. The Board may
revoke or vary any such appointment or delegation, but no person dealing in good
faith and without notice of such revocation or variation shall be affected by
any such revocation or variation. Any such power of attorney or other
A-III-12
documentation may contain such provisions for the protection and convenience of
persons dealing with any such attorney or agent as the Board may think fit.
41.1 The Board may entrust to and confer upon any Officer any of its
powers, authorities and discretions (with power to sub-delegate) on such terms
and conditions with such restrictions as it thinks fit and either collaterally
with, or to the exclusion of, its own powers and may from time to time revoke or
vary all or any of such powers, but no person dealing in good faith and without
notice of such revocation or variation shall be affected by any revocation or
variation.
41.2 The Board may delegate any of its powers, authorities and discretions
(with power to sub-delegate) to any committee of the Board, consisting of such
number of Directors as it thinks fit. The Board may make any such delegation on
such terms and conditions with such restrictions as it thinks fit and either
collaterally with, or to the exclusion of, its own powers and may from time to
time revoke or vary such delegation, but no person dealing in good faith and
without notice of such revocation or variation shall be affected by any
revocation or variation. Any committee so formed shall, in the exercise of the
powers, authorities and discretions so delegated, conform to any regulations
that may be imposed on it by the Board. The power to delegate to a committee
extends to all the powers, authorities and discretions of the Board generally
and shall not be limited by the fact that certain provisions of these Bye-laws
expressly refer to a committee or to the particular powers, authorities or
discretions of the Board or a Board committee.
COMMITTEES
42. Executive Committee. The Board may appoint an Executive Committee
consisting of one or more Directors, one of whom shall be designated as Chairman
of the Executive Committee. Each member of the Executive Committee shall
continue as a member thereof until the expiration of his or her term as a
Director or his or her earlier resignation or removal as a member of the
Executive Committee or as a Director or until his or her death.
43. Powers of the Executive Committee. The Executive Committee shall have and
may exercise all the powers and authority of the Board in the management of the
business and affairs of the Company, and may authorize the seal of the Company
to be affixed to all papers which may require it; but shall not have power or
authority in reference to the following matters: (i) approving or adopting, or
recommending to the Shareholders, any action or matter expressly required by
Applicable Law to be submitted to Shareholders for approval or (ii) adopting,
amending or repealing any Bye-law of the Company.
44. Procedures and Meetings of the Executive Committee. The Executive Committee
shall fix its own rules of procedure and shall meet at such times and at such
place or places as may be provided by such rules or as the members of the
Executive Committee shall fix. The Executive Committee shall keep minutes of its
meetings, which it shall deliver to the Board from time to time. The Chairman of
the Executive Committee or, in his or her absence, a member of the Executive
Committee chosen by a majority of the members present shall preside at meetings
of the Executive Committee, and the Secretary, or in his or her absence, an
Assistant Secretary, or in his or her absence another member of the Executive
Committee chosen by the Executive Committee, shall act as secretary of the
Executive Committee.
45. Quorum and Voting of the Executive Committee. A majority of the Executive
Committee shall constitute a quorum for the transaction of business, and the
affirmative vote of a majority of the members present at any meeting at which
there is a quorum shall be required for any action of the Executive Committee;
provided, however, that when an Executive Committee of one member is authorized
under the provisions of these Bye-laws, that one member shall constitute a
quorum.
46. Other Committees. The Board may appoint such other committee or committees
as it shall deem advisable and with such rights, powers, and authority as it
shall prescribe. Each such committee shall consist of one or more Directors.
Unless otherwise provided by the Board or these Bye-laws, a majority of the
members of each such other committee shall constitute a quorum, and the acts of
a majority of the members present at a meeting at which a quorum is present
shall be the act of such committee.
A-III-13
47. Vacancies; Committee Changes. In the absence or disqualification of a
member of any committee, the member or members thereof present at any meeting
and not disqualified from voting, whether or not he or they constitute a quorum,
may unanimously appoint another member of the Board to act at the meeting in the
place of any such absent or disqualified member.
47.1 The Board shall have the power at any time to fill vacancies in, to
change the membership of, and to discharge, any committee or any member of any
committee.
48. Compensation of Committee Members. Members of any committee shall be
entitled to such compensation for their services as members of the committee and
to such reimbursement for any reasonable expenses incurred in attending
committee meetings as may from time to time be fixed by the Board. Any committee
member may waive compensation for any meeting. Any committee member receiving
compensation under these provisions shall not be barred from serving the Company
in any other capacity and from receiving compensation and reimbursement of
reasonable expenses for such other services.
49. Telephonic Participation in Committee Meetings. Any and all members of any
committee designated by the Board may participate in a meeting of such committee
by means of conference telephone, satellite, video-conference or similar
communications equipment by means of which all persons participating in such
meeting can hear each other, and participation in such a meeting pursuant to
this Bye-law shall constitute presence in person at such meeting.
50. Written Consent in Lieu of Committee Meetings. A resolution in writing
signed or approved by all the members of any committee of the Board shall be as
valid and effectual as a resolution passed at a meeting of the committee duly
called and constituted. Such a resolution may be contained in one document or in
several documents in like form, each signed or approved by one or more of the
committee members and shall take effect as of the time of the last signature is
affixed.
