As
filed with the Securities and Exchange Commission on March 4, 2009
Registration
No. 333-
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
S-3
REGISTRATION
STATEMENT
UNDER
THE SECURITIES ACT OF 1933
CENTRAL
EUROPEAN MEDIA ENTERPRISES
LTD.
(Exact
name of registrant as specified in its charter)
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Bermuda
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98-0438382
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(State
or other jurisdiction of incorporation
or organization)
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(I.R.S.
Employer Identification No.)
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CLARENDON
HOUSE
2
Church Street, Hamilton
HM
11, Bermuda
(441)
296-1431
(Address,
including zip code, and telephone number, including area code, of registrant’s
principal executive offices)
DANIEL
PENN, ESQ.
c/o
CME Development Corporation
81
Aldwych
London
WC2B 4HN
England
011-44-20-7430-5430
011-44-20-7430-5403
(Facsimile)
(Name,
address, including zip code, and telephone number, including area code, of agent
for service):
Copies
to:
ROBERT
L. KOHL, ESQ.
Katten
Muchin Rosenman LLP
575
Madison Avenue
New
York, New York 10022
(212)
940-6380
(212)
940-6557 (Facsimile)
Approximate Date of Commencement of
Proposed Sale to the Public : From time to time after the Registration
Statement becomes effective.
If the
only securities being registered on this form are being offered pursuant to
dividend or interest reinvestment plans, please check the following box: o
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, check the following box: x
If this
form is filed to register additional securities for an offering pursuant to Rule
462(b) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. o
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. o
If this
form is a registration statement pursuant to General Instruction I.D or a
post-effective amendment thereto that shall become effective upon filing with
the Commission pursuant to Rule 462(e) under the Securities Act, check the
following box. x
If this
Form is a post-effective amendment to a registration statement filed pursuant to
General Instruction I.D filed to register additional securities or additional
classes of securities pursuant to Rule 413(b) under the Securities Act, check
the following box. o
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of “large accelerated filer,”
“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act.
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Large
accelerated filer x
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Accelerated
filer o
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Non-accelerated
filer o
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Smaller
reporting company o
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CALCULATION
OF REGISTRATION FEE
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Title
of each class of securities
to
be registered
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Amount
to be registered
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Proposed
maximum offering price per share
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Proposed
maximum aggregate offering price
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Amount
of registration Fee
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Class
A Common Stock, par value $.08 per share
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(1)
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(1)
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(1)
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(1)
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(1)
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An unspecified amount of shares
of Class A common stock to be offered at indeterminate prices is being
registered pursuant to this registration statement. The registrant is
deferring payment of the registration fee pursuant to Rule 456(b) and is
omitting this information in reliance on Rule 456(b) and
457(r).
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PROSPECTUS
Class
A Common Stock
We may
issue shares of our Class A common stock, and we or any selling security holders
may offer and sell shares of our Class A common stock from time to time in one
or more offerings. This prospectus describes the general terms of our Class A
common stock and the general manner in which these securities will be offered.
We will provide the specific manner in which these shares will be offered in
supplements to this prospectus, which may also supplement, update or amend
information contained in this document. You should read this prospectus and the
applicable prospectus supplement before you make any investment.
We and
any selling security holders may offer shares of our Class A common stock in
amounts and at prices determined at the time of offering. The shares may be sold
directly to you, through agents or through underwriters and dealers. If agents,
underwriters or dealers are used to sell the shares, we will name them and
describe their plan of distribution and compensation in a prospectus
supplement.
Our Class
A common stock is listed on the Nasdaq Global Select Market under the symbol
“CETV”. On February 27, 2009, the last reported sale price of shares
of Class A common stock on the Nasdaq Global Select Market was $6.36 per
share.
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Investing
in the shares involves certain risks. You should fully consider the risk factors
included in our most recent periodic reports filed with the U.S. Securities and
Exchange Commission, which are incorporated herein by reference, and in the
accompanying prospectus supplement, if any.
--------------------------
Neither
the Securities and Exchange Commission nor any state securities commission 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.
The date
of this prospectus is March 4, 2009.
You
should rely only on the information contained in this prospectus, in an
accompanying prospectus supplement or incorporated by reference herein or
therein. We have not authorized anyone to provide you with
information or make any representation that is different. If anyone
provides you with different or inconsistent information, you should not rely on
it. This prospectus and any accompanying prospectus supplement do not
constitute an offer to sell or a solicitation of an offer to buy any securities
other than the registered securities to which they relate, and this prospectus
and any accompanying prospectus supplement do not constitute an offer to sell or
the solicitation of an offer to buy securities in any jurisdiction where, or to
any person to whom, it is unlawful to make such an offer or
solicitation. You should not assume that the information contained in
this prospectus and any accompanying prospectus supplement is correct on any
date after the respective dates of the prospectus and such prospectus supplement
or supplements, as applicable, even though this prospectus and such prospectus
supplement or supplements are delivered or shares of Class A common stock are
sold pursuant to the prospectus and such prospectus supplement or supplements at
a later date. Since the respective dates of the prospectus contained
in this registration statement and any accompanying prospectus supplement, our
business, financial condition, results of operations and prospects may have
changed.
This
prospectus is part of a registration statement that we filed with the SEC using
a “shelf” registration process. Under this shelf process, we or selling security
holders may sell the shares described in this prospectus in one or more
offerings. This prospectus provides you with a general description of the shares
of our Class A common stock that we or selling security holders may offer. Each
time we or selling security holders sell shares, we will provide a prospectus
supplement that will contain specific information about the terms of the
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
“Where You Can Find More Information.”
Unless
the context otherwise indicates, the terms “CME,” “we,” “us,” and “our” refer to
Central European Media Enterprises Ltd. and our subsidiaries and
affiliates. The term “EU” refers to the European Union.
We file
annual, quarterly and current reports, proxy statements and other information
with the SEC. Our filings with the SEC are available to the public on
the Internet at the SEC’s website at http://www.sec.gov. You may also
read and copy any document that we file with the SEC at its Public Reference
Room, 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC
at 1-800-SEC-0330 for further information on the Public Reference Room and their
copy charges.
The
information incorporated by reference herein 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 SEC prior to the termination of this offering, modifies or
replaces such information. The following documents filed with the SEC
are incorporated by reference into this prospectus, except for any document or
portion thereof “furnished” to the SEC:
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our
Annual Report on Form 10-K for the year ended December 31, 2008;
and
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all
documents we file with the SEC pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), after the date of this prospectus and prior to the termination of
an offering under this prospectus.
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To
receive a free copy of any of the documents incorporated by reference in this
prospectus (other than exhibits, unless they are specifically incorporated by
reference in the documents), write us at the following address or call us at the
telephone number listed below:
CME
Development Corporation
Attn:
Corporate Secretary
Aldwych
House
81
Aldwych, London
WC2B 4HN,
England
011-44-20-7430-5430
We also
maintain a website at http://www.cetv-net.com through which you can obtain
copies of documents that we filed with the SEC. The contents of that
website are not incorporated by reference in or otherwise a part of this
prospectus.
This
prospectus and the documents incorporated by reference into this prospectus
contain forward-looking statements, including statements regarding our capital
needs, business strategy, expectations and intentions. Statements that use the
terms “believe”, “anticipate”, “expect”, “plan”, “estimate”, “intend” and
similar expressions of a future or forward-looking nature identify
forward-looking statements for purposes of the U.S. federal securities laws or
otherwise. For these statements and all other forward-looking statements, we
claim the protection of the safe harbor for forward-looking statements contained
in the Private Securities Litigation Reform Act of 1995.
