AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 13, 2002
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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NOBLE CORPORATION
(Exact name of registrant as specified in its charter)
CAYMAN ISLANDS 1381 98-0366361
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification Number)
ROBERT D. CAMPBELL
PRESIDENT
NOBLE CORPORATION
13135 SOUTH DAIRY ASHFORD, SUITE 800 13135 SOUTH DAIRY ASHFORD, SUITE 800
SUGAR LAND, TEXAS 77478 SUGAR LAND, TEXAS 77478
(281) 276-6100 (281) 276-6100
(Address, including zip code, and telephone number, (Name, address, including zip code, and telephone number,
including area code, of registrant's principal executive including area code, of agent for service)
offices)
---------------------
COPY TO:
David L. Emmons
Baker Botts L.L.P.
2001 Ross Avenue, Suite 700
Dallas, Texas 75201-2980
(214) 953-6500
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 of Noble Drilling Corporation, a Delaware corporation
("Noble-Delaware"), with Noble Cayman Acquisition Corporation, an indirect
wholly-owned subsidiary of the registrant pursuant to the Agreement and Plan of
Merger attached as Annex A to the Proxy Statement/Prospectus contained herein
have been satisfied.
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 registration statement for the same
offering. [ ]
CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED(1) REGISTERED PER SHARE(2) OFFERING PRICE(2) REGISTRATION FEE(3)
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Ordinary Shares, par value U.S.$0.10
per share.......................... 132,135,326 $36.36 $4,803,779,777 $441,948
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(1) Includes Series A Junior Participating Preferred Share Purchase Rights (the
"Rights"). The Rights are associated and will trade with the Ordinary Shares
of the registrant. No additional registration fee is required with respect
to the Rights.
(2) Reflects the market price of the Common Stock of Noble-Delaware to be
exchanged for Ordinary Shares of the registrant in connection with the
merger described in this Registration Statement computed in accordance with
Rule 457(c) and Rule 457(f)(1) under the Securities Act based upon the
average of the high and low prices of the Common Stock of Noble-Delaware as
reported by the New York Stock Exchange, Inc. on March 6, 2002 and is
estimated solely to determine the registration fee.
(3) A fee of $365,887 was previously paid by Noble-Delaware pursuant to Rule
14a-6 and Rule 0-11 under the Exchange Act in connection with the
preliminary Proxy Statement/Prospectus related hereto filed on February 6,
2002. Pursuant to Rule 457(b) under the Securities Act and Rule 0-11(a)(2)
under the Exchange Act, such fee is being credited against the registration
fee and, accordingly, only an additional $76,061 is being paid in connection
with this Registration Statement.
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 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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[NOBLE LOGO]
NOBLE DRILLING CORPORATION
13135 SOUTH DAIRY ASHFORD, SUITE 800
SUGAR LAND, TEXAS 77478
March , 2002
Dear Stockholder:
We are pleased to present for your approval at our 2002 annual
stockholders' meeting a proposal for restructuring Noble Drilling Corporation
(which we refer to as Noble-Delaware) that will effectively change our place of
incorporation from Delaware to the Cayman Islands. Noble Corporation, a Cayman
Islands company we recently formed (which we refer to as Noble-Cayman), will
become the parent holding company of Noble-Delaware and the other companies in
the Noble corporate group as a result of the merger of Noble-Delaware with a
subsidiary of Noble-Cayman. After completion of the merger, Noble-Cayman and the
Noble corporate group will continue to conduct our businesses as conducted prior
to the merger.
In the merger, the shares of Noble-Delaware common stock that you own will
automatically become Noble-Cayman ordinary shares. The number of Noble-Cayman
ordinary shares you will own will be the same as the number of shares of
Noble-Delaware common stock that you own immediately prior to the completion of
the merger, and your proportionate ownership and relative voting rights will
remain unchanged.
Accompanying this letter is a notice of the 2002 annual meeting of
stockholders and a proxy statement/prospectus. At the meeting you will be asked
to vote on the following matters in addition to the merger proposal: (i) the
election of directors of Noble-Delaware, (ii) a proposal to amend Noble-
Delaware's Amended and Restated Certificate of Incorporation to increase the
authorized shares of Noble-Delaware common stock, and (iii) proposals regarding
two Noble-Delaware stock option plans. We urge all stockholders to read the
proxy statement/prospectus carefully for details about the merger and related
restructuring transactions.
Generally, for U.S. federal income tax purposes, stockholders of
Noble-Delaware who are U.S. persons will recognize gain, if any, but not loss,
on the exchange of shares of Noble-Delaware for shares of Noble-Cayman in the
merger.
The restructuring cannot be completed unless the holders of a majority of
our outstanding shares approve the merger by voting to adopt the Agreement and
Plan of Merger (a copy of which accompanies this proxy statement/prospectus) at
the meeting.
YOUR VOTE IS VERY IMPORTANT. Please vote your proxy by telephone, via the
Internet or 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 meeting. You may revoke your proxy and vote in person if you decide
to attend the meeting.
WE URGE YOU TO CONSULT YOUR OWN TAX ADVISOR REGARDING YOUR PARTICULAR TAX
CONSEQUENCES. YOU SHOULD ALSO CONSIDER THE RISK FACTORS WE DESCRIBE STARTING ON
PAGE 13.
Your board of directors has unanimously approved the Agreement and Plan of
Merger providing for the merger, and each of the other proposals to be acted
upon at the meeting, and recommends that you vote "FOR" approval of the merger
and the other proposals.
We urge you to join us in supporting this important opportunity.
Sincerely,
JAMES C. DAY
Chairman of the Board and
Chief Executive Officer
[NOBLE LOGO]
NOBLE DRILLING CORPORATION
13135 SOUTH DAIRY ASHFORD, SUITE 800
SUGAR LAND, TEXAS 77478
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 25, 2002
To the Stockholders of
Noble Drilling Corporation:
A meeting of stockholders of Noble Drilling Corporation, a Delaware
corporation ("Noble-Delaware"), will be held on April 25, 2002, at 10:00 a.m.,
local time, at the St. Regis Hotel, 1919 Briar Oaks Lane, Houston, Texas, for
the following purposes:
1. To elect two directors to the class of directors whose three-year
term will expire in 2005;
2. To consider and vote upon a proposal to amend the Amended and
Restated Certificate of Incorporation of Noble-Delaware to increase the
number of authorized shares of common stock to 400,000,000 from 200,000,000;
3. To consider and vote upon a proposal to amend the Noble Drilling
Corporation 1991 Stock Option and Restricted Stock Plan;
4. To consider and vote upon a proposal regarding the Noble Drilling
Corporation 1992 Nonqualified Stock Option Plan for Non-Employee Directors;
5. To adopt the Agreement and Plan of Merger, which is attached to the
accompanying proxy statement/ prospectus as Annex A, among Noble-Delaware,
Noble Corporation, a Cayman Islands company and a wholly owned subsidiary of
Noble-Delaware ("Noble-Cayman"), Noble Holding (U.S.) Corporation, a
Delaware corporation and a wholly owned subsidiary of Noble-Cayman
("Holdco"), and Noble Cayman Acquisition Corporation, a Delaware corporation
and a wholly owned subsidiary of Holdco ("merger sub"), whereby we will in
effect change our place of incorporation from Delaware to the Cayman Islands
by merging Noble-Delaware with merger sub. As a result of the merger,
Noble-Delaware will be the surviving corporation and will become an
indirect, wholly owned subsidiary of Noble-Cayman, and each outstanding
share of the common stock of Noble-Delaware will automatically become one
ordinary share of Noble-Cayman so that all current stockholders of
Noble-Delaware will become holders of ordinary shares of Noble-Cayman; and
6. To transact such other business as may properly come before the
stockholders' meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on March 7, 2002 as
the record date for the determination of stockholders entitled to notice of and
to vote at the stockholders' meeting or any adjournment thereof. Only holders of
record of the common stock of Noble-Delaware at the close of business on the
record date are entitled to notice of and to vote at the meeting. A complete
list of such stockholders will be available for examination at the offices of
Noble-Delaware in Sugar Land, Texas during normal business hours for a period of
10 days prior to the meeting.
Your vote is very important. All stockholders are cordially invited to
attend the meeting. Stockholders are urged, whether or not they plan to attend
the meeting, to submit their proxy by telephone, via the Internet or by
completing, signing, dating and mailing the enclosed proxy or voting instruction
card in the postage-paid envelope provided. If a stockholder who has submitted a
proxy attends the meeting in person, such stockholder may revoke the proxy and
vote in person on all matters submitted at the meeting.
By Order of the Board of Directors
JULIE J. ROBERTSON
Secretary
Sugar Land, Texas
March , 2002
The information contained in this proxy statement/prospectus is not complete and
may be changed. We may not sell these securities until the registration
statement filed with the U.S. Securities and Exchange Commission is effective.
This proxy statement/prospectus is not an offer to sell these securities and it
is not soliciting an offer to buy these securities in any state where the offer
or sale is not permitted.
SUBJECT TO COMPLETION -- DATED MARCH 13, 2002
PROXY STATEMENT OF PROSPECTUS FOR ORDINARY SHARES OF
NOBLE DRILLING CORPORATION NOBLE CORPORATION
(a Delaware corporation) (a Cayman Islands exempted company limited by shares)
[NOBLE LOGO]
Our board of directors has unanimously approved and is submitting to our
stockholders for their approval at our 2002 annual stockholders' meeting a
proposal for the merger of Noble Drilling Corporation that would result in your
holding ordinary shares, including the associated Series A Junior Participating
preferred share purchase rights (the "Rights"), in a Cayman Islands company
rather than a Delaware corporation. The merger will effectively change our place
of incorporation from Delaware to the Cayman Islands. The number of shares and
associated Rights you will own and your percentage ownership in Noble
Corporation, the Cayman Islands company, will be the same as the number of
shares and Series A Junior Participating preferred stock purchase rights and
percentage ownership you held in Noble Drilling Corporation immediately prior to
the merger. After the completion of the merger, the Cayman Islands company and
the Noble corporate group will continue to conduct our businesses as conducted
prior to the merger. The shares of the Cayman Islands company will be listed on
the New York Stock Exchange under the symbol "NE," the same symbol under which
your shares are currently listed. Currently, there is no established public
trading market for the shares of the Cayman Islands company.
We believe that restructuring as a Cayman Islands company will position us
to realize potential business, financial and strategic benefits. The use of a
Cayman Islands company will allow us to organize our international business
activities so that we will be better positioned to benefit from more favorable
business, tax and financing environments. We also believe that the merger will
allow us to implement our business strategies more effectively. Specifically, as
a result of the merger, we expect to reduce our worldwide effective corporate
tax rate and to enhance our business growth and cash flow. Additionally, we
believe that the Cayman Islands company may be a more attractive investment
alternative to a wider range of investors.
Generally, for U.S. federal income tax purposes, stockholders of Noble
Drilling Corporation who are U.S. persons will recognize gain, if any, but not
loss, on the exchange of shares of Noble Drilling Corporation for the ordinary
shares of the Cayman Islands company in the merger. The U.S. federal income tax
consequences to particular stockholders will depend in part on their individual
circumstances. WE URGE YOU TO CONSULT YOUR OWN TAX ADVISOR REGARDING YOUR
PARTICULAR TAX CONSEQUENCES.
At the stockholders' meeting, you will be asked to vote on the proposed
merger. The merger cannot be completed unless the holders of a majority of our
outstanding shares approve it. You will also be asked to vote on the following
matters: (1) the election of directors of Noble Drilling Corporation, (2) a
proposal to amend Noble Drilling Corporation's Amended and Restated Certificate
of Incorporation to increase the number of authorized shares of our common
stock, (3) a proposal to amend the Noble Drilling Corporation 1991 Stock Option
and Restricted Stock Plan, and (4) a proposal regarding the Noble Drilling
Corporation 1992 Nonqualified Stock Option Plan for Non-Employee Directors.
This proxy statement/prospectus provides you with detailed information
regarding the merger and the other matters to be considered at the stockholders'
meeting. We encourage you to read this entire proxy statement/ prospectus
carefully.
YOU SHOULD CAREFULLY CONSIDER THE RISK FACTORS WE DESCRIBE STARTING ON PAGE
13.
Your vote is very important. Your board of directors recommends that you
vote to approve and adopt the merger and the merger agreement and each of the
other proposals to be acted upon at the stockholders' meeting. To ensure that
your shares are represented, please submit your proxy by telephone, via the
Internet or by completing, signing and dating the enclosed proxy card or voting
instruction card, as appropriate, and returning it promptly in the enclosed
envelope, whether or not you expect to attend the stockholders' meeting. You may
revoke your proxy and vote in person if you decide to attend the stockholders'
meeting.
The record date for the meeting is March 7, 2002. The date and time of the
meeting is April 25, 2002 at 10:00 a.m., Houston, Texas time, and the place of
the meeting is the St. Regis Hotel, 1919 Briar Oaks Lane, Houston, Texas.
NEITHER THE U.S. SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THE SECURITIES TO BE ISSUED IN THE
MERGER OR DETERMINED IF THIS PROXY STATEMENT/PROSPECTUS IS TRUTHFUL OR COMPLETE.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this proxy statement/prospectus is March , 2002, and it will
be first mailed to stockholders along with a form of proxy on March , 2002.
ADDITIONAL INFORMATION
This proxy statement/prospectus incorporates important business and
financial information about Noble Drilling Corporation that is not included in,
or delivered with, this proxy statement/prospectus. You may obtain this
information, without charge, by making written or oral request directed to Julie
J. Robertson, Senior Vice President-Administration and Secretary, Noble Drilling
Corporation, 13135 South Dairy Ashford, Suite 800, Sugar Land, Texas 77478,
telephone (800) 897-2785. The exhibits to these documents will generally not be
made available unless they are specifically incorporated by reference in this
proxy statement/prospectus.
TO ENABLE TIMELY DELIVERY OF THESE DOCUMENTS, ANY REQUEST SHOULD BE MADE BY
NO LATER THAN APRIL 18, 2002, WHICH IS FIVE BUSINESS DAYS PRIOR TO THE ANNUAL
MEETING.
For a more detailed discussion of the information incorporated by reference
into this proxy statement/ prospectus, see "Where You Can Find More Information"
beginning on page 71.
You should rely only on information contained in or incorporated by
reference into this proxy statement/prospectus. We have not authorized anyone
else to provide you with different information. We are not making an offer of
the securities in any state where the offer is not permitted. You should not
assume that the information contained in this proxy statement/prospectus is
accurate as of any date other than the date on the cover of this proxy
statement/prospectus, or in the case of documents incorporated by reference, the
date of the referenced document, and neither the mailing of this proxy
statement/prospectus to you nor the issuance of Noble Corporation ordinary
shares in the merger shall create any implication to the contrary.
PROXY VOTING OPTIONS
If your shares are held in your name, you can vote by proxy in three
convenient ways:
- TELEPHONE -- Call toll-free 1-800-850-5909 (24 hours a day, 7 days a
week) and follow the instructions. You will need to give the Company
Number and Control Number, both of which are contained on your proxy card
accompanying this proxy statement/prospectus. This method of voting your
proxy is available for residents of the United States and Canada only,
and is available until 5:00 p.m. Eastern Time on Wednesday, April 24,
2002.
- INTERNET -- Visit http://proxy.georgeson.com. Enter the Company Number
and Control Number from your proxy card and follow the instructions. This
method of voting will be available until 5:00 p.m. Eastern Time on
Wednesday, April 24, 2002.
- PROXY CARD -- Complete, sign and date your proxy card and mail it in the
postage paid envelope provided. Proxy cards must be received before
voting begins at the meeting.
If you hold shares through someone else, such as a stockbroker, you may get
material from them asking how you want to vote your shares. You should check to
see if they offer telephone or Internet voting.
If you were a participant in the Noble Drilling Corporation 401(k) Savings
Plan on the record date for the stockholders' meeting, you should receive a
voting instruction card. You can provide instructions to the plan trustee as to
how to vote shares held in the plan by calling the telephone number or visiting
the Internet site as set forth above, or by completing, dating and signing the
voting instruction card and mailing it in the postage paid envelope.
ii
TABLE OF CONTENTS
NOBLE STRUCTURE........................ 1
QUESTIONS AND ANSWERS.................. 2
SUMMARY................................ 5
Proposal to Amend Our Certificate of
Incorporation..................... 5
Proposal to Amend the Noble Drilling
Corporation 1991 Stock Option and
Restricted Stock Plan............. 5
Proposal Regarding the Noble Drilling
Corporation 1992 Nonqualified
Stock Option Plan for Non-Employee
Directors......................... 5
The Merger Proposal.................. 6
Market Price......................... 8
Stockholders' Meeting................ 9
Recommendations of the Board of
Directors......................... 9
Votes Required....................... 9
Proxies and Voting Instruction
Cards............................. 9
SELECTED HISTORICAL CONSOLIDATED
FINANCIAL DATA....................... 11
SUMMARY PRO FORMA FINANCIAL
INFORMATION.......................... 12
RISK FACTORS........................... 13
VOTING SECURITIES...................... 15
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS.................... 15
ELECTION OF DIRECTORS.................. 16
Nominees for Directors............... 16
Additional Information Regarding the
Board of Directors................ 18
Employment Agreements................ 19
SECURITY OWNERSHIP OF MANAGEMENT....... 20
Executive Stock Ownership............ 21
EXECUTIVE COMPENSATION................. 21
Report of the Compensation Committee
on Executive Compensation......... 21
Summary Compensation Table........... 24
Option/SAR Grants in 2001............ 25
Aggregated Option/SAR Exercises in
2001 and 12/31/01 Option/SAR
Values............................ 25
Defined Benefit Plans................ 25
Pension Plan Table................... 26
Performance Graph.................... 26
Supplemental Performance Graph....... 28
SECTION 16(a) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE................. 29
AUDITORS............................... 29
REPORT OF THE AUDIT COMMITTEE.......... 29
Audit Fees........................... 30
Financial Information Systems Design
and Implementation Fees........... 30
All Other Fees....................... 30
Summary.............................. 30
PROPOSAL TO ADOPT THE AMENDMENT TO THE
CERTIFICATE OF INCORPORATION......... 30
Background and Reasons............... 30
Proposed Amendment to the Certificate
of Incorporation.................. 31
Recommendation and Required
Affirmative Vote.................. 31
PROPOSAL TO AMEND THE NOBLE DRILLING
CORPORATION 1991 STOCK OPTION AND
RESTRICTED STOCK PLAN................ 31
General.............................. 31
Proposed Amendment to the 1991
Plan.............................. 32
Description of the 1991 Plan......... 32
U.S. Federal Income Tax
Consequences...................... 33
Recommendation and Required
Affirmative Vote.................. 35
PROPOSAL REGARDING THE NOBLE DRILLING
CORPORATION 1992 NONQUALIFIED STOCK
OPTION PLAN FOR NON-EMPLOYEE
DIRECTORS............................ 35
General.............................. 35
Proposal Regarding the 1992 Plan..... 35
Description of the 1992 Plan......... 36
U.S. Federal Income Tax
Consequences...................... 37
Recommendation and Required
Affirmative Vote.................. 38
THE MERGER............................. 38
Background and Reasons for the
Merger............................ 38
The Agreement and Plan of Merger..... 40
Amendment and Termination............ 40
Additional Agreements................ 40
Conditions to Consummation of the
Merger............................ 41
iii
Effective Time....................... 41
Management of Noble-Cayman........... 41
Recommendation and Required
Affirmative Vote.................. 41
Regulatory Approvals................. 42
Rights of Dissenting Stockholders.... 42
No Requirement to Exchange
Certificates...................... 42
Stock Compensation and Benefit
Plans............................. 42
Stockholder/Shareholder Rights
Plan.............................. 43
Stock Exchange Listing............... 43
Accounting Treatment of the Merger... 43
Restructuring Subsequent to the
Merger............................ 43
MATERIAL INCOME TAX CONSEQUENCES OF THE
MERGER............................... 44
U.S. Federal Income Tax Consequences
of the Merger..................... 44
Effect of Cayman Islands Tax Laws on
Noble-Cayman...................... 47
DESCRIPTION OF AUTHORIZED SHARES OF
NOBLE-CAYMAN......................... 47
Authorized Share Capital............. 48
Voting............................... 48
Quorum for General Meetings.......... 48
Dividend Rights...................... 49
Rights Upon Liquidation.............. 50
No Sinking Fund...................... 50
No Liability for Further Calls or
Assessments....................... 50
No Preemptive Rights................. 50
Redemption and Conversion............ 50
Repurchase........................... 50
Restrictions on Transfer............. 50
Other Classes or Series of Shares.... 50
Compulsory Acquisition of Shares Held
by Minority Holders............... 51
Transfer Agent....................... 51
Anti-Takeover Provisions............. 51
Shareholder Rights Plan.............. 53
COMPARISON OF RIGHTS OF
STOCKHOLDERS/SHAREHOLDERS............ 56
Stockholder/Shareholder Approval of
Business Combinations............. 57
Special Vote Required for
Combinations with Interested
Stockholders/ Shareholders........ 58
Fair Price to
Stockholders/Shareholders in
Business Combinations............. 59
Appraisal Rights and Compulsory
Acquisition....................... 60
Stockholder/Shareholder Consent to
Action Without Meeting............ 60
Special Meetings of Stockholders/
Shareholders...................... 61
Distributions and Dividends;
Repurchases and Redemptions....... 61
Vacancies on Board of Directors...... 61
Removal of Directors; Staggered Term
of Directors...................... 62
Inspection of Books and Records...... 62
Amendment of Governing Documents..... 63
Indemnification of Directors and
Officers.......................... 64
Limited Liability of Directors....... 65
Shareholders' Suits.................. 66
Advance Notification Requirements for
Proposals of
Stockholders/Shareholders......... 66
Stockholder/Shareholder Rights
Plan.............................. 67
Issuance of Preferred Shares......... 67
THE STOCKHOLDERS' MEETING.............. 68
Time, Place and Date................. 68
Proposals............................ 68
Quorum............................... 68
Record Date.......................... 68
Vote Required........................ 68
Proxies and Voting Instruction
Cards............................. 69
Solicitation of Proxies.............. 70
PROPOSALS OF SHAREHOLDERS.............. 70
LEGAL MATTERS.......................... 71
EXPERTS................................ 71
WHERE YOU CAN FIND MORE INFORMATION.... 71
CAUTIONARY STATEMENT REGARDING
FORWARD-LOOKING STATEMENTS........... 72
AGREEMENT AND PLAN OF MERGER.... ANNEX A
MEMORANDUM OF ASSOCIATION OF
NOBLE-CAYMAN.................. ANNEX B
ARTICLES OF ASSOCIATION OF
NOBLE-CAYMAN.................. ANNEX C
AMENDMENT OF THE 1992 PLAN...... ANNEX D
AMENDED AND RESTATED CHARTER OF
THE AUDIT COMMITTEE........... ANNEX E
iv
NOBLE STRUCTURE
We are seeking your approval at the annual stockholders' meeting of a
merger transaction (the "merger") which will restructure our internal corporate
organization. The merger will effectively change the place of our incorporation
from Delaware to the Cayman Islands.
The merger involves several steps. First, we have formed a new Cayman
Islands company named Noble Corporation ("Noble-Cayman"), as a wholly owned
subsidiary of Noble Drilling Corporation, the Delaware corporation whose shares
you currently own ("Noble-Delaware"). Noble-Cayman, in turn, has formed a wholly
owned Delaware subsidiary named Noble Holding (U.S.) Corporation ("Holdco"),
which has formed Noble Cayman Acquisition Corporation, a wholly owned Delaware
subsidiary (the "merger sub"). Following the stockholders' meeting, assuming we
have obtained the requisite approval of stockholders, the merger sub will merge
with and into Noble-Delaware, with Noble-Delaware surviving the merger. In the
merger, each person holding shares of common stock (and related preferred stock
purchase rights) of Noble-Delaware immediately before the merger will receive
one ordinary share (and related preferred share purchase right) of Noble-Cayman
for each share of common stock of Noble-Delaware (and related preferred stock
purchase right). As a result of the transaction, you will become a shareholder
in Noble-Cayman, the new Cayman Islands parent of the entire Noble group.
Immediately after the merger, Noble-Cayman will have outstanding the same number
of ordinary shares as there were outstanding shares of Noble-Delaware common
stock immediately before the merger. As of March 7, 2002, the record date for
the stockholders' meeting, there were 132,135,326 shares of Noble-Delaware
common stock outstanding.
In this proxy statement/prospectus, we sometimes refer to Noble-Delaware
and/or Noble-Cayman as "we," "us," "our" or "Noble."
We are also proposing several other items for your consideration at the
stockholders' meeting, including:
- the election of directors of Noble-Delaware;
- a proposal to amend Noble-Delaware's Amended and Restated Certificate of
Incorporation (the "certificate of incorporation") to increase the number
of authorized shares of common stock of Noble-Delaware to 400,000,000
from 200,000,000; and
- proposals regarding two stock option plans of Noble-Delaware.
You should note that each of the proposals will be effected if they are
approved by our stockholders, regardless of whether any of the other proposals
are approved. Furthermore, the proposals to be considered at the stockholders'
meeting, other than the merger proposal, will be relevant to the ongoing
operations of Noble-Cayman assuming we obtain the requisite stockholder approval
of the merger proposal. In particular, the number of authorized shares of
Noble-Cayman will be the same as the number of authorized shares of
Noble-Delaware, so that the number of authorized ordinary shares of Noble-Cayman
will be 400,000,000 if the proposed amendment of Noble-Delaware's certificate of
incorporation is approved by our stockholders. In addition, the directors who
are elected at the stockholders' meeting, together with the other directors of
Noble-Delaware whose terms do not expire at the stockholders' meeting, will
become the directors of Noble-Cayman if the merger proposal is approved by our
stockholders. Finally, assuming we obtain the requisite stockholder approval of
the merger proposal, Noble-Cayman will assume both of the option plans of
Noble-Delaware that will be considered at the stockholders' meeting, with
whatever changes, if any, as are approved by our stockholders at the
stockholders' meeting.
1
QUESTIONS AND ANSWERS
THE MERGER
Q: WHY DOES NOBLE WANT TO RESTRUCTURE?
A: We believe that becoming a Cayman Islands company will promote our
flexibility to reduce our worldwide effective corporate tax rate, will allow
us to restructure our business to increase operational efficiencies and will
result in a corporate structure that is generally more favorable for
expansion of our current business. Additionally, we believe Noble-Cayman
could be a more attractive investment alternative to a wider range of
investors.
Q: THE NEWS MEDIA HAVE REPORTED EXTENSIVELY ON FINANCIAL AND ACCOUNTING RULES
AND PRACTICES AMID RECENT PROMINENT COMPANY FAILURES AND BREAKUPS. IS NOBLE'S
PLAN TO RESTRUCTURE IN RESPONSE TO THESE DEVELOPMENTS?
A: No. We have no off-balance sheet debt, we will not remove any of our assets
or liabilities from the Noble consolidated financial statements as a result
of the restructuring, and we will continue to disclose our business and
financial transactions in a candid and transparent manner consistent with
long-standing practice.
Q: WHY WAS THE CAYMAN ISLANDS SELECTED AS THE PLACE OF DOMICILE OF NOBLE-CAYMAN?
A: We chose the Cayman Islands for its political stability, legal framework and
business-friendly environment. We already manage our international operations
from our existing Cayman Islands office and certain of our significant
international subsidiaries are incorporated there. There are a number of
companies that have chosen the Cayman Islands for their domicile which are
currently publicly traded on U.S. markets. The current tax laws of the Cayman
Islands are favorable to companies domiciled there. In addition, the Cayman
Islands corporate legal system is such that your rights as a Noble-Cayman
shareholder will be similar to your rights as a stockholder in
Noble-Delaware. We urge you to read the section entitled "Comparison of
Rights of Stockholders/Shareholders" beginning on page 56 for a more detailed
description of the differences between your rights under Delaware and Cayman
Islands law. Although Noble-Cayman will be incorporated in the Cayman
Islands, Noble-Cayman, like Noble-Delaware, will be headquartered in Sugar
Land, Texas.
Q: WILL THE RESTRUCTURING AFFECT CURRENT OR FUTURE OPERATIONS?
A: The restructuring should have no material impact on how we conduct day-to-day
operations. The location of future operations will depend on the needs of the
business, independent of our legal domicile.
Q: IS THE MERGER TAXABLE TO ME?
A: Generally, if you are a U.S. person, you will recognize gain, if any, but not
loss, on the receipt of Noble-Cayman shares in the merger. The gain will
equal the excess of the value of Noble-Cayman shares you receive in the
merger over your adjusted tax basis in the shares of Noble-Delaware you
exchange. Generally, any such gain will be capital gain. Your basis in the
Noble-Cayman shares you receive in exchange for shares in which you have a
gain will equal the fair market value of those shares. You will not be
permitted to recognize any loss realized on the exchange. Instead, your basis
in those Noble-Delaware shares in which you have a loss will carry over to
the Noble-Cayman shares you receive in the merger and will be used in
determining gain or loss upon any future sale of the Noble-Cayman shares. The
U.S. federal income tax consequences to particular stockholders will depend
in part on their individual circumstances. WE URGE YOU TO CONSULT YOUR OWN
TAX ADVISOR REGARDING YOUR PARTICULAR TAX CONSEQUENCES.
Q: IS THE MERGER A TAXABLE TRANSACTION FOR EITHER NOBLE-DELAWARE OR
NOBLE-CAYMAN?
A: No. We believe Noble-Delaware and Noble-Cayman will not incur any taxes in
connection with the consummation of the merger.
2
Q: HAS THE U.S. INTERNAL REVENUE SERVICE RENDERED AN OPINION ON THE MERGER OR
THE RELATED RESTRUCTURING TRANSACTIONS?
A: No. We are not requesting any ruling from the U.S. Internal Revenue Service.
Q: WHEN DO YOU EXPECT TO COMPLETE THE MERGER?
A: We intend to complete the merger as soon as practicable following the
approval of the merger by stockholders at the stockholders' meeting.
Q: DO I HAVE TO PHYSICALLY EXCHANGE MY NOBLE-DELAWARE STOCK CERTIFICATES FOR
NOBLE-CAYMAN ORDINARY SHARE CERTIFICATES?
A: No. You will not be required to physically exchange your stock certificates
as a result of the merger. After the merger, you will own one Noble-Cayman
ordinary share for each Noble-Delaware share of common stock you owned
immediately prior to the merger, and your Noble-Delaware certificates will
represent those Noble-Cayman ordinary shares. The merger will not dilute your
ownership interest.
Q: WHAT HAPPENS TO THE PREFERRED STOCK PURCHASE RIGHTS THAT ARE ATTACHED TO MY
NOBLE-DELAWARE SHARES?
A: In connection with the merger, your existing preferred stock purchase rights
will be replaced with new Noble-Cayman preferred share purchase rights that
are identical to your current rights.
Q: CAN I TRADE NOBLE-DELAWARE SHARES BETWEEN THE DATE OF THIS PROXY
STATEMENT/PROSPECTUS AND THE EFFECTIVE TIME OF THE MERGER?
A: Yes. The Noble-Delaware common stock will continue trading during this
period.
Q: AFTER THE MERGER, WHERE CAN I TRADE ORDINARY SHARES OF NOBLE-CAYMAN?
A: The Noble-Cayman ordinary shares will be listed and traded on the New York
Stock Exchange under the symbol "NE," the same symbol under which your shares
are currently listed.
Q: WHAT VOTE IS REQUIRED TO APPROVE THE MERGER?
A: The affirmative vote of the holders of a majority of shares of Noble-Delaware
common stock that were outstanding as of the record date for the
stockholders' meeting is required to approve the merger.
OTHER PROPOSALS
Q: WHY IS NOBLE-DELAWARE ASKING ITS STOCKHOLDERS TO VOTE UPON PROPOSALS OTHER
THAN THE MERGER IF NOBLE-DELAWARE COMMON STOCK WILL NO LONGER BE PUBLICLY
HELD?
A: Our board has determined that the other proposals are in the best interests
of our stockholders and has recommended that stockholders approve them even
if the merger is not approved by stockholders. If the merger is approved, (1)
Noble-Cayman will be a public company whose shares will be traded on the New
York Stock Exchange, (2) the directors you elect at the stockholders'
meeting, together with the other continuing directors of Noble-Delaware, will
become directors of Noble-Cayman, (3) the authorized capital structure of
Noble-Cayman will replicate the capital structure of Noble-Delaware and (4)
Noble-Cayman will assume both of the option plans of Noble-Delaware that will
be considered at the stockholders' meeting.
GENERAL
Q: WHAT SHOULD I DO NOW TO VOTE?
A: You should submit your proxy or voting instructions by telephone, via the
Internet, or by completing, signing and returning the enclosed proxy card, or
voting instruction card, as appropriate, and mailing your signed proxy card,
or voting instruction card, in the enclosed return envelope as soon as
possible. If your shares are held in your name, you may also vote at the
meeting in person. Even if you plan
3
to attend the meeting, we urge you to submit your proxy by telephone, via the
Internet, or by completing, signing and returning your proxy card. You can
change your vote at any time before your proxy is voted at the meeting. You
can do this in the manner described under "The Stockholders'
Meeting -- Proxies and Voting Instruction Cards" starting on page 69.
Q: IF MY SHARES ARE HELD IN "STREET NAME", WILL MY BROKER VOTE MY SHARES FOR ME?
A: As to the proposals regarding the merger and the amendment of our certificate
of incorporation, you must instruct your broker how to vote your shares on
these proposals or else your broker will not vote your shares. Follow your
broker's directions to provide instructions as to how your shares should be
voted. Your broker may vote on the other proposals, including the election of
directors.
Q: WHOM SHOULD I CALL WITH QUESTIONS?
A: You should contact either of the following:
Noble-Delaware:
John T. Rynd
13135 South Dairy Ashford,
Suite 800
Sugar Land, Texas 77478
Fax: (281) 276-6417
Phone: (800) 897-2785
the Proxy Solicitor:
Georgeson Shareholder
Communications Inc.
1717 State Street
New York, New York 10004
Phone: (866) 800-0431
4
SUMMARY
This summary highlights selected information from this proxy
statement/prospectus. It does not contain all of the information that is
important to you. To understand more fully the merger proposal and the other
proposals to be voted on by stockholders at the stockholders' meeting, and for a
more complete legal description of the merger, you should read carefully this
entire proxy statement/prospectus, including the annexes. See also "Where You
Can Find More Information" on page 71. The Agreement and Plan of Merger attached
as Annex A to this proxy statement/prospectus is the legal document that
contains the terms and conditions of the merger. The memorandum of association
and articles of association of Noble-Cayman will serve similar purposes as the
certificate of incorporation and bylaws of Noble-Delaware. The memorandum of
association and articles of association are attached as Annex B and Annex C,
respectively. In this proxy statement/prospectus, we refer to Noble Drilling
Corporation, the Delaware corporation whose shares you currently own, as
"Noble-Delaware." We refer to Noble Corporation, the newly formed Cayman Islands
company, as "Noble-Cayman." Additionally, we sometimes refer to Noble-Delaware
and/or Noble-Cayman as "we," "us," "our" or "Noble," and "you" refers to the
stockholders of Noble-Delaware or the shareholders of Noble-Cayman, as the
context requires. In addition, as the context requires, references to
Noble-Delaware common stock and Noble-Cayman ordinary shares include the
associated Noble-Delaware preferred stock purchase rights and the Noble-Cayman
preferred share purchase rights, respectively.
PROPOSAL TO AMEND OUR CERTIFICATE OF INCORPORATION (see page 30)
At the stockholders' meeting, you will be asked to adopt a proposal to
amend the certificate of incorporation of Noble-Delaware to increase the number
of authorized shares of Noble-Delaware common stock to 400,000,000 from
200,000,000.
Your board of directors has determined that it is advisable to effect the
amendment in order to provide a sufficient number of shares for future issue for
appropriate corporate purposes. The amendment to our certificate of
incorporation will be effected if it is adopted by the stockholders irrespective
of whether the merger proposal or any other proposal to be voted on by
stockholders is approved. Assuming we have obtained the requisite stockholder
approval of the merger proposal, Noble-Cayman will have a capital structure that
is identical in all material respects to that of Noble-Delaware.
PROPOSAL TO AMEND THE NOBLE DRILLING CORPORATION 1991 STOCK OPTION AND
RESTRICTED STOCK PLAN (see page 31)
At the stockholders' meeting, you will be asked to approve a proposal to
amend the Noble Drilling Corporation 1991 Stock Option and Restricted Stock Plan
in order to increase by 5,000,000 the number of shares of common stock available
for issuance thereunder.
Your board of directors has determined that such amendment is in the best
interests of Noble and its stockholders because it will permit the continuation
of a compensation plan that assists us in attracting and retaining key
employees. The plan amendment will be effected if this proposal is approved by
the stockholders irrespective of whether the merger proposal or any other
proposal to be voted on by stockholders is approved. Assuming we have obtained
the requisite stockholder approval of the merger proposal, Noble-Cayman will
assume the Noble Drilling Corporation 1991 Stock Option and Restricted Stock
Plan, after giving effect to the proposal regarding the plan, provided it is
approved by stockholders at the meeting.
PROPOSAL REGARDING THE NOBLE DRILLING CORPORATION 1992 NONQUALIFIED STOCK OPTION
PLAN FOR NON-EMPLOYEE DIRECTORS (see page 35)
At the stockholders' meeting, you will be asked to approve a proposal
regarding the Noble Drilling Corporation 1992 Nonqualified Stock Option Plan for
Non-Employee Directors. The proposal is to ratify certain option grants made to
non-employee directors under the 1992 plan during 2001 and to approve amendments
to the 1992 plan in order to increase to 650,000 from 325,000 the number of
shares of common stock available for issuance thereunder and to increase the
size of automatic annual option grants to be made under the plan following the
stockholders' meeting to 7,500 shares.
5
Your board of directors has determined that such amendments are in the best
interests of Noble and its stockholders because they will permit the
continuation of a compensation plan that assists us in attracting and retaining
qualified individuals to serve as directors of Noble. The proposal regarding the
1992 plan will be effected if it is approved by the stockholders irrespective of
whether the merger proposal or any other proposal to be voted on by stockholders
is approved. Assuming we have obtained the requisite stockholder approval of the
merger proposal, Noble-Cayman will assume the plan after giving effect to the
amendments to be voted on by stockholders provided they are approved by
stockholders at the meeting.
THE MERGER PROPOSAL (see page 38)
PARTIES TO THE MERGER
Noble-Delaware. Noble-Delaware was organized as a Delaware corporation in
1939. Noble-Delaware and its predecessors have been engaged in the contract
drilling of oil and gas wells domestically since 1921 and internationally during
various periods since 1939. We are a leading provider of diversified services
for the oil and gas industry. We perform contract drilling services with our
fleet of 49 offshore drilling units located in key markets worldwide. Our fleet
of floating deepwater units consists of nine semisubmersibles and three
dynamically positioned drillships, seven of which are designed to operate in
water depths greater than 5,000 feet. Our premium fleet of 34 independent leg,
cantilever jackup rigs includes 21 units that operate in water depths of 300
feet and greater, four of which operate in water depths of 360 feet and greater,
and 11 units that operate in water depths up to 250 feet. In addition, our fleet
includes three submersible drilling units. Nine of our drilling units are
capable of operating in harsh environments. Over 60% of our fleet is currently
deployed in international markets, principally including the North Sea, Brazil,
West Africa, the Middle East, India and Mexico. We operated in Venezuela as
recently as 2000. We also provide labor contract drilling services, well site
and project management services, and engineering services.
Merger Sub and Holdco. The merger sub is a newly formed Delaware
corporation. The merger sub was formed to merge with and into Noble-Delaware in
the merger. All merger sub shares are currently held by Holdco, a newly formed
Delaware subsidiary of Noble-Cayman. Holdco was formed to accomplish the
proposed merger and to hold all of the common stock of Noble-Delaware subsequent
to the merger. Neither the merger sub nor Holdco has transacted any business to
date except in connection with its formation and the merger and related
transactions.
Noble-Cayman. Noble-Cayman is a newly formed Cayman Islands exempted
company limited by shares and is currently wholly owned by Noble-Delaware.
Noble-Cayman 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 merger and related restructuring. As a result of the restructuring,
Noble-Cayman will become the parent holding company of the Noble corporate group
of subsidiary companies, including Noble-Delaware.
The principal executive offices of Noble-Cayman, Noble-Delaware, the merger
sub and Holdco are located at 13135 South Dairy Ashford, Suite 800, Sugar Land,
Texas 77478. The telephone number of each party at that address is (281)
276-6100.
THE MERGER
The merger is a transaction that will result in your owning ordinary shares
in a Cayman Islands company rather than common stock in a Delaware corporation.
You will own your shares in the Cayman Islands company in the same percentage as
you now own shares in the Delaware corporation.
The merger will effectively change our place of incorporation from Delaware
to the Cayman Islands. After completion of the merger, Noble-Cayman will
continue to conduct the businesses that Noble-Delaware now conducts.
The merger involves several steps. First, we have formed Noble-Cayman.
Noble-Cayman has formed Holdco, which in turn has formed the merger sub.
Finally, following the stockholders' meeting, assuming we have obtained the
requisite stockholder approval, the merger sub will merge with and into
Noble-Delaware, with Noble-Delaware surviving, and each outstanding share of
common stock of Noble-Delaware will automatically become one ordinary share of
Noble-Cay-
6
man. The Agreement and Plan of Merger, attached hereto as Annex A, is the
document that sets forth the terms of the merger.
We anticipate that the merger will become effective as soon as practicable
following the stockholders' meeting, if it is approved at the stockholders'
meeting by the requisite vote of our stockholders.
REASONS FOR THE MERGER
Currently, we conduct a substantial portion of our business in
international markets. Over 60% of our fleet is deployed in international
markets and approximately 54% of our 2001 revenues were derived from our
international operations. We expect that a substantial portion of the future
opportunities in our business will arise in international markets. We believe
that restructuring Noble as a Cayman Islands company will give us advantages in
pursuing these opportunities that are not available to a U.S. company and will
be more consistent with our business operations. In particular, we believe that
the merger:
- will promote our flexibility to reduce our worldwide effective corporate
tax rate;
- will allow us to restructure our business to increase operational
efficiencies, including improved worldwide cash management;
- will result in a corporate structure that is generally more favorable to
expand our business through acquisitions and use of joint ventures; and
- may increase our access to international capital markets and cause our
securities to become more attractive to non-U.S. investors, thus
providing the opportunity to broaden our investor base.
TAX CONSIDERATIONS
Taxation of Noble-Delaware and Noble-Cayman. Noble-Delaware and
Noble-Cayman will not incur any taxes in connection with the consummation of the
merger.
We may further restructure our operations internally following the merger
to best achieve our business objectives. We do not expect that any such further
restructuring would require us to obtain approval of the shareholders of Noble-
Cayman. Depending on the timing and means of achieving any such further
restructuring, we may incur tax liability. We do not expect any such liability
would be material.
Taxation of Noble-Delaware Stockholders. 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 Noble-Cayman shares in the merger. Generally the
gain will equal the excess of the fair market value of the Noble-Cayman shares
received in exchange for Noble-Delaware shares in the merger over the holder's
adjusted tax basis in the shares of Noble-Delaware exchanged. Generally, any
such gain will be capital gain. The holder's basis in those Noble-Cayman shares
will equal the fair market value of those shares. Stockholders will not be
permitted to recognize any loss realized on the exchange of their shares of
Noble-Delaware for shares of Noble-Cayman. Instead, their basis in those
Noble-Delaware shares in which they have a loss will carry over to the
Noble-Cayman shares they receive in the merger and will be used in determining
gain or loss upon any future sale of the Noble-Cayman shares. The holding period
for any Noble-Cayman shares received by a U.S. holder in exchange for
Noble-Delaware shares with respect to which gain was recognized will begin at
the effective date of the merger. The holding period for any Noble-Cayman shares
received by a U.S. holder in exchange for Noble-Delaware shares with respect to
which the holder has a loss will include the holding period of those
Noble-Delaware shares. The U.S. federal income tax consequences to particular
stockholders will depend in part on their individual circumstances.
WE ENCOURAGE YOU TO READ THE SECTION ENTITLED "MATERIAL INCOME TAX
CONSEQUENCES OF THE MERGER" BEGINNING ON PAGE 44 FOR A MORE DETAILED DESCRIPTION
OF THESE TAX CONSEQUENCES. WE ALSO URGE YOU TO CONSULT YOUR OWN TAX ADVISOR
REGARDING YOUR PARTICULAR TAX CONSEQUENCES.
NO PHYSICAL EXCHANGE OF CERTIFICATES
In the merger, each of your Noble-Delaware shares will be converted into
one ordinary share of Noble-Cayman. Your proportionate share ownership will not
change as a result of the merger. Your Noble-Delaware stock certificates will
auto-
7
matically become certificates representing Noble-Cayman shares, and you will not
be required to physically exchange your stock certificates, in connection with
the merger.
RIGHTS OF STOCKHOLDERS
The principal attributes of the Noble-Delaware shares and the Noble-Cayman
shares will be similar. However, there are differences between the rights of
stockholders under Delaware law and the rights of shareholders under Cayman
Islands law. In addition, there are differences between Noble-Delaware's
certificate of incorporation and bylaws and Noble-Cayman's memorandum of
association and articles of association. We discuss these differences in more
detail under "Description of Authorized Shares of Noble-Cayman" and "Comparison
of Rights of Stockholders/ Shareholders."
STOCKHOLDER/SHAREHOLDER RIGHTS PLANS
Noble-Delaware has a stockholder rights plan under which preferred stock
purchase rights are issued to stockholders of Noble-Delaware at the rate of one
right for each outstanding share of Noble-Delaware common stock. Noble-Cayman
has a shareholder rights plan that is substantially similar to the
Noble-Delaware stockholder rights plan. The Noble-Cayman plan provides for the
issuance of new preferred share purchase rights that are equivalent to the
Noble-Delaware preferred stock purchase rights. The new Noble-Cayman rights will
attach to all Noble-Cayman ordinary shares issued in connection with the merger
and thereafter.