NOTICES
51. Waiver of Notices. Whenever any notice is required to be given by
Applicable Law or these Bye-laws, a written waiver thereof; signed by the person
or persons entitled to such notice, whether before or after the time stated
therein, shall be deemed equivalent to such notice. Neither the business to be
transacted at, nor the purpose of any general meeting of Shareholders, any
meeting of other securityholders, the Board, or any committee of the Board need
be specified in any written waiver of notice unless so required by Applicable
Law or these Bye-laws.
52. Attendance at Meetings. Attendance of a person at any meeting, whether of
Shareholders or other securityholders (in person or by proxy), or the Board or
any committee of the Board, shall constitute a waiver of notice of such meeting,
except when such person attends such meeting for the express purpose of
objecting, and objects, at the beginning of the meeting, to the transaction of
any business on the ground that the meeting is not legally called or convened.
OFFICERS
53. Number and Qualifications of Officers. The officers of the Company shall
include the Chairman, one or more Deputy Chairmen, and a Secretary and may
include a President, one or more Vice Presidents, a Treasurer and such other
officers as may be elected or appointed in accordance with the provisions of
these Bye-laws. As and when elected or appointed the officers shall have such
power and perform such duties as set out in these Bye-laws or as otherwise
provided in a resolution of the Board. Any number of offices, except the offices
of President and Secretary, may be held by the same person.
54. Selection, Term of Office and Qualification of Officers. The officers shall
be elected from time to time by the Board at its first regular meeting after
each Annual General Meeting of Shareholders. Each officer shall hold his or her
office until his or her successor is elected and qualified or until he or she
shall resign in the manner provided in these Bye-laws, or until he or she shall
have been removed in the manner provided in these Bye-law, or until his or her
death. Other officers, including without limitation one or more Assistant
A-III-14
Treasurers and one or more Assistant Secretaries shall be chosen in such manner,
hold office for such period, have such authority, perform such duties and be
subject to removal as may be prescribed by the Board.
55. Resignations of Officers. Any officer may resign at any time upon written
notice to the Board, the President or the Secretary. Any such resignation shall
take effect at the time specified therein or, if the time when it shall become
effective shall not be specified therein, immediately upon its receipt thereof
by the Board or any such officer.
56. Removal of Officers. Any officer may be removed at any time, either with or
without cause, by the Board; and any officer not elected by the Board may be
removed in such manner as may be determined by the Board. Removal from office
however, shall not prejudice the contractual rights, if any, of the person
removed except as provided in such contract or such rights as otherwise may be
afforded by Applicable Law.
57. Vacancies in any Office. Any vacancy occurring in any office of the Company
which is required by these Bye-laws to be elected by the Board, whether by
death, resignation, removal or otherwise, shall be filled for the unexpired
portion of the term by the Board. A vacancy in any other office shall be filled
in such manner as may be determined by the Board.
58. Chairman. The Chairman, subject to the direction of the Board, shall have
general charge of the business, affairs and property of the Company and general
supervision over its other officers and agents and shall see that all orders and
resolutions of the Board are carried into effect and, subject to appointment by
the Board, may also hold such other office including Chief Executive Officer or
Chief Operating Officer of the Company.
59. Deputy Chairman. The Deputy Chairman or, in the event there be more than
one, the Deputy Chairmen in the order designated, or in the absence of any
designation, in the order of their seniority, shall have such powers and perform
such duties as may from time to time be assigned to him by the Board and shall
report to the Chairman, subject to the control of the Board.
60. The President. The President, subject to the control of the Chairman and
the Board, shall have general and active management of the business of the
Company and the general and active supervision and direction over the business
operations and affairs of the Company and over its several officers, agents and
employees and, subject to the appointment by the Board, may also hold such other
office including Chief Executive Officer or Chief Operating Officer of the
Company. He or she shall, unless also a Director, be an ex officio member of all
committees of the Board. In general, he or she shall have such other powers and
shall perform such other duties as usually pertain to the office of President or
as from time to time may be assigned to him or her by the Board or these
Bye-laws.
61. Vice Presidents. The Vice President or, in the event there be more than
one, the Vice Presidents in the order designated, or in the absence of any
designation, in the order of their seniority, shall have such powers and perform
such duties as from time to time may be assigned to him by the Board, the
Chairman or the President.
62. The Treasurer and Assistant Treasurers.
The Treasurer, if there be one, shall:
(a) have charge and custody of, and be responsible for, all the funds
and securities of the Company;
(b) keep full and accurate accounts of receipts and disbursements in
books belonging to the Company;
(c) cause all moneys and other valuables to be deposited to the credit
of the Company in such depositories as may be designated by the Board;
(d) receive, and give receipts for moneys due and payable to the
Company from any source whatsoever;
(e) disburse the funds of the Company and supervise the investment of
its funds as ordered or authorized by the Board, taking proper vouchers
therefor;
A-III-15
(f) render to the Chairman, the President and the Board at the regular
meetings of the Board, or whenever they may request it, an account of all
his transactions as Treasurer and of the financial condition of the
Company; and
(g) in general, have all the powers and perform all the duties
incident to the office of Treasurer and such other duties as from time to
time may be assigned to him or her by the Board, the Chairman or the
President.
In the absence of a Treasurer, the Board may endow the Vice
President -- Finance or another officer with such powers. The Assistant
Treasurer or Assistant Treasurers, if any, shall in the absence or disability of
the Treasurer or such other officer, or at his or her request, perform his or
her duties and exercise his powers and authority as may be assigned to him or
her by the Board, the Chairman or the President.