Forward-looking
statements are inherently subject to risks and uncertainties, many of which
cannot be predicted with accuracy or are otherwise beyond our control and some
of which might not even be anticipated. Forward-looking statements reflect our
current views with respect to future events and because our business is subject
to such risks and uncertainties, actual results, our strategic plan, our
financial position, results of operations and cash flows could differ materially
from those described in or contemplated by the forward-looking statements
contained in this report.
Important
factors that contribute to such risks include, but are not limited to, the
following: the effect of the credit crisis and economic downturn in our markets
as well as in the United States and Western Europe; decreases in television
advertising spending and the rate of development of the advertising markets in
the countries in which we operate; the impact of any additional investments we
make in our Bulgaria, Croatia and Ukraine operations; our effectiveness in
implementing our strategic plan for the Studio 1+1 group in Ukraine; our ability
to make future investments in television broadcast operations; our ability to
develop and implement strategies regarding sales and multi-channel
distribution; changes in the political and regulatory environments where we
operate and application of relevant laws and regulations; the timely renewals of
broadcasting licenses and our ability to obtain additional frequencies and
licenses; and our ability to acquire necessary programming and attract
audiences. The foregoing review of important factors should not be construed as
exhaustive and should be read in conjunction with other cautionary statements
that are included in this prospectus, any applicable prospectus supplement and
the documents incorporated by reference herein and therein. We undertake no
obligation to publicly update or review any forward-looking statements, whether
as a result of new information, future developments or
otherwise.
We have
over 14 years of experience owning and operating leading commercial television
stations in Central and Eastern Europe. We own and operate 18
television channels in seven Central and Eastern European
countries: Bulgaria, the Czech and Slovak Republics, Slovenia,
Romania, Croatia, and Ukraine (the first five of which are members of the
EU). Our television channels reach an aggregate of approximately 87.6
million people and we estimate our markets had a combined television advertising
spend of approximately US$ 2.1 billion in 2008.
We were
incorporated under the laws of Bermuda on June 15, 1994. Article 6 of
our Memorandum of Association states our objective to, among other things, act
as and perform all of the functions of a holding company and to provide
financing and financial services to our subsidiaries and
affiliates. We are registered with the Registrar of Companies in
Bermuda with registration number 19574. Our website is located at
www.cetv-net.com. The information on our website is not part of this
prospectus.
Our
registered office is located at Clarendon House, Church Street, Hamilton HM 11
Bermuda, and our telephone number is +1-441-296-1431. Certain of our
subsidiaries maintain offices at 81 Aldwych, London, WC2B 4HN, United Kingdom,
telephone number +44-20-7430-5430, and at Dam 5B, 1012 JS Amsterdam, The
Netherlands.
We intend
to use the net proceeds from the sale of the shares of our Class A common stock
for general corporate purposes, unless otherwise set forth in the applicable
prospectus supplement. We will not receive any proceeds from the sale
of any shares of Class A common stock by selling security
holders.
The
shares of our Class A common stock covered by this prospectus include shares
that may be offered or sold by holders of shares of our Class A common stock. In
such a case, we will provide you with a prospectus supplement naming the selling
security holders, the amount of shares of Class A common stock to be registered
and sold and any other terms of the shares being sold by each selling security
holder. A selling security holder may resell all, a portion or none of such
holder’s securities at any time and from time to time in an offering covered by
this prospectus and the accompanying prospectus supplement. Selling security
holders may also sell, transfer or otherwise dispose of some or all of these
securities in transactions exempt from the registration requirements of the
Securities Act of 1933, as amended (the “Securities Act”). We may pay all
expenses incurred with respect to the registration of shares owned by selling
security holders, other than underwriting fees, discounts or commissions, which
will be borne by the selling security holder.
As of
February 27, 2009 our authorized share capital was 120,000,000 shares, which
consists of (i) 100,000,000 shares of Class A common stock, par value $.08 per
share (which we refer to as Class A common stock), (ii) 15,000,000 shares of
Class B common stock, par value $.08 per share (which we refer to as Class B
common stock), and (iii) 5,000,000 preferred shares, par value $.08 per share
(which we refer to as “Preferred Stock”). As of February 27, 2009
there were 36,024,273 shares of Class A common stock issued and outstanding,
6,312,839 shares of Class B common stock issued and outstanding and no shares of
Preferred Stock issued and outstanding. The following statements are
summaries of certain provisions of our memorandum of association, bye-laws and
the Companies Act 1981, as amended, of Bermuda (the “Companies
Act”). These summaries do not purport to be complete and are
qualified in their entirety by reference to all of the provisions of our
memorandum of association and bye-laws, copies of each of which have been filed
or incorporated by reference as exhibits to our Annual Report on Form 10-K for
the year ended December 31, 2008. Prospective investors are urged to
read the exhibits for a complete understanding of our memorandum of association
and bye-laws.
Class
A Common Stock
The
holders of shares of Class A common stock are entitled to one vote per share and
are entitled to vote as a single class together with the holders of shares of
Class B common stock on all matters subject to shareholder approval, except that
the holders of shares of Class A common stock and the holders of shares of Class
B common stock will each vote as a separate class with respect to any proposed
“going private” transactions (as defined in our bye-laws and summarized below)
between us and Ronald S. Lauder or any of his Affiliates (as defined below); and
with respect to any matter requiring class voting by the Companies
Act. The holders of issued shares of Class A common stock are
entitled to receive dividends as and when declared by our Board of Directors,
pari passu with the holders of shares of Class B common stock, out of funds
legally available therefor, subject to any preferred dividend right of the
holders of any preferred stock. Under Bermuda law, a company’s board
of directors may declare and pay dividends from time to time unless there are
reasonable grounds for believing that the company is or would, after the
payment, be unable to pay its liabilities as they become due or that the
realizable value of its assets would thereby be less than the aggregate of its
liabilities and issued share capital and share premium accounts. The
holders of shares of Class A common stock have no preemptive or cumulative
voting rights and no rights to convert their shares of Class A common stock into
any other securities. In the event of our dissolution or winding up,
the holders of shares of Class A common stock are entitled to receive and share
ratably and equally in our remaining assets, if any, pari passu with the holders
of shares of Class B common stock, after the payment of all of our debts and
liabilities and subject to any liquidation preference on any issued and
outstanding shares of Preferred Stock.
Our
bye-laws provide that our board may in its absolute discretion and without
assigning any reason refuse to register the transfer of any shares of Class A
common stock to more than 4 (four) joint holders, or if the transfer of such
shares is restricted by an employee plan. Our Board of Directors may
decline to recognize any instrument of transfer unless it is accompanied by the
relevant share certificate and such other evidence of the transferor’s right to
make the transfer as our Board of Directors shall reasonably
require. Subject to the foregoing, a holder of shares of Class A
common stock may transfer the title to all or any of his shares by an instrument
of transfer in the usual or common form or in any other form approved by the
Board of Directors. The instrument of transfer must be signed by the
transferor and the transferee, although our Board of Directors may accept the
instrument signed only by the transferor.
Our
bye-laws further provide that nothing in the bye-laws shall impair the
settlement of transactions entered into through the facilities of the Nasdaq
Global Select Market except as provided by such exchange.
A
register of holders of shares of Class A common stock is maintained by Codan
Services Limited in Bermuda, and a branch register is maintained in the United
States by our transfer agent, American Stock Transfer and Trust
Company.
