<DOCUMENT>

<TYPE>S-4

<SEQUENCE>1

<FILENAME>h88237s-4.txt

<DESCRIPTION>COOPER INDUSTRIES, LTD.

<TEXT>

 

<PAGE>   1

 

     AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 11, 2001

 

                                                     REGISTRATION NO. 333-

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--------------------------------------------------------------------------------

 

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                             ---------------------

 

                                    FORM S-4

            REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

                             ---------------------

 

                            COOPER INDUSTRIES, LTD.

             (Exact Name of Registrant as Specified in its Charter)

 

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<S>                                     <C>                                     <C>

               BERMUDA                                   3640                               NOT APPLICABLE

   (State or Other Jurisdiction of           (Primary Standard Industrial                  (I.R.S. Employer

    Incorporation or Organization)           Classification Code Number)                 Identification No.)

</TABLE>

 

                             600 TRAVIS, SUITE 5800

                           HOUSTON, TEXAS 77002-1001

                           TELEPHONE: (713) 209-8400

                           FACSIMILE: (713) 209-8989

  (Address, Including Zip Code, and Telephone Number, Including Area Code, of

                   Registrant's Principal Executive Offices)

 

                           DIANE K. SCHUMACHER, ESQ.

              SENIOR VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY

                            COOPER INDUSTRIES, INC.

                             600 TRAVIS, SUITE 5800

                           HOUSTON, TEXAS 77002-1001

                           TELEPHONE: (713) 209-8400

                           FACSIMILE: (713) 209-8989

(Name, Address, Including Zip Code, and Telephone Number, Including Area Code of

                               Agent for Service)

 

                             ---------------------

 

                                   Copies to:

 

                            MARGARET L. WOLFF, ESQ.

                              SEAN C. DOYLE, ESQ.

                    SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP

                               FOUR TIMES SQUARE

                         NEW YORK, NEW YORK 10036-6522

                                 (212) 735-3000

                             ---------------------

 

    APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:  As soon as

practicable after this Registration Statement becomes effective and all other

conditions to the merger contemplated by the Agreement and Plan of Merger

described in the enclosed proxy statement/prospectus have been satisfied or

waived.

                             ---------------------

 

    If the securities being registered on this form are being offered in

connection with the formation of a holding company and there is compliance with

General Instruction G, check the following box.  [ ]

 

    If this form is filed to register additional securities for an offering

pursuant to Rule 462(b) under the Securities Act, check the following box and

list the Securities Act registration statement number of the earlier effective

registration statement for the same offering.  [ ]

 

    If this form is a post-effective amendment filed pursuant to Rule 462(d)

under the Securities Act, check the following box and list the Securities Act

registration statement number of the earlier effective registration statement

for the same offering.  [ ]

 

                        CALCULATION OF REGISTRATION FEE

 

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<CAPTION>

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                                                              PROPOSED MAXIMUM        PROPOSED MAXIMUM

       TITLE OF EACH CLASS OF            AMOUNT TO BE          OFFERING PRICE        AGGREGATE OFFERING          AMOUNT OF

    SECURITIES TO BE REGISTERED          REGISTERED(1)          PER UNIT(2)               PRICE(2)          REGISTRATION FEE(3)

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<S>                                   <C>                  <C>                     <C>                     <C>

Class A common shares, par value

  US$.01 per share (including the

  associated preferred share

  purchase rights)..................      96,600,000               $38.75              $3,743,250,000             $935,813

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</TABLE>

 

(1) Based on the maximum number of Class A common shares that may be required to

    be issued by Cooper Industries, Ltd. to shareholders of Cooper Industries,

    Inc. in the merger (96,600,000, which is the sum of (a) the aggregate number

    of outstanding shares of common stock, par value $5.00 per share, of Cooper

    Industries, Inc. on May 31, 2001, (b) the aggregate number of shares of

    Cooper Industries, Inc. that may be issued pursuant to the Cooper

    Industries, Inc. Employee Stock Purchase Plan and outstanding stock options

    that are currently exercisable or will become exercisable prior to the

    consummation of the merger, and (c) the number of shares of Cooper

    Industries, Inc. common stock otherwise expected to be issued prior to the

    consummation of the merger).

 

(2) Estimated solely for purposes of calculating the registration fee pursuant

    to Rule 457(f)(1) and 457(c) of the Securities Act of 1933, as amended,

    based on the average high and low per share prices of Cooper Industries,

    Inc. on June 8, 2001, as reported on the New York Stock Exchange ($38.75 per

    share) at an exchange ratio of 1.0 Cooper Industries, Ltd. share per Cooper

    Industries, Inc. share.

 

(3) Calculated by multiplying 0.000250 by the proposed maximum aggregate

    offering price.

 

                             ---------------------

 

    THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR

DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL

FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION

STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF

THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT

SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION,

ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.

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<PAGE>   2

 

                                                                   [COOPER LOGO]

 

                            COOPER INDUSTRIES, INC.

                             600 TRAVIS, SUITE 5800

                           HOUSTON, TEXAS 77002-1001

 

                                                               [Month day,] 2001

 

Dear Fellow Shareholder:

 

    We are pleased to present for your approval a proposal for reorganizing your

company and changing its place of incorporation from Ohio to Bermuda. If the

reorganization is completed, the shares you own of Cooper Industries, Inc.

(which we refer to as Cooper Ohio) will automatically become Class A common

shares of Cooper Industries, Ltd., a Bermuda company that we recently formed

(which we refer to as Cooper Bermuda). The number of Cooper Bermuda shares you

will own will be the same as the number of Cooper Ohio shares you own

immediately prior to the completion of the reorganization, and your relative

economic ownership in the company will remain unchanged. After completion of the

reorganization, Cooper Bermuda and its subsidiaries will continue to conduct the

business now conducted by Cooper Ohio and its subsidiaries.

 

    We believe this reorganization will facilitate the growth of your company by

enabling it to gain business, financial and strategic advantages that are not

available under our current corporate structure. For example, expansion of the

company's international business is an important part of our business strategy

and significant growth opportunities exist in the international marketplace. The

reorganization should enhance our competitiveness regarding these opportunities.

It should also increase our operational flexibility, improve our global tax

position and cash flow, and increase our capacity to reduce debt and repurchase

stock. Additionally, the company should be a more attractive investment

alternative to a wider range of investors.

 

    Cooper Ohio common stock is currently traded on the New York Stock Exchange

under the symbol "CBE" and, immediately following the reorganization, Cooper

Bermuda Class A common shares will be traded on the NYSE under the same symbol.

 

    This proxy statement/prospectus provides you with detailed information

regarding the reorganization. We encourage you to read this entire document

carefully. PLEASE CONSIDER THE RISK FACTORS BEGINNING ON PAGE 11.

 

    The reorganization cannot be completed unless the holders of a majority of

our outstanding shares on [record date] approve it. The reorganization will be

accomplished through a merger of a newly formed acquisition company into Cooper

Ohio, which will be the surviving company and continue to exist. Cooper Bermuda

will become the parent holding company of Cooper Ohio. Your Board of Directors

has approved the Agreement and Plan of Merger to facilitate the reorganization,

and it recommends that you vote "FOR" its adoption.

 

    We urge you to join us in supporting this important opportunity.

 

                                         /s/ H.JOHN RILEY, JR.

                                            H. John Riley, Jr.

                                            Chairman, President and

                                            Chief Executive Officer

 

    THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND

EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES

AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE

ACCURACY OR ADEQUACY OF THIS PROXY STATEMENT/PROSPECTUS. ANY REPRESENTATION TO

THE CONTRARY IS A CRIMINAL OFFENSE.

 

    This proxy statement/prospectus is dated [month day], 2001 and is first

being mailed to shareholders on or about [month day], 2001.

<PAGE>   3

 

                                 [COOPER LOGO]

 

                            COOPER INDUSTRIES, INC.

                             ---------------------

 

                   NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

                        TO BE HELD ON [MONTH DAY], 2001

 

                             ---------------------

 

To the Shareholders of Cooper Industries, Inc.:

 

    NOTICE IS HEREBY GIVEN that a Special Meeting of the Shareholders of Cooper

Industries, Inc. will be held at [Location], Houston, Texas on [day], [month

day], 2001, at [xx:xx] a.m. for the following purposes:

 

        1. To adopt the Agreement and Plan of Merger, substantially in the form

    attached to the accompanying proxy statement/prospectus as annex I, among

    Cooper Industries, Inc., Cooper Mergerco, Inc. and Cooper Industries, Ltd.,

    a Bermuda company, whereby the company will effectively change its place of

    incorporation from Ohio to Bermuda by merging Cooper Mergerco, Inc. with

    Cooper Industries, Inc., which will be the surviving entity and become a

    wholly-owned, indirect subsidiary of Cooper Industries, Ltd., and pursuant

    to which each share of Cooper Industries, Inc. will automatically become a

    share of Cooper Industries, Ltd. and all current shareholders of Cooper

    Industries, Inc. will become shareholders of Cooper Industries, Ltd.; and

 

        2. To transact such other business as may properly come before the

    special meeting.

