As filed with the Securities and Exchange Commission on March 22, 2004.
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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PLATINUM UNDERWRITERS HOLDINGS, LTD.
(Exact name of registrant as specified in its charter)
Bermuda Not Applicable
(State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification No.)
The Belvedere Building CT Corporation System
69 Pitts Bay Road 1633 Broadway 30th Floor
Pembroke, Bermuda HM 08 New York, New York 10019
Telephone: (441) 295-7195 Telephone: (800) 624-0909
(Address, including zip code, and telephone number, (Name, address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices) including area code, of agent for service)
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Copies to:
Linda E. Ransom
Jonathan L. Freedman
Dewey Ballantine LLP
1301 Avenue of the Americas
New York, NY 10019
(212) 259-8000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to
time after the effective date of this Registration Statement as determined
by market conditions.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box.
[ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, please 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, please check the following box and
list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration
statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
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Title of Each Class of Proposed Maximum Aggregate Amount of
Securities to be Registered (1) Offering Price Registration Fee
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Primary Offering (2)(3): $750,000,000 $95,025
Common Shares (4)
Preferred Shares (5)
Depositary Shares (6)
Debt Securities (7)
Warrants to Purchase Common Shares
Warrants to Purchase Preferred Shares
Warrants to Purchase Debt Securities
Purchase Contracts
Purchase Units
Secondary Offering (8):
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Common Shares of the Company (9)
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Total: $750,000,000 $95,025
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(1) These offered securities may be sold separately, together or as units with
other offered securities.
(2) Such indeterminate number or amount of common shares, preferred shares,
depositary shares, debt securities, warrants, purchase contracts and
purchase units of the Company as may from time to time be issued at
indeterminate prices, in U.S. Dollars or the equivalent thereof denominated
in foreign currencies or units of two or more foreign currencies or
composite currencies (such as Euros). In no event will the aggregate
maximum offering price of all securities issued by the Company pursuant to
this Registration Statement exceed $750,000,000, or if any debt securities
are issued with original issue discount, such principal amount as shall
result in an initial offering price of $750,000,000.
(3) Estimated solely for purposes of calculating the registration fee. Pursuant
to Rule 457(o) under the Securities Act of 1933, as amended, which permits
the registration fee to be calculated on the basis of the maximum offering
price of all the securities listed, the table does not specify by each
class information as to the amount to be registered, proposed maximum
offering price per unit or proposed maximum aggregate offering price.
Unless otherwise indicated in an amendment to this filing, no separate
consideration will be received for common shares, preferred shares or debt
securities that are issued by the Company upon conversion or exchange of
debt securities, preferred shares or depositary shares registered
hereunder.
(4) Also includes such presently indeterminate number of common shares as may
be issued by the Company (a) upon conversion of or exchange for any debt
securities or preferred shares that provide for conversion or exchange into
common shares, (b) upon exercise of warrants to purchase common shares or
(c) pursuant to purchase contracts.
(5) Also includes such presently indeterminate number of preferred shares as
may be issued by the Company (a) upon conversion of or exchange for any
debt securities that provide for conversion or exchange into preferred
shares, (b) upon exercise of warrants to purchase preferred shares or (c)
pursuant to purchase contracts.
(6) To be represented by depositary receipts representing an interest in all or
a specified portion of a common share or preferred share.
(7) Debt securities of the Company, which may be senior or subordinated.
(8) Estimated solely for the purpose of determining the registration fee
pursuant to Rule 457(c) of the Securities Act of 1933, as amended.
(9) Up to 18,460,000 common shares of the Company may be sold by selling
shareholders from time to time pursuant to this registration statement,
which includes 8,500,000 common shares issuable upon the exercise of
outstanding options.
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THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any jurisdiction where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED MARCH 22, 2004
PROSPECTUS
$750,000,000
PLATINUM UNDERWRITERS HOLDINGS, LTD.
COMMON SHARES, PREFERRED SHARES, DEPOSITARY SHARES, DEBT SECURITIES, WARRANTS TO
PURCHASE COMMON SHARES, WARRANTS TO PURCHASE PREFERRED SHARES, WARRANTS TO
PURCHASE DEBT SECURITIES, PURCHASE CONTRACTS AND PURCHASE UNITS
18,460,000 COMMON SHARES OF PLATINUM UNDERWRITERS HOLDINGS, LTD. OFFERED BY
SELLING SHAREHOLDERS
We may offer and sell from time to time:
- common shares;
- preferred shares;
- depositary shares representing common shares, preferred shares or debt
securities;
- senior or subordinated debt securities;
- warrants to purchase common shares, preferred shares or debt securities;
and
- purchase contracts and purchase units.
In addition, selling shareholders named in this prospectus may sell up to
18,460,000 of our common shares, which includes 8,500,000 common shares
issuable upon exercise of outstanding options. We will not receive any of the
proceeds from the sale of our common shares by selling shareholders.
We will provide the specific terms and initial public offering prices of
these securities in supplements to this prospectus. You should read this
prospectus and any supplement carefully before you invest.
INVESTING IN THESE SECURITIES INVOLVES CERTAIN RISKS. SEE "RISK FACTORS" ON
PAGE 4.
These securities may be sold to or through underwriters and also to other
purchasers or through agents. The names of any underwriters or agents and the
specific terms of a plan of distribution will be stated in an accompanying
prospectus supplement.
Any combination of these securities may be sold in one or more offerings up
to a total dollar amount of $750,000,000.
Our common shares are traded on the New York Stock Exchange under the
symbol "PTP." Other than for our common shares, there is no market for the other
securities we may offer.
NONE OF THE SECURITIES AND EXCHANGE COMMISSION, ANY STATE SECURITIES
COMMISSION, THE REGISTRAR OF COMPANIES IN BERMUDA OR THE BERMUDA MONETARY
AUTHORITY HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
This prospectus may not be used to consummate sales of offered securities
unless accompanied by a prospectus supplement.
The date of this prospectus is , 2004.
TABLE OF CONTENTS
Important Information About This Prospectus................................ 2
Available Information...................................................... 2
Platinum Underwriters Holdings, Ltd........................................ 4
Risk Factors............................................................... 4
General Description of the Offered Securities.............................. 4
Ratio of Earnings To Fixed Charges of Platinum Underwriters Holdings, Ltd.. 6
Forward-Looking Statements................................................. 7
Use of Proceeds............................................................ 8
Description of our Share Capital........................................... 8
Description of the Depositary Shares....................................... 14
Description of the Debt Securities......................................... 16
Certain Provisions Applicable to Subordinated Debt Securities ............. 30
Description of the Warrants to Purchase Common Shares or Preferred Shares.. 31
Description of the Warrants to Purchase Debt Securities ................... 33
Description of the Purchase Contracts and the Purchase Units .............. 34
Selling Shareholders....................................................... 36
Related Party Transactions................................................. 36
Certain Tax Considerations................................................. 40
Plan of Distribution....................................................... 50
Where You Can Find More Information........................................ 52
Incorporation of Certain Documents by Reference............................ 52
Legal Matters.............................................................. 53
Experts.................................................................... 53
Enforcement of Civil Liabilities under United States Federal Securities
Laws and Other Matters ................................................... 53
IMPORTANT INFORMATION ABOUT THIS PROSPECTUS
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR
TO WHICH WE HAVE REFERRED YOU. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
INFORMATION THAT IS DIFFERENT. THIS DOCUMENT MAY ONLY BE USED WHERE IT IS LEGAL
TO SELL THESE SECURITIES. THE INFORMATION IN THIS DOCUMENT MAY ONLY BE ACCURATE
ON THE DATE OF THIS DOCUMENT.
Consent under the Exchange Control Act 1972 (and its related
regulations) has been obtained from the Bermuda Monetary Authority for the issue
and transfer of our offered securities to and between non-residents of Bermuda
for exchange control purposes provided our common shares remain listed on an
appointed stock exchange, which includes the New York Stock Exchange. The issue
and transfer of in excess of 20% of our shares involving any persons regarded as
resident in Bermuda for exchange control purposes requires prior authorization
from the Bermuda Monetary Authority. This prospectus will be filed with the
Registrar of Companies in Bermuda in accordance with Bermuda law. In granting
such consent and in accepting this prospectus for filing, neither the Bermuda
Monetary Authority nor the Registrar of Companies in Bermuda accepts any
responsibility for our financial soundness or the correctness of any of the
statements made or opinions expressed in this prospectus.
References in this prospectus to "dollars" or "$" are to the lawful
currency of the United States of America, unless the context otherwise requires.
AVAILABLE INFORMATION
This prospectus is part of a registration statement that we have filed
with the Securities and Exchange Commission using a "shelf" registration
process, relating to the common shares, preferred shares, depositary shares,
debt securities, warrants, purchase contracts, purchase units, preferred
securities and preferred securities guarantees described in this prospectus.
This means:
- we and, in the case of an offering of our common shares, any
selling shareholder may issue any combination of securities
covered by this prospectus from time to time, up to a total
initial offering price of $750,000,000;
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- we, or any selling shareholder, as the case may be, will
provide a prospectus supplement each time these securities are
offered pursuant to this prospectus; and
- the prospectus supplement will provide specific information
about the terms of that offering and also may add to, update
or change information contained in this prospectus.
This prospectus provides you with a general description of the
securities we or any selling shareholder may offer. This prospectus does not
contain all of the information set forth in the registration statement as
permitted by the rules and regulations of the Commission. For additional
information regarding us and the offered securities, please refer to the
registration statement. Each time we or any selling shareholder sell securities,
we or any selling shareholder will provide a prospectus supplement that will
contain specific information about the terms of that offering. The prospectus
supplement may also add, update or change information contained in this
prospectus. You should read both this prospectus and any prospectus supplement
together with additional information described under the heading "Where You Can
Find More Information." In this prospectus, references to the "Company,"
"Platinum," "we," "us" and "our" refer to Platinum Underwriters Holdings, Ltd.'s
consolidated operations unless the context otherwise indicates. "Platinum
Holdings" refers solely to Platinum Underwriters Holdings, Ltd. "Platinum US"
refers to Platinum Underwriters Reinsurance, Inc. "Platinum UK" refers to
Platinum Re (UK) Limited. "Platinum Bermuda" refers to Platinum Underwriters
Bermuda, Ltd. "Platinum Ireland" refers to Platinum Regency Holdings. "Platinum
Finance" refers to Platinum Underwriters Finance, Inc.
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PLATINUM UNDERWRITERS HOLDINGS, LTD.
Platinum Holdings is a leading provider of property, casualty, and
finite reinsurance coverages, through reinsurance intermediaries, to a diverse
clientele on a worldwide basis. Platinum operates through its principal
subsidiaries in Bermuda, the United States and the United Kingdom.
Our principal executive offices are located at The Belvedere Building,
69 Pitts Bay Road, Pembroke, Bermuda HM 08. Our telephone number is (441)
295-7195.
For further information regarding Platinum, including financial
information, you should refer to our recent filings with the Securities and
Exchange Commission.
RISK FACTORS
Investing in our securities involves risk. Please see the risk factors
described in our Annual Report on Form 10-K for our most recent fiscal year,
which are incorporated by reference in this prospectus. Before making an
investment decision, you should carefully consider these risks as well as other
information we include or incorporate by reference in this prospectus. The risks
and uncertainties we have described are not the only ones facing our company.
Additional risks and uncertainties not presently known to us or that we
currently deem immaterial may also affect our business operations. Additional
risk factors may be included in a prospectus supplement relating to a particular
series or offering of securities.
GENERAL DESCRIPTION OF THE OFFERED SECURITIES
We may from time to time offer under this prospectus, separately or
together:
- common shares, which we would expect to list on the New York
Stock Exchange;
- preferred shares, the terms and series of which would be
described in the related prospectus supplement;
- depositary shares, each representing a fraction of a common
share or a particular series of preferred shares, which will
be deposited under a deposit agreement among us, a depositary
selected by us and the holders of the depository receipts;
- senior debt securities;
- subordinated debt securities, which will be subordinated in
right of payment to our senior indebtedness;
- warrants to purchase common shares and warrants to purchase
preferred shares, which will be evidenced by share warrant
certificates and may be issued under the share warrant
agreement independently or together with any other securities
offered by any prospectus supplement and may be attached to or
separate from such other offered securities;
- warrants to purchase debt securities, which will be evidenced
by debt warrant certificates and may be issued under the debt
warrant agreement independently or together with any other
securities offered by any prospectus supplement and may be
attached to or separate from such other offered securities;
- purchase contracts obligating holders to purchase from us a
specified number of common shares or preferred shares at a
future date or dates; and
- purchase units, consisting of a purchase contract and, as
security for the holder's obligation to purchase common shares
or preferred shares under the purchase contract, any of (1)
our debt
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securities, (2) debt obligations of third parties, including
U.S. Treasury securities or (3) our preferred shares.
The selling shareholders may offer up to 18,460,000 of our common
shares, which includes 8,500,000 common shares issuable upon exercise of
outstanding options.
The aggregate initial offering price of these offered securities will
not exceed $750,000,000.
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RATIO OF EARNINGS TO FIXED CHARGES OF PLATINUM UNDERWRITERS HOLDINGS,
LTD.
The following table sets forth our earnings to fixed charges for the
periods ended December 31, 2003 and 2002:
Period Ended
December 31,
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2003 2002(1)
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Ratio of Earnings to Fixed Charges 21.4 8.7
For purposes of computing these ratios, earnings consist of net income.
Fixed charges consist of interest expense and amortization of capitalized debt
expenses.
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(1) In 2002, we only had two months of operations following our initial public
offering on November 1, 2002.
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FORWARD-LOOKING STATEMENTS
This prospectus and the documents incorporated by reference into this
prospectus contain forward-looking statements within the meaning of Section 27A
of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934 (the "Exchange Act"). Forward-looking statements are necessarily based on
estimates and assumptions that are inherently subject to significant business,
economic and competitive uncertainties and contingencies, many of which, with
respect to future business decisions, are subject to change. These uncertainties
and contingencies can affect actual results and could cause actual results to
differ materially from those expressed in any forward-looking statements made
by, or on behalf of, us.
In particular, statements using words such as "may," "should,"
"estimate," "expect," "anticipate," "intend," "believe," "predict," "potential,"
or words of similar import generally involve forward-looking statements. This
prospectus and the documents incorporated by reference into this prospectus also
contain forward-looking statements with respect to our business and industry,
such as those relating to our strategy and management objectives and trends in
market conditions, market standing, product volumes, investment results and
pricing conditions.
In light of the risks and uncertainties inherent in all future
projections, the inclusion of forward-looking statements in this prospectus
should not be considered as a representation by us or any other person that our
objectives or plans will be achieved. Numerous factors could cause our actual
results to differ materially from those in the forward-looking statements,
including the following:
(1) our ability to successfully execute our business strategy;
(2) conducting operations in a competitive environment;
(3) our ability to maintain our A.M. Best Company rating;
(4) significant weather-related or other natural or man-made
disasters over which the Company has no control;
(5) the effectiveness of our loss limitation methods;
(6) the adequacy of the Company's liability for unpaid losses and
loss adjustment expenses ("LAE");
(7) the availability of retrocessional reinsurance on acceptable
terms;
(8) our ability to maintain our business relationships with
reinsurance brokers;
(9) general political and economic conditions, including the
effects of civil unrest, war or a prolonged U.S. or global economic downturn or
recession;
(10) the cyclicality of the property and casualty reinsurance
business;
(11) market volatility and interest rate and currency exchange rate
fluctuation;
(12) tax, regulatory or legal restrictions or limitations
applicable to the Company or the property and casualty reinsurance business
generally; and
(13) changes in the Company's plans, strategies, objectives,
expectations or intentions which may happen at any time at the Company's
discretion.
As a consequence, current plans, anticipated actions and future
financial condition and results may differ from those expressed in any
forward-looking statements made by or on behalf of the Company. The foregoing
factors, should not be construed as exhaustive. Additionally, forward-looking
statements speak
7
only as of the date they are made, and we undertake no obligation to release
publicly the results of any future revisions or updates we may make to
forward-looking statements to reflect new information or circumstances after the
date hereof or to reflect the occurrence of future events.
USE OF PROCEEDS
Unless indicated otherwise in a prospectus supplement, we expect to use
the net proceeds from the sale of the securities for general corporate purposes,
including working capital, capital expenditures, share repurchase programs and
acquisitions.
We will not receive any proceeds from the sale of our common shares by
any Selling Shareholder in such an offering.
DESCRIPTION OF OUR SHARE CAPITAL
The following description of the share capital of Platinum Holdings
summarizes certain provisions of Platinum Holdings' Bye-laws, and is qualified
in its entirety by reference to such Bye-laws. A copy of Platinum Holdings'
Bye-laws is filed as an exhibit to the registration statement of which this
prospectus is a part.
GENERAL
As of March 12, 2004, Platinum Holdings' authorized share capital
consisted of: (i) 200,000,000 common shares, par value $0.01 per share, of which
43,265,525 common shares were outstanding and (ii) 25,000,000 preferred shares,
par value $0.01 per share, none of which were outstanding. As of March 1, 2004
there were approximately 16 holders of record of our common shares, including
The St. Paul Companies, Inc. ("St. Paul"), which held 6,000,000 common shares
(the voting power of which is limited to 9.9% as described below) and an option
to acquire 6,000,000 common shares, and RenaissanceRe Holdings Ltd.
("RenaissanceRe"), which held 3,960,000 common shares (the voting power of which
is limited to 9.9% as described below) and an option to acquire 2,500,000 common
shares.
COMMON SHARES
Holders of common shares have no pre-emptive, redemption, conversion or
sinking fund rights, provided, however, that pursuant to a Formation and
Separation Agreement dated as of October 28, 2002 between the Company and St.
Paul (the "Formation Agreement") and a Transfer Restrictions, Registration
Rights and Standstill Agreement between the Company and RenaissanceRe dated as
of November 1, 2002, Platinum Holdings has granted St. Paul and RenaissanceRe
respectively, the pre-emptive rights specified therein. See "Related Party
Transactions." Subject to the limitation on voting rights described below,
holders of common shares are entitled to one vote per share on all matters
submitted to a vote of holders of common shares. Most matters to be approved by
holders of common shares require approval by a simple majority vote. The holders
of at least 75% of the common shares voting in person or by proxy at a meeting
must approve an amalgamation with another company. In addition, a resolution to
remove our independent auditors before the expiration of their term of office
must be approved by at least two-thirds of the votes cast at a meeting of the
shareholders of the Company. The quorum for any meeting of our shareholders is
two or more persons holding or representing more than 50% of the outstanding
common shares on an unadjusted basis. Our Board of Directors has the power to
approve our discontinuation from Bermuda to another jurisdiction. The rights
attached to any class of shares, common or preferred, may be varied with the
consent in writing of the holders of at least three-fourths of the issued shares
of that class or by a resolution passed by a majority of the votes cast at a
separate general meeting of the holders of the shares of the class in accordance
with the Bermuda Companies Act 1981 (the "Companies Act").
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In the event of a liquidation, winding-up or dissolution of Platinum
Holdings, whether voluntary or involuntary or for the purpose of a
reorganization or otherwise or upon any distribution of capital, the holders of
common shares are entitled to share equally and ratably in the assets of
Platinum Holdings, if any, remaining after the payment of all of its debts and
liabilities and the liquidation preference of any outstanding preferred shares.
All outstanding common shares are fully paid and nonassessable. Authorized but
unissued shares may, subject to any rights attaching to any existing class or
classes of shares, be issued at any time and at the discretion of the Board of
Directors without the approval of the shareholders of the Company with such
rights, preferences and limitations as the Board may determine.
LIMITATION ON VOTING RIGHTS
Each common share has one vote on a poll of the shareholders, except
that, if and for as long as the number of issued Controlled Shares (as defined
below) of any person would constitute 10% or more of the combined voting power
of the issued common shares of Platinum Holdings (after giving effect to any
prior reduction in voting power as described below), each issued Controlled
Share, regardless of the identity of the registered holder thereof, will confer
a fraction of a vote as determined by the following formula:
(T - C) / (9.1 x C)
Where: (1) "T" is the aggregate number of votes conferred by all the
issued common shares immediately prior to that application of
the formula with respect to such issued Controlled Shares
adjusted to take into account any prior reduction taken with
respect to any issued Controlled Shares pursuant to the
"sequencing provision" described below; and
(2) "C" is the number of issued Controlled Shares attributable to
that person. "Controlled Shares" of any person refers to all
common shares owned by that person, whether (i) directly, (ii)
with respect to persons who are U.S. persons, by application
of the attribution and constructive ownership rules of
Sections 958(a) and 958(b) of the U.S. Internal Revenue Code
of 1986, as amended (the "Code"), or (iii) beneficially,
directly or indirectly, within the meaning of Section 13(d)(3)
of the Securities Exchange Act of 1934 (the "Exchange Act"),
and the rules and regulations thereunder.
The formula will be applied successively as many times as may be
necessary to ensure that no person will be a 10% Shareholder (as defined below)
at any time (the "sequencing provision"). For the purposes of determining the
votes exercisable by shareholders as of any date, the formula first will be
applied to the common shares of each shareholder in declining order based on the
respective numbers of total Controlled Shares attributable to each shareholder.
Thus, the formula will be applied first to the votes of common shares held by
the shareholder to whom the largest number of total Controlled Shares is
attributable and thereafter sequentially with respect to the shareholder with
the next largest number of total Controlled Shares. The formula will be applied
iteratively thereafter to ensure that no person will be a 10% Shareholder. In
each case, calculations are made on the basis of the aggregate number of votes
conferred by the issued common shares as of such date, as reduced by the
application of the formula to any issued common shares of any shareholder with a
larger number of total Controlled Shares as of such date. A "10% Shareholder"
means a person who owns, in the aggregate, (i) directly, (ii) with respect to
persons who are U.S. persons, by application of the attribution and constructive
ownership rules of Sections 958(a) and 958(b) of the Code or (iii) beneficially,
directly or indirectly, within the meaning of Section 13(d)(3) of the Exchange
Act, issued common shares of the Company carrying 10% or more of the total
combined voting rights attaching to all issued common shares.