The Noble-Delaware stockholder rights plan has been amended to provide that
the existing rights will expire immediately prior to the effective time of the
merger. This amendment of the Noble-Delaware stockholder rights plan will not
result in the issuance of any stock pursuant to the rights or trigger redemption
of the rights and will effectively terminate the Noble-Delaware stockholder
rights plan immediately prior to the effective time of the merger. Stockholder
approval of the Agreement and Plan of Merger will also constitute any required
stockholder approval of the amendment to the Noble-Delaware stockholder rights
plan.
STOCK EXCHANGE LISTING
Immediately following the merger, the Noble-Cayman ordinary shares will be
listed on the New York Stock Exchange under the symbol "NE". This is the same
symbol under which the Noble-Delaware common stock is currently listed.
Noble-Delaware is currently included in the S&P 500 Index. We have been advised
by Standard & Poor's that Standard & Poor's does not expect any change to our
membership in the S&P 500 Index as a result of the merger, so long as we do not
change the businesses we are engaged in, or the location of our executive
offices and principal places of business as a result of the merger. The merger
will not result in any such changes.
REGULATORY APPROVALS
Currently, neither Noble-Delaware nor Noble-Cayman is required to file any
information with the U.S. Federal Trade Commission or the Antitrust Division of
the U.S. Department of Justice under the provisions of the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, in connection with the merger.
We are not aware of any other governmental approvals or actions that are
required to complete the merger other than compliance with U.S. federal and
state securities laws and Delaware and Cayman Islands corporate law.
RIGHTS OF DISSENTING STOCKHOLDERS
You will not have dissenters' appraisal rights in connection with the
merger.
ACCOUNTING TREATMENT OF THE MERGER
The merger will be accounted for as a combination of entities under common
control using the historical cost basis of the combining companies. The
accounting policies, procedures and internal controls of Noble-Cayman will
remain unchanged from those of Noble-Delaware as a result of the merger.
MARKET PRICE
The closing price per share of Noble-Delaware common stock on the New York
Stock Exchange was $38.92 on March 12, 2002. The high and low sales prices of
the Noble-Delaware common stock on the New York Stock Exchange were $31.06 and
$29.15, respectively, on Janu-
8
ary 30, 2002, the last trading day before the public announcement of the merger.
STOCKHOLDERS' MEETING (see page 68)
TIME, DATE, PLACE AND PURPOSE
The stockholders' meeting will be held at 10:00 a.m., Houston, Texas time,
on April 25, 2002, at the St. Regis Hotel, 1919 Briar Oaks Lane, Houston, Texas.
At the stockholders' meeting, you will be asked to approve the merger by voting
to adopt the Agreement and Plan of Merger. You will also be asked to elect two
persons to the board of directors of Noble-Delaware, to approve an amendment to
our certificate of incorporation to increase the number of authorized shares of
common stock of Noble-Delaware, and to approve certain proposals regarding two
stock option plans of Noble-Delaware.
RECORD DATE
Only holders of record of Noble-Delaware common stock at the close of
business on March 7, 2002, as shown in Noble-Delaware's transfer records, will
be entitled to vote, or to grant proxies to vote, at the stockholders' meeting.
QUORUM
The presence, in person or by proxy, of persons holding a majority of the
outstanding shares of Noble-Delaware common stock entitled to vote at the
stockholders' meeting will constitute a quorum.
RECOMMENDATIONS OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE
ELECTION OF ITS NOMINEES FOR DIRECTOR.
THE BOARD OF DIRECTORS HAS ALSO UNANIMOUSLY APPROVED THE PROPOSAL REGARDING
THE AMENDMENT OF OUR CERTIFICATE OF INCORPORATION AND THE PROPOSALS REGARDING
THE NOBLE DRILLING CORPORATION 1991 STOCK OPTION AND RESTRICTED STOCK PLAN AND
THE NOBLE DRILLING CORPORATION 1992 NONQUALIFIED STOCK OPTION PLAN FOR
NON-EMPLOYEE DIRECTORS, AND RECOMMENDS THAT YOU VOTE FOR THE APPROVAL AND
ADOPTION OF SUCH PROPOSALS.
THE BOARD OF DIRECTORS HAS ALSO UNANIMOUSLY APPROVED THE MERGER AND
RECOMMENDS THAT YOU VOTE FOR THE ADOPTION OF THE AGREEMENT AND PLAN OF MERGER.
VOTES REQUIRED (see page 68)
The directors nominated for election this year will be elected by a
plurality of the shares of Noble-Delaware common stock present and entitled to
vote at the stockholders' meeting.
Approval of the proposals regarding the Noble Drilling Corporation 1991
Stock Option and Restricted Stock Plan and the Noble Drilling Corporation 1992
Nonqualified Stock Option Plan for Non-Employee Directors requires the
affirmative vote of the holders of a majority of the outstanding shares of
Noble-Delaware common stock present and entitled to vote at the stockholders'
meeting.
Approval and adoption of the merger and the Agreement and Plan of Merger
and the amendment of Noble-Delaware's certificate of incorporation requires the
affirmative vote of the holders of a majority of the shares of Noble-Delaware
common stock outstanding and entitled to vote at the stockholders' meeting.
As of March 7, 2002, the record date, there were 132,135,326 shares of
Noble-Delaware common stock outstanding and entitled to vote. As of the record
date, our directors and executive officers and their affiliates directly owned,
in the aggregate, approximately 2,504,644 of such shares. This represents
approximately 1.88% of the outstanding shares of Noble-Delaware common stock.
These persons have informed us that they intend to vote their shares for the
election of the two directors nominated by the board of directors for election
at the meeting, in favor of the proposal to amend Noble-Delaware's certificate
of incorporation, in favor of the proposals regarding the Noble Drilling
Corporation 1991 Stock Option and Restricted Stock Plan and the Noble Drilling
Corporation 1992 Nonqualified Stock Option Plan for Non-Employee Directors, and
in favor of the adoption of the Agreement and Plan of Merger.
PROXIES AND VOTING INSTRUCTION CARDS (see page 69)
PROXIES
A proxy card is being sent to each holder of shares of Noble-Delaware
common stock as of the record date. If you held shares on the record date,
9
you may grant a proxy by telephone, via the Internet, or by marking the proxy
card appropriately, executing it in the space provided and returning it to
Noble-Delaware. If you hold your Noble-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 proxy card
must be received by Noble-Delaware prior to the beginning of voting at the
stockholders' meeting. See "Proxy Voting Options" above and "The Stockholders'
Meeting -- Proxies and Voting Instruction Cards" on page 69.
VOTING INSTRUCTION CARDS
A voting instruction card is being sent to participants in the Noble
Drilling Corporation 401(k) Savings Plan, as amended (the "Savings Plan"). If
you were a participant in the Savings Plan on the record date, you may instruct
the trustee of the Savings Plan how to vote by telephone, via the Internet, or
by marking the voting instruction card appropriately, executing it in the space
provided and returning it to Noble-Delaware. To be effective, a voting
instruction card must be received by Noble-Delaware prior to the beginning of
voting at the stockholders' meeting. See "Proxy Voting Options" above and "The
Stockholders' Meeting -- Proxies and Voting Instruction Cards" on page 69.
REVOCATION
A proxy may be revoked at any time prior to the time the proxy is voted at
the stockholders' meeting by any of the following methods:
- giving written notice of the revocation to the Secretary of
Noble-Delaware;
- appearing and voting in person at the stockholders' meeting; or
- submitting a new proxy with a later date, including a proxy given by
telephone, via the Internet or a properly completed, signed and delivered
later-dated proxy.
ABSENCE OF INSTRUCTIONS
Shares represented by a proxy that has not been revoked will be voted at
the meeting in accordance with the directions given. If no direction is made,
the proxy will be voted FOR the election of the two directors nominated by the
board of directors for election at the meeting, FOR the amendment to the
certificate of incorporation, FOR the amendment to the 1991 Stock Option and
Restricted Stock Plan, FOR the proposal regarding the 1992 Nonqualified Stock
Option Plan for Non-Employee Directors and FOR the approval and adoption of the
Agreement and Plan of Merger.
The trustee under the Savings Plan will vote the shares of common stock
credited to the Savings Plan participants' accounts in accordance with such
participants' instructions. If no such voting instructions are received from a
participant, then, unless otherwise instructed by the Savings Plan Committee,
the trustee under the Savings Plan will vote the shares credited to such
participant's account in the same proportions as the shares for which voting
instructions have been received from Savings Plan participants.
10
SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA
We prepared the selected historical consolidated financial data of
Noble-Delaware in the table below using the consolidated financial statements of
Noble-Delaware. We derived the consolidated income data below for each of the
five years ended December 31, 2001, and the other data as of December 31 for
each of such years, from our consolidated financial statements audited by
PricewaterhouseCoopers LLP, independent accountants.
We have included no data for Noble-Cayman, Holdco or the merger sub because
those entities were not in existence during any of the periods shown below.
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------
2001 2000 1999 1998 1997
---------- ---------- ---------- ---------- ----------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
STATEMENT OF INCOME DATA
Operating revenues.................... $1,002,329 $ 882,600 $ 705,903 $ 788,241 $ 713,195
Income before extraordinary
charge(1)(2)........................ 263,910 165,554 95,302 162,032 263,882
Net income(1)(2)(3)................... 262,922 165,554 84,469 162,032 257,197
Per common share:(1)
Income before extraordinary charge:
Basic............................ $ 1.99 $ 1.24 $ 0.72 $ 1.24 $ 2.00
Diluted.......................... 1.97 1.22 0.72 1.23 1.98
Net income:(3)
Basic............................ $ 1.98 $ 1.24 $ 0.64 $ 1.24 $ 1.95
Diluted.......................... 1.96 1.22 0.64 1.23 1.93
BALANCE SHEET DATA (at end of period)
Property and equipment, net........... $2,149,217 $2,095,129 $2,049,769 $1,649,133 $1,182,927
Total assets.......................... 2,750,740 2,595,531 2,432,324 2,178,632 1,505,811
Long-term debt........................ 550,131 650,291 730,893 460,842 138,139
Total debt(4)......................... 605,561 699,642 790,353 609,628 147,837
Shareholders' equity.................. 1,778,319 1,576,719 1,398,042 1,310,473 1,149,054
OTHER DATA
Net cash provided by operating
activities.......................... $ 451,046 $ 330,736 $ 277,443 $ 263,081 $ 203,741
Capital expenditures.................. 133,776 125,199 421,679 540,571 391,065
---------------
(1) The amounts include non-recurring gains on sales of property and equipment,
net of tax, of $128,489,000 ($0.97 per basic share and $0.96 per diluted
share) in 1997.
(2) The 1999 amount includes a non-recurring restructuring charge of $4,861,000,
net of tax, related to early retirement packages offered to a number of
domestic employees and the relocation of our Lafayette, Louisiana office to
Sugar Land, Texas.
(3) The amounts include net extraordinary charges of $988,000 ($0.01 per basic
and diluted share), $10,833,000 ($0.08 per basic and diluted share), and
$6,685,000 ($0.05 per basic and diluted share) in 2001, 1999 and 1997,
respectively.
(4) Consists of long-term debt ($550,131,000 at December 31, 2001), short-term
debt and current maturities of long-term debt ($55,430,000 at December 31,
2001). The December 31, 2001 amount includes $58,647,000 principal amount of
fixed rate senior secured notes issued by an indirect, wholly owned
subsidiary of Noble-Delaware, which notes are non-recourse except to the
issuer thereof.
11
SUMMARY PRO FORMA FINANCIAL INFORMATION
We have not presented a pro forma consolidated condensed balance sheet for
Noble-Cayman in this proxy statement/prospectus because it would be identical to
the historical consolidated condensed balance sheet of Noble-Delaware as of
December 31, 2001. That balance sheet is included in Noble-Delaware's Annual
Report on Form 10-K for the year ended December 31, 2001.
We have not presented a pro forma consolidated condensed statement of
income for Noble-Cayman in this proxy statement/prospectus because it would be
identical to the historical consolidated condensed statement of income of
Noble-Delaware for the year ended December 31, 2001. That statement of income is
also included in Noble-Delaware's Annual Report on Form 10-K for the year ended
December 31, 2001.
Costs incurred in connection with the merger are not expected to be
material and will be expensed as incurred.
12
RISK FACTORS
In considering whether to vote for approval of the merger, you should
consider carefully the following risks or investment considerations related to
the merger and the restructuring, in addition to the other information in this
proxy statement/prospectus.
THE MERGER WILL RESULT IN A TAXABLE GAIN TO CERTAIN NOBLE-DELAWARE STOCKHOLDERS.
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
Noble-Cayman ordinary shares in the merger. The gain recognized would equal the
excess, if any, of the fair market value of the Noble-Cayman ordinary shares
received in exchange for shares of Noble-Delaware common stock in which the
stockholder has a gain over the stockholder's adjusted tax basis in the shares
of Noble-Delaware common stock so exchanged. Generally, any such gain will be
capital gain. Stockholders will not be permitted to recognize any loss realized
on the exchange of their shares in the merger. Stockholders who have acquired
shares of Noble-Delaware common stock over a period of time may have a gain in
some shares, which will be recognized, and a loss in some shares, which will be
deferred. The U.S. federal income tax consequences to particular stockholders
will depend in part on their individual circumstances.
WE URGE YOU TO CONSULT YOUR OWN TAX ADVISOR REGARDING YOUR PARTICULAR TAX
CONSEQUENCES OF THE MERGER.
THE U.S. INTERNAL REVENUE SERVICE AND NON-U.S. TAXING AUTHORITIES MAY NOT AGREE
WITH OUR TAX TREATMENT OF VARIOUS ITEMS.
We believe that the restructuring will help reduce our worldwide effective
corporate tax rate. However, we cannot provide you any assurance as to the
amount of taxes we will pay as a result of or after the restructuring. The
amount of taxes we will pay will depend in part on whether the taxing
authorities in the jurisdictions in which we operate or are resident agree with
our treatment of various items associated with the restructuring.
The U.S. Treasury Department recently announced that it is conducting a
study of the issues arising in connection with transactions that are structured
similarly to the merger, and the implications of these transactions for U.S.
federal income tax purposes. We cannot predict the results of this study, or how
the results might affect the tax status of Noble-Cayman under U.S. tax laws
following the merger, if at all. If the U.S. Internal Revenue Service challenges
our treatment of the merger under U.S. tax laws, as a result of the study by the
U.S. Treasury Department or otherwise, or if the U.S. Congress subsequently
changes U.S. tax laws (see risk factor captioned "Changes in laws, including tax
law changes, could adversely affect Noble-Cayman, its subsidiaries and its
shareholders" below), it is possible that, if the merger has been consummated,
certain of our stockholders will have incurred taxable gain for U.S. federal
income tax purposes even though we would not obtain the reduction in our
worldwide effective corporate tax rate we seek to obtain as a result of the
merger.
THE U.S. INTERNAL REVENUE SERVICE MAY SUCCESSFULLY CONTEND THAT NOBLE-CAYMAN
SHOULD BE SUBJECT TO U.S. CORPORATE INCOME TAX, WHICH WOULD REDUCE
NOBLE-CAYMAN'S NET INCOME.
We believe that after the merger, the operations of Noble-Cayman and its
non-U.S. subsidiaries generally will not be subject to U.S. federal income tax
other than withholding taxes. However, if the U.S. Internal Revenue Service
successfully contends that Noble-Cayman or any of its non-U.S. subsidiaries is
engaged in a trade or business in the United States, Noble-Cayman or such
non-U.S. subsidiary would, subject to possible income tax treaty exemptions, be
required to pay U.S. corporate income tax and/or branch profits tax on income
that is effectively connected with such trade or business. Payment of any such
tax would reduce the net income of Noble-Cayman.
13
CHANGES IN LAWS, INCLUDING TAX LAW CHANGES, COULD ADVERSELY AFFECT NOBLE-CAYMAN,
ITS SUBSIDIARIES AND ITS SHAREHOLDERS.
Changes in tax laws, treaties or regulations or the interpretation or
enforcement thereof in the United States, the Cayman Islands or jurisdictions in
which Noble-Cayman or any of its subsidiaries operates or is resident could
adversely affect the tax consequences of the restructuring to Noble-Cayman, its
subsidiaries and its shareholders. Recently, two bills were introduced in the
U.S. House of Representatives , either of which could, if enacted, cause
Noble-Cayman to be required to pay U.S. federal income taxes. Payment of any
such tax would reduce the net income of Noble-Cayman. In addition, if the U.S.
Internal Revenue Service or other taxing authorities do not agree with our
assessment of the effects of such laws, treaties and regulations, this could
have a material adverse effect on the tax consequences of the restructuring.
At the present time, there is no Cayman Islands income or profits tax,
withholding tax, capital gains tax, capital transfer tax, estate duty or
inheritance tax payable by a Cayman Islands company or its shareholders.
Furthermore, Noble-Cayman has applied for and expects to receive an undertaking
from the Governor in Council of the Cayman Islands under the Tax Concessions Law
(1999 Revision) that generally provides that no new Cayman Islands taxes will be
applied to Noble-Cayman for 20 years from the date of the undertaking. We could
be subject to taxes in the Cayman Islands after that date. This undertaking
would not, however, prevent the imposition of taxes on any person ordinarily
resident in the Cayman Islands or any company in respect of its ownership of
real property or leasehold interests in the Cayman Islands.
In addition, as a company incorporated under the law of the Cayman Islands,
Noble-Cayman will become subject to changes in other laws of the Cayman Islands
and your rights as a shareholder of Noble-Cayman could change after the merger
as a result of such changes.
YOUR RIGHTS AS A STOCKHOLDER OF NOBLE-DELAWARE WILL CHANGE AS A RESULT OF THE
MERGER.
Because of the differences between Cayman Islands laws and Delaware laws
and certain differences between the governing documents of Noble-Cayman and
Noble-Delaware, your rights as a stockholder will change if the merger is
completed. For a detailed discussion of these differences, see "Comparison of
Rights of Stockholders/Shareholders" beginning on page 56.
THE ENFORCEMENT OF CIVIL LIABILITIES AGAINST NOBLE-CAYMAN MAY BE MORE DIFFICULT.
Noble-Cayman will be a Cayman Islands company and a substantial portion of
its assets may be located outside the United States. As a result, investors
could experience more difficulty enforcing judgments obtained against us in U.S.
courts than would currently be the case for U.S. judgments obtained against
Noble-Delaware. In addition, some claims may be more difficult to bring against
Noble-Cayman in Cayman Islands courts than it would be to bring similar claims
against a U.S. company in a U.S. court.
THE MARKET FOR NOBLE-CAYMAN SHARES MAY DIFFER FROM THE MARKET FOR NOBLE-DELAWARE
SHARES.
We intend to list the Noble-Cayman ordinary shares on the New York Stock
Exchange under the symbol "NE," the same trading symbol under which the
Noble-Delaware shares of common stock are currently listed on the NYSE. The
market price, trading volume or volatility of the Noble-Cayman shares could be
different from those of the Noble-Delaware shares.
WE MAY CHOOSE TO DEFER OR ABANDON THE MERGER.
The merger may be terminated and abandoned, at any time, by action of our
board of directors, whether before or after the stockholders' meeting. While we
currently expect the merger to take place as soon as practicable after obtaining
stockholder approval of the merger at the stockholders' meeting, the board of
directors may defer the merger for a significant time or may abandon the merger
after the stockholders' meeting because, among other reasons, of an increase in
our estimated cost of the merger or a determination by the board of directors
that the merger would have material adverse consequences to Noble.
14
VOTING SECURITIES
Our only outstanding voting security is the Noble-Delaware common stock.
Only holders of record of such common stock at the close of business on March 7,
2002, the record date for the stockholders' meeting, are entitled to notice of
and to vote at the meeting. On the record date for the stockholders' meeting,
there were 132,135,326 shares of Noble-Delaware common stock outstanding and
entitled to vote at the meeting. A majority of such shares of common stock,
present in person or represented by proxy, is necessary to constitute a quorum.
Each share of common stock is entitled to one vote. Under Delaware law, the
holders of Noble-Delaware common stock do not have appraisal rights with respect
to the matters to be voted upon at the stockholders' meeting.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth as of December 31, 2001 information with
respect to the only persons who were known by us to be the beneficial owners of
more than five percent of the outstanding shares of Noble-Delaware common stock.
NOBLE-DELAWARE COMMON STOCK
BENEFICIALLY OWNED
-----------------------------------
NAME AND ADDRESS OF BENEFICIAL OWNER NUMBER OF SHARES PERCENT OF CLASS
------------------------------------ ---------------- ----------------
AXA Financial, Inc. ...................................... 14,015,019(1) 10.6%
1290 Avenue of the Americas
New York, New York 10104
FMR Corp. ................................................ 13,061,819(2) 9.9%
82 Devonshire Street
Boston, Massachusetts 02109
Massachusetts Financial................................... 11,947,178(3) 9.0%
Services Company
500 Boylston Street
Boston, Massachusetts 02116
State Street Research & Management Company................ 6,607,650(4) 5.0%
One Financial Center, 30th Floor
Boston, Massachusetts 02111-2690
---------------
(1) According to a Schedule 13G (Amendment No. 8) dated February 12, 2002, filed
with the U.S. Securities and Exchange Commission (the "SEC") by AXA
Financial, Inc. jointly with AXA Conseil Vie Assurance Mutuelle, AXA
Assurances I.A.R.D. Mutuelle, AXA Assurances Vie Mutuelle, and AXA Courtage
Assurance Mutuelle and AXA, the amount beneficially owned includes (i)
48,800 shares beneficially owned by The Equitable Life Assurance Society of
the United States, with respect to which it has sole investment power, (ii)
13,371,169 shares beneficially owned by Alliance Capital Management L.P.
Alliance Capital Management L.P. has sole investment power with respect to
all of such shares, sole voting power with respect to 3,946,529 shares and
shared voting power with respect to 6,167,200 shares, (iii) 21,600 shares
beneficially owned by AXA Investment Managers Paris (France) with respect to
which it has sole voting power and sole investment power, and (iv) 573,450
shares beneficially owned by AXA Investment Managers UK Ltd., with respect
to which it has sole voting power and sole investment power.
(2) According to a Schedule 13G (Amendment No. 4) dated February 14, 2002, filed
with the SEC by FMR Corp. jointly with Edward C. Johnson 3d, Abigail P.
Johnson and Fidelity Management & Research Company ("Fidelity"), the amount
beneficially owned includes (i) 6,950,350 shares owned by several investment
companies ("Funds") for which Fidelity acts as investment adviser and (ii)
2,002,879 shares beneficially owned by Fidelity Management Trust Company
("FMTC") in its capacity as investment manager of certain institutional
accounts (the "Accounts"). FMR Corp. is the parent of Fidelity and FMTC and
is controlled by Edward C. Johnson 3d. Neither FMR Corp. nor Mr. Johnson has
sole voting power with respect to the shares owned by the Funds. Mr. Johnson
and FMR Corp., through its control of Fidelity, each has sole investment
power with respect to all of such
15
shares owned by the Funds. Mr. Johnson and FMR Corp., through its control of
FMTC, each has sole investment power with respect to all shares owned by the
Accounts, sole voting power with respect to 1,994,879 of such shares and no
voting power with respect to 8,000 of such shares. Fidelity International
Limited ("FIL"), acting as an investment adviser to non-U.S. investment
companies and certain institutional investors, is the beneficial owner of
4,108,190 of such shares. FIL has sole voting power and sole investment
power with respect to all of such shares. Strategic Advisors, Inc., which
provides investment advisory services to individuals, is the beneficial
owner and has the sole investment power with respect to 400 shares, but no
voting power with respect to such shares.
(3) According to a Schedule 13G (Amendment No. 3) dated February 12, 2002, filed
with the SEC, Massachusetts Financial Services Company has sole voting power
with respect to 11,454,822 of such shares and sole investment power with
respect to all of such shares.
(4) According to a Schedule 13G dated February 19, 2002, filed with the SEC,
State Street Research & Management Company has sole voting power with
respect to 6,453,202 of such shares and sole investment power with respect
to all of such shares.
ELECTION OF DIRECTORS
Our certificate of incorporation and bylaws provide for three classes of
directors, with approximately one-third of the directors constituting the board
of directors being elected each year to serve a three-year term. There are two
directors comprising the class whose term expires at the stockholders' meeting:
Lawrence J. Chazen and William A. Sears.
In accordance with our bylaws, the board of directors increased the number
of directors comprising the board from seven to eight with the appointment of
Luke R. Corbett on October 25, 2001. The board has nominated Messrs. Chazen and
Sears for re-election as directors of Noble-Delaware to serve three-year terms
expiring in 2005.
The directors nominated for election this year will be elected by a
plurality of the shares of Noble-Delaware common stock present in person or
represented by proxy at the stockholders' meeting and entitled to vote. All duly
submitted and unrevoked proxies will be voted for the nominees selected by the
board of directors, except where authorization so to vote is withheld. THE BOARD
RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE ELECTION OF ITS NOMINEES FOR DIRECTOR.
If the merger is approved by stockholders at the stockholders' meeting, the
board of directors of Noble-Delaware, including those directors elected by
stockholders at the stockholders' meeting, will become the directors of
Noble-Cayman and will carry their terms of office over to the Noble-Cayman
board.
Information with respect to the directors nominated for election this year,
and the directors whose terms do not expire at the stockholders' meeting, is
presented below.
NOMINEES FOR DIRECTORS
LAWRENCE J. CHAZEN,
age 61, director since 1994 Mr. Chazen has served since 1977 as Chief
Executive Officer of Lawrence J. Chazen, Inc.,
a California registered investment adviser
engaged in providing financial advisory
services.
WILLIAM A. SEARS,
age 67, director since 1998 Mr. Sears retired from his position as Director
of Operations for British Petroleum Exploration
in 1997, after serving with them in various
positions since 1983.
16
CLASS WHOSE TERM EXPIRES IN 2003
ROBERT D. CAMPBELL,
age 51, director since 1999 Mr. Campbell has served as President of
Noble-Delaware since January 1, 1999 and as a
Director since February 4, 1999. Prior to
January 1, 1999, Mr. Campbell practiced
corporate and securities law as a senior
shareholder with the law firm of Thompson &
Knight, P.C. and served as our general counsel
for more than five years.
JAMES C. DAY,
age 58, director since 1983 Mr. Day has served as Chairman of the Board of
Noble-Delaware since October 22, 1992, as Chief
Executive Officer since January 1, 1984, and he
served as President from January 1, 1984 to
January 1, 1999. From January 1983 until his
election as President and Chief Executive
Officer, Mr. Day served as Vice President. Mr.
Day is also a director of Global Industries
Ltd. and Noble Affiliates, Inc. and a trustee
of The Samuel Roberts Noble Foundation, Inc.
MARC E. LELAND,
age 63, director since 1994 Mr. Leland has served since 1984 as President
of Marc E. Leland & Associates, Inc., a company
engaged in the business of providing financial
advisory services. Mr. Leland is also a
director of Chartwell Leisure Inc.
CLASS WHOSE TERM EXPIRES IN 2004
MICHAEL A. CAWLEY,
age 54, director since 1985 Mr. Cawley has served as President and Chief
Executive Officer of The Samuel Roberts Noble
Foundation, Inc. since February 1, 1992, after
serving as Executive Vice President of the
Foundation since January 1, 1991. For more than
five years prior to 1991, Mr. Cawley was the
President of Thompson & Cawley, a professional
corporation, attorneys at law; and Mr. Cawley
currently serves as of counsel to the law firm
of Thompson, Cawley, Veazey & Burns, a
professional corporation. Mr. Cawley has served
as a trustee of the Foundation since 1988 and
is also a director of Noble Affiliates, Inc.
and Panhandle Royalty Company.
LUKE R. CORBETT,
age 55, director since 2001 Mr. Corbett has served as Chairman of the Board
and Chief Executive Officer of Kerr-McGee
Corporation since May 1999, and also from
February 1997 to February 1999. Between
February 1999 and May 1999, he served as Chief
Executive Officer of Kerr-McGee, and from 1995
to 1997, he served as President and Chief
Operating Officer of Kerr-McGee. Mr. Corbett
has served as a director of Kerr-McGee since
1995. He also serves on the Boards of Directors
of OGE Energy Corporation and BOK Financial
Corporation.
JACK E. LITTLE,
age 63, director since 2000 Mr. Little was President and Chief Executive
Officer of Shell Oil Company, and a member of
the Board of Directors and Chairman and Chief
Executive Officer of Shell Exploration &
Production Company for more than five years
until his retirement in June 1999.
17
ADDITIONAL INFORMATION REGARDING THE BOARD OF DIRECTORS
BOARD MEETINGS AND COMMITTEES
During 2001, prior to Mr. Corbett's appointment to our board of directors
in October 2001, our board held four meetings. All seven directors then in
office attended all of the meetings. Following Mr. Corbett's appointment, all of
the eight directors attended the remaining one board meeting. Noble-Delaware has
standing audit, compensation, finance and nominating committees of its board of
directors. The current members of the committees, number of meetings held by
each committee in 2001, and a brief description of the functions performed by
each committee are set forth below:
Audit Committee (four meetings). The current members of the audit
committee are Jack E. Little, Chairman; Lawrence J. Chazen; and William A.
Sears. Each of the members attended all meetings of the audit committee
held during 2001. The primary responsibility of the audit committee is to
review with our auditors the scope of the audit procedures to be applied in
conducting the annual audit and the results of the annual audit. The audit
committee's report relating to the 2001 fiscal year begins on page 29.
Compensation Committee (four meetings). The current members of the
compensation committee are Michael A. Cawley, Chairman; Luke R. Corbett;
and Marc E. Leland. Prior to Mr. Corbett's appointment to the committee in
October 2001, the committee held three meetings, which were attended by all
members. Following Mr. Corbett's appointment to the committee, all of the
members attended the remaining meeting. The primary responsibilities of the
compensation committee are to review and set the compensation levels of our
officers, including those officers who are also directors, evaluate the
performance of management, consider management succession and related
matters, administer our annual compensation plans and administer our
long-term incentive compensation plans. The compensation committee's report
relating to the 2001 fiscal year begins on page 21.
Finance Committee (four meetings). The current members of the finance
committee are Marc E. Leland, Chairman; Robert D. Campbell; and William A.
Sears. Two of the three members, Messrs. Campbell and Sears, attended all
meetings of the committee during 2001 and Mr. Leland attended at least 75%
of such meetings. The primary responsibilities of the finance committee are
to review and make recommendations to the board of directors with regard to
our financial affairs and policies, including capital requirements and
structure, share repurchase programs, dividend policy and long-range
financial strategic planning.
Nominating Committee (three meetings). The current members of the
nominating committee are Lawrence J. Chazen, Chairman; and Michael A.
Cawley. Each of the members attended all meetings of the committee. The
primary responsibility of the nominating committee is to select and
recommend nominees for election to Noble-Delaware's board of directors. The
nominating committee will consider nominees recommended by stockholders
entitled to vote for the election of directors, provided that such
recommendations are made in accordance with our bylaws. Generally, the
bylaws provide that a stockholder must deliver written notice to our
corporate Secretary not later than 90 days prior to the annual meeting
naming such stockholder's nominee(s) for director and specifying certain
information concerning such stockholder and nominee(s). We did not receive
any stockholder recommendations for nominees for election of directors at
the stockholders' meeting.
Compensation Committee Interlocks and Insider Participation. With the
exception of Tommy C. Craighead, who retired from the board of directors of
Noble-Delaware in April 2001 and became a director emeritus, the current members
of the compensation committee identified above were the only persons who served
on such committee during 2001. Mr. Day and Mr. Campbell both serve as executive
officers of certain wholly owned subsidiaries of Noble-Delaware. However, Mr.
Day's and Mr. Campbell's compensation is set solely by the compensation
committee of our board of directors, and they receive no additional compensation
for performing duties as executive officers or directors of these subsidiaries.
18
Neither Mr. Day, Mr. Campbell nor any other officer or employee of
Noble-Delaware or its subsidiaries is a member of the compensation committee.
COMPENSATION OF DIRECTORS
Annual Retainer and Other Fees and Expenses. We pay our non-employee
directors an annual retainer of $30,000, of which $6,000 is paid in common stock
pursuant to the Equity Compensation Plan for Non-Employee Directors (the
"Directors' Plan"). Under the Directors' Plan, non-employee directors may elect
to receive the balance in common stock or cash. We also pay our non-employee
directors a board meeting fee of $1,500 and a committee meeting fee of $1,000.
The chairman of a standing board committee receives an additional $1,000 per
committee meeting. We pay each director who is also one of our officers a fee of
$100 for each board meeting attended. We also reimburse directors for travel,
lodging and related expenses they may incur in attending board and committee
meetings.
Non-Employee Director Stock Options. Under the 1992 Nonqualified Stock
Option Plan for Non-Employee Directors (the "1992 Plan"), which was approved and
ratified by stockholders at the 1993 annual meeting, non-employee directors
receive a one-time grant of an option to purchase 10,000 shares of our common
stock. Thereafter, on the next business day after each annual meeting of our
stockholders, such directors receive an annual grant of an option to purchase
3,500 shares of our common stock. See "Proposal Regarding the Noble Drilling
Corporation 1992 Nonqualified Stock Option Plan for Non-Employee Directors" for
a discussion of certain matters relating to the 1992 Plan and option grants
thereunder. The options are granted at fair market value on the grant date and
are exercisable from time to time over a period commencing one year from the
grant date and ending on the expiration of 10 years from the grant date, unless
terminated sooner as described in the 1992 Plan.
EMPLOYMENT AGREEMENTS
Noble-Delaware has entered into employment agreements with each named
executive officer listed in the Summary Compensation Table appearing on page 24
of this proxy statement/prospectus. These employment agreements become effective
upon a change of control of Noble-Delaware (within the meaning set forth in the
agreements) or a termination of employment in connection with or in anticipation
of a change of control, and remain effective for three years thereafter.
The agreements provide that if the officer's employment is terminated
within three years after a change of control or prior to but in anticipation of
a change of control, either (1) by us for reasons other than death, disability
or "cause" (as defined in the agreement) or (2) by the officer for "good reason"
(which term includes a diminution of responsibilities or compensation, or a
determination by the officer to leave during the 30-day period immediately
following the first anniversary of the change of control), the officer will
receive: (a) any unpaid portion of his or her current salary and prorated
portion of his or her highest bonus paid either in the last three years before
the change of control or for the last completed fiscal year after the change of
control (the "Highest Bonus"); (b) a lump sum payment equal to three times the
sum of his annual base salary (based on the highest monthly salary paid in the
12 months prior to the change of control) and his or her Highest Bonus; (c)
benefits to the officer and his or her family at least equal to those which
would have been provided had the employment not been terminated for a three-
year period; (d) any compensation previously deferred by the officer (together
with any accrued interest or earnings thereon) and any accrued vacation pay; and
(e) a lump sum amount equal to the excess of (i) the actuarial equivalent of the
benefit under the qualified defined benefit retirement plan of Noble-Delaware
and its affiliated companies in which the officer is eligible to participate had
the officer's employment continued for three years after termination over (ii)
the actuarial equivalent of the officer's actual benefit under such plans. The
agreements also require Noble-Delaware to make an additional payment in an
amount such that after the payment of all income and excise taxes, the officer
will be in the same after-tax position as if no excise tax under Section 4999
(the so-called Parachute Payment excise tax) of the U.S. Internal Revenue Code
of 1986, as amended (the "Code"), if any, had been imposed.
19
Currently, it is anticipated that the employment agreements will be amended
so that, following the merger, they would become effective after a change of
control of Noble-Cayman, rather than Noble-Delaware. Noble-Cayman would
guarantee the obligations of Noble-Delaware under the agreements, as so amended.
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth as of March 7, 2002 the beneficial ownership
of Noble-Delaware common stock by each of Noble-Delaware's directors, each
"named executive officer" of Noble-Delaware listed in the Summary Compensation
Table appearing on page 24 of this proxy statement/prospectus and all
Noble-Delaware directors and executive officers as a group.
COMMON STOCK
BENEFICIALLY OWNED(1)
--------------------------
NUMBER OF PERCENT OF
NAME SHARES CLASS(2)
---- --------- ----------
Directors
Robert D. Campbell.......................................... 245,397(3) 0.19%
Michael A. Cawley........................................... 917,779(3)(4) 0.69%
Lawrence J. Chazen.......................................... 14,641(3) --
Luke R. Corbett............................................. 102 --
James C. Day................................................ 1,517,264(3)(4) 1.15%
Marc E. Leland.............................................. 72,735(3) --
Jack E. Little.............................................. 16,581(3) --
William A. Sears............................................ 36,413(3) --
Named Executive Officers (excluding any
director above) and Group
Danny W. Adkins............................................. 206,606(3) 0.16%
Mark A. Jackson............................................. 63,729(3) --
Julie J. Robertson.......................................... 288,036(3) 0.22%
All directors and executive officers as a group (11 2,504,644(5) 1.88%
persons)..................................................
---------------
(1) Unless otherwise indicated, the beneficial owner has sole voting and
investment power with respect to all shares listed.
(2) The percent of class shown is less than one-tenth of one percent unless
otherwise indicated.
(3) Includes shares attributable to shares of Noble-Delaware common stock not
outstanding but subject to currently exercisable options, as follows: Mr.
Campbell -- 139,999 shares; Mr. Cawley -- 39,500 shares; Mr. Chazen -- 8,500
shares; Mr. Day -- 335,499 shares; Mr. Leland -- 32,500 shares; Mr.
Little -- 15,000 shares; Mr. Sears -- 22,000 shares; Mr. Adkins -- 119,666
shares; Mr. Jackson -- 25,000 shares; and Ms. Robertson -- 185,666 shares.
(4) Includes 874,639 shares beneficially owned by The Samuel Roberts Noble
Foundation, Inc. Mr. Cawley, as President and Chief Executive Officer and a
trustee, and Mr. Day as a trustee, of the Foundation may be deemed to
beneficially own, and have voting and investment power with respect to, the
874,639 shares held by the Foundation. As one of the 13 members of the board
of trustees of the Foundation, neither Mr. Cawley nor Mr. Day represents
sufficient voting power on the Foundation's board of trustees to determine
voting or investment decisions with respect to the 874,639 shares. Mr.
Cawley and Mr. Day each disclaim any pecuniary interest in the 874,639
shares.
(5) Includes 923,330 shares not outstanding but subject to currently exercisable
options and 874,639 shares beneficially owned by the Foundation. See
footnotes (3) and (4) above.
20
EXECUTIVE STOCK OWNERSHIP
We encourage all of our executives to align their interests with our
stockholders by making a personal investment in our common stock. In 2000, we
adopted the minimum stock ownership guidelines set forth below for our
executives. We expect that each of our executives will meet these minimum
guidelines within five years of when the guidelines first apply to him or her.
OWNERSHIP GUIDELINES
(MULTIPLE OF BASE
PAY GRADE LEVEL SALARY)
--------------- --------------------
Pay Grade 37................................................ 5.0 times
Pay Grades 34 through 36.................................... 4.0 times
Pay Grades 31 through 33.................................... 3.5 times
Pay Grades 28 through 30.................................... 2.5 times
Pay Grades 27 through 28.................................... 2.0 times
EXECUTIVE COMPENSATION
The following report of the compensation committee of our board of
directors on executive compensation and the information herein under "Executive
Compensation -- Performance Graph" and "-- Supplemental Performance Graph" shall
not be deemed to be "soliciting material" or to be "filed" with the SEC or
subject to the SEC's proxy rules, except for the required disclosure herein, or
to the liabilities of Section 18 of the Securities Exchange Act of 1934, and
such information shall not be deemed to be incorporated by reference into any
filing made by us under such Act or the Securities Act of 1933.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
To the Stockholders of
Noble Drilling Corporation:
As members of the compensation committee (the "Committee") of the board of
directors of Noble Drilling Corporation ("Noble-Delaware"), it is our
responsibility to review and set the compensation levels of Noble-Delaware's
Chief Executive Officer ("CEO") and other executives, evaluate the performance
of management, and consider management succession and related matters. In
addition, we administer the annual and long-term incentive compensation plans of
Noble-Delaware. All decisions by the Committee relating to the compensation of
executive officers are reviewed by the full board, except for decisions about
grants or awards under the 1991 Stock Option and Restricted Stock Plan (the
"1991 Plan") of Noble-Delaware, which are made solely by the Committee in
accordance with the terms of the 1991 Plan.
Noble-Delaware has retained the services from time to time of the
management and compensation consulting firm of Towers Perrin to assist the
Committee in the performance of its responsibilities. The Committee considers
information with respect to the reasonableness of compensation paid to senior
officers of Noble-Delaware, as well as all employees of Noble-Delaware and its
subsidiaries in managerial positions. The Committee also takes into account how
compensation compares to compensation paid by competitors in Noble-Delaware's
industry as well as the performance of Noble-Delaware. Members of the Committee
review results of compensation surveys provided by Towers Perrin and others.
COMPENSATION POLICIES AND PROGRAMS
The compensation policies of Noble-Delaware, set by management and
supported by the Committee, focus on enhancing stockholder value. Specific
policies are designed to attract, motivate and retain persons of high quality
who will have the skill, training and dedication to help Noble-Delaware achieve
its corporate goals. The components of the executive compensation program are
base salary, annual incentive bonus and long-term stock incentives, which are
provided through stock option grants and restricted stock awards pursuant to the
1991 Plan.
21
Base Salary. The Committee annually reviews the base salaries of key
executive officers and determines whether salaries should be adjusted. Any
adjustments are based primarily on the executive's individual performance,
responsibilities and experience, as well as salary survey information. The
policy of the Committee is generally to set base salary levels for positions at
approximately the median levels determined from survey information for positions
deemed comparable by the Committee.
Annual Incentive Bonus. The compensation policy of Noble-Delaware is that
a part of the annual compensation of each officer should be related to and
contingent upon the performance of Noble-Delaware, as well as the individual
contribution of such officer. Noble-Delaware's short-term incentive compensation
plan (the "STIP") is available to all full-time employees of Noble-Delaware or
its subsidiaries in salary classifications 18 and higher who have completed one
year of service at the close of the plan year (December 31). The bonus earned by
employees with less than two years of service is prorated based on the number of
full months served. The target bonus for an employee is the base salary at year
end of such employee multiplied times the percentage factor assigned to such
employee's salary classification. Target percentage factors range from 10% to
75%, with a factor of 75% for the CEO and a maximum factor of 55% for executive
officers other than the CEO.
Annual corporate performance goals for Noble-Delaware for 2001 were
weighted with respect to three criteria as follows: net income (45%), cash flow
from operations (40%) and safety results (15%). Noble-Delaware's divisions'
goals for 2001 were weighted with respect to four criteria: safety results
(50%), personnel turnover (20%), net income (15%) and cash flow from operations
(15%).
Each goal weighting percentage is subject to adjustment within a range of
zero for achievement of less than 75% of the goal to 200% for achievement of
greater than 135% of the goal. The combined, weighted goal achievement is then
determined within a range of zero for achievement of less than 75% of the goal
to 200% for achievement of more than 135% of the goal. The target bonus for
employees of divisions is also adjusted to reflect the combined percentage of
achievement of all assigned goals using the ratio of 50% for operating region
goal achievement and 50% for Noble-Delaware goal achievement. The target bonus
for corporate employees is also adjusted to reflect the combined percentage of
achievement of all assigned goals using the ratio of 50% for Noble-Delaware goal
achievement and 50% for the cumulative average of the operating regions goal
achievement. The bonus amount is then determined by multiplying the target bonus
times the applicable multiplier. Using these percentages, the bonus received by
the CEO will not exceed 150% of his salary and the bonus received by any
executive officer other than the CEO will not exceed 110% of his or her salary.
Long-term Incentive Compensation. It is the compensation policy of
Noble-Delaware to use stock options and restricted stock as a means of
furnishing longer-term incentives to officers and other employees and to align
executive and stockholder interests by rewarding executives for the attainment
of stock price appreciation and total stockholder return. Under the 1991 Plan,
which was approved by stockholders at the 1991 annual meeting and amended with
stockholder approval in 1994, 1997 and 1999, and with respect to which a
proposal to further amend the plan will be voted upon by stockholders at the
stockholders' meeting, Noble-Delaware has flexibility in issuing options and
awarding restricted stock.
On October 25, 2001, the Committee awarded an aggregate of 215,500 shares
of restricted stock to a total of 11 employees, including five executive
officers. The shares of restricted stock vest over a five-year period, so long
as the recipient remains continuously employed by Noble-Delaware or any of its
subsidiaries. The common stock had a fair market value at the date of such award
of $30.315 per share.
2001 COMPENSATION OF CHIEF EXECUTIVE OFFICER
In October 2000, the 2001 salary of the CEO was determined by the Committee
as a function of his performance, the performance of Noble-Delaware and its
subsidiaries and competitive industry factors as provided by Towers Perrin. At
the request of the CEO, the annual salary increase was awarded to him in the
form of Noble-Delaware common stock. In October 2001, the Committee approved an
increase in the CEO's annual salary to $775,000 per year, effective November 1,
2001. Again, the Committee decided that Noble would pay the CEO's annual salary
increase of $50,000 for 2002 in the form of Noble-
22
Delaware common stock, in accordance with the request of the CEO. Under the
STIP, the calculated bonus paid to the CEO for 2001, applying the performance
goals criteria and adjustment factors discussed above under "Compensation
Policies and Programs -- Annual Incentive Bonus" was $435,938.
The Committee granted the CEO an option to purchase 125,000 shares of
Noble-Delaware common stock pursuant to the 1991 Plan on July 26, 2001. In
granting these options, the Committee relied upon competitive data provided by
Towers Perrin and its own assessment of Noble-Delaware's 2000 and 2001 results
of operations under the CEO's leadership. Pursuant to the above-described
policies and programs regarding restricted stock awarded under the 1991 Plan,
the Committee awarded the CEO 80,000 shares of restricted stock in October 2001
as part of the 215,500 shares of restricted stock awarded by the Committee
described above.
TAX DEDUCTIBILITY OF EXECUTIVE COMPENSATION
Section 162(m) of the U.S. Internal Revenue Code of 1986, as amended,
contains provisions that could limit the deductibility of certain compensation
payments to Noble-Delaware's executive officers. Noble-Delaware believes that
any compensation realized in connection with the exercise of stock options
granted by Noble-Delaware will continue to be deductible as performance-based
compensation. The policy of Noble-Delaware is to design its compensation
programs generally to preserve the tax deductibility of compensation paid to its
executive officers. The Committee could determine, however, taking into
consideration the burdens of compliance with Section 162(m) and other relevant
facts and circumstances, to pay compensation that is not fully deductible if the
Committee believes such payments are in Noble-Delaware's best interests.