63. The Secretary and Assistant Secretaries.
The Secretary shall:
(a) attend all meetings of the Board, any committee of the Board,
Shareholders and other securityholders and record all votes and the
proceedings of such meetings in minute books to be kept by him for that
purpose;
(b) see that all notices are duly given in accordance with the
provisions of these Bye-laws and as required by Applicable Law;
(c) be custodian of the records and the seal of the Company and affix
and attest the seal to all Share certificates of the Company (unless the
seal of the Company on such certificates shall be a facsimile, as
hereinafter provided) and affix and attest the seal to all other documents
to be executed on behalf of the Company under its seal;
(d) see that the books, reports, statements, certificates and other
documents and records required by Applicable Law to be kept and filed are
properly kept and filed; and
(e) in general, have all the powers and perform all the duties
incident to the office of Secretary and such other duties as from time to
time may be assigned to him or her by the Board, the Chairman or the
President.
The Assistant Secretary or Assistant Secretaries, if any, shall, in the
absence or disability of the Secretary or at his request, perform his or her
duties and exercise his or her powers and authority as may be assigned to him or
her by the Board, the Chairman or the President.
64. Compensation of Officers. The compensation of all officers of the Company
shall be fixed from time to time by the Board; no officer of the Company shall
be prevented from receiving compensation because he or she is also a Director of
the Company.
SHARE CERTIFICATES, TRANSFERS AND TRANSMISSIONS
65. Share Certificates. Certificates for Shares of the Company shall be in such
form, not inconsistent with these Bye-laws, as shall be approved by the Board
and shall be signed by or in the name of the Company by the Chairman, the
Vice-Chairman or by the President or a Vice President, and by the Treasurer or
an Assistant Treasurer, or the Secretary or an Assistant Secretary; provided
that the signatures of any such officers thereon may be facsimiles; and provided
further that no one individual can sign in respect of more than one required
office. The seal of the Company shall be impressed, by original or by facsimile,
printed or engraved, on all such certificates. A certificate may also be signed
by the transfer agent and a registrar as the Board may determine, and in such
case the signature of the transfer agent or the registrar may also be facsimile,
engraved or printed. In case any officer, transfer agent or registrar who has
signed or whose facsimile signature has been placed upon such certificate shall
have ceased to be such officer, transfer agent or registrar before such
certificate is issued, it may nevertheless be issued by the Company with the
same effect as if he were such officer, transfer agent or registrar at the date
of issue. Notwithstanding the foregoing, at the discretion of the Board or the
Secretary, the Company may issue Shares in uncertificated form upon the initial
issuance of such Shares or thereafter upon surrender of any certificates
representing such Shares.
A-III-16
66. The Share Register. The Register shall be kept in the manner prescribed by
the Companies Acts at the Registered Office or at such other place in Bermuda as
may be authorised by the Board from time to time. The Company may also keep one
or more branch registers at such place or places outside Bermuda to the extent
and in the manner permitted by the Companies Acts, and the Board may make such
regulations as it thinks fit regarding the keeping of any branch register and
may revoke or vary any such regulations. The Board may authorise any Share on
the Register to be included in a branch register or any Share registered on a
branch register to be registered on another branch register, provided that at
all times the Register is maintained in accordance with the Companies Acts.
67. Registration of Transfers. Registration of transfer of certificates
representing Shares shall be effected only on the books of the Company only upon
authorization by the registered holder thereof, or by his attorney authorized by
power of attorney duly executed and filed with the Secretary or with a
designated transfer agent or transfer clerk, and upon surrender to the Company
or any transfer agent of the Company of the certificate or certificates being
transferred, which certificate shall be properly endorsed or accompanied by a
duly executed share transfer in the usual common form or in any other form that
the Board may from time to time approve, proof of all necessary government and
regulatory approvals governing the transfer of the Shares and the payment of all
taxes thereon. Whenever a certificate is endorsed by or accompanied by a share
transfer form executed by someone other than the person or persons named in the
certificate, evidence of authority to transfer shall also be submitted with the
certificate. Whenever any transfers of Shares shall be made for collateral
security and not absolutely, and both the transferor and transferee request the
Company to do so, such fact shall be stated in the entry of the transfer.
68. Transmission of Shares. In the case of the death of a Shareholder, the
survivor or survivors, or the estate representative, as appropriate, shall be
the only person or persons recognised by the Company as having any title to
Shares held by such holder. Nothing in these Bye-laws shall release the estate
of a deceased holder from any liability in respect of any Share held by such
holder either solely or jointly with other persons. In this Bye-law, estate
representative means the person to whom probate or letters of administration or
confirmation as executor has or have been granted under the laws applicable to
the estate of the deceased Shareholder or, failing such person, such other
person as the Board may in its absolute discretion determine to be the person
recognised by the Company for the purpose of this Bye-law.
68.1. In the case of a person becoming entitled to a Share in consequence
of the death of a Shareholder or otherwise by operation of Applicable Law, the
Board may require the production to the Company of such evidence of such
person's entitlement as is prescribed by the Companies Acts or, to the extent
that no such evidence is prescribed, as may from time to time be required by the
Board. Upon production of such evidence the name and address of the person so
entitled shall be noted in the Register.
68.2. Subject to these Bye-laws, any Person Entitled by Transmission to a
Share shall be entitled to receive (and may give a discharge for) any dividends
or other moneys payable in respect of the Share, to attend and vote in respect
of the Share at general meetings of the Company and of the relevant class of
Shareholders and generally to exercise in respect of the Share all of the rights
or privileges of a Shareholder as if such person were registered as the holder
of the Share.