Class
B Common Stock
The
holders of shares of Class B common stock are entitled to ten votes per share
and are entitled to vote as a single class together with the holders of shares
of Class A common stock on all matters which are subject to shareholder
approval, except that the holders of the shares of Class A common stock and the
holders of shares of Class B common stock will each vote as a separate class
with respect to any proposed “going private” transactions (as defined in our
bye-laws and summarized below) between us and Ronald S. Lauder or any of his
Affiliates (as defined below) and any matter requiring class voting by the
Companies Act. The holders of the issued shares of Class B common
stock are entitled to receive dividends as and when declared by the Board of
Directors, pari passu with the holders of shares of Class A common stock, out of
funds legally available therefor, subject to any preferred dividend right of the
holders of any preferred stock. Under Bermuda law, a company’s board
of directors may declare and pay dividends from time to time unless there are
reasonable grounds for believing that the company is or would, after the
payment, be unable to pay its liabilities as they become due or that the
realizable value of its assets would thereby be less than the aggregate of its
liabilities and issued share capital and share premium accounts. The
holders of the shares of Class B common stock have no preemptive or cumulative
voting rights. The holders of the shares of Class B common stock have
the right to convert their shares of Class B common stock into shares of Class A
common stock at their election and on a one to one basis, and all shares of
Class B common stock will automatically convert into shares of Class A common
stock on a one to one basis when the number of shares of Class B common stock
represent less than 10% of the combined total number of shares of Class A common
stock and shares of Class B common stock issued and
outstanding. Shares of Class B common stock may be transferred only
to (i) other original holders of shares of Class B common stock; (ii) to members
of the immediate family of the original holder by gift, devise or otherwise
through laws of inheritance, descent or distribution, to a trust established by
the holder for the holder’s family members, to corporations of which the
majority of beneficial owners are or will be owned by the holders of shares of
Class B common stock and to a corporation or other entity the majority of the
beneficial owners of which are or will be owned by holders of shares of Class B
common stock; (iii) in the case where the holder of shares of Class B common
stock is a corporation, to its shareholders; (iv) in the case where the holder
of shares of Class B common stock is a partnership, to its partners; and (v) to
any person who would be a Permitted Transferee through a series of permitted
transfers (all of the foregoing referred to as a “Permitted
Transferee”). Any other transfer of shares of Class B common stock is
void. However, as discussed above, a holder of shares of Class B
common stock may convert his or her shares into shares of Class A common stock
as permitted by our bye-laws and transfer such shares of Class A common stock as
permitted by law. A transfer by an original holder of shares of Class
B common stock which is either a corporation or a partnership of more than 50%
of the equity interest in such corporation or partnership to other than a
Permitted Transferee shall result in an automatic conversion of all shares of
Class B common stock held by such corporation or partnership into an equal
number of shares of Class A common stock. We are entitled to seek
specific enforcement of such conversion of shares of Class B common stock into
shares of Class A common stock upon the failure of any holder and/or transferee
of shares of Class B common stock to comply with such conversion. In
such event, we are entitled to recover from the holder and the transferee who
failed to comply with such conversion, jointly and severally, the court costs,
reasonable attorneys’ fees and other costs and expenses incurred by it in
connection with the obtaining of such specific enforcement. In the
event of our dissolution or winding up, the holders of shares of Class B common
stock are entitled to receive and share ratably and equally in our remaining
assets, if any, pari passu with the holders of our shares of Class A common
stock, after the payment of all of our debts and liabilities and subject to any
liquidation preference on any issued and outstanding shares of Preferred
Stock.
A “going
private” transaction is any “Rule 13e-3 Transaction,” as that term is defined in
Rule 13e-3 promulgated under the U.S. Securities Exchange Act of 1934, as
amended, between us and (i) Ronald S. Lauder, (ii) any Affiliate of Mr. Lauder,
as defined below or (iii) any group consisting of Mr. Lauder or Affiliates of
Mr. Lauder.
An
Affiliate of Ronald S. Lauder is (i) any individual or entity who or that,
directly or indirectly, controls, is controlled by, or is under direct or
indirect common control with Mr. Lauder, (ii) any corporation or organization
(other than CME or a majority owned subsidiary of CME) of which Mr. Lauder is an
officer or a partner or is, directly or indirectly, the beneficial owner of 10%
or more of any class of voting securities, or in which Mr. Lauder has a
substantial beneficial interest, (iii) any trust or other estate in which Mr.
Lauder has a substantial beneficial interest or as to which Mr. Lauder serves as
trustee or in a similar fiduciary capacity or (iv) any relative or spouse of Mr.
Lauder, or any relative of such spouse, who has the same residence as Mr.
Lauder.
The
transfer agent and registrar for our shares of Class B common stock is Codan
Services Limited of Hamilton, Bermuda.
Preferred
stock
Subject
to the Companies Act and our memorandum of association and bye-laws, shares of
our Preferred Stock may be issued from time to time as determined by our Board
of Directors, without shareholder approval. Such shares of Preferred
Stock may be issued in such series and with such preferences, conversion or
other rights, voting powers, restrictions, limitations as to dividends,
qualifications or other provisions, as may be fixed by our Board of
Directors. While our Board of Directors has no current intention of
doing so, our Board of Directors, without shareholder approval, could issue
shares of Preferred Stock with voting and conversion rights which could
adversely affect the benefit of any voting power and the benefit of other rights
of the holders of shares of Class A common stock and which could be used by us
as an anti-takeover measure such as a “poison pill” without any further action
by the holders of shares of Class A common stock. This may have the
effect of delaying, deferring or preventing a change of control of CME by
increasing the number of shares necessary to gain control of us. At
the date of this prospectus, the Board of Directors has not authorized the
issuance of any shares of Preferred Stock and we have no agreements or
understanding for the issuance of any shares of Preferred Stock.
Meetings
of shareholders
Under
Bermuda law, a company is required to convene at least one general meeting of
shareholders each calendar year. Bermuda law provides that a special
general meeting of shareholders may be called by the board of directors of a
company and must be called upon the request of shareholders holding not less
than 10% of the paid-up capital of the company carrying the right to vote at
general meetings. Bermuda law also requires that shareholders be
given at least five days’ advance notice of a general meeting, but the
accidental omission to give notice to any person does not invalidate the
proceedings at a meeting. Our bye-laws provide that our Board of
Directors may convene an annual general meeting or a special general
meeting. Under our bye-laws, in general, at least 14 clear days’
notice of an annual general meeting or a special general meeting must be given
to each shareholder entitled to vote at such meeting. This notice
requirement is subject to the ability to hold such meetings on shorter notice if
such notice is agreed: (i) in the case of an annual general meeting
by all of the shareholders entitled to attend and vote at such meeting; or (ii)
in the case of a special general meeting by a majority in number of the
shareholders entitled to attend and vote at the meeting holding not less than
95% in nominal value of the shares entitled to vote at such
meeting. The quorum required for a general meeting of shareholders is
such number of shareholders holding a majority of the total issued voting shares
and present in person or by proxy.
Variation
of rights
If at any
time we have more than one class of shares, the rights attaching to any class,
unless otherwise provided for by the terms of issue of the relevant class, may
be varied either: (i) with the consent in writing of the holders of
at least 75% of the issued shares of that class; or (ii) with the sanction of a
resolution passed by at least 75% of the votes cast at a separate general
meeting of the relevant class of shareholders at which a quorum consisting of at
least two persons holding or representing one-third of the issued shares of the
relevant class is present. Our bye-laws specify that the creation or
issue of shares ranking equally with existing shares will not, unless expressly
provided by the terms of issue of existing shares, vary the rights attached to
existing shares.
Capitalization
of profits and reserves
Pursuant
to our bye-laws, our Board of Directors may (i) capitalize any part of the
amount of our share premium or other reserve accounts or any amount credited to
our profit and loss account or otherwise available for dividend or distribution
by applying such sum in paying up unissued shares to be allotted as fully paid
bonus shares pro-rata to the shareholders; or (ii) capitalize any sum standing
to the credit of a reserve account or sums otherwise available for dividend or
distribution by paying up in full partly paid shares of those shareholders who
would have been entitled to such sums if they were distributed by way of
dividend or distribution.