 

    The board of directors has fixed the close of business on [month day], 2001,

as the record date for determination of shareholders entitled to notice of, and

to vote at, the special meeting and any adjournments or postponements thereof.

 

    YOUR VOTE IS VERY IMPORTANT. TO ENSURE THAT YOUR SHARES ARE REPRESENTED, YOU

SHOULD VOTE YOUR PROXY VIA THE INTERNET, BY TELEPHONE OR BY COMPLETING, SIGNING

AND DATING THE ENCLOSED PROXY CARD AND RETURNING IT PROMPTLY IN THE ENCLOSED

ENVELOPE, WHETHER OR NOT YOU EXPECT TO ATTEND THE SPECIAL MEETING. YOU MAY

REVOKE YOUR PROXY AND VOTE IN PERSON IF YOU DECIDE TO ATTEND THE MEETING.

 

                                            By order of the Board of Directors:

 

                                            /s/ DIANE K. SCHUMACHER

                                            Diane K. Schumacher

                                            Senior Vice President, General

                                            Counsel

                                            and Secretary

 

[Month day], 2001

<PAGE>   4

 

                               TABLE OF CONTENTS

 

<TABLE>

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS...  iii

 

QUESTIONS AND ANSWERS ABOUT THE REORGANIZATION..............    1

 

SUMMARY.....................................................    4

  Parties to the Merger.....................................    4

  The Reorganization........................................    5

  Reasons for the Reorganization............................    5

  Conditions to Consummation of the Reorganization..........    6

  U.S. Federal Income Tax Consequences......................    6

  Rights of Shareholders....................................    7

  Stock Exchange Listing; Recent Stock Prices...............    7

  Rights of Dissenting Shareholders.........................    7

  Accounting Treatment of the Reorganization................    7

  Special Meeting...........................................    7

  Recommendation of the Board of Directors..................    7

  Vote Required.............................................    8

  Proxies...................................................    8

 

SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA.............    9

 

SUMMARY PRO FORMA FINANCIAL INFORMATION.....................   10

 

RISK FACTORS................................................   11

 

THE REORGANIZATION..........................................   13

  Structure of the Reorganization...........................   13

  Background and Reasons for the Reorganization.............   13

  The Merger Agreement......................................   15

  Conditions to Consummation of the Merger..................   15

  Effective Time............................................   15

  Amendment or Termination..................................   16

  Automatic Share Conversion................................   16

  Management of Cooper Bermuda..............................   16

  Required Vote for the Reorganization......................   16

  Rights of Dissenting Shareholders.........................   17

  Dividends.................................................   19

  Stock Compensation Plans..................................   19

  Stock Exchange Listing....................................   19

  Accounting Treatment of the Reorganization................   19

 

THE SPECIAL MEETING.........................................   20

  When and Where the Special Meeting Will be Held...........   20

  What Will be Voted Upon...................................   20

  Only Cooper Ohio Shareholders of Record as of [month day],

     2001 Are Entitled to Vote..............................   20

  Majority of Outstanding Shares Must be Represented For a

     Vote to be Taken.......................................   20

  Vote Required For Approval................................   20

  Voting Your Shares and Changing Your Vote.................   21

  How Proxies Are Counted...................................   21

  Cost of Solicitation......................................   22

</TABLE>

 

                                        i

<PAGE>   5

 

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DESCRIPTION OF AUTHORIZED SHARES OF COOPER INDUSTRIES,

  LTD. .....................................................   23

  Authorized Share Capital..................................   23

  Voting....................................................   23

  Dividend Rights...........................................   23

  Redemption and Conversion.................................   24

  Stock Exchange Listing....................................   24

  Changes to Rights of a Class or Series....................   24

  Quorum for General Meetings...............................   25

  Rights upon Liquidation...................................   25

  Sinking Fund..............................................   25

  Liability for Further Calls or Assessments................   25

  Preemptive Rights.........................................   25

  Repurchase Rights.........................................   25

  Restrictions on Transfer..................................   25

  Compulsory Acquisition of Shares Held by Minority

     Holders................................................   26

  Transfer Agent............................................   26

  Preferred Shares..........................................   26

  Anti-Takeover Provisions..................................   27

 

COMPARISON OF RIGHTS OF SHAREHOLDERS........................   28

  Comparison of Corporate Governance Provisions.............   29

 

INCOME TAX CONSEQUENCES OF THE REORGANIZATION...............   37

  U.S. Federal Income Tax Consequences of the

     Reorganization.........................................   37

  Bermuda Income Tax Consequences of the Reorganization.....   40

 

EXPERTS.....................................................   40

 

LEGAL MATTERS...............................................   40

 

PROPOSALS OF SHAREHOLDERS...................................   40

 

WHERE YOU CAN FIND MORE INFORMATION.........................   41

 

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.............   41

</TABLE>

 

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<S>       <C>

ANNEX I   -- AGREEMENT AND PLAN OF MERGER

ANNEX II  -- MEMORANDUM OF ASSOCIATION OF COOPER INDUSTRIES, LTD.

ANNEX III -- AMENDED AND RESTATED BYE-LAWS OF COOPER INDUSTRIES, LTD.

ANNEX IV  -- SECTION 1701.85 OF THE OHIO GENERAL CORPORATION LAW

</TABLE>

 

                                        ii

<PAGE>   6

 

           CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

 

    This document contains or incorporates by reference forward-looking

statements within the meaning of the Private Securities Litigation Reform Act of

1995 with respect to the reorganization and our financial condition, results of

operations and business. This Act protects public companies from liability for

forward-looking statements in private securities actions if the forward-looking

statement is identified and is accompanied by meaningful cautionary statements

identifying important factors that could cause actual results to differ

materially. Forward-looking statements by their nature involve a degree of risk

and uncertainty, including, but not limited to, the risks and uncertainties

referred to under "Risk Factors" and elsewhere herein. All statements regarding

the expected benefits of the reorganization are forward-looking statements. The

forward-looking statements may include statements for the period following

completion of the reorganization. You can find many of these statements by

looking for words such as "believes," "expects," "anticipates," "estimates,"

"continues," "may," "intends," "plans" or similar expressions in this document

or in the documents incorporated by reference. You should be aware that any

forward-looking statements in this document only reflect current expectations

and are not guarantees of performance.

 

    We have identified factors that could cause actual plans or results to

differ materially from those included in any forward-looking statements. These

factors include, but are not limited to:

 

    - an inability to realize expected benefits of the reorganization within the

      anticipated time frame, or at all;

 

    - changes in tax laws, tax treaties or tax regulations and the

      interpretation or enforcement thereof;

 

    - an inability to execute our business strategy;

 

    - costs or difficulties related to the reorganization and related

      transactions, which could be greater than expected;

 

    - changes in the rate of economic growth in the United States and other

      major international economies;

 

    - changes in trade, monetary and fiscal policies worldwide;

 

    - currency fluctuations;

 

    - outcomes of pending and future litigation;

 

    - increasing competition by foreign and domestic companies;

 

    - changes in capital needs; and

 

    - changing rates of inflation and other economic or business conditions.

 

Actual results may differ materially from those expressed or implied by

forward-looking statements. As you make your decision how to vote, please take

into account that forward-looking statements speak only as of the date of this

document or, in the case of documents incorporated by reference, the date of any

such document.

 

                                       iii

<PAGE>   7

 

                 QUESTIONS AND ANSWERS ABOUT THE REORGANIZATION

 

WHAT AM I BEING ASKED TO VOTE ON?

 

    You are being asked to vote in favor of a merger by which Cooper Ohio will

become a wholly-owned, indirect subsidiary of a new holding company, Cooper

Bermuda. Your shares of Cooper Ohio common stock will automatically become an

identical number of Cooper Bermuda Class A common shares.

 

HOW WILL THE REORGANIZATION BE ACCOMPLISHED?

 

    A new Ohio company, which has been formed specifically for the merger, will

merge into Cooper Ohio. Cooper Ohio will be the surviving company in the merger

and become a wholly-owned, indirect subsidiary of Cooper Bermuda. As a result of

the merger, each currently outstanding share of Cooper Ohio will automatically

convert into a Class A common share of Cooper Bermuda. This procedure allows you

to become a shareholder in Cooper Industries, Ltd., the new Bermuda parent

company of the entire Cooper Industries group. After this merger, you will own

an interest in a Bermuda holding company which, together with its subsidiaries,

will continue to be engaged in the same business that Cooper Ohio and its

subsidiaries were engaged in before the merger. The additional steps in the

reorganization are fully described in "The Reorganization -- Structure of the

Reorganization" on page 13. YOUR PROPORTIONATE OWNERSHIP AND RELATIVE VOTING

RIGHTS WILL NOT CHANGE AS A RESULT OF THE REORGANIZATION.