SUMMARY
The members of the Committee believe that linking executive compensation to
corporate performance results in a better alignment of compensation with
corporate goals and stockholder interests. As performance goals are met or
exceeded, resulting in increased value to stockholders, executive officers are
to be rewarded commensurately. The members of the Committee believe that
compensation levels during 2001 adequately reflect the compensation goals and
policies of Noble-Delaware.
February 4, 2002 COMPENSATION COMMITTEE
Michael A. Cawley, Chairman
Luke R. Corbett
Marc E. Leland
23
The following table shows the compensation of our Chief Executive Officer
and our four other most highly paid executive officers (collectively, the "named
executive officers"). See the Report of the Compensation Committee beginning on
page 21 of this proxy statement for an explanation of our compensation policies
and programs.
SUMMARY COMPENSATION TABLE
LONG-TERM COMPENSATION AWARDS
------------------------------------
ANNUAL COMPENSATION VALUE OF
------------------------------- SECURITIES LONG
OTHER UNDERLYING TERM ALL
ANNUAL RESTRICTED OPTIONS INCENTIVE OTHER
NAME AND COMPEN- STOCK (NUMBER OF PLAN PAY- COMPEN-
PRINCIPAL POSITION YEAR SALARY BONUS SATION AWARDS(1) SHARES)(2) OUTS SATION
------------------ ---- -------- ---------- ------- ---------- ---------- ---------- -------
James C. Day................ 2001 $733,334 $ 435,938 $7,855 $2,425,200 125,000 $2,512,290 $14,682(3)
Chairman and CEO 2000 $620,833 $1,087,500 $7,491 $3,617,600 125,000 $2,287,984 $13,297
1999 $537,500 $ 675,000 $7,161 $1,556,250 100,000 $ 475,930 $14,076
Robert D. Campbell.......... 2001 $372,500 $ 200,000 $ 0 $ 757,875 65,000 $ 738,030 $ 8,329(3)
President 2000 $345,000 $ 407,000 $ 0 $1,276,800 65,000 $ 565,000 $11,315
1999 $327,500 $ 280,500 $ 0 $1,231,600 140,000 $ 0 $ 8,272
Mark A. Jackson............. 2001 $301,667 $ 125,000 $ 0 $ 454,725 35,000 $ 134,900 $ 7,140(4)(5)
Senior Vice 2000 $100,000 $ 125,000 $ 0 $1,225,000 75,000 $ 0 $ 2,625
President and Chief
Financial Officer
Danny W. Adkins............. 2001 $242,500 $ 135,000 $ 0 $ 606,300 55,000 $ 755,010 $ 7,536(5)(6)
Senior Vice President -- 2000 $215,000 $ 216,000 $ 0 $1,064,000 55,000 $ 575,291 $ 8,942
Operations, Noble Drilling 1999 $197,500 $ 141,750 $ 0 $ 830,000 55,000 $ 34,784 $ 6,467
International (Cayman)
Ltd.
Julie J. Robertson.......... 2001 $224,167 $ 135,000 $ 0 $ 606,300 50,000 $ 681,570 $10,203(5)
Senior Vice President -- 2000 $176,667 $ 189,000 $ 0 $1,064,000 50,000 $ 545,598 $10,072
Administration and 1999 $157,500 $ 114,750 $ 0 $ 622,500 45,000 $ 57,579 $ 9,365
Corporate Secretary
---------------
(1) Dollar values of awards of restricted stock shown in the table for 2001
represent restricted stock awards made on October 25, 2001. The dollar
values of such awards of restricted shares are based on the closing price of
Noble-Delaware common stock on October 25, 2001 ($30.315) and represent the
following number of shares: Mr. Day -- 80,000 shares; Mr. Campbell -- 25,000
shares; Mr. Jackson -- 15,000 shares; Mr. Adkins -- 20,000 shares; and Ms.
Robertson -- 20,000 shares. One fifth of such restricted shares, which are
not subject to performance based conditions, will vest on each of October
25, 2002, 2003, 2004, 2005 and 2006.
(2) Options represent the right to purchase shares of Noble-Delaware common
stock at a fixed price per share.
(3) Consists of Noble-Delaware (or subsidiary) contributions to a defined
contribution plan (and unfunded, nonqualified excess benefit plan), term
life insurance premiums and directors' fees, respectively, as follows: Mr.
Day -- $10,200, $3,982 and $500; and Mr. Campbell -- $7,140, $689 and $500.
(4) Mr. Jackson joined Noble-Delaware as Senior Vice President and Chief
Financial Officer on September 1, 2000.
(5) Consists of Noble-Delaware (or subsidiary) contributions to a defined
contribution plan (and unfunded, nonqualified excess benefit plan) and term
life insurance premiums, respectively, as follows: Mr. Jackson -- $7,140 and
$0; Mr. Adkins -- $7,140 and $396; and Ms. Robertson -- $10,200 and $3.
(6) Mr. Adkins became an executive officer in February 2001.
24
The following table sets forth certain information with respect to options
to purchase Noble-Delaware common stock we granted during the year ended
December 31, 2001 to each of the named executive officers.
OPTION/SAR GRANTS IN 2001
INDIVIDUAL GRANTS
----------------------------------------------------
NUMBER OF
SECURITIES PERCENT OF POTENTIAL REALIZABLE VALUE AT
UNDERLYING TOTAL ASSUMED ANNUAL RATES OF
OPTIONS OPTIONS EXERCISE STOCK PRICE APPRECIATION FOR
GRANTED GRANTED TO PRICE OPTION TERM(1)
(NUMBER OF EMPLOYEES PER -----------------------------
NAME SHARES)(2) IN 2001 SHARE EXPIRATION DATE 5%(3) 10%(4)
---- ---------- ---------- -------- --------------- ------------- -------------
James C. Day............ 125,000 6.51% $31.10 July 25, 2011 $2,445,000 $6,195,000
Robert D. Campbell...... 65,000 3.39% $31.10 July 25, 2011 $1,271,400 $3,221,400
Mark A. Jackson......... 35,000 1.82% $31.10 July 25, 2011 $ 684,600 $1,734,600
Danny W. Adkins......... 55,000 2.87% $31.10 July 25, 2011 $1,075,800 $2,725,800
Julie J. Robertson...... 50,000 2.61% $31.10 July 25, 2011 $ 978,000 $2,478,000
---------------
(1) The values shown are based on the indicated assumed annual rates of
appreciation compounded annually. Actual gains realized, if any, on stock
option exercises and Noble-Delaware common stock holdings are dependent on
the future performance of the Noble-Delaware common stock and overall stock
market conditions. It is possible that the values shown in this table will
not be achieved.
(2) For each person, the amount shown represents a single grant of options on
July 26, 2001. One-third of the options becomes exercisable on each of July
26, 2002, July 26, 2003 and July 26, 2004.
(3) Reflects an assumed market price per share of Noble-Delaware common stock of
$50.66.
(4) Reflects an assumed market price per share of Noble-Delaware common stock of
$80.66.
The following table sets forth certain information with respect to the
exercise of options to purchase Noble-Delaware common stock and stock
appreciation rights (SARs) during the year ended December 31, 2001, and the
unexercised options held at December 31, 2001 and the value thereof, by each of
the named executive officers.
AGGREGATED OPTION/SAR EXERCISES IN 2001
AND 12/31/01 OPTION/SAR VALUES
SHARES NUMBER OF SECURITIES VALUE OF UNEXERCISED IN-THE-
ACQUIRED UNDERLYING OPTIONS/SARS AT MONEY OPTIONS/SARS AT
ON EXERCISE 12/31/01 (SHARES) 12/31/01
(NUMBER OF VALUE --------------------------- -----------------------------
NAME SHARES) REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ---------- ----------- ------------- ------------ --------------
James C. Day.......... 37,000 $1,361,955 335,499 261,668 $2,938,675 $1,111,600
Robert D. Campbell.... -- -- 114,999 155,001 1,661,162 1,049,313
Mark A. Jackson....... -- -- 25,000 85,000 -- 117,775
Danny W. Adkins....... -- -- 119,666 118,001 1,406,066 526,595
Julie J. Robertson.... -- -- 185,666 106,334 2,096,505 466,775
DEFINED BENEFIT PLANS
Our defined benefit plans that cover our executive officers provide the
benefits shown below. The estimates assume that benefits are received in the
form of 10-year certain and life annuity.
25
PENSION PLAN TABLE
ESTIMATED ANNUAL BENEFITS UPON RETIREMENT AT AGE 65
FIVE-YEAR AVERAGE AFTER COMPLETION OF THE FOLLOWING YEARS OF SERVICE(2)
ANNUAL -----------------------------------------------------
COMPENSATION(1) 15 20 25 30
----------------- ----------- ----------- ----------- -----------
$ 125,000.......................................... $ 30,000 $ 40,000 $ 50,000 $ 60,000
200,000......................................... 48,000 64,000 80,000 96,000
300,000......................................... 72,000 96,000 120,000 144,000
400,000......................................... 96,000 128,000 160,000 192,000
800,000......................................... 192,000 256,000 320,000 384,000
1,000,000......................................... 240,000 320,000 400,000 480,000
1,400,000......................................... 336,000 448,000 560,000 672,000
1,800,000......................................... 432,000 576,000 720,000 864,000
---------------
(1) Benefit amounts under the Noble Drilling Salaried Employees' Retirement Plan
(and unfunded, nonqualified excess benefit plan) are based on an employee's
vested percentage, average monthly compensation and number of years of
benefit service (maximum 30 years). The plan defines average monthly
compensation generally to mean the participant's average monthly rate of
compensation from us for the five successive calendar years which give the
highest average monthly rate of compensation for the participant. Plan
compensation is defined (with certain exceptions) to mean basic
compensation, bonuses, commissions and overtime pay, exclusive of
extraordinary compensation, but prior to reduction for any compensation
deferred under a cash or deferred arrangement qualifying under Sections
401(k) or 125 of the Internal Revenue Code of 1986, as amended. Accordingly,
the amounts reported in the Summary Compensation Table included elsewhere
herein under the table caption "Annual Compensation" approximate plan
compensation for 2001.
(2) We calculated the retirement benefits shown above using 1.6% of final
average pay multiplied by years of service. This slightly overstates the
benefit since that part of the final average pay that is below the Social
Security "covered compensation" level should be multiplied by 1.0% instead
of 1.6%. "Covered compensation" is the average of the Social Security Wage
Bases during the 35-year period ending with the year the employee reaches
Social Security Retirement Age. The amount of benefit shown is not subject
to deductions for Social Security.
As of December 31, 2001, the named executive officers had the following
approximate credited years of service for retirement purposes: Mr. Day -- 23;
Mr. Campbell -- 3; Mr. Jackson -- 1; Mr. Adkins -- 7; and Ms. Robertson -- 12.
PERFORMANCE GRAPH
The following graph sets forth the cumulative total stockholder return for
the Noble-Delaware common stock, the NYSE Stock Market Index (U.S. Companies),
and a Competitor Group Index for the years indicated as prescribed by the SEC's
rules. In accordance with the SEC's rules, we have elected to select a group of
peer companies on an industry basis for comparison purposes. The competitor
group is composed of seven industry participants: Atwood Oceanics, Inc., Diamond
Offshore Drilling, Inc., ENSCO International Incorporated, GlobalSantaFe
Corporation, Pride International, Inc., Rowan Companies, Inc. and Transocean
Sedco Forex Inc. Total return calculations were weighted according to the
respective company's market capitalization.
26
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURNS
PERFORMANCE GRAPH AMONG NOBLE DRILLING CORPORATION,
NYSE STOCK MARKET INDEX (U.S. COMPANIES) AND
SEVEN-MEMBER COMPETITOR GROUP INDEX
[PERFORMANCE GRAPH]
12/31/96 12/31/97 12/31/98 12/31/99 12/29/00 12/31/01
Noble-Delaware 100.0 154.1 65.1 164.8 218.6 171.3
NYSE Stock Market 100.0 132.9 159.3 174.4 181.3 167.6
Competitor Group 100.0 143.2 58.9 96.7 136.0 98.4
NOTES:
A. The lines represent monthly index levels derived from compounded daily
returns that include all dividends.
B. The indexes are reweighted daily, using the market capitalization on the
previous trading day.
C. If the monthly interval, based on the fiscal year-end, is not a trading day,
the preceding trading day is used.
D. The index level for all series was set to $100.0 on 12/31/1996.
27
SUPPLEMENTAL PERFORMANCE GRAPH
Noble-Delaware has elected to include a supplemental performance graph,
which compares the cumulative total stockholder return for the Noble-Delaware
common stock, the NYSE Stock Market Index (U.S. Companies) and a Competitor
Group Index for the period indicated below. In accordance with the SEC's rules,
we have elected to select a group of peer companies on an industry basis for
comparison purposes. The competitor group is composed of seven industry
participants: Atwood Oceanics, Inc., Diamond Offshore Drilling, Inc., ENSCO
International Incorporated, GlobalSantaFe Corporation, Pride International,
Inc., Rowan Companies, Inc. and Transocean Sedco Forex Inc. Total return
calculations were weighted according to the respective company's market
capitalization.
COMPARISON OF FOURTEEN-YEAR CUMULATIVE TOTAL RETURNS
PERFORMANCE GRAPH AMONG NOBLE DRILLING CORPORATION,
NYSE STOCK MARKET INDEX (U.S. COMPANIES) AND
SEVEN-MEMBER COMPETITOR GROUP INDEX
[PERFORMANCE GRAPH]
12/31/87 12/31/88 12/31/89 12/31/90 12/31/91 12/31/92 12/31/93
Noble-Delaware 100.0 121.9 231.3 181.3 78.1 110.9 218.8
NYSE Stock Market 100.0 117.6 152.5 145.6 191.2 208.0 229.8
Competitor Group 100.0 92.6 176.0 158.8 88.1 98.3 147.3
12/31/94 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99 12/31/00 12/31/01
Noble-Delaware 146.9 225.0 496.9 765.6 323.4 818.8 1085.9 851.0
NYSE Stock Market 229.8 311.4 377.4 501.7 601.1 658.3 684.2 632.9
Competitor Group 130.7 277.6 535.7 767.3 315.5 518.2 728.7 527.1
NOTES:
A. The lines represent annual index levels derived from compounded daily
returns that include all dividends.
B. The indexes are reweighted daily, using the market capitalization on the
previous trading day.
C. If the annual interval, based on the fiscal year-end, is not a trading day,
the preceding trading day is used.
D. The index level for all series was set to $100.0 on 12/31/1987.
28
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires our directors
and officers, and persons who own more than 10% of our common stock, to file
with the SEC initial reports of ownership and reports of changes in ownership of
such stock. Directors, officers and beneficial owners of more than 10% of the
Noble-Delaware common stock are required by SEC regulations to furnish us with
copies of all Section 16(a) forms they file.
To our knowledge, based solely on a review of the copies of such reports
furnished to us and written representations that no other reports were required,
during the year ended December 31, 2001, our directors, officers and beneficial
owners of more than 10% of our common stock complied with all applicable Section
16(a) filing requirements.
AUDITORS
Our board of directors has appointed PricewaterhouseCoopers LLP, which has
audited our financial statements since 1994, to audit our financial statements
for the year ending December 31, 2002. We will not submit this appointment to
stockholders for ratification or approval. Representatives of
PricewaterhouseCoopers LLP are expected to be present at the stockholders'
meeting to respond to appropriate questions from stockholders, and will be given
the opportunity to make a statement should they desire to do so.
REPORT OF THE AUDIT COMMITTEE
To the Stockholders of
Noble Drilling Corporation:
The board of directors of Noble Drilling Corporation ("Noble-Delaware")
maintains an audit committee comprising three outside directors. The board of
directors and the audit committee believe that the audit committee's current
member composition satisfies the rules of the New York Stock Exchange that
govern audit committee composition, including the requirement that audit
committee members all be "independent" as that term is defined in Section
303.01(B)(2)(a) and (3) of the NYSE's listing standards.
The audit committee oversees Noble-Delaware's financial process on behalf
of the entire board of directors. Management has the primary responsibility for
Noble-Delaware's financial statements and the reporting process, including the
systems of internal controls. In fulfilling its oversight responsibilities, the
audit committee reviewed and discussed the audited financial statements with
management. The board of directors has adopted an amended and restated written
Charter of the audit committee, a copy of which is attached as Appendix E to
this proxy statement/prospectus.
The audit committee reviewed and discussed with the independent auditors
all communications required by generally accepted auditing standards, including
those described in Statement on Auditing Standards No. 61. In addition, the
audit committee has discussed with Noble-Delaware's independent auditors the
auditors' independence from management and Noble-Delaware, including the matters
in the written disclosures below and the letter from the independent auditors
required by the Independence Standards Board, Standard No. 1.
The audit committee discussed with the independent auditors the overall
scope and plans for their audit. The audit committee meets with the independent
auditors, with and without management present, to discuss the results of their
examination, their evaluation of Noble-Delaware's internal controls and the
overall quality of Noble-Delaware's financial reporting. The audit committee
held four meetings during 2001 and met again on January 31, 2002.
29
AUDIT FEES
The aggregate fees billed for professional services rendered by
PricewaterhouseCoopers LLP for the audit of Noble-Delaware's annual financial
statements for the fiscal year ended December 31, 2001 and the reviews of the
financial statements included in Noble-Delaware's Quarterly Reports on Form 10-Q
for the 2001 fiscal year (collectively, the "Audit Services") were $392,500.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
PricewaterhouseCoopers LLP did not render any professional services
described in Paragraph (c)(4)(ii) of Rule 2-01 of Regulation S-X (17 CFR
210.2-01) during the year ended December 31, 2001.
ALL OTHER FEES
The aggregate fees billed for all other services (the "Other Services")
rendered to Noble-Delaware by PricewaterhouseCoopers LLP during the year ended
December 31, 2001, other than the Audit Services, were $2,945,374. The Other
Services consisted of tax compliance and advisory services totaling $1,816,742,
internal audit services totaling $400,797, statutory audit services totaling
$294,000, employee benefit plan audit services totaling $44,000 and other
services totaling $389,835.
SUMMARY
In reliance on the reviews and discussions referred to above, the audit
committee recommended to the board of directors (and the board has approved)
that the audited financial statements be included in Noble-Delaware's Annual
Report on Form 10-K for the year ended December 31, 2001 for filing with the
SEC. The audit committee also determined that the provision of the Other
Services rendered by PricewaterhouseCoopers LLP was compatible with maintaining
PricewaterhouseCoopers LLP's independence.
February 4, 2002 AUDIT COMMITTEE
Jack E. Little, Chairman
Lawrence J. Chazen
William A. Sears
PROPOSAL TO ADOPT THE AMENDMENT TO THE CERTIFICATE OF INCORPORATION
BACKGROUND AND REASONS
As of the record date, there were issued and outstanding 132,135,326 shares
of Noble-Delaware common stock, and an aggregate of 10,315,000 shares of
Noble-Delaware common stock were reserved for issuance pursuant to certain
Noble-Delaware employee benefit plans or upon the exercise of outstanding
employee or non-employee director stock options.
The authorized capital of Noble-Delaware currently consists of 200,000,000
shares of common stock and 15,000,000 shares of preferred stock. In order to
provide a sufficient number of shares for future issue for appropriate corporate
purposes, we are proposing that the certificate of incorporation of Noble-
Delaware be amended to increase the number of authorized shares of common stock
to 400,000,000. If such amendment is adopted, the additional shares of
Noble-Delaware common stock would be available for future issue at the
discretion of our board of directors without further action by our stockholders.
Depending on the circumstances of any such issuance, your existing interest in
Noble could be diluted. There are no pending or proposed transactions,
financings or other uses currently contemplated by the board of directors for
the issuance of the additional shares of Noble-Delaware common stock. Assuming
the merger is approved by our stockholders at the stockholders' meeting,
Noble-Cayman's articles of
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association will provide for a capital structure that is identical in all
material respects to the Noble-Delaware capital structure, after giving effect
to the amendment of our certificate of incorporation, provided it is approved by
stockholders at the stockholders' meeting.
PROPOSED AMENDMENT TO THE CERTIFICATE OF INCORPORATION
Our board of directors has declared it advisable and has adopted, and
recommends that you adopt the proposed amendment to our certificate of
incorporation to revise Article IV, Section 1 by deleting such section in its
entirety and substituting therefor the following:
"Section 1. The total number of shares of all classes of stock which
the Corporation shall have the authority to issue is 415,000,000,
consisting of (1) 15,000,000 shares of Preferred Stock, par value $1.00 per
share ("Preferred Stock"), and (2) 400,000,000 shares of Common Stock, par
value $.10 per share ("Common Stock")."
RECOMMENDATION AND REQUIRED AFFIRMATIVE VOTE
The affirmative vote of the holders of a majority of the shares of
Noble-Delaware common stock outstanding and entitled to vote at the
stockholders' meeting is required to adopt the amendment to our certificate of
incorporation. Our board of directors has declared the amendment advisable and
believes that it is in the best interests of Noble-Delaware and our
stockholders. ACCORDINGLY, THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR
THE ADOPTION OF THE AMENDMENT TO NOBLE-DELAWARE'S CERTIFICATE OF INCORPORATION.
We intend to effect the amendment, if adopted by the stockholders at the
stockholders' meeting, irrespective of whether the merger proposal or any other
proposal is approved.
PROPOSAL TO AMEND THE NOBLE DRILLING CORPORATION
1991 STOCK OPTION AND RESTRICTED STOCK PLAN
GENERAL
The Noble Drilling Corporation 1991 Stock Option and Restricted Stock Plan
(the "1991 Plan") was approved by stockholders at the 1991 annual meeting of
stockholders. The 1991 Plan was amended with stockholder approval in 1994, 1997
and 1999. The purpose of the 1991 Plan is to assist us in attracting and
retaining as officers and key employees, persons of training, experience and
ability and to furnish additional incentive to such persons by encouraging them
to become owners of our common stock. Our board of directors believes that our
success depends in large part on our ability to attract and retain individuals
of outstanding ability who are motivated to exert their best efforts on our
behalf. Our board of directors has concluded that the number of shares currently
available for awards under the 1991 Plan is inadequate to permit the continued
use of a long-term equity component in our compensation program. Consequently,
our board of directors has approved an amendment of the 1991 Plan (the "1991
Plan Amendment") to increase the number of shares available under the 1991 Plan
by 5,000,000 shares (which represented less than 4% of outstanding
Noble-Delaware common stock as of January 31, 2002).
As of January 31, 2002, there were outstanding options granted under the
1991 Plan covering 8,284,288 shares of Noble-Delaware common stock, and
1,182,349 shares of Noble-Delaware common stock outstanding as restricted stock
awarded under the 1991 Plan. Only 365,499 shares of Noble-Delaware common stock
remained available for future grants or awards under the 1991 Plan as of that
date. If the 1991 Plan Amendment is approved by stockholders, our employees
eligible to participate in the 1991 Plan could receive more benefits under the
plan than are currently available to them.
The number of options or shares of restricted stock that may be granted
under the 1991 Plan (as amended in accordance with the 1991 Plan Amendment) to
any person entitled to participate in the 1991 Plan are not currently
determinable.
On July 26, 2001, options to purchase 1,918,850 shares of Noble-Delaware
common stock at an exercise price of $31.10 per share were granted under the
1991 Plan. All such options were granted at the
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average of the reported high and low sale prices of a share of Noble-Delaware
common stock on the date of the grant. The last sale price of Noble-Delaware
common stock reported on the New York Stock Exchange on March 12, 2002 was
$38.92 per share.
PROPOSED AMENDMENT TO THE 1991 PLAN
Our board of directors has declared it advisable and has approved, and
recommends that you approve, the proposed 1991 Plan Amendment by deleting
section 4(a) of the 1991 Plan in its entirety and substituting therefor the
following:
"(a) The total number of Shares that may be purchased pursuant to Options,
issued or transferred pursuant to the exercise of SARs or awarded as Restricted
Stock shall not exceed 20,700,000 in the aggregate, and the total number of
Shares for which Options and SARs may be granted, and which may be awarded as
Restricted Stock, to any one person during any continuous five-year period shall
not exceed 1,500,000 in the aggregate; provided that each such maximum number of
shares shall be increased or decreased as provided in Section 13 of the Plan."
DESCRIPTION OF THE 1991 PLAN
The material features of the 1991 Plan are described below.
General. Under the 1991 Plan, shares of Noble-Delaware common stock may be
subject to grants of incentive stock options, nonqualified stock options, stock
appreciation rights ("SARs") or awards of restricted stock to officers and other
employees of Noble-Delaware and its affiliates until the shares of
Noble-Delaware common stock available under the 1991 Plan have been exhausted or
the plan has been terminated. Shares of stock covered by an option that expires
or terminates prior to its exercise, and shares of restricted stock returned to
us, are again available for awards under the 1991 Plan. In the event of a stock
dividend, stock split, stock combination, recapitalization, merger in which
Noble-Delaware is the surviving corporation, reorganization or the like,
appropriate adjustments will be made in the maximum number of shares subject to
the 1991 Plan and the number of shares and option prices under then outstanding
options.
Administration. The 1991 Plan is administered by the compensation
committee of our board of directors, which must consist of two or more
directors, all of whom must be Non-Employee Directors as defined in Rule 16b-3
under the Securities Exchange Act of 1934, as amended, and Outside Directors
within the meaning of Section 162(m) of the Code. The compensation committee
makes grants of options and awards of restricted stock, determines the terms and
provisions of the respective agreements covering such grants or awards and all
other decisions concerning the 1991 Plan. It is impracticable to estimate the
total number of officers and employees eligible to participate in the 1991 Plan.
Stock Options and SARs. During the term of the 1991 Plan, the compensation
committee may grant incentive stock options, nonqualified stock options or any
combination thereof to any eligible employee. Options will be exercisable at
such time or times, not more than 10 years from the date of grant, as may be
provided by their terms. The compensation committee may, however, accelerate the
time at which an option is exercisable without regard to its terms. The
compensation committee may grant SARs in conjunction with all or any portion of
an option either at the time of the initial option grant or, with respect to a
nonqualified stock option, at any time after the initial option grant while the
nonqualified option is outstanding. SARs generally will be subject to the same
terms and conditions and exercisable to the same extent as options. SARs entitle
an optionee to receive without payment to Noble-Delaware (except for applicable
withholding taxes) the excess of the aggregate fair market value per share with
respect to which the SAR is then being exercised (determined as of the date of
such exercise) over the aggregate purchase price of such shares as provided in
the related option. Payment may be made in shares of Noble-Delaware common stock
or in cash, or a combination thereof, as determined by the compensation
committee.
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Option Price. The option price for each share of Noble-Delaware common
stock covered by an incentive stock option shall not be less than the greater of
(1) the par value of such share or (2) the Fair Market Value (as defined in the
1991 Plan) of such share at the time such option is granted. The option price
for each share of Noble-Delaware common stock covered by a nonqualified stock
option shall not be less than the greater of (1) the par value of such share or
(2) 100% of the Fair Market Value of such share at the time the option is
granted, except that the minimum option price may be equal to or greater than
85% of the Fair Market Value of such share at the time the option is granted to
the extent the discount from Fair Market Value is expressly granted in lieu of a
reasonable amount of salary or cash bonus.
Restricted Stock. The 1991 Plan provides that restricted stock may be
awarded by the compensation committee. Restricted stock is Noble-Delaware common
stock that may not be sold, assigned, transferred, discounted, exchanged,
pledged or otherwise encumbered or disposed of until the restrictions set by the
compensation committee, which may include, among other things, the achievement
of specific goals, have been satisfied (the "Restricted Period"). During the
Restricted Period, unless specifically provided in the 1991 Plan, the recipient
of restricted stock would be the record owner of such shares and have all the
rights of a stockholder with respect to such shares, including the right to vote
and the right to receive dividends or other distributions made or paid with
respect to such shares. The 1991 Plan provides that the compensation committee
has the authority to cancel all or any portion of any outstanding restrictions
prior to the expiration of the Restricted Period. If during the Restricted
Period an individual's continuous employment terminates for any reason, any
restricted stock remaining subject to restrictions will be forfeited by the
individual and transferred at no cost to Noble-Delaware.
Amendment and Termination of the 1991 Plan. Our board of directors may at
any time amend, suspend or terminate the 1991 Plan, except that the board may
not, without stockholder approval, amend the 1991 Plan so as to (i) increase the
maximum number of shares subject thereto, or (ii) reduce the option price per
share covered by options granted under the plan below the price specified in the
plan. Additionally, the board may not modify, impair or cancel any outstanding
option or related SARs, or the restrictions applicable to restricted stock,
without the consent of the holder thereof.
U.S. FEDERAL INCOME TAX CONSEQUENCES
The following summary is based on an analysis of the Code, existing laws,
judicial decisions, administrative rulings, regulations and proposed
regulations, all of which are subject to change. Moreover, the following is only
a summary of U.S. federal income tax consequences and such consequences may be
either more or less favorable than those described below depending on an
employee's particular circumstances.
Incentive Stock Options. Generally, no income will be recognized by an
optionee for U.S. federal income tax purposes upon the grant or exercise of an
incentive stock option. To the extent, however, that an incentive option is
exercised more than three months (12 months in the event of disability) from the
date of termination of employment for any reason other than death, the option
will be taxed in the same manner described below for nonqualified stock options
(rather than in the manner described for an incentive stock option). The basis
of shares transferred to an optionee pursuant to the exercise of an incentive
option is the price paid for the shares. If the optionee holds the shares for at
least one year after transfer of the shares to the optionee and two years after
the grant of the incentive option, the optionee will recognize capital gain or
loss upon sale of the shares received upon the exercise equal to the difference
between the amount realized on the sale and the basis of the stock. Generally,
if the shares are not held for that period, the optionee will recognize ordinary
income upon disposition in an amount equal to the excess of the fair market
value of the shares on the date of exercise over the amount paid for such
shares, or if less (and if the disposition is a transaction in which loss, if
sustained, would be recognized), the gain on disposition. Any additional gain or
loss realized by the optionee upon such disposition will be a capital gain or
loss. The excess of the fair market value of shares received upon the exercise
of an incentive option over the option price for the shares is an item of
adjustment for the optionee for purposes of the
33
alternative minimum tax. Additional special rules apply if an optionee uses
already owned shares of Noble-Delaware common stock to pay the exercise price
for shares under an incentive stock option.
Noble-Delaware is not entitled to a deduction upon the exercise of an
incentive stock option. If, however, the optionee disposes of the shares
received pursuant to exercise prior to the expiration of one year following
transfer of the shares to the optionee or two years after grant of the option,
Noble-Delaware may, subject to the deduction limitations described below, deduct
an amount equal to the ordinary income recognized by the optionee upon
disposition of the shares at the time such income is recognized by the optionee.
Nonqualified Stock Options. An optionee will not recognize any income for
U.S. federal income tax purposes upon the grant of a nonqualified stock option.
Upon exercise of a nonqualified option, the optionee will recognize ordinary
income in an amount equal to the excess of the fair market value of the shares
on the date of exercise over the amount paid for such shares. Income recognized
upon the exercise of nonqualified options will be considered compensation
subject to withholding at the time the income is recognized, and, therefore, we
must make the necessary arrangements with the optionee to ensure that the amount
of the tax required to be withheld is available for payment.
Nonqualified options will provide Noble-Delaware with a deduction equal to
the amount of ordinary income recognized by the optionee at the time of such
recognition by the optionee, subject to the deduction limitations described
below.
The basis of shares transferred to an optionee upon the exercise of a
nonqualified option is the price paid for such shares plus an amount equal to
any income recognized by the optionee as a result of the exercise of the option.
If an optionee thereafter sells shares acquired upon exercise of a nonqualified
option, any amount realized over the basis of the shares will constitute capital
gain to the optionee for U.S. federal income tax purposes. Additional special
rules apply if an optionee uses already owned shares of our common stock to pay
the exercise price for shares under a nonqualified option.
SARs. Neither the recipient nor Noble-Delaware will be subject to any U.S.
federal income tax consequences upon the grant of SARs. Generally, the recipient
will recognize ordinary income subject to withholding upon the exercise of SARs
in an amount equal to the amount of cash received and the fair market value of
any shares acquired pursuant to the exercise. Subject to the deduction
limitations described below, Noble-Delaware generally will be entitled to a
corresponding tax deduction equal to the amount includable in the recipient's
income.
Restricted Stock. If the restrictions on an award of restricted stock are
of a nature that such shares are both subject to a substantial risk of
forfeiture and are not freely transferable within the meaning of Section 83 of
the Code, the recipient will not recognize income for federal income tax
purposes at the time of the award. The recipient may, however, affirmatively
elect within 30 days after the date the restricted stock is received to include
the fair market value of the shares of restricted stock on the date of the
award, less any amount paid therefor, in gross income for the year of the award
pursuant to Section 83(b) of the Code. In the absence of such an election, the
recipient will be required to include in income for federal income tax purposes
in the year in which the shares either become freely transferable or are no
longer subject to a substantial risk of forfeiture within the meaning of Section
83 of the Code, the fair market value of the shares of restricted stock on such
date, less any amount paid therefor. Noble-Delaware will be entitled to a
deduction at the time of income recognition to the recipient in an amount equal
to the amount the recipient is required to include in income with respect to the
shares, subject to the deduction limitations described below. If a Section 83(b)
election is made and the restricted stock is subsequently forfeited, no
deduction will be allowed to the recipient with respect to such forfeiture.
Limitations on Noble-Delaware's Compensation Deduction. Under certain
circumstances, Section 162(m) of the Code limits the deduction that
Noble-Delaware may take for otherwise deductible compensation payable in a
particular year to certain of our officers to the extent that compensation paid
to any such officer for such year exceeds $1 million. The 1991 Plan has been
designed to enable awards of options (other than nonqualified options granted at
less than fair market value on the date of grant) and
34
SARs granted by the committee to be deductible without regard to the limitation
of Section 162(m) of the Code.
RECOMMENDATION AND REQUIRED AFFIRMATIVE VOTE
The affirmative vote of the holders of a majority of the outstanding shares
of Noble-Delaware common stock present and entitled to vote at the stockholders'
meeting is required for approval of the 1991 Plan Amendment. Our board of
directors has declared the amendment advisable and believes that it is in the
best interests of Noble-Delaware and our stockholders. ACCORDINGLY, THE BOARD OF
DIRECTORS RECOMMENDS THAT YOU VOTE FOR APPROVAL OF THE 1991 PLAN AMENDMENT. We
intend to effect the 1991 Plan Amendment, if the proposal is approved by the
stockholders at the stockholders' meeting, irrespective of whether the merger
proposal or any other proposal is approved.
PROPOSAL REGARDING THE NOBLE DRILLING CORPORATION
1992 NONQUALIFIED STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
GENERAL
The Noble Drilling Corporation 1992 Nonqualified Stock Option Plan for
Non-Employee Directors (the "1992 Plan") was approved by stockholders in 1992,
and was amended, subject to stockholder approval, by our board of directors in
April 2000 to increase the number of shares subject to the annual grant of
options to non-employee directors to 5,000 from 3,500. In January 2002, our
board further amended the 1992 Plan (the "1992 Plan Amendments"), subject to
stockholder approval, to
- increase by 325,000 the aggregate number of shares of Noble-Delaware
common stock available for issuance under the 1992 Plan, effective for
grants following the stockholders' meeting; and
- increase to 7,500 the number of shares subject to annual grants of
options under the plan.
PROPOSAL REGARDING THE 1992 PLAN
Ratification of April 2001 Options. In April 2000, our board of directors
determined, based on independent market analysis performed by Towers Perrin,
that the size of annual option grants under the 1992 Plan should be increased to
5,000 from 3,500 shares in order to continue to attract and retain qualified
individuals to serve as non-employee directors of Noble-Delaware. In April 2001,
options were granted under the 1992 Plan, subject to stockholder approval of the
increase in the size of annual awards, to the persons then serving as
non-employee directors (Messrs. Cawley, Chazen, Leland, Little and Sears)
covering 5,000 shares each. As part of this proposal regarding the 1992 Plan,
you are being asked to ratify such option grants. If the proposal is approved by
stockholders, these non-employee directors would retain these options, which
cover an additional 1,500 shares of Noble-Delaware common stock per person.
1992 Plan Amendments. As of January 31, 2002, there were outstanding
options granted under the 1992 Plan covering 193,000 shares of Noble-Delaware
common stock. Only 50,000 shares of Noble-Delaware common stock remained
available for future grants under the 1992 Plan as of that date. The 1992 Plan
Amendments would result in an additional 325,000 shares of Noble-Delaware common
stock being available for future grants under the plan.
In January 2002, our board of directors determined that the number of
shares of Noble-Delaware common stock covered by annual option grants under the
1992 Plan should be further increased in order to continue to attract and retain
qualified individuals to serve as non-employee directors of Noble-Delaware. The
board determined that an increase to 7,500 shares was appropriate. The 1992 Plan
Amendments are attached as Annex D.
If the proposal regarding the 1992 Plan is approved by stockholders,
pursuant to the 1992 Plan Amendments our non-employee directors would receive
annual grants of options covering 7,500 shares, rather than 3,500 shares as
specified in the original 1992 Plan. This change would be effective for grants
35
beginning with annual grants to be made following the stockholders' meeting.
Pursuant to the 1992 Plan Amendments, our non-employee directors who are
eligible to participate in the 1992 Plan would receive additional benefits under
the 1992 Plan as a result of this change. This amendment would not apply to any
prior grants of options under the 1992 Plan.
DESCRIPTION OF THE 1992 PLAN
The material features of the 1992 Plan, giving effect to the 1992 Plan
Amendments, are as described below.
General. The 1992 Plan provides for automatic grants to directors who are
not employees of Noble-Delaware or its subsidiaries or affiliated entities of
nonqualified options to purchase common stock of Noble-Delaware. Each
non-employee director receives a one-time grant of an option to purchase 10,000
shares of our common stock upon the first grant date after the director's
election or appointment to the board. Thereafter, on the next business day after
each annual meeting of our stockholders, each such director receives an annual
grant of an option to purchase 7,500 shares. The options are granted at fair
market value on the grant date and are exercisable from time to time over a
period commencing one year from the grant date and ending on the expiration of
10 years from the grant date, unless terminated sooner as described in the 1992
Plan. The maximum number of shares of Noble-Delaware common stock issuable under
the 1992 Plan is 650,000, subject to the adjustment provisions of the plan.
In the event of a stock dividend, stock split, stock combination,
recapitalization, merger in which Noble-Delaware is the surviving corporation,
reorganization or the like, appropriate adjustments will be made in the maximum
number of shares subject to the 1992 Plan and the number of shares and option
prices under then outstanding options.
The following table sets forth the number of shares subject to options
granted under the 1992 Plan for each of our current non-employee directors, as
well as the number of shares with respect to which such options have been
exercised as of January 31, 2002. In all cases, option prices were equal to 100%
of fair market value on the date of grant:
SHARES ACQUIRED
OPTIONEE NUMBER OF SHARES(1) UPON EXERCISE
-------- ------------------- ---------------
Michael A. Cawley.................................. 39,500 0
Lawrence J. Chazen................................. 8,500 24,000
Luke R. Corbett.................................... 0 0
Marc E. Leland..................................... 32,500 0
Jack E. Little..................................... 15,000 0
William A. Sears................................... 22,000 0
---------------
(1) For purposes of this table, assumes the April 2001 grants of options under
the 1992 Plan covering 5,000 shares per non-employee director will be
ratified by stockholders.
The exercise prices for such options range from $6.76 to $47.69 per share.
The closing price of our common stock on the New York Stock Exchange on March
12, 2002 was $38.92 per share.
Administration. The 1992 Plan is administered by our board of directors.
Types of Options. Options granted under the 1992 Plan will continue to be
options which do not meet the requirements of Section 422 of the Code, known as
"nonqualified stock options."
Option Price. The option price shall be 100% of fair market value on the
date of grant, determined with reference to the closing price of our common
stock on the New York Stock Exchange.
Payment. Payment for shares purchased upon the exercise of an option may
be made by cash, check, or appropriate exercise through an optionee's brokerage
firm, at the time of purchase.
36
Term, Amendment and Termination of the 1992 Plan. To the extent permitted
by law, the board of directors may amend, modify, suspend or terminate the 1992
Plan. However, stockholder approval is required before any amendment can become
effective which would (i) increase the maximum number of shares issuable under
the 1992 Plan other than pursuant to the adjustment provisions, (ii) change the
class of persons eligible to receive options, (iii) materially increase the
benefits accruing to participants under the 1992 Plan, (iv) have the effect of
providing for the grant of options to purchase common stock at less than fair
market value or (v) require approval of stockholders under the rules of the SEC.
Subject to earlier termination, the 1992 Plan will remain in effect until the
maximum number of shares issuable under the plan have been issued.
U.S. FEDERAL INCOME TAX CONSEQUENCES
The following summary is based on an analysis of the Code, existing laws,
judicial decisions, administrative rulings, regulations and proposed
regulations, all of which are subject to change. Moreover, the following is only
a summary of U.S. federal income tax consequences and such consequences may be
either more or less favorable than those described below depending on a
director's particular circumstances.
For U.S. federal income tax purposes, the grant of a nonqualified stock
option should not result in recognition of income by the optionee. Upon exercise
of a nonqualified stock option by an employee who is not then an officer or
director, the excess of the fair market value of the shares on the exercise date
over the option price will be considered as compensation taxable as ordinary
income. If, however, at the time of exercise of the option, the optionee remains
a director or is an "officer" as defined in Rule 16a-1 of the Securities
Exchange Act of 1934, and if the sale of the stock at a profit within six months
could subject such person to suit under Section 16(b) of the Securities Exchange
Act of 1934, the fair market value of the stock is determined, and the tax
applicable thereto is incurred, at the end of such six-month period or at such
earlier time as may be determined (i) by such person's election made under
Section 83(b) of the Code within 30 days of the date of exercise to be taxed
sooner, or (ii) by the occurrence of an event which causes Section 16(b) of the
Securities Exchange Act of 1934 to become inapplicable to such person. In the
event of a gain or loss realized upon the sale of the shares received upon
exercise of a nonqualified stock option, the optionee will recognize long-term
or short-term capital gain or loss, depending on the optionee's holding period
for the shares.
As nonqualified stock options, the options that may be granted under the
1992 Plan will provide us with a deduction equal to the amount of ordinary
income recognized by the optionee at the time of such recognition by the
optionee, subject to the deduction limitations described below.
The basis of shares transferred to an optionee upon the exercise of an
option granted under the 1992 Plan is the price paid for such shares plus an
amount equal to any income recognized by the optionee as a result of the
exercise of the option. If an optionee thereafter sells shares acquired upon
exercise of an option granted under the 1992 Plan, any amount realized over the
basis of the shares will constitute capital gain to the optionee for federal
income tax purposes. Additional special rules apply if an optionee uses already
owned shares of our common stock to pay the exercise price for shares under an
option granted under the 1992 Plan.
Under certain circumstances, Noble-Delaware's deduction may be limited by
the provisions of Section 162(m) of the Code. Section 162(m) generally limits
Noble-Delaware's deduction for certain types of compensation paid to certain of
our officers to no more than $1 million per year. If a director who receives
options under the 1992 Plan later becomes one of such officers and recognizes
income from the exercise of options received under the 1992 Plan while serving
as such an officer, Section 162(m) could limit Noble-Delaware's deduction.
If the proposed merger is approved, in connection therewith the 1992 Plan
will be adopted and assumed by Noble-Cayman. After the merger, the amounts
otherwise deductible for U.S. federal income tax purposes may provide no tax
benefit to Noble-Cayman by reason of its having no United States source income
from which to deduct such amounts.
37
RECOMMENDATION AND REQUIRED AFFIRMATIVE VOTE
The affirmative vote of the holders of a majority of the outstanding shares
of Noble-Delaware common stock present and entitled to vote at the stockholders'
meeting is required for approval of the proposal to ratify option grants made
under the 1992 Plan in April 2001 and amend the 1992 Plan in accordance with the
1992 Plan Amendments. Our board of directors has declared the proposal regarding
the 1992 Plan advisable and believes that it is in the best interests of
Noble-Delaware and our stockholders. ACCORDINGLY, THE BOARD OF DIRECTORS
RECOMMENDS THAT YOU VOTE FOR APPROVAL OF THE PROPOSAL. We intend to effect the
1992 Plan Amendments, if the proposal is approved by the stockholders at the
stockholders' meeting, irrespective of whether the merger proposal or any other
proposal is approved.
THE MERGER
Our board of directors has unanimously approved and recommends that you
approve the proposed merger by adopting the Agreement and Plan of Merger. The
merger involves several steps. First, we have formed Noble-Cayman as a direct
subsidiary of Noble-Delaware. Noble-Cayman, in turn, has formed Holdco which in
turn has formed the merger sub. Following the stockholders' meeting, assuming we
have obtained the requisite stockholder approval, the merger sub will merge with
and into Noble-Delaware, with Noble-Delaware surviving. As a result of the
merger, Noble-Delaware will become an indirect, wholly owned subsidiary of
Noble-Cayman and the holders of common stock of Noble-Delaware immediately prior
to the merger will receive ordinary shares of Noble-Cayman.
After the merger, you will continue to own an interest in a parent company,
Noble-Cayman, that will be managed by the same board of directors and officers
that currently manage Noble-Delaware. Furthermore, after completion of the
merger, Noble-Cayman and the Noble corporate group will continue to conduct our
businesses as conducted prior to the merger and will have the same assets and
employees as Noble-Delaware and its subsidiaries. Your proportionate ownership
and relative voting rights will not change as a result of the merger. The merger
will be effected pursuant to the Agreement and Plan of Merger, which is the
legal document providing all of the terms and conditions of the merger. A copy
is attached hereto as Annex A and is a part of this proxy statement/prospectus.
WE ENCOURAGE YOU TO READ THE ENTIRE AGREEMENT CAREFULLY.