Because of the voting limitation described in the preceding paragraph,
the common shares owned by St. Paul and RenaissanceRe have reduced voting
rights. Should St. Paul or RenaissanceRe dispose of some or all of the common
shares it owns, the reduced voting rights with respect to the common shares
disposed of by St. Paul or RenaissanceRe will be eliminated (except if the
disposition is to any other person who holds, or who as a result of such
transaction would hold, 10% or more of our total voting rights), and
9
those common shares thereafter will be entitled to full voting rights, subject
to future dilution to avoid creating a 10% Shareholder. Therefore, the voting
power of the common shares held by all of our shareholders other than St. Paul
or RenaissanceRe will be diluted upon any such disposition by St. Paul or
RenaissanceRe.
Our directors are empowered to require any shareholder to provide
information as to that shareholder's beneficial ownership of common shares, the
names of persons having beneficial ownership of the shareholder's common shares,
relationships, associations or affiliations with other shareholders or any other
facts the directors may deem relevant to a determination of the number of
Controlled Shares attributable to any person. Our directors may disregard the
votes attached to the common shares of any holder failing to respond to such a
request or submitting incomplete or untrue information.
Our directors retain certain discretion to make such final adjustments
to the aggregate number of votes attaching to the common shares of any
shareholder that they consider fair and reasonable in all the circumstances to
ensure that no person will be a 10% Shareholder at any time.
RESTRICTIONS ON TRANSFER
Our Bye-laws contain several provisions restricting the transferability
of common shares. The directors are required to decline to register a transfer
of common shares if they have reason to believe that the result of such transfer
would be (i) that any person other than a St. Paul Person or a RenaissanceRe
Person (as defined below) would become or continue to be a 10% Shareholder or
(ii) that a St. Paul Person or a RenaissanceRe Person would become or continue
to be a United States 25% Shareholder (as defined below), in each case without
giving effect to the limitation on voting rights described above. Similar
restrictions apply to Platinum Holdings' ability to issue or repurchase common
shares. "St. Paul Person" means any of St. Paul and its affiliates and a
"RenaissanceRe Person" means any of RenaissanceRe and its affiliates. A "United
States 25% Shareholder" means a U.S. person who owns, directly or by application
of the constructive ownership rules of Sections 958(a) and 958(b) of the Code,
25% or more of either (i) the total combined voting rights attaching to the
issued common shares and the issued shares of any other class of Platinum
Holdings or (ii) the total combined value of the issued common shares and any
other issued shares of Platinum Holdings, determined pursuant to Section 957 of
the Code. Only for the purposes of these provisions of our Bye-laws, it is
assumed that all RenaissanceRe Persons are U.S. Persons. These restrictions on
the transfer, issuance or repurchase of shares do not apply to any issuance of
common shares pursuant to a contract to purchase common shares from Platinum
Holdings included in the 7.00% equity security units issued by Platinum
Holdings, though the limitations on voting rights, discussed above, do apply to
such common shares.
Our directors also may, in their absolute discretion, decline to
register the transfer of any common shares if they have reason to believe (i)
that the transfer may expose us, any of our subsidiaries, any shareholder or any
person ceding insurance to any of our subsidiaries to adverse tax or regulatory
treatment in any jurisdiction or (ii) that registration of the transfer under
the Securities Act of 1933, as amended ("Securities Act") or under any U.S.
state securities laws or under the laws of any other jurisdiction is required
and such registration has not been duly effected. In addition, our directors may
decline to approve or register a transfer of common shares unless all applicable
consents, authorizations, permissions or approvals of any governmental body or
agency in Bermuda, the United States or any other applicable jurisdiction
required to be obtained prior to such transfer shall have been obtained.
We are authorized to request information from any holder or prospective
acquiror of common shares as necessary to give effect to the transfer, issuance
and repurchase restrictions described above, and may decline to effect any
transaction if complete and accurate information is not received as requested.
Conyers, Dill & Pearman, our Bermuda counsel, has advised us that while
the precise form of the restrictions on transfer contained in our Bye-laws is
untested, as a matter of general principle, restrictions on transfers are
enforceable under Bermuda law and are not uncommon. A proposed transferee will
be permitted to dispose of any common shares purchased that violate the
restrictions and as to the transfer of which registration is refused. The
proposed transferor of those common shares will be deemed to own those
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common shares for dividend, voting and reporting purposes until a transfer of
such common shares has been registered on the register of shareholders of
Platinum Holdings.
If the directors refuse to register a transfer for any reason, they
must notify the proposed transferor and transferee within thirty days of such
refusal. Our Bye-laws also provide that our Board of Directors may suspend the
registration of transfers for any reason and for such periods as it may
determine, provided that it may not suspend the registration of transfers for
more than 45 days in any period of 365 consecutive days.
Our directors may designate our Chief Executive Officer to exercise
their authority to decline to register transfers or to limit voting rights as
described above, or to take any other action, for as long as the Chief Executive
Officer is also a director.
The voting restrictions and restrictions on transfer described above
may have the effect of delaying, deferring or preventing a change in control of
Platinum Holdings.
PREFERRED SHARES
Pursuant to our Bye-laws and Bermuda law, our Board of Directors by
resolution may establish one or more series of preferred shares having a number
of shares, designations, relative voting rights, dividend rates, liquidation and
other rights, preferences, limitations and powers as may be fixed by the Board
of Directors without any further shareholder approval which, if any preferred
shares are issued, will include restrictions on voting and transfer intended to
avoid having us become a "controlled foreign corporation" for U.S. federal
income tax purposes. If our Board of Directors issues preferred shares
conferring any voting rights, it will amend our Bye-laws to apply the
limitations on the voting rights discussed above under "--Limitation on Voting
Rights" to those preferred shares. Any rights, preferences, powers and
limitations as may be established could also have the effect of discouraging an
attempt to obtain control of the Company. The issuance of preferred shares could
also adversely affect the voting power of the holders of our common shares, deny
such holders the receipt of a premium on their common shares in the event of a
tender or other offer for the common shares and depress the market price of the
common shares.
BYE-LAWS
Our Bye-laws provide for our corporate governance, including the
establishment of share rights, modification of those rights, issuance of share
certificates, imposition of a lien over shares in respect of unpaid amounts on
those shares, calls on shares which are not fully paid, forfeiture of shares,
the transfer of shares, alterations of capital, the calling and conduct of
general meetings of shareholders, proxies, the appointment and removal of
directors, conduct and power of directors, the payment of dividends, the
appointment of an auditor and our winding-up.
Our Bye-laws provide that our Board of Directors shall be elected
annually and shall not be staggered. Shareholders may only remove a director for
cause prior to the expiration of that director's term at a special meeting of
shareholders at which a majority of the holders of shares voting thereon vote in
favor of that action.
Our Bye-laws also provide that if our Board of Directors in its
absolute discretion determines that share ownership by any shareholder may
result in adverse tax, regulatory or legal consequences to us, any of our
subsidiaries or any other shareholder, then we will have the option, but not the
obligation, to repurchase all or part of the shares held by such shareholder to
the extent the Board of Directors determines it is necessary to avoid such
adverse or potential adverse consequences. The price to be paid for such shares
will be the fair market value of such shares.
Our Bye-laws provide that when any matter is required to be submitted
to a vote of the shareholders of any direct or indirect non-U.S. subsidiary of
the Company, the Company is required to submit a proposal relating to such
matter to the shareholders of the Company, and the Company shall then vote or
cause to be voted all the shares of such subsidiary owned by the Company in
accordance with or proportional to the vote of its shareholders.
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Our shareholders will consider and vote upon a proposal to remove this
provision from our Bye-laws at our annual general meeting of shareholders to be
held on May 6, 2004.
TRANSFER AGENT
Our registrar and transfer agent for the common shares is Mellon
Investor Services LLC.
DIFFERENCES IN CORPORATE LAW
The Companies Act differs in certain material respects from laws
generally applicable to U.S. corporations and their shareholders. Set forth
below is a summary of certain significant provisions of the Companies Act
(including modifications adopted pursuant to our Bye-laws) applicable to us,
which differ in certain respects from provisions of Delaware corporate law,
which is the law that governs many U.S. public companies. The following
statements are summaries, and do not purport to deal with all aspects of Bermuda
law that may be relevant to us and our shareholders.
INTERESTED DIRECTORS. Our Bye-laws provide that transactions we enter
into in which a director has an interest are not voidable by us, nor can the
interested director be liable to us for any profit realized pursuant to such
transactions, provided the nature of the interest is disclosed at the first
opportunity at a meeting of directors, or in writing to the directors. Under
Delaware law, such a transaction would not be voidable if (i) the material facts
as to the interested director's relationship or interests are disclosed or are
known to the board of directors and the board in good faith authorized the
transaction by the affirmative vote of a majority of the disinterested
directors, even though the disinterested directors constitute less than a
quorum, (ii) the material facts as to the director's relationship or interest
and as to the transaction are disclosed or are known to the shareholders
entitled to vote on the transaction and the transaction is specifically approved
in good faith by vote of the shareholders or (iii) the transaction is fair to
the corporation as of the time it is authorized, approved or ratified by the
board of directors, a committee of the board of directors or the shareholders.
Under Delaware law, the interested director could be held liable for a
transaction in which that director derived an improper personal benefit.
MERGERS AND SIMILAR ARRANGEMENTS. We may acquire the business of
another Bermuda company or a company incorporated outside Bermuda and carry on
such business when it is within the objects of our memorandum of association. In
the case of an amalgamation, we may amalgamate with another Bermuda company or
with an entity incorporated outside Bermuda. A shareholder who did not vote in
favor of the amalgamation may apply to a Bermuda court for a proper valuation of
his or her shares if he or she is not satisfied that fair value has been offered
for those shares. The court ordinarily would not disapprove the transaction on
that ground absent evidence of fraud or bad faith. Under Delaware law, with
certain exceptions, a merger, consolidation or sale of all or substantially all
the assets of a corporation must be approved by the board of directors and the
holders of a majority of the outstanding shares entitled to vote thereon. Under
Delaware law, a stockholder of a corporation participating in certain major
corporate transactions may, under certain circumstances, be entitled to
appraisal rights pursuant to which the stockholder may receive cash in the
amount of the fair value of the shares held by that stockholder (as determined
by a court) in lieu of the consideration that stockholder would otherwise
receive in the transaction. Delaware law does not provide stockholders of a
corporation with voting or appraisal rights when the corporation acquires
another business through the issuance of its stock or other consideration (i) in
exchange for the assets of the business to be acquired, (ii) in exchange for the
outstanding stock of the corporation to be acquired; (iii) in a merger of the
corporation to be acquired with a subsidiary of the acquiring corporation or
(iv) in a merger in which the corporation's certificate of incorporation is not
amended and the corporation issues less than 20% of its common stock outstanding
prior to the merger.
TAKEOVERS. Bermuda law provides that where an offer is made for shares
of another company and, within four months of the offer, the holders of not less
than 90% of the shares which are the subject of the offer (other than shares
held by or for the offeror or its subsidiaries) accept, the offeror may by
notice require the nontendering shareholders to transfer their shares on the
terms of the offer. Dissenting
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shareholders may apply to the court within one month of the notice objecting to
the transfer. The burden is on the dissenting shareholders to show that the
court should exercise its discretion to enjoin the required transfer, which the
court will be unlikely to do unless the offer is obviously and convincingly
unfair. Delaware law provides that a parent corporation, by resolution of its
board of directors and without any shareholder vote, may merge with any
subsidiary of which it owns at least 90% of the outstanding shares of each class
of stock that is entitled to vote on the transaction. Upon any such merger,
dissenting stockholders of the subsidiary would have appraisal rights.
SHAREHOLDER'S SUIT. The rights of shareholders under Bermuda law are
not as extensive as the rights of shareholders under legislation or judicial
precedent in many U.S. jurisdictions. Class actions and derivative actions are
generally not available to shareholders under the laws of Bermuda. However, the
Bermuda courts ordinarily would be expected to follow English case law
precedent, which would permit a shareholder to commence an action in our name to
remedy a wrong done to us where the act complained of is alleged to be beyond
our corporate power or is illegal or would result in the violation of our
memorandum of association or Bye-laws. Furthermore, consideration would be given
by the court to acts that are alleged to constitute a fraud against the minority
shareholders or where an act requires the approval of a greater percentage of
shareholders than actually approved it. The winning party in such an action
generally would be able to recover a portion of attorneys' fees incurred in
connection with such action. Class actions and derivative actions generally are
available to stockholders under Delaware law for, among other things, breach of
fiduciary duty, corporate waste and actions not taken in accordance with
applicable law. In such actions, the court has discretion to permit the winning
party to recover attorneys' fees incurred in connection with such action.
INDEMNIFICATION OF DIRECTORS. Our Bye-laws indemnify our directors and
officers in their capacity as such in respect of any loss arising or liability
attaching to them by virtue of any rule of law in respect of any negligence,
default, breach of duty or breach of trust of which a director or officer may be
guilty in relation to us other than in respect of his own fraud or dishonesty,
which is the maximum extent of indemnification permitted under the Companies
Act. Under Delaware law, a corporation may indemnify a director or officer of
the corporation against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred in defense of an
action, suit or proceeding by reason of such position if (i) the director or
officer acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the corporation and (ii) with respect to
any criminal action or proceeding, if the director or officer had no reasonable
cause to believe his conduct was unlawful.
INSPECTION OF CORPORATE RECORDS. Members of the general public have the
right to inspect our public documents available at the office of the Registrar
of Companies in Bermuda, which will include our memorandum of association
(including our objects and powers) and alterations to our memorandum of
association, including any increase or reduction of our authorized capital. Our
shareholders have the additional right to inspect our Bye-laws, minutes of
general meetings and our audited financial statements, which must be presented
to the annual general meeting of shareholders. Our register of shareholders is
also open to inspection by shareholders without charge, and to members of the
public for a fee. We are required to maintain a share register in Bermuda but
may establish a branch register outside Bermuda. We are required to keep at our
registered office a register of our directors and officers which is open for
inspection by members of the public without charge. Bermuda law does not,
however, provide a general right for shareholders to inspect or obtain copies of
any other corporate records. Delaware law permits any stockholder to inspect or
obtain copies of a corporation's stockholder list and its other books and
records for any purpose reasonably related to such person's interest as a
stockholder.
ENFORCEMENT OF JUDGMENTS AND OTHER MATTERS. We have been advised by
Conyers, Dill & Pearman, our Bermuda counsel, that there is doubt as to whether
the courts of Bermuda would enforce (1) judgments of United States courts
obtained in actions against us or our directors and officers, as well as the
experts named in this prospectus who reside outside the United States predicated
upon the civil liability provisions of the United States federal securities laws
and (2) original actions brought in Bermuda against us or our directors and
officers, as well as the experts named in this prospectus who reside outside the
United States predicated solely upon United States federal securities laws.
There is no treaty in effect between the United States and Bermuda providing for
such enforcement, and there are grounds upon which
13
Bermuda courts may not enforce judgments of United States courts. Certain
remedies available under the laws of U.S. jurisdictions, including certain
remedies available under the U.S. federal securities laws, would not be allowed
in Bermuda courts as contrary to Bermuda's public policy.
DESCRIPTION OF THE DEPOSITARY SHARES
GENERAL
We may, at our option, elect to offer depositary shares, each
representing a fraction (to be set forth in the prospectus supplement relating
to our common shares or a particular series of preferred shares) of a common
share or a fraction of a share of a particular class or series of preferred
shares as described below. In the event we elect to do so, depositary receipts
evidencing depositary shares will be issued to the public.
The common shares or the shares of the class or series of preferred
shares represented by depositary shares will be deposited under a deposit
agreement among us, a depositary selected by us and the holders of the
depositary receipts. The depositary will be a bank or trust company having its
principal office in the United States and having a combined capital and surplus
of at least $50,000,000. Subject to the terms of the deposit agreement, each
owner of a depositary share will be entitled, in proportion to the applicable
fraction of a common share or preference share represented by such depositary
share, to all the rights and preferences of the common shares or preferred
shares represented thereby (including dividend, voting, redemption and
liquidation rights). The depositary shares will be evidenced by depositary
receipts issued pursuant to the deposit agreement. Depositary receipts will be
distributed to those persons purchasing the fractional common shares or
fractional shares of the applicable class or series of preferred shares in
accordance with the terms of the offering described in the related prospectus
supplement. Forms of the deposit agreement and depositary receipt have been
filed as exhibits to the registration statement of which this prospectus forms a
part.
Pending the preparation of definitive depositary receipts, the
depositary may, upon our written order, issue temporary depositary receipts
substantially identical to (and entitling the holders thereof to all the rights
pertaining to) the definitive depositary receipts but not in definitive form.
Definitive depositary receipts will be prepared thereafter without unreasonable
delay, and temporary depositary receipts will be exchangeable for definitive
depositary receipts without charge to the holder thereof.
The following description of the depositary shares sets forth the
material terms and provisions of the depositary shares to which any prospectus
supplement may relate. The particular terms of the depositary shares offered by
any prospectus supplement, and the extent to which the general provisions
described below may apply to the offered securities, will be described in the
prospectus supplement, which will also include a discussion of certain U.S.
federal income tax considerations.
DIVIDENDS AND OTHER DISTRIBUTIONS
The depositary will distribute all cash dividends or other
distributions received in respect of the related common shares or preferred
shares to the record holders of depositary shares relating to such common shares
or preferred shares in proportion to the number of such depositary shares owned
by such holders.
In the event of a distribution other than in cash, the depositary will
distribute property received by it to the record holders of depositary shares
entitled thereto, unless the depositary determines that it is not feasible to
make such distribution, in which case the depositary may, with our approval,
sell such property and distribute the net proceeds from the sale to such
holders.
WITHDRAWAL OF SHARES
Upon surrender of the depositary receipts at the corporate trust office
of the depositary (unless the related depositary shares have previously been
called for redemption), the holder of the depositary shares
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evidenced thereby is entitled to delivery of the number of whole shares of the
related common shares or class or series of preferred shares and any money or
other property represented by such depositary shares. Holders of depositary
shares will be entitled to receive whole shares of the related common shares or
class or series of preferred shares on the basis set forth in the prospectus
supplement for such common shares or class or series of preferred shares, but
holders of such whole common shares or preferred shares will not thereafter be
entitled to exchange them for depositary shares. If the depositary receipts
delivered by the holder evidence a number of depositary shares in excess of the
number of depositary shares representing the number of whole common shares or
preferred shares to be withdrawn, the depositary will deliver to such holder at
the same time a new depositary receipt evidencing such excess number of
depositary shares. In no event will fractional common shares or preferred shares
be delivered upon surrender of depositary receipts to the depositary.
REDEMPTION OF DEPOSITARY SHARES
Whenever we redeem common shares or preferred shares held by the
depositary, the depositary will redeem as of the same redemption date the number
of depositary shares representing common shares or shares of the related class
or series of preferred shares so redeemed. The redemption price per depositary
share will be equal to the applicable fraction of the redemption price per share
payable with respect to such common shares or class or series of preferred
shares. If less than all the depositary shares are to be redeemed, the
depositary shares to be redeemed will be selected by lot or pro rata as may be
determined by the depositary.
VOTING THE COMMON SHARES OR PREFERRED SHARES
Upon receipt of notice of any meeting at which the holders of common
shares or preferred shares are entitled to vote, the depositary will mail the
information contained in such notice of meeting to the record holders of the
depositary shares relating to such common shares or preferred shares. Each
record holder of such depositary shares on the record date (which will be the
same date as the record date for common shares or preferred shares, as
applicable) will be entitled to instruct the depositary as to the exercise of
the voting rights pertaining to the amount of common shares or preferred shares
represented by such holder's depositary shares. The depositary will endeavor,
insofar as practicable, to vote the number of the common shares or preferred
shares represented by such depositary shares in accordance with such
instructions, and we will agree to take all action which the depositary deems
necessary in order to enable the depositary to do so. The depositary will vote
all common shares or preferred shares held by it proportionately with
instructions received if it does not receive specific instructions from the
holders of depositary shares representing such common shares or preferred
shares.
AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT
The form of depositary receipt evidencing the depositary shares and any
provision of the deposit agreement may at any time be amended by agreement
between us and the depositary. However, any amendment which materially and
adversely alters the rights of the holders of depositary receipts will not be
effective unless such amendment has been approved by the holders of depositary
receipts representing at least a majority (or, in the case of amendments
relating to or affecting rights to receive dividends or distributions or voting
or redemption rights, 66%, unless otherwise provided in the related prospectus
supplement) of the depositary shares then outstanding. The deposit agreement may
be terminated by us or the depositary only if (1) all outstanding depositary
shares have been redeemed, (2) there has been a final distribution in respect of
the common shares or the preferred shares in connection with our liquidation,
dissolution or winding up and such distribution has been distributed to the
holders of depositary receipts or (3) upon the consent of holders of depositary
receipts representing not less than 66?% of the depositary shares outstanding,
unless otherwise provided in the related prospectus supplement.
CHARGES OF DEPOSITARY
We will pay all transfer and other taxes and governmental charges
arising solely from the existence of the depositary arrangements. We will also
pay charges of the depositary in connection with the
15
initial deposit of the related common shares or preferred shares and any
redemption of such common shares or preferred shares. Holders of depositary
receipts will pay all other transfer and other taxes and governmental charges
and such other charges as are expressly provided in the deposit agreement to be
for their accounts.
The depositary may refuse to effect any transfer of a depositary
receipt or any withdrawal of common shares or preferred shares evidenced thereby
until all such taxes and charges with respect to such depositary receipt or such
common shares or preferred shares are paid by the holders thereof.