68.3. Any Person Entitled by Transmission to a Share may elect either to be
registered as the holder of the Share or to have a nominee registered as the
transferee. Any such person electing to be registered shall deliver or send to
the Company a signed written notice stating that such person so elects. Any such
person electing to have a nominee registered shall signify that election by
signing an instrument of transfer in favour of such nominee. All the provisions
of these Bye-laws relating to the right to transfer and the registration of
transfer of Shares shall apply to any such notice or instrument of transfer as
if the death of the Shareholder or other event giving rise to the transmission
had not occurred and the notice or instrument of transfer was an instrument of
transfer signed by such Shareholder.
68.4. The Board may at any time give notice requiring a Person Entitled by
Transmission to a Share to elect either to be registered or to transfer the
Share, and if the person does not comply with the notice within sixty (60) days
the Board may withhold payment of all dividends and other moneys payable in
respect of the Share until the person complies with the notice.
A-III-17
68.5. Subject to any directions of the Board from time to time in force,
the Secretary may exercise all powers and discretions of the Board under this
Bye-law 68.
69. Determination of Shareholders. Except as otherwise provided by Applicable
Law, the Company shall be entitled to recognize the exclusive right of a person
in whose name any Share or Shares stand on the register of Shareholders as the
owner of such Share or Shares for all purposes, including, without limitation,
the rights to receive dividends or other distributions, and to vote as such
owner, the Company may hold any such Shareholder of record liable for calls and
assessments and the Company shall not be bound to recognize any trust or any
equitable, contingent, or legal claim to or interest in any such Share or Shares
on the part of any other person whether or not it shall have express or other
notice thereof.
70. Regulations, Governing Issuance and Transfer of Shares. The Board shall
have the power and authority to make all such rules and regulations, not
inconsistent with these Bye-laws, as it may deem expedient concerning the issue,
transfer and registration of Shares. It may appoint, or authorize any officer or
officers to appoint, one or more transfer agents or one or more transfer clerks
and one or more registrars and may require all Share certificates to bear the
signature or signatures of any of them.
71. Fixing Record Date. In order that the Company may determine the
Shareholders of record entitled to notice of, or to vote at, any meeting of
Shareholders or any adjournment thereof, or entitled to express consent to
corporate action in writing without a meeting, or entitled to receive payment of
any dividend or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or exchange of Share or
for the purpose of any other lawful action, the Board may fix, in advance, a
record date, which shall not be more than sixty (60) nor less than ten (10) days
before the date of such meeting, nor more than sixty (60) days prior to any
other action. Except as otherwise provided by Applicable Law, or these Bye-laws
or by resolution of the Board:
(1) The record date for determining Shareholders entitled to notice of or
to vote at a meeting of Shareholders shall be at the close of business on the
day next preceding the day on which notice is given, or, if notice is waived, at
the close of business on the day next preceding the day on which the meeting is
held;
(2) The record date for determining Shareholders entitled to express
consent to corporate action in writing without a meeting, when no prior action
by the Board is necessary, shall be the day on which the first written consent
is expressed; and
(3) The record date for determining Shareholders for any other purpose
shall be at the close of business on the day on which the Board adopts the
resolution relating thereto.
71.1 A determination of Shareholders of record entitled to notice of or to
vote at a meeting of Shareholders shall apply to any adjournment of the meeting;
provided, however, that the Board may fix a new record date for the adjourned
meeting.
72. Lost, Stolen or Destroyed Share Certificates. The holder of any
certificates representing Shares shall immediately notify the Company of any
loss, theft, destruction or mutilation of such certificate, and the Board may
authorize the issuance of a new certificate in lieu thereof upon satisfactory
proof of such loss, theft or destruction upon the giving of an open penalty bond
with surety satisfactory to the Treasurer and the Company's counsel, to protect
the Company or any person injured on account of the alleged loss, theft or
destruction of any such certificate or the issuance of a new certificate from
any liability or expense which it or they may incur by reason of the original
certificates remaining outstanding and upon payment of the Company's reasonable
costs incident thereto.
DIVIDENDS
73. Dividends and Reserves. Subject to the Companies Act and the rights
attaching to a particular class or series of Shares, the Board may, out of funds
available therefor, declare dividends upon Shares to be paid to the
Shareholders, according to their respective rights and interests as and when
they deem expedient, and may fix the time for payment of such dividends. The
Company may deduct from any dividend, distribution or other monies payable to a
Shareholder by the Company on or in respect of any Shares all sums of money (if
any)
A-III-18
presently payable by the Shareholder to the Company on account of calls or
otherwise in respect of Shares. No dividend, distribution or other monies
payable by the Company on or in respect of any Share shall bear interest against
the Company.
WINDING UP
74. Winding-Up. If the Company is wound up, the liquidator may, with the
sanction of a Resolution and any other sanction required by the Companies Acts:
(1) divide among the Shareholders in cash or in kind the whole or any part
of the assets of the Company (whether they consist of property of the same kind
or not) and for such purposes set such value as the liquidator deems fair on any
property to be so divided, and determine how such division shall be carried out
as between the Shareholders or different classes of Shareholders, provided that
in all events, amounts will be distributed pursuant to the rights attached to
those Shares then outstanding; and
(2) vest the whole or any part of such assets in trustees upon such trusts
for the benefit of the contributories as the liquidator, with the like sanction,
thinks fit, but so that no Shareholder shall be compelled to accept any Shares
or other assets upon which there is any liability.