BACKGROUND AND REASONS FOR THE MERGER
Noble is a leading provider of diversified services for the oil and gas
industry. We perform contract drilling services with our fleet of 49 offshore
drilling units located in key markets worldwide. Our fleet of floating deepwater
units consists of nine semisubmersibles and three dynamically positioned
drillships, seven of which are designed to operate in water depths greater than
5,000 feet. Our premium fleet of 34 independent leg, cantilever jackup rigs
includes 21 units that operate in water depths of 300 feet and greater, four of
which operate in water depths of 360 feet and greater, and 11 units that operate
in water depths of up to 250 feet. In addition, our fleet includes three
submersible drilling units. Nine of our drilling units are capable of operating
in harsh environments. Over 60% of the fleet is currently deployed in
international markets, principally including the North Sea, Brazil, West Africa,
the Middle East, India and Mexico. We operated in Venezuela as recently as 2000.
We also provide labor contract drilling services, well site and project
management services, and engineering services.
International activities are a significant part of our business. Our
revenues from non-U.S. operations were 64% of our total revenues in 1997, 74% in
1998, 67% in 1999, 46% in 2000 and 54% in 2001. We expect that the percentage
will increase in 2002 as compared to 2001. Our principal executive offices are
located in Sugar Land, Texas and will not change as a result of the merger. Our
international operations are managed out of our office in Grand Cayman, Cayman
Islands. We also have field offices in Aberdeen, Scotland; Doha, Qatar; Abu
Dhabi, U.A.E.; Leduc, Alberta and St. John's, Newfoundland, Canada; Del Carmen,
Mexico; Macae, Brazil; Esjberg, Denmark; Lagos and Port Harcourt, Nigeria;
Beverwijk, The Netherlands; Stavanger, Norway; and Ciudad Ojeda, Venezuela.
38
The location of our fleet of 49 offshore drilling units at December 31,
2001 was as follows:
LOCATION NUMBER OF UNITS
-------- ---------------
International
North Sea................................................. 9
Middle East............................................... 7
West Africa............................................... 6
Brazil.................................................... 5
India and Far East........................................ 2
Mexico.................................................... 1
--
Total International......................................... 30
--
Domestic
U.S. Gulf of Mexico....................................... 19
--
Total Units................................................. 49
==
We expect that a substantial portion of the future opportunities in our
business will arise in international markets. The merger is intended to position
Noble to benefit from these opportunities. We believe that restructuring Noble
as a Cayman Islands company will give us competitive advantages not available to
a U.S. corporation and will be more consistent with our business operations. In
particular, we believe the merger:
- will promote our flexibility to reduce our worldwide effective corporate
tax rate. The United States imposes corporate income tax on the worldwide
income of U.S. corporations. In contrast, the Cayman Islands, and other
non-U.S. jurisdictions in which we operate or are resident, impose tax at
rates substantially less than the United States. Thus, although the
earnings of Noble-Delaware and its U.S. subsidiaries will continue to be
subject to U.S. corporate income tax, we believe that after the merger
the operations of Noble-Cayman and its non-U.S. subsidiaries generally
will not be subject to U.S. tax other than withholding taxes, absent a
change in U.S. tax laws. Noble-Cayman and its subsidiaries may be
required to pay taxes in the jurisdictions in which they operate or are
resident. Our worldwide effective corporate tax rate will be impacted by,
among other things, future dayrates and the tax rates in jurisdictions
where our rigs operate from time to time -- both of which we cannot
control. Accordingly, we cannot give you any assurance of the amount by
which our worldwide effective corporate tax rate will be reduced as a
result of the merger, if at all.
- will allow us to restructure our business to increase operational
efficiencies, including improved worldwide cash management and increased
flexibility for operating foreign-owned rigs in the United States, and
will allow us to operate under a parent company that does not own
directly any drilling units or other operating assets.
- will result in a corporate structure that is generally more favorable to
expand our business through acquisitions and use of joint ventures.
Acquisitions, both of offshore drilling units and other companies,
represent an important element of our business strategy. The favorable
tax regime in the Cayman Islands, combined with improved flexibility for
worldwide cash management, may enhance the attractiveness of terms and
conditions of acquisitions and, if applicable, joint ventures.
- may increase our access to international capital markets and cause our
securities to become more attractive to non-U.S. investors, thus
providing the opportunity to broaden our investor base. The merger could
enhance our recognition by the international investment communities,
including financial analysts, investment banks and the financial media.
This recognition may translate into an increased level of investment by
non-U.S. investors. In addition, more favorable tax treatment for
non-U.S. shareholders following the merger could further our ability to
attract foreign investors. Distributions with respect to stock in a U.S.
corporation to nonresident aliens could be subject to withholding taxes
under the Code. In addition, estate taxes are payable in some cases in
respect of
39
the value of shares in a U.S. corporation owned by a non-U.S. investor.
Since we would be a non-U.S. corporation following the merger, these
taxes would generally no longer be applicable to non-U.S. investors. As a
result, non-U.S. investors may be more receptive to an investment in
Noble-Cayman shares than Noble-Delaware shares.
We cannot assure you, however, that the anticipated benefits of the merger
will be realized.
THE AGREEMENT AND PLAN OF MERGER
There are several steps to the merger:
- Noble-Delaware has formed Noble-Cayman, which in turn has formed Holdco,
which in turn has formed the merger sub;
- Following the stockholders' meeting, assuming we have obtained the
requisite stockholder approval, the merger sub will merge with and into
Noble-Delaware, with Noble-Delaware surviving as an indirect, wholly
owned subsidiary of Noble-Cayman; and
- In the merger, each outstanding share of Noble-Delaware common stock will
be cancelled and one ordinary share of Noble-Cayman will be issued to the
holder of such cancelled Noble-Delaware share in exchange therefor. This
effectively results in the conversion of each Noble-Delaware share held
by you into one Noble-Cayman ordinary share. Furthermore, each issued
share of Noble-Delaware common stock owned by Noble-Delaware as a
treasury share will automatically be canceled and retired and will cease
to exist, without consideration being delivered in exchange for those
shares.
AMENDMENT AND TERMINATION
The Agreement and Plan of Merger may be amended, modified or supplemented
at any time before or after it is adopted by the stockholders of Noble-Delaware.
However, after adoption, no amendment, modification or supplement may be made or
effected that requires further approval by Noble-Delaware stockholders without
obtaining that approval.
The board of directors of Noble-Delaware may terminate the Agreement and
Plan of Merger and abandon the merger at any time prior to its effectiveness.
ADDITIONAL AGREEMENTS
Pursuant to the Agreement and Plan of Merger, Noble-Delaware, Noble-Cayman
and Holdco have agreed, among other things, that:
- Noble-Delaware will take steps to ensure that resales of securities by
affiliates will be made pursuant to an effective registration statement
or in compliance with Rule 145 under the Securities Act or an exemption
from the registration requirements under the Securities Act;
- Noble-Cayman will assume certain employee benefit and compensation plans
and agreements of Noble-Delaware;
- Noble-Cayman will assume the obligations of Noble-Delaware with respect
to its unconditional guarantees of project financing commitments
regarding the semisubmersibles Noble Jim Thompson and Noble Paul Wolff;
- Noble-Cayman and Holdco will guarantee the obligations of Noble-Delaware
under Noble-Delaware's existing unsecured revolving $200 million bank
credit facility, under which there are currently no outstanding
borrowings;
- Noble-Cayman and Holdco will guarantee the obligations of Noble-Delaware
under the indenture governing Noble-Delaware's 6.95% Senior Notes due
2009 and 7.50% Senior Notes due 2019;
40
- Noble-Cayman will guarantee the obligations of Noble-Delaware under
change of control employment agreements that Noble-Delaware has in place
with certain executive officers; and
- Noble-Cayman will enter into indemnity agreements with those directors
and executive officers who currently have indemnity agreements with
Noble-Delaware, upon terms substantially similar to the Noble-Delaware
agreements.
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 Agreement and Plan of Merger is adopted by the requisite vote of
stockholders of Noble-Delaware;
- none of the parties to the Agreement and Plan of Merger is subject to any
decree, order or injunction that prohibits the consummation of the
merger;
- the registration statement of which this proxy statement/prospectus is a
part has been declared effective by the SEC and no stop order is in
effect;
- the Noble-Cayman ordinary shares to be issued pursuant to the merger are
authorized for listing on the New York Stock Exchange, subject to
official notice of issuance;
- we receive an opinion from Thompson & Knight L.L.P., our special U.S. tax
counsel, confirming, as of the effective date of the merger, the matters
discussed under "Material Income Tax Consequences of the Merger -- U.S.
Federal Income Tax Consequences of the Merger";
- we receive an opinion from Maples and Calder, our special Cayman Islands
counsel, confirming, as of the effective date of the merger, the matters
discussed under "Material Income Tax Consequences of the Merger -- Effect
of Cayman Islands Tax Laws on Noble-Cayman" and covering certain other
Cayman Islands legal matters; and
- we receive an opinion from Baker Botts L.L.P. covering certain other
legal matters.
Noble-Delaware and its subsidiaries are parties to certain agreements that
require the consent of third parties prior to 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 adverse effect on our business or our ability to complete
the merger.
EFFECTIVE TIME
We anticipate that the merger will become effective as soon as practicable
following approval by the stockholders at the stockholders' meeting.
MANAGEMENT OF NOBLE-CAYMAN
Immediately prior to the effective time of the merger, the current officers
and directors of Noble-Delaware will be appointed as the officers and directors
of Noble-Cayman, and Noble-Delaware's directors will carry their terms of office
over to the Noble-Cayman board of directors.
RECOMMENDATION AND REQUIRED AFFIRMATIVE VOTE
The affirmative vote of the holders of a majority of the shares of
Noble-Delaware common stock outstanding and entitled to vote at the
stockholders' meeting is required for approval and adoption of the merger and
the Agreement and Plan of Merger. Our board of directors has declared the merger
and the Agreement and Plan of Merger advisable and believes it is in the best
interests of Noble-Delaware and our stockholders. ACCORDINGLY, THE BOARD OF
DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR APPROVAL AND ADOPTION OF THE
MERGER AND THE AGREEMENT AND PLAN OF MERGER. We intend to effect the merger and
the
41
Agreement and Plan of Merger, if approved and adopted by the stockholders at the
stockholders' meeting, irrespective of whether any other proposal is approved.
REGULATORY APPROVALS
Currently, neither Noble-Delaware nor Noble-Cayman is required to file any
information with the U.S. Federal Trade Commission or the Antitrust Division of
the U.S. Department of Justice under the provisions of the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, in connection with the merger.
We are not aware of any other governmental approvals or actions that are
required to complete the merger other than compliance with U.S. federal and
state securities laws and Delaware and Cayman Islands corporate law.
RIGHTS OF DISSENTING STOCKHOLDERS
Under Delaware law, you will not have dissenters' appraisal rights in
connection with the merger because, among other reasons, the Noble-Cayman
ordinary shares will be listed on the New York Stock Exchange.
NO REQUIREMENT TO EXCHANGE CERTIFICATES
Stock certificates representing shares of Noble-Delaware common stock, and
the associated Noble-Delaware preferred stock purchase rights, will, at the
effective time, automatically represent the same number of Noble-Cayman ordinary
shares, and the associated Noble-Cayman preferred share purchase rights. You
will not be required to exchange your stock certificates as a result of the
merger. Should you desire to sell some or all of your Noble-Cayman shares after
the effective time of the merger, delivery of the stock certificate or
certificates that previously represented Noble-Delaware shares will be
sufficient.
Following the merger, certificates bearing the name of Noble-Cayman will be
issued in the normal course upon surrender of outstanding Noble-Delaware
certificates for transfer or exchange. If you surrender a certificate
representing Noble-Delaware shares for exchange or transfer and new certificates
are to be issued in a name other than that appearing on the surrendered
certificate, it will be a condition to the exchange or transfer that the
surrendered certificate be accompanied by (1) all documents required to evidence
and effect the transfer and (2) evidence that any applicable stock transfer
taxes have been paid.
STOCK COMPENSATION AND BENEFIT PLANS
As part of the merger, the Noble Drilling Corporation 1991 Stock Option and
Restricted Stock Plan, the Noble Drilling Corporation 1992 Nonqualified Stock
Option Plan for Non-Employee Directors, the Noble Drilling Corporation Equity
Compensation Plan for Non-Employee Directors, the Noble Drilling Corporation
401(k) Savings Plan, the Noble Drilling Corporation 401(k) Savings Restoration
Plan, the Noble International Employees Retirement Savings Plan, the Noble
Drilling Field Hourly Employees' Retirement Plan, the Noble Drilling Corporation
Salaried Employees' Retirement Plan and the Noble Drilling Corporation
Retirement Restoration Plan will be amended as necessary to give effect to the
merger including to provide that Noble-Cayman shares will thereafter be issued,
held, available or used to measure benefits, as appropriate, under the plans in
lieu of Noble-Delaware shares, including upon the exercise of any options issued
under the plans. As part of the merger the Noble Drilling Corporation 1991 Stock
Option and Restricted Stock Plan, the Noble Drilling Corporation 1992
Nonqualified Stock Option Plan for Non-Employee Directors, and the Noble
Drilling Corporation Equity Compensation Plan for Non-Employee Directors, and
such other plans as shall be agreed to by Noble-Cayman and Noble-Delaware, will
be adopted and assumed by Noble-Cayman. In the case of the 1991 Plan and the
1992 Plan, such plans will be assumed after giving effect to such of the
proposed amendments to such plans to be voted on by stockholders at the
stockholders' meeting as are approved by stockholders. See "Proposal to Amend
the Noble Drilling Corporation 1991 Stock Option and Restricted Stock Plan" and
"Proposal Regarding the Noble Drilling Corporation 1992 Nonqualified Stock
Option Plan for Non-Employee Directors." Stockholder approval of the Agreement
and Plan of Merger will also constitute any required
42
stockholder approval of the plan amendments and the adoption and assumption by
Noble-Cayman of the plans it assumes as part of the merger. Plans that provide
benefits to employees of Noble-Delaware and its operating subsidiaries will
continue to provide benefits to such employees subsequent to their assumption by
Noble-Cayman.
STOCKHOLDER/SHAREHOLDER RIGHTS PLAN
Noble-Delaware has a stockholder rights plan under which preferred stock
purchase rights are issued to stockholders of Noble-Delaware at the rate of one
right for each outstanding share of Noble-Delaware common stock. Noble-Cayman
has a shareholder rights plan that is substantially similar to the Noble-
Delaware stockholder rights plan. The Noble-Cayman plan provides for the
issuance of new preferred share purchase rights that are equivalent to the
Noble-Delaware preferred stock purchase rights. The new Noble-Cayman rights will
attach to all Noble-Cayman ordinary shares issued in connection with the merger
and thereafter.
The Noble-Delaware stockholder rights plan has been amended to provide that
the existing rights will expire immediately prior to the effective time of the
merger. This amendment of the Noble-Delaware stockholder rights plan will not
result in the issuance of any stock pursuant to the rights or trigger redemption
of the rights and will effectively terminate the Noble-Delaware stockholder
rights plan immediately prior to the effective time of the merger. Stockholder
approval of the Agreement and Plan of Merger will also constitute any required
stockholder approval of the amendment to the Noble-Delaware stockholder rights
plan.
For additional details, please see "Description of Authorized Shares of
Noble-Cayman -- Shareholder Rights Plan" and "Comparison of Rights of
Stockholders/Shareholders -- Stockholder/Shareholder Rights Plan."
STOCK EXCHANGE LISTING
Noble-Delaware common stock is currently listed on the New York Stock
Exchange. There is currently no established public trading market for the
ordinary shares of Noble-Cayman. We intend to make an application so that,
immediately following the merger, the ordinary shares of Noble-Cayman will be
listed on the New York Stock Exchange under the symbol "NE," the same symbol
under which the Noble-Delaware common stock is currently listed. Noble-Delaware
is currently included in the S&P 500 Index. We have been advised by Standard &
Poor's that Standard & Poor's does not expect any change to our membership in
the S&P 500 Index as a result of the merger, so long as we do not change the
businesses we are engaged in, or the location of our executive offices and
principal places of business as a result of the merger. The merger will not
result in any such changes.
ACCOUNTING TREATMENT OF THE MERGER
The merger will be accounted for as a combination of entities under common
control using the historical cost basis of the combining companies. The
accounting policies, procedures and internal controls of Noble-Cayman will
remain unchanged from those of Noble-Delaware as a result of the merger.
RESTRUCTURING SUBSEQUENT TO THE MERGER
We may further restructure our operations internally following the merger
to best achieve our business objectives. We do not expect that any such further
restructuring would require us to obtain approval of the shareholders of
Noble-Cayman. Depending on the timing and means of achieving any such further
restructuring, we may incur tax liability. We do not expect that any such
liability would be material.
43
MATERIAL INCOME TAX CONSEQUENCES OF THE MERGER
U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER
The following general discussion summarizes the anticipated material U.S.
federal income tax consequences of the receipt of Noble-Cayman shares by certain
holders of Noble-Delaware shares pursuant to the merger. This discussion does
not address all of the U.S. federal income tax consequences that may be relevant
to particular Noble-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 Noble-Delaware shares 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 own, or are deemed to own, 10% or more, determined by voting
power, of Noble-Delaware shares or Noble-Cayman shares; and
- holders subject to taxation as U.S. expatriates.
Further, this discussion does not address any U.S. federal estate, gift or
alternative minimum tax consequences or any state, local or foreign tax
consequences relating to the merger or the ownership and disposition of
Noble-Cayman shares.
The U.S. federal income tax consequences to particular stockholders will
depend in part on their individual circumstances. EACH NOBLE-DELAWARE
STOCKHOLDER IS STRONGLY URGED TO CONSULT ITS OWN TAX ADVISOR AS TO THE
PARTICULAR TAX CONSEQUENCES TO IT OF THE RECEIPT OF NOBLE-CAYMAN SHARES PURSUANT
TO THE MERGER CONTEMPLATED BY THIS PROXY STATEMENT/PROSPECTUS AND THE OWNERSHIP
AND DISPOSITION OF NOBLE-CAYMAN SHARES, INCLUDING THE APPLICABILITY AND EFFECT
OF FEDERAL, STATE, LOCAL AND FOREIGN INCOME AND OTHER TAX LAWS IN ITS PARTICULAR
CIRCUMSTANCES.
This discussion is based on the U.S. Internal Revenue Code of 1986, as
amended (the "Code"), the U.S. Treasury regulations promulgated thereunder, and
judicial and administrative interpretations thereof, in each case as in effect
on the date of this proxy statement/prospectus. All of the foregoing is subject
to change, which change could apply with retroactive effect and could affect the
tax consequences described below. Neither Noble-Delaware nor Noble-Cayman will
request any ruling from the U.S. Internal Revenue Service as to the U.S. federal
income tax consequences of the merger, but Noble-Delaware has obtained an
opinion of Thompson & Knight L.L.P., our special U.S. tax counsel, as to the
U.S. tax consequences described below with respect to the merger.
This discussion is also based on certain assumptions regarding the factual
circumstances that will exist at the time of the merger, including certain
representations made or to be made by Noble-Delaware and Noble-Cayman. 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. This discussion assumes that Noble-Delaware
stockholders hold their Noble-Delaware shares and will hold Noble-Cayman shares
as capital assets.
44
U.S. TAXATION OF U.S. HOLDERS
For purposes of this discussion, a "U.S. holder" is a beneficial owner of
Noble-Delaware shares that, for U.S. federal income tax purposes, is:
- a citizen or resident of the United States;
- a corporation or partnership created or organized in or under the laws of
the United States 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 its Noble-Delaware shares.
Receipt of Noble-Cayman Shares. Because Noble-Cayman is not a U.S.
corporation, each U.S. holder will recognize gain, but not loss, on the receipt
of Noble-Cayman shares in exchange for Noble-Delaware shares pursuant to the
merger. The exchange of each Noble-Delaware share by a U.S. holder will be
treated as a separate transaction that either will generate current gain or will
create deferred loss. If the fair market value of a Noble-Cayman share received
in exchange for a Noble-Delaware share exceeds the U.S. holder's basis in the
Noble-Delaware share, the U.S. holder will recognize gain in an amount equal to
such excess. Any gain recognized will be capital gain and will be long-term
capital gain if the Noble-Delaware share has been held for more than one year at
the effective time of the merger. A U.S. holder that recognizes gain on receipt
of the Noble-Cayman shares will have an aggregate adjusted tax basis in such
shares equal to the fair market value of such shares. The holding period for any
such Noble-Cayman shares will begin at the effective time of the merger. A U.S.
holder will not be permitted to recognize any loss realized on the exchange of
its Noble-Delaware shares, but the aggregate adjusted tax basis of the
Noble-Cayman shares received by a U.S. holder in exchange for Noble-Delaware
shares in which the U.S. holder has a loss will be equal to such U.S. holder's
aggregate adjusted tax basis in those Noble-Delaware shares surrendered in the
exchange. This basis will then be used in determining gain or loss on future
sales of Noble-Cayman shares. The holding period for any Noble-Cayman shares
received by a U.S. holder in exchange for Noble-Delaware shares with respect to
which no loss was recognized will include the holding period of those
Noble-Delaware shares.
It is possible that a U.S. holder of Noble-Delaware shares will have some
shares in which the holder has a gain and some shares in which the holder has a
loss. If all such shares are held at the time of the merger, any such gain will
be required to be recognized for U.S. federal income tax purposes without offset
for any such losses.
Distributions. Subject to the discussion below under "-- Passive Foreign
Investment Company Considerations," the gross amount of any distribution by
Noble-Cayman of cash or property (other than certain distributions, if any, of
ordinary shares distributed pro rata to all shareholders of Noble-Cayman) with
respect to Noble-Cayman shares will be includable 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 Noble-Cayman as determined under U.S.
federal income tax principles. Such dividends will 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 Noble-Cayman exceeds Noble-Cayman's current and accumulated
earnings and profits as determined under U.S. federal income tax principles, it
will be treated first as a tax-free return of the U.S. holder's adjusted tax
basis in the shares and amounts in excess of such basis will be treated as
capital gain. Noble-Cayman will maintain calculations of its earnings and
profits under U.S. federal income tax principles.
45
Sale or Exchange of Noble-Cayman 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 Noble-Cayman
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 Noble-Cayman 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 is currently 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 one year. 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% of its gross income is passive
income or (2) at least 50% 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. For
purposes of determining whether a non-U.S. corporation is a PFIC, its gross
income and assets include the pro rata share of the gross income and the assets,
respectively, of any company in which the non-U.S. corporation is considered to
own 25% or more of the share by value.
Based on certain estimates of its gross income and gross assets and the
nature of its business, Noble-Cayman believes that it will not be classified as
a PFIC for its current taxable year. Noble-Cayman's status in future years will
depend on its assets and activities in those years. Noble-Cayman 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. Nevertheless, 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,
Noble-Delaware cannot assure you that Noble-Cayman will not become a PFIC.
If Noble-Cayman were a PFIC, a U.S. holder of Noble-Cayman 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, Noble-Cayman shares. A U.S. holder of Noble-
Cayman shares could make a variety of elections that may alleviate the tax
consequences referred to above, and one of these elections may be made
retroactively.
We cannot assure you that Noble will have timely knowledge of any future
status as a PFIC. In this regard, Noble does not assume any obligation to make a
timely disclosure with respect to PFIC status. If you are a U.S. holder, we urge
you to consult your tax advisor about the PFIC rules, and especially the
elections that may be made to alleviate the tax consequences of PFIC status.
U.S. TAXATION OF NON-U.S. HOLDERS
Except as described in "-- Backup Withholding Tax and Information Reporting
Requirements" below, a non-U.S. holder will not be subject to U.S. federal
income tax or withholding tax on gain realized, if any, on the exchange of
Noble-Delaware shares for Noble-Cayman shares.
Except as described in "-- Backup Withholding Tax and Information Reporting
Requirements" below, a non-U.S. holder will not be subject to U.S. federal
income tax or withholding tax on dividend distributions with respect to, and
gain realized from the sale or exchange of, Noble-Cayman shares unless:
- the dividends or gains are effectively connected with the conduct of a
trade or business and, in the case of a resident of a country which has a
treaty with the United States, the item is attributable to a permanent
establishment, or in the case of an individual, a fixed place of
business, within the United States; or
- subject to some exceptions, the non-U.S. holder is an individual who is
present in the United States for 183 days or more during the taxable year
of the sale and other required conditions exist.
46
BACKUP WITHHOLDING TAX AND INFORMATION REPORTING REQUIREMENTS
U.S. backup withholding tax and information reporting rules generally apply
to payments of dividends on, and proceeds from the sale or redemption of, shares
of stock of corporations made within the United States. The backup withholding
rules require that 30% of payments to noncorporate holders of corporate stock be
withheld and paid to the U.S. Internal Revenue Service unless the holder
furnishes its correct taxpayer identification number to the person making the
payment or otherwise complies with, or establishes an exemption from, such
backup withholding tax requirements.
The exchange of Noble-Delaware shares for Noble-Cayman shares should not be
subject to information reporting or backup withholding because the exchange will
not be for cash.
Currently, U.S. holders of Noble-Delaware shares are subject to the backup
withholding tax and information reporting rules with respect to dividends on
Noble-Delaware shares and proceeds from the sale or redemption of Noble-Delaware
shares. After the merger, it is anticipated that the same rules will apply to
dividends on Noble-Cayman shares and to proceeds from the sale or redemption of
Noble-Cayman shares. A U.S. holder may avoid the backup withholding tax by
providing the person making the payment with the holder's taxpayer
identification number or other evidence of exemption as noted above.
Non-U.S. holders of Noble-Delaware shares generally are not subject to U.S.
backup withholding tax and information reporting rules with respect to dividends
on Noble-Delaware shares and proceeds from the sale or redemption of
Noble-Delaware shares as long as the non-U.S. holder provides either:
- a taxpayer identification number;
- certification as to its foreign status; or
- other evidence establishing an exemption.
EFFECT OF CAYMAN ISLANDS TAX LAWS ON NOBLE-CAYMAN
The following is the opinion of Maples and Calder, special Cayman Islands
counsel to Noble, with respect to the material Cayman Islands tax consequences
arising from the restructuring and the ownership and disposition of Noble-Cayman
shares after the merger.
At the present time, there is no Cayman Islands income or profits tax,
withholding tax, capital gains tax, capital transfer tax, estate duty or
inheritance tax payable by a Cayman Islands corporation or its shareholders. In
addition, Noble-Cayman has applied for and expects to receive an undertaking
from the Governor in Council of the Cayman Islands under the Tax Concessions Law
(1999 Revision) that generally provides that no new Cayman Islands taxes will be
applied to Noble-Cayman for 20 years from the date of the undertaking. Noble
expects this undertaking to provide that, for that 20-year period:
- no law enacted in the Cayman Islands imposing any tax to be levied on
profits, income, gains or appreciations shall apply to Noble-Cayman or
its operations; and
- no withholding or other tax to be levied on profits, income, gains or
appreciations or any estate duty or inheritance tax shall be payable by
Noble-Cayman or its shareholders.
Therefore, there will be no Cayman Islands tax consequences with respect to
the restructuring or with respect to ownership or disposition by shareholders of
or subsequent distributions in respect of the Noble-Cayman shares.
DESCRIPTION OF AUTHORIZED SHARES OF NOBLE-CAYMAN
The following discussion is a summary of Noble-Cayman's share capital. The
information provided in this summary assumes the adoption by stockholders at the
stockholders' meeting of the amendment to Noble-Delaware's certificate of
incorporation increasing the authorized shares of Noble-Delaware common stock to
400,000,000 from 200,000,000. This summary is not complete and is subject to the
complete text of Noble-Cayman's memorandum of association (the "memorandum") and
its articles of association (the
47
"articles") as they will be in effect on the date of the merger. Noble-Cayman's
memorandum is attached to this proxy statement/prospectus as Annex B and its
articles are attached as Annex C. WE ENCOURAGE YOU TO READ THOSE DOCUMENTS
CAREFULLY.
In accordance with Cayman Islands law, holders of shares of Noble-Cayman
are referred to as "members" in Noble-Cayman's memorandum and articles. In order
to avoid any confusion that the use of this term could cause our U.S.
stockholders, we have used the term "shareholders" rather than "members"
throughout this proxy statement/prospectus when we refer to members of
Noble-Cayman.
AUTHORIZED SHARE CAPITAL
Noble-Cayman's memorandum provides that its authorized share capital is
US $55,000,000, divided into 400,000,000 ordinary shares, par value US$0.10, and
15,000,000 preferred shares, par value US$1.00. The preferred shares are "blank
check" shares; therefore, our board of directors may designate and create the
preferred shares as shares of any series and determine the respective rights and
restrictions of any such series.
VOTING
The holders of Noble-Cayman's ordinary shares will be entitled to one vote
per share other than on the election of directors.
With respect to the election of directors, each holder of Noble-Cayman's
ordinary shares entitled to vote at the election will have the right to vote, in
person or by proxy, the number of shares held by him for as many persons as
there are directors to be elected. The directors will be divided into three
classes, with only one class being up for election each year. Directors will be
elected by a plurality of the votes cast in the election. Neither Cayman Islands
law nor the articles provide for cumulative voting for the election of
directors.
There are no limitations imposed by Cayman Islands law or Noble-Cayman's
articles on the right of nonresident shareholders to hold or vote their
Noble-Cayman ordinary shares.
The rights attached to any separate class or series of shares, unless
otherwise provided by the terms of the shares of that class or series, may be
varied and amended only with the consent in writing of the holders of all of the
issued shares of that class or series or by a special resolution passed at a
separate general meeting of holders of the shares of that class or series. The
necessary quorum for that meeting is the presence of holders of a majority of
the shares of that class or series. Each holder of shares of the class or series
present, in person or by proxy, will have one vote for each share of the class
or series of which he is the holder. Outstanding shares will not be deemed to be
varied by the creation or issue of further shares that rank in any respect prior
to or equivalent with those shares.
Under Cayman Islands law, some matters, like altering the memorandum or the
articles, changing the name of Noble-Cayman, voluntarily winding up the company
or resolving to be registered by way of continuation in a jurisdiction outside
the Cayman Islands, require the approval of shareholders by a special
resolution. A special resolution is a resolution passed by the holders of at
least two-thirds of the shares voted at a general meeting or approved in writing
by all shareholders of a company entitled to vote at a general meeting of the
company.
QUORUM FOR GENERAL MEETINGS
The presence of shareholders, in person or by proxy, holding a majority of
the issued shares generally entitled to vote at a meeting is a quorum for the
transaction of most business. However, pursuant to Noble-Cayman's articles,
different quorums are required in some cases to approve a change in Noble-
Cayman's articles. Shareholders present in person or by proxy holding at least
95% of the issued shares entitled to vote at a meeting is the required quorum at
a general meeting to consider or adopt a special
48
resolution to amend, vary, suspend the operation of or disapply any of the
following provisions of the articles:
- Articles 31 through 49 -- which relate to the convening of, and
proceedings and procedures at, general meetings;
- Articles 52 through 60 -- which relate to the election, appointment and
classification of directors;
- Articles 62 and 63 -- which require shareholders to approve certain
business combinations with interested shareholders (with the exceptions
described below); or
- Article 64 -- which requires shareholders to approve the sale, lease or
exchange of all or substantially all of Noble-Cayman's property or
assets.
However, shareholders present, in person or by proxy, holding a majority of
the issued shares entitled to vote at the meeting will constitute a quorum if:
- a majority of the board of directors has, at or prior to the meeting,
recommended a vote in favor of the special resolution; and
- in the case of a special resolution to amend, vary, suspend the operation
of or disapply Article 62 of the articles, the favorable recommendation
is made by a majority of the disinterested directors, meaning those
directors who are unaffiliated with and are not nominees of the
interested shareholder and were directors prior to the time the
interested shareholder became an interested shareholder; or
- in the case of a special resolution to amend, vary, suspend the operation
of or disapply Article 63 of the articles, other than a special
resolution referred to in the next full paragraph below, the favorable
board of directors' recommendation is made at a time when a majority of
the board of directors then in office were directors prior to any person
becoming an interested shareholder during the previous three years or
were recommended for election or elected to succeed those directors by a
majority of those directors.
In addition, shareholders present, in person or by proxy, holding a
majority of the issued shares entitled to vote at a meeting also will constitute
the required quorum to consider or adopt a special resolution to delete Article
63 of the articles if:
- the resolution will not be effective until 12 months after it is passed
by shareholders; and
- the restrictions in Article 63 of the articles will otherwise continue to
apply to any business combination between Noble-Cayman and any person who
became an interested shareholder on or prior to the passing of the
resolution.
The shareholders present at a duly constituted general meeting may continue
to transact business until adjournment, despite the withdrawal of shareholders
that leaves less than a quorum.
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 on the
shares issued and authorize payment of the dividends out of Noble-Cayman's
lawfully available funds. The board of directors may declare that any dividend
be paid wholly or partly by the distribution of shares of Noble-Cayman and/or
specific assets.
Noble-Delaware does not currently pay periodic cash dividends on shares of
Noble-Delaware common stock. Although Noble-Cayman does not expect to pay
periodic cash dividends on Noble-Cayman ordinary shares following the merger,
any future declaration and payment of dividends by Noble-Cayman would be:
- dependent upon its results of operations, financial condition, cash
requirements and other relevant factors;
- subject to the discretion of its board of directors;
49
- subject to restrictions contained in debt instruments; and
- payable only out of its accumulated profits or its share premium account
in accordance with Cayman Islands law. The share premium account is the
excess of the purchase price for shares issued over the nominal or par
value of those shares.
RIGHTS UPON LIQUIDATION
Upon the liquidation of Noble-Cayman, after creditors of the company have
been paid in full and the full amounts that holders of any issued shares ranking
senior to the ordinary shares as to distribution on liquidation or winding up
are entitled to receive have been paid or set aside for payment, the holders of
Noble-Cayman's ordinary shares are entitled to receive, pro rata, any remaining
assets of Noble-Cayman available for distribution. The liquidator may deduct
from the amount payable in respect of those ordinary shares any liabilities the
holder has to or with Noble-Cayman.
NO SINKING FUND
The Noble-Cayman ordinary shares have no sinking fund provisions.
NO LIABILITY FOR FURTHER CALLS OR ASSESSMENTS
The Noble-Cayman shares to be issued in the merger will be duly and validly
issued, fully paid and nonassessable.
NO PREEMPTIVE RIGHTS
Holders of ordinary shares will have no preemptive or preferential right to
purchase any securities of Noble-Cayman.
REDEMPTION AND CONVERSION
The Noble-Cayman ordinary shares will not be convertible into shares of any
other class or series or be subject to redemption either by Noble-Cayman or the
holder of the shares.
REPURCHASE
Under Noble-Cayman's articles, Noble-Cayman may purchase any issued
ordinary shares in the circumstances and on the terms as are agreed by
Noble-Cayman and the holder of the shares whether or not Noble-Cayman has made a
similar offer to all or any other of the holders of ordinary shares.
RESTRICTIONS ON TRANSFER
Subject to the rules of the New York Stock Exchange and any other stock
exchange on which the ordinary shares may be listed, the board of directors may,
in its absolute discretion and without assigning any reason, decline to register
any transfer of shares.
OTHER CLASSES OR SERIES OF SHARES
The board of directors may from time to time authorize by means of a board
resolution the issuance of preferred shares in one or more series of preferred
shares, 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
series the number of shares which shall constitute such series, voting power,
full or limited, or no voting power, and designations, preferences and relative,
participating, optional or other special rights and qualifications, limitations
or restrictions thereof. Such a "blank check" preferred share provision could
have certain "anti-takeover" effects. See "-- Anti-Takeover Provisions" below.
50
COMPULSORY ACQUISITION OF SHARES HELD BY MINORITY HOLDERS
An acquiring party is generally able to acquire compulsorily the ordinary
shares of minority holders in one of two ways:
- By a procedure under the Cayman Islands Companies Law, 2001 Second
Revision (the "Companies Law"), known as a "scheme of arrangement." A
scheme of arrangement is made by obtaining the consent of the Cayman
Islands company, the consent of the court and approval of the arrangement
by holders of ordinary shares (1) representing 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 ordinary shares other than
those held by the acquiring party, if any. If a scheme of arrangement
receives all necessary consents and approvals, all holders of ordinary
shares of a company would be compelled to sell their shares under the
terms of the scheme of arrangement.
- By acquiring pursuant to a tender offer 90% of the ordinary 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 ordinary
shares not owned by the offeror, obtained the approval of not less than
90% of all the shares to which the offer relates, the offeror may, at any
time within two months after the end of that four month period, require
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, unless within one month from the
date on which the notice to compulsorily acquire was given to the
nontendering shareholder, the nontendering shareholder is able to
convince the court to order otherwise.
TRANSFER AGENT
The transfer agent and registrar for the ordinary shares will be UMB Bank,
N.A., Kansas City, Missouri.
ANTI-TAKEOVER PROVISIONS
General. Noble-Cayman's articles, like the certificate of incorporation of
Noble-Delaware, have provisions that could have an anti-takeover effect. These
provisions are intended to enhance the ability of the board of directors to deal
with unsolicited takeover attempts by increasing the likelihood of continuity
and stability in the composition of the board of directors. These provisions
could have the effect of discouraging transactions that may involve an actual or
threatened change of control of Noble-Cayman.
Classified Board. The articles provide that Noble-Cayman's board of
directors will be divided into three classes serving staggered three-year terms.
Directors can be removed from office, only with cause, by the affirmative vote
of the holders of a majority of the issued shares generally entitled to vote.
The board of directors does not have the power to remove directors. Vacancies on
the board of directors may be filled only by the remaining directors and not by
the shareholders. These provisions could have the effect of precluding an
acquiror from removing incumbent directors and simultaneously gaining control of
the board of directors by filling the vacancies created by the removal of
directors with its own nominees, unless the acquiror controls at least
two-thirds of the combined voting power of the ordinary shares (the percentage
necessary to adopt a special resolution to amend these provisions if a quorum of
95% can be obtained). This could result in delaying a shareholder from obtaining
majority representation on the board of directors.
Number of Directors. The articles provide that the board of directors will
consist of not less than three directors, the exact number to be set from time
to time by a majority of the whole board of directors. 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 until a general meeting at which
directors are to be appointed.
51
Advance Notice Provisions. The articles establish an advance notice
procedure that must be followed by shareholders if they wish to nominate
candidates for election as directors at an annual or extraordinary general
meeting of shareholders. The articles provide generally that, if you desire to
nominate a candidate for election as a director at an annual general meeting,
you must give us notice not less than 90 days prior to the annual general
meeting. Similarly, the articles provide that, if you desire to nominate a
candidate for election as a director at an extraordinary general meeting, you
must give notice prior to the close of business on the seventh day following the
date in which notice of such meeting is first given. In each case, the notice
must contain specified information concerning the shareholder submitting the
proposal.
Action Only by Unanimous Written Consent. Subject to the terms of any
other class of shares in issue, any action required or permitted to be taken by
the holders of Noble-Cayman's ordinary shares must be taken at a duly called
annual or extraordinary general meeting of shareholders or by written consent
signed by all of the holders of Noble-Cayman's ordinary shares. Extraordinary
general meetings may be called by a majority of the entire board of directors,
the Chairman of the Board, the Chief Executive Officer or the President.
Shareholders do not have the authority to call an extraordinary general meeting.
Preferred Shares. 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 issue from
time to time any other classes or series of shares with the designations and
relative powers, preferences, conversion or other rights, voting powers,
restrictions, limitations as to dividends or terms or conditions of redemption
as they consider fit. 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 ordinary 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. With the
exception of the Noble-Cayman Series A Junior Participating preferred shares
established in connection with the Noble-Cayman shareholder rights plan, no
preferred shares have been established as of the date of this proxy
statement/prospectus.
Quorum Requirements. The special quorum provisions contained in the
articles require the holders of 95% of all the voting shares to be present, in
person or by proxy, at a general meeting to consider or adopt a special
resolution to amend, vary, suspend the operation of or disapply the following
provisions of the articles, unless a majority of the board of directors has
recommended that the shareholders vote in favor of the special resolution:
- Articles 31 through 49 -- which relate to the convening of, and
proceedings and procedures at, general meetings;
- Articles 52 through 60 -- which relate to the election, appointment and
classification of directors;
- Articles 62 and 63 -- which require shareholders to approve certain
business combinations with interested shareholders (for a description of
exceptions to the quorum requirements to these provisions, see "-- Quorum
for General Meetings"); or
- Article 64 -- which requires shareholders to approve the sale, lease or
exchange of all or substantially all of Noble-Cayman's property or
assets.
Restrictions on Business Combinations. As a Cayman Islands company,
Noble-Cayman is not subject to Section 203 of the Delaware General Corporation
Law, which restricts business combinations with interested stockholders.
However, Article 63 of the articles contains provisions that largely mirror the
intention of Section 203 and generally prohibit "business combinations" between
Noble-Cayman and an "interested shareholder." Specifically, "business
combinations" between an "interested shareholder" and Noble-Cayman are
prohibited for a period of three years after the time the interested shareholder
acquired its shares, unless:
- the business combination or the transaction resulting in the person
becoming an interested shareholder is approved by the board of directors
prior to the date the interested shareholder acquired Noble-Cayman's
shares;
52
- the interested shareholder acquired at least 85% of Noble-Cayman's shares
in the transaction in which it became an interested shareholder; or
- the business combination is approved by a majority of the board of
directors and by the affirmative vote of disinterested shareholders
holding at least two-thirds of the shares generally entitled to vote.
For purposes of this provision, "business combinations" is defined broadly
to include mergers, consolidations of majority owned subsidiaries, sales or
other dispositions of assets having an aggregate value in excess of 10% of the
consolidated assets of Noble-Cayman, and most transactions that would increase
the interested shareholder's proportionate share ownership in Noble-Cayman.
"Interested shareholder" is defined as a person who, together with any
affiliates and/or associates of that person, beneficially owns, directly or
indirectly, 15% or more of the issued voting shares of Noble-Cayman.
Fair Price Provisions. In addition, the Noble-Delaware certificate of
incorporation contains a "fair price" anti-takeover provision that is now
included as Article 62 of the Noble-Cayman articles. This provision requires the
approval of at least 80% of the voting shares before Noble-Cayman may enter into
certain "business combinations" with an "interested shareholder" unless:
- the business combination is approved by a majority of the disinterested
members of the board of directors; or
- the aggregate amount of cash and the fair market value of the
consideration other than cash to be received by the shareholders in the
business combination meets certain specified threshold minimum standards;
and certain specified events have occurred or failed to occur, as
applicable.
For purposes of the fair price provisions, "business combination" is
broadly defined to include mergers and consolidations of Noble-Cayman or its
subsidiaries with an interested shareholder or any other person that is or would
be an interested shareholder after such transaction; a sale, exchange or
mortgage of assets having a fair market value of US$1.0 million or more to an
interested shareholder or any affiliate of an interested shareholder; the
issuance or transfer of securities in Noble-Cayman or its subsidiaries having a
fair market value of US$1.0 million or more to an interested shareholder or any
affiliate of an interested shareholder; the adoption of a plan of liquidation or
dissolution proposed by any interested shareholder or any affiliate of an
interested shareholder; and any reclassification of securities or other
transaction which has the effect, directly or indirectly, of increasing the
number of shares beneficially owned by any interested shareholder or any
affiliate of an interested shareholder. "Interested shareholder" is generally
defined as a person who, together with any affiliates of that person,
beneficially owns, directly or indirectly, 5% or more of the combined voting
power of the then issued and outstanding shares of Noble-Cayman.
SHAREHOLDER RIGHTS PLAN
Issuance of Rights. The Noble-Cayman shareholder rights plan provides for
the issuance of one right (a "right") to purchase one one-hundredth of a
Noble-Cayman Series A Junior Participating preferred share for each Noble-Cayman
ordinary share in issue as of the effective time of the merger (the "rights
record date").
Evidence of Rights. Under the shareholder rights plan, until the earlier
to occur of (1) 10 days following a public announcement that a person or group
of affiliated or associated persons (an "acquiring person") has acquired
beneficial ownership of 15% or more of the Noble-Cayman ordinary shares or (2)
10 business days (or such later date as may be determined by action of the board
of directors of Noble-Cayman prior to such time as any person or group of
affiliated persons becomes an acquiring person) following the commencement of,
or announcement of an intention to make, a tender offer or exchange offer the
consummation of which would result in the beneficial ownership by a person or
group of 15% or more of the Noble-Cayman ordinary shares (the earlier of such
dates being called the "distribution date"), the rights will be evidenced by
certificates representing Noble-Cayman ordinary shares, together with a summary
of the rights.
53
The shareholder rights plan provides that, until the distribution date (or
earlier redemption or expiration of the rights), the rights will be transferred
with and only with Noble-Cayman ordinary shares. Until the distribution date (or
earlier redemption or expiration of the rights), new Noble-Cayman ordinary share
certificates issued after the rights record date upon transfer or new issuance
of Noble-Cayman ordinary shares will contain a notation incorporating the
Noble-Cayman shareholder rights plan by reference. Until the distribution date
(or earlier redemption or expiration of the rights), the surrender for transfer
of any certificates for Noble-Cayman ordinary shares in issue as of the rights
record date, even without such notation or a copy of the summary of rights, will
also constitute the transfer of the rights associated with Noble-Cayman ordinary
shares represented by such certificate. As soon as practicable following the
distribution date, separate certificates evidencing the rights will be mailed to
holders of record of Noble-Cayman ordinary shares as of the close of business on
the distribution date and such separate certificates alone will evidence the
rights.
Duration of Rights. The rights are not exercisable until the distribution
date. The rights will expire on July 10, 2005 (the same expiration date of the
Noble-Delaware preferred stock purchase rights), unless this date is extended or
unless the rights are earlier redeemed or exchanged by Noble-Cayman, in each
case as described below.
Adjustments. The purchase price payable, and the number of Series A Junior
Participating preferred shares or other securities or property issuable, upon
exercise of the rights are subject to adjustment from time to time to prevent
dilution (1) in the event of a share dividend on or a subdivision, combination
or reclassification of, the Series A Junior Participating preferred shares, (2)
upon the grant to holders of the Series A Junior Participating preferred shares
of certain rights or warrants to subscribe for or purchase Series A Junior
Participating preferred shares at a price, or securities convertible into Series
A Junior Participating preferred shares with a conversion price, less than the
then-current market price of the Series A Junior Participating preferred shares
or (3) upon the distribution to holders of the Series A Junior Participating
preferred shares of evidences of indebtedness or assets (excluding regular
periodic cash dividends or dividends payable in Series A Junior Participating
preferred shares) or of subscription rights or warrants (other than those
referred to above).