MISCELLANEOUS
The depositary will forward all reports and communications from us
which are delivered to the depositary and which we are required to furnish to
the holders of common shares or preferred shares.
Neither we nor the depositary will be liable if either of us is
prevented or delayed by law or any circumstance beyond our control in performing
our obligations under the deposit agreement. Our obligations and the obligations
of the depositary under the deposit agreement will be limited to performance in
good faith of their duties thereunder and neither we nor the depositary will be
obligated to prosecute or defend any legal proceeding in respect of any
depositary shares or class or series of preferred shares unless satisfactory
indemnity is furnished. We and the depositary may rely on written advice of
counsel or accountants, or information provided by persons presenting preferred
shares for deposit, holders of depositary shares or other persons believed to be
competent and on documents believed to be genuine.
RESIGNATION AND REMOVAL OF DEPOSITARY
The depositary may resign at any time by delivering to us notice of its
election to do so, and we may at any time remove the depositary. Any such
resignation or removal of the depositary will take effect upon the appointment
of a successor depositary, which successor depositary must be appointed within
60 days after delivery of the notice of resignation or removal and must be a
bank or trust company having its principal office in the United States and
having a combined capital and surplus of at least $50,000,000.
DESCRIPTION OF THE DEBT SECURITIES
GENERAL
The following description of our debt securities sets forth the
material terms and provisions of the debt securities to which any prospectus
supplement may relate and may be amended or supplemented by terms described in
the applicable prospectus supplement. Our senior debt securities are to be
issued under a senior indenture between us and ______, as trustee, dated ____,
2004, as supplemented. Our subordinated debt securities are to be issued under a
subordinated indenture between us and ______, as trustee, which is filed as an
exhibit to the registration statement of which this prospectus forms a part. The
senior indenture and the subordinated indenture are sometimes referred to herein
collectively as the "indentures" and each individually as an "indenture," and
the trustees under each of the indentures are sometimes referred to herein
collectively as the "trustees" and each individually as a "trustee." The
particular terms of the series of debt securities offered by any prospectus
supplement, and the extent to which general provisions described below may apply
to the offered series of debt securities, will be described in the prospectus
supplement.
The following summaries of the material terms and provisions of the
indentures and the related debt securities are not complete and are subject to,
and are qualified in their entirety by reference to, all provisions of the
indentures, including the definitions of certain terms in the indentures and
those terms to be made a part of the indentures by the Trust Indenture Act of
1939, as amended. Wherever we refer to particular articles, sections or defined
terms of an indenture, without specific reference to an indenture, those
articles, sections or defined terms are contained in all indentures. The senior
indenture and the
16
subordinated indenture are substantially identical, except for certain covenants
of ours and provisions relating to subordination.
The indentures do not limit the aggregate principal amount of the debt
securities which Platinum Holdings may issue under them and provide that
Platinum Holdings may issue debt securities under them from time to time in one
or more series. The indentures do not limit the amount of other indebtedness or
the debt securities which we or our subsidiaries may issue.
Unless otherwise provided in a prospectus supplement, our senior debt
securities will be unsecured obligations of Platinum Holdings, and will rank
equally with all of Platinum Holdings other unsecured and unsubordinated
indebtedness. The subordinated debt securities will be unsecured obligations of
Platinum Holdings, subordinated in right of payment to the prior payment in full
of all Senior Indebtedness (which term includes the senior debt securities) of
Platinum Holdings as described below under "Subordination of the Subordinated
Debt Securities" and in the applicable prospectus supplement.
Because Platinum Holdings is a holding company, our rights and the
rights of our creditors (including the holders of our debt securities) and
shareholders to participate in distributions by certain of our subsidiaries upon
that subsidiary's liquidation or reorganization or otherwise would be subject to
the prior claims of that subsidiary's creditors, except to the extent that we
may ourselves be a creditor with recognized claims against that subsidiary or
our creditor may have the benefit of a guaranty from our subsidiary. None of our
creditors has the benefit of a guaranty from any of our subsidiaries. The rights
of our creditors (including the holders of our debt securities) to participate
in the distribution of stock owned by us in certain of our subsidiaries,
including our insurance subsidiaries, may also be subject to approval by certain
insurance regulatory authorities having jurisdiction over such subsidiaries.
Our ability to receive dividends and other distributions from our
insurance company subsidiaries is limited by applicable law and regulation. See
"Our Business -- Regulation" in our Annual Report on Form 10-K for the year
ended December 31, 2003 incorporated by reference in this prospectus. If we are
unable to receive dividends or distributions from our insurance company
subsidiaries, or if such dividends or distributions are limited, our ability to
make payments owing with respect to the debt securities will be adversely
affected.
The prospectus supplement relating to the particular series of debt
securities offered thereby will describe the following terms of the offered
series of debt securities:
- the title of such debt securities and the series in which such
debt securities will be included, which may include
medium-term notes, the aggregate principal amount of such debt
securities and any limit upon such principal amount;
- the date or dates, or the method or methods, if any, by which
such date or dates will be determined, on which the principal
of such series of debt securities will be payable;
- the rate or rates at which such series of debt securities will
bear interest, if any, which rate may be zero in the case of
certain debt securities issued at an issue price representing
a discount from the principal amount payable at maturity, or
the method by which such rate or rates will be determined
(including, if applicable, any remarketing option or similar
method), and the date or dates from which such interest, if
any, will accrue or the method by which such date or dates
will be determined;
- the date or dates on which interest, if any, on such series of
debt securities will be payable and any regular record dates
applicable to the date or dates on which interest will be so
payable;
- the place or places where the principal of, any premium or
interest on or any additional amounts with respect to such
series of debt securities will be payable, any of such series
of debt securities that are issued in registered form may be
surrendered for registration of
17
transfer or exchange, and any such debt securities may be
surrendered for conversion or exchange;
- whether any of such series of debt securities are to be
redeemable at our option and, if so, the date or dates on
which, the period or periods within which, the price or prices
at which and the other terms and conditions upon which such
series of debt securities may be redeemed, in whole or in
part, at our option;
- whether we will be obligated to redeem or purchase any of such
series of debt securities pursuant to any sinking fund or
analogous provision or at the option of any holder thereof
and, if so, the date or dates on which, the period or periods
within which, the price or prices at which and the other terms
and conditions upon which such debt securities will be
redeemed or purchased, in whole or in part, pursuant to such
obligation, and any provisions for the remarketing of such
series of debt securities so redeemed or purchased;
- if other than denominations of $1,000 and any integral
multiple thereof, the denominations in which any series of
debt securities to be issued in registered form will be
issuable and, if other than a denomination of $5,000, the
denominations in which any debt securities to be issued in
bearer form will be issuable;
- whether the series of debt securities will be listed on any
national securities exchange;
- whether the series of debt securities will be convertible into
common shares and/or exchangeable for other securities issued
by us, and, if so, the terms and conditions upon which such
series of debt securities will be so convertible or
exchangeable;
- if other than the principal amount, the portion of the
principal amount (or the method by which such portion will be
determined) of such series of debt securities that will be
payable upon declaration of acceleration of the maturity
thereof;
- if other than United States dollars, the currency of payment,
including composite currencies, of the principal of, any
premium or interest on or any additional amounts with respect
to any of such series of debt securities;
- whether the principal of, any premium or interest on or any
additional amounts with respect to such series of debt
securities will be payable, at our election or the election of
a holder, in a currency other than that in which such series
of debt securities are stated to be payable and the date or
dates on which, the period or periods within which, and the
other terms and conditions upon which, such election may be
made;
- any index, formula or other method used to determine the
amount of payments of principal of, any premium or interest on
or any additional amounts with respect to such series of debt
securities;
- whether such series of debt securities are to be issued in the
form of one or more global securities and, if so, the identity
of the depositary for such global security or securities;
- whether such series of debt securities are the senior debt
securities or subordinated debt securities and, if the
subordinated debt securities, the specific subordination
provisions applicable thereto;
- in the case of subordinated debt securities, the relative
degree, if any, to which such series of subordinated debt
securities of the series will be senior to or be subordinated
to other series of the subordinated debt securities or other
indebtedness of ours in right of payment, whether
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such other series of the subordinated debt securities or other
indebtedness are outstanding or not;
- in the case of subordinated debt securities, any limitation on
the issuance of additional Senior Indebtedness;
- any deletions from, modifications of or additions to the
Events of Default or covenants of ours with respect to such
series of debt securities;
- whether the provisions described below under "Discharge,
Defeasance and Covenant Defeasance" will be applicable to such
series of debt securities;
- a discussion of certain U.S. federal income tax
considerations;
- whether any of such series of debt securities are to be issued
upon the exercise of warrants, and the time, manner and place
for such debt securities to be authenticated and delivered;
and
- any other terms of such series of debt securities and any
other deletions from or modifications or additions to the
applicable indenture in respect of such debt securities.
Platinum Holdings will have the ability under the indentures to
"reopen" a previously issued series of debt securities and issue additional debt
securities of that series or establish additional terms of that series. Platinum
Holdings is also permitted to issue debt securities with the same terms as
previously issued debt securities.
Unless otherwise provided in the related prospectus supplement,
principal, premium, interest and additional amounts, if any, with respect to any
series of debt securities will be payable at the office or agency maintained by
us for such purposes (initially the corporate trust office of the trustee). In
the case of debt securities issued in registered form, interest may be paid by
check mailed to the persons entitled thereto at their addresses appearing on the
security register or by transfer to an account maintained by the payee with a
bank located in the United States. Interest on debt securities issued in
registered form will be payable on any interest payment date to the persons in
whose names the debt securities are registered at the close of business on the
regular record date with respect to such interest payment date. Interest on such
debt securities which have a redemption date after a regular record date, and on
or before the following interest payment date, will also be payable to the
persons in whose names the debt securities are so registered. All paying agents
initially designated by us for the debt securities will be named in the related
prospectus supplement. We may at any time designate additional paying agents or
rescind the designation of any paying agent or approve a change in the office
through which any paying agent acts, except that we will be required to maintain
a paying agent in each place where the principal of, any premium or interest on
or any additional amounts with respect to the debt securities are payable.
Unless otherwise provided in the related prospectus supplement, the
debt securities may be presented for transfer (duly endorsed or accompanied by a
written instrument of transfer, if so required by us or the security registrar)
or exchanged for other debt securities of the same series (containing identical
terms and provisions, in any authorized denominations, and of a like aggregate
principal amount) at the office or agency maintained by us for such purposes
(initially the corporate trust office of the trustee). Such transfer or exchange
will be made without service charge, but we may require payment of a sum
sufficient to cover any tax or other governmental charge and any other expenses
then payable. We will not be required to (1) issue, register the transfer of, or
exchange, the debt securities during a period beginning at the opening of
business 15 days before the day of mailing of a notice of redemption of any such
debt securities and ending at the close of business on the day of such mailing
or (2) register the transfer of or exchange any debt security so selected for
redemption in whole or in part, except the unredeemed portion of any debt
security being redeemed in part. Any transfer agent (in addition to the security
registrar) initially designated by us for any debt securities will be named in
the related prospectus supplement. We may at any time designate additional
transfer agents or rescind the designation of any transfer agent or
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approve a change in the office through which any transfer agent acts, except
that we will be required to maintain a transfer agent in each place where the
principal of, any premium or interest on or any additional amounts with respect
to the debt securities are payable.
Unless otherwise provided in the related prospectus supplement, the
debt securities will be issued only in fully registered form without coupons in
minimum denominations of $1,000 and any integral multiple thereof. The debt
securities may be represented in whole or in part by one or more global debt
securities registered in the name of a depositary or its nominee and, if so
represented, interests in such global debt security will be shown on, and
transfers thereof will be effected only through, records maintained by the
designated depositary and its participants as described below. Where the debt
securities of any series are issued in bearer form, the special restrictions and
considerations, including special offering restrictions and special U.S. federal
income tax considerations, applicable to such debt securities and to payment on
and transfer and exchange of such debt securities will be described in the
related prospectus supplement.
The debt securities may be issued as original issue discount securities
(bearing no fixed interest or bearing fixed interest at a rate which at the time
of issuance is below specified market rates) to be sold at a substantial
discount below their principal amount and may for various other reasons be
considered to have original issue discount for U.S. federal income tax purposes.
In general, original issue discount is included in the income of holders on a
yield-to-maturity basis. Accordingly, depending on the terms of the debt
securities, holders may be required to include amounts in income prior to the
receipt thereof. Special U.S. federal income tax and other considerations
applicable to original issue discount securities will be described in the
related prospectus supplement.
The debt securities may also be issued at a premium (issued for an
amount in excess of the face amount of such securities). In general such bond
premium would be amortizable over the term of the debt instrument and deductible
by the holders for U.S. federal income tax purposes. Special U.S. federal income
tax and other considerations applicable to securities issued at a premium will
be described in the related prospectus supplement.
If the purchase price of any debt securities is payable in one or more
foreign currencies or currency units or if any debt securities are denominated
in one or more foreign currencies or currency units or if the principal of, or
any premium or interest on, or any additional amounts with respect to, any debt
securities is payable in one or more foreign currencies or currency units, the
restrictions, elections, certain U.S. federal income tax considerations,
specific terms and other information with respect to such debt securities and
such foreign currency or currency units will be set forth in the related
prospectus supplement.
We will comply with Section 14(e) under the Exchange Act, and any other
tender offer rules under the Exchange Act which may then be applicable, in
connection with any obligation of ours to purchase debt securities at the option
of the holders. Any such obligation applicable to a series of debt securities
will be described in the related prospectus supplement.
Unless otherwise described in a prospectus supplement relating to any
series of debt securities, the indentures do not contain any provisions that
would limit our ability to incur indebtedness or that would afford holders of
the debt securities protection in the event of a sudden and significant decline
in our credit quality or a takeover, recapitalization or highly leveraged or
similar transaction involving us. Accordingly, we could in the future enter into
transactions that could increase the amount of indebtedness outstanding at that
time or otherwise affect our capital structure or credit rating. You should
refer to the prospectus supplement relating to a particular series of the debt
securities for information regarding to any deletions from, modifications of or
additions to the Events of Defaults described below or our covenants contained
in the indentures, including any addition of a covenant or other provisions
providing event risk or similar protection.
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CONVERSION AND EXCHANGE
The terms, if any, on which debt securities of any series are convertible
into or exchangeable for common shares, preferred shares or other securities
issued by us, property or cash, or a combination of any of the foregoing, will
be set forth in the related prospectus supplement. Such terms may include
provisions for conversion or exchange, either mandatory, at the option of the
holder, or at our option, in which the securities, property or cash to be
received by the holders of the debt securities would be calculated according to
the factors and at such time as described in the related prospectus supplement.
Any such conversion or exchange will comply with applicable Bermuda law, our
memorandum of association and Bye-laws.
OPTIONAL REDEMPTION
Unless otherwise described in a prospectus supplement, relating to any
debt securities, we may at our option, redeem any series of debt securities, in
whole or in part, at any time at the redemption price. Unless otherwise
described in a prospectus supplement, debt securities' will not be subject to
sinking fund or other mandatory redemption or to redemption or repurchase at the
option of the holders upon a change of control, a change in management, an asset
sale or any other specified event.
SELECTION AND NOTICE
Unless otherwise described in a prospectus supplement, we will send the
holders of the debt securities to be redeemed a notice of redemption by
first-class mail at least 30 and not more than 60 days prior to the date fixed
for redemption. If we elect to redeem fewer than all the debt securities, unless
otherwise agreed in a holders' redemption agreement, the trustee will select in
a fair and appropriate manner, including pro rata or by lot, the debt securities
to be redeemed in whole or in part.
Unless we default in payment of the redemption price, the debt securities
called for redemption shall cease to accrue any interest on or after the
redemption date.
CONSOLIDATION, AMALGAMATION, MERGER AND SALE OF ASSETS
Unless otherwise described in a prospectus supplement, each indenture
provides that Platinum Holdings may not (1) consolidate or amalgamate with or
merge into any person or convey, transfer or lease our properties and assets as
an entirety or substantially as an entirety to any person, or (2) permit any
person to consolidate or amalgamate with or merge into Platinum Holdings, or
convey, transfer or lease its properties and assets as an entirety or
substantially as an entirety to us, unless (a) such person is a corporation or
limited liability company organized and existing under the laws of the United
States, any state thereof or the District of Columbia, Bermuda or any country
which is, on the date of the indenture, a member of the Organization of Economic
Cooperation and Development and will expressly assume, by supplemental indenture
satisfactory in form to the trustee, the due and punctual payment of the
principal of, any premium and interest on and any additional amounts with
respect to the debt securities issued thereunder, and the performance of our
obligations under the indenture and the debt securities issued thereunder; (b)
immediately after giving effect to such transaction and treating any
indebtedness which becomes an obligation of ours or of a designated subsidiary
as a result of such transaction as having been incurred by us or such subsidiary
at the time of such transaction, no event of default, and no event which after
notice or lapse of time or both would become an event of default, will have
happened and be continuing; and (c) certain other documents are delivered.
CERTAIN OTHER COVENANTS
Except as otherwise permitted under "- Limitations on Liens of Stock of
Subsidiaries" and "Consolidation, Amalgamation, Merger and Sale of Assets"
described above, we will do or cause to be done all things necessary to maintain
in full force and effect our legal existence, rights (charter and statutory) and
franchises. We are not, however, required to preserve any right or franchise if
we determine that it is no
21
longer desirable in the conduct of our business and the loss is not
disadvantageous in any material respect to the holders of any debt securities.
(Section 4.8 of the indenture)
EVENTS OF DEFAULT
Unless we provide other or substitute Events of Default in a prospectus
supplement, the following events will constitute an event of default under the
applicable indenture with respect to a series of debt securities (whatever the
reason for such event of default and whether it will be voluntary or involuntary
or be effected by operation of law or pursuant to any judgment, decree or order
of any court or any order, rule or regulation of any administrative or
governmental body):
(1) default in the payment of any interest on the series of debt
securities, or any additional amounts payable with respect thereto, when
such interest becomes or such additional amounts become due and payable,
and continuance of such default for a period of 30 days;
(2) default in the payment of the principal of or any premium on the
series of debt securities, or any additional amounts payable with respect
thereto, when such principal or premium becomes or such additional amounts
become due and payable either at maturity, upon any redemption, by
declaration of acceleration or otherwise;
(3) default in the performance, or breach, of any covenant or
warranty of ours contained in the indenture (other than the defaults
specified in clause (1) or (2) above), and the continuance of such default
or breach for a period of 60 days after written notice has been given as
provided in the indenture;
(4) default in the payment at maturity of our Indebtedness in excess
of $50;000,000 or if any event of default as defined in any mortgage,
indenture or instrument under which there may be issued, or by which there
may be secured or evidenced, any of our Indebtedness (other than
indebtedness which is non-recourse to us) happens and results in
acceleration of more than $50,000,000 in principal amount of such
Indebtedness (after giving effect to any applicable grace period), and
such default is not cured or waived or such acceleration is not rescinded
or annulled within a period of 30 days after written notice has been given
as provided in the indenture;
(5) we shall fail within 60 days to pay, bond or otherwise discharge
any uninsured judgment or court order for the payment of money in excess
of $50,000,000, which is not stayed on appeal or is not otherwise being
appropriately contested in good faith;
(6) certain events relating to our bankruptcy, insolvency or
reorganization; or
(7) our default in the performance or breach of the conditions
relating to amalgamation, consolidation, merger or sale of assets stated
above, and the continuation of such violation for 60 days after notice is
given to us. (Section 6.1 of the indenture)
If an event of default with respect to the debt securities (other than an
event of default described in clause (6) of the preceding paragraph) occurs and
is continuing, either the trustee or the holders of at least 25% in principal
amount of the outstanding debt securities by written notice as provided in the
indenture may declare the principal amount of all outstanding debt securities to
be due and payable immediately. An event of default described in clause (6) of
the preceding paragraph will cause the principal amount and accrued interest to
become immediately due and payable without any declaration or other act by the
trustee or any holder. At any time after a declaration of acceleration has been
made, but before a judgment or decree for payment of money has been obtained by
the trustee, and subject to applicable law and certain other provisions of the
indenture, the holders of a majority in aggregate principal amount of the debt
securities may, under certain circumstances, rescind and annul such
acceleration.
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Each indenture provides that, within 60 days after the occurrence of any
event which is, or after notice or lapse of time or both would become, an event
of default with respect to the debt securities, the trustee will transmit, in
the manner set forth in the indenture and subject to the exceptions described
below, notice of such default to the holders of the debt securities unless such
default has been cured or waived. However, except in the case of a default in
the payment of principal of, or premium, if any, or interest on, or additional
amounts with respect to, any debt securities, the trustee may withhold such
notice if and so long as the board, executive committee or a trust committee of
directors and/or responsible officers of the trustee in good faith determine
that the withholding of such notice is in the best interest of the holders of
the debt securities.
If an event of default occurs, has not been waived and is continuing with
respect to the debt securities, the trustee may in its discretion proceed to
protect and enforce its rights and the rights of the holders of the debt
securities by all appropriate judicial proceedings. Each indenture provides
that, subject to the duty of the trustee during any default to act with the
required standard of care, the trustee will be under no obligation to exercise
any of its rights or powers under such indenture at the request or direction of
any of the holders of the debt securities, unless such holders shall have
offered to the trustee reasonable indemnity. Subject to such provisions for the
indemnification of the trustee, and subject to applicable law and certain other
provisions of the indenture, the holders of a majority in aggregate principal
amount of the outstanding debt securities will have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the trustee, or exercising any trust or power conferred on the trustee, with
respect to the debt securities.
Under the Companies Act, any payment or other disposition of property made
by us within six months prior to the commencement of our winding up will be
invalid if made with the intent to fraudulently prefer one or more of our
creditors at a time that we were unable to pay our debts as they became due.