Anti-takeover
protections
Our
bye-laws contain provisions that could make it more difficult for a third party
to acquire us without the consent of our Board of Directors. These
provisions provide for discretion conferred upon our Board of Directors to
determine the powers, preferences and rights of our preference shares and to
issue the preference shares without shareholder approval. This could
impede the ability of one or more shareholders (acting in concert) to acquire
sufficient influence over the election of directors and other matters to effect
a change in control of our management. Our bye-laws also establish an
advance notice procedure for the nomination, other than by or at the direction
of our Board of Directors, of candidates for election as
directors. These provisions could make it more difficult for a third
party to acquire us, even if the third party’s offer may be considered
beneficial by many shareholders. As a result, shareholders may be
limited in their ability to obtain a premium for their shares.
Amendment
of memorandum of association and bye-laws
Bermuda
law provides that the memorandum of association of a company may be amended by a
resolution passed at a general meeting of shareholders. Our bye-laws
provide that no bye-law shall be rescinded, altered or amended, and no new
bye-law shall be made, unless it shall have been approved by a resolution of our
Board of Directors and by an ordinary resolution of the holders of shares of
Class A common stock and shares of Class B common stock voting together as a
single class.
Under
Bermuda law, the holders of an aggregate of not less than 20% in par value of
the company’s issued share capital or any class thereof have the right to apply
to the Supreme Court of Bermuda for an annulment of any amendment of the
memorandum of association adopted by shareholders at any general meeting, other
than an amendment which alters or reduces a company’s share capital as provided
in the Companies Act. Where such an application is made, the
amendment becomes effective only to the extent that it is confirmed by the
Bermuda court. An application for an annulment of an amendment of the
memorandum of association must be made within twenty-one days after the date on
which the resolution altering the company’s memorandum of association is passed
and may be made on behalf of persons entitled to make the application by one or
more of their number as they may appoint in writing for the
purpose. No application may be made by shareholders voting in favor
of the amendment.
Differences
in corporate law
Bermuda
law and the Companies Act differ in certain respects from laws generally
applicable to United States corporations and their shareholders. Set
forth below is a summary of certain material differences between Bermuda law and
Delaware corporate law. The following statements are summaries, and
do not purport to deal with all aspects of Bermuda law that may be relevant to
us or our shareholders.
Fiduciary Duty; Interested
Directors. Under Bermuda law, at common law, the directors of
a Bermuda company owe a fiduciary duty to the company to act in good faith in
their dealings with or on behalf of the company and to exercise their powers and
fulfill the duties of their office honestly. This duty includes the
following elements: (i) a duty to act in good faith in the best
interests of the company; (ii) a duty not to make a personal profit from
opportunities that arise from the office of director; (iii) a duty to avoid
conflicts of interest; and (iv) a duty to exercise powers for the purpose for
which such powers were intended. In addition, the Companies Act
imposes a specific duty on directors and officers of a Bermuda company to act
honestly and in good faith with a view to the best interests of the company and
requires them to exercise the care, diligence and skill that a reasonably
prudent person would exercise in comparable circumstances. The
Companies Act also imposes various duties on officers of a company with respect
to certain matters of management and administration of the
company. Our bye-laws provide that no director or officer shall be
disqualified by his office from entering into a contract or arrangement with us
nor can such director be liable to us for any profit realized pursuant to such a
transaction provided the nature of such director’s or officer’s interest is
disclosed at the first opportunity at a meeting of directors, or in writing to
the directors. Under Delaware law no such transaction would be
voidable if (i) the material facts as to such interested director’s relationship
or interests are disclosed or are known to the board of directors and the board
in good faith authorizes the transaction by the affirmative vote of a majority
of the disinterested directors, (ii) such material facts are disclosed or are
known to the stockholders entitled to vote on such transaction and the
transaction is specifically approved in good faith by vote of the stockholders
or (iii) the transaction is fair as to the corporation as of the time it is
authorized, approved or ratified. Under Delaware law, such interested
director could be held liable for any transaction for which such director
derived an improper personal benefit.
Amalgamation, Merger and Other
Business Combinations. We may acquire the business of another
Bermuda company similarly exempt from Bermuda taxes or a company incorporated
outside Bermuda and carry on such business when it is within the objects of our
memorandum of association. We may amalgamate with another Bermuda
company or with a company incorporated in another jurisdiction which permits
such a company to amalgamate with a Bermuda company, subject to board and
certain shareholder approval (except for an amalgamation between certain
affiliates). Under Bermuda law, in the event of an amalgamation of a
Bermuda company with another company or corporation, a shareholder of the
Bermuda company who is not satisfied that fair value has been offered for such
shareholder’s shares may, within one month of notice of the shareholders meeting
to consider the amalgamation, apply to the Supreme Court of Bermuda to appraise
the fair value of such shareholder’s shares. Under Delaware law, with
certain exceptions, any merger, consolidation or sale of all or substantially
all the assets of a corporation must be approved by the board of directors and a
majority of the issued shares entitled to vote. Under Delaware law, a
stockholder of a corporation participating in certain major corporate
transactions may, under varying circumstances, be entitled to appraisal rights
pursuant to which such stockholder may receive cash in the amount of the fair
market value of the shares held by such stockholder (as determined by a court or
by agreement of the corporation and the stockholder) in lieu of the
consideration such 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
issued stock of the corporation to be acquired or (iii) in a merger of the
corporation to be acquired with a subsidiary of the acquiring
corporation.
Takeovers. Under
Bermuda law, an acquiring party is generally able to acquire compulsorily the
shares of minority shareholders in the following ways:
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By
a procedure under the Companies Act known as a “scheme of
arrangement”. A scheme of arrangement could be effected by
obtaining the agreement of the company and of holders of shares,
representing in the aggregate a majority in number and at least 75% in
value of the shareholders present and voting at a court ordered meeting
held to consider the scheme of arrangement. The scheme of
arrangement must then be sanctioned by the Bermuda Supreme
Court. If a scheme of arrangement receives all necessary
agreements and sanctions, upon the filing of the court order with the
Registrar of Companies in Bermuda, all holders of shares could be
compelled to sell their shares under the terms of the scheme of
arrangement.
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If
the acquiring party is a company, it may compulsorily acquire all the
shares of the target company by acquiring pursuant to a tender offer 90%
of the shares or class of shares not already owned by, or by a nominee
for, the acquiring party (the offeror), or any of its
subsidiaries. If an offeror has, within four months after the
making of an offer for all the shares or class of shares not owned by, or
by a nominee for, the offeror, or any of its subsidiaries, obtained the
approval of the holders of 90% or more of all the shares to which the
offer relates, the offeror may, at any time within two months beginning
with the date on which the approval was obtained, by notice require any
non-tendering shareholder to transfer its shares on the same terms as the
original offer. In those circumstances, non-tendering
shareholders will be compelled to sell their shares unless the Supreme
Court of Bermuda (on application made within a one-month period from the
date of the offeror’s notice of its intention to acquire such shares)
orders otherwise.
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Where
one or more parties holds not less than 95% of the shares or a class of
shares of a company, such holder(s) may, pursuant to a notice given to the
remaining shareholders or class of shareholders, acquire the shares of
such remaining shareholders or class of shareholders. When this
notice is given, the acquiring party is entitled and bound to acquire the
shares of the remaining shareholders on the terms set out in the notice,
unless a remaining shareholder, within one month of receiving such notice,
applies to the Supreme Court of Bermuda for an appraisal of the value of
their shares. This provision only applies where the acquiring
party offers the same terms to all holders of shares whose shares are
being acquired. Delaware law provides that a parent
corporation, by resolution of its board of directors and without any
shareholder vote, may merge with any 90% or more owned
subsidiary. Upon any such merger, dissenting stockholders of
the subsidiary would have appraisal
rights.