The number of rights in issue is also subject to adjustment in the event of
a share division of Noble-Cayman ordinary shares or a share dividend on
Noble-Cayman ordinary shares payable in Noble-Cayman ordinary shares or
subdivisions, consolidations or combinations of Noble-Cayman ordinary shares
occurring, in any such case, prior to the distribution date.
Series A Junior Participating Preferred Shares. Series A Junior
Participating preferred shares purchasable upon exercise of the rights will not
be redeemable. Each Series A Junior Participating preferred share will be
entitled, when, as and if declared, to a minimum preferential quarterly dividend
payment of US$.01 per share but will be entitled to an aggregate dividend of 100
times the dividend declared per Noble-Cayman ordinary share. In the event of
liquidation, the holders of the Series A Junior Participating preferred shares
will be entitled to a minimum preferential liquidation payment of US$1.00 per
share and will be entitled to an aggregate payment of 100 times the payment made
per Noble-Cayman ordinary share. Each Series A Junior Participating preferred
share will have 100 votes, voting together with Noble-Cayman ordinary shares.
Finally, in the event of any amalgamation, merger, consolidation or other
transaction in which Noble-Cayman ordinary shares are converted or exchanged,
each Series A Junior Participating preferred share will be entitled to receive
100 times the amount received per Noble-Cayman ordinary share. These rights are
protected by customary antidilution provisions.
Because of the nature of the Series A Junior Participating preferred
shares' dividend, liquidation and voting rights, the value of the one
one-hundredth interest in a Series A Junior Participating preferred share
purchasable upon exercise of each right should approximate the value of one
Noble-Cayman ordinary share.
Exercise of Rights. In the event that any person or group of affiliated or
associated persons becomes an acquiring person, each holder of a right, other
than rights beneficially owned by the acquiring person
54
(which will thereupon become void), will thereafter have the right to receive
upon exercise of a right at the then-current exercise price of the right
(currently $120), that number of Noble-Cayman ordinary shares having a market
value of two times the exercise price of the right.
In the event that, after a person or group has become an acquiring person,
Noble-Cayman is acquired in an amalgamation, merger or other business
combination transaction or 50% or more of its consolidated assets or earning
power are sold, proper provision will be made so that each holder of a right
(other than rights beneficially owned by an acquiring person, which will have
become void) will thereafter have the right to receive, upon the exercise
thereof at the then-current exercise price of the right, that number of common
shares of the person with whom Noble-Cayman has engaged in the foregoing
transaction or such person's parent, which at the time of such transaction will
have a market value of two times the exercise price of the right.
Exchange of Rights. At any time after any person or group becomes an
acquiring person and prior to the acquisition by such person or group of 50% or
more of the Noble-Cayman ordinary shares in issue or the occurrence of an event
described in the prior paragraph, the board of directors of Noble-Cayman may
exchange the rights (other than rights owned by such person or group which will
have become void), in whole or in part, at an exchange ratio of one Noble-Cayman
ordinary share, or one one-hundredth of a Series A Junior Participating
preferred share (or of a share of a class or series of Noble-Cayman shares
having equivalent rights, preferences and privileges), per right (subject to
adjustment).
Fractional Shares. With certain exceptions, no adjustment in the purchase
price will be required until cumulative adjustments require an adjustment of at
least 1% in such purchase price. Noble-Cayman may, but is not required to, issue
fractional Series A Junior Participating preferred shares (other than fractions
which are integral multiples of one one-hundredth of a Series A Junior
Participating preferred share, which may, at the election of Noble-Cayman, be
evidenced by depositary receipts), and in lieu thereof Noble-Cayman may make an
adjustment in cash based on the market price of the Series A Junior
Participating preferred shares on the last trading day prior to the date of
exercise.
Redemption. At any time prior to the time an acquiring person becomes
such, the board of directors of Noble-Cayman may redeem the rights in whole, but
not in part, at a redemption price of US$.01 per right. The redemption of the
rights may be made effective at such time, on such basis and with such
conditions as the board of directors in its sole discretion may establish.
Immediately upon any redemption of the rights, the right to exercise the rights
will terminate and the only right thereafter of the holders of rights will be to
receive the redemption price.
Amendment of Rights. The terms of the rights may be amended by the board
of directors of Noble-Cayman without the consent of the holders of the rights,
including an amendment to lower the 15% threshold for an acquiring person
described above to not less than the greater of (1) the sum of .001% and the
largest percentage of the Noble-Cayman ordinary shares in issue then known to
Noble-Cayman to be beneficially owned by any person or group of affiliated or
associated persons and (2) 10%, except that from and after such time as any
person or group of affiliated or associated persons becomes an acquiring person
no such amendment may adversely affect the interests of the holders of the
rights.
No Rights as a Shareholder. Until a right is exercised, the holder
thereof, as such, will have no rights as a shareholder of Noble-Cayman
including, without limitation, the right to vote or to receive dividends.
Certain Anti-Takeover Effects. The rights have certain anti-takeover
effects. The rights will cause substantial dilution to a person or group that
attempts to acquire Noble-Cayman on terms not approved by the board of directors
of Noble-Cayman, except pursuant to an offer conditioned on a substantial number
of rights being acquired. The rights should not interfere with any amalgamation,
merger or other business combination approved by the board of directors since
the rights may be redeemed by Noble-Cayman at the redemption price prior to the
time that a person or group has acquired beneficial ownership of 15% or more of
the Noble-Cayman ordinary shares.
See "The Merger -- Stockholder/Shareholder Rights Plan" and "Comparison of
Rights of Stockholders/Shareholders -- Stockholder/Shareholder Rights Plan."
55
COMPARISON OF RIGHTS OF STOCKHOLDERS/SHAREHOLDERS
Your rights as a stockholder of Noble-Delaware are governed by Delaware law
and Noble-Delaware's certificate of incorporation and bylaws. After the merger,
you will become a shareholder of Noble-Cayman and your rights will be governed
by Cayman Islands law and Noble-Cayman's memorandum and articles.
The principal attributes of Noble-Delaware's common stock and
Noble-Cayman's ordinary shares will be similar. However, there are differences
between your rights under Delaware law and Cayman Islands law, which is modeled
on the laws of England and Wales. In addition, there are differences between
Noble-Delaware's certificate of incorporation and bylaws and Noble-Cayman's
memorandum and articles. The following discussion is a summary of material
differences in your rights resulting from the merger, including:
- an increase in the requisite shareholder vote required under Cayman
Islands law to approve business combinations;
- the absence of shareholder appraisal rights under Cayman Islands law;
- the absence under Cayman Islands laws of a statutory right of
shareholders to inspect a company's books and records; and
- limited rights of shareholders to bring shareholder derivative actions
under Cayman Islands law.
This summary is not complete and does not cover all of the differences
between Cayman Islands law and Delaware law affecting corporations and their
shareholders or all the differences between Noble-Delaware's certificate of
incorporation and bylaws and Noble-Cayman's memorandum and articles. We believe
this summary is accurate. It is, however, subject to the complete text of the
relevant provisions of the Companies Law, the Delaware General Corporation Law
(the "DGCL"), Noble-Delaware's certificate of incorporation and bylaws, and
Noble-Cayman's memorandum and articles. We encourage you to read those laws and
documents. The form of Noble-Cayman's memorandum is attached to this proxy
statement/prospectus as Annex B and the form of its articles is attached as
Annex C. For information as to how you can obtain Noble-Delaware's certificate
of incorporation and bylaws, see "Where You Can Find More Information."
56
STOCKHOLDER/SHAREHOLDER APPROVAL OF BUSINESS COMBINATIONS
Noble-Delaware Noble-Cayman
Under the DGCL, a merger, consolidation, Unlike Delaware law, Cayman Islands law does
sale, lease, exchange or other disposition not include a statutory merger procedure.
of all or substantially all of the property The Companies Law does, however, provide for
of the corporation not in the usual and a procedure known as a "scheme of
regular course of the corporation's arrangement." A scheme of arrangement is
business, or a dissolution of the made by obtaining the consent of the Cayman
corporation, is generally required to be Islands company, the consent of the court
approved by the holders of a majority of the and approval by holders of ordinary shares
shares entitled to vote on the matter, (1) representing a majority in number of the
unless the certificate of incorporation shareholders present at the meeting held to
provides otherwise. However, mergers in consider the arrangement and (2) holding at
which less than 20% of a corporation's stock least 75% of all the issued ordinary shares
is issued generally do not require other than those held by the acquiring
stockholder approval. In addition, mergers party, if any. If a scheme of arrangement
in which an acquiring corporation owns 90% receives all of the necessary consents, all
or more of each class of stock of the holders of ordinary shares of a company
acquired corporation may be completed would be compelled to sell their shares
without the vote of the acquired corpora- under the terms of the scheme of
tion's board of directors or stockholders. arrangement. Noble-Cayman's Cayman Islands
counsel, Maples and Calder, has advised that
Cayman Islands courts are unlikely to refuse
to sanction such a scheme of arrangement in
the absence of bad faith, fraud or unequal
treatment of shareholders.
In addition, Cayman Islands companies may be
acquired by other corporations by the direct
acquisition of the share capital of the
Cayman Islands company or by direct asset
acquisition. The Companies Law provides that
when an offer is made for ordinary shares of
a Cayman Islands company and, within four
months of the offer, the holders of not less
than 90% of those shares accept, the offeror
may, for two months after that four-month
period, require the remaining ordinary
shareholders to transfer their ordinary
shares on the same terms as the original
offer.
Noble-Cayman's articles provide that, in
order for it to sell, lease or exchange all
or substantially all of its property or
assets, other than transactions with
entities it controls, it must first obtain:
- approval by the board of directors; and
- approval of the holders of a majority of
the issued shares generally entitled to
vote.
57
SPECIAL VOTE REQUIRED FOR COMBINATIONS WITH INTERESTED STOCKHOLDERS/SHAREHOLDERS
Noble-Delaware Noble-Cayman
Section 203 of the DGCL provides that, in There is no provision in the Companies Law
general, a corporation may not engage in a equivalent to Section 203 of the DGCL. Arti-
business combination with an interested cle 63 of Noble-Cayman's articles, however,
stockholder for a period of three years includes restrictions on transactions with
after the time of the transaction in which interested shareholders that have been
the person became an interested stockholder. structured to largely mirror Section 203.
These provisions prohibit Noble-Cayman from
The prohibition on business combinations engaging in a business combination with an
with interested stockholders does not apply interested shareholder for a period of three
in some cases, including if: years after the time of the transaction in
which the person became an interested
- the board of directors of the corporation, shareholder.
prior to the time of the transaction in
which the person became an interested The exceptions to the prohibition on
stockholder, approves (1) the business business combinations with interested
combination or (2) the transaction in shareholders are the same in all material
which the stockholder becomes an respects to those applicable to
interested stockholder; Noble-Delaware under Section 203. Noble-
Cayman's articles include a counterpart to the
- upon consummation of the transaction which definition of "interested stockholder" in
resulted in the stockholder becoming an Section 203 that is the same in all material
interested stockholder, the interested respects.
stockholder owned at least 85% of the
voting stock of the corporation
outstanding at the time the transaction
commenced; or
- the board of directors and the holders of
at least two-thirds of the outstanding
voting stock not owned by the interested
stockholder approve the business
combination on or after the time of the
transaction in which the person became an
interested stockholder.
For the purpose of Section 203, the DGCL
generally defines an interested stockholder
to include any person who, together with
that person's affiliates or associates, (1)
owns 15% or more of the outstanding voting
stock of the corporation or (2) is an
affiliate or associate of the corporation
and owned 15% or more of the outstanding
voting stock of the corporation at any time
within the previous three years.
58
FAIR PRICE TO STOCKHOLDERS/SHAREHOLDERS IN BUSINESS COMBINATIONS
Noble-Delaware Noble-Cayman
The affirmative vote of at least 80% of the The provisions of Noble-Cayman's articles
voting power of Noble-Delaware is required are substantially similar.
for the approval of any business combination
with an interested stockholder, but this 80%
requirement is not applicable if:
- the disinterested directors of
Noble-Delaware approved the business
combination by a majority vote; or
- the aggregate amount of cash or other
consideration to be received in the
business combination by holders of the
common stock of Noble-Delaware, other than
the interested stockholder involved in the
business combination, meets certain
specified minimum standards, and if
certain specified events have occurred or
have failed to occur.
"Business combination" is broadly defined
for the purpose of these provisions to
include mergers and consolidations of
Noble-Delaware or its subsidiaries with an
interested stockholder; a sale, exchange or
mortgage of assets having a fair market
value of US$1.0 million or more to an
interested stockholder or any affiliate of
an interested stockholder; the issuance of
or transfer of securities in Noble-Delaware
or its subsidiaries having a fair market
value of US$1.0 million or more to an
interested stockholder or any affiliate of
an interested stockholder; the adoption of a
plan of liquidation or dissolution proposed
by any interested stockholder or any
affiliate of an interested stockholder; and
any reclassification of securities or other
transaction which has the effect, directly
or indirectly, of increasing the number of
shares beneficially owned by an interested
stockholder or any affiliate of an
interested stockholder.
"Interested stockholder" is generally
defined for the purpose of these provisions
as a person who, together with any
affiliates of that person, beneficially
owns, directly or indirectly, 5% or more of
the combined voting power of the then issued
and outstanding shares of Noble-Delaware.
59
APPRAISAL RIGHTS AND COMPULSORY ACQUISITION
Noble-Delaware Noble-Cayman
Under the DGCL, a stockholder of a The Companies Law does not specifically
corporation does not have appraisal rights provide for appraisal rights. However, in
in connection with a merger or connection with the compulsory transfer of
consolidation, if, among other things: shares to a 90% shareholder of a Cayman
Islands company as described under
- the corporation's shares are listed on a "-- Stockholder/Shareholder Approval of
national securities exchange or held of Business Combinations," a minority
record by more than 2,000 stockholders; or shareholder may apply to the court within
one month of receiving notice of the
- the corporation will be the surviving compulsory transfer objecting to that
corporation of the merger, and no vote of transfer. In these circumstances, the burden
its stockholders is required to approve is on the minority shareholder to show that
the merger. the court should exercise its discretion to
prevent the compulsory transfer.
However, a stockholder is entitled to Noble-Cayman has been advised that the court
appraisal rights in the case of a merger or is unlikely to grant any relief in the
consolidation if the stockholder is required absence of bad faith, fraud, unequal
to accept in exchange for the shares treatment of shareholders or collusion as
anything other than: between the offeror and the holders of the
shares who have accepted the offer as a
- shares of stock of the corporation means of unfairly forcing out minority
surviving or resulting from the merger or shareholders.
consolidation;
- shares of any other corporation that on
the effective date of the merger or
consolidation will be either listed on a
national securities exchange or held of
record by more than 2,000 stockholders;
and
- cash instead of fractional shares of the
corporation.
The Noble-Delaware shares are currently
listed on the New York Stock Exchange, and
we intend to list the Noble-Cayman shares on
the New York Stock Exchange prior to the
effective time of the merger.
STOCKHOLDER/SHAREHOLDER CONSENT TO ACTION WITHOUT MEETING
Noble-Delaware Noble-Cayman
Under the DGCL, unless otherwise provided in The Companies Law and Noble-Cayman's
the certificate of incorporation, any action articles provide that shareholders may take
that can be taken at a meeting of the action requiring a special resolution
stockholders may be taken without a meeting without a meeting only by unanimous written
if written consent to the action is signed consent.
by the holders of outstanding stock having
the minimum number of votes necessary to
authorize or take the action at a meeting of
the stockholders. Noble-Delaware's
certificate of incorporation provides that
its stockholders may not act by written
consent.
60
SPECIAL MEETINGS OF STOCKHOLDERS/SHAREHOLDERS
Noble-Delaware Noble-Cayman
Under the DGCL, a special meeting of Under Noble-Cayman's articles, an
stockholders may be called only by the board extraordinary general meeting of
of directors or by persons authorized in the Noble-Cayman's shareholders may be called
certificate of incorporation or the bylaws. only by a majority of the board of
Noble-Delaware's bylaws provide that a directors, the Chairman of the Board, the
special meeting of stockholders may be Chief Executive Officer or the President.
called only by a majority of the board of
directors, the Chairman of the Board or the
President.
DISTRIBUTIONS AND DIVIDENDS; REPURCHASES AND REDEMPTIONS
Noble-Delaware Noble-Cayman
Under the DGCL, a corporation may pay Under Cayman Islands law, the board of
dividends out of surplus and, if there is no directors of Noble-Cayman may pay dividends
surplus, out of net profits for the current to the ordinary shareholders out of
and/or the preceding fiscal year, unless the Noble-Cayman's:
net assets of the corporation are less than
the capital represented by issued and - profits; or
outstanding shares having a preference on
asset distributions. Surplus is defined in - "share premium account," which represents
the DGCL as the excess of the net assets the excess of the price paid to Noble-Cayman
over capital, as such capital may be on issue of its shares over the par or
adjusted by the board. A Delaware "nominal" value of those shares, which is
corporation may purchase or redeem shares of similar to the U.S. concept of additional
any class except when its capital is paid in capital.
impaired or would be impaired by the
purchase or redemption. A corporation may, However, no dividends may be paid if, after
however, purchase or redeem out of capital payment, Noble-Cayman would not be able to
shares that are entitled upon any pay its debts as they come due in the
distribution of its assets to a preference ordinary course of business.
over another class or series of its shares
if the shares are to be retired and the Under the Companies Law, shares of a Cayman
capital reduced. Islands company may be redeemed or
repurchased out of profits of the company,
out of the proceeds of a fresh issue of
shares made for that purpose or out of
capital, provided the company has the
ability to pay its debts as they come due in
the ordinary course of business.
VACANCIES ON BOARD OF DIRECTORS
Noble-Delaware Noble-Cayman
Under the DGCL, a vacancy or a newly created Noble-Cayman's articles provide that a
directorship may be filled by a majority of vacancy or a newly created directorship may
the remaining directors, although less than be filled only by a majority of the
a quorum, unless otherwise provided in the remaining directors.
certificate of incorporation or bylaws.
Noble-Delaware's certificate of
incorporation provides that a vacancy or a
newly created directorship may be filled
only by a majority of the remaining
directors.
61
REMOVAL OF DIRECTORS; STAGGERED TERM OF DIRECTORS
Noble-Delaware Noble-Cayman
Under the DGCL, except in the case of a The Companies Law does not contain
corporation with a classified board or with provisions specifically related to
cumulative voting, any director or the classified boards of directors. However,
entire board may be removed, with or without Noble-Cayman's articles provide for a
cause, by the holders of a majority of the classified board of directors and also
shares entitled to vote at an election of provide that directors may be removed by the
directors. holders of a majority of the shares entitled
to vote on the election of directors for
Noble-Delaware's certificate of "cause".
incorporation provides that the board of
directors consists of three classes of If the merger is effected, Noble-Delaware's
directors, with each class of directors directors, including those elected at the
elected for three-year terms and one class stockholders' meeting, will be appointed as
coming up for election by the stockholders Noble-Cayman's directors and will serve in
each year. Noble-Delaware's certificate of the same class of directors for the same
incorporation provides that directors of unexpired term as they did for
Noble-Delaware may be removed at any annual Noble-Delaware.
or special meeting of stockholders for
"cause" by the holders of a majority of the
shares entitled to vote on the election of
directors.
INSPECTION OF BOOKS AND RECORDS
Noble-Delaware Noble-Cayman
Under the DGCL, any stockholder may inspect Shareholders of a Cayman Islands company
the corporation's books and records for a have no general rights to inspect or obtain
proper purpose. copies of the list of shareholders or
corporate records of the company (other than
the register of mortgages and charges).
However, Noble-Cayman's articles provide
that any shareholder may inspect Noble-
Cayman's books and records for a proper
purpose. The board of directors of
Noble-Cayman may establish procedures or
conditions regarding these inspection rights
for the following purposes:
- protecting the interests of Noble-Cayman;
- protecting the confidentiality of the
information contained in those books and
records;
- protecting the convenience of Noble-
Cayman; or
- protecting any other interest of
Noble-Cayman that the board of directors
deems proper.
62
AMENDMENT OF GOVERNING DOCUMENTS
Noble-Delaware Noble-Cayman
Under the DGCL, a certificate of Under the Companies Law, Noble-Cayman's
incorporation may be amended if: memorandum and articles may be amended only
by a special resolution. Noble-Cayman's
- the board of directors sets forth the board of directors may not effect amendments
proposed amendment in a resolution, to Noble- Cayman's articles on its own. Some
declares the advisability of the amendment amendments to Noble-Cayman's articles
and directs that it be submitted to a vote require as a quorum the presence of
at a meeting of stockholders; and shareholders holding at least 95% of the
shares entitled to vote at that meeting. See
- the holders of a majority of shares of "Description of Authorized Shares of Noble-
stock entitled to vote on the matter Cayman -- Quorum for General Meetings."
approve the amendment, unless the
certificate of incorporation requires the
vote of a greater number of shares.
In addition, under the DGCL, class voting
rights exist with respect to amendments to
the certificate of incorporation that
adversely affect the terms of the shares of
a class. Class voting rights do not exist as
to other extraordinary matters, unless the
certificate of incorporation provides
otherwise. Noble-Delaware's certificate of
incorporation does not provide otherwise.
Under the DGCL, the board of directors may
amend bylaws if so authorized in the
certificate of incorporation. The
stockholders of a Delaware corporation also
have the power to amend bylaws.
Noble-Delaware's bylaws may be altered or
repealed at any meeting of the stockholders,
subject to the approval of the holders of at
least 80% of the outstanding voting stock of
Noble-Delaware. The bylaws may also be
amended by action of a majority of the board
of directors.
Noble-Delaware's certificate of
incorporation generally does not require a
supermajority vote of stockholders in order
to be amended. However, the certificate of
incorporation requires the approval of at
least 80% of the outstanding voting stock of
Noble-Delaware in order to alter, amend,
change or repeal or in order to adopt a
provision inconsistent with the provisions
governing fair-price protection, the
staggered board, the limitation on
stockholder action by written consent and
the amendment of the bylaws.
63
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Noble-Delaware Noble-Cayman
Delaware law generally permits a corporation Cayman Islands law does not limit the extent
to indemnify its directors and officers to which a company's articles of association
against expenses, judgments, fines and may provide for the indemnification of its
amounts paid in settlement actually and directors, officers, employees and agents
reasonably incurred in connection with a except to the extent that such provision may
third-party action, other than a derivative be held by the Cayman Islands courts to be
action, and against expenses actually and contrary to public policy. For instance, a
reasonably incurred in the defense or provision purporting to provide indem-
settlement of a derivative action, provided nification against the consequences of
that there is a determination that the committing a crime, or against the
individual acted in good faith and in a indemnified person's own fraud or
manner reasonably believed to be in or not dishonesty, may be deemed contrary to public
opposed to the best interests of the policy.
corporation. That determination must be
made, in the case of an individual who is a Noble-Cayman's articles provide for
director or officer at the time of the indemnification of directors and officers to
determination: the fullest extent allowed by law and for
advancement of expenses to defend claims
- by a majority of the disinterested against directors and officers.
directors, even though less than a quorum;
Noble-Cayman intends to enter into indemnity
- by a committee of disinterested directors, agreements with each of its directors and
designated by a majority vote of those executive officers of Noble-Cayman who
disinterested directors, even though less were previously parties to indemnity
than a quorum; agreements with Noble-Delaware. These
indemnity agreements will be substantially
- by independent legal counsel, regardless similar to the indemnity agreements of
of whether a quorum of disinterested Noble-Delaware.
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.
Noble-Delaware's bylaws provide for
indemnification of directors and officers to
the fullest extent permitted by law and for
advancement of expenses to defend claims
against directors and officers.
64
LIMITED LIABILITY OF DIRECTORS
Noble-Delaware Noble-Cayman
Delaware law permits the adoption of a The Companies Law has no equivalent
provision in a corporation's certificate of provision to Delaware law regarding the
incorporation limiting or eliminating the limitation of directors' liability; however,
monetary liability of a director to a Article 111 of Noble-Cayman's articles
corporation or its stockholders by reason of includes provisions that have been
a director's breach of the fiduciary duty of structured to largely mirror the provisions
care. Delaware law does not permit any of Delaware law. Cayman Islands law will
limitation of the liability of a director not, in any event, allow the limitation of a
for: director's liability for his own fraud or
dishonesty.
- breaching the duty of loyalty to the
corporation or its stockholders;
- failing to act in good faith;
- engaging in intentional misconduct or a
known violation of law;
- obtaining an improper personal benefit
from the corporation; or
- paying a dividend or approving a stock
repurchase that was illegal under
applicable law.
Noble-Delaware's certificate of
incorporation eliminates the monetary
liability of a director to the fullest
extent permitted by Delaware law.
65
SHAREHOLDERS' SUITS
Noble-Delaware Noble-Cayman
Delaware law requires only that the The Cayman Islands courts have recognized
stockholder bringing a derivative suit must derivative suits by shareholders; however,
have been a stockholder at the time of the the consideration of those suits has been
wrong complained of or that the stock was limited. In this regard, the Cayman Islands
transferred to him by operation of law from courts ordinarily would be expected to
a person who was such a stockholder. In follow English precedent, which would permit
addition, the stockholder must remain a a minority shareholder to commence an action
stockholder throughout the litigation. against or a derivative action in the name
of the company only:
- where the act complained of is alleged to
be beyond the corporate power of the company
or illegal;
- where the act complained of is alleged to
constitute a fraud against the minority
perpetrated by those in control of the
company;
- where the act requires approval by the
shareholders of a greater percentage of the
company's shares than actually approved
it; or
- where there is an absolute necessity to
waive the general rule that a shareholder
may not bring such an action in order that
there not be a denial of justice or a
violation of the company's memorandum of
association.
ADVANCE NOTIFICATION REQUIREMENTS FOR PROPOSALS OF STOCKHOLDERS/SHAREHOLDERS
Noble-Delaware Noble-Cayman
Noble-Delaware's bylaws require stockholders Noble-Cayman's articles include requirements
wishing to nominate directors or propose similar to those in Noble-Delaware's bylaws.
business for an annual stockholders' meeting
to give timely advance notice as described
under "Proposals of Shareholders."
66
STOCKHOLDER/SHAREHOLDER RIGHTS PLAN
Noble-Delaware Noble-Cayman
Noble-Delaware adopted a stockholder rights The board of directors of Noble-Cayman has
plan in 1995. The Noble-Delaware stockholder adopted a plan substantially similar to the
rights plan has been amended to provide that Noble-Delaware stockholder rights plan,
the existing rights will expire immediately which plan has been approved and adopted by
prior to the effective time of the merger. Noble-Delaware as the sole shareholder of
This amendment of the Noble-Delaware Noble-Cayman and provides for the issuance
stockholder rights plan will not result in of new preferred share purchase rights that
the issuance of any preference stock are equivalent to the Noble-Delaware
pursuant to the rights or trigger redemption preferred stock purchase rights. The
of the rights and will effectively terminate Noble-Cayman shareholder rights plan will
the Noble-Delaware stockholder rights plan expire on the original expiration date of
immediately prior to the effective time of the Noble-Delaware stockholder rights plan.
the merger. Stockholder approval of the Initially, the new rights will attach to all
Agreement and Plan of Merger will also Noble-Cayman ordinary shares issued at or
constitute any required stockholder approval after the effective time of the merger. See
of the amendment to the stockholder rights "The Merger -- Stockholder/Shareholder
plan. Rights Plan" and "Description of Authorized
Shares of Noble-Cayman -- Shareholder Rights
Plan."
ISSUANCE OF PREFERRED SHARES
Noble-Delaware Noble-Cayman
The provisions of Noble-Delaware's The provisions of Noble-Cayman's articles
certificate of incorporation allow for the are substantially similar. Such "blank
issuance of preferred stock with rights and check" preferred share provisions could have
preferences as determined by the board of certain "anti- takeover" effects. See
directors. "Description of Authorized Shares of
Noble-Cayman -- Other Classes or Series of
Shares", and "-- Anti-Takeover Provisions."
67
THE STOCKHOLDERS' MEETING
TIME, PLACE AND DATE
The 2002 annual meeting of stockholders of Noble-Delaware will be held at
10:00 a.m., Houston, Texas time, on April 25, 2002, at the St. Regis Hotel, 1919
Briar Oaks Lane, Houston, Texas. This proxy statement/prospectus constitutes
notice of the stockholders' meeting as is required by Delaware law and our
bylaws.
PROPOSALS
At the stockholders' meeting, stockholders will be asked to vote upon the
following proposals:
- the election of two directors to the class of directors whose three-year
term will expire in 2005;
- a proposal to amend Noble-Delaware's certificate of incorporation to
increase the number of authorized shares of common stock to 400,000,000
from 200,000,000;
- a proposal to amend the 1991 Plan;
- a proposal regarding the 1992 Plan; and
- a proposal to adopt the Agreement and Plan of Merger.
QUORUM
The presence, in person or by proxy, of stockholders holding a majority of
the outstanding shares of Noble-Delaware common stock entitled to vote at the
stockholders' meeting will constitute a quorum. Abstentions and "broker
non-votes" will be counted as present for purposes of determining whether there
is a quorum at the stockholders' meeting.
RECORD DATE
Only stockholders of record at the close of business on March 7, 2002, as
shown in Noble-Delaware's records, will be entitled to vote, or to grant proxies
to vote, at the stockholders' meeting.
VOTE REQUIRED
The directors nominated for election this year will be elected by a
plurality of the shares of common stock of Noble-Delaware present in person or
represented by proxy at the stockholders' meeting. All duly submitted and
unrevoked proxies will be voted FOR the nominees selected by the board of
directors, except where authorization so to vote is withheld.
Adoption of the amendment to Noble-Delaware's certificate of incorporation
and adoption of the Agreement and Plan of Merger requires the affirmative vote
of the holders of a majority of the shares of Noble-Delaware common stock
outstanding and entitled to vote at the stockholders' meeting. Approval of the
proposals regarding the 1991 Plan and the 1992 Plan requires the affirmative
vote of the holders of a majority of the outstanding shares of Noble-Delaware
common stock present and entitled to vote at the stockholders' meeting.
Under the rules of the New York 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 not permitted to exercise their voting discretion with
respect to proposals for non-routine matters like the amendment to
Noble-Delaware's certificate of incorporation and the adoption of the Agreement
and Plan of Merger. Thus, absent specific instructions from you, your broker is
not empowered to vote your shares with respect to such matters (i.e., "broker
non-votes"). Your broker is empowered to vote your shares with respect to the
election of directors and the proposals regarding the 1991 Plan and the 1992
Plan.
68
With regard to the election of directors, votes may be cast in favor of or
withheld from each nominee. Votes that are withheld will be excluded entirely
from the vote and will have no effect. Similarly, broker non-votes and other
limited proxies will have no effect on the outcome of the election of directors.
Since the affirmative vote of the holders of a majority of the outstanding
shares of Noble-Delaware common stock is required for adoption of the amendment
to Noble-Delaware's certificate of incorporation and adoption of the Agreement
and Plan of Merger, a broker non-vote or abstention will have the same effect as
a vote against such proposals. The failure of a stockholder to submit a proxy or
vote in person at the stockholders' meeting will also have the effect of a vote
against the proposals to amend Noble-Delaware's certificate of incorporation and
to adopt the Agreement and Plan of Merger.
Abstentions with respect to the proposals regarding the 1991 Plan and the
1992 Plan will have the same effect as a vote against such proposals. Broker
non-votes will have no effect on the outcome of the vote on such proposals.
Similarly, the failure of a stockholder to submit a proxy or vote in person at
the stockholders' meeting will have no effect.
As of the record date for the stockholders' meeting, there were 132,135,326
shares of Noble-Delaware common stock outstanding and entitled to vote. As of
the record date, our directors and executive officers and their affiliates
directly owned, in the aggregate, approximately 2,504,644 shares of
Noble-Delaware common stock, which represents approximately 1.88% of the then
outstanding Noble-Delaware common stock. These persons have informed us that
they intend to vote their shares FOR the election of the two directors nominated
for election at the meeting, FOR the proposal to adopt the amendment of the
certificate of incorporation of Noble-Delaware, FOR the proposals regarding the
1991 Plan and the 1992 Plan, and FOR the proposal to adopt the Agreement and
Plan of Merger.
PROXIES AND VOTING INSTRUCTION CARDS
Proxies. If your shares are held in your name, you can vote by proxy in
three ways: by telephone, via the Internet or by completing, signing, dating and
returning the enclosed proxy card. See "Proxy Voting Options" on page (ii).
Shares represented by a proxy given to us and not revoked, will be voted at the
meeting in accordance with the directions given. If no direction is made, the
proxy will be voted FOR the election of the two directors nominated for election
at the meeting, FOR the proposal to adopt the amendment of the Noble-Delaware
certificate of incorporation, FOR the proposal to approve the amendment of the
1991 Plan, FOR the proposals regarding the 1992 Plan and FOR the proposal to
adopt the Agreement and Plan of Merger.
If any other matters are properly presented at the stockholders' meeting
for consideration, the persons named in the proxy will have the discretion to
vote on these matters in accordance with their best judgment. Proxies voted
against any of our proposals will not be voted in favor of any adjournment of
the stockholders' meeting for the purpose of soliciting additional proxies in
favor of such proposals.
Voting Instruction Cards. If you were a participant in the Noble Drilling
Corporation 401(k) Savings Plan (the "Savings Plan") on the record date for the
stockholders' meeting, you may instruct the trustee of the Savings Plan how to
vote by telephone, via the Internet or by completing, signing and returning the
enclosed voting instruction card. See "Proxy Voting Options" on page (ii). The
trustee under the Savings Plan will vote the shares of Noble-Delaware common
stock credited to a Savings Plan participant's accounts in accordance with such
participant's instructions. If no such voting instructions are received from a
participant, then, unless otherwise directed by the Savings Plan Committee, the
trustee under the Savings Plan will vote the shares credited to such
participant's account in the same proportions as the shares for which voting
instructions have been received from Savings Plan participants.
Revocation. You may revoke your proxy at any time prior to its exercise
by:
- giving written notice of the revocation to the Secretary of
Noble-Delaware;
- appearing and voting in person at the stockholders' meeting; or
69
- properly submitting a later-dated proxy. You may submit a later dated
proxy by telephone, via the Internet or by completing, signing and
delivering a later dated proxy card to the Secretary of Noble-Delaware at
or before the stockholders' meeting.
Your presence without voting at the stockholders' meeting will not
automatically revoke your proxy, and any revocation during the meeting will not
affect votes previously taken. If you hold your Noble-Delaware shares in the
name of a bank, broker or other nominee, you should follow the instructions
provided by your bank, broker or nominee in revoking your previously granted
proxy.
Validity. The inspectors of election will determine all questions as to
the validity, form, eligibility, including time of receipt, and acceptance of
proxies. Their determination will be final and binding. The board of directors
of Noble-Delaware has the right to waive any irregularities or conditions as to
the manner of voting. Noble-Delaware may accept your proxy by any form of
communication permitted by Delaware law so long as Noble-Delaware is reasonably
assured that the communication is authorized by you.
SOLICITATION OF PROXIES
Proxies are being solicited on behalf of the board of directors of
Noble-Delaware. The expenses of preparing, printing and mailing the proxy and
the materials used in the solicitation will be borne by Noble-Delaware.
Georgeson Shareholder Communications Inc. has been retained by
Noble-Delaware to aid in the solicitation of proxies, for a fee of $10,000 and
the reimbursement of out-of-pocket expenses. Proxies may also be solicited by
personal interview, telephone, telegram and via the Internet by directors,
officers and employees of Noble-Delaware, who will not receive additional
compensation for those services. Arrangements also may be made with brokerage
houses and other custodians, nominees and fiduciaries for the forwarding of
solicitation materials to the beneficial owners of Noble-Delaware shares held by
those persons, and Noble-Delaware will reimburse them for reasonable expenses
incurred by them in connection with the forwarding of solicitation materials.
PROPOSALS OF SHAREHOLDERS
Pursuant to the merger, Noble-Cayman will become the parent holding company
of the Noble corporate group of subsidiary companies, including Noble-Delaware,
and the successor issuer of Noble-Delaware for purposes of U.S. securities laws.
Any proposal by a shareholder intended to be presented at the 2003 Annual
General Meeting of Shareholders of Noble-Cayman, or the Annual Meeting of
Stockholders of Noble-Delaware (if the merger is not effected), must be received
at our principal executive offices at 13135 South Dairy Ashford, Suite 800,
Sugar Land, Texas 77478, Attn: Julie J. Robertson, Senior Vice
President -- Administration and Secretary, no later than November 26, 2002, for
inclusion in the proxy materials relating to that meeting.
Noble-Cayman's articles and Noble-Delaware's bylaws provide that all
shareholder nominations for nominees for election to the board of directors must
be made following written notice to our corporate secretary accompanied by
certain background and other information specified in the articles or bylaws, as
the case may be. In connection with any annual meeting, written notice of a
shareholder's intention to make such nominations must be given to our corporate
secretary not later than the date which is 90 days in advance of the annual
meeting.
In order for a shareholder to bring other business before an annual meeting
of shareholders, timely notice must be received by our corporate secretary not
less than 60 nor more than 120 days in advance of the meeting. The notice must
include a description of the proposed item, the reasons the shareholder believes
support its position concerning the 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 our proxy
70
statement. The foregoing time limits also apply in determining whether notice is
timely for purposes of rules adopted by the SEC relating to the exercise of
discretionary voting authority.
LEGAL MATTERS
Certain legal matters in connection with the merger have been passed upon
for Noble by Baker Botts L.L.P., Dallas, Texas. Legal matters in connection with
the Noble-Cayman ordinary shares have been passed upon for Noble by its Cayman
Islands counsel, Maples and Calder, Cayman Islands. Maples and Calder has also
rendered an opinion regarding the Cayman Islands tax consequences of the merger
referred to in "Material Income Tax Consequences of the Merger -- Effect of
Certain Cayman Islands Tax Laws." Thompson & Knight L.L.P., Dallas, Texas, has
rendered an opinion regarding the United States federal income tax consequences
of the merger referred to in "Material Income Tax Consequences of the
Merger -- U.S. Federal Income Tax Consequences of the Merger."
EXPERTS
The financial statements incorporated in this proxy statement/prospectus by
reference to Noble-Delaware's Annual Report on Form 10-K for the year ended
December 31, 2001, have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
WHERE YOU CAN FIND MORE INFORMATION
Noble-Delaware is subject to the informational requirements of the U.S.
Securities Exchange Act of 1934 and in accordance therewith files annual,
quarterly and current reports, proxy statements and other information with the
SEC. You may read and copy any reports, statements or other information we file
at the SEC's public reference room at 450 Fifth Street, N.W., Washington, D.C.
20549. Please call the SEC at 1-800-SEC-0330 for further information on the
public reference room. Noble-Delaware's SEC filings also are available to the
public from commercial document retrieval services and at the World Wide Web
site maintained by the SEC at http://www.sec.gov. You may also inspect those
reports, proxy statements and other information concerning Noble-Delaware at the
offices of the New York Stock Exchange, 20 Broad Street, New York, New York
10005, on which the Noble-Delaware common stock is currently listed.
Noble-Cayman has filed a Registration Statement on Form S-4 with the SEC to
register the Noble-Cayman ordinary shares and preferred share purchase rights to
be issued in connection with the merger. This proxy statement/prospectus is a
part of that registration statement and constitutes a prospectus of Noble-Cayman
in addition to being a proxy statement of Noble-Delaware for the stockholders'
meeting.
As allowed by SEC rules, this proxy statement/prospectus does not contain
all the information you can find in the registration statement or the exhibits
thereto.
The SEC allows Noble-Delaware to "incorporate by reference" information
into this proxy statement/ prospectus, which means that Noble-Delaware can
disclose important information to you by referring you to another document filed
separately with the SEC. The information incorporated by reference is deemed to
be part of this proxy statement/prospectus, except for any information
superseded by information in this proxy statement/prospectus. This proxy
statement/prospectus incorporates by reference the documents set forth below
that Noble-Delaware previously filed with the SEC. These documents contain
important information about Noble-Delaware.
1. Annual Report on Form 10-K for the year ended December 31, 2001;
2. Current Report on Form 8-K dated January 31, 2002; and
71
3. The description of the Noble-Delaware common stock and preferred
stock purchase rights contained in our registration statements filed with
the SEC under Section 12 of the Securities Exchange Act of 1934, dated
March 14, 1996 (two registration statements) and September 3, 1997.
We are also incorporating by reference all additional documents that we file
with the SEC under Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange
Act of 1934 between the date of this proxy statement/prospectus and the date of
the stockholders' meeting.
If you are a stockholder or beneficial owner, Noble-Delaware may already
have sent you some of the documents incorporated by reference, but you can
obtain any of them from Noble-Delaware or the SEC. Documents incorporated by
reference are available from Noble-Delaware without charge, excluding exhibits
unless Noble-Delaware specifically has incorporated by reference an exhibit in
this proxy statement/prospectus. Stockholders, beneficial owners and any other
person to whom a proxy statement/ prospectus is delivered, may obtain without
charge a copy of documents that we incorporate by reference in this proxy
statement/prospectus by requesting them in writing or by telephone at the
following address:
Noble Drilling Corporation
13135 South Dairy Ashford, Suite 800
Sugar Land, Texas 77478
Telephone: (800) 897-2785
If you would like to request documents from Noble-Delaware, please do so by
no later than April 18, 2002, which is five business days prior to the
stockholders' meeting, to enable timely delivery.
You should rely only on the information contained or incorporated by
reference in this proxy statement/prospectus to consider and vote upon the
approval and adoption of the merger and the Agreement and Plan of Merger and the
other proposals to be considered at the stockholders' meeting. We have not
authorized anyone to provide you with information that is different from what is
contained in this proxy statement/prospectus. The date of this proxy
statement/prospectus can be found on the first page. You should not assume that
the information contained in this proxy statement/prospectus is accurate as of
any date other than that date, and neither the mailing of this proxy
statement/prospectus to stockholders nor the issuance of Noble-Cayman shares in
the merger shall create any implication to the contrary.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
THIS PROXY STATEMENT/PROSPECTUS CONTAINS OR INCORPORATES BY REFERENCE
FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995 WITH RESPECT TO THE RESTRUCTURING AND OUR
FINANCIAL CONDITION, RESULTS OF OPERATIONS AND BUSINESS. THIS ACT PROTECTS
PUBLIC COMPANIES FROM LIABILITY FOR FORWARD-LOOKING STATEMENTS IN PRIVATE
SECURITIES LITIGATION IF THE FORWARD-LOOKING STATEMENT IS IDENTIFIED AND IS
ACCOMPANIED BY MEANINGFUL CAUTIONARY STATEMENTS IDENTIFYING IMPORTANT FACTORS
THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THE FORWARD-LOOKING
STATEMENTS. FORWARD-LOOKING STATEMENTS BY THEIR NATURE INVOLVE A DEGREE OF RISK
AND UNCERTAINTY, INCLUDING, BUT NOT LIMITED TO, THE RISKS AND UNCERTAINTIES
REFERRED TO UNDER "RISK FACTORS" AND ELSEWHERE HEREIN OR IN THE DOCUMENTS
INCORPORATED BY REFERENCE. ALL STATEMENTS REGARDING THE EXPECTED BENEFITS OF THE
RESTRUCTURING ARE FORWARD-LOOKING STATEMENTS. THE FORWARD-LOOKING STATEMENTS MAY
INCLUDE STATEMENTS FOR THE PERIOD FOLLOWING COMPLETION OF THE MERGER. 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 PROXY STATEMENT/PROSPECTUS OR IN THE DOCUMENTS
INCORPORATED BY REFERENCE. YOU SHOULD BE AWARE THAT ANY FORWARD-LOOKING
STATEMENTS IN THIS PROXY STATEMENT/PROSPECTUS REFLECT ONLY CURRENT EXPECTATIONS
AND ARE NOT GUARANTEES OF PERFORMANCE. MANY POSSIBLE EVENTS OR FACTORS COULD
AFFECT OUR FUTURE FINANCIAL RESULTS AND PERFORMANCE. THIS COULD CAUSE OUR
RESULTS OR PERFORMANCE TO DIFFER MATERIALLY FROM THOSE WE EXPRESS IN OUR
FORWARD-LOOKING STATEMENTS. YOU SHOULD CONSIDER THESE RISKS WHEN DECIDING HOW TO
VOTE. ALSO, AS YOU MAKE YOUR DECISION HOW TO VOTE, PLEASE TAKE INTO ACCOUNT THAT
FORWARD-LOOKING STATEMENTS SPEAK ONLY AS OF THE DATE OF THIS PROXY
STATEMENT/PROSPECTUS OR, IN THE CASE
72
OF DOCUMENTS INCORPORATED BY REFERENCE, THE DATE OF ANY SUCH DOCUMENT, OR IN
CERTAIN CASES, AS OF A SPECIFIED DATE.