MODIFICATION AND WAIVER
We and the trustee may modify or amend each indenture with the consent of
the holders of not less than a majority in aggregate principal amount
outstanding of a series of debt securities affected by the amendment or
modification; provided, however, that no such modification or amendment may,
without the consent of the holder of each outstanding debt security affected
thereby:
- change the stated maturity of the principal of, or any premium or
installment of interest on, or any additional amounts with respect
to, the series of debt securities,
- reduce the principal amount of, or the rate (or modify the
calculation of such principal amount or rate) of interest on, or any
additional amounts with respect to, or any premium payable upon the
redemption of, the series of debt securities,
- change our obligation to pay additional amounts with respect to the
series of debt securities,
- change the redemption provisions of the series of debt securities
or, following the occurrence of any event that would entitle a
holder to require us to redeem or repurchase the series of debt
securities at the option of the holder, adversely affect the right
of redemption or repurchase at the option of such holder, of the
series of debt securities,
- change the place of payment or the coin or currency in which the
principal of, any premium or interest on or any additional amounts
with respect to, the series of debt securities is payable,
- impair the right to institute suit for the enforcement of any
payment on or after the stated maturity of the series of debt
securities (or, in the case of redemption, on or after the
redemption date or, in the case of repayment at the option of any
holder, on or after the repayment date),
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- reduce the percentage in principal amount of the series of debt
securities, the consent of whose holders is required in order to
take specific actions,
- reduce the requirements for quorum or voting by holders of the
series of debt securities in the applicable section of the
indenture,
- modify any of the provisions in the indenture regarding the waiver
of past defaults and the waiver of certain covenants by the holders
of the series of debt securities except to increase any percentage
vote required or to provide that other provisions of the indenture
cannot be modified or waived without the consent of the holder of
each debt security affected thereby, or
- modify any of the above provisions. (Section 10.2 of the indenture)
In addition, no supplemental indenture may directly or indirectly modify
or eliminate the subordination provisions of the subordinated indentures in any
manner which might terminate or impair the subordination of the subordinated
debt securities to Senior Indebtedness without the prior written consent of the
holders of the Senior Indebtedness.
We and the trustee may modify or amend each indenture and the series of
debt securities without the consent of any holder in order to, among other
things:
- provide for our successor pursuant to a consolidation, amalgamation,
merger or sale of assets that complies with the merger covenant;
- add to our covenants for the benefit of the holders of the series of
debt securities or to surrender any right or power conferred upon us
by the indenture;
- provide for a successor trustee with respect to the series of debt
securities;
- cure any ambiguity or correct or supplement any provision in the
indenture which may be defective or inconsistent with any other
provision, or to make any other provisions with respect to matters
or questions arising under the indenture which will not adversely
affect the interests of the holders of the series of debt
securities;
- change the conditions, limitations and restrictions on the
authorized amount, terms or purposes of issue, authentication and
delivery of the series of debt securities under the indenture;
- add any additional events of default with respect to the series of
debt securities;
- provide for conversion or exchange rights of the holders of the
series of debt securities; or
- make any other change that does not materially adversely affect the
interests of the holders of the series of debt securities. (Section
10.1 of the indenture)
The holders of at least a majority in aggregate principal amount of the
series of debt securities may, on behalf of the holders of the debt securities,
waive compliance by us with certain restrictive provisions of the indenture.
(Section 4.9 of the indenture) The holders of not less than a majority in
aggregate principal amount of the series of debt securities may, on behalf of
the holders of the debt securities, waive any past default and its consequences
under the indenture with respect to the series of debt securities, except a
default (1) in the payment of principal of, any premium or interest on or any
additional amounts with respect to the series of debt securities or (2) in
respect of a covenant or provision of the
24
indenture that cannot be modified or amended without the consent of the holder
of each debt security. (Section 6.10 of the indenture)
Under each indenture, we are required to furnish the trustee annually a
statement as to performance by us of certain of our obligations under the
indenture and as to any default in such performance. We are also required to
deliver to the trustee, within five days after occurrence thereof, written
notice of any event of default or any event which after notice or lapse of time
or both would constitute an event of default under clause (3) in " -- Events of
Default" described above. (Section 4.10 of the indenture)
DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE
We may discharge certain obligations to holders of the debt securities
that have not already been delivered to the trustee for cancellation and that
either have become due and payable or will become due and payable within one
year (or called for redemption within one year) by depositing with the trustee,
in trust, funds in U.S. dollars or Government Obligations (as defined below) in
an amount sufficient to pay the entire indebtedness on the debt securities with
respect to principal and any premium, interest and additional amounts to the
date of such deposit (if the debt securities have become due and payable) or
with respect to principal, any premium and interest to the maturity or
redemption date thereof, as the case may be. (Section 12.1 of the indenture)
Each indenture provides that, unless the provisions of Section 12.2 of
such indenture are made inapplicable to the debt securities pursuant to Section
3.1 of the indenture, we may elect either (1) to defease and be discharged from
any and all obligations with respect to the debt securities (except for, among
other things, the obligation to pay principal, interest and additional amounts,
if any, upon the occurrence of certain events of taxation, assessment or
governmental charge with respect to payments on the debt securities and other
obligations to register the transfer or exchange of the debt securities, to
replace temporary or mutilated, destroyed, lost or stolen debt securities, to
maintain an office or agency with respect to the debt securities and to hold
moneys for payment in trust) ("defeasance") or (2) to be released from our
obligations with respect to the debt securities under certain covenants and any
omission to comply with such obligations will not constitute a default or an
event of default with respect to the debt securities ("covenant defeasance").
Defeasance or covenant defeasance, as the case may be, will be conditioned upon
the irrevocable deposit by us with the trustee, in trust, of an amount in U.S.
dollars, or Government Obligations, or both, applicable to such debt securities
which through the scheduled payment of principal and interest in accordance with
their terms will provide money in an amount sufficient to pay the principal of,
any premium and interest on the debt securities on the scheduled due dates or
any prior redemption date. (Section 12.2 of the indenture)
Such a trust may only be established if, among other things:
(1) the applicable defeasance or covenant defeasance does not result
in a breach or violation of, or constitute a default under, any material
agreement or instrument, other than the indenture, to which we are a party
or by which we are bound,
(2) no event of default or event which with notice or lapse of time
or both would become an event of default with respect to the debt
securities to be defeased will have occurred and be continuing on the date
of establishment of such a trust after giving effect to such establishment
and, with respect to defeasance only, no bankruptcy proceeding will have
occurred and be continuing at any time during the period ending on the
91st day after such date,
(3) with respect to registered securities and any bearer securities
for which the place of payment is within the United States, we have
delivered to the trustee an opinion of counsel (as specified in the
indenture) to the effect that the holders of the debt securities will not
recognize income, gain or loss for U.S. federal income tax purposes as a
result of such defeasance or covenant defeasance and will be subject to
U.S. federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such defeasance or covenant
25
defeasance had not occurred, and such opinion of counsel, in the case of
defeasance, must refer to and be based upon a letter ruling of the
Internal Revenue Service received by us, a Revenue Ruling published by the
Internal Revenue Service or a change in applicable U.S. federal income tax
law occurring after the date of the indenture, and
(4) with respect to defeasance, we have delivered to the trustee an
officers' certificate as to solvency and the absence of intent of
preferring holders over our other creditors. (Section 12.2 of the
indenture)
"Government Obligations" means debt securities which are (1) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (2) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America the timely payment of which is unconditionally guaranteed as a full
faith and credit obligation by the United States of America which, in the case
of clauses (1) and (2), are not callable or redeemable at the option of the
issuer or issuers thereof, and will also include a depository receipt issued by
a bank or trust company as custodian with respect to any such Government
Obligation or a specific payment of interest on or principal of or any other
amount with respect to any such Government Obligation held by such custodian for
the account of the holder of such depository receipt, provided that (except as
required by law) such custodian is not authorized to make any deduction from the
amount payable to the holder of such depository receipt from any amount received
by the custodian with respect to the Government Obligation or the specific
payment of interest on or principal of or any other amount with respect to the
Government Obligation evidenced by such depository receipt. (Section 1.1 of the
indenture)
In the event we effect covenant defeasance with respect to the debt
securities and the debt securities are declared due and payable because of the
occurrence of any event of default other than an event of default with respect
to any covenant as to which there has been covenant defeasance, the Government
Obligations on deposit with the trustee will be sufficient to pay amounts due
on the debt securities at the time of the stated maturity or redemption date but
may not be sufficient to pay amounts due on the debt securities at the time of
the acceleration resulting from such event of default. However, we would remain
liable to make payment of such amounts due at the time of acceleration.
PAYMENT OF ADDITIONAL AMOUNTS
Unless otherwise described in a prospectus supplement, we will make all
payments of principal of and premium, if any, interest and any other amounts on,
or in respect of, the debt securities without withholding or deduction at source
for, or on account of, any present or future taxes, fees, duties, assessments or
governmental charges of whatever nature imposed or levied by or on behalf of
Bermuda or any other jurisdiction in which we are organized (a "taxing
jurisdiction") or any political subdivision or taxing authority thereof or
therein, unless such taxes, fees, duties, assessments or governmental charges
are required to be withheld or deducted by (x) the laws (or any regulations or
rulings promulgated thereunder) of a taxing jurisdiction or any political
subdivision or taxing authority thereof or therein or (y) an official position
regarding the application, administration, interpretation or enforcement of any
such laws, regulations or rulings (including, without limitation, a holding by a
court of competent jurisdiction or by a taxing authority in a taxing
jurisdiction or any political subdivision thereof). If a withholding or
deduction at source is required, we will, subject to certain limitations and
exceptions described below, pay to the holder of any debt security such
additional amounts as may be necessary so that every net payment of principal,
premium, if any, interest or any other amount made to such holder, after the
withholding or deduction, will not be less than the amount provided for in such
debt security or in the indenture to be then due and payable.
We will not be required to pay any additional amounts for or on account
of:
(1) any tax, fee, duty, assessment or governmental charge of
whatever nature which would not have been imposed but for the fact that
such holder (a) was a resident, domiciliary or national of, or engaged in
business or maintained a permanent establishment or was physically present
in, the relevant taxing jurisdiction or any political subdivision thereof
or otherwise had
26
some connection with the relevant taxing jurisdiction other than by reason
of the mere ownership of, or receipt of payment under, such debt security,
(b) presented, where presentation is required, such debt security for
payment in the relevant taxing jurisdiction or any political subdivision
thereof, unless such debt security could not have been presented for
payment elsewhere, or (c) presented, where presentation is required, such
debt security for payment more than 30 days after the date on which the
payment in respect of such debt security became due and payable or
provided for, whichever is later, except to the extent that the holder
would have been entitled to such additional amounts if it had presented
such debt security for payment on any day within that 30-day period;
(2) any estate, inheritance, gift, sale, transfer, personal property
or similar tax, assessment or other governmental charge;
(3) any tax, assessment or other governmental charge that is imposed
or withheld by reason of the failure by the holder of such debt security
to comply with any reasonable request by us addressed to the holder within
90 days of such request (a) to provide information concerning the
nationality, residence or identity of the holder or (b) to make any
declaration or other similar claim or satisfy any information or reporting
requirement, which is required or imposed by statute, treaty, regulation
or administrative practice of the relevant taxing jurisdiction or any
political subdivision thereof as a precondition to exemption from all or
part of such tax, assessment or other governmental charge;
(4) any withholding or deduction required to be made pursuant to any
EU Directive on the taxation of savings implementing the conclusions of
the ECOFIN Council meetings of 26-27 November 2000, 3 June 2003 or any law
implementing or complying with, or introduced in order to conform to, such
EU Directive; or
(5) any combination of items (1), (2), (3) and (4).
In addition, we will not pay additional amounts with respect to any
payment of principal of, or premium, if any, interest or any other amounts on,
any such debt security to any holder who is a fiduciary or partnership or other
than the sole beneficial owner of such debt security if such payment would be
required by the laws of the relevant taxing jurisdiction (or any political
subdivision or relevant taxing authority thereof or therein) to be included in
the income for tax purposes of a beneficiary or partner or settlor with respect
to such fiduciary or a member of such partnership or a beneficial owner to the
extent such beneficiary, partner or settlor would not have been entitled to such
additional amounts had it been the holder of the debt security. (Section 4.4 of
the indenture)
REDEMPTION FOR TAX PURPOSES
Unless otherwise described in a prospectus supplement, we may redeem the
debt securities at our option, in whole but not in part, at a redemption price
equal to 100% of the principal amount, together with accrued and unpaid interest
and additional amounts, if any, to the date fixed for redemption, at any time we
receive an opinion of counsel that as a result of (1) any change in or amendment
to the laws or treaties (or any regulations or rulings promulgated under these
laws or treaties) of Bermuda or any taxing jurisdiction (or of any political
subdivision or taxation authority affecting taxation) or any change in the
application or official interpretation of such laws, regulations or rulings, or
(2) any action taken by a taxing authority of Bermuda or any taxing jurisdiction
(or any political subdivision or taxing authority affecting taxation) which
action is generally applied or is taken with respect to the Company, or (3) a
decision rendered by a court of competent jurisdiction in Bermuda or any taxing
jurisdiction (or any political subdivision) whether or not such decision was
rendered with respect to us, there is a substantial probability that we will be
required as of the next interest payment date to pay additional amounts with
respect to the debt securities as provided in "Payment of Additional Amounts"
above and such requirements cannot be avoided by the use of reasonable measures
(consistent with practices and interpretations generally followed or in effect
at the time such measures could be taken) then available. If we elect to redeem
the debt securities under this provision, we will give written notice of such
election to the trustee and the holders of the debt securities.
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Interest on the debt securities will cease to accrue unless we default in the
payment of the redemption price. (Section 4.5 of the indenture)
GLOBAL SECURITIES
The debt securities of a series may be issued in whole or in part in the
form of one or more global debt securities that will be deposited with, or on
behalf of, a depositary identified in the prospectus supplement relating to such
series.
The specific terms of the depositary arrangement with respect to a series
of the debt securities will be described in the prospectus supplement relating
to such series. We anticipate that the following provisions will apply to all
depositary arrangements.
Upon the issuance of a global security, the depositary for such global
security or its nominee will credit, on its book-entry registration and transfer
system, the respective principal amounts of the debt securities represented by
such global security. Such accounts will be designated by the underwriters or
agents with respect to such debt securities or by us if such debt securities are
offered and sold directly by us. Ownership of beneficial interests in a global
security will be limited to persons that may hold interests through
participants. Ownership of beneficial interests in such global security will be
shown on, and the transfer of that ownership will be effected only through,
records maintained by the depositary or its nominee (with respect to interests
of participants) and on the records of participants (with respect to interests
of persons other than participants). The laws of some states require that
certain purchasers of securities take physical delivery of such securities in
definitive form. Such limits and such laws may impair the ability to transfer
beneficial interests in a global security.
So long as the depositary for a global security, or its nominee, is the
registered owner of such global security, such depositary or such nominee, as
the case may be, will be considered the sole owner or holder of the debt
securities represented by such global security for all purposes under the
applicable indenture. Except as described below, owners of beneficial interests
in a global security will not be entitled to have the debt securities of the
series represented by such global security registered in their names and will
not receive or be entitled to receive physical delivery of the debt securities
of that series in definitive form.
Principal of, any premium and interest on, and any additional amounts with
respect to, the debt securities registered in the name of a depositary or its
nominee will be made to the depositary or its nominee, as the case may be, as
the registered owner of the global security representing such debt securities.
None of the trustee, any paying agent, the security registrar or us will have
any responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests of the global
security for such debt securities or for maintaining, supervising or reviewing
any records relating to such beneficial ownership interests.
We expect that the depositary for a series of the debt securities or its
nominee, upon receipt of any payment with respect to such debt securities, will
credit immediately participants' accounts with payments in amounts proportionate
to their respective beneficial interest in the principal amount of the global
security for such debt securities as shown on the records of such depositary or
its nominee. We also expect that payments by participants to owners of
beneficial interests in such global security held through such participants will
be governed by standing instructions and customary practices, as is now the case
with securities held for the accounts of customers registered in "street name,"
and will be the responsibility of such participants.
The indentures provide that if:
(1) the depositary for a series of the debt securities notifies us
that it is unwilling or unable to continue as depositary or if such
depositary ceases to be eligible under the applicable indenture and a
successor depositary is not appointed by us within 90 days of written
notice;
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(2) we determine that the debt securities of a particular series
will no longer be represented by global securities and executes and
delivers to the trustee a company order to such effect; or
(3) an Event of Default with respect to a series of the debt
securities has occurred and is continuing,
then in each such case, the global securities will be exchanged for the debt
securities of such series in definitive form of like tenor and of an equal
aggregate principal amount, in authorized denominations.
Such definitive debt securities will be registered in such name or names
as the depositary shall instruct the trustee. (Section 3.5 of the indenture). It
is expected that such instructions may be based upon directions received by the
depositary from participants with respect to ownership of beneficial interests
in global securities.
GOVERNING LAW
Each indenture and the debt securities will be governed by, and construed
in accordance with, the laws of the State of New York applicable to agreements
made or instruments entered into and, in each case, performed in that state.
INFORMATION CONCERNING THE TRUSTEE
Unless otherwise specified in the applicable prospectus supplement, _____
is to be the trustee and paying agent under each indenture and is one of a
number of banks with which Platinum and its subsidiaries maintain banking
relationships in the ordinary course of business.
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CERTAIN PROVISIONS APPLICABLE TO SUBORDINATED DEBT SECURITIES
SUBORDINATION OF THE SUBORDINATED DEBT SECURITIES
The subordinated debt securities will, to the extent set forth in the
subordinated indenture, be subordinate in right of payment to the prior payment
in full of all Senior Indebtedness. In the event of:
(1) any insolvency or bankruptcy case or proceeding, or any
receivership, liquidation, reorganization or other similar case or
proceeding in connection therewith, relative to us or to our creditors, as
such, or to our assets; or
(2) any voluntary or involuntary liquidation, dissolution or other
winding up of ours, whether or not involving insolvency or bankruptcy; or
(3) any assignment for the benefit of creditors or any other
marshalling of assets and liabilities of ours;
then and in any such event the holders of Senior Indebtedness will be entitled
to receive payment in full of all amounts due or to become due on or in respect
of all Senior Indebtedness, or provision will be made for such payment in cash,
before the holders of the subordinated debt securities are entitled to receive
or retain any payment on account of principal of, or any premium or interest on,
or any additional amounts with respect to, subordinated debt securities, and to
that end the holders of Senior Indebtedness will be entitled to receive, for
application to the payment thereof, any payment or distribution of any kind or
character, whether in cash, property or securities, including any such payment
or distribution which may be payable or deliverable by reason of the payment of
any other Indebtedness of ours being subordinated to the payment of subordinated
debt securities, which may be payable or deliverable in respect of subordinated
debt securities in any such case, proceeding, dissolution, liquidation or other
winding up event. (Section 13.3 of the subordinated indenture)
By reason of such subordination, in the event of our liquidation or
insolvency, holders of Senior Indebtedness and holders of other obligations of
ours that are not subordinated to Senior Indebtedness may recover more, ratably,
than the holders of subordinated debt securities.
Subject to the payment in full of all Senior Indebtedness, the rights of
the holders of subordinated debt securities will be subrogated to the rights of
the holders of Senior Indebtedness to receive payments or distributions of cash,
property or securities of ours applicable to such Senior Indebtedness until the
principal of, any premium and interest on, and any additional amounts with
respect to, subordinated debt securities have been paid in full. (Section 13.4
of the subordinated indenture)
No payment of principal (including redemption and sinking fund payments)
of or any premium or interest on or any additional amounts with respect to the
subordinated debt securities, or payments to acquire such securities (other than
pursuant to their conversion), may be made (1) if any Senior Indebtedness of
ours is not paid when due and any applicable grace period with respect to such
default has ended and such default has not been cured or waived or ceased to
exist, or (2) if the maturity of any Senior Indebtedness of ours has been
accelerated because of a default. (Section 13.2 of the subordinated indenture)
The subordinated indenture does not limit or prohibit us from incurring
additional Senior Indebtedness, which may include Indebtedness that is senior to
subordinated debt securities, but subordinate to our other obligations. The
senior debt securities will constitute Senior Indebtedness under the
subordinated indenture.
The term "Senior Indebtedness" means all Indebtedness of ours outstanding
at any time, except:
(1) the subordinated debt securities;
30
(2) Indebtedness as to which, by the terms of the instrument
creating or evidencing the same, it is provided that such Indebtedness is
subordinated to or ranks equally with the subordinated debt securities;
(3) Indebtedness of ours to an affiliate of ours;
(4) interest accruing after the filing of a petition initiating any
bankruptcy, insolvency or other similar proceeding unless such interest is
an allowed claim enforceable against us in a proceeding under federal or
state bankruptcy laws;
(5) trade accounts payable; and
(6) any Indebtedness, including all other debt securities and
guarantees in respect of those debt securities, initially issued to any
trust, partnership or other entity affiliated with us which is a financing
vehicle of ours or any Affiliate of ours in connection with an issuance by
such entity of preferred securities.
Such Senior Indebtedness will continue to be Senior Indebtedness and be
entitled to the benefits of the subordination provisions irrespective of any
amendment, modification or waiver of any term of such Senior Indebtedness.
(Sections 1.1 and 13.8 of the subordinated indenture)
The subordinated indenture provides that the foregoing subordination
provisions, insofar as they relate to any particular issue of subordinated debt
securities, may be changed prior to such issuance. Any such change would be
described in the related prospectus supplement.
DESCRIPTION OF THE WARRANTS TO PURCHASE
COMMON SHARES OR PREFERRED SHARES
The following statements with respect to the common share warrants and
preference share warrants are summaries of, and subject to, the detailed
provisions of a share warrant agreement to be entered into by us and a share
warrant agent to be selected at the time of issue. The particular terms of any
warrants offered by any prospectus supplement, and the extent to which the
general provisions described below may apply to the offered securities, will be
described in the prospectus supplement.