 

WHAT ARE THE BENEFITS TO THE COMPANY OF COMPLETING THIS REORGANIZATION?

 

    We believe that a significant portion of our business is currently, and in

the future a greater portion will be, generated from non-U.S. markets. We

believe the reorganization will allow us to take advantage of financial and

other business opportunities that are not available under our current corporate

structure, including:

 

    - Maximization of our potential business growth and cash flow;

 

    - Improvement of our worldwide effective tax rate;

 

    - Use of the greater cash flow to invest for further earnings growth,

      including by developing higher growth product lines and acquiring

      complementary higher growth electrical and electronic businesses;

 

    - Use of the greater cash flow to reduce the amount of our debt and

      repurchase stock; and

 

    - Expansion of our investor base as our Company's shares may become more

      attractive to non-U.S. investors.

 

See "The Reorganization -- Background and Reasons for the Reorganization" on

page 13 in this proxy statement/prospectus.

 

WILL THE REORGANIZATION DILUTE MY OWNERSHIP INTEREST?

 

    No. The reorganization will not dilute your ownership interest. Immediately

after the reorganization is consummated you will own the same percentage of

Cooper Bermuda Class A common shares as you own of Cooper Ohio common stock

immediately prior to the completion of the reorganization. In the

reorganization, Cooper Bermuda will issue its Class B common shares to Cooper

Ohio. Only Cooper Ohio and other wholly-owned subsidiaries of Cooper Bermuda

will own the Class B common shares. Consequently, the Cooper Bermuda Class B

common shares that are held by Cooper Ohio will not dilute your ownership

interest because Cooper Ohio will be a wholly-owned, indirect subsidiary of

Cooper Bermuda.

 

    The Cooper Bermuda Class B common shares are convertible by the holder into

Class A common shares in two circumstances: (1) to satisfy obligations under

stock plans of Cooper Bermuda and its subsidiaries and (2) as consideration for

acquisitions. See "Description of Authorized Shares of Cooper Industries,

Ltd. -- Redemption and Conversion" on page 24 in this proxy

statement/prospectus.

<PAGE>   8

 

WHY IS THE COMPANY PROPOSING THIS REORGANIZATION?

 

    The objective of the reorganization is to enhance shareholder value.

However, we cannot predict what impact, if any, the reorganization will have in

the long-term in light of the fact that the achievement of our objectives

depends on many things, including our ability to react to any changes in the tax

laws and treaties of the various jurisdictions where we operate.

 

WILL COOPER OHIO SHAREHOLDERS BE TAXED AS A RESULT OF THE REORGANIZATION?

 

    Generally, for U.S. federal income tax purposes, shareholders who are U.S.

persons will recognize gain, if any, but not loss, on the receipt of Cooper

Bermuda Class A common shares in the merger. Such a holder will generally

recognize gain equal to the difference, if any, between the fair market value of

the Cooper Bermuda Class A common shares received in exchange for Cooper Ohio

common stock in the merger and the holder's adjusted tax basis in the holder's

shares of Cooper Ohio common stock exchanged therefor. Generally, any such gain

will be capital gain. Shareholders will not be permitted to recognize any loss

realized on the exchange of their shares of Cooper Ohio common stock in the

merger, but their aggregate adjusted tax basis in the Cooper Bermuda Class A

common shares received would equal the aggregate adjusted tax basis of their

shares of Cooper Ohio common stock. Thus, any loss would be preserved.

 

    WE URGE YOU TO CONSULT YOUR OWN TAX ADVISORS REGARDING YOUR PARTICULAR TAX

CONSEQUENCES OF THE REORGANIZATION.

 

WILL COOPER OHIO BE TAXED AS A RESULT OF THE REORGANIZATION?

 

    Based on current estimates of the fair market value of the assets

transferred to Cooper Bermuda in connection with the reorganization, we believe

that Cooper Ohio will not incur a material amount of U.S. federal income or

withholding tax as a result of the reorganization.

 

WHEN DO YOU EXPECT TO COMPLETE THE MERGER?

 

    We hope to complete the merger shortly after the special meeting of Cooper

Ohio shareholders, assuming that it is approved by shareholders at that meeting.

 

WHY WAS BERMUDA SELECTED AS THE DOMICILE OF THE NEW PARENT COMPANY?

 

    We chose Bermuda for its political stability, legal framework and business

friendly environment. The first international (i.e., not locally owned) company

was incorporated in Bermuda in the 1930s, and there are currently many companies

domiciled there which are publicly traded on U.S. and European markets. Under

current Bermuda law, a Bermuda company is not required to pay taxes in Bermuda

on either income or capital gains. In addition, despite certain differences, the

corporate legal system, based on English law, is such that your rights as a

Cooper Bermuda shareholder will be substantially unchanged from your rights as a

shareholder in Cooper Ohio. We encourage you to read the section "Comparison of

Rights of Shareholders" beginning on page 28 for a more detailed description of

the differences between your rights under Ohio law and under Bermuda law.

 

WILL THE PROPOSAL AFFECT CURRENT OPERATIONS? WHAT ABOUT THE FUTURE?

 

    The reorganization, which will move the company's domicile from Ohio to

Bermuda, will have no immediate impact on how we conduct day-to-day operations.

The location of future operations will depend on the needs of the business,

independent of our place of incorporation.

 

WHAT VOTE IS REQUIRED TO APPROVE THE TRANSACTION?

 

    In order for us to change our domicile, we need affirmative votes from a

majority of the voting power of Cooper Ohio. SHARES FOR WHICH NO VOTES ARE CAST

WILL BE TREATED AS THOUGH THEY WERE VOTED AGAINST THE AGREEMENT AND PLAN OF

MERGER, SO IT IS VERY IMPORTANT FOR ALL SHAREHOLDERS TO VOTE. See "Special

Meeting -- Vote Required For Approval" on page 20.

 

WILL I BE ABLE TO TRADE MY SHARES DURING THE TIME IT TAKES TO COMPLETE THE

REORGANIZATION?

 

    Yes. You will be able to trade your shares during the time it takes to

complete the reorganization.

 

                                        2

<PAGE>   9

 

HOW DO I VOTE IF MY SHARES ARE REGISTERED IN MY NAME?

 

    After you read this document, you may vote by any one of the following

methods:

 

    (1) CALL 1-877-779-8683 from the U.S. or Canada (this call is toll free) or

        001-201-536-8073 from all other countries to vote by telephone anytime

        up to 12:00 midnight, New York time on [month day], 2001; or

 

    (2) GO TO THE WEBSITE: http://www.eproxyvote.com/cbe to vote over the

        Internet anytime up to 12:00 midnight, New York time on [month day],

        2001; or

 

    (3) MARK, SIGN AND MAIL your proxy card in the enclosed postage-prepaid

        envelope. If you are voting by telephone or by the Internet, please do

        not return your proxy card.

 

    Please vote as soon as possible even if you currently plan to attend the

meeting in person, so that your shares may be represented and voted at the

special meeting.

 

HOW DO I VOTE MY SHARES IN THE COOPER INDUSTRIES, INC. RETIREMENT SAVINGS AND

STOCK OWNERSHIP PLAN ("CO-SAV")?

 

    If you hold shares of Cooper Ohio through CO-SAV, you must instruct the

CO-SAV Trustee, the Chase Manhattan Bank, how to vote your shares. The CO-SAV

shares are included in your proxy and you instruct the Trustee how to vote your

shares by simply submitting your proxy by one of the three methods described

above for registered shareholders. If you do not properly submit your proxy (or

if you submit your proxy with an unclear voting designation or with no voting

designation at all), then the Trustee will vote the shares in your CO-SAV

account in proportion to the way the other CO-SAV participants vote their

shares. The Trustee will also vote Cooper Ohio common shares not yet allocated

to participants' accounts in proportion to the way that CO-SAV participants vote

their shares.

 

HOW DO I VOTE IF MY BROKER HOLDS MY SHARES IN STREET NAME?

 

    After you read this document, you should follow the voting instructions

provided by your broker.

 

IF MY BROKER HOLDS MY SHARES IN "STREET NAME," WILL MY BROKER VOTE MY SHARES FOR

ME?

 

    NO. IF YOU DO NOT PROVIDE YOUR BROKER WITH INSTRUCTIONS ON HOW TO VOTE YOUR

"STREET NAME" SHARES, YOUR BROKER WILL NOT BE PERMITTED TO VOTE THEM. You should

complete and return the enclosed form of proxy or be sure to provide your broker

with instructions on how to vote your shares.

