Download Annual Report, 2.44 MB - Xyratex

Bermuda law whereby two corporate entities combine and continue as a combined corporateentity but where neither of the original corporate entities cease to exist, usually requireshareholder approval.• Shareholder suits: The circumstances in which a shareholder may bring a derivative action inBermuda are significantly more limited than in the United States. In general, under Bermudalaw, derivative actions are permitted only when the act complained of is alleged to be beyondthe corporate power of the company, is illegal or would result in the violation of the company’smemorandum of association or bye-laws. In addition, Bermuda courts would consider permittinga derivative action for acts that are alleged to constitute a fraud against the minorityshareholders or, for instance, acts that require the approval of a greater percentage of thecompany’s shareholders than those who actually approved them.• Limitations on directors’ liability: Our bye-laws provide that each shareholder agrees to waive anyclaim or right of action he or she may have, whether individually or in the right of the company,against any director, except with respect to claims or rights of action arising out of the fraud ordishonesty of a director. This waiver may have the effect of barring certain claims againstdirectors arising under U.S. federal securities laws. In general, United States companies maylimit the personal liability of their directors as long as they acted in good faith and withoutknowing violation of law.We have provisions in our bye-laws that may discourage a change of control.Our bye-laws contain provisions that could make it more difficult for a third party to acquire uswithout the consent of our board of directors. These provisions include:• a classified board of directors with staggered three-year terms;• the ability of our board of directors to determine the rights, preferences and privileges of ourpreference shares and to issue the preference shares without shareholder approval; and• the need for an affirmative vote of the holders of not less than 66% of our voting shares forcertain business combination transactions which have not been approved by our board ofdirectors.These provisions could make it more difficult for a third party to acquire us, even if the thirdparty’s offer may be considered beneficial by many shareholders. As a result, shareholders may belimited in their ability to obtain a premium for their shares.ITEM 4: INFORMATION ON THE COMPANYItem 4A: History and DevelopmentXyratex Ltd is a limited liability company incorporated under the laws of Bermuda. Xyratex Ltdwas incorporated on April 10, 2002 and is registered with the Registrar of Companies in Bermudaunder registration number EC 31989. As a Bermuda company we are governed by the Companies Act1981 of Bermuda. Our registered office is located at Clarendon House, Church Street, Hamilton,Bermuda. Our agent for service of process in the United States is Chris Sharman, 2031 ConcourseDrive, San Jose, California 95131-1727, USA (telephone: (408) 894 0800).Xyratex Ltd became the parent company of our business immediately prior to the closing of ourinitial public offering on June 29, 2004, in order to facilitate the listing of our common shares on theNASDAQ National Market. Xyratex Ltd became our parent company by way of a scheme ofarrangement under Section 425 of the Companies Act 1985 of the United Kingdom, pursuant to whichthe issued shares in Xyratex Group Limited, the parent company of our business prior to the time ofour initial public offering, were cancelled in consideration of (i) the issue of common shares of19