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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 United States 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
the corporate power of the Company 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 our shareholders than that which actually approved
it. When the affairs of a company are being conducted in a manner
which is oppressive or prejudicial to the interests of some part of the
shareholders, one or more shareholders may apply to the Supreme Court of
Bermuda, which may make such order as it sees fit, including an order regulating
the conduct of the company’s affairs in the future or ordering the purchase of
the shares of any shareholders by other shareholders or by the
company. 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 attorney fees incurred in connection with such
action.
Indemnification of Directors and
Officers. Section 98 of the Companies Act provides generally
that a Bermuda company may indemnify its directors, officers and auditors
against any liability which by virtue of any rule of law would otherwise be
imposed on them in respect of any negligence, default, breach of duty or breach
of trust, except in cases where such liability arises from fraud or dishonesty
of which such director, officer or auditor may be guilty in relation to the
company. Section 98 further provides that a Bermuda company may
indemnify its directors, officers and auditors against any liability incurred by
them in defending any proceedings, whether civil or criminal, in which judgment
is awarded in their favor or in which they are acquitted or granted relief by
the Supreme Court of Bermuda pursuant to section 281 of the Companies
Act. Our bye-laws provide that our directors, officers, any person
appointed to any committee by the board of directors and certain other persons
(and their respective heirs, executors or administrators) in their capacity as
such shall be indemnified and held harmless by us in respect of their acts or
omissions, except in respect of their fraud or dishonesty. Under
Delaware law, a corporation may adopt a provision eliminating or limiting the
personal liability of a director to the corporation or its stockholders for
monetary damages for breach of fiduciary duty as a director, except for breaches
of the director’s duty of loyalty, for acts or omissions not in good faith or
which involve intentional misconduct or knowing violations of law, for improper
payment of dividends or for any transaction from which the director derived an
improper personal benefit. Delaware law has provisions and
limitations similar to Bermuda regarding indemnification by a corporation of its
directors or officers, except that under Delaware law the statutory rights to
indemnification may not be as limited.
Our
bye-laws also provide that our shareholders waive any claim or right of action
that they might have, both individually and on our behalf, against any of our
directors or officers in relation to any act or failure to act in the
performance of such director’s or officer’s duties, except in respect of any
fraud or dishonesty of such director or officer. Our bye-laws provide
that the indemnity and waiver of claims provided in our bye-laws shall extend,
as a matter of contract, between each shareholder and each former director and
officer of the Company (and their respective heirs, executors or administrators)
to any act done, purported to be done, concurred in or omitted in or about the
execution of their duty, or supposed duty, or in their respective offices or
trust by the former directors or officers of the Company. The
indemnification provided in our bye-laws is not exclusive of other
indemnification rights to which a director or officer may be entitled, provided
these rights do not extend to his or her fraud or dishonesty.
Insofar
as indemnification for liabilities arising under the Securities Act may be
permitted to directors, officers or persons controlling the registrant pursuant
to the foregoing provisions, the registrant has been informed that in the
opinion of the SEC such indemnification is against public policy as expressed in
the Securities Act and is therefore unenforceable.
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
its objects and powers) and any alteration to the memorandum of association and
documents relating to an increase or reduction of authorized
capital. The shareholders have the additional right to inspect the
bye-laws, minutes of general meetings and audited financial statements, which
must be presented to the annual general meeting of shareholders. Our
register of members is also open to inspection by members of the public without
charge. We are required to maintain our register of members in
Bermuda but may, subject to the provisions of the Companies Act, 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 to shareholders and to 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 shareholder to inspect or obtain
copies of a corporation’s shareholder list and its other books and records for
any purpose reasonably related to such person’s interest as a
shareholder.
Certain
other provisions of Bermuda law
We have
been designated by the Bermuda Monetary Authority as a non-resident for Bermuda
exchange control purposes. This designation allows us to engage in
transactions in currencies other than the Bermuda dollar, and there are no
restrictions on our ability to transfer funds (other than funds denominated in
Bermuda dollars) in or out of Bermuda or to pay dividends to United States
residents who are holders of shares of our Class A common
stock. General permission under the Exchange Control Act 1972 (and
its related regulations) was obtained by the Company from the Bermuda Monetary
Authority for the issue and transfer of shares of Class A common stock to and
between non-residents of Bermuda for exchange control purposes provided our
shares of Class A common stock remain listed on an appointed stock exchange,
which includes the National Association of Security Dealers Automated Quotations
System (NASDAQ).
In
addition, under the Exchange Control Act 1972 (and its related regulations), the
Bermuda Monetary Authority has now granted general permission, where equity
securities of a Bermuda company are and remain listed on an appointed stock
exchange, for the issue and subsequent transfer of any securities of the
company from and/or to a non-resident of Bermuda for so long as any equity
securities of the company remain so listed.
The
Bermuda Monetary Authority has also granted consent for the issue and transfer
of up to 20% of the shares of our Class A common stock in issue from time to
time to persons resident in Bermuda for exchange control purposes without the
need to obtain prior approval.
In
accordance with Bermuda law, share certificates are only issued in the names of
companies, partnerships or individuals. In the case of a shareholder
acting in a special capacity (for example as a trustee), certificates may, at
the request of the shareholder, record the capacity in which the shareholder is
acting. Notwithstanding the recording of any such special capacity we
are not bound to investigate or incur any responsibility in respect of the
proper administration of any such trust.
We will
take no notice of any trust applicable to any of our shares whether or not we
had notice of such trust.
FEDERAL
INCOME TAX CONSIDERATIONS
The
following discussion is a general summary of the material income tax
consequences of an investment in the shares of Class A common stock under United
States federal income tax laws and Bermuda tax laws. Investors should
appreciate that the taxation consequences for investors may be otherwise than as
stated below. Investors should consult their professional advisers on
the possible tax consequences of their purchasing, holding or selling the shares
of Class A common stock under state and local tax laws, or under the laws of
their countries of citizenship, residence, ordinary residence or
domicile.
Bermuda
Tax Considerations
At the
present time, there is no Bermuda income or profits tax, withholding tax,
capital gains tax, capital transfer tax, estate duty or inheritance tax payable
by us or by our shareholders in respect of our shares. The Company is
not subject to stamp duty on the issue, transfer or redemption of its
shares.
We have
obtained an assurance from the Minister of Finance of Bermuda under the Exempted
Undertakings Tax Protection Act 1966 that, in the event that 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, such tax shall not, until March 28, 2016, be applicable
to us or to any of our operations or to our shares, debentures or other
obligations except insofar as such tax applies to persons ordinarily resident in
Bermuda or is payable by us in respect of real property owned or leased by us in
Bermuda.
United
States Tax Considerations
The
following is a summary of material United States federal income tax consequences
of the ownership of the shares of Class A common stock, as of the date
hereof. This discussion only applies to holders that hold the shares
of Class A common stock as capital assets.
This
discussion does not represent a detailed description of the United States
federal income tax consequences applicable to you if you are subject to special
treatment under the United States federal income tax laws, including if you
are
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a
dealer in securities or currencies;
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a
financial institution;
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a
regulated investment company;
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a
real estate investment trust;
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a
tax-exempt organization;
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an
insurance company,
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a
person that owns, or is deemed to own, 10% or more of the voting power of
all classes of our stock;
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a
person holding the shares of Class A common stock as part of a hedging,
integrated, conversion or constructive sale transaction or a
straddle;
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a
trader in securities that has elected the mark-to-market method of
accounting for your securities;
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a
person liable for alternative minimum
tax;
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a
person who is an investor in a pass-through
entity;
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a
United States holder whose "functional currency" is not the U.S.
dollar;
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a
“controlled foreign corporation”;
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a
“passive foreign investment company”;
or
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a
United States expatriate.
