In addition, our Bye-laws provide that no Person
shall be permitted to own or control shares in RenaissanceRe to the extent such ownership would result in such Person or any other any Person being considered to own or control Controlled Shares, as our Board of Directors may determine in its sole
discretion, and such ownership of Controlled Shares (i) would render any Person a Ten Percent Shareholder, (ii) cause RenaissanceRe to become a controlled foreign corporation within the meaning of section 957 of the U.S.
Internal Revenue Code of 1986, as amended (the Code), or (iii) cause RenaissanceRe to become a foreign personal holding company within the meaning of section 552 of the Code. Our Board of Directors has the right to waive
these restrictions in its sole discretion and may decline to register any transfer of shares if the transfer, in the discretion of the Board, would have any of the effects described in clauses (i)-(iii) above. These limits may have the effect of
deterring purchases of large blocks of common shares or proposals to acquire us, even if some or a majority of the shareholders might deem these purchases or acquisition proposals to be in their best interests. With respect to this issue, also see
the provisions discussed below under Anti-Takeover Effects of Certain Bye-Law Provisions.
Controlled Shares in reference to any Person means (i) all capital shares of RenaissanceRe such Person is deemed to own
directly, indirectly or by attribution (within the meaning of Section 958 of the Code) and (ii) all capital shares of RenaissanceRe directly, indirectly or beneficially owned by such Person (within the meaning of section 13(d) of the
Exchange Act).
Ten Percent Shareholder means a Person who our Board of Directors determines, in its sole and absolute
discretion, owns or controls Controlled Shares representing more than 9.9% of the total voting rights of all of our issued and outstanding capital shares.
Person means an individual, partnership, joint-stock company, corporation, trust or unincorporated organization, limited liability
company, a government, agency or political subdivision thereof, an entity or arrangement treated as one of the foregoing for U.S. income tax purposes, or a group within the meaning of section 13(d) of the Exchange Act.
Our Bermuda counsel has advised us that, while the precise form of the restrictions on transfers contained in the Bye-Laws is untested, as a matter of general principle, restrictions on transfers are enforceable under Bermuda law and are not uncommon.
ANTI-TAKEOVER EFFECTS OF CERTAIN BYE-LAW PROVISIONS
Our Bye-Laws contain certain provisions that make it more difficult to acquire control of us by means
of a tender offer, open market purchase, a proxy fight or otherwise. These provisions are designed to encourage persons seeking to acquire control of us to negotiate with our directors. We believe that, as a general rule, the interests of our
shareholders would be best served if any change in control results from negotiations with our directors. These provisions could have the effect of discouraging a prospective acquirer from making a tender offer or otherwise attempting to obtain
control of us. In addition, these Bye-Law provisions could prevent the removal of our current Board of Directors and management.
In addition to those provisions of the Bye-Laws discussed above under Transfers of Shares,
set forth below is a description of certain other provisions of the Bye-Laws. Because the following description is intended as a summary only and is therefore not complete, you should refer to the Bye-Laws, which are incorporated by reference as an exhibit to the registration statement of which this prospectus forms a part, for complete information regarding these provisions.
BOARD OF DIRECTOR PROVISIONS
Our Bye-Laws provide for a classified board, to which approximately one-third of the Board is elected each year at our annual general meeting of shareholders. Accordingly, our
directors serve three-year terms rather than one-year terms. Moreover, our Bye-Laws provide that each director may be removed by the shareholders only for cause upon the
affirmative vote of the holders of not less than 66 2/3% of the voting rights attached to all issued and outstanding capital shares entitled to vote for the election of that director. Further, our Bye-Laws fix
the size of the Board at eight directors although the incumbent Board may increase its size to eleven members; there are currently eleven members of the Board. In addition, shareholders may only nominate persons for election as director at an annual
or special general meeting of shareholders called for the purpose of electing directors only if, among other things, a satisfactory written notice signed by not less than 20 shareholders holding in the aggregate not less than 10% of our outstanding paid-up share capital is timely submitted.
We believe that these
Bye-Law provisions enhance the likelihood of continuity and stability in the composition of the Board and in the policies formulated by the Board. We believe these provisions assist our Board to represent more
effectively the interests of all shareholders, including taking action in response to demands or actions by a minority shareholder or group.
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