 

WHAT DO I DO IF I WANT TO CHANGE MY VOTE?

 

    There are three ways in which you may revoke your proxy and change your

vote:

 

    - First, you may send a written notice to our proxy solicitor, Georgeson

      Shareholder Communications, Inc., stating that you would like to revoke

      your proxy. This notice must be received prior to the special meeting.

 

    - Second, you may complete and submit a new, later-dated proxy by any of the

      three methods described above. The latest dated proxy actually received by

      the Company prior to the special meeting will be the one that is counted,

      and all earlier proxies will be revoked.

 

    - Third, you may attend the special meeting and vote in person. Simply

      attending the meeting, however, will not revoke your proxy.

 

If you have instructed a broker to vote your shares, you must follow directions

received from your broker to change or revoke your proxy.

 

DO I HAVE TO CHANGE MY STOCK CERTIFICATES?

 

    No. After the merger is completed, your stock certificates will

automatically represent the same number of Cooper Bermuda Class A common shares.

For further information, please see "The Reorganization -- Automatic Share

Conversion" on page 16.

 

WHO DO I CONTACT WITH FURTHER QUESTIONS?

 

    Please call the company's proxy solicitor,

Georgeson Shareholder Communications, Inc. at (800) 223-2064, or write us at

Office of the Secretary, Cooper Industries, Inc., P.O. Box 4446, Houston, Texas

77210-4446.

                                        3

<PAGE>   10

 

                                    SUMMARY

 

    This summary highlights selected information from this proxy

statement/prospectus and may not contain all of the information that is

important to you. To understand the merger and other transactions more fully and

for a more complete description of the legal terms of the merger, you should

read carefully this entire proxy statement/prospectus, including the annexes,

and the other documents we have referred you to. See "Where You Can Find More

Information." The Agreement and Plan of Merger is attached as annex I to this

proxy statement/prospectus. The Memorandum of Association and Bye-laws that will

govern our company once we are domiciled in Bermuda and are attached as annexes

II and III.

 

PARTIES TO THE MERGER

 

  Cooper Industries, Inc.

 

    Cooper Ohio was incorporated under the laws of the State of Ohio on January

8, 1919. Cooper operates in two business segments: Electrical Products and Tools

& Hardware. Cooper manufactures, markets and sells its products and provides

services throughout the world. Cooper has manufacturing facilities in 21

countries and currently employs approximately 34,000 people. With its two

business segments, Cooper serves four major markets: industrial/utility,

construction, electronics/telecom and energy. Markets for Cooper's products and

services are worldwide, though the United States is the largest market.

 

    The Electrical Products segment manufactures, markets and sells electrical

and circuit protection products, including fittings, support systems,

enclosures, wiring devices, plugs, receptacles, lighting fixtures, fuses,

emergency lighting, fire detection systems and security products for use in

residential, commercial and industrial construction, maintenance and repair, and

electronics and telecom applications. The segment also manufactures, markets and

sells products for use by utilities and in industry for electrical power

transmission and distribution, including distribution switchgear, transformers,

transformer terminations and accessories, capacitors, voltage regulators, surge

arresters, pole line hardware and other related power systems components. The

segment's product lines are marketed directly to original equipment

manufacturers and utilities and to a variety of end users through major

distributor chains, retail home centers and thousands of independent

distributors.

 

    The Tools & Hardware segment manufactures, markets and sells hand tools for

industrial, construction and consumer markets; automated assembly systems for

industrial markets; and electric and pneumatic industrial power tools for

general industry, primarily automotive and aerospace manufacturers. The

segment's products are sold by a company sales force, independent distributors

and retailers.

 

  Cooper Industries, Ltd.

 

    Cooper Bermuda is a newly formed Bermuda company and is currently

wholly-owned by Cooper Ohio. Cooper Bermuda has no significant assets or

capitalization and has not engaged in any business or other activities other

than in connection with its formation and the reorganization and related

transactions. As a result of the reorganization, it will become the indirect

parent holding company of Cooper Ohio.

 

  Cooper Mergerco, Inc.

 

    Cooper Mergerco, Inc. is a newly formed Ohio corporation and a wholly-owned,

indirect subsidiary of Cooper Bermuda. Cooper Mergerco was formed to accomplish

the proposed merger. It has no significant assets or capitalization and has not

engaged in any business or other activities except in connection with its

formation and the reorganization and related transactions.

 

    The principal executive offices of Cooper Ohio, Cooper Bermuda and Cooper

Mergerco are located at 600 Travis, Suite 5800, Houston, Texas 77002-1001. The

telephone number of each party at that address is (713) 209-8400. The principal

registered office of Cooper Bermuda is located at Cedar House, 41 Cedar Avenue,

Hamilton HM 12, Bermuda.

 

                                        4

<PAGE>   11

 

THE REORGANIZATION (SEE PAGE 13)

 

    Our Board of Directors has approved and recommends that you adopt the

Agreement and Plan of Merger which effectively changes your company's place of

incorporation from Ohio to Bermuda. The reorganization will be accomplished

through the merger of Cooper Mergerco into Cooper Ohio. Cooper Ohio will be the

surviving company in the merger and become a wholly-owned, indirect subsidiary

of Cooper Bermuda. The terms of the merger are set forth in the Agreement and

Plan of Merger attached as annex I to this proxy statement/ prospectus. As a

result of the merger, your shares of Cooper Ohio common stock will automatically

become Cooper Bermuda Class A common shares so that you will own shares in a

Bermuda corporation rather than an Ohio corporation. For a more detailed

description of the differences between your rights under Ohio law and under

Bermuda law, please see "Comparison of Rights of Shareholders" on page 28. After

completion of the reorganization, Cooper Bermuda and its subsidiaries will

continue to conduct the business that Cooper Ohio and its subsidiaries now

conduct.

 

    The reorganization involves the following steps:

 

        1. As part of the reorganization, Cooper Ohio will transfer the shares

    of certain subsidiaries (the "Transferred Assets") to Cooper Bermuda in

    exchange for that number of Cooper Bermuda Class B common shares, par value

    US$.01 per share, which has a fair market value equal to the fair market

    value of the Transferred Assets. For U.S. federal income and withholding tax

    purposes, Cooper Ohio will be required to recognize gain, but not loss, on

    any assets transferred to Cooper Bermuda in the reorganization. Based on

    current estimates of the fair market value of the Transferred Assets, we

    believe that Cooper Ohio will not incur a material amount of U.S. federal

    income or withholding taxes as a result of this transaction. For a

    description of the terms of the Cooper Bermuda Class B common shares, please

    see the discussion under "Description of Authorized Shares of Cooper

    Industries, Ltd." on page 23.

 

        2. Cooper Mergerco will merge into Cooper Ohio. Cooper Ohio will be the

    surviving entity and become a wholly-owned, indirect subsidiary of Cooper

    Bermuda.

 

        3. In the merger, the outstanding shares of Cooper Ohio will

    automatically convert by operation of law into Class A common shares of

    Cooper Bermuda, and the current shareholders of Cooper Ohio will own exactly

    the same number of Cooper Bermuda Class A common shares as they currently

    own in Cooper Ohio. For a description of the terms of the Cooper Bermuda

    Class A common shares, please see the discussion under "Description of

    Authorized Shares of Cooper Industries, Ltd." on page 23.

 

        4. Immediately following the merger, the number of Cooper Bermuda Class

    B common shares owned by Cooper Ohio will be adjusted to reflect the

    relative fair market values as of the effective date of the Transferred

    Assets and Cooper Ohio, based on the market value of the Cooper Ohio common

    shares. We currently estimate the aggregate number of Class B common shares

    to be issued in the exchange to be approximately [80] million.

 

    Shareholders are not required to exchange their stock certificate(s) as a

result of the merger. Each outstanding certificate representing shares of Cooper

Ohio shall automatically represent the same number of Cooper Bermuda Class A

common shares. Following the merger, certificates bearing the name of Cooper

Bermuda will be issued in the normal course upon surrender of certificates

bearing the name of Cooper Ohio for exchange or transfer.

 

REASONS FOR THE REORGANIZATION (SEE PAGE 13)

 

    International activities are an important part of our current business.

Expansion of our international business is an important part of our current

business strategy and significant growth opportunities exist in the

international marketplace. Growth through acquisitions and investment in higher

growth product lines are also important parts of our strategy. We believe that

reorganizing as a Bermuda corporation will allow us to implement our business

strategy more effectively.