EXEMPTION AND INDEMNIFICATION OF DIRECTORS AND OFFICERS
75. Exemption and Indemnification of Officers. Subject always to these
Bye-laws, no Officer shall be liable for the acts, receipts, neglects or
defaults of any other Officer nor shall any Officer be liable in respect of any
negligence, default or breach of duty on his or her own part in relation to the
Company or any Subsidiary, or for any loss, misfortune or damage which may
happen, in or arising out of the actual or purported execution or discharge of
his or her duties or the exercise or purported exercise of his or her powers or
otherwise in relation to or in connection with his or her duties, powers or
office.
75.1. Subject always to these Bye-laws, every Officer shall be indemnified
and held harmless out of the funds of the Company against all liabilities,
losses, damages or expenses (including but not limited to liabilities under
contract, tort and statute or any applicable foreign law or regulation and all
legal and other costs and expenses properly payable) incurred or suffered by the
Officer arising out of the actual or purported execution or discharge of the
Officer's duties (including. without limitation, in respect of his or her
service at the request of the Company as a director, officer, partner, trustee,
employee, agent or similar functionary of another person) or the exercise or
purported exercise of the Officer's powers or otherwise, in relation to or in
connection with the Officer's duties, powers or office (including but not
limited to liabilities attaching to the Officer and losses arising by virtue of
any rule of law in respect of any negligence, default, breach of duty or breach
of trust of which such Officer may be guilty in relation to the Company or any
Subsidiary of the Company).
75.2. Every Officer shall be indemnified out of the funds of the Company
against all liabilities arising out of the actual or purported execution or
discharge of the Officer's duties or the exercise or purported exercise of the
Officer's powers or otherwise, in relation to or in connection with the
Officer's duties, powers or office, incurred by such Officer in defending any
proceedings, whether civil or criminal, in which judgement is given in the
Officer's favour, or in which the Officer is acquitted, or in connection with
any application under the Companies Acts in which relief from liability is
granted to the Officer by the court.
75.3. In this Bye-law 75 (i) the term "Officer" includes, in addition to
the persons specified in the definition of that term in Bye-law 1, the Resident
Representative, a member of a committee constituted under these Bye-laws, any
person acting as an Officer or committee member in the reasonable belief that
the Officer has been so appointed or elected, notwithstanding any defect in such
appointment or election, and any person who formerly was an Officer or acted in
any of the other capacities described in this clause (i) and (ii) where the
context so admits, references to an Officer include the estate and personal
representatives of a deceased Officer or any such other person.
A-III-19
75.4. The provisions for exemption from liability and indemnity contained
in this Bye-law shall have effect to the fullest extent permitted by Applicable
Law, but shall not extend to any matter which would render any of them void
pursuant to the Companies Acts.
75.5. To the extent that any person is entitled to claim an indemnity
pursuant to these Bye-laws in respect of an amount paid or discharged by him or
her, the relevant indemnity shall take effect as an obligation of the Company to
reimburse the person making such payment (including advance payments of fees or
other costs) or effecting such discharge.
75.6. The rights to indemnification and reimbursement of expenses provided
by these Bye-laws shall not be deemed to be exclusive of, and are in addition
to, any other rights to which a person may be entitled. Any repeal or amendment
of this Bye-law 75 shall be prospective only and shall not limit the rights of
any Officer or the obligation of the Company with respect to any claim arising
prior to any such repeal or amendment.
75.7. In so far as it is permissible under Applicable Law, each Shareholder
and the Company agree to waive any claim or right of action the Shareholder or
it may at any time have, whether individually or by or in the right of the
Company, against any Officer on account of any action taken by such Officer or
the failure of such Officer to take any action in the performance of his duties
with or for the Company, provided however, that such waiver shall not apply to
any claims or rights of action arising out of the fraud or dishonesty of such
Officer or to recover any gain, personal profit or advantage to which such
Officer is not legally entitled.
75.8. Subject to the Companies Acts, expenses incurred in defending any
civil or criminal action or proceeding for which indemnification is required
pursuant to this Bye-law 75 shall be paid by the Company in advance of the final
disposition of such action or proceeding upon receipt of an undertaking by or on
behalf of the indemnified party to repay such amount if it shall ultimately be
determined that the indemnified party is not entitled to be indemnified pursuant
to this Bye-law 75.
75.9 Each Shareholder of the Company, by virtue of its acquisition and
continued holding of a Share, shall be deemed to have acknowledged and agreed
that the advances of funds may be made by the Company as aforesaid, and when
made by the Company under this Bye-law 75 are made to meet expenditures incurred
for the purpose of enabling such Officer to properly perform his or her duties
as an Officer.
ACCOUNTING RECORDS
76. Accounting Records. The Board shall cause accounting records of the Company
to be kept in accordance with the requirements of the Companies Acts.
76.1. The records of account shall be kept at the Registered Office or at
such other place or places as the Board thinks fit. If the records of account
are kept at some place outside Bermuda, there shall be kept at an office of the
Company in Bermuda such records as are required by the Companies Acts to be so
kept. The records of account shall at all times be open to inspection by the
Directors and, to the extent prescribed by the Companies Acts, by the Resident
Representative. No Shareholder (other than a Director) shall have any right to
inspect any accounting record or book or document of the Company except as
conferred by Applicable Law or authorised by the Board or by Resolution.