GENERAL
The share warrants, evidenced by share warrant certificates, may be issued
under the share warrant agreement independently or together with any other
securities offered by any prospectus supplement and may be attached to or
separate from such other offered securities. If share warrants are offered, the
related prospectus supplement will describe the designation and terms of the
share warrants, including without limitation the following:
- the offering price, if any;
- the aggregate number of warrants;
- the designation and terms of the common shares or preferred shares
purchasable upon exercise of the share warrants;
- if applicable, the date on and after which the share warrants and
the related offered securities will be separately transferable;
- the number of common shares or preferred shares purchasable upon
exercise of one share warrant and the initial price at which such
shares may be purchased upon exercise;
31
- the date on which the right to exercise the share warrants shall
commence and the date on which such right shall expire;
- a discussion of certain U.S. federal income tax considerations;
- the call provisions, if any;
- the currency, currencies or currency units in which the offering
price, if any, and exercise price are payable;
- the antidilution provisions of the share warrants; and
- any other terms of the share warrants.
The common shares or preferred shares issuable upon exercise of the share
warrants will, when issued in accordance with the share warrant agreement, be
fully paid and nonassessable.
EXERCISE OF STOCK WARRANTS
Share warrants may be exercised by surrendering to the share warrant agent
the share warrant certificate with the form of election to purchase on the
reverse thereof duly completed and signed by the warrantholder, or its duly
authorized agent (such signature to be guaranteed by a bank or trust company, by
a broker or dealer which is a member of the National Association of Securities
Dealers, Inc. or by a member of a national securities exchange), indicating the
warrantholder's election to exercise all or a portion of the share warrants
evidenced by the certificate. Surrendered share warrant certificates will be
accompanied by payment of the aggregate exercise price of the share warrants to
be exercised, as set forth in the related prospectus supplement, in lawful money
of the United States, unless otherwise provided in the related prospectus
supplement. Upon receipt thereof by the share warrant agent, the share warrant
agent will requisition from the transfer agent for the common shares or the
preferred shares, as the case may be, for issuance and delivery to or upon the
written order of the exercising warrantholder, a certificate representing the
number of common shares or preferred shares purchased. If less than all of the
share warrants evidenced by any share warrant certificate are exercised, the
share warrant agent will deliver to the exercising warrantholder a new share
warrant certificate representing the unexercised share warrants.
ANTIDILUTION AND OTHER PROVISIONS
The exercise price payable and the number of common shares or preferred
shares purchasable upon the exercise of each share warrant and the number of
share warrants outstanding will be subject to adjustment in certain events which
will be described in a prospectus supplement. These may include the issuance of
a stock dividend to holders of common shares or preferred shares, respectively,
or a combination, subdivision or reclassification of common shares or preferred
shares, respectively. In lieu of adjusting the number of common shares or
preferred shares purchasable upon exercise of each share warrant, we may elect
to adjust the number of share warrants. No adjustment in the number of shares
purchasable upon exercise of the share warrants will be required until
cumulative adjustments require an adjustment of at least 1% thereof. We may, at
our option, reduce the exercise price at any time. No fractional shares will be
issued upon exercise of share warrants, but we will pay the cash value of any
fractional shares otherwise issuable. Notwithstanding the foregoing, in case of
our consolidation, merger, or sale or conveyance of our property as an entirety
or substantially as an entirety, the holder of each outstanding share warrant
shall have the right to the kind and amount of shares of stock and other
securities and property (including cash) receivable by a holder of the number of
common shares or preferred shares into which such share warrants were
exercisable immediately prior thereto.
32
NO RIGHTS AS SHAREHOLDERS
Holders of share warrants will not be entitled, by virtue of being such
holders, to vote, to consent, to receive dividends, to receive notice as
shareholders with respect to any meeting of shareholders for the election of our
directors or any other matter, or to exercise any rights whatsoever as our
shareholders.
DESCRIPTION OF THE WARRANTS TO PURCHASE DEBT SECURITIES
The following statements with respect to the debt warrants are summaries
of, and subject to, the detailed provisions of a debt warrant agreement to be
entered into by us and a debt warrant agent to be selected at the time of issue.
The debt warrant agreement may include or incorporate by reference standard
warrant provisions substantially in the form of the Standard Debt Warrant
Provisions filed as an exhibit to the registration statement of which this
prospectus forms a part. The particular terms of any warrants offered by any
prospectus supplement, and the extent to which the general provisions described
below may apply to the offered securities, will be described in the prospectus
supplement.
GENERAL
The debt warrants, evidenced by debt warrant certificates, may be issued
under the debt warrant agreement independently or together with any other
securities offered by any prospectus supplement and may be attached to or
separate from such other offered securities. If debt warrants are offered, the
related prospectus supplement will describe the designation and terms of the
debt warrants, including without limitation the following:
- the offering price, if any;
- the aggregate number of debt warrants;
- the designation, aggregate principal amount and terms of the debt
securities purchasable upon exercise of the debt warrants;
- if applicable, the date on and after which the debt warrants and the
related offered securities will be separately transferable;
- the principal amount of debt securities purchasable upon exercise of
one debt warrant and the price at which such principal amount of
debt securities may be purchased upon exercise;
- the date on which the right to exercise the debt warrants shall
commence and the date on which such right shall expire;
- a discussion of certain U.S. federal income tax considerations;
- whether the warrants represented by the debt warrant certificates
will be issued in registered or bearer form;
- the currency, currencies or currency units in which the offering
price, if any, and exercise price are payable;
- the antidilution provisions of the debt warrants; and
- any other terms of the debt warrants.
Warrantholders will not have any of the rights of holders of debt
securities, including the right to receive the payment of principal of, any
premium or interest on, or any additional amounts with respect to,
33
the debt securities or to enforce any of the covenants of the debt securities or
the applicable indenture except as otherwise provided in the applicable
indenture.
EXERCISE OF DEBT WARRANTS
Debt warrants may be exercised by surrendering the debt warrant
certificate at the office of the debt warrant agent, with the form of election
to purchase on the reverse side of the debt warrant certificate properly
completed and executed (with signature(s) guaranteed by a bank or trust company,
by a broker or dealer which is a member of the National Association of
Securities Dealers, Inc. or by a member of a national securities exchange), and
by payment in full of the exercise price, as set forth in the related prospectus
supplement. Upon the exercise of debt warrants, we will issue the debt
securities in authorized denominations in accordance with the instructions of
the exercising warrantholder. If less than all of the debt warrants evidenced by
the debt warrant certificate are exercised, a new debt warrant certificate will
be issued for the remaining number of debt warrants.
DESCRIPTION OF THE PURCHASE CONTRACTS
AND THE PURCHASE UNITS
We may issue purchase contracts, obligating holders to purchase from us,
and obligating us to sell to the holders, a specified number of our common
shares, preferred shares, debt securities or securities of third parties, a
basket of such securities, an index or indices of such securities or any
combination of the above, as specified in the applicable prospectus supplement,
at a future date or dates. The price per security may be fixed at the time the
purchase contracts are issued or may be determined by reference to a specific
formula set forth in the purchase contracts and to be described in the
applicable prospectus supplement. The purchase contracts may be issued
separately or as a part of purchase units consisting of a purchase contract and,
as security for the holder's obligations to purchase the securities under the
purchase contracts, either:
(1) our senior debt securities or our subordinated debt
securities;
(2) our preferred shares; or
(3) debt obligations of third parties, including U.S. Treasury
securities.
The applicable prospectus supplement will specify the securities that will
secure the holder's obligations to purchase securities under the applicable
purchase contract. Unless otherwise described in a prospectus supplement, the
securities related to the purchase contracts securing the holders' obligations
to purchase securities will be pledged to a collateral agent, for our benefit,
under a pledge agreement. The pledged securities will secure the obligations of
holders of purchase contracts to purchase securities under the related purchase
contracts. The rights of holders of purchase contracts to the related pledged
securities will be subject to our security interest in those pledged securities.
That security interest will be created by the pledge agreement. No holder of
purchase contracts will be permitted to withdraw the pledged securities related
to such purchase contracts from the pledge arrangement except upon the
termination or early settlement of the related purchase contracts. Subject to
that security interest and the terms of the purchase contract agreement and the
pledge agreement, each holder of a purchase contract will retain full beneficial
ownership of the related pledged securities.
The purchase contracts may require us to make periodic payments to the
holders of the purchase units or vice versa, and such payments may be unsecured
or prefunded on some basis. The purchase contracts may require holders to secure
their obligations in a specified manner and in certain circumstances we may
deliver newly issued prepaid purchase contracts upon release to a holder of any
collateral securing such holder's obligations under the original purchase
contract.
The applicable prospectus supplement will describe the terms of any
purchase contracts or purchase units and, if applicable, prepaid purchase
contracts.
34
Except as described in a prospectus supplement, the collateral agent will,
upon receipt of distributions on the pledged securities, distribute those
payments to us or a purchase contract agent, as provided in the pledge
agreement. The purchase contract agent will in turn distribute payments it
receives as provided in the purchase contract.
35
SELLING SHAREHOLDERS
The selling shareholders may from time to time on one or more occasions
offer and sell any or all of their common shares that are registered under this
prospectus. The registration of the selling shareholders' common shares does not
necessarily mean that the selling shareholders will offer or sell any of their
shares.
The selling shareholders may sell, transfer or otherwise dispose of some
or all of their common shares, including common shares and other securities of
Platinum not covered by this prospectus, in transactions exempt from the
registration requirements of the Securities Act of 1933, including in
open-market transactions in reliance on Rule 144 under the Securities Act. We
will update, amend or supplement this prospectus from time to time to update the
disclosure in this section as may be required.
All expenses incurred with the registration of Platinum common shares
owned by the selling shareholders will be borne by us; provided that we will
not be obligated to pay any legal expenses of the selling shareholders in
connection with such registration.
The following table sets forth information as of March 1, 2004 regarding
beneficial ownership of common shares and the applicable voting rights attached
to such share ownership in accordance with our Bye-laws by the selling
shareholder that may offer common shares pursuant to this registration
statement.
Number
Beneficial Ownership of of
Selling Common Beneficial Ownership of
Shareholders Prior Shares Selling Shareholders After
to the Offering(s) (1) Offered the Offering(s) (1)
Name and Address of Beneficial Owner Number Percentage (4) Number Percentage (4)
------------------------------------ ------ -------------- ------ ------ --------------
The St. Paul Companies, Inc.
385 Washington Street
St. Paul, Minnesota 55102 12,000,000(2) 24.4
RenaissanceRe Holdings Ltd. 6,460,000(3) 14.1
Renaissance House
8-12 East Broadway
Pembroke HM 19
Bermuda
For a description of the relationships between St. Paul,
RenaissanceRe and us, see "Related Party Transactions."
-------------
(1) Our Bye-laws contain provisions limiting the total voting power of
shareholders owning specified percentages of our common shares. See
"Description of Our Share Capital."
(2) The security holders are St. Paul and its wholly owned subsidiary St. Paul
Fire and Marine Insurance Company ("St. Paul Fire and Marine"). Amounts
include 6,000,000 common shares of which St. Paul Fire and Marine is the
record owner and 6,000,000 common shares issuable to St. Paul upon
exercise of options. See "Related Party Transactions."
(3) Amounts include 2,500,000 common shares issuable to RenaissanceRe upon
exercise of options. See "Related Party Transactions."
(4) Calculated on the basis of [_______] common shares outstanding.
RELATED PARTY TRANSACTIONS
TRANSACTIONS WITH ST. PAUL AND ITS SUBSIDIARIES
Concurrently with the completion of the Company's initial public offering
on November 1, 2002, the Company issued 6,000,000 common shares (or 14% of the
then outstanding common shares) to St. Paul in a private placement pursuant to
the Formation Agreement. The voting power of these common shares is limited to
9.9% of the voting power of the outstanding common shares, pursuant to the
Bye-laws of the Company. St. Paul also received an option to purchase up to
6,000,000 additional common shares at any time during the ten years following
the Company's initial public offering at a price of $27.00 per share (the "St.
Paul Option"). In return for the common shares and the St. Paul Option, St. Paul
contributed to the Company cash in the amount of $122 million and substantially
all of the 2002 reinsurance business and related assets of the reinsurance
underwriting segment of St. Paul ("St. Paul Re"), including all of the
outstanding capital stock of Platinum US. Among the fixed assets transferred
were furniture, equipment, systems and software, and the intangible assets
included broker lists, contract renewal rights and licenses.
36
The Formation Agreement contains provisions regarding indemnification of each of
St. Paul and the Company by the other, restrictions on St. Paul regarding
competition with the Company and the transfer or acquisition of common shares in
certain circumstances, and requirements relating to pre-emptive rights and
participation in common share buy-back programs. The Formation Agreement
provided that the Company and its subsidiaries enter into several agreements
with St. Paul and its subsidiaries, as described below.
The Company entered into a Registration Rights Agreement with St. Paul as
of November 1, 2002, pursuant to which St. Paul has the right to require the
Company, subject to certain specified exceptions, on four occasions to register
under the Securities Act, any common shares owned by St. Paul or its affiliates
for sale in a public offering beginning as of November 1, 2003. Pursuant to this
agreement, the Company has also agreed to use its reasonable best efforts to
enable St. Paul from and after the third anniversary of the completion of the
Company's initial public offering to distribute the common shares it
beneficially owns in an offering on a continuous or delayed basis pursuant to a
registration statement under the Securities Act. After November 1, 2007, St.
Paul will have the right to an additional two demand registrations if St. Paul
beneficially owns more than 9.9% of the common shares then outstanding. Each
demand must include a number of common shares with a market value equal to at
least $50 million, except that this limitation will not apply to St. Paul's last
demand registration.
Certain subsidiaries of the Company entered into several quota share
retrocession agreements with subsidiaries of St. Paul, pursuant to which St.
Paul's subsidiaries transferred the liabilities, related assets and rights and
risks under substantially all of the reinsurance contracts entered into by St.
Paul's subsidiaries on or after January 1, 2002, excluding certain liabilities
relating to the flooding in Europe in August 2002 and business underwritten in
London for certain financial services companies (the "Quota Share Retrocession
Agreements"). These agreements provided for the transfer to subsidiaries of the
Company of cash and other assets aggregating approximately $485,687,000, which
represents substantially all of the existing 2002 underwriting year loss
reserves, excluding certain liabilities retained by St. Paul, allocated loss
adjustment expense reserves, other reserves related to non-traditional
reinsurance treaties, unearned premium reserves (subject to agreed upon
adjustments) and other related reserves, which relate to contracts entered into
on and after January 1, 2002, as of the date of the transfer and 100% of future
premiums (less any ceding commission under the Quota Share Retrocession
Agreements) associated with the transferred reinsurance contracts relating to
periods after the date of the transfer. Trusts have been established and funded
to secure Platinum US's retrocession obligations to St. Paul's subsidiaries.
Platinum US and St. Paul Fire and Marine Insurance Company, a wholly owned
subsidiary of St. Paul ("St. Paul Fire and Marine"), entered into a US
Underwriting Management Agreement dated as of November 1, 2002. Pursuant to this
agreement, Platinum US has authority to write renewals of certain
non-traditional reinsurance contracts for a period of three years on behalf of
St. Paul Fire and Marine or Mountain Ridge Insurance Company, a wholly owned
subsidiary of St. Paul. Platinum US bears all the expenses incurred in
underwriting and administering the non-traditional business that it reinsures.
St. Paul Fire and Marine is required to pay the direct and reasonable indirect
costs of non-traditional business not reinsured by Platinum US. Platinum UK and
St. Paul Reinsurance Company Limited ("St. Paul Re UK") entered into a similar
agreement dated as of November 1, 2002 providing Platinum UK with substantially
the same rights to underwrite business on behalf of St. Paul Re UK.
In addition, St. Paul Re UK, St. Paul Management Limited and Platinum UK
entered into a UK Business Transfer Agreement under which Platinum UK acquired
the reinsurance business of St. Paul Re UK, together with the associated
customer lists and goodwill (other than the assumption of liability for, or the
management of, existing reinsurance contracts entered into by St. Paul Re UK on
or prior to November 1, 2002). Platinum UK is entitled to write reinsurance
business for its own account and benefit in succession to St. Paul Re UK. In
consideration for the transfer, a portion of the St. Paul Option, covering
894,260 common shares with an aggregate exercise price of $8,119,881, was
allocated to St. Paul Re UK.
The Company and Platinum UK entered into Master Services Agreements with
St. Paul and St. Paul Re UK pursuant to which St. Paul and its subsidiaries
provide certain services, including accounting, payroll administration, human
resources management and systems support, at cost until the Company and
37
Platinum UK deem it no longer necessary. Both of these Master Services
Agreements, which originally were scheduled to terminate on June 30, 2003, were
amended by the parties to terminate on June 30, 2004 with respect to certain
services. The Company and Platinum UK are required to pay St. Paul and St. Paul
Re UK a total of $181,506 for services provided in 2003 under the Master
Services Agreements. The Company and Platinum UK also entered into Run-off
Services Agreements with St. Paul and St. Paul Re UK, pursuant to which the
Company and Platinum UK, for a period of up to two years following completion of
the Company's initial public offering, provide St. Paul and St. Paul Re UK with
specified services at cost in administering the run-off of certain reinsurance
contracts. St. Paul and St. Paul Re UK paid the Company and Platinum UK
approximately $605,236 for services provided in 2003 under the Run-off Services
Agreements.
Pursuant to the Employee Benefits and Compensation Matters Agreement, St.
Paul transferred certain of its employees to Platinum US. The agreement provides
for the allocation of assets and liabilities and certain other agreements with
respect to employee compensation and benefit plans. The agreement provides that
St. Paul will reimburse Platinum US pro rata for any retention bonuses that are
paid to certain employees of the Company.
Platinum UK is a party to a sublease agreement with St. Paul Re UK under
which Platinum UK subleases office space in London at a rate equivalent to St.
Paul's cost. A total of $710,000 is payable under this agreement for 2003.
Platinum US entered into an Aggregate Excess of Loss Retrocession
Agreement with Mountain Ridge Insurance Company, a St. Paul subsidiary, on June
11, 2003. This Agreement related to an underlying agreement with Liberty Mutual
which, in turn, was reinsured by Platinum US under a 100% Quota Share
Retrocession Agreement with Mountain Ridge Insurance Company.
Platinum US has entered into several novation and other agreements with
St. Paul and various ceding insurance companies, whereby Platinum has replaced
St. Paul as the reinsurer on the respective contracts. In certain cases, these
contracts were originally issued by St. Paul Fire and Marine because Platinum US
was not authorized as a reinsurer in Wisconsin. Several novation agreements were
entered into after Platinum US became authorized in Wisconsin.
Platinum UK entered into an Excess of Loss Reinsurance contract with XL Re
on July 1, 2003 that replaced an existing contract between XL Re and St Paul.
This contract includes a provision whereby St. Paul receives a commission as
compensation for forfeiting a $5.65 million deficit premium that would have been
paid to St. Paul if the existing contract had simply been terminated.
Platinum Bermuda is one of several reinsurers participating on five
excess-of-loss reinsurance contracts and a variable quota share reinsurance
contract with certain subsidiaries of St. Paul relating to contract surety
business. Platinum Bermuda expects to receive approximately $4.6 million in
premium under these contracts in 2004.
TRANSACTIONS WITH RENAISSANCERE AND ITS SUBSIDIARIES
Concurrently with the completion of the Company's initial public offering,
the Company sold 3,960,000 common shares to RenaissanceRe at a price of $22.50
per share less the underwriting discount (the "RenaissanceRe Investment") in a
private placement pursuant to the Investment Agreement. In addition,
RenaissanceRe received an option to purchase up to 2,500,000 additional common
shares at any time during the ten years following the Company's initial public
offering at a purchase price of $27.00 per share. The Investment Agreement
provides that, for so long as RenaissanceRe beneficially owns common shares
representing at least 62.5% of the common shares purchased pursuant to the
Investment Agreement, one qualified person designated by RenaissanceRe, who is
reasonably acceptable to the Company, but not an officer, director or employee
of RenaissanceRe or any of its subsidiaries, will be nominated by the Company
for election as a director of the Company at each shareholder meeting at which
directors are elected and the Company shall use commercially reasonable efforts
to cause this director's appointment to the Executive Committee and, subject to
applicable law, rules or regulations, the Governance Committee of
38
the Board of Directors of the Company. The Investment Agreement also provides
that, for so long as RenaissanceRe beneficially owns common shares representing
at least 62.5% of the common shares purchased pursuant to the Investment
Agreement, RenaissanceRe will have the right to designate a representative to
attend (but not to vote at) meetings of the Board of Directors and to receive
notices, agendas, minutes and all other materials distributed to participants at
such meetings.
The Company and RenaissanceRe entered into a Transfer Restrictions,
Registration Rights and Standstill Agreement as of November 1, 2002, pursuant to
which, prior to November 1, 2003, RenaissanceRe could not transfer any interest
in the common shares it purchased pursuant to the Investment Agreement except
under certain conditions. Under this agreement, RenaissanceRe has the right to
require the Company, subject to certain specified exceptions, on four occasions
to register under the Securities Act any Common Shares owned by RenaissanceRe or
its affiliates for sale in a public offering beginning as of November 1, 2003.
The Company has also agreed to use its reasonable best efforts to enable
RenaissanceRe, from and after the third anniversary of the completion of the
Company's initial public offering, to distribute the common shares it
beneficially owns in an offering on a continuous or delayed basis pursuant to a
registration statement under the Securities Act. After November 1, 2007,
RenaissanceRe will have the right to an additional two demand registrations if
RenaissanceRe beneficially owns more than 9.9% of the common shares then
outstanding. Each demand must include a number of common shares with a market
value equal to at least $50 million, except that this limitation will not apply
to RenaissanceRe's last demand registration. This agreement also contains
provisions regarding indemnification of each of RenaissanceRe and the Company by
the other, restrictions on RenaissanceRe regarding the acquisition of common
shares in certain circumstances, and requirements relating to pre-emptive rights
and participation in common share buy-back programs.