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For
purposes of this discussion, a “U.S. holder” is a beneficial owner of the
Class A common stock that is:
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an
individual citizen or resident of the United
States;
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a
corporation (or any other entity treated as a corporation for United
States federal income tax purposes) created or organized in or under the
laws of the United States, any state thereof or the District of
Columbia;
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an
estate the income of which is subject to United States federal income
taxation regardless of its source;
or
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a
trust if it (i) is subject to the primary supervision of a court within
the United States and one or more United States persons have the authority
to control all substantial decisions of the trust or (ii) has a valid
election in effect under applicable United States Treasury regulations to
be treated as a United States
person.
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The term
“non-U.S. holder” means a beneficial owner of the Class A common
stock (other than a partnership) that is not a U.S. holder.
If a
partnership holds the Class A common stock, the tax treatment of a partner will
generally depend upon the status of the partner and the activities of the
partnership. If you are a partner of a partnership holding the Class
A common stock, you should consult your own tax advisors.
The
discussion below is based on the Internal Revenue Code of 1986, as amended to
the date hereof (the “Code”), administrative pronouncements, judicial decisions
and final, temporary and proposed Treasury regulations, changes to any of which
subsequent to the date of this prospectus may affect, perhaps retroactively, the
tax consequences described herein. This discussion is not intended to
constitute a complete analysis of all tax considerations relevant to an
investment in the shares of Class A common stock. It does not take
into account the individual circumstances of any particular prospective
investor, nor does it address any aspect of estate or gift tax laws or of state,
local or foreign tax laws. We are not seeking a ruling from the U.S.
Internal Revenue Service (“IRS”) or an opinion of legal counsel as to any tax
matters discussed below. We strongly urge you to consult your own tax
advisor for advice concerning the application of the U.S. federal income tax
laws to your particular situation, as well as any tax consequences arising under
state, local or foreign tax laws.
U.S.
Holders
The
following discussion is a summary of certain United States federal income tax
consequences that will apply to you if you are a U.S. holder.
Taxation
of Distributions on Shares of Class A Common Stock
If we
make any distributions on our Class A common stock (other than certain pro rata
distributions of shares of Class A common stock), you generally will be required
to include the amount of such distribution in gross income as a taxable dividend
to the extent such distribution is paid from our current or accumulated earnings
and profits as determined applying United States federal income tax
principles. Subject to the rules described below under “Passive
Foreign Investment Company,” distributions in excess of our earnings and profits
generally will first be treated as a nontaxable return of capital to the extent
of your adjusted tax basis in your shares of Class A common stock, and then as
gain from the sale or exchange of a capital asset. The amount of the
dividend generally will be treated as foreign source passive income for foreign
tax credit purposes. The dividend will not be eligible for the
dividends received deduction generally allowed to U.S. corporations under the
Code. For U.S. holders who are individuals, such dividends should
qualify for preferential rates of taxation (currently in effect until December
31, 2010), provided that our common stock continues to trade on the NASDAQ or
another established United States securities market and the U.S. holder
satisfies certain holding period requirements.
Sale,
Exchange or Redemption of Shares of Class A Common Stock
Upon the
sale, exchange, redemption or other taxable disposition of any shares of our
Class A common stock, you generally will recognize capital gain or loss (subject
to the rules discussed below under “Passive Foreign Investment Company”) equal
to the difference between the amount of cash and the fair market value of any
property you received upon such disposition and your adjusted tax basis in such
shares. Such capital gain or loss will be treated as U.S.-source gain
or loss for purposes of computing your foreign tax credit limitation, and will
be long-term capital gain or loss if your holding period in the shares is more
than one year, and otherwise will be short-term capital gain or
loss.
Passive
Foreign Investment Company
We
believe that we will not be classified as a “passive foreign investment company”
(“PFIC”) under U.S. tax laws for the current year and we expect to operate in a
manner as to not become a PFIC in the future. We will be classified
as a PFIC as to you if, for any of our taxable years during which you own shares
of Class A common stock, either 75% or more of our annual gross income is
passive income, or 50% or more of the average quarterly value of our assets
produce or are held for the production of passive income. Passive
income for purposes of the PFIC rules generally includes dividends, interest and
other types of investment income. In applying the income and asset
tests, we will be treated as receiving a proportionate share of the income and
as owning a proportionate share of the assets of each foreign corporation in
which we own 25% or more in value of the stock.
If we
become a PFIC at any time while you hold shares of Class A common stock, then,
unless you make a special tax election (described below) for the year in which
we become a PFIC (or unless your shares of Class A common stock are otherwise
required to be marked-to-market for U.S. federal income tax purposes), you will
be subject to special rules generally intended to eliminate any benefits from
the deferral of U.S. federal income tax that you might otherwise derive from
investing in a foreign corporation that does not distribute all of its earnings
on a current basis. Upon a disposition of shares of our Class A
common stock, any gain recognized by you would be allocated ratably over your
holding period for shares of our Class A common stock. The amounts
allocated to the taxable year of the sale or other disposition and to any year
before we became a PFIC would be taxed as ordinary income. The amount
allocated to each other taxable year would be taxed to you at the highest tax
rate in effect for such year, and an interest charge would be imposed on your
resulting tax liability allocated to such taxable year. Any
distributions on shares of our Class A common stock would not be eligible for
preferential rates of taxation as described above under “Taxation of
Distributions on Shares of Class A Common Stock.” Further, any distributions in
respect of shares of our Class A common stock in excess of 125 percent of the
average of the annual distributions received by you during the preceding three
years or your holding period in shares of our Class A common stock, whichever is
shorter, would be subject to taxation as described above with respect to the
sale or other disposition of shares of Class A common stock.
If you
own shares of Class A common stock in the year (if any) in which we become a
PFIC, then you would be eligible to make a mark-to-market election, provided
that shares of our common stock continue to trade on the NASDAQ. If
you were to make the mark-to-market election, you would include each year, as
ordinary income, the excess, if any, of the fair market value of your shares of
Class A common stock at the end of the taxable year over your adjusted tax
basis, and would be permitted an ordinary loss in respect of the excess, if any,
of your adjusted tax basis in your shares of Class A common stock over the fair
market value of your shares of Class A common stock at the end of the taxable
year (but only to the extent of the net amount of previously included income as
a result of the mark-to-market election). Your tax basis in your
shares of Class A common stock would be adjusted to reflect any such income or
loss amounts. Any gain recognized on the sale or other disposition of
your shares of Class A common stock would be treated as ordinary
income.
You are
urged to consult your tax advisor concerning the potential application of the
PFIC rules, including the availability and consequences of making the elections
discussed above.
Backup
Withholding and Information Reporting
Unless
you are an “exempt recipient” (generally, corporations and certain other persons
who, when required, demonstrate their exempt status), you generally will be
subject to information reporting with respect to payments of dividends (if any)
on shares of our Class A common stock and proceeds from the sale, exchange or
other disposition of our Class A common stock. You will also be
subject to backup withholding on such payments at the applicable statutory rate
(currently, 28%) if you fail to supply an accurate taxpayer identification
number or otherwise fail to comply with applicable certification
requirements. Backup withholding tax is not an additional tax and may
be credited against your regular U.S. federal income tax liability or refunded
by the IRS. You should consult your tax advisor regarding the
application of these rules.
Non-U.S.
Holders
The
following is a summary of certain United States federal tax consequences that
will apply to you if you are a non-U.S. holder.