76.2. The Board shall arrange for the financial statements of the Company
to be prepared and audited in respect of each year or other period from time to
time fixed by the Board and shall arrange for those financial statements to be
made available to Shareholders and laid before the Shareholders in general
meeting in accordance with the requirements of the Companies Acts.
AUDITORS
77. Auditors. Auditors shall be appointed and their duties regulated in
accordance with the Companies Acts, Applicable Law and such requirements not
inconsistent with the Companies Acts and Applicable Law as the Board may from
time to time determine.
A-III-20
GENERAL PROVISIONS
78. Execution of Contracts, Papers and Documents. Except as otherwise required
by Applicable Law or these Bye-laws, any contract or other instrument may be
executed and delivered in the name and on behalf of the Company by such officers
or employees of the Company, or such other person as the Board may from time to
time determine, or in the absence of such determination, by the Chairman or the
President. Such authority may be general or confined to specific instances as
the Board may determine. Unless authorized by the Board or expressly permitted
by these Bye-laws, no officer or agent or employee shall have any power or
authority to bind the Company by any contract or engagement or to pledge its
credit or to incur a pecuniary liability for any purpose.
79. Voting Shares in Other Companies. The Company may vote any and all shares
and other securities having voting rights which may at any time and from time to
time be held by it in any other company or companies and such vote may be cast
either in person or by proxy by such officer of the Company as the Board may
appoint or, in the absence of such appointment, by the Chairman or President.
80. Cheques, Drafts, etc. All cheques, drafts, bills of exchange or other
orders for the payment of money out of the funds of the Company, and all notes
or other evidences of indebtedness of the Company, shall be signed in the name
and on behalf of the Company by such persons and in such manner as shall from
time to time be authorized by the Board.
81. Corporate Seal. The Seal shall consist of a circular metal device with the
name of the Company around its outer margin and the country and the year of
incorporation across its centre. The Company may also have for use in any
territory outside Bermuda one or more additional Seals, each of which shall be a
duplicate of the Seal.
81.1 The Board shall provide for the custody of every Seal. A Seal shall
only be used by authority of the Board or of a committee of the Board. Subject
to the Companies Acts, and except as otherwise provided in these Bye-laws, any
instrument to which a Seal is affixed shall be signed by an Officer or by any
person who has been authorised by the Board either generally or specifically to
attest to the use of a Seal.
82. Fiscal Year. The fiscal year of the Company shall be a period of twelve
(12) calendar months beginning January 1 and ending on the following December 31
in the same year.
TRANSACTIONS WITH DIRECTORS AND OFFICERS
83. Affiliated Transactions. A Director may hold any other office or place of
profit with the Company (except that of auditor) in addition to his or her
office of Director for such period and upon such terms as the Board may
determine, and may be paid such extra remuneration for so doing (whether by way
of salary, commission, participation in profits or otherwise) as the Board may
determine, in addition to any remuneration or other amounts payable to a
Director pursuant to any other Bye-law.
83.1 A Director may act in a professional capacity for the Company
(otherwise than as auditor) and the Director shall be entitled to remuneration
for professional services as if he or she were not a Director.
83.2 Subject to the Companies Acts, a Director, (i) may be a party to, or
otherwise interested in, any transaction or arrangement with the Company or in
which the Company is otherwise interested, and (ii) may be a director or other
officer of, or employed by, or a party to any transaction or arrangement with,
or otherwise interested in, any company or other person promoted by the Company
or in which the Company is interested. A Director who in any way, whether
directly or indirectly, to his or her knowledge has a material interest in a
contract with the Company or any of its subsidiaries shall declare the nature of
the Director's interest at the first opportunity at a meeting of the Board at
which the question of entering into the contract is first taken into
consideration, if the Director knows this interest then exists, or in any other
case at the first meeting of the Board after learning that he or she is or has
become so interested.
83.3 Subject to the Companies Acts and any further disclosure required
thereby, a general notice to the Directors by a Director or other Officer
declaring that he or she is a director or officer of any company, or has a
A-III-21
material interest in, any company or person and is to be regarded as interested
in any transaction or arrangement made with that company or person, shall be a
sufficient declaration of interest in relation to any transaction or arrangement
so made.
83.4 So long as, where it is necessary, a Director declares the nature of
his or her interest in accordance with this Bye-law, a Director shall not by
reason of his or her office be accountable to the Company for any benefit the
Director derives from any office or employment to which these Bye-laws allow him
or her to be appointed or from any transaction or arrangement in which these
Bye-laws allow the Director to be interested, and no such transaction or
arrangement shall be avoided on the ground of any such interest or benefit.
84. Determining Quorum in the Event of Common or Interested Director. Upon
declaring their interest, common or interested Directors may be counted in
determining the presence of a quorum and, subject to these Bye-laws, may vote at
a meeting of the Board or of a committee thereof which considered or authorized
the contract or transaction.
CONTINUATION
85. Continuance. Subject to the Companies Acts, approval of the Board and a
Resolution passed by a majority of the issued Shares entitled to vote may
approve the discontinuation of the Company in Bermuda and the continuation of
the Company in a jurisdiction outside Bermuda.