 

                                        5

<PAGE>   12

 

    We believe that the reorganization should improve our global tax position

and should maximize potential growth and cash flow. We anticipate that the

reorganization may result in significant tax savings net of tax costs. These

savings are expected to result in a reduction in our annual effective tax rate

from approximately 35% to within a range from 18% to 23% over the next several

years as a result of the reorganization and transferring the Transferred Assets

to Cooper Bermuda, after accounting for (1) taxes, if any, incurred on the

transfer of the Transferred Assets to Cooper Bermuda, (2) taxes incurred by

Cooper Ohio with respect to distributions on the Cooper Bermuda Class B common

shares, and (3) the taxability of any gains realized by Cooper Ohio with respect

to any disposition of the Cooper Bermuda Class B common shares. However, we

cannot give any assurance as to what our annual effective tax rate will be after

the reorganization. After the reorganization our tax rate will depend on, among

other things, the level and geographic mix of our earnings and our ability to

react to any changes in tax laws, treaties and policies and the interpretation

of such laws, treaties and policies in the jurisdictions where we operate. Our

actual effective tax rate may vary materially from our expectation.

 

    Any improvement in our cash flow will allow the company to develop higher

growth product lines and to acquire higher-growth electrical and electronic

businesses. Increased cash flow would also put the company in a better position

to reduce the amount of its debt.

 

    We believe that the reorganization will increase the company's

attractiveness to non-U.S. investors and result in a more favorable corporate

structure for expansion of our current business.

 

    For a discussion of the risk factors associated with the reorganization,

please see the discussion under "Risk Factors" on page 11.

 

CONDITIONS TO CONSUMMATION OF THE REORGANIZATION (SEE PAGE 15)

 

    The consummation of the reorganization is conditioned on several factors,

including the affirmative vote of a majority of the voting power of Cooper Ohio

and that none of the parties to the Agreement and Plan of Merger is subject to

any governmental authority which prohibits the consummation of the

reorganization.

 

    For additional factors, please see "The Reorganization -- The Merger

Agreement -- Conditions to Consummation of the Merger" on page 15.

 

U.S. FEDERAL INCOME TAX CONSEQUENCES (SEE PAGE 37)

 

    Generally, for U.S. federal income tax purposes, shareholders who are U.S.

persons will recognize gain, if any, but not loss, on the receipt of Cooper

Bermuda Class A common shares in the reorganization. Such a holder will

generally recognize gain equal to the difference, if any, between the fair

market value of the Cooper Bermuda Class A common shares received in exchange

for Cooper Ohio common shares in the reorganization and the holder's adjusted

tax basis in the holder's shares of Cooper Ohio common stock exchanged therefor.

Generally, any such gain will be capital gain. Shareholders will not be

permitted to recognize any loss realized on the exchange of their shares of

Cooper Ohio common stock in the reorganization, but their aggregate adjusted tax

basis in the Cooper Bermuda Class A common shares received would equal the

aggregate adjusted tax basis of their shares of Cooper Ohio common stock. Thus,

any loss would be preserved.

 

    WE URGE YOU TO CONSULT YOUR OWN TAX ADVISORS REGARDING YOUR

PARTICULAR TAX CONSEQUENCES OF THE REORGANIZATION.

 

    A more detailed discussion of the material U.S. federal income tax

consequences of the reorganization is set forth under the heading "Income Tax

Consequences of the Reorganization -- U.S. Federal Income Tax Consequences of

the Reorganization" on page 37.

 

                                        6

<PAGE>   13

 

RIGHTS OF SHAREHOLDERS (SEE PAGE 28)

 

    The principal attributes of the Cooper Ohio common stock and the Cooper

Bermuda Class A common shares will be similar. There are differences, however,

between the rights of shareholders under Ohio law and Bermuda law. In addition,

there are differences between our current articles of incorporation and

regulations and Cooper Bermuda's memorandum of association and bye-laws. We

encourage you to read the section titled "Comparison of Rights of Shareholders"

on page 28 for a more detailed discussion of these differences.

 

STOCK EXCHANGE LISTING; RECENT STOCK PRICES (SEE PAGE 19)

 

    Immediately following the merger, Cooper Bermuda's Class A common shares

will be listed on the New York Stock Exchange under the symbol "CBE," the same

symbol under which Cooper Ohio's common stock is currently listed. Since the

Cooper Bermuda Class B common shares will be held only by Cooper Ohio and other

wholly-owned subsidiaries of Cooper Bermuda, they will not be registered with

the Securities and Exchange Commission or publicly traded.

 

    The closing price per share of our shares on the New York Stock Exchange was

$38.01 on June 8, 2001. The high and low sales prices of Cooper Ohio's common

shares on the New York Stock Exchange were $39.50 and $38.00 on June 8, 2001,

the last trading day before the public announcement of the reorganization.

 

RIGHTS OF DISSENTING SHAREHOLDERS (SEE PAGE 17)

 

    Under the Ohio General Corporation Law, shareholders of record as of the

record date for the special meeting who comply with the applicable requirements

of Ohio law will have the right to seek an appraisal of the fair cash value of

their shares. We have included a copy of the provisions of Ohio law that govern

appraisal rights as annex IV.

 

ACCOUNTING TREATMENT OF THE REORGANIZATION (SEE PAGE 19)

 

    The reorganization will be accounted for as a reorganization of entities

under common control which will not result in changes in the historical

consolidated carrying amount of assets, liabilities and shareholders' equity.

 

SPECIAL MEETING (SEE PAGE 20)

 

    Time, Date, Place.  The special meeting of shareholders will be held at

xx:xx a.m., local time, on [Month day], 2001, at [Location], Houston, Texas.

 

    Record Date.  Only shareholders of record at the close of business on [Month

day], 2001, as shown in our records, will be entitled to vote, or to grant

proxies to vote, at the special meeting.

 

    Quorum.  The presence, in person or by proxy, of shareholders holding a

majority of the voting power of Cooper Ohio will constitute a quorum.

 

RECOMMENDATION OF THE BOARD OF DIRECTORS

 

    THE BOARD OF DIRECTORS OF COOPER OHIO APPROVED THE AGREEMENT AND PLAN OF

MERGER AND RECOMMENDS THAT YOU VOTE FOR ITS ADOPTION.

 

VOTE REQUIRED (SEE PAGE 20)

 

    ADOPTION OF THE AGREEMENT AND PLAN OF MERGER REQUIRES THE AFFIRMATIVE VOTE

OF A MAJORITY OF THE VOTING POWER OF COOPER OHIO. ABSTENTIONS AND BROKER

NON-VOTES WILL THEREFORE BE COUNTED AS VOTES AGAINST ADOPTION OF THE MERGER

AGREEMENT. As of the [Month day], 2001 record date, there were xx,xxx,xxx Cooper

Ohio shares outstanding and entitled to vote. As of the record date, our

directors and executive officers and their affiliates directly owned, in the

aggregate, approximately xxy,xxx Cooper Ohio shares, which represents

approximately .xx% of the outstanding Cooper Ohio shares. These persons have

informed us that they intend to vote their shares in favor of the proposal to

adopt the Agreement and Plan of Merger.

 

                                        7

<PAGE>   14

 

PROXIES (SEE PAGE 21)

 

  General

 

    Shareholders of record and beneficial owners of shares in CO-SAV may vote by

any one of the following methods:

 

    (1) CALL 1-877-779-8683 from the U.S. or Canada (this call is toll free) or

        001-201-536-8073 from all other countries to vote by telephone anytime

        up to 12:00 midnight, New York time on [month day], 2001; or

 

    (2) GO TO THE WEBSITE: http://www.eproxyvote.com/cbe to vote over the

        Internet anytime up to 12:00 midnight, New York time on [month day],

        2001; or

 

    (3) MARK, SIGN AND MAIL your proxy card in the enclosed postage-prepaid

        envelope. If you are voting by telephone or by the Internet, please do

        not return your proxy card.

 

    If you hold your Cooper Ohio shares in the name of a bank, broker or other

nominee, you should follow the instructions provided by your bank, broker or

nominee when voting your shares. To be effective, a form of proxy must be

received by us prior to the beginning of voting at the special meeting.

 

  Revocation

 

    There are three ways in which you may revoke your proxy and change your

vote:

 

    - First, you may send a written notice to our proxy solicitor, Georgeson

      Shareholder Communications, Inc., stating that you would like to revoke

      your proxy. This notice must be received prior to the special meeting.

 

    - Second, you may complete and submit a new later-dated proxy by any of the

      three methods described above. The latest dated proxy actually received by

      the company prior to the special meeting will be the one that is counted,

      and all earlier proxies will be revoked.

 

    - Third, you may attend the special meeting and vote in person. Simply

      attending the meeting, however, will not revoke your proxy.

 

If you have instructed a broker to vote your shares, you must follow directions

received from your broker to change or revoke your proxy.