WE HAVE IDENTIFIED FACTORS THAT COULD CAUSE ACTUAL PLANS OR RESULTS TO
DIFFER MATERIALLY FROM THOSE INCLUDED IN ANY FORWARD-LOOKING STATEMENTS. THESE
FACTORS INCLUDE, BUT ARE NOT LIMITED TO, THE FOLLOWING:
- an inability to realize expected benefits of the restructuring within the
anticipated time frame, or at all;
- changes in tax law, tax treaties or tax regulations or the interpretation
or enforcement thereof, including taxing authorities not agreeing with
our assessment of the effects of such laws, treaties and regulations;
- an inability to execute any of our business strategies;
- costs or difficulties related to the merger and related restructuring
transactions, which could be greater than expected;
- changes in the rate of economic growth in the U.S. or in other major
international economies;
- significant changes in trade, monetary or fiscal policies worldwide,
including changes in interest rates;
- currency fluctuations between the U.S. dollar and other currencies;
- costs and effects of unanticipated legal and administrative proceedings;
- volatility in crude oil and natural gas prices;
- heavy demand for the equipment and services we need in order to finish on
schedule any shipyard refurbishment and conversion project that we have
underway or plan to begin;
- potential deterioration in demand by our customers for our drilling
services;
- intense competition in the drilling industry;
- political and economic conditions in markets where we from time to time
operate;
- adverse weather (such as hurricanes) and seas;
- operational risks (such as blowouts, fires and loss of production);
- cancellation by our customers of drilling contracts or letter agreements
or letters of intent for drilling contracts or their exercise of early
termination provisions generally found in our drilling contracts;
- limitations on our insurance coverage or our inability to obtain or
maintain insurance coverage at rates that we believe are commercially
reasonable;
- requirements and potential liability imposed by governmental regulation
of the drilling industry (including environmental regulation);
- changes in our customers' drilling programs or budgets due to their own
internal corporate events, changes in the markets and prices for oil and
gas, or shifts in the relative strengths of various geographic drilling
markets brought on by things such as a general economic slowdown, or
regional or worldwide recession;
- the discovery of significant additional oil and/or gas reserves or the
construction of significant oil and/or gas delivery or storage systems
that impact regional or worldwide energy markets;
- changes in oil and gas drilling technology or in our competitors'
drilling rig fleets that could make our drilling rigs less competitive or
require major capital investment to keep them competitive;
- acts of war or terrorism and the aftermath of the September 11, 2001
terrorist attacks on the United States; and
- such other risk factors as may be discussed in our reports filed with the
SEC.
We disclaim any obligation or undertaking to disseminate any updates or
revisions to our statements, forward-looking or otherwise, to reflect changes in
our expectations or any change in events, conditions or circumstances on which
any such statements are based.
73
ANNEX A
AGREEMENT AND PLAN OF MERGER
ANNEX A
AGREEMENT AND PLAN OF MERGER
AMONG
NOBLE CORPORATION,
NOBLE HOLDING (U.S.) CORPORATION,
NOBLE CAYMAN ACQUISITION CORPORATION
AND
NOBLE DRILLING CORPORATION
DATED AS OF MARCH 11, 2002
TABLE OF CONTENTS
PAGE
----
ARTICLE I THE MERGER
SECTION 1.1 The Merger.................................................. A-1
SECTION 1.2 Filing Certificate of Merger; Effective Time................ A-2
ARTICLE II CHARTER DOCUMENTS, DIRECTORS AND OFFICERS OF SURVIVING
CORPORATION AND NOBLE-CAYMAN, AND CERTAIN REPRESENTATIONS.................. A-2
SECTION 2.1 Name of Surviving Corporation............................... A-2
SECTION 2.2 Certificate of Incorporation of Surviving Corporation....... A-2
SECTION 2.3 Bylaws of Surviving Corporation............................. A-2
SECTION 2.4 Directors of Surviving Corporation.......................... A-2
SECTION 2.5 Officers of Surviving Corporation........................... A-2
SECTION 2.6 Directors and Officers of Noble-Cayman...................... A-2
SECTION 2.7 Representations of Holdco................................... A-2
ARTICLE III CONVERSION AND EXCHANGE OF STOCK............................... A-3
SECTION 3.1 Conversion of Stock in the Merger........................... A-3
SECTION 3.2 Certificates Representing Noble-Delaware Shares............. A-3
SECTION 3.3 Dissenters' Rights.......................................... A-4
ARTICLE IV EMPLOYEE BENEFIT AND COMPENSATION PLANS AND AGREEMENTS.......... A-4
SECTION 4.1 Plans....................................................... A-4
SECTION 4.2 Change of Control Agreements................................ A-4
SECTION 4.3 New Indemnity Agreements.................................... A-4
ARTICLE V CONDITIONS PRECEDENT............................................. A-5
ARTICLE VI TERMINATION, AMENDMENT AND WAIVER............................... A-6
SECTION 6.1 Termination................................................. A-6
SECTION 6.2 Effect of Termination....................................... A-6
SECTION 6.3 Amendment................................................... A-6
SECTION 6.4 Waiver...................................................... A-6
ARTICLE VII COVENANTS...................................................... A-6
SECTION 7.1 Agreements of Rule 145 Affiliates........................... A-6
SECTION 7.2 Rule 16b-3 Approval......................................... A-7
SECTION 7.3 Guarantees.................................................. A-7
SECTION 7.4 Holdco Vote................................................. A-7
ARTICLE VIII GENERAL PROVISIONS............................................ A-7
SECTION 8.1 Assignment; Binding Effect; Benefit......................... A-7
SECTION 8.2 Entire Agreement............................................ A-7
SECTION 8.3 Governing Law............................................... A-7
SECTION 8.4 Counterparts................................................ A-7
SECTION 8.5 Headings.................................................... A-8
A-i
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of March 11,
2002, among Noble Drilling Corporation, a Delaware corporation
("Noble-Delaware"), Noble Corporation, a Cayman Islands company and a direct,
wholly owned subsidiary of Noble-Delaware ("Noble-Cayman"), Noble Holding (U.S.)
Corporation, a Delaware corporation and a direct, wholly owned subsidiary of
Noble-Cayman ("Holdco"), and Noble Cayman Acquisition Corporation, a Delaware
corporation and a direct, wholly owned subsidiary of Holdco ("Merger Sub");
WITNESSETH:
WHEREAS, the Boards of Directors of each of Noble-Delaware, Noble-Cayman,
Holdco and Merger Sub have determined that it is in the best interests of their
respective shareholders to reorganize so that Noble-Cayman will become the
parent holding company of its indirect subsidiary Noble-Delaware as a result of
the merger of Merger Sub with and into Noble-Delaware (the "Merger");
WHEREAS, the respective Boards of Directors of Noble-Delaware,
Noble-Cayman, Holdco and Merger Sub have each approved the Merger, pursuant to
which Noble-Delaware will be the surviving corporation and become an indirect,
wholly owned subsidiary of Noble-Cayman, upon the terms and subject to the
conditions set forth in this Agreement, and whereby each issued and outstanding
share of common stock, par value US$0.10 per share, of Noble-Delaware
("Noble-Delaware Common Stock"), other than those treasury shares of
Noble-Delaware Common Stock owned by Noble-Delaware, shall automatically become
one ordinary share, par value US$0.10 per share, of Noble-Cayman ("Noble-Cayman
Ordinary Shares");
WHEREAS, pursuant to the Merger and this Agreement, the preferred stock
purchase rights attached to the Noble-Delaware Common Stock issued pursuant to
that certain Rights Agreement (the "Noble-Delaware Rights Agreement"), dated as
of June 28, 1995, between Noble-Delaware and Liberty Bank and Trust Company of
Oklahoma City, N.A., as Rights Agent, as amended (the "Noble-Delaware Rights"),
will expire and a new Noble-Cayman Right (as defined below) will be issued with
each Noble-Cayman Ordinary Share issued in the Merger;
WHEREAS, the Merger requires, among other things, the adoption of this
Agreement by the affirmative vote of the holders of a majority of the issued and
outstanding shares of Noble-Delaware Common Stock;
WHEREAS, for federal income tax purposes, it is intended that the Merger
shall qualify as a reorganization within the meaning of Section 368 of the
United States Internal Revenue Code of 1986, as amended, and that all parties to
this Agreement will be parties to the reorganization within the meaning of
Section 368(b) thereof; and
WHEREAS, the parties intend that this Agreement shall constitute a "plan of
reorganization" within the meaning of Treasury Regulation section 1.368-3;
NOW, THEREFORE, in consideration of the foregoing and of the covenants and
agreements contained herein, and of other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
ARTICLE I
THE MERGER
SECTION 1.1 The Merger. Subject to the terms and conditions of this
Agreement, and in accordance with the Delaware General Corporation Law (the
"DGCL"), at the Effective Time (as defined in Section 1.2), Merger Sub shall be
merged with and into Noble-Delaware in accordance with this Agreement, and the
separate corporate existence of Merger Sub shall thereupon cease. Noble-
Delaware shall continue as the surviving corporation in the Merger (sometimes
hereinafter referred to as
A-1
the "Surviving Corporation"), becoming a direct wholly owned subsidiary of
Holdco, and all the properties, rights, privileges, powers and franchises of
Merger Sub shall vest in the Surviving Corporation without any transfer or
assignment having occurred, and all debts, liabilities and duties of Merger Sub
shall attach to the Surviving Corporation, all in accordance with the DGCL.
SECTION 1.2 Filing Certificate of Merger; Effective Time. As soon as
practicable following the satisfaction or, to the extent permitted by applicable
law, waiver of the conditions set forth in Article V, if this Agreement shall
not have been terminated prior thereto as provided in Section 6.1, Merger Sub
and Noble-Delaware shall cause a certificate of merger (the "Certificate of
Merger") meeting the requirements of Section 252 of the DGCL to be properly
executed and filed in accordance with such section. The Merger shall become
effective at the later of (1) the time of filing of the Certificate of Merger
with the Secretary of State of the State of Delaware in accordance with the DGCL
and (2) at such later time that the parties hereto shall have agreed upon and
designated in the Certificate of Merger as the effective time of the Merger (the
"Effective Time").
ARTICLE II
CHARTER DOCUMENTS,
DIRECTORS AND OFFICERS OF
SURVIVING CORPORATION AND NOBLE-CAYMAN,
AND CERTAIN REPRESENTATIONS
SECTION 2.1 Name of Surviving Corporation. The name of the Surviving
Corporation shall be "Noble Drilling Corporation."
SECTION 2.2 Certificate of Incorporation of Surviving Corporation. The
Certificate of Incorporation of the Surviving Corporation shall be amended as of
the Effective Time so as to contain only the provisions contained in the
Certificate of Incorporation of Merger Sub in effect immediately prior to the
Effective Time, except that Article I of such Certificate of Incorporation of
Merger Sub shall provide that the name of the Surviving Corporation shall be
"Noble Drilling Corporation." Such Certificate of Incorporation, as so amended,
shall continue to be the Certificate of Incorporation of the Surviving
Corporation until amended as provided therein and under the DGCL.
SECTION 2.3 Bylaws of Surviving Corporation. The bylaws of Merger Sub in
effect immediately prior to the Effective Time shall be the bylaws of the
Surviving Corporation, until duly amended in accordance with applicable law.
SECTION 2.4 Directors of Surviving Corporation. The directors of Merger
Sub immediately prior to the Effective Time shall be the directors of the
Surviving Corporation, each such director to serve in such capacity until his
earlier death, resignation or removal or until his successor is duly elected and
qualified.
SECTION 2.5 Officers of Surviving Corporation. The officers of Merger Sub
immediately prior to the Effective Time shall be the officers of the Surviving
Corporation, each such officer to serve in such capacity until the earlier of
his death, resignation or removal or until his successor(s) are duly elected and
qualified.
SECTION 2.6 Directors and Officers of Noble-Cayman. Prior to the
Effective Time, Noble-Delaware, in its capacity as the sole shareholder of
Noble-Cayman, agrees to take or cause to be taken all such actions as are
necessary to cause those persons serving as the directors and officers of Noble-
Delaware immediately prior to the Effective Time to be elected or appointed as
the directors and officers of Noble-Cayman, each such person to have the same
office(s) with Noble-Cayman (and the same unexpired term of office in the case
of directors) as he or she held with Noble-Delaware.
SECTION 2.7 Representations of Holdco. Holdco hereby represents and
warrants that it is the owner of all of the outstanding capital stock of Merger
Sub, free and clear of any liens, claims or encumbrances.
A-2
ARTICLE III
CONVERSION AND EXCHANGE OF STOCK
SECTION 3.1 Conversion of Stock in the Merger. At the Effective Time, by
virtue of the Merger and without any action on the part of the holder of any
shares:
(a) Cancellation of Noble-Delaware Owned Stock. Each issued share of
Noble-Delaware Common Stock that is owned by Noble-Delaware as a treasury
share immediately prior to the Effective Time shall automatically be
cancelled and retired and shall cease to exist, and no consideration shall
be delivered or deliverable in exchange therefor.
(b) Conversion of Noble-Delaware Shares. Each issued and outstanding
share of Noble-Delaware Common Stock (other than the issued shares to be
cancelled in accordance with Section 3.1(a)) shall be automatically
cancelled and one validly issued, fully paid and nonassessable share of
Noble-Cayman Ordinary Shares shall be issued in exchange therefor. In
furtherance thereof, Noble-Cayman agrees to issue Noble-Cayman Ordinary
Shares to the current holders of shares of Noble-Delaware Common Stock as
provided hereby.
(c) Effect on Noble-Cayman Shares In Issue. All of the issued and
outstanding shares of Noble-Cayman Ordinary Shares held by Noble-Delaware
prior to the Effective Time shall be repurchased by Noble-Cayman at the
Effective Time in exchange for US$1,000 cash in the aggregate.
(d) Conversion of Merger Sub Common Stock. Each issued and
outstanding share of common stock, par value US$0.10 per share, of Merger
Sub shall be converted into and become one share of the Surviving
Corporation and shall constitute the only outstanding shares of capital
stock of the Surviving Corporation.
(e) Stock Based Compensation Plans. The stock based benefit and
compensation plans and programs and agreements providing for the grant or
award to Noble-Delaware's (and its affiliates') (i) employees of options or
other rights to purchase, receive, acquire, hold or realize the benefits
measured by the value of, as appropriate, Noble-Delaware Common Stock (the
"Employee Stock Plans") and (ii) directors of options or other rights to
purchase, receive, acquire, hold or realize the benefits measured by the
value of, as appropriate, Noble-Delaware Common Stock (the "Director Stock
Plans") shall be maintained and sponsored in accordance with Section 4.1 of
this Agreement. The Employee Stock Plans, together with the Director Stock
Plans, are referred to herein as the "Stock Plans."
(f) Rights. Each Noble-Delaware Right shall automatically expire
immediately prior to the Effective Time in accordance with the
Noble-Delaware Rights Agreement, and one new right (each a "Noble-Cayman
Right") will be issued with each share of Noble-Cayman Ordinary Shares
issued in the Merger pursuant to a Noble-Cayman Rights Agreement to be
entered into prior to the Effective Time between Noble-Cayman and UMB Bank,
N.A., as Rights Agent, containing terms and conditions substantially
similar to those contained in the Noble-Delaware Rights Agreement.
SECTION 3.2 Certificates Representing Noble-Delaware Shares.
(a) At the Effective Time, each certificate representing outstanding shares
of Noble-Delaware Common Stock, other than shares to be cancelled as set forth
in Section 3.1(a), shall automatically represent the same number of Noble-Cayman
Ordinary Shares and the related Noble-Cayman Rights, and therefore, certificates
representing Noble-Delaware Common Stock do not need, and are not required, to
be exchanged for certificates representing Noble-Cayman Ordinary Shares and the
related Noble-Cayman Rights. Following the Merger, certificates bearing the name
of Noble-Cayman will be issued in the normal course upon surrender of
certificates bearing the name of Noble-Delaware for exchange or transfer.
(b) All Noble-Cayman Ordinary Shares issued pursuant to the Merger shall be
deemed to have been issued and delivered in full satisfaction of all rights
pertaining to the shares of Noble-Delaware Common Stock, subject, however, to
the obligation of the Surviving Corporation (if any) to pay any dividends or
A-3
make any distributions with a record date prior to the Effective Time which may
have been declared or made by Noble-Delaware on such shares of Noble-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 Noble-Delaware Common Stock that were
outstanding immediately prior to the Effective Time. If, after the Effective
Time, certificates are presented to the Surviving Corporation they shall be
cancelled and exchanged as provided in this Article III, except as otherwise
provided by law.
SECTION 3.3 Dissenters' Rights. There are no dissenters' rights or
appraisal rights available to holders of Noble-Delaware Common Stock under the
DGCL in connection with the Merger.
ARTICLE IV
EMPLOYEE BENEFIT AND COMPENSATION PLANS AND AGREEMENTS
SECTION 4.1 Plans.
(a) At the Effective Time, (i) Noble-Delaware shall continue to sponsor and
maintain each Stock Plan listed on EXHIBIT A, attached hereto, and (ii)
Noble-Cayman shall assume the rights and obligations of Noble-Delaware under
each Stock Plan listed on EXHIBIT B (the "Assumed Plans").
(b) To the extent any Stock Plan provides for the issuance or purchase of,
or otherwise relates to, Noble-Delaware Common Stock, after the Effective Time
such Stock Plan shall be deemed to provide for the issuance or purchase of, or
otherwise relate to, Noble-Cayman Ordinary Shares and all options or awards
issued, or benefits available or based upon the value of Noble-Delaware Common
Stock, under such Stock Plan after the Effective Time shall entitle the holder
thereof to purchase, receive, acquire, hold or realize the benefits measured by
the value of, as appropriate, Noble-Cayman Ordinary Shares in accordance with
the terms of such Stock Plan. The outstanding options or other awards, or
benefits available, under the terms of the Stock Plans shall be exercisable,
issuable or available upon the same terms and conditions as under such Stock
Plans and the agreements relating thereto immediately prior to the Effective
Time, except that upon the exercise, issuance or availability of such options,
awards or benefits, Noble-Cayman Ordinary Shares shall be issuable, held or
available in lieu of shares of Noble-Delaware Common Stock. The number of
Noble-Cayman Ordinary Shares issuable or available upon the exercise, issuance
or availability of such option, award or benefit, immediately after the
Effective Time and the option, exercise or measurement price of each such
option, award or benefit shall be the number of shares and option, exercise or
measurement price in effect immediately prior to the Effective Time.
(c) Such amendments deemed necessary or appropriate by Noble-Delaware and
Noble-Cayman to effect the Merger and related reorganization transactions,
including to facilitate the assignment to Noble-Cayman of the Assumed Plans,
shall be adopted and entered into with respect to the Stock Plans. The
Noble-Delaware stockholder approval and adoption of this Agreement shall also be
deemed to satisfy any requirement of stockholder approval of (i) such amendments
and (ii) the assumption by Noble-Cayman of the Assumed Plans.
SECTION 4.2 Change of Control Agreements. Noble-Delaware shall cause
those certain "change of control" agreements that are currently in place between
Noble-Delaware and certain of its executive officers and key employees (the
"Change of Control Agreements") to be amended so that such Change of Control
Agreements shall become effective after a "change of control" of Noble-Cayman,
rather than a "change of control" of Noble-Delaware. Furthermore, Noble-Cayman
shall guarantee Noble-Delaware's obligations under the Change of Control
Agreements.
SECTION 4.3 New Indemnity Agreements. Noble-Cayman shall offer to enter
into indemnity agreements (the "New Indemnity Agreements") with each executive
officer and director of Noble-Cayman who, immediately prior to the Effective
Time, is a party to an indemnity agreement with Noble-Delaware (each an "Old
Indemnity Agreement") and the terms and conditions of the New Indemnity
Agreements shall be identical in all material respects to those set forth in the
Old Indemnity Agreements.
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ARTICLE V
CONDITIONS PRECEDENT
The respective obligation of each party to effect the Merger is subject to
the satisfaction or waiver of the following conditions:
(a) This Agreement, the Merger and the other transactions contemplated
hereby shall have been adopted and approved by the affirmative vote of
holders of a majority of the issued and outstanding shares of
Noble-Delaware Common Stock entitled to vote thereon at the record date for
such actions as set by the Board of Directors of Noble-Delaware.
(b) None of the parties hereto shall be subject to any decree, order
or injunction of a court of competent jurisdiction, U.S. or foreign, which
prohibits the consummation of the Merger.
(c) The registration statement on Form S-4 (the "Registration
Statement") filed with the Securities and Exchange Commission (the "SEC")
by Noble-Cayman in connection with the offer and issuance of the
Noble-Cayman Ordinary Shares shall have become effective under the
Securities Act of 1933, as amended (the "Securities Act"), and no stop
order with respect thereto shall be in effect.
(d) The Noble-Cayman Ordinary Shares to be issued pursuant to the
Merger shall have been authorized for listing on the New York Stock
Exchange, subject to official notice of issuance.
(e) Other than the filing of the Certificate of Merger provided for
under Article I, all material consents, appeals, authorizations of, or
filings or registrations with and notices to any governmental or regulatory
authority required of Noble-Delaware, Noble-Cayman or any of their
subsidiaries to consummate the Merger and the other transactions
contemplated hereby, including without limitation any filings required
under applicable state securities and "Blue Sky" laws and any consents or
filings with the United States Maritime Administration (or any agency
thereof), shall have been made or obtained.
(f) Any consents required under instruments evidencing indebtedness
and any consents required under any contracts to which Noble-Delaware or
any subsidiary of Noble-Delaware is a party, shall have been obtained.
(g) Noble-Delaware and Noble-Cayman shall have received an opinion
from Thompson & Knight L.L.P., in form and substance reasonably
satisfactory to Noble-Delaware and Noble-Cayman, dated as of the date of
the Effective Time, confirming the matters discussed under the caption
"Material Income Tax Consequences of the Merger -- U.S. Federal Income Tax
Consequences of the Merger" in the proxy statement/prospectus included in
the Registration Statement.
(h) Noble-Delaware and Noble-Cayman shall have received an opinion
from Maples and Calder, in form and substance reasonably satisfactory to
Noble-Delaware and Noble-Cayman, dated as of the date of the Effective
Time, confirming the matters discussed under "Material Income Tax
Consequences of the Merger -- Effect of Cayman Islands Tax Laws on
Noble-Cayman" in the proxy statement/prospectus included in the
Registration Statement.
(i) Noble-Delaware and Noble-Cayman shall have received an opinion of
Baker Botts L.L.P., in form and substance reasonably satisfactory to them,
dated as of the date of the Effective Time, substantially to the effect
that:
(i) Each of Noble-Delaware, Merger Sub and Holdco is a corporation
duly incorporated and validly existing under the laws of the State of
Delaware;
(ii) Each of Noble-Delaware, Merger Sub and Holdco has the
corporate power and corporate authority to execute and deliver this
Agreement and to perform its obligations hereunder; and
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(iii) The execution and delivery by each of Noble-Delaware, Merger
Sub and Holdco of, and the performance by each of them of its
obligations under, this Agreement has been duly authorized by all
necessary corporate action on the part of each of Noble-Delaware, Merger
Sub and Holdco under their respective Certificates of Incorporation and
Bylaws, and under the DGCL.
(j) Noble-Delaware and Noble-Cayman shall have received an opinion of
Maples and Calder, in form and substance reasonably satisfactory to
Noble-Delaware and Noble-Cayman, dated as of the date of the Effective
Time, substantially to the effect that:
(i) Noble-Cayman is a company duly incorporated and validly
existing under the laws of the Cayman Islands;
(ii) Noble-Cayman has the corporate power and corporate authority
to execute and deliver this Agreement and to perform its obligations
hereunder; and
(iii) The execution and delivery by Noble-Cayman of, and the
performance by Noble-Cayman of its obligations under, this Agreement has
been duly authorized by all necessary corporate action on the part of
Noble-Cayman under its Memorandum and Articles of Association and under
the Cayman Islands Companies Law.
(k) The representations and warranties of the parties set forth herein
shall be true and correct in all material respects and the covenants of the
parties set forth herein shall have been performed in all material
respects.
ARTICLE VI
TERMINATION, AMENDMENT AND WAIVER
SECTION 6.1 Termination. This Agreement may be terminated at any time
prior to the Effective Time, whether before or after approval by the
stockholders of Noble-Delaware, by action of the Board of Directors of
Noble-Delaware.
SECTION 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
Noble-Delaware, Noble-Cayman, Holdco or Merger Sub.
SECTION 6.3 Amendment. This Agreement may be amended by the parties
hereto at any time before or after any required approval or adoption by the
stockholders of Noble-Delaware of this Agreement or matters presented in
connection with this Agreement; provided, however, that after any such approval
or adoption, there shall be made no amendment requiring further approval or
adoption by such stockholders under applicable law until such further approval
is obtained. This Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties hereto.
SECTION 6.4 Waiver. At any time prior to the Effective Time, the parties
may waive compliance by the other parties with any of the agreements contained
in this Agreement, or may waive any of the conditions to consummation of the
Merger contained in this Agreement. Any agreement on the part of a party to any
such waiver shall be valid only if set forth in an instrument in writing signed
on behalf of such party. The failure of any party to this Agreement to assert
any of its rights under this Agreement or otherwise shall not constitute a
waiver of such rights.
ARTICLE VII
COVENANTS
SECTION 7.1 Agreements of Rule 145 Affiliates. Prior to the Effective
Time, Noble-Delaware shall cause to be prepared and delivered to Noble-Cayman a
list identifying all persons who, immediately prior to the Effective Time,
Noble-Delaware believes may be deemed to be "affiliates" of Noble-Delaware, as
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that term is used in paragraphs (c) and (d) of Rule 145 under the Securities Act
(the "Rule 145 Affiliates"). Noble-Cayman shall be entitled to place a
restrictive legend on any certificate(s) representing Noble-Cayman Ordinary
Shares received by such Rule 145 Affiliates. Noble-Delaware shall use its best
efforts to cause each person who is identified as a Rule 145 Affiliate in such
list to deliver to Noble-Cayman, at or prior to the Effective Time, a written
agreement, in the form to be approved by the parties hereto, that such Rule 145
Affiliate will not sell, pledge, transfer or otherwise dispose of any Noble-
Cayman Ordinary Shares issued to such Rule 145 Affiliate pursuant to the Merger,
except pursuant to an effective registration statement or in compliance with
Rule 145 or an exemption from the registration requirements of the Securities
Act.
SECTION 7.2 Rule 16b-3 Approval. Noble-Delaware, Noble-Cayman, Holdco and
Merger Sub shall take all such steps as may be required to cause the
transactions contemplated by Sections 3.1 hereof and any other dispositions of
Noble-Delaware equity securities (including derivative securities) or
acquisitions of Noble-Cayman equity securities (including derivative securities)
in connection with this Agreement by each individual who (i) is a director or
officer of Noble-Delaware, or (ii) at the Effective Time, will become a director
or officer of Noble-Cayman, to be exempt under Rule 16b-3 promulgated under the
Securities Exchange Act of 1934, as amended.
SECTION 7.3 Guarantees. At or immediately after the Effective Time,
Noble-Cayman and Holdco agree to assume and thereafter perform or guaranty such
debt of Noble-Delaware, including, without limitation, Noble-Delaware's existing
unsecured revolving $200,000,000 bank credit facility, Noble-Delaware's project
financing commitments regarding the semisubmersibles Noble Jim Thompson and
Noble Paul Wolff and the indenture governing Noble-Delaware's 6.95% Senior Notes
due 2009 and 7.50% Senior Notes due 2019, as Noble-Cayman, Noble-Delaware and
Holdco shall mutually agree.
SECTION 7.4 Holdco Vote. Prior to the date of the meeting of stockholders
of Noble-Delaware to consider and vote upon the adoption of this Agreement,
Holdco, in its capacity as sole stockholder of Merger Sub, shall have adopted
this Agreement.
ARTICLE VIII
GENERAL PROVISIONS
SECTION 8.1 Assignment; Binding Effect; Benefit. Neither this Agreement
nor any of the rights, interests or obligations hereunder shall be assigned by
any of the parties hereto (whether by operation of law or otherwise) without the
prior written consent of the other parties. Subject to the preceding sentence,
this Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and assigns. Notwithstanding
anything contained in this Agreement to the contrary, except for the provisions
of Article IV and Article VII (collectively, the "Third Party Provisions"),
nothing in this Agreement, expressed or implied, is intended to confer on any
person other than the parties hereto or their respective successors and assigns
any rights, remedies, obligations or liabilities under or by reason of this
Agreement. The Third Party Provisions may be enforced only by the specifically
intended beneficiaries thereof.
SECTION 8.2 Entire Agreement. This Agreement and any documents delivered
by the parties in connection herewith constitute the entire agreement among the
parties with respect to the subject matter hereof and supersede all prior
agreements and understandings among the parties with respect thereto. No
addition to or modification of any provision of this Agreement shall be binding
upon any party hereto unless made in writing and signed by all parties hereto.
SECTION 8.3 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware without regard to
its rules of conflict of laws.
SECTION 8.4 Counterparts. This Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts
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shall together constitute one and the same instrument. Each counterpart may
consist of a number of copies hereof each signed by less than all, but together
signed by all of the parties hereto.
SECTION 8.5 Headings. Headings of the Articles and Sections of this
Agreement are for the convenience of the parties only and shall be given no
substantive or interpretative effect whatsoever.
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IN WITNESS WHEREOF, Noble-Delaware, Noble-Cayman, Holdco 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.
"NOBLE-DELAWARE"
NOBLE DRILLING CORPORATION
By: /s/ ROBERT D. CAMPBELL
------------------------------------
Name: Robert D. Campbell
Title: President
"NOBLE-CAYMAN"
NOBLE CORPORATION
By: /s/ ROBERT D. CAMPBELL
------------------------------------
Name: Robert D. Campbell
Title: President
"HOLDCO"
NOBLE HOLDING (U.S.) CORPORATION
By: /s/ JULIE J. ROBERTSON
------------------------------------
Name: Julie J. Robertson
Title: Vice President and Secretary
"MERGER SUB"
NOBLE CAYMAN ACQUISITION CORPORATION
By: /s/ TIMOTHY S. THOMASSON
------------------------------------
Name: Timothy S. Thomasson
Title: Controller and Assistant
Treasurer
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EXHIBIT A
Noble Drilling Corporation 401(k) Savings Plan(1)
Noble Drilling Field Hourly Employees' Retirement Plan(1)
Noble Drilling Corporation Salaried Employees' Retirement Plan(1)
Noble Drilling Corporation Retirement Restoration Plan
Noble Drilling Corporation 401(k) Savings Restoration Plan(2)
Noble International Employees' Retirement Plan
---------------
(1) Noble-Delaware will continue to be the sponsor of the trusts associated
with each of these plans.
(2) Noble-Cayman will become the grantor of the "rabbi" trust associated
with the Noble Drilling Corporation 401(k) Savings Restoration Plan.
A-10
EXHIBIT B
Noble Drilling Corporation 1991 Stock Option and Restricted Stock Plan
Noble Drilling Corporation Equity Compensation Plan for Non-Employee Directors
Noble Drilling Corporation 1992 Nonqualified Stock Option Plan for Non-Employee
Directors
A-11
ANNEX B
MEMORANDUM OF ASSOCIATION
OF
NOBLE-CAYMAN
THE COMPANIES LAW (2001 SECOND REVISION)
OF THE CAYMAN ISLANDS
COMPANY LIMITED BY SHARES
MEMORANDUM OF ASSOCIATION
OF
NOBLE CORPORATION
1 The name of the Company is NOBLE CORPORATION.
2 The registered office of the Company shall be at the offices of M&C
Corporate Services Limited, Ugland House, P.O. Box 309 GT, George Town, Grand
Cayman, Cayman Islands, or at such other place as the Directors may from time to
time decide.
3 The objects for which the Company is established are unrestricted and
the Company shall have full power and authority to carry out any object not
prohibited by the Companies Law (2001 Second Revision) or as revised, or any
other law of the Cayman Islands.
4 The liability of each Member is limited to the amount from time to time
unpaid on such Member's shares.
5 The share capital of the Company is US$55,000,000 divided into
400,000,000 Ordinary Shares of a par value of US$0.10 each and 15,000,000
Preferred Shares of a par value of US$1.00 each.
6 The Company has power to register by way of continuation as a body
corporate limited by shares under the laws of any jurisdiction outside the
Cayman Islands and to be deregistered in the Cayman Islands.
7 Capitalised terms that are not defined in this Memorandum of Association
bear the same meaning as those given in the Articles of Association of the
Company.
WE, the subscriber to this Memorandum of Association, wish to be formed into a
company pursuant to this Memorandum of Association, and we agree to take the
number of shares shown opposite our name.
DATED this 12th day of February 2002.
SIGNATURE, ADDRESS AND NUMBER OF SHARES
DESCRIPTION OF SUBSCRIBER TAKEN
------------------------- ----------------
Noble Drilling Corporation One
13135 South Dairy Ashford, Suite 800
Sugar Land, Texas 77478
U.S.A.
acting by M&C Corporate Services Limited, its
attorney-in-fact, acting by:
/s/ GARETH GRIFFITHS
------------------------------------------------
Gareth Griffiths
/s/ MELANIE JONES
------------------------------------------------
Melanie Jones
/s/ FAITH J. ANDREJAK-ZAMORA
------------------------------------------------
Faith J. Andrejak-Zamora
Witness to the above signatures
I, CINDY Y. JEFFERSON-BULGIN Dep., Registrar of Companies in and for the Cayman
Islands, DO HEREBY CERTIFY that this is a true and correct copy of the
Memorandum of Association of this Company duly incorporated on the 12th day of
February 2002.
/s/ CINDY Y. JEFFERSON-BULGIN
--------------------------------------
REGISTRAR OF COMPANIES
B-1
ANNEX C
ARTICLES OF ASSOCIATION
OF
NOBLE-CAYMAN
THE COMPANIES LAW (2001 SECOND REVISION)
OF THE CAYMAN ISLANDS
COMPANY LIMITED BY SHARES
ARTICLES OF ASSOCIATION
OF
NOBLE CORPORATION
INTERPRETATION
1 In these Articles Table A in the Schedule to the Statute does not apply
and, unless there is something in the subject or context inconsistent therewith:
"ARTICLES" means these articles of association of the
Company.
"AUDITOR" means the person for the time being performing
the duties of auditor of the Company (if any).
"BOARD", "BOARD OF DIRECTORS"
or "DIRECTORS" means the directors for the time being of the
Company.
"COMPANY" means Noble Corporation.
"DIVIDEND" includes an interim dividend.
"ELECTRONIC RECORD" has the same meaning as in the Electronic
Transactions Law (2000 Revision).
"MEMBER" has the same meaning as in the Statute.
"MEMORANDUM" means the memorandum of association of the
Company.
"ORDINARY RESOLUTION" means a resolution passed by a simple majority
of the Members as, being entitled to do so,
vote in person or, where proxies are allowed,
by proxy at a general meeting, and includes a
unanimous written resolution. In computing the
majority when a poll is demanded regard shall
be had to the number of votes to which each
Member is entitled by the Articles.
"REGISTER OF MEMBERS" means the register maintained in accordance
with the Statute and includes (except where
otherwise stated) any duplicate Register of
Members.
"REGISTERED OFFICE" means the registered office for the time being
of the Company.
"SEAL" means the common seal of the Company and
includes every duplicate seal.
"SECRETARY" includes an assistant secretary and any person
appointed to perform the duties of secretary of
the Company.
"SHARE" and "SHARES" means a share or shares in the Company and
includes a fraction of a share.
"SPECIAL RESOLUTION" has the same meaning as in the Statute.
"STATUTE" means the Companies Law (2001 Second Revision)
of the Cayman Islands.
"U.S." or "UNITED STATES" means the United States of America.
C-1
2 In the Articles:
2.1 words importing the singular number include the plural number and
vice-versa;
2.2 words importing the masculine gender include the feminine gender;
2.3 words importing persons include corporations, partnerships,
unincorporated associations and other entities;
2.4 "written" and "in writing" include all modes of representing or
reproducing words in visible form, including in the form of an Electronic
Record;
2.5 references to provisions of any law or regulation shall be
construed as references to those provisions as amended, modified,
re-enacted or replaced from time to time;
2.6 any phrase introduced by the terms "including", "include", "in
particular" or any similar expression shall be construed as illustrative
and shall not limit the sense of the words preceding those terms; and
2.7 headings are inserted for reference only and shall be ignored in
construing these Articles.
COMMENCEMENT OF BUSINESS
3 The business of the Company may be commenced as soon after incorporation
as the Directors shall see fit.
4 The Directors may pay, out of the capital or any other monies of the
Company, all expenses incurred in or about the formation and establishment of
the Company, including the expenses of registration.
ISSUE OF SHARES
5 Subject to the provisions, if any, in the Memorandum (and to any
direction that may be given by the Company in general meeting) and without
prejudice to any rights attached to any existing shares, the Directors may
allot, issue, grant options over or otherwise dispose of shares (including
fractions of a share) with or without preferred, deferred or other rights or
restrictions, whether in regard to Dividend, voting, return of capital or
otherwise and to such persons, at such times and on such other terms as they
think proper.
6 The Company shall not issue shares to bearer.
PREFERRED SHARES
7 The Directors may provide, out of the unissued Preferred Shares, for
series of Preferred Shares. Before any Preferred Shares of any such series are
issued, the Directors shall fix, by resolution or resolutions, the following
provisions of the Preferred Shares thereof:
7.1 the designation of such series, the number of Preferred Shares to
constitute such series and the subscription price thereof if different from
the par value thereof;
7.2 whether the shares of such series shall have voting rights, in
addition to any voting rights provided by law, and, if so, the terms of
such voting rights, which may be general or limited;
7.3 the Dividends, if any, payable on such series, whether any such
Dividends shall be cumulative, and, if so, from what dates, the conditions
and dates upon which such Dividends shall be payable, the preference or
relation which such Dividends shall bear to the Dividends payable on any
shares of any other class or any other series of Preferred Shares;
C-2
7.4 whether the Preferred Shares of such series shall be subject to
redemption by the Company, and, if so, the times, prices and other
conditions of such redemption;
7.5 the amount or amounts payable upon Preferred Shares of such
series upon, and the rights of the holders of such series in, a voluntary
or involuntary liquidation, dissolution or winding up, or upon any
distribution of the assets, of the Company;
7.6 whether the Preferred Shares of such series shall be subject to
the operation of a retirement or sinking fund and, if so, the extent to and
manner in which any such retirement or sinking fund shall be applied to the
purchase or redemption of the Preferred Shares of such series for
retirement or other corporate purposes and the terms and provisions
relative to the operation thereof;
7.7 whether the Preferred Shares of such series shall be convertible
into, or exchangeable for, shares of any other class or any other series of
Preferred Shares or any other securities and, if so, the price or prices or
the rate or rates of conversion or exchange and the method, if any, of
adjusting the same, and any other terms and conditions of conversion or
exchange;
7.8 the limitations and restrictions, if any, to be effective while
any Preferred Shares of such series are outstanding upon the payment of
Dividends or the making of other distributions on, and upon the purchase,
redemption or other acquisition by the Company of, the Ordinary Shares or
shares of any other class of shares or any other series of Preferred
Shares;
7.9 the conditions or restrictions, if any, upon the creation of
indebtedness of the Company or upon the issue of any additional shares,
including additional shares of such series or of any other class of shares
or any other series of Preferred Shares; and
7.10 any other powers, preferences and relative, participating,
optional and other special rights, and any qualifications, limitations and
restrictions thereof.
Without limiting the foregoing, the voting powers of any series of Preferred
Shares may include the right, in the circumstances specified in the resolution
or resolutions providing for the issuance of such Preferred Shares, to elect one
or more Directors who shall be in addition to the number of Directors of the
Company fixed pursuant to Article 52 hereof and who shall serve for such term
and have such voting powers as shall be stated in the resolution or resolutions
providing for the issuance of such Preferred Shares. The term of office and
voting powers of any Director elected in the manner provided in the immediately
preceding sentence of this Article 7 may be greater than or less than those of
any other Director or class of Directors.
8 The powers, preferences and relative, participating, optional and other
special rights of each series of Preferred Shares, and the qualifications,
limitations or restrictions thereof, if any, may differ from those of any and
all other series at any time outstanding. All shares of any one series of
Preferred Shares shall be identical in all respects with all other shares of
such series, except that shares of any one series issued at different times may
differ as to the dates from which Dividends thereon shall be cumulative.
ORDINARY SHARES
9 Each holder of Ordinary Shares shall be entitled to one vote for each
Ordinary Share held of record on all matters on which Members generally are
entitled to vote. Subject to the provisions of law and the rights of the holders
of any class or series of shares having a preference as to Dividends over the
Ordinary Shares then outstanding, Dividends may be paid on the Ordinary Shares
at such times and in such amounts as the Board of Directors shall determine.
Upon the dissolution, liquidation or winding up of the Company, after any
preferential amounts to be distributed to the holders of any class or series of
shares having a preference over the Ordinary Shares then outstanding have been
paid or declared and set apart for payment, the holders of the Ordinary Shares
shall be entitled to receive all the remaining assets of the Company available
for distribution to its Members ratably in proportion to the number of shares
held by them, respectively. The Ordinary Shares are not redeemable.
C-3
REGISTER OF MEMBERS
10 The Company shall maintain or cause to be maintained the Register of
Members in accordance with the Statute.
FIXING RECORD DATE
11 In order that the Company may determine the Members entitled to notice
of or to vote at any meeting of Members or any adjournment thereof, 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 shares or for the purpose of any other lawful action, the Board
of Directors may fix a record date, which record date shall not precede the date
upon which the resolution fixing the record date is adopted by the Board of
Directors, and which record date shall not be more than 60 nor less than 10 days
before the date of such meeting, nor more than 60 days prior to any other
action. A determination of Members entitled to notice of or to vote at a meeting
of the Members shall apply to any adjournment of the meeting; provided, however,
that the Board of Directors may fix a new record date for the adjourned meeting.
12 If no record date is fixed for the determination of Members entitled to
receive payment of a Dividend, the date on which the resolution of the Directors
declaring such Dividend is adopted shall be the record date for such
determination of Members.
CERTIFICATES FOR SHARES
13 A Member shall be entitled to a share certificate only if the Directors
resolve that share certificates shall be issued. Share certificates representing
shares, if any, shall be in such form as the Directors may determine. Share
certificates shall be signed by the Chairman of the Board or the Chief Executive
Officer or the President or a Vice President, and by the Secretary or an
Assistant Secretary or the Treasurer or an Assistant Treasurer of the Company,
and sealed with the seal of the Company, which may be by a facsimile thereof.
Any or all such signatures may be facsimiles if countersigned by a transfer
agent or registrar. Although any officer, transfer agent or registrar whose
manual or facsimile signature is affixed to such a certificate ceases to be such
officer, transfer agent or registrar before such certificate has been issued, it
may nevertheless be issued by the Company with the same effect as if such
officer, transfer agent or registrar were still such at the date of its issue.
The Register of Members and blank share certificates shall be kept by the
Secretary or by a transfer agent or by a registrar or by any other officer or
agent designated by the Board. All certificates for shares shall be
consecutively numbered or otherwise identified and shall specify the shares to
which they relate. All certificates surrendered to the Company for transfer
shall be cancelled and, subject to these Articles, no new certificate shall be
issued until the former certificate representing a like number of relevant
shares shall have been surrendered and cancelled.
14 The Company shall not be bound to issue more than one certificate for
shares held jointly by more than one person and delivery of a certificate to one
joint holder shall be a sufficient delivery to all of them.
15 The holder of any share of the Company shall immediately notify the
Company of any loss, theft, destruction or mutilation of the certificate
therefor; the Company may issue to such holder a new certificate or certificates
for shares, upon the surrender of the mutilated certificate or, in the case of
loss, theft or destruction of the certificate, upon satisfactory proof of such
loss, theft or destruction; the Board of Directors, or a committee designated
thereby, or the transfer agent and registrar for the shares, may, in their
discretion, require the owner of the lost, stolen or destroyed certificate, or
such person's legal representative, to give the Company a bond in such sum and
with such surety or sureties as they may direct to indemnify the Company and
said transfer agent and registrar against any claim that may be made on account
of the alleged loss, theft or destruction of any such certificate or the
issuance of such new certificate.
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The Board of Directors may make such additional rules and regulations as it
may deem expedient concerning the issue and transfer of certificates
representing shares of each class of the Company and may make such rules and
take such action as it may deem expedient concerning the issue of certificates
in lieu of certificates claimed to have been lost, destroyed, stolen or
mutilated.
TRANSFER OF SHARES
16 Shares are transferable subject to the consent of the Directors who
may, in their absolute discretion, decline to register any transfer of shares
without giving any reason. If the Directors refuse to register a transfer they
shall notify the transferee within two months of such refusal. The Secretary of
the Company, or a transfer agent appointed in respect of the relevant shares,
shall register a transfer of shares on surrender by the transferee of the
certificate or certificates for such shares properly endorsed or accompanied by
a duly executed share transfer. The person in whose name shares stand on the
books of the Company shall be deemed the owner thereof for all purposes as
regards the Company; provided, however, that whenever any transfer of shares
shall be made for collateral security and not absolutely, and written notice
thereof shall be given to the Secretary or to such transfer agent, such fact
shall be stated in the entry of the transfer. No transfer of shares shall be
valid until it shall have been entered in the Register of Members of the Company
by an entry showing from and to whom transferred.
17 Each Member shall designate to the Secretary or transfer agent of the
Company an address at which notices of meetings and all other corporate notices
may be served or mailed to such person, and, if any Member shall fail to
designate such address, corporate notices may be served upon such person by mail
directed to such person at such person's post office address, if any, as the
same appears on the share record books of the Company or at such person's last
known post office address.
18 The instrument of transfer of any share shall be in writing and shall
be executed by or on behalf of the transferor or by such transferor's attorney
thereunto authorised by a power of attorney duly executed and filed with the
Secretary of the Company or a transfer agent for the relevant shares (and if the
Directors so require, signed by the transferee). The transferor shall be deemed
to remain the holder of a share until the name of the transferee is entered in
the Register of Members.
REDEMPTION AND REPURCHASE OF SHARES
19 Subject to the provisions of the Statute and these Articles, the
Company may issue shares that are to be redeemed or are liable to be redeemed at
the option of the Member or the Company.
20 20.1 Subject to the provisions of the Statute, the Company may
purchase its own shares (including any redeemable shares). (This authorisation
is in accordance with section 37(2) of the Statute or any modification or
re-enactment thereof for the time being in force.)
20.2 In such manner as is referred to in Section 37(3)(d) of the
Statute or any modification or re-enactment thereof for the time being in
force, this Article authorises the purchase by the Company in accordance
with provisions of the Statute of such of its own shares (including any
redeemable shares) as the Directors may from time to time determine and
agree with the holder or holders thereof in such manner, including at such
price and on all such other terms, as the Directors may from time to time
determine and agree as aforesaid, and whether or not the Company has made a
similar offer to all or any of the other Members. The Company may deduct
from the price for such shares the aggregate amount of any outstanding
debts, liabilities and engagements to or with the Company (whether
presently payable or not) by the holder of such shares, either alone or
jointly with any other person.
21 The Company may make a payment in respect of the redemption or purchase
of its own shares in any manner permitted by the Statute, including out of
capital.