Income
and Gain on Shares of Class A Common Stock
If you
are a non-U.S. holder, subject to the discussion below under “Backup Withholding
and Information Reporting,” you generally will not be subject to U.S. federal
income or withholding tax on dividends (if any) paid on shares of Class A common
stock or gain upon the disposition of shares of Class A common stock,
unless:
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the
income or gain is “U.S. trade or business income,” which means income or
gain that is effectively connected with your conduct of a trade or
business, or a permanent establishment or a fixed base, in the United
States; or
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you
are an individual who is present in the United States for 183 days or more
in the taxable year of disposition and certain other conditions are
met.
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If the
first subparagraph above applies, then you generally will be subject to regular
U.S. income tax in the same manner as if such income or gain were realized by a
U.S. holder. In addition, if you are a corporation, then such income
or gain may be subject to a branch profits tax at a rate of 30%, or such lower
rate provided by an applicable income tax treaty. If the second
subparagraph applies, then you generally will be subject to tax at a rate of
30%, subject to reduction by an applicable income tax treaty.
Backup
Withholding and Information Reporting
If you
hold your shares of Class A common stock through a non-U.S. office of a non-U.S.
related broker or financial institution, then information reporting and backup
withholding generally will not be required. Information reporting,
and possibly backup withholding, may apply if you hold your shares of Class A
common stock through a U.S. or U.S.-related broker or financial institution or a
U.S. office of a non-U.S. broker or financial institution and you fail to
provide appropriate identifying information. You should consult your
tax advisor regarding the application of these rules.
Various
legal matters will be passed upon for us by Katten Muchin Rosenman LLP, New
York, United States as to matters of United States federal law, and by Conyers,
Dill & Pearman, Hamilton, Bermuda, as to matters of Bermuda
law. In connection with the preparation of this prospectus, Conyers
Dill & Pearman has relied upon the information provided to it by the
Company, and has not made any systematic effort to verify the information
contained herein.
The
consolidated financial statements and the related financial statement schedule
incorporated in this prospectus by reference from the Company's Annual Report on
Form 10-K for the year ended December 31, 2008, and the effectiveness of Central
European Media Enterprises Ltd.'s internal control over financial reporting have
been audited by Deloitte LLP, an independent registered public accounting firm,
as stated in their reports, which are incorporated herein by
reference. Such consolidated financial statements and the financial
statement schedule have been so incorporated in reliance upon the reports of
such firm given upon their authority as experts in accounting and
auditing.
PART
II
INFORMATION
NOT REQUIRED IN PROSPECTUS
Item
14. Other Expenses of Issuance and Distribution.
The
following table sets forth the estimated expenses in connection with the
registration and sale of the shares of Class A common stock registered hereby,
all of which will be paid by the registrant:
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SEC
registration fee
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Legal
fees and expenses
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Accounting
fees and expenses
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Miscellaneous
expenses
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Total
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$ | ** |
*
To be deferred pursuant to Rule 456(b) and calculated in connection with the
offering of shares of our Class A common stock under this registration statement
pursuant to Rule 457(r).
** These
fees and expenses will vary based on the number of issuances and amount of
securities offered and thus cannot be estimated
at this time.
Item
15. Indemnification of Trustees and Officers.
Under
Bermuda law and our bye-laws, the Directors, Secretary and other officers (such
term to include any person appointed to any committee by the Board) for the time
being and each such person who is or was or had agreed to become a Director or
officer of Central European Media Enterprises Ltd. and each such person who is
or was serving or who had agreed to serve as an employee or agent of Central
European Media Enterprises Ltd. or as a Director, officer, employee or agent of
another company, corporation, partnership, joint venture, trust or other
enterprise in which Central European Media Enterprises Ltd. is or was engaged
acting in relation to any of the affairs of the Company for the time being
acting in relation to any of the affairs of Central European Media Enterprises
Ltd. and every one of them, and their heirs, executors and administrators, are
indemnified and secured harmless out of the assets and profits of Central
European Media Enterprises Ltd. from and against all actions, costs, charges,
losses, damages and expenses which they or any of them, their heirs, executors
or administrators, shall or may incur or sustain by or by reason of any act
done, purported to be done, concurred in or omitted in or about the execution of
their duty, or supposed duty, or in their respective offices or trusts, or on
behalf of Central European Media Enterprises Ltd. or purportedly on behalf of
Central European Media Enterprises Ltd., none of them shall be answerable for
the acts, receipts, neglects or defaults of the others of them or for joining in
any receipts for the sake of conformity, or for any bankers or other persons
with whom any moneys or effects belonging to Central European Media Enterprises
Ltd. shall or may be lodged or deposited for safe custody, or for insufficiency
or deficiency of any security upon which any moneys of or belonging to Central
European Media Enterprises Ltd. shall be placed out on or invested, or for any
other loss, misfortune or damage which may happen in the execution of their
respective offices or trusts, or in relation thereto, provided that this
indemnity shall not extend to any matter in respect of any fraud or dishonesty
which may attach to any of said persons. Subject to the provisions of the
Companies Act 1981 of Bermuda, as amended, and without limiting the generality
or the effect of the foregoing, Central European Media Enterprises Ltd. may
enter into one or more agreements with any person which provide for
indemnification greater or different than that provided in our
bye-laws.
Each
shareholder agrees under our bye-laws to waive and release any claim or right of
action such shareholder might have, whether individually or by or in the right
of Central European Media Enterprises Ltd., against any Director or officer on
account of any act done, purported to be done, concurred in or omitted in or
about the execution of their duty, or supposed duty, or in their respective
offices or trusts 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 CME,
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.
The
indemnity provided in our bye-laws shall extend, as a matter of contract between
each shareholder and each former Director and officer of the Company and their
heirs, executors and administrators, to any act done, purported to be done,
concurred in or omitted in or about the execution of their duty, or supposed
duty, or in their respective offices or trusts by the former Directors and
officers of the Company. The waiver of claims or right of action by each
shareholder provided shall extend, as a matter of contract between each
shareholder and each former Director and officer of the CME and their heirs,
executors and administrators, to any act done, purported to be done, concurred
in or omitted in or about the execution of their duty, or supposed duty, or in
their respective offices or trusts by the former Directors and officers of the
CME.
Any
repeal or modification of our bye-laws affecting the above provisions shall not
adversely affect any right or protection existing under our bye-laws immediately
prior to such repeal or modification.
Item
16. Exhibits.
The
following exhibits are included in this report:
|
Exhibit
Number
|
Description
|
|
4.1
|
Specimen
certificate for shares of Class A common stock (incorporated by reference
to Exhibit 4.01 to Amendment No. 1 to our Registration Statement
on
Form
S-1 (File No. 33-80344) filed with the Commission on August 19,
1994).
|
|
4.2
|
Memorandum
of Association (incorporated by reference to Exhibit 3.01 to our
Registration Statement on Form S-1 (File No. 33-80344) filed with the
Commission on June 19, 1994).
|
|
4.3
|
Amended
and Restated Bye-Laws (incorporated by reference to Exhibit 3.02 to our
Annual Report on Form 10-K for the fiscal year ended December 31, 2008
filed with the Commission on February 25, 2009).
|
|
5.1
|
Opinion
of Conyers Dill & Pearman regarding the validity of the shares of
Class A common stock being registered hereby.
|
|
23.1
|
Consent
of Conyers Dill & Pearman (contained in Exhibit
5.1).
|
|
23.2
|
Consent
of Deloitte
LLP.
|
Item
17. Undertakings.
|
(a)
|
The
undersigned registrant hereby
undertakes:
|
(1)
To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i)
To include any prospectus required by section 10(a)(3) of the Securities
Act of 1933;
(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 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;
Provided,
however, that paragraphs (a)(1)(i), (a)(1)(ii) and (a)(1)(iii) of this section
do not apply if the registration statement is on Form S-3 or Form F-3 and the
information required to be included in a post-effective amendment by those
paragraphs is contained in reports filed with or furnished to the Commission by
the registrant pursuant to section 13 or section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in this registration
statement, or is contained in a form of prospectus filed pursuant to Rule 424(b)
that is part of the registration statement.