The Company entered into a five-year Services and Capacity Reservation
Agreement with RenaissanceRe, effective October 1, 2002, pursuant to which
RenaissanceRe provides services to the subsidiaries of the Company in connection
with its property catastrophe book of business. At the Company's request,
RenaissanceRe will analyze the Company's property catastrophe treaties and
contracts and will assist the Company in measuring risk and managing the
Company's aggregate catastrophe exposures. Based upon such analysis,
RenaissanceRe will furnish quotations at the Company's request for rates for
non-marine property catastrophe retrocessional coverage with aggregate limits up
to $100 million annually, either on an excess-of-loss or proportional basis. The
Company and RenaissanceRe may then enter into retrocessional agreements on the
basis of the quotations. The fee for the coverage commitment and the services
provided by RenaissanceRe under this agreement is $4 million at inception and at
each anniversary, adjusted to 3.5% of the Company's gross written non-marine
non-finite property catastrophe premium for the previous annual period, if and
to the extent such amount is greater than the fee paid in such previous annual
period. Either party may terminate this agreement if the other is deemed
impaired or insolvent by applicable regulatory or judicial authorities or is the
subject of conservation, rehabilitation, liquidation, bankruptcy or similar
insolvency proceedings. The Company paid a total of $4 million to RenaissanceRe
pursuant to this agreement for 2003.
Platinum Bermuda and Platinum US have each entered into substantially
similar Referral Agreements with Renaissance Underwriting Managers Ltd. ("RUM"),
a subsidiary of RenaissanceRe, effective November 1, 2002 (collectively, the
"Referral Agreements"), pursuant to which RUM provides referrals of treaty and
facultative reinsurance contracts to Platinum Bermuda and Platinum US (the
"Referred Contracts"). Under the Referral Agreements, Platinum Bermuda and
Platinum US each have the opportunity to quote on Referred Contracts that would
not otherwise be presented to Platinum Bermuda or Platinum US in the normal
course. Under each of the Referral Agreements, Platinum Bermuda and Platinum US
pay RUM an annual finder's fee and, in certain circumstances, a profit
commission for Referred Contracts actually bound by Platinum Bermuda or Platinum
US in accordance with formulas set forth in the Referral Agreements. Under the
Referral Agreements, RUM may elect, at the time it refers a Referred Contract,
to cause Platinum Bermuda or Platinum US to retrocede up to 30% of such Referred
Contract actually bound by Platinum Bermuda or Platinum US (the "RenRe Retro
Share"). The finder's fee and any profit commission due to RUM under each
Referral Agreement is reduced by the amount of the RenRe Retro Share. The RenRe
Retro Share may be subject to an aggregate loss ratio cap that will limit the
maximum liability of RenaissanceRe to 225% of Gross Premium Written (as defined
in the Referral
39
Agreement) for each annual period. The Referral Agreements expire on October 31,
2007. No amounts were paid to RUM by Platinum US under its Referral Agreement in
2003. Platinum Bermuda paid RUM $400,283 under its Referral Agreement in 2003.
Platinum US entered into an Excess of Loss Contract with RenaissanceRe
effective as of June 11, 2003, where the loss index is based on a property
catastrophe program purchased by Platinum US. Under this contract, RenaissanceRe
is liable for 50% of all premiums (plus a 2% override) and is entitled to 50% of
any loss recoveries under the indexed property catastrophe program.
Platinum US is party to two property catastrophe excess of loss programs
with the Glencoe Group of Companies, which are affiliates of RenaissanceRe.
Platinum has a 5% participation across four layers of reinsurance on one program
and a 15% participation on the other program.
CERTAIN TAX CONSIDERATIONS
The following discussion of the taxation of Platinum Holdings, Platinum
US, Platinum UK, Platinum Bermuda and Platinum Ireland and the taxation of our
shareholders is based upon current law. Legislative, judicial or administrative
changes may occur which could affect this discussion, possibly on a retroactive
basis. This discussion does not address special classes of shareholders, such as
shareholders that own directly, or indirectly through certain foreign entities
or through the constructive ownership rules of the Code, 10% or more of the
voting power or value of Platinum Holdings. Except for matters where it is
explicitly stated that we will not receive an opinion of counsel, the statements
as to U.S. federal income tax law set forth below are the opinion of Dewey
Ballantine LLP, our U.S. counsel, as to such tax laws (subject to the
qualifications, assumptions and factual determinations set forth in such
statements). The statements as to Bermuda tax law set forth below are the
opinion of Conyers, Dill & Pearman, our Bermuda counsel, as to such tax laws
(subject to the qualifications and assumptions set forth in such statements).
The statements as to U.K. tax law set forth below are the opinion of Slaughter
and May, our U.K. counsel, as to such tax laws (subject to the qualifications
and assumptions set forth in such statements). The statements as to Irish tax
law set forth below are the opinion of A. & L. Goodbody, our Irish counsel, as
to such tax laws (subject to the qualifications and assumptions set forth in
such statements). You are urged to consult your tax advisor as to the tax
consequences of ownership and disposition of the offered securities. This
discussion is limited to the tax consequences of ownership and disposition of
common shares. Tax considerations applicable to other types of securities will
be described in the related prospectus supplement.
TAXATION OF THE COMPANY, PLATINUM US, PLATINUM UK, PLATINUM BERMUDA AND PLATINUM
IRELAND BERMUDA
Under current Bermuda law, there is no income tax, capital gains tax or
withholding tax payable by us or Platinum Bermuda. Platinum Holdings and
Platinum Bermuda have received from the Bermuda Minister of Finance a standard
assurance under Bermuda's Exempted Undertakings Tax Protection Act 1966, to the
effect that in the event any legislation is enacted in Bermuda imposing any tax
computed on profits or income, or computed on any capital asset, gain or
appreciation, or any tax in the nature of estate duty or inheritance tax, then
the imposition of any such tax shall not be applicable to Platinum Holdings,
Platinum Bermuda, or any of their operations or the shares, debentures or other
obligations of Platinum Holdings or Platinum Bermuda, until 2016. This assurance
is subject to the proviso that it is not construed so as to prevent the
application of any tax or duty to such persons as are ordinarily resident in
Bermuda (Platinum Holdings and Platinum Bermuda are not currently so affected)
or to prevent the application of any tax payable in accordance with the
provisions of the Land Tax Act 1967 of Bermuda or otherwise payable in relation
to the property leased to us or Platinum Bermuda.
40
UNITED STATES FEDERAL INCOME TAXATION
We have structured and operated Platinum Holdings, Platinum UK, Platinum
Bermuda and Platinum Ireland in such a manner that they will not be considered
to be conducting a trade or business within the U.S. for purposes of U.S.
federal income taxation. Whether business is being conducted in the U.S. is an
inherently factual determination depending on such matters as (i) the size and
substance of the offices of our non-U.S. subsidiaries, (ii) whether employees of
non-U.S. subsidiaries make binding decisions while physically present in the
U.S., (iii) the number of employees permanently located in the offices of our
non-U.S. subsidiaries, and the levels of their managerial importance and (iv)
the situs of meetings of our board of directors and the boards of directors of
our non-U.S. subsidiaries. Because of the factual nature of these matters and
because definitive identification of activities which constitute being engaged
in a trade or business in the U.S. is not provided by the Code or regulations or
court decisions, counsel will not render an opinion regarding whether these
entities are to be deemed to be conducting business in the U.S. The IRS might
successfully contend that Platinum Holdings, Platinum UK, Platinum Bermuda
and/or Platinum Ireland is engaged in a trade or business in the U.S. A foreign
corporation deemed to be engaged in a U.S. trade or business is subject to U.S.
federal income tax, as well as branch profits tax in certain circumstances, on
its income which is treated as effectively connected with the conduct of that
trade or business unless the corporation is entitled to relief under the
permanent establishment provision of an applicable tax treaty, as discussed
below. Such income tax, if imposed, would be based on effectively connected
income computed in a manner generally analogous to that applied to the income of
a domestic corporation, except that a foreign corporation is entitled to
deductions and credits only if it files a U.S. income tax return. Under
regulations, the foreign corporation would be entitled to deductions and credits
for the taxable year only if the return for that year is timely filed under
rules set forth therein. Penalties may be assessed for failure to file tax
returns. Platinum Holdings, Platinum UK, Platinum Bermuda and Platinum Ireland
do intend to file protective U.S. federal income tax returns. The federal tax
rates currently are a maximum of 35% for a corporation's effectively connected
income and 30% for branch profits tax. The branch profits tax is imposed on net
income after subtracting the regular corporate tax and making certain other
adjustments.
Under the income tax treaty between Bermuda and the United States,
Platinum Bermuda is not subject to United States income tax on any net premium
income found to be effectively connected with a U.S. trade or business unless
that trade or business is conducted through a permanent establishment in the
United States. It is unclear whether the Bermuda treaty is equally applicable to
investment income. Because of the factual nature of, and the lack of definitive
parameters for determining the existence of, a permanent establishment and the
lack of clarity in the Bermuda treaty with respect to its applicability to
investment income, counsel will not render an opinion with respect to whether
Platinum Bermuda will have a permanent establishment in the U.S. or whether the
Bermuda treaty protects investment income not attributable to a U.S. permanent
establishment from U.S. taxation. Further, Platinum Bermuda is not entitled to
the benefits of the Bermuda treaty unless:
- more than 50% of Platinum Bermuda's stock is beneficially owned,
directly or indirectly, by Bermuda residents or U.S. citizens or
residents, and
- Platinum Bermuda's income is not used in substantial part to make
disproportionate distributions to, or to meet certain liabilities
to, persons who are not Bermuda residents or U.S. citizens or
residents.
Under the income tax treaty between the United Kingdom and the U.S. (the
"U.K. Treaty"), Platinum UK will not be subject to United States income tax on
any income found to be effectively connected with a U.S. trade or business
unless that trade or business is conducted through a permanent establishment in
the U.S. Platinum UK will be entitled to the benefits of the U.K. Treaty if:
- During at least half of the days during the relevant taxable period,
at least 50% of Platinum UK's stock is beneficially owned, directly
or indirectly, by citizens or residents of the U.S.
41
and the U.K., and Platinum UK's income is not used in substantial
part to make certain payments, or to meet certain liabilities to,
persons who are not U.S. or U.K. residents; or
- With respect to specific items of income, profit or gain derived
from the U.S., if such income, profit or gain is considered to be
derived in connection with, or incidental to, Platinum UK's business
conducted in the U.K.
Under the income tax treaty between Ireland and the United States (the
"Irish Treaty"), Platinum Ireland is not subject to United States income tax on
any income determined to be effectively connected with a U.S. trade or business
unless that trade or business is conducted through a permanent establishment in
the U.S. Platinum Ireland will generally be entitled to the benefits of the
Irish treaty if at least 50 percent of the shares of Platinum Holdings, measured
by both vote and value, are owned by U.S. citizens or residents. Because of the
factual nature of, and the lack of definitive parameters for, determining the
existence of a permanent establishment, counsel will not render an opinion with
respect to whether Platinum Ireland will have a permanent establishment in the
U.S.
Foreign corporations not engaged in a trade or business in the U.S. are
nonetheless subject to U.S. withholding tax at a rate of 30% of the gross amount
of certain "fixed or determinable annual or periodical gains, profits and
income" derived from sources within the U.S. (such as dividends and certain
interest on investments), subject to reduction by applicable treaties. Dividends
paid by Platinum Finance to Platinum Ireland will be subject to withholding at a
rate of 5%, provided that Platinum Ireland is entitled to the benefits of the
Irish Treaty as described above and certain other requirements are met. If
Platinum Ireland is not entitled to the benefits of the Irish Treaty and/or
certain other requirements are not met, dividends paid by Platinum Finance to
Platinum Ireland will be subject to withholding at a rate of 30%.
The U.S. also imposes an excise tax on insurance and reinsurance premiums
paid to foreign insurers or reinsurers with respect to risks located in the U.S.
The rate of tax applicable to premiums paid to Platinum Bermuda is 1% for
reinsurance premiums. The excise tax does not apply to premiums paid to Platinum
UK, provided that Platinum UK is entitled to the benefits of the UK Treaty and
certain other requirements are met.
Platinum Finance and Platinum US are U.S. corporations and are subject
to taxation in the U.S. at regular corporate rates.
THE UNITED KINGDOM
Platinum UK is a U.K. resident company which will be subject to
corporation tax in the United Kingdom on its worldwide profits. The current rate
of U.K. taxation applicable to U.K. resident corporations is generally 30%.
Currently, no U.K. withholding tax applies to dividends paid by Platinum UK.
IRELAND
Under relevant case law and practice a company is resident in Ireland for
tax purposes if its central management and control is, as a matter of fact,
located in Ireland. It is assumed, for the purposes of the material under this
heading, that Platinum Ireland is resident in Ireland for tax purposes.
Platinum Ireland is subject to Irish corporate tax on its worldwide
income. Dividends received by it from Platinum Finance and Platinum UK are
subject to Irish corporate tax (at the current applicable rate of 25%) subject
to any available relief under the double tax treaties Ireland has with the
United States and the United Kingdom.
Platinum Ireland will generally be entitled to the benefits of the Irish
Treaty if at least 50% of the shares of Platinum Holdings, measured by both vote
and value, are owned by US citizens or residents. Assuming that Platinum Ireland
is entitled to the benefits of the Irish Treaty in respect of dividends from
42
Platinum Finance, it would be entitled to a credit against Irish corporation tax
on the dividends for US tax imposed on the profits out of which the dividends
are declared. Alternatively, relief for US tax may be available under Irish
domestic law.
Assuming that Platinum Ireland is entitled to the benefits of the tax
treaty between Ireland and the United Kingdom in respect of dividends received
from Platinum UK it would be entitled to a credit against Irish corporation tax
on the dividends for UK tax imposed on the profits out of which the dividends
are declared.
Platinum Ireland is subject to Irish corporate tax on any trading income
at a rate of 12.5%.
Platinum Ireland will be exempt from the Irish capital duty of 1% (on the
value of share capital issued by it) because it is a unlimited liability
company.
TAXATION OF SHAREHOLDERS BERMUDA TAXATION
Currently, there is no Bermuda withholding tax on dividends paid by us or
Platinum Bermuda.
UNITED STATES TAXATION OF U.S. AND NON-U.S. SHAREHOLDERS
UNITED STATES SHAREHOLDERS
GENERAL. The following discussion is the opinion of Dewey Ballantine LLP,
our U.S. tax counsel, as to the material U.S. federal income tax consequences
relating to the acquisition, ownership and disposition of common shares if you
are a beneficial owner of common shares and you are:
- a citizen or resident of the U.S.;
- a domestic corporation;
- an estate whose income is subject to U.S. federal income tax
regardless of its source; or
- a trust if a U.S. court can exercise primary supervision over the
trust's administration and one or more U.S. persons are authorized
to control all substantial decisions of the trust. This discussion
applies to you only if you purchase your common shares in this
offering and hold your common shares as capital assets. This
discussion does not deal with the tax consequences applicable to all
categories of investors, some of which (such as broker-dealers,
investors who hold common shares as part of hedging or conversion
transactions and investors whose functional currency is not the U.S.
dollar) may be subject to special rules. Prospective investors are
advised to consult their own tax advisers with respect to their
particular circumstances and with respect to the effects of U.S.
federal, state, local or other laws to which they may be subject.
DIVIDENDS. Distributions with respect to your common shares will be
treated as ordinary dividend income to the extent of the Company's current or
accumulated earnings and profits as determined for U.S. federal income tax
purposes, subject to the discussion below relating to the potential application
of the "controlled foreign corporation", "related person insurance income", or
"passive foreign investment company" rules. Such dividends will not be eligible
for the dividends-received deduction allowed to U.S. corporations under the
Code. Any such dividends received by individual U.S. holders generally are
subject to a reduced maximum tax rate through December 31, 2008 of 15%. The rate
reduction does not apply to dividends received in respect of short-term or
hedged positions in the common shares and in certain other situations. The
amount of any distribution in excess of our current and accumulated earnings and
profits will not be treated as dividend income and will first be applied to
reduce your tax basis in the common
43
shares, and any amount in excess of tax basis will be treated as gain from the
sale or exchange of your common shares.
CLASSIFICATION OF PLATINUM HOLDINGS, PLATINUM UK, PLATINUM BERMUDA OR
PLATINUM IRELAND AS A CONTROLLED FOREIGN CORPORATION. Each "United States
shareholder" of a foreign corporation that is a "controlled foreign corporation"
("CFC") for an uninterrupted period of 30 days or more during a taxable year,
and who owns shares in the CFC directly or indirectly through foreign entities
on the last day of the CFC's taxable year must include in its gross income for
U.S. federal income tax purposes its pro rata share of the CFC's "subpart F
income", even if the subpart F income is not distributed. If Platinum Holdings,
Platinum Bermuda, Platinum Ireland and/or Platinum UK is deemed to be a CFC,
substantially all of Platinum Holdings' income and that of each of Platinum
Bermuda and Platinum Ireland will be subpart F income. Any U.S. corporation,
citizen, resident or other U.S. person who owns, directly or indirectly through
foreign persons, or is considered to own (by application of the rules of
constructive ownership set forth in Code section 958(b), applying to family
members, partnerships, estates, trusts or controlled corporations or holders of
certain options, including for these purposes, holders of our equity security
units) 10% or more of the total combined voting power of all classes of stock of
the foreign corporation will be considered to be a "United States shareholder".
A foreign insurance company such as Platinum UK or Platinum Bermuda is treated
as a CFC (other than for purposes of related person insurance income, as
described below) only if its "United States shareholders" collectively own more
than 25% of the total combined voting power or total value of the corporation's
stock. Because of the limitations on concentration of voting power of our common
shares, the dispersion of our share ownership among holders other than St. Paul
and its subsidiaries, and the restrictions on transfer, issuance or repurchase
of common shares, you should not be subject to treatment as a United States
shareholder of a CFC. However, these prophylactic provisions have not been
tested in court and it is possible that they could be challenged by the Internal
Revenue Service and found to be ineffective in preventing CFC status from
arising. Because our Bye-laws provide that no single shareholder (including St.
Paul) is permitted to hold as much as 10% of the total combined voting power of
Platinum Holdings, shareholders of Platinum Holdings should not be viewed as
United States shareholders of a CFC for purposes of these rules. Again, there
can be no assurance that these ownership limitations will be effective. Assuming
they are effective, however, neither the indirect foreign tax credit nor the
intercompany dividends received deduction attributable to U.S. source income
will be available to U.S. corporate holders of the common shares who, absent
such provision, would qualify therefor.
RPII COMPANIES. Different definitions of "United States shareholder" and
"controlled foreign corporation" are applicable in the case of a foreign
corporation which earns "related person insurance income" ("RPII"). RPII is
defined in Code section 953(c)(2) as any "insurance income" attributable to
policies of insurance or reinsurance with respect to which the person (directly
or indirectly) insured is a "United States shareholder" or a "related person" to
such a shareholder. In general, and subject to certain limitations, "insurance
income" is income (including premium and investment income) attributable to the
issuing of any insurance or reinsurance contract in connection with risks
located in a country other than the country under the laws of which the
controlled foreign corporation is created or organized and which would be taxed
under the portions of the Code relating to insurance companies if the income
were the income of a domestic insurance company.
The term "related person" for this purpose means someone who controls or
is controlled by the United States shareholder or someone who is controlled by
the same person or persons which control the United States shareholder.
"Control" is measured by either more than 50% in value or more than 50% in
voting power of stock, applying constructive ownership principles similar to the
rules of section 958 of the Code. A corporation's pension plan is ordinarily not
a "related person" with respect to the corporation unless the pension plan owns,
directly or indirectly through the application of constructive ownership rules
similar to those contained in section 958, more than 50%, measured by vote or
value, of the stock of the corporation. For purposes of inclusion of Platinum
UK's or Platinum Bermuda's RPII in the income of United States shareholders,
unless an exception applies, the term "United States shareholder" includes all
U.S. persons who own, directly or indirectly, any amount (rather than 10% or
more) of Platinum UK's or Platinum Bermuda's stock. Platinum UK or Platinum
Bermuda will be treated as a controlled foreign corporation for RPII purposes if
such persons collectively own directly, indirectly or constructively 25% or
44
more of the stock of Platinum UK or Platinum Bermuda by vote or value. St. Paul
will actually own approximately 15% (and will, after applying the constructive
ownership rules of the Code, own no more than 24.9%) of the common shares of
Platinum Holdings upon completion of the Public Offering. Accordingly, unless an
exception applies, it is likely that Platinum UK and Platinum Bermuda will each
be treated as a CFC for purposes of the RPII rules.
RPII EXCEPTIONS. The special RPII rules do not apply if:
- Direct or indirect insureds and persons related to such insureds,
whether or not U.S. persons, are treated at all times during the
taxable year as owning less than 20% of the voting power and less
than 20% of the value of the stock of Platinum UK or Platinum
Bermuda, as applicable,
- RPII, determined on a gross basis, is less than 20% of Platinum UK's
or Platinum Bermuda's gross insurance income for the taxable year,
as applicable,
- Platinum UK or Platinum Bermuda elects to be taxed on its RPII as if
the RPII were effectively connected with the conduct of a United
States trade or business and to waive all treaty benefits with
respect to RPII and meets certain other requirements, or
- Platinum UK or Platinum Bermuda elects to be treated as a United
States corporation.
Platinum UK and Platinum Bermuda have not and do not intend to make either
of the elections described above. Additionally, as subsidiaries of St. Paul and
RenaissanceRe may be reinsured by Platinum UK and/or Platinum Bermuda, persons
related to insureds may indirectly own more than 20% of the value of the stock
of Platinum UK and Platinum Bermuda. Thus, only the second exception may be
available.