AMALGAMATION
86. Amalgamation. Any resolution proposed for consideration at any general
meeting to approve the amalgamation of the Company with any other company,
wherever incorporated, shall require the approval of the majority provided for
in Bye-law 22 at such meeting and the quorum for such meeting shall be that
required in Bye-law 19 and a poll may be demanded in respect of such resolution
in accordance with the provisions of the Companies Act.
ALTERATION OF BYE-LAWS
87. Alteration of Bye-laws. These Bye-laws may be revoked or amended only by
the Board, which may from time to time revoke or amend them in any way by a
resolution of the Board, but no such revocation or amendment shall be operative
unless and until it is approved by a Resolution of the holders of a majority of
the issued Shares entitled to vote.
A-III-22
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law permits the
indemnification of directors, employees and agents of Delaware corporations.
Consistent with Section 145, Article Seventh of the Restated Certificate of
Incorporation of Nabors Delaware states as follows:
(a) Each person who was or is made a party or is threatened to be made
a party to or is involved in any action, suit or proceeding, whether civil,
criminal, administrative or investigative (hereinafter collectively
referred to as a "proceeding"), by reason of the fact that he or she, or a
person of whom he or she is the legal representative, is or was a director
or officer of the Corporation or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another
corporation or of a partnership, joint venture, trust or other enterprise,
including service with respect to employee benefit plans, whether the basis
of such proceeding is alleged action in an official capacity as a director,
officer, employee or agent or in any other capacity while serving as a
director, officer, employee or agent, shall be indemnified and held
harmless by the Corporation to the fullest extent authorized by the
Delaware General Corporation Law, as the same exists or may hereafter be
amended (but, in the case of any such amendment, only to the extent that
such amendment permits the Corporation to provide broader indemnification
rights than said law permitted the Corporation to provide prior to such
amendment), against all expense, liability and loss (including attorneys'
fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or
to be paid in settlement) reasonably incurred or suffered by such person in
connection therewith and such indemnification shall continue as to a person
who has ceased to be a director, officer, employee or agent and shall inure
to the benefit of his or her heirs, executors and administrators.
(b) The right to indemnification conferred in this Section shall
include the right to be paid by the Corporation the expenses incurred in
defending any such proceeding in advance of its final disposition;
provided, however, that if the Delaware General Corporation Law requires,
the payment of such expenses incurred by a director or officer in advance
of the final disposition of a proceeding, shall be made only upon delivery
to the Corporation of an undertaking, by or on behalf of such director or
officer, to repay all amounts so advanced if it shall ultimately be
determined that such director or officer is not entitled to be indemnified
under this Section or otherwise. The Corporation may, by action of its
Board of Directors, provide indemnification to employees and agents of the
Corporation with the same scope and effect as the foregoing indemnification
of directors and officers.
(c) The right to indemnification and the payment of expenses incurred
in defending a proceeding in advance of its final disposition conferred in
this Section shall not be exclusive of any other right which any person may
have or hereafter acquired under any statute, provision of the Certificate
of Incorporation or By-laws, agreement, vote of stockholders or
disinterested directors or otherwise.
(d) The Corporation may maintain insurance, at its expense, to protect
itself and any director, officer, employee or agent of the Corporation or
another corporation, partnership, joint venture, trust or other enterprise
against any such expense, liability or loss, whether or not the Corporation
would have the power to indemnify such person against such expense,
liability or loss under the Delaware General Corporation law.
(e) Any repeal or modification of this Section directly or indirectly,
such as by adoption of an inconsistent provision of this Certificate of
Incorporation, shall not apply to or have any effect on the rights of any
officer and director to indemnification and advancement of expenses with
respect to any acts or omissions occurring prior to such repeal or
modification.
(f) If this Section or any portion hereof shall be invalidated on any
ground by any court of competent jurisdiction, then the Corporation shall
nevertheless indemnify each director and officer of the
II-1
corporation as to expense, liability and loss (including attorneys' fees,
judgments, fines, ERISA excise taxes or penalties and amounts paid or to be
paid in settlement) with respect to any proceeding to the full extent
permitted by any applicable portion of this Section that shall not have
been invalidated and to the full extent permitted by applicable law.
Nabors Delaware has entered into agreements with each of its directors and
officers indemnifying each of them against expenses, settlements, judgments and
fines in connection with any threatened, pending or completed action, suit,
arbitration or proceeding where the individual's involvement is by reason of the
fact that he is or was a director or officer or served at Nabors Delaware's
request as a director or officer of another organization, except that
indemnification is not provided against judgments or fines in a derivative suit
unless permitted by Delaware law.
The officers and directors of Nabors Delaware and Nabors Bermuda are
covered by directors and officers insurance aggregating $50,000,000.
Nabors Industries Ltd. is a Bermuda exempted company. Section 98 of the
Companies Act of 1981 of Bermuda, as amended (the "Companies Act"), provides
generally that a Bermuda company may indemnify its directors, officers and
auditors against any liability which 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, officer or auditor may be guilty in relation
to the company. Section 98 further provides that a Bermuda company may indemnify
its directors, officers and auditors against any liability incurred by them in
defending any proceedings, whether civil or criminal, in which 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 Act.
Nabors Industries Ltd. has adopted provisions in its bye-laws that provide
that it shall indemnify its officers and directors to the maximum extent
permitted under the Companies Act. If the reorganization is completed, Nabors
Bermuda anticipates that it will enter into indemnification agreements with its
directors and officers with terms and conditions substantially similar to the
agreements Nabors Delaware has entered into with its directors and officers
(subject always to Bermuda law and any limitations on such agreements contained
in the Companies Act).