 

                                        8

<PAGE>   15

 

                SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA

 

    The selected historical consolidated financial data of Cooper Ohio in the

table below were derived from Cooper Ohio's audited consolidated financial

statements as of and for the five years ended December 31, 2000 and Cooper

Ohio's unaudited interim consolidated financial statements as of and for the

three months ended March 31, 2001 and 2000. In Cooper Ohio management's opinion,

the unaudited interim consolidated financial statements have been prepared on

the same basis as the audited consolidated financial statements and include all

adjustments, consisting of normal recurring adjustments, necessary to present

fairly the results of operations and financial position of Cooper Ohio for the

periods presented. This data should be read in conjunction with the audited and

unaudited interim consolidated financial statements of Cooper Ohio, including

the notes to the financial statements, incorporated by reference into this proxy

statement/prospectus.

 

    We have not included data for Cooper Bermuda because it did not conduct

business during any of the periods discussed below.

 

<TABLE>

<CAPTION>

                                                  THREE MONTHS

                                                 ENDED MARCH 31,                   YEARS ENDED DECEMBER 31,

                                               -------------------   ----------------------------------------------------

                                                 2001       2000       2000       1999       1998     1997(1)    1996(1)

                                               --------   --------   --------   --------   --------   --------   --------

                                                                  (IN MILLIONS, EXCEPT PER SHARE DATA)

<S>                                            <C>        <C>        <C>        <C>        <C>        <C>        <C>

INCOME STATEMENT DATA:

  Revenues...................................  $1,095.1   $1,038.9   $4,459.9   $3,868.9   $3,651.2   $3,415.6   $3,380.5

                                               --------   --------   --------   --------   --------   --------   --------

  Income from continuing operations..........  $   56.4   $   83.9   $  357.4   $  331.9   $  335.9   $  310.0   $  285.1

  Income from discontinued operations

    (Automotive Products), net of taxes......        --         --         --         --       87.1       84.6       30.3

                                               --------   --------   --------   --------   --------   --------   --------

  Net income.................................  $   56.4   $   83.9   $  357.4   $  331.9   $  423.0   $  394.6   $  315.4

                                               ========   ========   ========   ========   ========   ========   ========

INCOME PER COMMON SHARE DATA:

  Basic --

    Income from continuing operations........  $    .60   $    .89   $   3.82   $   3.53   $   2.97   $   2.64   $   2.66

    Income from discontinued operations

      (Automotive Products), net of taxes....        --         --         --         --        .77        .72        .28

                                               --------   --------   --------   --------   --------   --------   --------

  Net income.................................  $    .60   $    .89   $   3.82   $   3.53   $   3.74   $   3.36   $   2.94

                                               ========   ========   ========   ========   ========   ========   ========

  Diluted --

    Income from continuing operations........  $    .60   $    .89   $   3.80   $   3.50   $   2.93   $   2.57   $   2.52

    Income from discontinued operations

      (Automotive Products), net of taxes....        --         --         --         --        .76        .69        .25

                                               --------   --------   --------   --------   --------   --------   --------

  Net income.................................  $    .60   $    .89   $   3.80   $   3.50   $   3.69   $   3.26   $   2.77

                                               ========   ========   ========   ========   ========   ========   ========

BALANCE SHEET DATA (at period end):

Total assets.................................  $4,822.2   $4,399.7   $4,789.3   $4,143.4   $3,779.1   $5,507.3   $5,318.9

Long-term debt, excluding current

  maturities.................................  $1,414.1   $1,129.7   $1,300.8   $  894.5   $  774.5   $1,272.2   $1,737.7

Shareholders' equity.........................  $1,925.8   $1,751.8   $1,904.2   $1,743.1   $1,563.6   $2,683.5   $1,967.2

CASH DIVIDENDS PER COMMON SHARE..............  $    .35   $    .35   $   1.40   $   1.32   $   1.32   $   1.32   $   1.32

</TABLE>

 

---------------

 

(1) Includes the results of the Kirsch window treatment operation for the

    five-month period ended May 30, 1997 and the year ended December 31, 1996.

    Kirsch was sold to Newell Co. on May 30, 1997.

 

    In October 1998, Cooper Ohio sold its Automotive Products segment for $1.9

billion in proceeds. The financial information in the above table excludes the

results of the Automotive Products segment from income from continuing

operations. The discontinued segment's results are presented separately in the

caption, "Income from discontinued operations (Automotive Products), net of

taxes."

 

                                        9

<PAGE>   16

 

                    SUMMARY PRO FORMA FINANCIAL INFORMATION

 

    A pro forma condensed consolidated balance sheet for Cooper Bermuda is not

presented in this proxy statement/prospectus because there would be no

significant pro forma adjustments required to be made to the historical

consolidated balance sheet of Cooper Ohio as of December 31, 2000 and March 31,

2001. That balance sheet is included in Cooper Ohio's Quarterly Report on Form

10-Q for the three months ended March 31, 2001.

 

    A pro forma condensed consolidated income statement for Cooper Bermuda is

not presented in this proxy statement/prospectus because there would be no

significant pro forma adjustments required to be made to income from operations

in the historical consolidated income statements of Cooper Ohio for the year

ended December 31, 2000 or the three months ended March 31, 2001. Those income

statements are included in Cooper Ohio's 2000 proxy statement for the year ended

December 31, 2000 and in its Quarterly Report on Form 10-Q for the three months

ended March 31, 2001.

 

    Costs incurred in connection with the reorganization are not expected to be

material and are expensed as incurred.

 

                                        10

<PAGE>   17

 

                                  RISK FACTORS

 

THE REORGANIZATION COULD RESULT IN A TAXABLE GAIN.

 

    In connection with the reorganization, Cooper Ohio intends to exchange the

Transferred Assets for the Class B common shares of Cooper Bermuda. Cooper Ohio

will be subject to U.S. federal income tax on the gain, if any, realized on the

exchange. Based on current estimates of the fair market value of the Transferred

Assets and the Cooper Bermuda Class B common shares, we believe that Cooper Ohio

will not incur a material amount of U.S. federal income or withholding tax as a

result of the reorganization. Although the company believes that such

determination is correct, any such determination will not be binding on the

Internal Revenue Service, which may assert that the fair market value of the

Class B common shares is different than that determined, resulting in income or

withholding tax. Therefore, while we expect that the company should not incur a

material amount of U.S. federal taxes as a result of the exchange of the

Transferred Assets for the Class B common shares, there can be no assurance that

the IRS will not contest such determination or that the IRS will not succeed in

any such contest.

 

    Finally, changes in the tax laws, tax treaties or tax regulations and the

interpretation or enforcement thereof could adversely affect the tax

consequences of the reorganization to all parties.

 

COOPER BERMUDA MAY BECOME SUBJECT TO U.S. CORPORATE INCOME TAX, WHICH WOULD

REDUCE COOPER BERMUDA'S NET INCOME.

 

    Cooper Ohio currently is subject to U.S. corporate income tax on its

worldwide income. After the reorganization, Cooper Ohio and its subsidiaries

will continue to be subject to U.S. corporate income tax on their operations.

Cooper Bermuda anticipates that its non-U.S. operations will not be subject to

U.S. corporate income tax other than withholding taxes imposed on U.S. source

dividend income.

 

    Cooper Bermuda and other non-U.S. Cooper affiliates intend to conduct their

operations in a manner that will cause them not to be engaged in the conduct of

a trade or business in the U.S. Based on compliance with guidelines designed to

ensure that Cooper Bermuda and its non-U.S. affiliates do not engage in the

conduct of a U.S. trade or business, Cooper Bermuda and its non-U.S. affiliates

believe that they should not be required to pay U.S. corporate income tax, other

than withholding tax on U.S. source dividend income. However, if the IRS

successfully contends that Cooper Bermuda or any of its non-U.S. affiliates are

engaged in a trade or business in the U.S., Cooper Bermuda or that non-U.S.

affiliate would be required to pay U.S. corporate income tax on income that is

subject to the taxing jurisdiction of the U.S., and possibly the U.S. branch

profits tax.

 

THE ENFORCEMENT OF JUDGMENTS IN SHAREHOLDER SUITS AGAINST COOPER BERMUDA MAY BE

MORE DIFFICULT.

 

    Cooper Bermuda is a Bermuda company. As a result, it may be difficult for

you to effect service of process within the United States or to enforce

judgments obtained against Cooper Bermuda in United States courts. Cooper

Bermuda will irrevocably agree that it may be served with process with respect

to actions based on offers and sales of securities made in the United States by

having Cooper Industries, Inc. (Cooper Ohio) located at 600 Travis, Suite 5800,

Houston, Texas 77002-1001, be its United States agent appointed for that

purpose.