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VARIATION OF RIGHTS OF SHARES
22 If at any time the share capital of the Company is divided into
different classes or series of shares, the rights attached to any class or
series (unless otherwise provided by the terms of issue of the shares of that
class or series) may, whether or not the Company is being wound-up, be varied
with the sanction of a Special Resolution passed at a general meeting of the
holders of the shares of that class or series.
23 The provisions of these Articles relating to general meetings shall
apply to every such general meeting of the holders of one class or series of
shares. Separate general meetings of the holders of a class or series of shares
may be called only by (a) the Chairman of the Board, (b) the Chief Executive
Officer, (c) the President, or (d) a majority of the entire Board of Directors
(unless otherwise specifically provided by the terms of issue of the shares of
such class or series). Nothing in this Article 23 or Article 22 shall be deemed
to give any Member or Members the right to call a class or series meeting.
24 The rights conferred upon the holders of the shares of any class or
series issued with preferred or other rights shall not, unless otherwise
expressly provided by the terms of issue of the shares of that class or series,
be deemed to be varied by the creation or issue of further shares ranking prior
to or pari passu therewith. The rights of the holders of Ordinary Shares shall
not be deemed varied by the creation or issue of shares with preferred or other
rights, which may be effected by the Directors as provided in these Articles
without any vote or consent of the holders of Ordinary Shares.
COMMISSION ON SALE OF SHARES
25 The Company may, in so far as the Statute permits, pay a commission to
any person in consideration of his subscribing or agreeing to subscribe, whether
absolutely or conditionally, for any shares of the Company. Such commissions may
be satisfied by the payment of cash and/or the issue of fully or partly paid-up
shares. The Company may also on any issue of shares pay such brokerage or
underwriting commission or discount as may be lawful.
NON-RECOGNITION OF TRUSTS
26 The Company shall not be bound by or compelled to recognise in any way
(even when notified) any equitable, contingent, future or partial interest in
any share, or (except only as is otherwise provided by these Articles or the
Statute) any other rights in respect of any share other than an absolute right
to the entirety thereof in the registered holder.
AMENDMENTS OF MEMORANDUM AND ARTICLES OF ASSOCIATION AND ALTERATION OF CAPITAL
27 The Company may by Ordinary Resolution:
27.1 increase the share capital by such sum as the resolution shall
prescribe and with such rights, priorities and privileges annexed thereto,
as the Company in general meeting may determine;
27.2 consolidate and divide all or any of its share capital into
shares of larger amount than its existing shares;
27.3 by subdivision of its existing shares or any of them divide the
whole or any part of its share capital into shares of smaller amount than
is fixed by the Memorandum or into shares without par value; and
27.4 cancel any shares that at the date of the passing of the
resolution have not been taken or agreed to be taken by any person.
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28 All new shares created in accordance with the provisions of the
preceding Article shall be subject to the same provisions of the Articles with
reference to the payment of calls, liens, transfer, transmission, forfeiture and
otherwise as the shares in the original share capital.
29 Subject to the provisions of the Statute and the provisions of these
Articles as regards the matters to be dealt with by Ordinary Resolution, the
Company may by Special Resolution:
29.1 change its name;
29.2 alter or add to these Articles;
29.3 alter or add to the Memorandum with respect to any objects,
powers or other matters specified therein; and
29.4 reduce its share capital and any capital redemption reserve
fund.
REGISTERED OFFICE
30 Subject to the provisions of the Statute, the Company may by resolution
of the Directors change the location of its Registered Office.
GENERAL MEETINGS
31 All general meetings other than annual general meetings shall be called
extraordinary general meetings.
32 The Company shall in each year hold a general meeting as its annual
general meeting, and shall specify the meeting as such in the notices calling
it. The annual general meeting shall be held on the fourth Thursday in April in
each year, if not a legal holiday under the laws of the place where the meeting
is to be held, and, if a legal holiday, then on the next succeeding day not a
legal holiday under the laws of such place, or on such other date and at such
hour as may from time to time be fixed by the Directors, the Chairman of the
Board, the Chief Executive Officer or the President.
33 Except as otherwise required by law and subject to the rights of the
holders of any class or series of shares having a preference over the Ordinary
Shares as to Dividends or upon liquidation, extraordinary general meetings of
the Members for any purpose or purposes may be called only by (a) the Chairman
of the Board, (b) the Chief Executive Officer, (c) the President or (d) a
majority of the entire Board of Directors. Only such business as is specified in
the notice of any extraordinary general meeting of the Members shall come before
such meeting.
34 In order for business to be properly brought before a general meeting
by a Member, the business must be legally proper and written notice thereof must
have been filed with the Secretary of the Company not less than 60 nor more than
120 days prior to the meeting. Each such notice shall set forth: (a) the name
and address of the Member who intends to make the proposal as the same appear in
the Company's records; (b) the class and number of shares of the Company that
are owned by such Member; and (c) a clear and concise statement of the proposal
and the Member's reasons for supporting it. The filing of a Member notice as
required above shall not, in and of itself, constitute the making of the
proposal described therein. If the chairman of the meeting determines that any
proposed business has not been properly brought before the meeting, he shall
declare such business out of order; and such business shall not be conducted at
the meeting.
35 Except as otherwise provided by law, written notice of each meeting of
the Members, whether annual or extraordinary, shall be given, either by personal
delivery or by mail, not less than 10 nor more than 60 days before the date of
the meeting to each Member of record entitled to notice of the meeting. If
mailed, such notice shall be deemed given when deposited in the United States
mail, postage prepaid, directed to the Member at such Member's address as it
appears on the records of the Company. Each such notice shall state the place,
date and hour of the meeting, and the purpose or purposes for which the
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meeting is called. Notice of any meeting of Members shall not be required to be
given to any Member who shall attend such meeting in person or by proxy without
protesting, prior to or at the commencement of the meeting, the lack of proper
notice to such Member, or who shall waive notice thereof as provided in Article
108. Notice of adjournment of a meeting of Members need not be given if the time
and place to which it is adjourned are announced at such meeting, unless the
adjournment is for more than 30 days or, after adjournment, a new record date is
fixed for the adjourned meeting.
36 In the absence of a quorum, the holders of a majority of the votes
entitled to be cast by the Members, present in person or represented by proxy,
may adjourn the meeting from time to time. At any such adjourned meeting at
which a quorum may be present, any business may be transacted which might have
been transacted at the meeting as originally called.
37 At each meeting of the Members, the Chairman of the Board, or, in the
absence of the Chairman of the Board, the Chief Executive Officer or the
President, shall act as chairman. The order of business at each such meeting
shall be as determined by the chairman of the meeting. The chairman of the
meeting shall have the right and authority to prescribe such rules, regulations
and procedures and to do all such acts and things as are necessary or desirable
for the proper conduct of the meeting, including, without limitation, the
establishment of procedures for the maintenance of order and safety, limitations
on the time allotted to questions or comments on the affairs of the Company,
restrictions on entry to such meeting after the time prescribed for the
commencement thereof, and the opening and closing of the voting polls. The
chairman of the meeting shall announce at each such meeting the date and time of
the opening and the closing of the voting polls for each matter upon which the
Members will vote at such meeting.
38 It shall be the duty of the Secretary or other officer of the Company
who has charge of the Register of Members to prepare and make, at least 10 days
before each meeting of the Members, a complete list of the Members entitled to
vote thereat, arranged in alphabetical order, and showing the address of each
Member and the number of shares registered in such Member's name. Such list
shall be produced and kept available at the times and places required by law.
39 Except as otherwise provided by law or these Articles, each holder of
record of any class or series of shares having a preference over the Ordinary
Shares of the Company as to Dividends or upon liquidation shall be entitled at
each meeting of Members to such number of votes for each share as may be fixed
in these Articles or in the resolution or resolutions adopted by the Directors
providing for the issuance of such shares, and each holder of record of Ordinary
Shares shall be entitled at each meeting of Members to one vote for each share,
in each case, registered in such Member's name on the books of the Company:
39.1 on the date fixed pursuant to Article 11 as the record date for
the determination of Members entitled to notice of and to vote at such
meeting; or
39.2 if no such record date shall have been so fixed, then at the
close of business on the day next preceding the date on which notice of
such meeting 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.
40 Each Member entitled to vote at any meeting of Members may authorise
not in excess of three persons to act for such Member by a proxy signed by such
Member or such Member's attorney-in-fact. A proxy need not be a Member of the
Company. Any such proxy shall be delivered to the secretary of such meeting at
or prior to the time designated for holding such meeting but, in any event, not
later than the time designated in the order of business for so delivering such
proxies. No such proxy shall be voted or acted upon after three years from its
date, unless the proxy provides for a longer period.
41 The instrument appointing a proxy may be in any usual or common form
and may be expressed to be for a particular meeting or any adjournment thereof
or generally until revoked.
42 Votes given in accordance with the terms of an instrument of proxy
shall be valid notwithstanding the previous death or insanity of the principal
or revocation of the proxy or of the
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authority under which the proxy was executed, or the transfer of the share in
respect of which the proxy is given unless notice in writing of such death,
insanity, revocation or transfer was received by the Company at the Registered
Office before the commencement of the general meeting, or adjourned meeting at
which it is sought to use the proxy.
43 At each meeting of the Members, all corporate actions, other than the
election of directors, to be taken by vote of the Members (except as otherwise
required by law and except as otherwise provided in these Articles) shall be
authorised by a majority of the votes cast by the Members entitled to vote
thereon, present in person or represented by proxy. Directors shall be elected
by a plurality of the votes of the shares present in person or represented by
proxy at the meeting and entitled to vote on the election of the directors.
Where a separate vote by a class or classes or series is required, the
affirmative vote of the majority of shares of such class or classes or series
present in person or represented by proxy at the meeting shall be the act of
such class or series (unless provided otherwise in the resolutions providing for
the issuance of such series).
44 Unless required by law or determined by the chairman of the meeting to
be advisable, the vote on any matter, including the election of directors, need
not be by written ballot. In the case of a vote by written ballot, each ballot
shall be signed by the Member voting, or by such Member's proxy, and shall state
the number of shares voted.
45 Either the Board of Directors or, in the absence of an appointment of
inspectors by the Board, the Chairman of the Board, the Chief Executive Officer
or the President shall, in advance of each meeting of the Members, appoint one
or more inspectors to act at such meeting and make a written report thereof. In
connection with any such appointment, one or more persons may, in the discretion
of the body or person making such appointment, be designated as alternate
inspectors to replace any inspector who fails to act. If no inspector or
alternate is able to act at any meeting of Members, the chairman of such meeting
shall appoint one or more inspectors to act at such meeting. Each such inspector
shall perform such duties as are required by law and as shall be specified by
the Board, the Chairman of the Board, the Chief Executive Officer, the President
or the chairman of the meeting. Each such inspector, before entering upon the
discharge of his duties, shall take and sign an oath faithfully to execute the
duties of inspector with strict impartiality and according to the best of his
ability. Inspectors need not be Members. No director or nominee for the office
of director shall be appointed such an inspector.
PROCEEDINGS AT GENERAL MEETINGS
46 No business shall be transacted at any general meeting unless a quorum
is present. Except as otherwise provided by law or by these Articles, the
holders of a majority of the votes entitled to be cast by the Members entitled
to vote, which if any vote is to be taken by classes or series shall mean the
holders of a majority of the votes entitled to be cast by the Members of each
such class or series, present in person or represented by proxy, shall
constitute a quorum for the transaction of business at any meeting of the
Members.
47 47.1 Members present in person or by proxy holding at least 95% of the
issued shares entitled to vote at a meeting is the required quorum at a general
meeting to consider or adopt a Special Resolution to amend, vary, suspend the
operation of or disapply any of the provisions of Articles 31-49, Articles
52-60, Article 62, Article 63 or Article 64. However, Members present, in person
or by proxy, holding a majority of the issued shares entitled to vote at the
meeting is a quorum if:
(a) in the case of a Special Resolution to amend, vary, suspend the
operation of or disapply Articles 31-49, 52-60 or 64, a majority of the
Board of Directors has, at or prior to the meeting, recommended a vote
in favour of the Special Resolution; or
(b) in the case of a Special Resolution to amend, vary, suspend the
operation of or disapply Article 62, a majority of the Disinterested
Directors (as defined in such Article) has, at or prior to the meeting,
recommended a vote in favour of the Special Resolution; or
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(c) in the case of a Special Resolution to amend, vary, suspend the
operation of or disapply Article 63, other than a Special Resolution
referred to in Article 47.2 below,
(i) a majority of the Board of Directors has, at or prior to the
meeting, recommended a vote in favour of the Special Resolution; and
(ii) the favourable Board of Directors' recommendation is made
at a time when a majority of the Board of Directors then in office
were Directors prior to any person becoming an Interested Member (as
defined in Article 63) during the previous three years or were
recommended for election or elected to succeed those Directors by a
majority of those Directors.
47.2 In addition, Members present, in person or by proxy, holding a
majority of the issued shares entitled to vote at a meeting is also the
required quorum to consider or adopt a Special Resolution to delete Article
63 if:
(a) the resolution will not be effective until 12 months after the
passing of the resolution; and
(b) the restrictions in Article 63 will otherwise continue to apply
to any Business Combination between the Company and any person who
became an Interested Member (as defined in Article 63) on or prior to
the passing of the resolution.
48 The Members present at a duly constituted general meeting may continue
to transact business until adjournment, despite the withdrawal of Members that
leave less than a quorum.
49 Subject to the rights of the holders of the Preferred Shares or any
other class or series of shares having a preference over the Ordinary Shares as
to Dividends or upon liquidation, any action required or permitted to be taken
by the Members of the Company must be effected at a duly called annual or
extraordinary general meeting of Members of the Company and may not be effected
by any consent in writing by such Members.
CORPORATE MEMBERS
50 Any corporation or other non-natural person which is a Member may in
accordance with its constitutional documents, or in the absence of such
provision by resolution of its directors or other governing body, authorise such
person as it thinks fit to act as its representative at any meeting of the
Company or of any class of Members, and the person so authorised shall be
entitled to exercise the same powers on behalf of the corporation which he
represents as the corporation could exercise if it were an individual Member.
SHARES THAT MAY NOT BE VOTED
51 Shares in the Company that are beneficially owned by the Company shall
not be voted, directly or indirectly, at any meeting and shall not be counted in
determining the total number of outstanding Shares at any given time.
DIRECTORS
52 Except as otherwise provided in any resolution or resolutions adopted
by the Directors pursuant to the provisions of Article 7 relating to the rights
of the holders of any class or series of shares having a preference over the
Ordinary Shares as to Dividends or upon liquidation, the number of Directors of
the Company shall be fixed from time to time by resolution adopted by vote of a
majority of the entire Board of Directors, provided that the number so fixed
shall not be less than three. The first Directors of the Company shall be
determined in writing by, or appointed by a resolution of, the subscribers.
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53 The Directors, other than those who may be elected by the holders of
shares of any class or series of shares having a preference over the Ordinary
Shares as to Dividends or upon liquidation pursuant to the terms of any
resolution or resolutions providing for the issuance of such shares adopted by
the Board, shall be classified, with respect to the time for which they
severally hold office, into three classes as follows: one class of three
Directors shall be originally elected for a term expiring at the annual general
meeting to be held in 2003, another class of three Directors shall be originally
elected for a term expiring at the annual general meeting to be held in 2004,
and another class of two Directors shall be originally elected for a term
expiring at the annual general meeting to be held in 2005, with each class to
hold office until its successors are elected and qualified. Any newly created
directorships resulting from any increase in the number of Directors shall be
allocated to the classes of Directors described in the immediately preceding
sentence in such manner so as to maintain, as nearly as possible, the equality
in number of the Directors in each class. At each annual general meeting of the
Members of the Company, the successors of the class of Directors whose term
expires at that meeting shall be elected to hold office for a term expiring at
the annual general meeting held in the third year following the year of their
election. No decrease in the number of Directors constituting the Board of
Directors shall shorten the terms of any incumbent Director.
54 Each Director shall be at least 21 years of age. A person shall be
eligible to be elected a Director of the Company until the annual general
meeting of the Company next succeeding such person's 70th birthday, and any
person serving as a Director on such Director's 70th birthday shall be eligible
to complete such Director's term as such. Directors need not be Members of the
Company.
55 Subject to the rights of the holders of any class or series of shares
having a preference over the Ordinary Shares as to Dividends or upon
liquidation, at each annual general meeting of the Members, there shall be
elected the Directors of the class the term of office of which shall then
expire.
56 In any election of Directors, the persons receiving a plurality of the
votes cast, up to the number of Directors to be elected in such election, shall
be deemed elected.
57 Subject to the rights of the holders of any class or series of shares
having a preference over the Ordinary Shares as to Dividends or upon
liquidation, nominations for the election of Directors may be made by the Board
of Directors or by any Member entitled to vote for the election of Directors.
Any Member entitled to vote for the election of Directors at a meeting may
nominate persons for election as Directors only if written notice of such
Member's intent to make such nomination is given, either by personal delivery or
by United States mail, postage prepaid, to the Secretary of the Company not
later than (a) with respect to an election to be held at an annual general
meeting of Members, 90 days in advance of such meeting, and (b) with respect to
an election to be held at an extraordinary general meeting of Members for the
election of Directors, the close of business on the seventh day following the
date on which notice of such meeting is first given to Members. Each such notice
shall set forth: (i) the name and address of the Member who intends to make the
nomination of the person or persons to be nominated; (ii) a representation that
the Member is a holder of record of shares of the Company entitled to vote at
such meeting and intends to appear in person or by proxy at the meeting to
nominate the person or persons specified in the notice; (iii) a description of
all arrangements or understandings between the Member and each nominee and any
other person or persons (naming such person or persons) pursuant to which the
nomination or nominations are to be made by the Member; (iv) such other
information regarding each nominee proposed by such Member as would have been
required to be included in a proxy statement filed pursuant to the proxy rules
of the United States Securities and Exchange Commission had each nominee been
nominated, or intended to be nominated, by the Board of Directors; and (v) the
consent of each nominee to serve as a Director of the Company if so elected. The
chairman of the meeting may refuse to acknowledge the nomination of any person
not made in compliance with the foregoing procedure.
58 Any Director of the Company may at any time resign by giving written
notice to the Board of Directors, the Chairman of the Board, the Chief Executive
Officer, the President or the Secretary of the Company. Such resignation shall
take effect at the time specified therein or, if the time be not specified,
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upon receipt thereof; and unless otherwise specified therein, the acceptance of
such resignation shall not be necessary to make it effective.
59 Subject to the rights of the holders of the Preferred Shares or any
other class or series of shares having a preference over the Ordinary Shares as
to Dividends or upon liquidation, any Director may be removed from office only
for cause and only by the affirmative vote of the holders of a majority of the
combined voting power of the then outstanding shares of Voting Shares (as
defined in Article 62), voting together as a single class. For purposes of this
Article, "cause" shall mean the wilful and continuous failure of a Director
substantially to perform such Director's duties to the Company (other than any
such failure resulting from incapacity due to physical or mental illness) or the
wilful engaging by a Director in gross misconduct materially and demonstrably
injurious to the Company.
60 Subject to the rights of the holders of any class or series of shares
having a preference over the Ordinary Shares as to Dividends or upon
liquidation, newly created directorships resulting from any increase in the
number of Directors may be filled by the Board of Directors, or if not so
filled, by the Members at the next annual general meeting or extraordinary
general meeting called for that, and any vacancies on the Board of Directors
resulting from death, resignation, removal or other cause shall be filled only
by the affirmative vote of a majority of the remaining Directors then in office,
even though less than a quorum of the Board of Directors, or by a sole remaining
Director, or if not so filled, by the Members at the next annual general meeting
or extraordinary general meeting called for that purpose. Any Director elected
in accordance with the preceding sentence of this Article shall hold office for
the remainder of the full term of the class of Directors in which the new
directorship was created or the vacancy occurred and until such Director's
successor shall have been elected and qualified.
POWERS OF DIRECTORS
61 Subject to the provisions of the Statute, the Memorandum and the
Articles, including, without limitation, Article 62, Article 63 and Article 64
and to any directions given by Special Resolution, the business of the Company
shall be managed by the Directors who may exercise all the powers of the Company
and do all such lawful acts and things as are not by law or by these Articles
directed or required to be exercised or done by the Members. No alteration of
the Memorandum or Articles and no such direction shall invalidate any prior act
of the Directors which would have been valid if that alteration had not been
made or that direction had not been given. A duly convened meeting of Directors
at which a quorum is present may exercise all powers exercisable by the
Directors.
62 62.1 The Directors shall not, to the extent it is within their power,
take or permit to be taken any of the following actions:
(a) any merger or consolidation of the Company with (i) any
Interested Member or (ii) any other company (whether or not itself an
Interested Member) that is, or after such merger or consolidation would
be, an Affiliate or Associate of an Interested Member; or
(b) (i) any sale, lease, exchange, mortgage, pledge, transfer,
dividend or distribution (other than on a pro rata basis to all Members)
or other disposition (in one transaction or a series of transactions) to
or with any Interested Member or any Affiliate or Associate of any
Interested Member of any assets of the Company or of any Subsidiary
having an aggregate Fair Market Value of US$1,000,000 or more, or (ii)
any merger or consolidation of any Subsidiary of the Company having
assets with an aggregate Fair Market Value of US$1,000,000 or more with
(A) any Interested Member or (B) any other company (whether or not
itself an Interested Member) that is, or after such merger or
consolidation would be, an Affiliate or Associate of an Interested
Member; or
(c) the issuance or transfer by the Company or any Subsidiary (in
one transaction or a series of transactions) to any Interested Member or
any Affiliate or Associate of any Interested Member of any securities of
the Company or any Subsidiary in exchange for cash, securities or other
property (or a combination thereof) having an aggregate Fair Market
Value of
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US$1,000,000 or more, other than the issuance of securities upon the
conversion of convertible securities of the Company or any Subsidiary;
or
(d) the adoption of any plan or proposal for the liquidation or
dissolution of the Company proposed by or on behalf of any Interested
Member or any Affiliate or Associate of any Interested Member; or
(e) any reclassification of securities (including any reverse stock
split), or recapitalisation of the Company, or any merger or
consolidation of the Company with any of its Subsidiaries, or any other
transaction (whether or not with or into or otherwise involving any
Interested Member), that in any such case has the effect, directly or
indirectly, of increasing the proportionate share of the outstanding
shares of any class or series of shares or securities convertible into
shares of the Company or any Subsidiary that is directly or indirectly
beneficially owned by any Interested Member or any Affiliate or
Associate of any Interested Member; or
(f) any series or combination of transactions directly or
indirectly having the same effect as any of the foregoing; or
(g) any agreement, contract or other arrangement providing directly
or indirectly for any of the foregoing;
without the affirmative vote of the holders of at least 80 percent of
the combined voting power of the then outstanding shares of all classes
and series of the Company entitled to vote generally in the election of
directors ("Voting Shares"), voting together as a single class. Such
affirmative vote shall be required notwithstanding the fact that no vote
may be required, or that a lesser percentage may be specified, by these
Articles or by any resolution or resolutions of the Directors adopted
pursuant to Article 7 or in any agreement with any national securities
exchange or otherwise.
The term "Business Combination" as used in this Article 62 shall mean
any transaction that is referred to in any one or more of the preceding
paragraphs (a) through (g) of this Article 62.1.
62.2 The provisions of one or more of the preceding paragraphs (a)
through (g) of Article 62.1 shall not be applicable to any particular
Business Combination, if all the conditions specified in either of the
following paragraphs (a) or (b) of this Article 62.2 are met:
(a) such Business Combination shall have been approved by a
majority of the Disinterested Directors; or
(b) all of the six conditions specified in the following clauses
(i) through (vi) shall have been met:
(i) the transaction constituting the Business Combination shall
provide for a consideration to be received by holders of Ordinary
Shares in exchange for all their Ordinary Shares, and the aggregate
amount of the cash and the Fair Market Value as of the date of the
consummation of the Business Combination of any consideration other
than cash to be received per share by holders of Ordinary Shares in
such Business Combination shall be at least equal to the higher of
the following:
(A) (if applicable) the highest per share price (including
any brokerage commissions, transfer taxes and soliciting dealers'
fees) paid in order to acquire any Ordinary Shares beneficially
owned by the Interested Member that were acquired (I) within the
two-year period immediately prior to the Announcement Date or
(II) in the transaction in which it became an Interested Member,
whichever is higher; and
(B) the Fair Market Value per share of Ordinary Shares on
the Announcement Date or on the Determination Date, whichever is
higher; and
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(ii) the transaction constituting the Business Combination shall
provide for a consideration to be received by holders of any class or
series of outstanding Voting Shares other than Ordinary Shares in
exchange for all their shares of such Voting Shares, and the
aggregate amount of the cash and the Fair Market Value as of the date
of the consummation of the Business Combination of any consideration
other than cash to be received per share by holders of shares of such
Voting Shares in such Business Combination shall be at least equal to
the highest of the following (it being intended that the requirements
of this paragraph (b)(ii) shall be required to be met with respect to
every class and series of such outstanding Voting Shares, whether or
not the Interested Member beneficially owns any shares of a
particular class or series of Voting Shares):
(A) (if applicable) the highest per share (including any
brokerage commissions, transfer taxes and soliciting dealers'
fees) paid in order to acquire any shares of such class or series
of Voting Shares beneficially owned by the Interested Member that
were acquired (I) within the two-year period immediately prior to
the Announcement Date or (II) in the transaction in which it
became an Interested Member, whichever is higher;
(B) (if applicable) the highest preferential amount per
share to which the holders of shares of such class or series of
Voting Shares are entitled in the event of any voluntary or
involuntary liquidation, dissolution or winding up of the
Company; and
(C) the Fair Market Value per share of such class or series
of Voting Shares on the Announcement Date or on the Determination
Date, whichever is higher; and
(iii) the consideration to be received by holders of a
particular class or series of outstanding Voting Shares (including
Ordinary Shares) shall be in cash or in the same form as was
previously paid in order to acquire shares of such class or series of
Voting Shares that are beneficially owned by the Interested Member,
and if the Interested Member beneficially owns shares of any class or
series of Voting Shares that were acquired with varying forms of
consideration, the form of consideration to be received by holders of
such class or series of Voting Shares shall be either cash or the
form used to acquire the largest number of shares of such class or
series of Voting Shares beneficially owned by it; and
(iv) after such Interested Member has become an Interested
Member and prior to the consummation of such Business Combination:
(A) except as approved by a majority of the Disinterested
Directors, there shall have been no failure to declare and pay at
the regular dates therefor the full amount of any Dividends
(whether or not cumulative) payable on the outstanding Preferred
Shares or any class or series of shares having a preference over
the Ordinary Shares as to Dividends or upon liquidation;
(B) there shall have been (I) no reduction in the annual
rate of Dividends paid on the Ordinary Shares (except as
necessary to reflect any subdivision of the Ordinary Shares),
except as approved by a majority of the Disinterested Directors,
and (II) an increase in such annual rate of Dividends (as
necessary to prevent any such reduction) in the event of any
reclassification (including any reverse stock split),
recapitalisation, reorganisation or any similar transaction that
has the effect of reducing the number of outstanding Ordinary
Shares, unless the failure so to increase such annual rate is
approved by a majority of the Disinterested Directors; and
(C) such Interested Member shall not have become the
beneficial owner of any additional Voting Shares except as part
of the transaction that resulted in such Interested Member
becoming an Interested Member; and
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(v) after such Interested Member has become an Interested
Member, such Interested Member shall not have received the benefit,
directly or indirectly (except proportionately as a Member), of any
loans, advances, guarantees, pledges or other financial assistance or
any tax credits or other tax advantages provided by the Company,
whether in anticipation of or in connection with such Business
Combination or otherwise; and
(vi) a proxy or information statement describing the proposed
Business Combination and complying with the requirements of the U.S.
Securities Exchange Act of 1934 and the rules and regulations
thereunder (or any subsequent provisions replacing such Act, rules or
regulations) shall be mailed Members of the Company at least 30 days
prior to the consummation of such Business Combination (whether or
not such proxy or information statement is required to be mailed
pursuant to such Act or subsequent provisions).
62.3 For purposes of this Article 62:
(a) A "person" shall mean any individual, firm, corporation,
company, partnership, trust or other entity.
(b) "Interested Member" shall mean any person (other than the
Company or any Subsidiary) who or that:
(i) is the beneficial owner, directly or indirectly, of five
percent or more of the combined voting power of the then outstanding
Voting Shares; or
(ii) is an Affiliate of the Company and at any time within the
two-year period immediately prior to the date in question was the
beneficial owner, directly or indirectly, of five percent or more of
the combined voting power of the then outstanding Voting Shares; or
(iii) is an assignee of or has otherwise succeeded to the
beneficial ownership of any shares of Voting Shares that were at any
time within the two-year period immediately prior to the date in
question beneficially owned by an Interested Member, if such
assignment or succession shall have occurred in the course of a
transaction or series of transactions not involving a public offering
within the meaning of the U.S. Securities Act of 1933.
(c) A person shall be a "beneficial owner" of any Voting Shares:
(i) that such person or any of its Affiliates or Associates
beneficially owns, directly or indirectly; or
(ii) that such person or any of its Affiliates or Associates has
(A) the right to acquire (whether such right is exercisable
immediately or only after the passage of time), pursuant to any
agreement, arrangement or understanding or upon the exercise of
conversion rights, exchange rights, warrants or options, or
otherwise, or (B) the right to vote or to direct the vote pursuant to
any agreement, arrangement or understanding; or
(iii) that are beneficially owned, directly or indirectly, by
any other person with which such person or any of its Affiliates or
Associates has any agreement, arrangement or understanding for the
purpose of acquiring, holding, voting or disposing of any Voting
Shares.
(d) For the purposes of determining whether a person is an
Interested Member pursuant to paragraph (b) of this Article 62.3, the
number of Voting Shares deemed to be outstanding shall include shares
deemed owned by such person through application of paragraph (c) of this
Article 62.3 but shall not include any other Voting Shares that may be
issuable to other persons pursuant to any agreement, arrangement or
understanding, or upon exercise of conversion rights, exchange rights,
warrants or options, or otherwise.
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(e) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the U.S. Securities Exchange Act of 1934, as in effect
on January 1, 2002.
(f) "Subsidiary" shall mean any company a majority of whose
outstanding shares or stock having ordinary voting power in the election
of Directors is owned by the Company, by a Subsidiary or by the Company
and one or more Subsidiaries; provided, however, that for the purposes
of the definition of Interested Member set forth in paragraph (b) of
this Article 62.3, the term "Subsidiary" shall mean only a company of
which a majority of each class of equity security is owned by the
Company, by a Subsidiary or by the Company and one or more Subsidiaries.
(g) "Disinterested Director" means any member of the Board of
Directors of the Company who is unaffiliated with, and not a nominee of,
the Interested Member and was a member of the Board of Directors prior
to the time that the Interested Member became an Interested Member, and
any successor of a Disinterested Director who is unaffiliated with, and
not a nominee of, the Interested Member and is recommended to succeed a
Disinterested Director by a majority of Disinterested Directors then on
the Board of Directors.
(h) "Fair Market Value" means: (i) in the case of shares or stock,
the highest closing sale price during the 30-day period immediately
preceding the date in question of such share or stock on the New York
Stock Exchange Composite Tape, or, if such share or stock is not quoted
on the Composite Tape, on the New York Stock Exchange, or, if such share
or stock is not listed on such Exchange, on the principal United States
securities exchange registered under the Securities Exchange Act of 1934
on which such share or stock is listed, or, if such share or stock is
not listed on any such exchange, the highest closing sale price or bid
quotation with respect to such share or stock during the 30-day period
immediately preceding the date in question on the National Association
of Securities Dealers, Inc. Automated Quotations System or any system
then in use, or, if no such prices or quotations are available, the fair
market value on the date in question of a share of such share or stock
as determined by a majority of the Disinterested Directors in good
faith; and (ii) in the case of property other than cash or shares or
stock, the fair market value of such property on the date in question as
determined by a majority of the Disinterested Directors in good faith.
(i) "Announcement Date" means the date of first public announcement
of the proposal of the Business Combination.
(j) "Determination Date" means the date on which the Interested
Member became an Interested Member.
62.4 A majority of the Disinterested Directors of the Company shall
have the power and duty to determine, on the basis of information known to
them after reasonable inquiry, all facts necessary to determine compliance
with this Article 62, including, without limitation, (a) whether a person
is an Interested Member, (b) the number of Voting Shares beneficially owned
by any person, (c) whether a person is an Affiliate or Associate of another
person, (d) whether the requirements of Article 62.2 have been met with
respect to any Business Combination, and (e) whether the assets that are
the subject of any Business Combination have, or the consideration to be
received for the issuance or transfer of securities by the Company or any
Subsidiary in any Business Combination has, an aggregate Fair Market Value
of US$1,000,000 or more; and the good faith determination of a majority of
the Disinterested Directors on such matters shall be conclusive and binding
for all purposes of this Article 62.
63 63.1 The Company shall not engage in any Business Combination with any
Interested Member for a period of 3 years following the date that such Member
became an Interested Member, unless:
(a) prior to such date the Board of Directors approved either the
Business Combination or the transaction which resulted in the Member
becoming an Interested Member, or
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(b) upon consummation of the transaction which resulted in the
Member becoming an Interested Member, the Interested Member owned at
least 85% of the Voting Shares of the Company outstanding at the time
the transaction commenced, excluding for purposes of determining the
number of shares outstanding those shares owned (i) by persons who are
directors and also officers and (ii) employee share plans in which
employee participants do not have the right to determine confidentially
whether shares held subject to the plan will be tendered in a tender or
exchange offer, or
(c) on or subsequent to such date the Business Combination is
approved by the Board of Directors and authorised at a general meeting
of Members, and not by written consent, by the affirmative vote of at
least 66 2/3% of the outstanding Voting Shares which are not owned by
the Interested Member.
63.2 The restrictions contained in this Article 63 shall not apply
if:
(a) a Member becomes an Interested Member inadvertently and (i) as
soon as practicable divests itself of ownership of sufficient shares so
that the Member ceases to be an Interested Member and (ii) would not, at
any time within the 3 year period immediately prior to a Business
Combination between the Company and such Member, have been an Interested
Member but for the inadvertent acquisition of ownership; or
(b) the Business Combination is proposed prior to the consummation
or abandonment of and subsequent to the earlier of the public
announcement or the notice required hereunder of a proposed transaction
which (i) constitutes one of the transactions described in the second
sentence of this Article 63.2(b); (ii) is with or by a person who either
was not an Interested Member during the previous 3 years or who became
an Interested Member with the approval of the Board of Directors; and
(iii) is approved or not opposed by a majority of the members of the
Board of Directors then in office (but not less than 1) who were
Directors prior to any person becoming an Interested Member during the
previous 3 years or were recommended for election or elected to succeed
such Directors by a majority of such Directors. The proposed
transactions referred to in the preceding sentence are limited to a (A)
a merger or consolidation of the Company (except for a merger in respect
of which, pursuant to Section 251(f) of the General Corporation Law of
the State of Delaware, U.S., no vote of the Members would be required if
the Company were incorporated under the law of such State); (B) a sale,
lease, exchange, mortgage, pledge, transfer or other disposition (in one
transaction or a series of transactions) of assets of the Company or of
any direct or indirect majority-owned subsidiary of the Company (other
than to any direct or indirect wholly-owned subsidiary or to the
Company) having an aggregate market value equal to 50% or more of either
that aggregate market value of all of the assets of the Company
determined on a consolidated basis or the aggregate market value of all
the outstanding shares of the Company; or (C) a proposed tender or
exchange offer for 50% or more of the outstanding Voting Shares of the
Company. The Company shall give not less than 20 days notice to all
Interested Members prior to the consummation of any of the transactions
described in clauses (A) and (B) of the second sentence of this Article
63.2(b).
(c) As used in this Article 63, the term:
(i) "affiliate" means a person that directly, or indirectly
through one or more intermediaries, controls, or is controlled by, or
is under common control with, another person.
(ii) "associate" when used to indicate a relationship with any
person means (A) any corporation, partnership, unincorporated
association or other entity of which such person is a director,
officer or partner or is, directly or indirectly, the owner of 20% or
more of any class of Voting Shares, (B) any trust or other estate in
which such person has at least a 20% beneficial interest or as to
which such person serves as trustee or in a similar fiduciary
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capacity, and (C) any relative or spouse of such person, or any
relative of such spouse, who has the same residence as such person.
(iii) "Business Combination", when used in reference to the
Company and any Interested Member of the Company, means:
(A) any merger or consolidation of the Company or any direct
or indirect majority-owned subsidiary of the Company with (I) the
Interested Member, or (II) with any other corporation,
partnership, unincorporated association or other entity if the
merger or consolidation is caused by the Interested Member and as
a result of such merger or consolidation Article 63.1 is not
applicable to the surviving entity;
(B) any sale, lease, exchange, mortgage, pledge, transfer or
other disposition (in one transaction or series of transactions),
except proportionately as a Member of the Company, to or with the
Interested Member, of assets of the Company or of any direct or
indirect majority-owed subsidiary of the Company which assets
have an aggregate market value equal to 10% or more of either the
aggregate market value of all the assets of the Company
determined on a consolidated basis or the aggregate market value
of all the Voting Shares of the Company;
(C) any transaction which results in the issuance or
transfer by the Company or by any direct or indirect
majority-owned subsidiary of the Company of any shares of the
Company or of such subsidiary to the Interested Member, except
(I) pursuant to the exercise, exchange or conversion of
securities exercisable for, exchangeable for or convertible into
shares of the Company or any such subsidiary which securities
were outstanding prior to the time that the Interested Member
became such, (II) pursuant to a merger which could be
accomplished under Section 251(g) of the General Corporation Law
of the State of Delaware, U.S. if the Company were incorporated
under the laws of such State, (III) pursuant to a dividend or
distribution paid or made, or the exercise, exchange or
conversion of securities exercisable for, exchangeable for or
convertible into shares of such Company or any such subsidiary
which security is distributed, pro rata to all holders of a class
or series of shares of such Company subsequent to the time the
Interested Shares became such, (IV) pursuant to an exchange offer
by the Company to purchase made on the same terms to all holders
of said shares, or (V) any issuance or transfer of shares by the
Company, provided however, that in no case under (III)-(V) above
shall there be an increase in the Interested Member's
proportionate share of the shares of any class or series of the
Company or of the voting shares of the Company;
(D) any transaction involving the Company or any direct or
indirect majority owned subsidiary of the Company which has the
effect, directly or indirectly, of increasing the proportionate
share of the shares of any class or series, or securities
convertible into the shares of any class or series, of the
Company or of any such subsidiary which is owned by the
Interested Member, except as a result of immaterial changes due
to fractional share adjustments or as a result of any purchase or
redemption of any shares not caused, directly or indirectly, by
the Interested Member; or
(E) any receipt by the Interested Member of the benefit,
directly or indirectly (except proportionately as a Member of the
Company) of any loans, advance, guarantees, pledges or other
financial benefits (other than those expressly permitted in
subparagraphs (A)-(D) above) provided by or through the Company
or any direct or indirect majority owned subsidiary.
(iv) "control," including the term "controlling", "controlled
by" and "under common control with," means the possession, directly
or indirectly, of the power to direct or cause the
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direction of the management and polices of a person whether through
the ownership of Voting Shares, by contract or otherwise. A person
who is the owner of 20% or more of the outstanding Voting Shares of
any corporation, partnership, unincorporated association or other
entity shall be presumed to have control of such entity in the
absence of proof by a preponderance of the evidence to the contrary.
Notwithstanding the foregoing, a presumption of control shall not
apply where such person holds Voting Shares, in good faith and not
for the purpose of circumventing this Article, as an agent, bank,
broker, nominee, custodian or trustee for one or more owners who do
not individually or as a group have control of such entity.
(v) "Interested Member" means any person (other than the Company
and any direct or indirect majority-owned subsidiary of the Company)
that
(A) is the owner of 15% or more of the outstanding Voting
Shares of the Company, or
(B) is an affiliate or associate of the Company and was the
owner of 15% or more of the outstanding Voting Shares of the
Company at any time within the 3 year period immediately prior to
the date on which it is sought to be determined whether such
person is an Interested Member;
and the affiliates and associates of such person; provided,
however, that the term "Interested Member" shall not include any
person whose ownership of shares in excess of the 15% limitation
set forth herein is the result of action taken solely by the
Company provided that such person shall be an Interested Member
if thereafter such person acquires additional Voting Shares of
the Company, except as a result of further corporate action not
caused, directly or indirectly, by such person. For the purpose
of determining whether a person is an Interested Member, the
Voting Shares of the Company deemed to be outstanding shall
include shares deemed to be owned by the person through
application of Article 63.2(c)(viii) but shall not include any
other unissued shares of the Company which may be issuable
pursuant to any agreement, arrangement or understanding, or upon
exercise of conversion rights, warrants or options, or otherwise.
(vi) "person" means any individual, corporation, partnership,
unincorporated association or other entity.
(vii) "Voting Shares" means with respect to any company or
corporation, shares of any class or series entitled to vote generally
in the election of directors and, with respect to any entity that is
not a company or corporation, any equity interest entitled to vote
generally in the election of the governing body of such entity.
(viii) "owner" including the terms "own" and "owned" when used
with respect to any shares means a person that individually or with
or through any of its affiliates or associates:
(A) beneficially owns such shares directly or indirectly; or
(B) has (I) the right to acquire such shares (whether such
right is exercisable immediately or only after the passage of
time) pursuant to any agreement, arrangement or understanding or
upon the exercise of conversion rights, exchange rights, warrants
or options, or otherwise; provided, however, that a person shall
not be deemed the owner of shares tendered pursuant to a tender
or exchange offer made by such person or any of such person's
affiliates or associates until such tendered stock is accepted
for purchase or exchange; or (II) the right to vote such shares
pursuant to any agreement, arrangement or understanding;
provided, however, that a person shall not be deemed the owner of
any shares because of such person's right to vote such shares if
the agreement, arrangement or understanding to vote such shares
arises solely from a revocable proxy
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or consent given in response to a proxy or consent solicitation
made to 10 or more persons; or
(C) has any agreement, arrangement or understanding for the
purpose of acquiring, holding, voting (except voting pursuant to
a revocable proxy or consent as described in item (II) of clause
(B) of this Article 63.2(c)(viii)), or disposing of such shares
with any other person that beneficially owns, or whose affiliates
or associates beneficially own, directly or indirectly, such
shares.
64 In addition to any approval of Members required pursuant to the terms
of any class or series of shares other than Ordinary Shares, the approval of the
holders of a majority of the issued shares generally entitled to vote at a
meeting called for such purpose, following approval by the Board of Directors,
shall be required in order for the Company to "sell, lease, or exchange all or
substantially all of its property and assets" (as that phrase is interpreted for
the purposes of Section 271 of the General Corporation Law of the State of
Delaware, U.S., as amended or re-enacted from time to time), provided that the
foregoing approval by Members shall not be required in the case of any
transaction between the Company and any entity the Company "directly or
indirectly controls" (as that phrase is defined in Rule 405 under the United
States Securities Act of 1933, as amended or re-enacted from time to time).
PROCEEDINGS OF DIRECTORS
65 Except as otherwise provided by law or these Articles, a majority of
the entire Board of Directors shall constitute a quorum for the transaction of
business at any meeting of the Board, and, except as so provided, the vote of a
majority of the Directors present at any meeting at which a quorum is present
shall be the act of the Board. In the absence of a quorum, a majority of the
Directors present may adjourn the meeting to another time and place. At any
adjourned meeting at which a quorum is present, any business that might have
been transacted at the meeting as originally called may be transacted.
66 The Board of Directors may hold its meetings at such place or places as
the Board may from time to time determine or as shall be specified or fixed in
the respective notices or waivers of notice thereof.
67 Regular meetings of the Board of Directors shall be held at such times
and places as the Board shall from time to time by resolution determine. If any
day fixed for a regular meeting shall be a legal holiday under the laws of the
place where the meeting is to be held, the meeting that would otherwise be held
on that day shall be held at the same hour on the next succeeding business day.
68 Special meetings of the Board of Directors shall be held whenever
called by the Chairman of the Board, the Chief Executive Officer or the
President or by a majority of the Directors.
69 Notice of regular meetings of the Board of Directors or of any
adjourned meeting thereof need not be given. Notice of each special meeting of
the Board shall be mailed or transmitted by delivery service to each Director,
addressed to such Director at such Director's residence or usual place of
business, at least two days before the day on which the meeting is to be held or
shall be sent to such Director at such place by telegraph or facsimile
telecommunication or be given personally or by telephone, not later than the day
before the meeting is to be held, but notice need not be given to any Director
who shall, either before or after the meeting, submit a signed waiver of such
notice or who shall attend such meeting without protesting, prior to or at its
commencement, the lack of notice to such Director. Every such notice shall state
the time and place but need not state the purpose of the meeting.
70 The Board of Directors may adopt such rules and regulations not
inconsistent with the provisions of law or these Articles for the conduct of its
meetings and management of the affairs of the Company as the Board may deem
proper.
71 Any one or more members of the Board of Directors or any committee
thereof may participate in any meeting of the Board or of any such committee by
means of conference telephone or similar
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communications equipment by means of which all persons participating in the
meeting can hear each other, and such participation in a meeting shall
constitute presence in person at such meeting.
72 Any action required or permitted to be taken at any meeting of the
Board of Directors or any committee thereof may be taken without a meeting if
all of the members of the Board or of any such committee consent thereto in
writing and the writing or writings are filed with the minutes of proceedings of
the Board or of such committee.
73 Each Director who shall not at the time also be a salaried officer or
employee of the Company or any of its subsidiaries (an "Outside Director"), in
consideration of such person serving as a Director, shall be entitled to receive
from the Company such amount per annum and such fees for attendance at meetings
of the Board of Directors or of committees of the Board, or both, as the Board
shall from time to time determine. In addition, each Director, whether or not an
Outside Director, shall be entitled to receive from the Company reimbursement
for the reasonable expenses incurred by such person in connection with the
performance of such person's duties as a Director. Nothing contained in this
Article shall preclude any Director from serving the Company or any of its
subsidiaries in any other capacity and receiving proper compensation therefor.