(2)
That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3)
To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(4)
That, for the purpose of determining liability under the Securities Act of
1933 to any purchaser:
(A) Each
prospectus filed by the registrant pursuant to Rule 424(b)(3) (§230.424(b)(3) of
this chapter) shall be deemed to be part of the registration statement as of the
date the filed prospectus was deemed part of and included in the registration
statement; and
(B) Each
prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7)
(§230.424(b)(2), (b)(5), or (b)(7) of this chapter) as part of a registration
statement in reliance on Rule 430B relating to an offering made pursuant to Rule
415(a)(1)(i), (vii), or (x) (§230.415(a)(1)(i), (vii), or (x) of this chapter)
for the purpose of providing the information required by section 10(a) of the
Securities Act of 1933 shall be deemed to be part of and included in the
registration statement as of the earlier of the date such form of prospectus is
first used after effectiveness or the date of the first contract of sale of
securities in the offering described in the prospectus. As provided in Rule
430B, for liability purposes of the issuer and any person that is at that date
an underwriter, such date shall be deemed to be a new effective date of the
registration statement relating to the securities in the registration statement
to which that prospectus relates, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof. Provided,
however, that no statement made in a registration statement or prospectus that
is part of the registration statement or made in a document incorporated or
deemed incorporated by reference into the registration statement or prospectus
that is part of the registration statement will, as to a purchaser with a time
of contract of sale prior to such effective date, supersede or modify any
statement that was made in the registration statement or prospectus that was
part of the registration statement or made in any such document immediately
prior to such effective date.
(5)
That, for the purpose of determining liability of the
registrant under the Securities Act of 1933 to any purchaser in the initial
distribution of the securities, the undersigned registrant undertakes that in a
primary offering of securities of the undersigned registrant pursuant to this
registration statement, regardless of the underwriting method used to sell the
securities to the purchaser, if the securities are offered or sold to such
purchaser by means of any of the following communications, the undersigned
registrant will be a seller to the purchaser and will be considered to offer or
sell such securities to such purchaser:
(i) Any
preliminary prospectus or prospectus of the undersigned registrant relating to
the offering required to be filed pursuant to Rule 424 (§230.424 of this
chapter);
(ii) Any
free writing prospectus relating to the offering prepared by or on behalf of the
undersigned registrant or used or referred to by the undersigned
registrant;
(iii) The
portion of any other free writing prospectus relating to the offering containing
material information about the undersigned registrant or its securities provided
by or on behalf of the undersigned registrant; and
(iv) Any
other communication that is an offer in the offering made by the undersigned
registrant to the purchaser.
(b)
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant’s annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(c)
The undersigned registrant hereby undertakes
to deliver or cause to be delivered with the prospectus, to each person to whom
the prospectus is sent or given, the latest annual report, to security holders
that is incorporated by reference in the prospectus and furnished pursuant to
and meeting the requirements of Rule 14a-3 or Rule 14c-3 under the Securities
Exchange Act of 1934; and, where interim financial information required to be
presented by Article 3 of Regulation S-X is not set forth in the prospectus, to
deliver, or cause to be delivered to each person to whom the prospectus is sent
or given, the latest quarterly report that is specifically incorporated by
reference in the prospectus to provide such interim financial
information.
(d)
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, as amended, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and it has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Prague, the Czech Republic, on this 4th day of March
2009.
|
CENTRAL
EUROPEAN MEDIA ENTERPRISES LTD.
|
||
|
By:
|
/s/
Adrian Sarbu
|
|
|
Adrian
Sarbu
|
||
|
President
and Chief Operating Officer
(Principal
Executive
Officer)
|
||
POWER
OF ATTORNEY
KNOW ALL
MEN BY THESE PRESENTS, that each person whose signature appears below
constitutes and appoints Adrian Sarbu and Wallace Macmillan, and each of them,
his true and lawful attorney-in-fact and agent, each acting alone, with full
power of substitution and resubstitution, for him and in his name, place, and
stead, in any and all capacities, to sign any or all amendments (including
post-effective amendments and any subsequent Registration Statement filed
pursuant to Rule 462(b) under the Securities Act) to this Registration
Statement, and to file the same, with all the exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents, each acting alone, full power
and authority to do and perform each and every act and thing requisite or
necessary to be done in and about the premises as fully, to all intents and
purposes, as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, each acting alone, or 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, as amended, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
|
SIGNATURE
|
TITLE
|
DATE
|
||
|
/s/
Ronald. S. Lauder
|
Chairman
of the Board of
|
March
4, 2009
|
||
|
Ronald
S. Lauder
|
Directors
|
|||
|
/s/
Herbert A. Granath
|
Vice
Chairman of the Board of
|
March
4, 2009
|
||
|
Herbert
A. Granath
|
Directors
|
|||
|
/s/
Adrian Sarbu
|
President
and Chief Operating
|
March
4, 2009
|
||
|
Adrian
Sarbu
|
Officer
|
|||
|
(Principal
Executive Officer)
|
||||
|
/s/
Wallace Macmillan
|
Chief
Financial Officer
|
March
4, 2009
|
||
|
Wallace
Macmillan
|
(Principal
Financial Officer and
|
|||
|
Accounting
Officer)
|
||||
|
/s/
Frank Ehmer
|
Director
|
March
4, 2009
|
||
|
Frank
Ehmer
|
||||
|
/s/
Charles R. Frank, Jr.
|
Director
|
March
4, 2009
|
||
|
Charles
R. Frank, Jr.
|
||||
|
/s/
Herbert Kloiber
|
Director
|
March
4, 2009
|
||
|
Herbert
Kloiber
|
||||
|
/s/
Igor Kolomoisky
|
Director
|
March
4, 2009
|
||
|
Igor
Kolomoisky
|
||||
|
/s/
Alfred W. Langer
|
Director
|
March
4, 2009
|
||
|
Alfred
W. Langer
|
||||
|
/s/
Bruce Maggin
|
Director
|
March
4, 2009
|
||
|
Bruce
Maggin
|
||||
|
/s/
Ann Mather
|
Director
|
March
4, 2009
|
||
|
Ann
Mather
|
||||
|
/s/
Duco Sickinghe
|
Director
|
March
4, 2009
|
||
|
Duco
Sickinghe
|
||||
|
/s/
Christian Stahl
|
Director
|
March
4, 2009
|
||
|
Christian
Stahl
|
||||
|
/s/
Eric Zinterhofer
|
Director
|
March
4, 2009
|
||
|
Eric
Zinterhofer
|
EXHIBIT
INDEX
|
4.1
|
Specimen
certificate for shares of Class A common stock (incorporated by reference
to Exhibit 4.01 to Amendment No. 1 to our Registration Statement on Form
S-1 (File No. 33-80344) filed with the Commission on August 19,
1994).
|
|
4.2
|
Memorandum
of Association (incorporated by reference to Exhibit 3.01 to our
Registration Statement on Form S-1 (File No. 33-80344) filed with the
Commission on June 19, 1994).
|
|
4.3
|
Amended
and Restated Bye-Laws (incorporated by reference to Exhibit 3.02 to our
Annual Report on Form 10-K for the fiscal year ended December 31, 2008
filed with the Commission on February 25, 2009).
|
|
Opinion
of Conyers Dill & Pearman regarding the validity of the shares of
Class A common stock being registered hereby.
|
|
|
23.1
|
Consent
of Conyers Dill & Pearman (contained in Exhibit
5.1).
|
|
Consent
of Deloitte
LLP.
|