 

    Cooper Bermuda has been advised by its Bermuda counsel, Appleby, Spurling &

Kempe, that a judgment for the payment of money rendered by a court in the

United States based on civil liability would not be automatically enforceable in

Bermuda. Cooper Bermuda has also been advised by Appleby, Spurling & Kempe that

a final and conclusive judgment obtained in a court of competent jurisdiction in

the United States under which a sum of money is payable as compensatory damages

may be the subject of an action in the Supreme Court of Bermuda under the common

law doctrine of obligation, by action on the debt evidenced by the court's

judgment. Such an action should be successful upon proof that the sum of money

is due and payable, and without having to prove the facts supporting the

underlying judgment, as long as:

 

    - the court that gave the judgment was competent to hear the action in

      accordance with private international law principles as applied by the

      courts in Bermuda; and

 

                                        11

<PAGE>   18

 

    - the judgment is not contrary to public policy in Bermuda, was not obtained

      by fraud or in proceedings contrary to natural justice of Bermuda and is

      not based on an error in Bermuda law.

 

    A Bermuda court may impose civil liability on Cooper Bermuda or its

directors or officers in a suit brought in the Supreme Court of Bermuda against

Cooper Bermuda or such persons with respect to facts that constitute a violation

of U.S. federal securities laws, provided that the facts surrounding such

violation would constitute or give rise to a cause of action under Bermuda law.

 

ANTI-TAKEOVER PROVISIONS IN COOPER BERMUDA'S BYE-LAWS AND ITS SHAREHOLDERS

RIGHTS PLAN WILL MAINTAIN CERTAIN EXISTING ANTI-TAKEOVER PROVISIONS OF COOPER

OHIO.

 

    Provisions in Cooper Bermuda's bye-laws and shareholders rights plan, which

replicate certain provisions of Cooper Ohio's articles of incorporation,

regulations and shareholders rights plan, could discourage unsolicited takeover

bids from third parties or the removal of incumbent management. These provisions

include:

 

    - a classified board of directors;

 

    - the requirement that 80% of the voting power of Cooper Bermuda approve

      certain business combinations unless those business combinations are

      approved by two-thirds of the continuing directors of Cooper Bermuda or

      meet certain fair price requirements set forth in Cooper Bermuda's

      bye-laws; and

 

    - the possible dilution of a potential acquiror's interest in Cooper Bermuda

      as a result of the operation of the shareholders rights plan.

 

    Similar to the authority of Cooper Ohio's board of directors, the board of

directors of Cooper Bermuda also may issue preferred shares and determine their

rights and qualifications. The issuance of preferred shares may delay, defer or

prevent a merger, amalgamation, tender offer or proxy contest involving Cooper

Bermuda. This may cause the market price of Cooper Bermuda shares to decrease

significantly.

 

EXCLUSION OF COOPER BERMUDA CLASS A COMMON SHARES FROM THE S&P 500 INDEX COULD

ADVERSELY AFFECT THE MARKET PRICE OF THE COOPER BERMUDA CLASS A COMMON SHARES.

 

    Mutual funds that track stock indexes, such as the S&P 500 Index, do so by

holding shares in the companies represented in those indexes. The S&P 500 tracks

the performance of 500 stocks considered representative of the U.S. economy

generally. Cooper Ohio is currently included in the S&P 500 Index. There are a

number of companies incorporated outside the United States that have been

included in the S&P 500 Index. Based on a review of the factors considered by

the S&P to determine inclusion in the S&P 500 Index, we believe that Cooper

Bermuda will satisfy the criteria for continued inclusion in the S&P 500 Index.

 

    In the event Cooper Bermuda were not to be included in the S&P 500 Index,

certain mutual funds currently holding a substantial number of shares of Cooper

Ohio would be required to sell such shares (or the Class A common shares of

Cooper Bermuda they receive in the merger). These sales could adversely affect

the market price of the Cooper Bermuda Class A common shares.

 

                                        12

<PAGE>   19

 

                               THE REORGANIZATION

 

STRUCTURE OF THE REORGANIZATION

 

    The Board of Directors has approved and recommends that you adopt the

Agreement and Plan of Merger whereby we will change our domicile from Ohio to

Bermuda. The reorganization will be accomplished through the merger of Cooper

Mergerco into Cooper Ohio. Cooper Ohio will be the surviving company in the

merger and become a wholly-owned, indirect subsidiary of Cooper Bermuda. The

terms of the merger are set forth in the Agreement and Plan of Merger attached

as annex I to this proxy statement/prospectus. As a result of the merger your

shares of Cooper Ohio common stock will automatically become the same number of

Cooper Bermuda Class A common shares.

 

    After completion of the reorganization, you will own an interest in a

Bermuda holding company which, through Cooper Ohio and its other subsidiaries,

will be engaged in the same business that Cooper Ohio and its subsidiaries were

engaged in prior to the reorganization.

 

    The reorganization involves the following steps:

 

        1. As part of the reorganization, Cooper Ohio will transfer the

    Transferred Assets to Cooper Bermuda in exchange for that number of Cooper

    Bermuda Class B common shares, par value US$.01 per share, which has a fair

    market value equal to the fair market value of the Transferred Assets. For

    U.S. federal income and withholding tax purposes, Cooper Ohio will be

    required to recognize gain, but not loss, on any assets transferred to

    Cooper Bermuda in the reorganization. Based on current estimates of the fair

    market value of the Transferred Assets, we believe that Cooper Ohio will not

    incur a material amount of U.S. federal income or withholding taxes as a

    result of this transaction. For a description of the terms of the Cooper

    Bermuda Class B common shares, please see the discussion under "Description

    of Authorized Shares of Cooper Industries, Ltd." on page 23.

 

        2. Cooper Mergerco will merge into Cooper Ohio. Cooper Ohio will be the

    surviving entity and become a wholly-owned, indirect subsidiary of Cooper

    Bermuda.

 

        3. In the merger, the outstanding shares of Cooper Ohio will

    automatically convert by operation of law into Class A common shares of

    Cooper Bermuda, and the current shareholders of Cooper Ohio will own exactly

    the same number of Cooper Bermuda Class A common shares as they currently

    own in Cooper Ohio. For a description of the terms of the Cooper Bermuda

    Class A common shares, please see the discussion under "Description of

    Authorized Shares of Cooper Industries, Ltd." on page 23.

 

        4. Immediately following the merger, the number of Cooper Bermuda Class

    B common shares owned by Cooper Ohio will be adjusted to reflect the

    relative fair market values as of the effective date of the Transferred

    Assets and Cooper Ohio, based on the market value of the Cooper Ohio common

    shares. We currently estimate the aggregate number of Class B common shares

    to be issued in the exchange to be approximately [80] million.

 

    In addition, Cooper Bermuda expects to guarantee certain indebtedness of its

subsidiaries following completion of the reorganization.

 

BACKGROUND AND REASONS FOR THE REORGANIZATION

 

    International activities are an important part of our current business. In

2000, our international revenues accounted for 27% of total revenues. We have

manufacturing facilities in 21 countries with approximately 47% of our

manufacturing facilities located outside the United States and we currently

employ approximately 13,000 persons outside the United States. Expansion of our

international business is an important part of our current business strategy and

significant growth opportunities exist in the international marketplace. Growth

through acquisitions and investment in higher growth product lines are also

important parts of our strategy. In light of this, the board of directors of

Cooper Ohio believes that reorganizing Cooper Ohio as a Bermuda company will

 

                                        13

<PAGE>   20

 

allow us to implement our business strategy more effectively. In particular, the

board is recommending the reorganization because it believes that the

reorganization will:

 

    - improve our global tax position and should maximize potential growth and

      cash flow. We anticipate that the reorganization may result in significant

      tax savings net of tax costs. These savings are expected to result in a

      reduction in our annual effective tax rate from approximately 35% to

      within a range from 18% to 23% over the next several years as a result of

      the reorganization and transferring the Transferred Assets to Cooper

      Bermuda, after accounting for (1) taxes, if any, incurred on the transfer

      of the Transferred Assets to Cooper Bermuda, (2) taxes incurred by Cooper

      Ohio with respect to distributions on the Cooper Bermuda Class B common

      shares, and (3) the taxability of any gains realized by Cooper Ohio with

      respect to any disposition of the Cooper Bermuda Class B common shares.

      However, we cannot give any assurance as to what our annual effective tax

      rate will be after the reorganization. After the reorganization our tax

      rate will depend on, among other things, the level and geographic mix of

      our earnings and our ability to react to any changes in tax laws, treaties

      and policies and the interpretation of such laws, treaties and policies in

      the jurisdictions where we operate. Our actual effective tax rate may vary

      materially from our expectation.

 

    - maximize existing business growth and cash flow.

 

    - allow the company to develop higher growth product lines and to acquire

      higher-growth electrical and electronic businesses by virtue of the

      increased cash flow.

 

    - position the company to reduce the amount of its debt and repurchase its

      stock with the additional cash flow.

 

    - increase the Company's attractiveness to non-U.S. investors.

 

    - result in a more favorable corporate structure for expansion of our

      current business.