Where none of these exceptions applies, each U.S. person who owns directly
or indirectly shares in Platinum Holdings (and therefore, indirectly in Platinum
UK and Platinum Bermuda) at the end of any taxable year, will be required to
include in its gross income for United States federal income tax purposes its
share of RPII of Platinum UK and/or Platinum Bermuda for the entire taxable
year. This inclusion will be determined as if such RPII were distributed
proportionately only to such United States shareholders holding common shares at
the end of the taxable year. The inclusion will be limited to the current-year
earnings and profits of Platinum UK or Platinum Bermuda, as applicable, reduced
by the shareholder's pro rata share, if any, of certain prior-year deficits in
earnings and profits.
COMPUTATION OF RPII. In order to determine how much RPII each of Platinum
UK and Platinum Bermuda has earned in each taxable year, we will obtain and rely
upon information from Platinum UK's and Platinum Bermuda's insureds and
reinsureds to determine whether any of the insureds, reinsureds or other persons
related to such insureds or reinsureds own our shares and are U.S. persons. Each
year, each of Platinum UK and Platinum Bermuda will send a letter after the most
recent taxable year to each person who was a policyholder to represent whether
it was a United States shareholder of the Company or related to a United States
shareholder during the year. For any taxable year in which Platinum UK's or
Platinum Bermuda's gross RPII is 20% or more of its gross insurance income for
the year, we may also seek information from our shareholders as to whether
direct or indirect owners of our shares at the end of the year are U.S. persons
so that the RPII may be determined and apportioned among such persons. To the
extent we are unable to determine whether a direct or indirect owner of shares
is a U.S. person, we may assume that such owner is not a U.S. person, thereby
increasing the per share RPII amount for all United States shareholders.
APPORTIONMENT OF RPII TO UNITED STATES SHAREHOLDERS. If Platinum UK's or
Platinum Bermuda's RPII for any future taxable year is 20% or more of its gross
insurance income, every U.S. person directly or indirectly owning common shares
on the last day of that year will be required to include in gross income its
share of Platinum UK's or Platinum Bermuda's RPII for such year, whether or not
distributed. A U.S. person owning common shares during our taxable year but not
on the last day of the taxable year for which
45
Platinum Bermuda and/or Platinum UK is a controlled foreign corporation within
the meaning of the RPII provisions of the Code, which would normally be December
31, is not required to include in gross income any part of Platinum UK's or
Platinum Bermuda's RPII. Correspondingly, a U.S. person directly or indirectly
owning common shares on the last day of the taxable year in which Platinum UK or
Platinum Bermuda is a controlled foreign corporation for purposes of these
provisions is required to include in its income its pro rata share of the RPII
for the entire year, even though it did not own the common shares for the entire
year.
INFORMATION REPORTING. Each U.S. person who is a direct or indirect
shareholder of Platinum Holdings on the last day of our taxable year must attach
to the income tax or information return it would normally file for the period
which includes that date a Form 5471 if Platinum UK or Platinum Bermuda is a CFC
for RPII purposes for any continuous thirty-day period during its taxable year,
whether or not any net RPII income is required to be reported. Platinum UK or
Platinum Bermuda, as the case may be, will not be considered to be a CFC for
this purpose and, therefore, Form 5471 will not be required, for any taxable
year in which Platinum UK's or Platinum Bermuda's gross RPII constitutes less
than 20% of its gross insurance income. For any year in which Platinum UK's or
Platinum Bermuda's gross RPII constitutes 20% or more of its gross insurance
income, we intend to provide Form 5471 to our direct or indirect United States
shareholders for attachment to the returns of such shareholders. The amounts of
the RPII inclusions may be subject to adjustment based upon subsequent IRS
examination. A tax-exempt organization will be required to attach Form 5471 to
its information return in the circumstances described above. Failure to file
Form 5471 may result in penalties. In addition, U.S. persons who at any time
acquire 10% or more of our shares will have an independent obligation to file
Form 5471.
TAX-EXEMPT SHAREHOLDERS. Tax-exempt entities will be required to treat
certain subpart F insurance income, including RPII, that is includible in income
by the tax-exempt entity as unrelated business taxable income.
DISTRIBUTIONS; BASIS; EXCLUSION OF DISTRIBUTIONS FROM GROSS INCOME. A
United States shareholder's tax basis in its common shares will be increased by
the amount of any RPII that the shareholder includes in income. The shareholder
may exclude from income the amount of any distribution by us to the extent of
the RPII included in income for the year in which the distribution was paid or
for any prior year. The United States shareholder's tax basis in its common
shares will be reduced by the amount of such distributions that are excluded
from income. While, in certain circumstances, a United States shareholder may be
able to exclude from income distributions with respect to RPII that a prior
shareholder included in income, that exclusion will not generally be available
to holders who purchase common shares in this offering or in the public trading
markets and are therefore unable to identify the previous shareholder and
demonstrate that such shareholder had previously included the RPII in income.
DISPOSITIONS OF COMMON SHARES. Subject to the discussion below relating to
the potential application of Code section 1248 or the passive foreign investment
company rules, you will recognize a gain or loss for United States federal
income tax purposes upon the sale or exchange of any common shares equal to the
difference between the amount realized upon such sale or exchange and your basis
in the common shares. If your holding period for these common shares is more
than one year, any gain will be subject to tax at a current maximum marginal tax
rate of 15% for individuals and 35% for corporations.
Code section 1248 provides that if a U.S. person disposes of stock in a
foreign corporation and such person owned directly, indirectly through certain
foreign entities or constructively 10% or more of the voting shares of the
corporation at any time during the five-year period ending on the date of
disposition when the corporation was a CFC, any gain from the sale or exchange
of the shares may be treated as ordinary income to the extent of the CFC's
earnings and profits during the period that the shareholder held the shares
(with certain adjustments). A 10% United States shareholder may in certain
circumstances be required to report a disposition of shares of a CFC by
attaching IRS Form 5471 to the United States income tax or information return
that it would normally file for the taxable year in which the disposition
occurs. Code section 953(c)(7) generally provides that section 1248 also will
apply to the sale or exchange of shares in a foreign corporation if the foreign
corporation would be taxed as an insurance company if it were a domestic
corporation, regardless of whether the shareholder is a 10% shareholder or
whether RPII
46
constitutes 20% or more of the corporation's gross insurance income. Existing
Treasury regulations do not address whether Code section 1248 and the
requirement to file Form 5471 would apply if the foreign corporation is not a
CFC but the foreign corporation has a subsidiary that is a CFC or that would be
taxed as an insurance company if it were a domestic corporation (although, as
discussed above, shareholders of 10% or more of the shares of the Company will
have an independent obligation to file Form 5471 in respect of the taxable year
in which they reach the 10% threshold). Code section 1248 and the requirement to
file Form 5471 should not apply to dispositions of common shares because (i) we
should not have any U.S. shareholders that own directly, indirectly or
constructively 10% or more of the voting power of the common shares, and (ii) we
are not directly engaged in the insurance business and, under proposed
regulations, Code sections 953 and 1248 appear to be applicable only in the case
of shares of corporations that are directly engaged in the insurance business.
However, the IRS might interpret the proposed regulations in a different manner
and the proposed regulations may be amended or promulgated in final form so as
to provide that Code section 1248 and the requirement to file Form 5471 will
apply to dispositions of common shares.
FOREIGN TAX CREDIT. If U.S. persons own a majority of the Company's
shares, only a portion of the current income inclusions under the CFC, RPII and
passive foreign investment company rules, if any, and of dividends paid by us
(including any gain from the sale of common shares that is treated as a dividend
under section 1248 of the Code) will be treated as foreign source income for
purposes of computing a shareholder's U.S. foreign tax credit limitation.
UNCERTAINTY AS TO APPLICATION OF RPII. Regulations interpreting the RPII
provisions of the Code exist only in proposed form. It is not certain whether
these regulations will be adopted in their proposed form or what changes might
ultimately be made or whether any such changes, as well as any interpretation or
application of the RPII rules by the IRS, the courts or otherwise, might have
retroactive effect. Accordingly, the meaning of the RPII provisions and their
application to Platinum UK and Platinum Bermuda is uncertain. These provisions
include the grant of authority to the U.S. Treasury to prescribe "such
regulations as may be necessary to carry out the purposes of this subsection,
including . . . regulations preventing the avoidance of this subsection through
cross insurance arrangements or otherwise". In addition, there can be no
assurance that the IRS will not challenge any determinations by Platinum UK or
Platinum Bermuda as to the amount, if any, of RPII that should be includible in
your income or that the amounts of the RPII inclusions will not be subject to
adjustment based upon subsequent IRS examination. Each U.S. person considering
an investment in common shares should consult its tax advisor as to the effects
of these uncertainties.
PASSIVE FOREIGN INVESTMENT COMPANIES. Sections 1291 through 1298 of the
Code contain special rules applicable to foreign corporations that are "passive
foreign investment companies" ("PFICs"). In general, a foreign corporation will
be a PFIC during a given year if:
- 75% or more of its income constitutes "passive income" or
- 50% or more of its assets produce passive income.
If we were to be characterized as a PFIC during a given year, our United
States shareholders would be subject to a penalty tax at the time of their sale
at a gain of, or receipt of an "excess distribution" with respect to, their
common shares, unless such shareholders elected to be taxed on their pro rata
share of our earnings whether or not such earnings were distributed or elected
to be taxed on the investment in common shares on a mark-to-market basis. In
general, a shareholder receives an "excess distribution" if the amount of the
distribution is more than 125% of the average distribution with respect to the
stock during the three preceding taxable years (or shorter period during which
the taxpayer held the stock). In general, the penalty tax is equivalent to an
interest charge on taxes that are deemed due during the period the United States
shareholder owned the shares, computed by assuming that the excess distribution
or gain (in the case of a sale) with respect to the shares was taxed in equal
portions at the highest applicable tax rate on ordinary income throughout the
shareholder's period of ownership. The interest charge is equal to the
applicable rate imposed on underpayments of United States federal income tax for
such period.
47
For the above purposes, passive income is defined to include income of the
kind which would be foreign personal holding company income under Code section
954(c), and generally includes interest, dividends, annuities and other
investment income. The PFIC statutory provisions, however, contain an express
exception for income "derived in the active conduct of an insurance business by
a corporation which is predominantly engaged in an insurance business . . .".
This exception is intended to ensure that income derived by a bona fide
insurance company is not treated as passive income, except to the extent such
income is attributable to financial reserves in excess of the reasonable needs
of the insurance business. We expect, for purposes of the PFIC rules, that each
of Platinum UK and Platinum Bermuda will be predominantly engaged in an
insurance business and is unlikely to have financial reserves in excess of the
reasonable needs of its insurance business. The PFIC statutory provisions
contain a look-through rule stating that, for purposes of determining whether a
foreign corporation is a PFIC, such foreign corporation shall be treated as if
it received "directly its proportionate share of the income . . ." and as if it
"held its proportionate share of the assets . . ." of any other corporation in
which it owns at least 25% by value of the stock. While no explicit guidance is
provided by the statutory language, under this look-through rule we should be
deemed to own the assets and to have received the income of our insurance
subsidiaries directly for purposes of determining whether we qualify for the
insurance exception. This interpretation of the look-through rule is consistent
with the legislative intention generally to exclude bona fide insurance
companies from the application of PFIC provisions; there can, of course, be no
assurance as to what positions the IRS or a court might take in the future. Each
U.S. person considering an investment in common shares should consult its tax
advisor as to the effects of the PFIC rules.
OTHER. Except as discussed below with respect to backup withholding,
dividends paid by us will not be subject to U.S. withholding tax.
TRANSFER REPORTING REQUIREMENTS
A U.S. person (including a tax exempt entity) that transfers our common
shares to a non-U.S. person may be required to file a Form 926 or similar form
with the IRS if the cost of such purchases, including the cost of certain
related purchases and purchases by related persons, exceeds $100,000. In the
event such person fails to file any such required form, such person could be
required to pay a penalty equal to 10% of the gross amount paid for such common
shares (subject to a maximum penalty of $100,000, except in cases involving
intentional disregard). U.S. persons should consult their tax advisors with
respect to this or any other reporting requirement which may apply with respect
to their acquisition of our common shares.
NON-U.S. SHAREHOLDERS
Subject to certain exceptions, non-U.S. persons will be subject to United
States federal income tax on dividend distributions with respect to, and gain
realized from the sale or exchange of, common shares only if such dividends or
gains are effectively connected with the conduct of a trade or business within
the U.S. Nonresident alien individuals will not be subject to U.S. estate tax
with respect to our common shares.
ALL SHAREHOLDERS
Information reporting to the IRS by paying agents and custodians located
in the United States will be required with respect to payments of dividends on
the common shares to U.S. persons. Thus, you may be subject to backup
withholding with respect to dividends paid by such persons, unless you:
- are a corporation or come within certain other exempt categories
and, when required, demonstrate this fact, or
48
- provide a taxpayer identification number, certify as to no loss of
exemption from backup withholding and otherwise comply with
applicable requirements of the backup withholding rules.
Backup withholding is not an additional tax and may be credited against
your regular federal income tax liability.
PROPOSED U.S. TAX LEGISLATION
Congress is currently considering a revision of certain aspects of the
U.S. tax system as applicable to non-U.S. corporations and their shareholders.
At the present time, the version of the bill that Congress is considering will
not negatively impact the Company or its shareholders. There can be no
assurance, however, that the bill that is ultimately passed by Congress will not
adversely affect the Company or its shareholders. Investors should consult their
tax advisor to determine the impact of any changes in U.S. federal income tax
law on the Company or on your investment in our common shares.
UNITED KINGDOM TAXATION
The following discussion applies only to U.K. resident individuals and
U.K. resident companies who beneficially own shares in Platinum Holdings and who
hold those shares as capital assets and not as dealers.
Such individuals will be liable to tax on dividends received, at a rate of
10% for those shareholders who are subject to tax only at the basic rate, and
32.5% for those shareholders who are liable to tax at the higher rate of tax.
Individual shareholders who while resident in the U.K. are non-U.K. domiciled
will be chargeable to tax in respect of dividends only if and to the extent that
the dividends are remitted to or enjoyed in the United Kingdom in any way.
Individual shareholders are potentially liable to capital gains tax in
respect of chargeable gains arising on any disposal of their shares. Once again,
resident shareholders who are non-U.K. domiciled will be chargeable to capital
gains tax on a disposal of their shares only as regards remittances made to the
United Kingdom of the proceeds.
For U.K. inheritance tax purposes, the shares of Platinum Holdings will
rank as non-U.K. assets which may have a bearing on the imposition of
inheritance tax in relation to gifts or the passing of the shares on death,
particularly where the donor or deceased was non-U.K. domiciled.
U.K. companies will be liable to corporation tax at the ordinary rate in
relation to dividends received on the shares and gains arising on the disposal
of the shares.
Were a U.K. company ever to hold shares that carried the entitlement
(aggregated with shares held by certain connected persons) to at least 25% of
the profits of Platinum, the U.K.'s Controlled Foreign Companies provisions
could be material, with the result that in certain circumstances underlying
profits of Platinum and its subsidiaries might be taxed in the hands of the U.K.
shareholder.
PROSPECTIVE INVESTORS SHOULD CONSULT THEIR OWN TAX ADVISORS CONCERNING ANY
FEDERAL, STATE, LOCAL AND NON-U.S. TAX CONSEQUENCES OF OWNERSHIP AND DISPOSITION
OF THE COMMON SHARES WHICH ARE PARTICULAR TO THEM.
49
PLAN OF DISTRIBUTION
We and/or the selling shareholders may sell offered securities in any one
or more of the following ways from time to time:
(1) through agents;
(2) to or through underwriters;
(3) through dealers; or
(4) directly to purchasers.
The prospectus supplement with respect to the offered securities will set
forth the terms of the offering of the offered securities, including the name or
names of any underwriters, dealers or agents; the purchase price of the offered
securities and the proceeds to us and/or the selling shareholders from such
sale; any underwriting discounts and commissions or agency fees and other items
constituting underwriters' or agents' compensation; any public offering price
and any discounts or concessions allowed or reallowed or paid to dealers and any
securities exchange on which such offered securities may be listed. Any public
offering price, discounts or concessions allowed or reallowed or paid to dealers
may be changed from time to time.
The selling shareholders may offer their common shares in one or more
offerings pursuant to one or more prospectus supplements, and each such
prospectus supplement will set forth the terms of the relevant offering as
described above. To the extent the common shares offered pursuant to a
prospectus supplement remain unsold, the selling shareholder may offer those
common shares on different terms pursuant to another prospectus supplement,
provided that no selling shareholder may offer or sell more common shares in the
aggregate than are indicated in the table set forth under the caption "Selling
Shareholders" pursuant to any such prospectus supplements.
The distribution of the offered securities may be effected from time to
time in one or more transactions at a fixed price or prices, which may be
changed, at market prices prevailing at the time of sale, at prices related to
such prevailing market prices or at negotiated prices.
Offers to purchase offered securities may be solicited by agents
designated by us from time to time. Any such agent involved in the offer or sale
of the offered securities in respect of which this prospectus is delivered will
be named, and any commissions payable by us and/or the selling shareholders to
such agent will be set forth, in the applicable prospectus supplement. Unless
otherwise indicated in such prospectus supplement, any such agent will be acting
on a reasonable best efforts basis for the period of its appointment. Any such
agent may be deemed to be an underwriter, as that term is defined in the
Securities Act, of the offered securities so offered and sold.
If offered securities are sold by means of an underwritten offering, we
and/or the selling shareholders will execute an underwriting agreement with an
underwriter or underwriters, and the names of the specific managing underwriter
or underwriters, as well as any other underwriters, and the terms of the
transaction, including commissions, discounts and any other compensation of the
underwriters and dealers, if any, will be set forth in the prospectus supplement
which will be used by the underwriters to make resales of the offered
securities. If underwriters are utilized in the sale of the offered securities,
the offered securities will be acquired by the underwriters for their own
account and may be resold from time to time in one or more transactions,
including negotiated transactions, at fixed public offering prices or at varying
prices determined by the underwriters at the time of sale.
Our offered securities may be offered to the public either through
underwriting syndicates represented by managing underwriters or directly by the
managing underwriters. If any underwriter or underwriters are utilized in the
sale of the offered securities, unless otherwise indicated in the prospectus
50
supplement, the underwriting agreement will provide that the obligations of the
underwriters are subject to certain conditions precedent and that the
underwriters with respect to a sale of offered securities will be obligated to
purchase all such offered securities of a series if any are purchased. We,
and/or the selling shareholders may grant to the underwriters options to
purchase additional offered securities, to cover over-allotments, if any, at the
public offering price (with additional underwriting discounts or commissions),
as may be set forth in the prospectus supplement relating thereto. If we and/or
the selling shareholders grant any over-allotment option, the terms of such
over-allotment option will be set forth in the prospectus supplement relating to
such offered securities.
If a dealer is utilized in the sales of offered securities in respect of
which this prospectus is delivered, we and/or the selling shareholders will sell
such offered securities to the dealer as principal. The dealer may then resell
such offered securities to the public at varying prices to be determined by such
dealer at the time of resale. Any such dealer may be deemed to be an
underwriter, as such term is defined in the Securities Act, of the offered
securities so offered and sold. The name of the dealer and the terms of the
transaction will be set forth in the related prospectus supplement.
Offers to purchase offered securities may be solicited directly by us
and/or the selling shareholders and the sale thereof may be made by us and/or
the selling shareholders directly to institutional investors or others, who may
be deemed to be underwriters within the meaning of the Securities Act with
respect to any resale thereof. The terms of any such sales will be described in
the related prospectus supplement.
We may enter into derivative or other hedging transactions with financial
institutions. These financial institutions may in turn engage in sales of common
shares to hedge their position, deliver this prospectus in connection with some
or all of those sales and use the shares covered by this prospectus to close out
any short position created in connection with those sales. We may also sell our
common shares short using this prospectus and deliver common shares covered by
this prospectus to close out such short positions, or loan or pledge common
shares to financial institutions that in turn may sell the common shares using
this prospectus. We may pledge or grant a security interest in some or all of
the common shares covered by this prospectus to support a derivative or hedging
position or other obligation and, if we default in the performance of our
obligations, the pledgees or secured parties may offer and sell the common
shares from time to time pursuant to this prospectus.
Offered securities may also be offered and sold, if so indicated in the
applicable prospectus supplement, in connection with a remarketing upon their
purchase, in accordance with a redemption or repayment pursuant to their terms,
or otherwise, by one or more firms ("remarketing firms"), acting as principals
for their own accounts or as agents for us. Any remarketing firm will be
identified and the terms of its agreements, if any, with us and its compensation
will be described in the applicable prospectus supplement. Remarketing firms may
be deemed to be underwriters, as such term is defined in the Securities Act, in
connection with the offered securities remarketed thereby.
Agents, underwriters, dealers and remarketing firms may be entitled under
relevant agreements entered into with us to indemnification by us against
certain civil liabilities, including liabilities under the Securities Act that
may arise from any untrue statement or alleged untrue statement of a material
fact or any omission or alleged omission to state a material fact in this
prospectus, any supplement or amendment hereto, or in the registration statement
of which this prospectus forms a part, or to contribution with respect to
payments which the agents, underwriters, dealers or remarketing firms may be
required to make.
If so indicated in the prospectus supplement, we will authorize
underwriters or other persons acting as our agents to solicit offers by certain
institutions to purchase offered securities from us pursuant to contracts
providing for payments and delivery on a future date. Institutions with which
such contracts may be made include commercial and savings banks, insurance
companies, pension funds, investment companies, educational and charitable
institutions and others, but in all cases such institutions must be approved by
us. The obligations of any purchaser under any such contract will be subject to
the condition that the purchase of the offered securities shall not at the time
of delivery be prohibited under the laws of the jurisdiction to which such
purchaser is subject. The underwriters and such other agents will not have any
responsibility in respect of the validity or performance of such contracts.