74 The Board of Directors may appoint one or more directors emeritus as it
shall from time to time determine. Each director emeritus appointed shall hold
office at the pleasure of the Board of Directors. A director emeritus shall be
entitled, but shall have no obligation, to attend and be present at the meetings
of the Board of Directors, although a meeting of the Board of Directors may be
held without notice to any director emeritus and no director emeritus shall be
considered in determining whether a quorum of the Board of Directors is present.
A director emeritus shall advise and counsel the Board of Directors on the
business and operations of the Company as requested by the Board of Directors;
however, a director emeritus shall not be entitled to vote on any matter
presented to the Board of Directors. A director emeritus, in consideration of
such person serving as a director emeritus, shall be entitled to receive from
the Company such fees for attendance at meetings of the Board of Directors as
the Board shall from time to time determine. In addition, a director emeritus
shall be entitled to receive from the Company reimbursement for the reasonable
expenses incurred by such person in connection with the performance of such
person's duties as a director emeritus.
COMMITTEES
75 The Board of Directors may designate an Executive Committee which shall
consist of three or more of the Directors of the Company. The Board may
designate one or more Directors as alternate members of the Executive Committee,
who may replace any absent or disqualified member at any meeting of the
Executive Committee. In the absence or disqualification of a member of the
Executive Committee, the member or members present at any meeting and not
disqualified from voting, whether or not such member or members constitute a
quorum, may unanimously appoint another member of the Board of Directors to act
at the meeting in the place of any such absent or disqualified member. 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
authorise the seal of the Company to be affixed to all papers that may require
it, except that neither the Executive Committee nor any other committee of the
Board shall have the power or authority in reference to approving or adopting,
or recommending to the Members, any action or matter expressly required by the
Statute to be submitted to Members for approval.
76 The Board shall have power at any time to change the membership of the
Executive Committee, to fill all vacancies in it and to discharge it, either
with or without cause.
77 The Board of Directors may designate one or more committees other than
the Executive Committee, each of which shall consist of one or more of the
Directors of the Company. The Board may designate one or more Directors as
alternate members of any such committee, who may replace any absent or
disqualified member at any meeting of such committee. In addition, in the
absence or disqualification of a member of any such committee, the member or
members present at any meeting and not disqualified
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from voting, whether or not such member or members constitute a quorum, may
unanimously appoint another member of the Board of Directors to act at the
meeting in the place of any such absent or disqualified member. Each such
committee of the Board, except as otherwise provided by law, or these Articles,
shall have and may exercise such authority of the Board as may be specified in
the resolution or resolutions of the Board designating such committee. The Board
shall have power at any time to change the membership of, to fill all vacancies
in and to discharge any such committee, either with or without cause.
78 Regular meetings of any committee of the Board of Directors (including
the Executive Committee), of which no notice shall be necessary, may be held at
such times and places as shall be fixed by resolution adopted by a majority of
the members thereof. Special meetings of any committee of the Board of Directors
(including the Executive Committee) shall be called at the request of any member
thereof. Notice of each special meeting of any committee of the Board of
Directors (including the Executive Committee) shall be sent by mail, delivery
service, facsimile telecommunication, telegraph or telephone, or be delivered
personally to each member thereof not later than the day before the day on which
the meeting is to be held, but notice need not be given to any member who shall,
either before or after the meeting, submit a signed waiver of such notice or who
shall attend such meeting without protesting, prior to or at its commencement,
the lack of such notice to such member. Any special meeting of any committee of
the Board (including the Executive Committee) shall be a legal meeting without
any notice thereof having been given, if all the members thereof shall be
present thereat. Notice of any adjourned meeting of any committee of the Board
(including the Executive Committee) need not be given. Any committee of the
Board (including the Executive Committee) may adopt such rules and regulations
not inconsistent with the provisions of law or these Articles for the conduct of
its meetings as such committee may deem proper. A majority of the members of any
committee of the Board (including the Executive Committee) shall constitute a
quorum for the transaction of business at any meeting, and the vote of a
majority of the members thereof present at any meeting at which a quorum is
present shall be the act of such committee. Each committee of the Board of
Directors (including the Executive Committee) shall keep written minutes of its
proceedings and shall report on such proceedings to the Board.
OFFICERS
79 The officers of the Company shall be a Chairman of the Board, a Chief
Executive Officer, a President, one or more Vice Presidents, a Treasurer, a
Secretary, a Controller, and such other officers or agents with such titles and
such duties as the Board of Directors may from time to time determine, each to
have such authority, functions or duties as in these Articles provided or as the
Board may from time to time determine, and each to hold office for such term as
may be prescribed by the Board and until such person's successor shall have been
chosen and shall qualify, or until such person's death or resignation, or until
such person's removal in the manner hereinafter provided. The Chairman of the
Board and the Chief Executive Officer shall be elected by the Directors. One
person may hold the offices and perform the duties of any two or more of said
officers; provided, however, that no officer shall execute, acknowledge or
verify any instrument in more than one capacity if such instrument is required
by law or these Articles to be executed, acknowledged or verified by two or more
officers. The Board may from time to time authorise any officer to appoint and
remove any such other officers and agents and to prescribe their powers and
duties. The Board may require any officer or agent to give security for the
faithful performance of such person's duties.
80 Any officer may be removed, either with or without cause, by the Board
of Directors at any meeting thereof called for that purpose, or, except in the
case of any officer elected by the Board, by any committee or superior officer
upon whom such power may be conferred by the Board.
81 Any officer may resign at any time by giving notice to the Board of
Directors, the Chairman of the Board, the Chief Executive Officer or the
Secretary of the Company. Any such resignation shall take
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effect at the date of receipt of such notice or at any later date specified
therein; and, unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.
82 A vacancy in any office because of death, resignation, removal or any
other cause may be filled for the unexpired portion of the term in the manner
prescribed in these Articles for election to such office.
83 The Chairman of the Board shall, if present, preside at meetings of the
Members, meetings of the Board and meetings of the Executive Committee. The
Chairman of the Board shall counsel with and advise the Chief Executive Officer
and President and shall exercise or perform such other powers and duties as may
from time to time be assigned to the Chairman of the Board by the Board or the
Executive Committee.
84 The Chief Executive Officer shall have the general control and
management of the business and affairs of the Company, subject to the direction
and control of the Board of Directors. The Chief Executive Officer shall see
that all orders and resolutions of the Board of Directors are carried into
effect, and shall exercise or perform such other powers and duties as may from
time to time be assigned to the Chief Executive Officer by the Board or the
Executive Committee. The Chief Executive Officer may sign and execute in the
name of the Company deeds, mortgages, bonds, contracts or other instruments
authorised by the Board or any committee thereof empowered to authorise the
same.
85 The President shall exercise or perform such powers and duties as may
from time to time be assigned to the President by the Chief Executive Officer or
the Board of Directors. The President may sign and execute in the name of the
Company deeds, mortgages, bonds, contracts or other instruments authorised by
the Chief Executive Officer, the Board or any committee thereof empowered to
authorise the same.
86 Each Vice President shall have such powers and duties as shall be
prescribed by the President, the Chief Executive Officer, the Chairman of the
Board or the Board of Directors. Any Vice President may sign and execute in the
name of the Company deeds, mortgages, bonds, contracts or other instruments
authorised by the Board or any committee thereof empowered to authorise the
same.
87 The Treasurer shall perform all duties incident to the office of
Treasurer and such other duties as from time to time may be assigned to the
Treasurer by the President, the Chief Executive Officer, the Chairman of the
Board or the Board of Directors.
88 It shall be the duty of the Secretary to act as secretary at all
meetings of the Board of Directors, of the Executive Committee and of the
Members and to record the proceedings of such meetings in a book or books to be
kept for that purpose; the Secretary shall see that all notices required to be
given by the Company are duly given and served; the Secretary shall be custodian
of the seal of the Company and shall affix the seal or cause it to be affixed to
all certificates of shares of the Company (unless the seal of the Company on
such certificates shall be a facsimile, as hereinafter provided) and to all
documents, the execution of which on behalf of the Company under its seal is
duly authorised in accordance with the provisions of these Articles. The
Secretary shall have charge of the Register of Members and also of the other
books, records and papers of the Company and shall see that the reports,
statements and other documents required by law are properly kept and filed; and
the Secretary shall in general perform all the duties incident to the office of
Secretary and such other duties as from time to time may be assigned to such
person by the President, the Chief Executive Officer, the Chairman of the Board
or the Board of Directors.
89 The Controller shall perform all of the duties incident to the office
of the Controller and such other duties as from time to time may be assigned to
such person by the President, the Chief Executive Officer, the Chairman of the
Board or the Board of Directors.
90 The Assistant Treasurers, the Assistant Secretaries and the Assistant
Controllers shall perform such duties as shall be assigned to them by the
Treasurer, Secretary or Controller, respectively, or by the President, the Chief
Executive Officer, the Chairman of the Board or the Board of Directors.
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SEAL
91 The Company may, if the Directors so determine, have a Seal. The Seal
shall only be used by the authority of the Directors or of a committee of the
Directors authorised by the Directors. Every instrument to which the Seal has
been affixed shall be signed by at least one person who shall be either a
Director or some officer or other person appointed by the Directors for the
purpose.
92 The Company may have for use in any place or places outside the Cayman
Islands a duplicate Seal or Seals each of which shall be a facsimile of the
common Seal of the Company and, if the Directors so determine, with the addition
on its face of the name of every place where it is to be used.
93 A Director or officer, representative or attorney of the Company may
without further authority of the Directors affix the Seal over his signature
alone to any document of the Company required to be authenticated by him under
seal or to be filed with the Registrar of Companies in the Cayman Islands or
elsewhere wheresoever.
DIVIDENDS, DISTRIBUTIONS AND RESERVE
94 Subject to the Statute and this Article, the Directors may declare
Dividends and distributions on shares in issue and authorise payment of the
Dividends or distributions out of the funds of the Company lawfully available
therefor. No Dividend or distribution shall be paid except out of the realised
or unrealised profits of the Company, or out of the share premium account or as
otherwise permitted by the Statute.
95 Except as otherwise provided by the rights attached to shares, all
Dividends shall be declared and paid according to the par value of the shares
that a Member holds.
96 The Directors may deduct from any Dividend or distribution payable to
any Member all sums of money (if any) then payable by him to the Company on
account of calls or otherwise.
97 The Directors may declare that any Dividend or distribution be paid
wholly or partly by the distribution of specific assets and in particular of
shares, debentures, or securities of any other company or in any one or more of
such ways and where any difficulty arises in regard to such distribution, the
Directors may settle the same as they think expedient and in particular may
issue fractional shares and fix the value for distribution of such specific
assets or any part thereof and may determine that cash payments shall be made to
any Members upon the basis of the value so fixed in order to adjust the rights
of all Members and may vest any such specific assets in trustees as may seem
expedient to the Directors.
98 Any Dividend, distribution, interest or other monies payable in cash in
respect of shares may be paid by wire transfer to the holder or by cheque or
warrant sent through the post directed to the registered address of the holder
or, in the case of joint holders, to the registered address of the holder who is
first named on the Register of Members or to such person and to such address as
such holder or joint holders may in writing direct. Every such cheque or warrant
shall be made payable to the order of the person to whom it is sent. Any one of
two or more joint holders may give effectual receipts for any Dividends,
bonuses, or other monies payable in respect of the share held by them as joint
holders.
99 No Dividend or distribution shall bear interest against the Company.
100 Any Dividend which cannot be paid to a Member and/or which remains
unclaimed after six months from the date of declaration of such Dividend may, in
the discretion of the Directors, be paid into a separate account in the
Company's name, provided that the Company shall not be constituted as a trustee
in respect of that account and the Dividend shall remain as a debt due to the
Member. Any Dividend which remains unclaimed after a period of six years from
the date of declaration of such Dividend shall be forfeited and shall revert to
the Company.
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CAPITALISATION
101 The Directors may capitalise any sum standing to the credit of any of
the Company's reserve accounts (including share premium account and capital
redemption reserve fund) or any sum standing to the credit of profit and loss
account or otherwise available for distribution and to appropriate such sum to
Members in the proportions in which such sum would have been divisible amongst
them had the same been a distribution of profits by way of Dividend and to apply
such sum on their behalf in paying up in full unissued shares for allotment and
distribution credited as fully paid-up to and amongst them in the proportion
aforesaid. In such event the Directors shall do all acts and things required to
give effect to such capitalisation, with full power to the Directors to make
such provisions as they think fit for the case of shares becoming distributable
in fractions (including provisions whereby the benefit of fractional
entitlements accrue to the Company rather than to the Members concerned). The
Directors may authorise any person to enter on behalf of all of the Members
interested into an agreement with the Company providing for such capitalisation
and matters incidental thereto and any agreement made under such authority shall
be effective and binding on all concerned.
BOOKS OF ACCOUNT
102 The Directors shall cause proper books of account to be kept with
respect to all sums of money received and expended by the Company and the
matters in respect of which the receipt or expenditure takes place and the
assets and liabilities of the Company. Proper books shall not be deemed to be
kept if there are not kept such books of account as are necessary to give a true
and fair view of the state of the Company's affairs and to explain its
transactions.
103 The Directors shall from time to time determine whether and to what
extent and at what times and places and under what conditions or regulations the
accounts and books of the Company or any of them shall be open to the inspection
of Members not being Directors and no Member (not being a Director) shall have
any right of inspecting any account or book or document of the Company except as
conferred by Statute or authorised by the Directors or by the Company in general
meeting.
104 The Directors may from time to time cause to be prepared and to be
laid before the Company in general meeting profit and loss accounts, balance
sheets, group accounts (if any) and such other reports and accounts as may be
required by law.
AUDIT
105 The Directors may appoint an Auditor of the Company who shall hold
office until removed from office by a resolution of the Directors, and may fix
his or their remuneration.
106 Every Auditor of the Company shall have a right of access at all times
to the books and accounts and vouchers of the Company and shall be entitled to
require from the Directors and officers of the Company such information and
explanation as may be necessary for the performance of the duties of the
Auditor.
107 Auditors shall, if so required by the Directors, make a report on the
accounts of the Company during their tenure of office at the next annual general
meeting following their appointment in the case of a company which is registered
with the Registrar of Companies as an ordinary company, and at the next
extraordinary general meeting following their appointment in the case of a
company which is registered with the Registrar of Companies as an exempted
company, and at any other time during their term of office, upon request of the
Directors or any general meeting of the Members.
WAIVER OF NOTICE
108 Whenever any notice whatsoever is required to be given by these
Articles or by law, the person entitled thereto may, either before or after the
meeting or other matter in respect of which such notice is
C-25
to be given, waive such notice in writing, which writing shall be filed with or
entered upon the records of the meeting or the records kept with respect to such
other matter, as the case may be, and in such event such notice need not be
given to such person and such waiver shall be deemed equivalent to such notice.
WINDING UP
109 If the Company shall be wound up, and the assets available for
distribution amongst the Members shall be insufficient to repay the whole of the
share capital, such assets shall be distributed so that, as nearly as may be,
the losses shall be borne by the Members in proportion to the par value of the
shares held by them. If in a winding up the assets available for distribution
amongst the Members shall be more than sufficient to repay the whole of the
share capital at the commencement of the winding up, the surplus shall be
distributed amongst the Members in proportion to the par value of the shares
held by them at the commencement of the winding up subject to a deduction from
those shares in respect of which there are monies due, of all monies payable to
the Company for unpaid calls or otherwise. This Article is without prejudice to
the rights of the holders of shares issued upon special terms and conditions.
110 If the Company shall be wound up the liquidator may, with the sanction
of a Special Resolution of the Company and any other sanction required by the
Statute, divide amongst the Members in kind the whole or any part of the assets
of the Company (whether they shall consist of property of the same kind or not)
and may for that purpose value any assets and determine how the division shall
be carried out as between the Members or different classes of Members. The
liquidator may, with the like sanction, vest the whole or any part of such
assets in trustees upon such trusts for the benefit of the Members as the
liquidator, with the like sanction, shall think fit, but so that no Member shall
be compelled to accept any asset upon which there is a liability.
INDEMNITY AND LIMITATION OF LIABILITY
111 No Director shall be personally liable to the Company or its Members
for monetary damages for breach of fiduciary duty as a Director, except for
liability (a) for any breach of the Director's duty of loyalty to the Company or
to its Members, (b) for acts or omissions not in good faith or that involve
intentional misconduct or a knowing violation of law or (c) for any transaction
from which the Director derived an improper personal benefit.
112 The Company shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Company), by reason of the fact
that such person is or was a Director, officer, employee or agent of the
Company, or is or was serving at the request of the Company as a Director,
officer, employee or agent of another company, corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by such person in connection with such action, suit or proceeding if
such person acted in good faith and in a manner such person reasonably believed
to be in or not opposed to the best interests of the Company, and, with respect
to any criminal action or proceeding, had no reasonable cause to believe such
person's conduct was unlawful. The termination of any action, suit or proceeding
by judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself, create a presumption that the person did
not act in good faith and in a manner which such person reasonably believed to
be in or not opposed to the best interests of the Company, and, with respect to
any criminal action or proceeding, had reasonable cause to believe that such
person's conduct was unlawful.
113 The Company shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the Company to procure a judgment in its favor by
reason of the fact that such person is or was a Director, officer, employee or
agent of the Company, or is or was serving at the request of the Company as a
Director, officer, employee or agent of another company, partnership, joint
venture, trust or other enterprise, against expenses
C-26
(including attorneys' fees) actually and reasonably incurred by such person in
connection with the defence or settlement of such action or suit if such person
acted in good faith and in a manner such person reasonably believed to be in or
not opposed to the best interests of the Company, except that no indemnification
shall be made in respect of any claim, issue or matter as to which such person
shall have been adjudged to be liable to the Company unless and only to the
extent that the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the such court shall deem proper.
114 Any indemnification under Article 112 or Article 113 (unless ordered
by a court) shall be made by the Company only as authorised in the specific case
upon a determination that indemnification of the present or former Director,
officer, employee or agent is proper in the circumstances because such person
has met the applicable standard of conduct set forth in Article 112 or Article
113. Such determination shall be made, with respect to a person who is a
Director or officer at the time of such determination, (a) by a majority vote of
the Directors who are not parties to such action, suit or proceeding, even
though less than a quorum, or (b) by a committee of such Directors designated by
majority vote of such Directors, even though less than a quorum, or (c) if there
are not such Directors, or if such Directors so direct, by independent legal
counsel in a written opinion, or (d) by the Members.
115 Notwithstanding the provisions of Article 112 or Article 113, to the
extent that a present or former Director or officer of the Company has been
successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in either of such Articles or in defense of any claim,
issue or matter therein, such person shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by such person in
connection therewith.
116 Expenses (including attorneys' fees) incurred by a present or former
officer or Director in defending any civil, criminal, administrative or
investigative action, suit or proceeding shall be paid by the Company in advance
of the final disposition of such action, suit or proceeding upon receipt by the
Company of an undertaking by or on behalf of such officer or Director to repay
all such amounts advanced if it shall ultimately be determined that such person
is not entitled to be indemnified by the Company under Articles 112 through 121
or otherwise. Such expenses (including attorneys' fees) incurred by present or
former employees or agents of the Company other than officers or Directors may
be so paid upon such terms and conditions, if any, as the Company deems
appropriate.
117 The indemnification and advancement of expenses provided by, or
granted pursuant to, the provisions of Article 116 shall not be deemed exclusive
of any other rights to which any person seeking indemnification or advancement
of expenses may be entitled under any law, agreement, vote of Members or
disinterested Directors or otherwise, both as to action in such person's
official capacity and as to action in another capacity while holding such
office. All rights to indemnification and advancement of expenses under Article
116 shall be deemed to be provided by a contract between the Company and the
Director, officer, employee or agent, as the case may be, who served in such
capacity at any time while these Articles and other relevant provisions of the
Statute and other applicable law, if any, are in effect. Any repeal or
modification thereof shall not affect any rights or obligations then existing.
118 The Company may purchase and maintain insurance on behalf of any
person who is or was a Director, officer, employee or agent of the Company, or
is or was serving at the request of the Company as a Director, officer, employee
or agent of another company, corporation, partnership, joint venture, trust or
other enterprise, against any liability asserted against such person and
incurred by such person in any such capacity, or arising out of such person's
status as such, whether or not the Company would have the power to indemnify
such person against such liability under the applicable provisions of the
Statute.
119 For purposes of Articles 112 through 121, references to "the Company"
shall include, in addition to the resulting company or, any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had continued, would
have had power and authority to indemnify its directors, officers, employees or
agents, so that any person who is or was a director, officer, employee or agent
of such constituent company or corporation, or is or
C-27
was serving at the request of such constituent corporation as a director,
officer, employee or agent of another company corporation, partnership, joint
venture, trust or other enterprise, shall stand in the same position under the
provisions of Articles 112 through 121 with respect to the resulting or
surviving corporation as such person would have with respect to such constituent
company or corporation if its separate existence had continued.
120 For purposes of Articles 112 through 121, references to "other
enterprise" shall include employee benefit plans; references to "fines" shall
include any excise tax assessed on a person with respect to any employee benefit
plan; and references to "serving at the request of the Company" shall include
any service as a Director, officer, employee or agent of the Company that
imposes duties on, or involves services by, such Director, officer, employee or
agent with respect to an employee benefit plan, its participants or
beneficiaries; and a person who acted in good faith and in a manner such person
reasonably believed to be in the interest of the participants and beneficiaries
of an employee benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the Company" as referred to in Articles 112
through 121.
121 The indemnification and advancement of expenses provided by, or
granted pursuant to, Articles 112 through 121 shall, unless otherwise provided
when authorised or ratified, continue as to a person who has ceased to be a
Director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
FINANCIAL YEAR
122 Unless the Directors otherwise prescribe, the financial year of the
Company shall end on 31st December in each year and, following the year of
incorporation, shall begin on 1st January in each year.
TRANSFER BY WAY OF CONTINUATION
123 If the Company is exempted as defined in the Statute, it shall,
subject to the provisions of the Statute and with the approval of a Special
Resolution, have the power to register by way of continuation as a body
corporate under the laws of any jurisdiction outside the Cayman Islands and to
be deregistered in the Cayman Islands.
INSPECTION OF BOOKS AND RECORDS
124 A Member may inspect the Company's books and records for a proper
purpose. The Directors shall in their sole discretion determine whether a
purpose is a proper purpose. The Directors may establish procedures or
conditions regarding the inspection rights of the Members for the purpose of
protecting the interests of the Company, protecting the confidentiality of the
information contained in the Company's books and records, the convenience of the
Company or protecting any other interests of the Company that the Directors deem
proper.
MISCELLANEOUS
125 The Board of Directors or any committee thereof shall designate the
officers, employees and agents of the Company who shall have power to execute
and deliver deeds, contracts, mortgages, bonds, debentures, notes, cheques,
drafts and other orders for the payment of money and other documents for and in
the name of the Company and may authorise such officers, employees and agents to
delegate such power (including authority to redelegate) by written instrument to
other officers, employees or agents of the Company. Such delegation may be by
resolution or otherwise and the authority granted shall be general or confined
to specific matters, all as the Board or any such committee may determine. In
the absence of such designation referred to in the first sentence of this
Article, the officers of the Company shall have such power so referred to, to
the extent incident to the normal performance of their duties.
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126 All funds of the Company not otherwise employed shall be deposited
from time to time to the credit of the Company or otherwise as the Board of
Directors or any committee thereof or any officer of the Company to whom power
in that respect shall have been delegated by the Board or any such committee
shall select.
127 All cheques, drafts and other orders for the payment of money out of
the funds of the Company, and all notes or other evidence of indebtedness of the
Company, shall be signed on behalf of the Company in such manner as shall from
time to time be determined by resolution of the Board of Directors or of any
committee thereof.
128 The Board of Directors or any committee thereof shall designate the
officers of the Company who shall have authority from time to time to appoint an
agent or agents of the Company to exercise in the name and on behalf of the
Company the powers and rights that the Company may have as the holder of shares,
stock or other securities in any other companies or corporation, and to vote or
consent in respect of such shares, stock or securities; such designated officers
may instruct the person or persons so appointed as to the manner of exercising
such powers and rights; and such designated officers may execute or cause to be
executed in the name and on behalf of the Company and under its corporate seal,
or otherwise, such written proxies, powers of attorney or other instruments as
they may deem necessary or proper in order that the Company may exercise its
said powers and rights.
DATED this 12th day of February 2002.
Noble Drilling Corporation
13135 South Dairy Ashford, Suite 800
Sugar Land, Texas 77478
acting by M&C Corporate Services Limited,
its attorney-in-fact, acting by:
/s/ GARETH GRIFFITHS
---------------------------------------------------------
Gareth Griffiths
/s/ MELANIE JONES
---------------------------------------------------------
Melanie Jones
/s/ FAITH J. ANDREJAK-ZAMORA
---------------------------------------------------------
Faith J. Andrejak-Zamora
Witness to the above signatures
I, CINDY Y. JEFFERSON-BULGIN Dep., Registrar of Companies in and for the Cayman
Islands DO HEREBY CERTIFY that this is a true and correct copy of the Articles
of Association of this Company duly incorporated on the 12th day of February
2002.
/s/ CINDY Y. JEFFERSON-BULGIN
--------------------------------------
REGISTRAR OF COMPANIES
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ANNEX D
AMENDMENT OF THE 1992 PLAN
AMENDMENT NO. 2
DATED JANUARY 31, 2002
TO THE
NOBLE DRILLING CORPORATION
1992 NONQUALIFIED STOCK OPTION PLAN
FOR NON-EMPLOYEE DIRECTORS
WHEREAS, Noble Drilling Corporation, a Delaware corporation (the
"Company"), established the 1992 Nonqualified Stock Option Plan for Non-Employee
Directors (the "Plan"), and reserved the right of the Board of Directors of the
Company (the "Board of Directors") under Section 5.01 thereunder to amend the
Plan, subject to stockholder approval; and
WHEREAS, in April 2000, the Plan was amended by the Board of Directors,
subject to stockholder approval, to increase the number of shares subject to
annual grants of options under the Plan; and
WHEREAS, the Company desires to further amend certain provisions of the
Plan, as provided herein, in order to enable the Company to continue to attract
and retain qualified, non-employee directors, by increasing the aggregate number
of shares of common stock of the Company ("Common Stock") authorized for grants
under the Plan and by increasing the number of shares of Common Stock subject to
annual grants of options under the Plan;
NOW THEREFORE, BE IT RESOLVED, that pursuant to Section 5.01 of the Plan,
the Board of Directors hereby amends the Plan as follows:
1. The second sentence of Section 3.02(b) of the Plan is deleted in
its entirety and the following is substituted in its place:
"Thereafter, each Non-Employee Director serving on a Grant Date
shall automatically be granted, as of such date, an Option to purchase
7,500 shares of Common Stock."
2. The first sentence of Section 4.01 of the Plan is deleted in its
entirety and the following is substituted in its place:
"The total number of shares of Common Stock as to which Options may
be granted shall be 650,000, in the aggregate, except as such number of
shares shall be adjusted from and after the Effective Date in accordance
with the provisions of Section 4.02 hereof."
RESOLVED FURTHER, that this Amendment No. 2 shall amend only those
provisions of the Plan set forth herein, and those Sections, paragraphs and
sentences not expressly amended hereby shall remain in full force and effect.
RESOLVED FURTHER, that this Amendment No. 2 shall be effective immediately
upon its approval by the stockholders of the Company.
D-1
ANNEX E
AMENDED AND RESTATED
CHARTER OF THE AUDIT COMMITTEE
CHARTER OF THE
AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
OF NOBLE DRILLING CORPORATION
(EFFECTIVE AS OF JANUARY 31, 2002)
I. PURPOSE
The primary purpose of the Audit Committee (the "Audit Committee" or the
"Committee") of the Board of Directors (the "Board") of Noble Drilling
Corporation (the "Corporation") is to assist the Board in fulfilling its
oversight responsibility by reviewing: the Corporation's financial reports (and
other financial information) provided by the Corporation to the United States
Securities and Exchange Commission and the investing public, the Corporation's
systems of internal control regarding finance, accounting, legal compliance and
ethics that management and the Board have established; and the Corporation's
auditing, accounting and financial reporting processes generally. Consistent
with this, the Committee should encourage continuous improvements in the
Corporation's policies, procedures and practices and in compliance at all
levels.
The Committee assists the Board and Management in assuring appropriate
corporate governance, functioning in an oversight role, recognizing that the
Corporation's management is responsible for preparing the Corporation's
financial statements, and the independent auditors are responsible for auditing
those statements. The Committee is not providing any expert or special assurance
as to the Corporation's financial statements or any professional certification
as to the independent auditor's work.
The Corporation's independent auditors are ultimately accountable to the
Board and the Audit Committee, and the Board and the Audit Committee have the
ultimate authority and responsibility to select, evaluate and, where
appropriate, replace the independent auditors.
II. COMPOSITION
The Audit Committee shall be appointed by the Board from its members and
shall be composed of a minimum of three directors, all of whom shall be
financially literate, with at least one having accounting or related financial
management expertise, in each case as determined by the Board in its business
judgment. Each member of the Committee shall be independent (as defined below)
and free from any relationships that, in the opinion of the Board, would
interfere with the exercise of objective judgment as a Committee member.
An independent director is one who:
Is not and has not been employed by the Corporation for at least three
years prior to election to the Audit Committee.
Is not and has not been for at least three years prior to election to
the Audit Committee an executive officer of the Corporation, whether or not
he or she is or was employed by the Corporation.
Is not a member of the immediate family of an individual who is, or
has been at any time during the past three years, employed by the
Corporation or any of its affiliates as an executive officer.
Is not employed as an executive of another company where any of the
Corporation's executives serve on that company's compensation committee.
Is not a person who (i) is a partner, controlling shareholder, or
executive officer of an organization that has a business relationship with
the Corporation, or (ii) has a direct business relationship with the
Corporation, unless, in each case, the Board of Directors determines in its
business judgment that the relationship does not interfere with the
director's exercise of independent judgment. In making a determination
regarding the independence of a director pursuant to this paragraph, the
Board of Directors should consider, among other things, the materiality of
the relationship to the Corporation, to the director and, if applicable, to
the organization with which the
E-1
director is affiliated. For purposes of this paragraph, "business
relationships" can include commercial, industrial, banking, consulting,
legal, accounting and other relationships. A director can have this
relationship directly with the Corporation, or the director can be a
partner, officer or employee of an organization that has such a
relationship. The director may serve on the Audit Committee without the
above-referenced Board of Directors' determination after three years
following the termination of, as applicable, either (1) the relationship
between the organization with which the director is affiliated and the
Corporation, (2) the relationship between the director and his or her
partnership status, shareholder interest or executive officer position, or
(3) the direct business relationship between the director and the
Corporation.
The members of the Audit Committee shall be appointed at the annual
meeting of the Board following the annual meeting of the Corporation's
stockholders and each member shall serve until the next such annual meeting
of the Board, or until his or her successor shall be duly appointed. Unless
a Chairperson of the Committee is selected by the full Board, the members
of the Committee may designate a Chairperson by majority vote of the entire
Committee.
III. RESPONSIBILITIES
The following shall be recurring responsibilities of the Audit Committee in
carrying out its oversight function. The duties and responsibilities of the
Audit Committee should remain flexible in order to best react to changing
conditions and to enable the Committee to assure the Board and stockholders that
the Corporation's financial systems and public reporting practices are in
accordance with all requirements. These responsibilities are set forth as a
guide with the understanding that the Committee may diverge from this guide as
appropriate.
1. Recommend to the Board the appointment or termination of the
Corporation's independent auditors;
2. Review the adequacy of the Corporation's system of internal
controls including the reliability of its financial reporting systems;
confer with the Corporation's independent auditors with respect to their
assessment of the adequacy of such controls and systems; and review
management's response to any material weakness in the Corporation's
internal controls which may be identified by the independent auditors;
3. Confer with the Corporation's independent auditors concerning the
scope of their audit of the financial statements of the Corporation and its
subsidiaries; review and approve the independent auditors' engagement
letter; provide sufficient opportunity for the independent auditors to meet
with the members of the Committee without members of management present;
direct the attention of the independent auditors to specific matters or
areas deemed by the Committee to be of special significance to the
Corporation and its subsidiaries; authorize such auditors to perform such
supplemental reviews or audits as the Committee may deem necessary or
appropriate; receive periodically from the independent auditors a formal
written statement delineating all relationships between the independent
auditors and the Corporation; and engage in active dialogue with the
independent auditors on all matters which could affect the independence of
the auditors;
4. Review the Corporation's significant accounting principles and
policies and significant changes thereto; review proposed and implemented
changes in accounting standards and principles which have or may have a
material impact on the Corporation's financial statements; review
significant management judgments and accounting estimates used in financial
statement preparation; and review the accounting for significant corporate
transactions;
5. Review with the independent auditors any disagreements with
management or difficulties they may have encountered in performing their
audits of the financial statements of the Corporation and its subsidiaries;
6. Review the scope of audit and non-audit services provided to the
Corporation and its subsidiaries by the independent auditors and the fees
for such services;
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7. Review with management and the independent auditors the audited
financial statements to be included in the Corporation's Annual Report on
Form 10-K; and review and consider with the independent auditors the
matters required to be discussed by Statement of Auditing Standards No. 61
("SAS No. 61"), including deficiencies in internal controls, fraud, illegal
acts, management judgments and estimates, audit adjustments, audit
difficulties, and the independent auditors' judgments about the quality of
the Corporation's accounting practices;
8. Review with the independent auditors and management the
Corporation's interim financial results to be included in each quarterly
report on Form 10-Q, including any matters required to be discussed by SAS
No. 61, prior to the Corporation's filing of the related Form 10-Q with the
Securities and Exchange Commission;
9. Confer with the director of internal audit, management and the
independent auditors as requested by any of them or by the Committee, and
at least annually, and review their reports with respect to the
functioning, quality and adequacy of programs for compliance with the
Corporation's policies and procedures regarding business ethics, compliance
with applicable laws and regulations (such as environmental laws and
regulations), financial controls and internal auditing, including
information regarding violations or probable violations of such policies;
and report the foregoing to the Board with such recommendations as the
Committee may deem appropriate;
10. Review with the director of internal audit, at least annually, the
activities, budget, staffing and structure of the internal auditing
function of the Corporation and its subsidiaries, and any recommendations
of the Committee with respect to improving the performance of or
strengthening that function;
11. Initiate, when appropriate, investigations of matters within the
scope of the Committee's general responsibilities;
12. Review and reassess the adequacy of this charter annually; and
13. Prepare reports of the Committee that are required by the rules of
the Securities and Exchange Commission to be included in the Corporation's
annual stockholders meeting proxy statement, as well as any other reports
required by the Securities and Exchange Commission or the New York Stock
Exchange.
IV. MEETINGS
The Audit Committee shall meet a minimum of three times annually.
V. REPORTING
The proceedings of all meetings of the Audit Committee will be documented
in the minutes, which will be approved by the Committee and presented at
meetings of the full Board.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Cayman Islands law does not limit the extent to which a company's articles
of association may provide for the indemnification of its directors, officers,
employees and agents except to the extent that such provision may be held by the
Cayman Islands courts to be contrary to public policy.
Noble-Cayman's articles of association provide the following:
Article 111 of Noble-Cayman's articles of association provides that no
Noble-Cayman director will be personally liable to Noble-Cayman or its
shareholders for monetary damages for breach of fiduciary duty as a director,
except for liability (a) for any breach of the director's duty of loyalty to
Noble-Cayman or to its shareholders, (b) for acts or omissions not in good faith
or that involve intentional misconduct or a knowing violation of law or (c) for
any transaction from which the director derived an improper personal benefit.
Article 112 of Noble-Cayman's articles of association provides that
Noble-Cayman will indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other than
an action by or in the right of Noble-Cayman), by reason of the fact that such
person is or was a director, officer, employee or agent of Noble-Cayman, or is
or was serving at the request of Noble-Cayman as a director, officer, employee
or agent of another company, corporation, partnership, joint venture, trust or
other enterprise, against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by such person
in connection with such action, suit or proceeding if such person acted in good
faith and in a manner such person reasonably believed to be in or not opposed to
the best interests of Noble-Cayman, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe such person's conduct was
unlawful. The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the person did not act in good
faith and in a manner which such person reasonably believed to be in or not
opposed to the best interests of Noble-Cayman, and, with respect to any criminal
action or proceeding, had reasonable cause to believe that such person's conduct
was unlawful.
Article 113 of Noble-Cayman's articles of association provides that
Noble-Cayman shall indemnify any person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action or suit by or
in the right of Noble-Cayman to procure a judgment in its favor by reason of the
fact that such person is or was a director, officer, employee or agent of
Noble-Cayman, or is or was serving at the request of Noble-Cayman as a director,
officer, employee or agent of another company, partnership, joint venture, trust
or other enterprise, against expenses (including attorneys' fees) actually and
reasonably incurred by such person in connection with the defence or settlement
of such action or suit if such person acted in good faith and in a manner such
person reasonably believed to be in or not opposed to the best interests of
Noble-Cayman, except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to Noble-Cayman unless and only to the extent that the court in which
such action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which the such court shall deem proper.
Any indemnification under Article 112 or Article 113 of Noble-Cayman's
articles of association (unless ordered by a court) shall be made by
Noble-Cayman only as authorised in the specific case upon a determination that
indemnification of the present or former director, officer, employee or agent is
proper in the circumstances because such person has met the applicable standard
of conduct set forth in Article 112 or Article 113 of Noble-Cayman's articles of
association. Such determination shall be made, with respect to a person who is a
director or officer at the time of such determination, (a) by a majority
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vote of the directors who are not parties to such action, suit or proceeding,
even though less than a quorum, or (b) by a committee of such directors
designated by majority vote of such directors, even though less than a quorum,
or (c) if there are not such directors, or if such directors so direct, by
independent legal counsel in a written opinion, or (d) by the shareholders.
To the extent that a present or former director or officer of Noble-Cayman
has been successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in either of Articles 112 or 113 or in defense of any
claim, issue or matter therein, such person shall be indemnified against
expenses (including attorneys' fees) actually and reasonably incurred by such
person in connection therewith.
Expenses (including attorneys' fees) incurred by a present or former
officer or director in defending any civil, criminal, administrative or
investigative action, suit or proceeding shall be paid by Noble-Cayman in
advance of the final disposition of such action, suit or proceeding upon receipt
by Noble-Cayman of an undertaking by or on behalf of such officer or director to
repay all such amounts advanced if it shall ultimately be determined that such
person is not entitled to be indemnified by Noble-Cayman under its articles of
association or otherwise. Such expenses (including attorneys' fees) incurred by
present or former employees or agents of Noble-Cayman other than officers or
directors may be so paid upon such terms and conditions, if any, as Noble-Cayman
deems appropriate.
The indemnification and advancement of expenses shall not be deemed
exclusive of any other rights to which any person seeking indemnification or
advancement of expenses may be entitled under any law, agreement, vote of
shareholders or disinterested directors or otherwise, both as to action in such
person's official capacity and as to action in another capacity while holding
such office.
Noble-Cayman intends to enter into an indemnity agreement with each of its
directors and officers to supplement the indemnification protection available
under Noble-Cayman's articles of association referred to above. These indemnity
agreements will generally provide that Noble-Cayman will indemnify the parties
thereto to the fullest extent permitted by law.
Noble-Cayman will also maintain insurance to protect itself and its
directors, officers, employees and agents against expenses, liabilities and
losses incurred by such persons in connection with their services in the
foregoing capacities.
The foregoing summaries are necessarily subject to the complete text of
Noble-Cayman's articles of association and the indemnity agreements referred to
above and are qualified in their entirety by reference thereto.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits.
EXHIBIT
NUMBER DESCRIPTION
------- -----------
2.1 -- Agreement and Plan of Merger dated as of March 11, 2002
between Noble Corporation, Noble Cayman Acquisition
Corporation, Noble Holding (U.S.) Corporation and Noble
Drilling Corporation (included as Annex A to the proxy
statement/prospectus that constitutes part of this
registration statement)
3.1 -- Certificate of Incorporation of Noble Holding (U.S.)
Corporation
3.2 -- Bylaws of Noble Holding (U.S.) Corporation
3.3 -- Memorandum of Association for Noble Corporation (included as
Annex B to the proxy statement/prospectus that constitutes
part of this registration statement)
3.4 -- Articles of Association for Noble Corporation (included as
Annex C to the proxy statement/prospectus that constitutes
part of this registration statement)
3.5 -- Specimen Ordinary Share Certificate, par value US $0.10 per
share, of Noble Corporation
4.1 -- Rights Agreement between Noble Corporation and UMB Bank,
N.A., as Rights Agent
II-2
EXHIBIT
NUMBER DESCRIPTION
------- -----------
5.1 -- Opinion of Maples and Calder, regarding the legality of
securities to be issued by Noble Corporation
8.1 -- Opinion of Maples and Calder, regarding certain Cayman
Islands tax matters (included in Exhibit 5.1)
8.2 -- Opinion of Thompson & Knight L.L.P., regarding certain U.S.
tax matters
23.1 -- Consent of PricewaterhouseCoopers LLP
23.2 -- Consent of Maples and Calder (included in Exhibit 5.1)
23.3 -- Consent of Thompson & Knight L.L.P. (included in Exhibit
8.2)
99.1 -- Proxy card for use in connection with the Stockholders'
Meeting of Noble Drilling Corporation
99.2 -- Voting instruction card for use in connection with the
Stockholders' Meeting of Noble Drilling Corporation
99.3 -- Consent of Michael A. Cawley
99.4 -- Consent of Lawrence J. Chazen
99.5 -- Consent of Luke R. Corbett
99.6 -- Consent of Marc E. Leland
99.7 -- Consent of Jack E. Little
99.8 -- Consent of William A. Sears
(b) Financial Statement Schedules.
All schedules are omitted because they are not applicable.
ITEM 22. UNDERTAKINGS
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 Securities 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 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:
(1) To respond to requests for information that is incorporated by
reference into the prospectus pursuant to Items 4, 10(b), 11 or 13 of Form
S-4, 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.
(2) 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.
(3) 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 form with respect to
II-3
reofferings by persons who may be deemed underwriters, in addition to the
information called for by the other Items of the applicable form.
(4) That every prospectus (i) that is filed pursuant to the paragraph
immediately preceding, or (ii) that purports to meet the requirements of
section 10(a)(3) of the Securities Act of 1933 and is used in connection
with an offering of securities subject to Rule 415, will be filed as 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.
(5) 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 section 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.
(6) To deliver or cause to be delivered with the prospectus to each
person to whom the prospectus is sent or given, the latest annual report,
to security holders that is incorporated by reference in the prospectus and
furnished pursuant to and meeting the requirements of Rule 14a-3 or Rule
14c-3 under the Securities Exchange Act of 1934; and, where interim
financial information required to be presented by Article 3 of Regulation
S-X is not set forth in the prospectus, to deliver, or cause to be
delivered to each person to whom the prospectus is sent or given, the
latest quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Christ Church, Country of
Barbados, on March 8, 2002.
NOBLE CORPORATION
By: /s/ JAMES C. DAY
------------------------------------
James C. Day
Chairman of the Board and
Chief Executive Officer
Each person whose signature appears below appoints James C. Day and Robert
D. Campbell and each of them, each of whom may act without the joinder of the
other, as his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities to sign (i) any and all amendments (including
post-effective amendments) to this registration statement and (ii) any
registration statement of the type contemplated by Rule 462(b) under the
Securities Act of 1933, as amended, and to file the same, with all exhibits
thereto and all other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done, as fully and for all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them or their substitutes, may lawfully
do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons on March 8, 2002
in the capacities indicated.
SIGNATURE TITLE
--------- -----
/s/ JAMES C. DAY Chairman of the Board, Chief Executive
----------------------------------------------------- Officer and Director (Principal Executive
James C. Day Officer)
/s/ ROBERT D. CAMPBELL President and Director
-----------------------------------------------------
Robert D. Campbell
/s/ MARK A. JACKSON Senior Vice President -- Finance, Chief
----------------------------------------------------- Financial Officer, Treasurer, Controller and
Mark A. Jackson Assistant Secretary (Principal Financial and
Accounting Officer)
/s/ JULIE J. ROBERTSON Senior Vice-President -- Administration,
----------------------------------------------------- Secretary and Director
Julie J. Robertson
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INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
------- -----------
2.1 -- Agreement and Plan of Merger dated as of March 11, 2002
between Noble Corporation, Noble Cayman Acquisition
Corporation, Noble Holding (U.S.) Corporation and Noble
Drilling Corporation (included as Annex A to the proxy
statement/prospectus that constitutes part of this
registration statement)
3.1 -- Certificate of Incorporation of Noble Holding (U.S.)
Corporation
3.2 -- Bylaws of Noble Holding (U.S.) Corporation
3.3 -- Memorandum of Association for Noble Corporation (included as
Annex B to the proxy statement/prospectus that constitutes
part of this registration statement)
3.4 -- Articles of Association for Noble Corporation (included as
Annex C to the proxy statement/prospectus that constitutes
part of this registration statement)
3.5 -- Specimen Ordinary Share Certificate, par value US $0.10 per
share, of Noble Corporation
4.1 -- Rights Agreement between Noble Corporation and UMB Bank,
N.A., as Rights Agent
5.1 -- Opinion of Maples and Calder, regarding the legality of
securities to be issued by Noble Corporation
8.1 -- Opinion of Maples and Calder, regarding certain Cayman
Islands tax matters (included in Exhibit 5.1)
8.2 -- Opinion of Thompson & Knight L.L.P., regarding certain U.S.
tax matters
23.1 -- Consent of PricewaterhouseCoopers LLP
23.2 -- Consent of Maples and Calder (included in Exhibit 5.1)
23.3 -- Consent of Thompson & Knight L.L.P. (included in Exhibit
8.2)
99.1 -- Proxy card for use in connection with the Stockholders'
Meeting of Noble Drilling Corporation
99.2 -- Voting instruction card for use in connection with the
Stockholders' Meeting of Noble Drilling Corporation
99.3 -- Consent of Michael A. Cawley
99.4 -- Consent of Lawrence J. Chazen
99.5 -- Consent of Luke R. Corbett
99.6 -- Consent of Marc E. Leland
99.7 -- Consent of Jack E. Little
99.8 -- Consent of William A. Sears