II-2
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
EXHIBIT
NO. DESCRIPTION
------- -----------
2 Agreement and Plan of Merger among Nabors Industries, Inc.,
Nabors Acquisition Corp. VIII, Nabors Industries Ltd. and
Nabors US Holdings Inc. (included as annex I to the proxy
statement/ prospectus).
3.1 Memorandum of Association of Nabors Industries Ltd.
(included as annex II to the proxy statement/prospectus).
3.2 Amended and Restated Bye-Laws of Nabors Industries Ltd.
(included as annex III to the proxy statement/prospectus).
5.1* Opinion of Appleby, Spurling & Kempe as to the legality of
the securities being issued.
8.1 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP as to
certain tax matters.
8.2* Opinion of Appleby, Spurling & Kempe as to certain tax
matters (included in Exhibit 5.1).
8.3 Opinion of David King & Co. as to certain tax matters.
23.1 Consent of PricewaterhouseCoopers LLP.
23.2 Consent of Skadden, Arps, Slate, Meagher & Flom LLP
(included in Exhibit 8.1).
23.3* Consent of Appleby, Spurling & Kempe (included in Exhibit
5.1).
23.4 Consent of David King & Co. (included in Exhibit 8.3).
24* Powers of Attorney.
99.1* Form of Proxy Card.
---------------
* Previously filed as an exhibit to the Registrant's registration statement on
Form S-4 (File No. 333-76198) filed with the Commission on January 2, 2002 or
with Pre-effective Amendment No. 1 thereto, filed with the Commission on March
22, 2002 or with Pre-effective Amendment No. 2, filed with the Commission on
April 17, 2002.
ITEM 22. UNDERTAKINGS
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the 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.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant 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 registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
The undersigned registrant hereby undertakes as follows: that prior to any
public reoffering of the securities registered hereunder through use of a
prospectus which is a part of this registration statement, by any person or
party who is deemed to be an underwriter within the meaning of Rule 145(c), the
issuer undertakes that such reoffering prospectus will contain the information
called for by the applicable registration
II-3
form with respect to reofferings by persons who may be deemed underwriters, in
addition to the information called for by the other times of the applicable
form.
The registrant undertakes that every prospectus: (1) that is filed pursuant
to the immediately preceding paragraph, or (2) that purports to meet the
requirements of Section 10(a)(3) of the Act and is used in connection with an
offering of securities subject to Rule 415, will be filed as a part of an
amendment to the registration statement and will not be used until such
amendment is effective, and that, for purposes of determining any liability
under the Securities Act of 1933, 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.
The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Item 4, 10(b), 11, or 13 of this form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through the
date of responding to the request.
The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
II-4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Amendment No. 3 to the Registrant's Registration Statement
on Form S-4 to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Houston, Texas on the 29th day of April, 2002.
NABORS INDUSTRIES LTD.
By: /s/ ANTHONY G. PETRELLO
------------------------------------
Anthony G. Petrello
President and Chief Operating
Officer
SIGNATURE TITLE DATE
--------- ----- ----
/s/ ANTHONY G. PETRELLO Director, President and Chief April 29, 2002
------------------------------------------------ Operating Officer
Anthony G. Petrello
* Vice President -- Finance
------------------------------------------------ (principal financial and
Bruce P. Koch accounting officer)
* Director and Vice President
------------------------------------------------
Timothy J. Counsell
* Director, Vice President --
------------------------------------------------ Administration and Secretary
Daniel McLachlin
* Director
------------------------------------------------
Stephen James
*By: /s/ ANTHONY G. PETRELLO April 29, 2002
------------------------------------------
Anthony G. Petrello
Attorney-in-Fact
II-5
EXHIBIT INDEX
EXHIBIT
NO. DESCRIPTION
------- -----------
2 Agreement and Plan of Merger among Nabors Industries, Inc.,
Nabors Acquisition Corp. VIII, Nabors Industries Ltd. and
Nabors US Holdings Inc. (included as annex I to the proxy
statement/ prospectus).
3.1 Memorandum of Association of Nabors Industries Ltd.
(included as annex II to the proxy statement/prospectus).
3.2 Amended and Restated Bye-Laws of Nabors Industries Ltd.
(included as annex III to the proxy statement/prospectus).
5.1* Opinion of Appleby, Spurling & Kempe as to the legality of
the securities being issued.
8.1 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP as to
certain tax matters.
8.2* Opinion of Appleby, Spurling & Kempe as to certain tax
matters (included in Exhibit 5.1).
8.3 Opinion of David King & Co. as to certain tax matters.
23.1 Consent of PricewaterhouseCoopers LLP.
23.2 Consent of Skadden, Arps, Slate, Meagher & Flom LLP
(included in Exhibit 8.1).
23.3* Consent of Appleby, Spurling & Kempe (included in Exhibit
5.1).
23.4 Consent of David King & Co. (included in Exhibit 8.3).
24* Powers of Attorney.
99.1* Form of Proxy Card.
---------------
* Previously filed as an exhibit to the Registrant's registration statement on
Form S-4 (File No. 333-76198) filed with the Commission on January 2, 2002 or
with Pre-effective Amendment No. 1 thereto, filed with the Commission on March
22, 2002 or with Pre-effective Amendment No. 2, filed with the Commission on
April 17, 2002.