51
Disclosure in the prospectus supplement of our use of delayed delivery
contracts will include the commission that underwriters and agents soliciting
purchases of the securities under delayed contracts will be entitled to receive
in addition to the date when we will demand payment and delivery of the
securities under the delayed delivery contracts. These delayed delivery
contracts will be subject only to the conditions that we describe in the
prospectus supplement.
Each series of offered securities will be a new issue and, other than the
common shares which are listed on the New York Stock Exchange, will have no
established trading market. We may elect to list any series of offered
securities on an exchange, and in the case of the common shares, on any
additional exchange, but, unless otherwise specified in the applicable
prospectus supplement, we shall not be obligated to do so. No assurance can be
given as to the liquidity of the trading market for any of the offered
securities.
Underwriters, dealers, agents and remarketing firms, as well as their
respective affiliates, may be customers of, engage in transactions with, or
perform services for, us and our subsidiaries in the ordinary course of
business.
WHERE YOU CAN FIND MORE INFORMATION
GENERAL
We have filed with the Securities and Exchange Commission, a registration
statement on Form S-3 under the Securities Act with respect to the common
shares, preferred shares, depositary shares, debt securities, warrants, purchase
contracts and purchase units offered by this prospectus. This prospectus, filed
as part of the registration statement, does not contain all of the information
set forth in the registration statement and its exhibits and schedules, portions
of which have been omitted as permitted by the rules and regulations of the SEC.
For further information about us and the securities, we refer you to the
registration statement and to its exhibits and schedules. Statements in this
prospectus about the contents of any contract, agreement or other document are
not necessarily complete and, in each instance, we refer you to the copy of such
contract, agreement or document filed as an exhibit to the registration
statement, with each such statement being qualified in all respects by reference
to the document to which it refers. Anyone may inspect the registration
statement and its exhibits and schedules without charge at the public reference
facilities the SEC maintains at 450 Fifth Street, N.W., Washington, D.C. 20549.
You may obtain copies of all or any part of these materials from the SEC upon
the payment of certain fees prescribed by the SEC. You may obtain further
information about the operation of the SEC's Public Reference Room by calling
the SEC at 1-800-SEC-0330. You may also inspect these reports and other
information without charge at a web site maintained by the SEC. The address of
this site is http://www.sec.gov.
We are subject to the informational requirements of the Exchange Act.
Accordingly, we file annual, quarterly and current reports, proxy statements and
other information with the SEC. You may inspect and copy these reports, proxy
statements and other information at the public reference facilities maintained
by the SEC at the address noted above. You also may obtain copies of this
material from the Public Reference Room of the SEC as described above, or
inspect them without charge at the SEC's web site or at our web site, the
address of which is http://www.platinumre.com. We also furnish our shareholders
with annual reports containing consolidated financial statements audited by an
independent accounting firm. Our web site is not incorporated into or otherwise
a part of this prospectus.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
We file annual, quarterly and current reports, proxy statements and other
information with the SEC. The SEC allows us to "incorporate by reference" the
information we file with it, which means that we can disclose important
information to you by referring to those documents. The information incorporated
by reference is an important part of this prospectus. Any statement contained in
a document which is incorporated by reference in this prospectus is
automatically updated and superseded if information contained in this
prospectus, or information that we later file with the Commission, modifies or
replaces this information. All documents we file pursuant to Sections 13(a),
13(c), 14 or 15(d) of the
52
Exchange Act, after the initial filing of this registration statement and until
we sell all the securities shall be deemed to be incorporated by reference into
this prospectus. We incorporate by reference the following previously filed
documents:
(1) Our Current Reports on Form 8-K filed on February 12, 2004 and
February 17, 2004;
(2) Our Annual Report on Form 10-K for the year ended December 31,
2003; and
(3) The information set forth under the caption "Description of
Our Common Shares" in our registration statement on Form S-1,
Registration No. 333-86906, filed with the SEC on April 25,
2002, as thereafter amended and supplemented, including the
prospectus constituting part of such registration statement
filed pursuant to Rule 424(b) under the Securities Act on
October 29, 2002.
To receive a free copy of any of the documents incorporated by reference
in this prospectus (other than exhibits to the registration statement of which
this prospectus is a part), call or write us at the following address: Platinum
Underwriters Holdings, Ltd., The Belvedere Building, 69 Pitts Bay Road,
Pembroke, Bermuda HM 08, Bermuda, (441) 295-7195.
LEGAL MATTERS
Certain matters as to U.S. law in connection with this offering will be
passed upon for us by Dewey Ballantine LLP. Certain matters as to Bermuda law in
connection with this offering will be passed upon for us by Conyers Dill &
Pearman, Hamilton, Bermuda. Certain matters as to United Kingdom law will be
passed upon for us by Slaughter & May. Certain matters as to Irish law will be
passed upon for us by A. & L. Goodbody. Additional legal matters may be passed
on for us, any underwriters, dealers or agents by counsel which we will name in
the applicable prospectus supplement.
EXPERTS
The consolidated balance sheets of Platinum Underwriters Holdings, Ltd.
as of December 31, 2003 and 2002 and the related consolidated statements of
income and comprehensive income, shareholders' equity and cash flows for the
year ended December 31, 2003 and the period from April 19, 2002 (date of
inception) to December 31, 2002, and all related financial statement schedules,
incorporated in this prospectus by reference to the Annual Report on Form 10-K
for the year ended December 31, 2003 have been audited by KPMG LLP, independent
auditors, as set forth in their reports appearing therein. The consolidated
financial statements and financial statement schedules referred to above are
included in reliance upon such reports of KPMG LLP, given upon the authority of
such firm as experts in accounting and auditing.
The combined statements of underwriting results and identifiable
underwriting cash flows of The St. Paul Companies, Inc. Reinsurance
Underwriting Segment (Predecessor) for the period from January 1, 2002 through
November 1, 2002 and the year ended December 31, 2001 incorporated in this
prospectus by reference to the Annual Report on Form 10-K for the year ended
December 31, 2003 have been audited by KPMG LLP, independent auditors, as set
forth in their report appearing therein. The combined statements referred to
above are included in reliance upon such report of KPMG LLP, given upon the
authority of such firm as experts in accounting and auditing. The audit report
covering Predecessor's combined statements contains an explanatory paragraph
that states that the combined statements are not intended to be a complete
presentation of Predecessor's or St. Paul's financial position, results of
operations, or cash flows.
ENFORCEMENT OF CIVIL LIABILITIES UNDER
UNITED STATES FEDERAL SECURITIES LAWS AND OTHER MATTERS
Platinum Holdings is a Bermuda company, and certain of its officers and
directors are or will be residents of various jurisdictions outside the United
States. A substantial portion of the assets of Platinum Holdings (in particular
the assets of Platinum Bermuda, which is also a Bermuda company) and of such
officers and directors, at any one time, are or may be located in jurisdictions
outside the United States. Therefore, it could be difficult for investors to
effect service of process within the United States on Platinum Holdings or any
of its officers and directors who reside outside the U.S. or to recover against
Platinum Holdings or any such individuals on judgments of courts in the U.S.,
including judgments
53
predicated upon civil liability under the U.S. federal securities laws. Platinum
Holdings has been advised by Conyers, Dill & Pearman, its Bermuda counsel, that
there is doubt as to whether the courts of Bermuda would enforce (1) judgments
of U.S. courts obtained in actions against such persons or Platinum Holdings
predicated upon the civil liability provisions of the U.S. federal securities
laws and (2) original actions brought in Bermuda against such persons or
Platinum Holdings predicated solely upon United States federal securities laws.
There is no treaty in effect between the U.S. and Bermuda providing for such
enforcement, and there are grounds upon which Bermuda courts may not enforce
judgments of U.S. courts. Certain remedies available under the laws of U.S.
jurisdictions, including certain remedies available under the U.S. federal
securities laws, would not be allowed in Bermuda courts as contrary to Bermuda's
public policy. Notwithstanding the foregoing, Platinum Holdings has irrevocably
agreed that it may be served with process with respect to actions against it
arising out of violations of the U.S. federal securities laws in any federal or
state court in the U.S. relating to the transactions covered by this prospectus
by serving CT Corporation System, 1633 Broadway, 30th Fl., New York, New York
10019, telephone (800) 624-0909, its U.S. agent appointed for that purpose.
54
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We will deliver a copy of this prospectus to the Registrar of Companies in
Bermuda for filing pursuant to the Companies Act. However, the Bermuda Monetary
Authority and Registrar of Companies in Bermuda accept no responsibility for the
financial soundness of any proposal or for the correctness of any of the
statements made or opinions expressed in this prospectus.
55
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the expenses payable by the Registrant in
connection with the issuance and distribution of the securities being registered
hereby. All of such expenses are estimates, other than the filing and quotation
fees payable to the Securities and Exchange Commission.
Filing Fee -- Securities and Exchange Commission $ 95,025
*Fees and Expenses of Counsel 75,000
*Printing Expenses 100,000
*Fees and Expenses of Accountants 25,000
*Rating Agency Fees 250,000
*Trustee Fees and Expenses 6,000
*Miscellaneous Expenses 100,000
-----------
*Total $ 651,025
===========
* Estimated
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS
Section 98 of the Companies Act 1981 provides generally that a Bermuda
company may indemnify its directors, officers and auditors against any liability
which by virtue of Bermuda law otherwise would be imposed on them, except in
cases where such liability arises from the fraud or dishonesty of which such
director, officer or auditor may be guilty in relation to the company. Section
98 further provides that a Bermuda company may indemnify its directors, officers
and auditors against any liability incurred by them in defending any proceeding,
whether civil or criminal, in which judgment is awarded in their favor or in
which they are acquitted if granted relief by the Supreme Court of Bermuda in
certain proceedings arising under Section 281 of the Companies Act.
The Company has adopted provisions in its Bye-laws that provide that the
Company shall indemnify its officers and directors to the maximum extent
permitted under the Companies Act.
Bye-law 32 of the Registrant's Bye-laws provides that each shareholder
agrees to waive any claim or right of action it might have, whether individually
or by or in the right of the Registrant, against any director or officer on
account of any action taken by such director or officer, or the failure of such
director or officer to take any action in the performance of his duties with or
for the Registrant, provided that such waiver shall not extend to any matter in
respect of any fraud or dishonesty which may attach to such director or officer.
Reference is made to the form of Underwriting Agreement to be filed as
Exhibit 1.1 hereto for provisions providing that the Underwriters are obligated,
under certain circumstances, to indemnify the directors, certain officers and
the controlling persons of the Registrant against certain liabilities under the
Securities Act.
Reference is made to the Registration Rights Agreement filed as Exhibit
10.11 to Platinum Holdings' Registration Statement on Form S-1 (Registration No.
333-86906) for provisions providing that St. Paul is obligated, under certain
circumstances, to indemnify the directors, certain officers and the controlling
persons of the Registrant against certain liabilities under the Securities Act.
Reference is made to the Transfer Restrictions, Registration Rights and
Standstill Agreement filed as Exhibit 10.45 to Platinum Holdings' Registration
Statement on Form S-1 (Registration No. 333-86906) for provisions providing that
RenaissanceRe is obligated, under certain circumstances, to indemnify the
directors, certain officers and the controlling persons of the Registrant
against certain liabilities under the Securities Act.
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ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
Exhibit
Number Description
------ -----------
*1.1 Form of Underwriting Agreement relating to common shares, preferred
shares, depositary shares, debt securities and warrants of Platinum
Holdings
*1.2 Form of Underwriting Agreement relating to purchase contracts
*1.3 Form of Underwriting Agreement relating to purchase units
*3.1 Memorandum of Association
*3.2 Bye-laws (incorporated herein by reference to Exhibit 3.2 to our
Registration Statement on Form S-1 registration No. 333-86906).
*4.1 Specimen Common Share Certificate (incorporated herein by reference
to our Registration Statement on Form S-1 (Registration No.
333-86906))
*4.2 Form of Indenture for senior debt securities between Platinum
Holdings and one or more banking institutions to be qualified as
Trustee pursuant to Section 305(b)(2) of the Trust Indenture Act of
1939. The form or forms of senior debt securities with respect to
each particular offering will be filed as an exhibit to a Current
Report on Form 8-K and incorporated herein by reference.
*4.3 Form of Subordinated Indenture, to be entered into between Platinum
Holdings and _____. The form or forms of subordinated debt
securities and any supplemental indentures with respect to each
particular offering will be filed as an exhibit to a Current Report
on Form 8-K and incorporated herein by reference.
*4.4 Form of Indenture for subordinated debt securities between Platinum
Holdings and one or more banking institutions to be qualified as
Trustee pursuant to Section 305(b)(2) of the Trust Indenture Act of
1939 (incorporated herein by reference to Exhibit 4.3, except for
name of Trustee). The form or forms of subordinated debt securities
with respect to each particular offering will be filed as an exhibit
to a Current Report on Form 8-K and incorporated herein by
reference.
*4.5 Form of Certificate of Designation, Preferences and Rights relating
to preferred shares
*4.6 Form of Standard Share Warrant Provisions
*4.7 Form of Standard Debt Warrant Provisions
*4.8 Form of Depositary Agreement
*4.9 Form of Standard Purchase Contract Provisions
*5.1 Opinion of Conyers Dill & Pearman
*5.2 Opinion of Dewey Ballantine LLP
*8.1 Opinion of Dewey Ballantine LLP
*8.2 Opinion of A. & L. Goodbody
*8.3 Opinion of Slaughter & May
II-2
Exhibit
Number Description
------ -----------
12.1 Statement regarding Calculation of Ratio of Earnings to Fixed
Charges
*23.1 Consent of Conyers Dill & Pearman (included in Exhibit 5.1)
*23.2 Consent of Dewey Ballantine LLP (included in Exhibit 5.2)
*23.3 Consent of Dewey Ballantine LLP (included in Exhibit 8.1)
*23.4 Consent of A. & L. Goodbody (included in 8.2)
*23.5 Consent of Slaughter & May (included in 8.3)
23.6 Consent of KPMG LLP (New York, New York)
23.7 Consent of KPMG LLP (Minneapolis, Minnesota)
*25.1 Statement of Eligibility of _____ on Form T-1, as trustee for the
Senior Indenture
*25.2 Statement of Eligibility of _____ on Form T-1, as trustee for the
Subordinated Indenture
*25.3 Statement of Eligibility of _____ on Form T-1, as trustee for the
Junior Subordinated Indenture
*99.1 Form F-N
----------
* To be filed, if necessary, subsequent to the effectiveness of this
registration statement by an amendment to this registration statement or
incorporated by reference pursuant to a Current Report on Form 8-K in
connection with an offering of securities.
ITEM 17. UNDERTAKINGS
The undersigned registrants hereby undertake:
(a) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the effective registration statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
II-3
provided, however, that paragraphs (a)(i) and (a)(ii) do not apply if the
registration statement is on Form S-3 or S-8 and the information required to be
included in a post-effective amendment by those paragraphs is contained in
periodic reports filed with or furnished to the Commission by the registrants
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in this registration statement.
(b) That, for the purpose of determining any liability under the
Securities Act of 1933, as amended, 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.
(c) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
The undersigned registrants hereby undertake that, for purposes of
determining any liability under the Securities Act of 1933, as amended, each
filing of our annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
The undersigned registrants hereby undertake to provide to the underwriter
at the closing specified in the underwriting agreements, certificates in such
denominations and registered in such names as required by the underwriter to
permit prompt delivery to each purchaser.
The undersigned registrants hereby undertake that:
(a) For purposes of determining any liability under the Securities Act of
1933, as amended, the information omitted from the form of prospectus filed as
part of this registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the registrants pursuant to Rule 424(b)(1) or (4)
or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective; and
(b) For the purpose of determining any liability under the Securities Act
of 1933, as amended, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended, may be permitted to directors, officers and controlling
persons of the registrants pursuant to the provisions set forth or described in
Item 15 of this registration statement, or otherwise, the registrants have been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is therefore unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by a registrant of expenses
incurred or paid by a director, officer or controlling person of such registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrants will, unless in the opinion of their counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by them is
against public policy as expressed in the Securities Act of 1933, as amended,
and will be governed by the final adjudication of such issue.
The undersigned registrants hereby undertake to file an application for
the purpose of determining the eligibility of the trustee to act under
subsection (a) of Section 310 of the Trust Indenture Act in accordance with the
rules and regulations prescribed by the Commission under Section 305(b)(2) of
the Trust Indenture Act of 1939.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
Platinum Underwriters Holdings, Ltd. certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form S-3 and has
duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Pembroke, Bermuda, on the 12th day of
March 2004.
PLATINUM UNDERWRITERS HOLDINGS, LTD.
By /s/ GREGORY E.A. MORRISON
------------------------------------
Gregory E.A. Morrison
President, Chief Executive Officer
and Director
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints Gregory E.A. Morrison and Michael
E. Lombardozzi, and each of them acting individually, his true and lawful
attorney-in-fact and agent, each with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this Registration Statement and to sign any and all registration statements
relating to the same offering of securities as this Registration Statement that
are filed pursuant to Rule 462(b) of the Securities Act of 1933, as amended, and
to file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission and any other regulatory
authority, granting unto said attorney-in-fact and agent, full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in connection therewith, as fully to all intents and purposes as such
person might or could do in person, hereby ratifying and confirming all that
said attorney-in-fact and agent, his substitute or 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 below by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ GREGORY E.A. MORRISON President, Chief Executive Officer, and March 12, 2004
------------------------- Director
Gregory E.A. Morrison
/s/ WILLIAM A. ROBBIE Executive Vice President and Chief March 12, 2004
------------------------- Financial Officer (Principal Financial
William A. Robbie and Accounting Officer)
/s/ STEVEN H. NEWMAN Chairman of the Board of Directors March 12, 2004
-------------------------
Steven H. Newman
/s/ H. FURLONG BALDWIN Director March 12, 2004
-------------------------
H. Furlong Baldwin
/s/ JONATHAN F. BANK Director March 12, 2004
-------------------------
Jonathan F. Bank
II-5
SIGNATURE TITLE DATE
--------- ----- ----
/s/ DAN R. CARMICHAEL Director March 12, 2004
-------------------------
Dan R. Carmichael
/s/ JAY S. FISHMAN Director March 12, 2004
-------------------------
Jay S. Fishman
/s/ PETER T. PRUITT Director March 12, 2004
-------------------------
Peter T. Pruitt
/s/ NEILL A. CURRIE Director March 12, 2004
-------------------------
Neill A. Currie
/s/ DONALD PUGLISI Authorized Representative in the United March 12, 2004
------------------------- States
Donald Puglisi
II-6
Exhibit
Number Description
------- -----------
*1.1 Form of Underwriting Agreement relating to common shares, preferred
shares, depositary shares, debt securities and warrants of Platinum
Holdings
*1.2 Form of Underwriting Agreement relating to purchase contracts
*1.3 Form of Underwriting Agreement relating to purchase units
*3.1 Memorandum of Association
*3.2 Bye-laws (incorporated herein by reference to Exhibit 3.2 to our
Registration Statement on Form S-1 registration No. 333-86906).
*4.1 Specimen Common Share Certificate (incorporated herein by reference
to our Registration Statement on Form S-1 (Registration No.
333-86906))
*4.2 Form of Indenture for senior debt securities between Platinum
Holdings and one or more banking institutions to be qualified as
Trustee pursuant to Section 305(b)(2) of the Trust Indenture Act of
1939. The form or forms of senior debt securities with respect to
each particular offering will be filed as an exhibit to a Current
Report on Form 8-K and incorporated herein by reference.
*4.3 Form of Subordinated Indenture, to be entered into between Platinum
Holdings and _____. The form or forms of subordinated debt
securities and any supplemental indentures with respect to each
particular offering will be filed as an exhibit to a Current Report
on Form 8-K and incorporated herein by reference.
*4.4 Form of Indenture for subordinated debt securities between Platinum
Holdings and one or more banking institutions to be qualified as
Trustee pursuant to Section 305(b)(2) of the Trust Indenture Act of
1939 (incorporated herein by reference to Exhibit 4.3, except for
name of Trustee). The form or forms of subordinated debt securities
with respect to each particular offering will be filed as an exhibit
to a Current Report on Form 8-K and incorporated herein by
reference.
*4.5 Form of Certificate of Designation, Preferences and Rights relating
to preferred shares
*4.6 Form of Standard Share Warrant Provisions
*4.7 Form of Standard Debt Warrant Provisions
*4.8 Form of Depositary Agreement
*4.9 Form of Standard Purchase Contract Provisions
*5.1 Opinion of Conyers Dill & Pearman
*5.2 Opinion of Dewey Ballantine LLP
*8.1 Opinion of Dewey Ballantine LLP
*8.2 Opinion of A. & L. Goodbody
*8.3 Opinion of Slaughter & May
1
Exhibit
Number Description
------- -----------
12.1 Statement regarding Calculation of Ratio of Earnings to Fixed
Charges
*23.1 Consent of Conyers Dill & Pearman (included in Exhibit 5.1)
*23.2 Consent of Dewey Ballantine LLP (included in Exhibit 5.2)
*23.3 Consent of Dewey Ballantine LLP (included in Exhibit 8.1)
*23.4 Consent of A. & L. Goodbody (included in 8.2)
*23.5 Consent of Slaughter & May (included in 8.3)
23.6 Consent of KPMG LLP (New York, New York)
23.7 Consent of KPMG LLP (Minneapolis, Minnesota)
*25.1 Statement of Eligibility of _____ on Form T-1, as trustee for the
Senior Indenture
*25.2 Statement of Eligibility of _____ on Form T-1, as trustee for the
Subordinated Indenture *25.3 Statement of Eligibility of _____ on
Form T-1, as trustee for the Junior Subordinated Indenture
*99.1 Form F-N
----------
* To be filed, if necessary, subsequent to the effectiveness of this
registration statement by an amendment to this registration
statement or incorporated by reference pursuant to a Current Report
on Form 8-K in connection with an offering of securities.
2