 

    Distributions with respect to stock in a U.S. corporation to nonresident

aliens could be subject to withholding taxes under the Internal Revenue Code. In

addition, estate taxes are payable in some cases in respect of the value of

shares in a U.S. corporation owned by a non-U.S. investor. As we will be a

non-U.S. corporation following the reorganization, these taxes will generally no

longer be applicable to non-U.S. investors. As a result, non-U.S. investors may

be more receptive to an investment in Cooper Bermuda Class A common shares.

 

    Cooper Bermuda will be indirectly subject to U.S. tax on income earned from

its U.S. business much as we are now. However, we believe the reorganization:

 

    - will improve our worldwide effective tax rate;

 

    - may facilitate foreign tax savings through a more flexible corporate

      structure; and

 

    - may provide future U.S. tax savings to the extent that new foreign

      businesses may be held by Cooper Bermuda without any intervening U.S.

      owners.

 

    Thus the new corporate structure should give us greater flexibility in

seeking to lower our worldwide tax liability and effective tax rate.

 

    In addition to the potential benefits described above, the reorganization

will expose you to some risks. Please see the discussion under "Risk Factors" on

page 11. There are also differences between the Ohio and the Bermuda corporate

law and the organizational documents of Cooper Ohio and Cooper Bermuda. For a

discussion of these differences, please see "Comparison of Rights of

Shareholders" on page 28. The board of directors has determined that the

potential advantages of the reorganization substantially outweigh these risks

and differences. Accordingly, the board of directors of Cooper Ohio has approved

the Agreement and Plan of Merger and recommends that shareholders vote "FOR" its

adoption. However, no assurances can be given that the anticipated benefits of

the reorganization will be realized.

 

                                        14

<PAGE>   21

 

THE MERGER AGREEMENT

 

    Cooper Ohio, Cooper Bermuda and Cooper Mergerco have entered into the merger

agreement which is the legal document that governs the merger. We recommend that

you read carefully the complete merger agreement for the precise legal terms of

the merger and other information that may be important to you. The merger

agreement is included in this proxy statement/prospectus as annex I.

 

CONDITIONS TO CONSUMMATION OF THE MERGER

 

    The merger will not be completed unless, among other things, the following

conditions are satisfied or, if allowed by law, waived:

 

    - the merger agreement is adopted by the affirmative vote of a majority of

      the voting power of Cooper Ohio outstanding as of the record date;

 

    - none of the parties to the merger agreement is subject to any governmental

      decree, order or injunction that prohibits the consummation of any of the

      steps in the reorganization;

 

    - the registration statement of which this proxy statement/prospectus is a

      part is declared effective by the Securities and Exchange Commission, and

      no stop order is in effect;

 

    - the Cooper Bermuda Class A common shares to be issued pursuant to the

      merger are authorized for listing on the New York Stock Exchange, subject

      to official notice of issuance;

 

    - all filings required by a governmental or regulatory agency are made; and

 

    - all consents and approvals required by any governmental or regulatory

      agency and all other material third-party consents are received.

 

    We are parties to agreements that require the consent of third parties prior

to the implementation of the merger. We believe that we will obtain all material

consents required prior to the completion of the merger and that the failure to

obtain any other consents will not have a material impact on our business or our

ability to consummate the reorganization.

 

EFFECTIVE TIME

 

    If the merger agreement is adopted by the requisite vote of our

shareholders, the merger will become effective upon the filing of a certificate

of merger with the Secretary of State of the State of Ohio in accordance with

Ohio law. Cooper Ohio expects to file the certificate of merger and have the

merger become effective as promptly as possible following the special meeting.

 

    In the event the conditions to the merger are not satisfied, the merger may

be abandoned or delayed even after the merger agreement has been adopted by our

shareholders. In addition, the merger may be abandoned or delayed for any reason

by the board of directors of Cooper Ohio at any time prior to its becoming

effective, even though the merger agreement has been adopted by our shareholders

and all conditions to the merger have been satisfied.

 

                                        15

<PAGE>   22

 

AMENDMENT OR TERMINATION

 

    The merger agreement may be amended, modified or supplemented at any time

before or after its adoption. However, after adoption, no amendment,

modification or supplement may be made or effected that does any of the

following:

 

    - alters or changes the amount or kind of shares to be received by

      shareholders in the merger;

 

    - alters or changes any term of the articles of the surviving corporation,

      except for alterations or changes that could otherwise be adopted by the

      directors of the surviving corporation; or

 

    - alters or changes any other terms and conditions of the merger agreement

      if any of the alterations or changes, alone or in the aggregate, would

      materially adversely affect the holders of Cooper Ohio common stock.

 

    Our board of directors may terminate the merger agreement and abandon the

merger at any time prior to its effectiveness.

 

AUTOMATIC SHARE CONVERSION

 

    Shares of Cooper Ohio common stock will automatically convert by operation

of law into Class A common shares of Cooper Bermuda upon the consummation of the

merger. YOU DO NOT NEED TO TENDER YOUR SHARES IN ORDER TO EXERCISE YOUR RIGHTS

AS A SHAREHOLDER OF COOPER BERMUDA. Your share certificate representing Cooper

Ohio common stock will, at the effective time of the merger, automatically

represent the same number of Class A common shares of Cooper Bermuda.

 

    If you hold Cooper Ohio common stock, you WILL NOT be required to exchange

your stock certificates as a result of the merger. If you desire to sell some or

all of your Cooper Bermuda Class A common shares after the effective date of the

merger, delivery of the stock certificate(s) which previously represented shares

of Cooper Ohio common stock will be sufficient. Your right to sell shares of

Cooper Ohio before the effective date of the merger will also not be affected.

 

    Following the merger, certificates bearing the name of Cooper Industries,

Ltd. will be issued in the normal course upon surrender of certificates bearing

the name of Cooper Industries, Inc. for exchange or transfer. If you surrender a

share certificate and request the new certificate to be issued in a name other

than the one appearing on the surrendered certificate, you must endorse the

share certificate or otherwise prepare it to be in proper form for transfer.

 

MANAGEMENT OF COOPER BERMUDA

 

    When the reorganization is completed, all of the directors and substantially

all of the executive officers of Cooper Ohio will become the directors and

executive officers of Cooper Bermuda. Assuming the merger agreement is approved

and adopted, the current directors of Cooper Ohio will carry over their

remaining terms of office to Cooper Bermuda.

 

REQUIRED VOTE FOR THE REORGANIZATION

 

    In order to complete the reorganization, the merger agreement must be

adopted by the affirmative vote of a majority of the voting power of Cooper

Ohio. Because of this vote requirement, ABSTENTIONS WILL HAVE THE SAME EFFECT AS

VOTES AGAINST THE PROPOSAL TO ADOPT THE MERGER AGREEMENT. THE FAILURE OF A

SHAREHOLDER TO SUBMIT A FORM OF PROXY OR TO VOTE IN PERSON AT THE MEETING WILL

ALSO HAVE THE EFFECT OF A VOTE AGAINST THE ADOPTION OF THE MERGER AGREEMENT.

Under the rules of the New York Stock Exchange, brokers who hold shares in

street name for customers have the authority to vote on many "routine" proposals

when they have not received instructions from beneficial owners. Under these

rules, brokers are precluded from exercising their voting discretion with

respect to proposals for non-routine matters like the merger. THUS, ABSENT

SPECIFIC INSTRUCTIONS FROM YOU, YOUR BROKER IS NOT EMPOWERED TO VOTE YOUR SHARES

WITH RESPECT TO THE ADOPTION OF THE MERGER AGREEMENT (I.E., "BROKER NON-VOTES").

Since the affirmative vote of a majority of the voting power of Cooper Ohio is

required for

 

                                        16

<PAGE>   23

 

adoption of the merger agreement, A BROKER NON-VOTE WILL HAVE THE SAME EFFECT AS

A VOTE AGAINST THE MERGER AGREEMENT.

 

    As of the record date for the special meeting, there were xx,xxxx,xxx shares

of Cooper Ohio common stock outstanding and entitled to vote. As of the record

date, our directors and executive officers owned, in the aggregate,

approximately xxx,xxx shares of our common stock, which represents approximately

 .xx% of the outstanding Cooper Ohio common stock. These persons have informed us

that they intend to vote their shares in favor of the proposal to adopt the

merger agreement.

 

RIGHTS OF DISSENTING SHAREHOLDERS

 

    Shareholders of a corporation that is proposing to merge with another entity

are sometimes entitled to appraisal or dissenters' rights in connection with the

proposed transaction, depending on the circumstances. Most commonly, these

rights give shareholders who oppose the merger the right to receive the fair

value of their shares, as determined in a judicial appraisal proceeding, instead

of the consideration being offered in the merger.

 

    Cooper Ohio shareholders are entitled to dissenters' rights. Cooper Ohio, as

an Ohio corporation, is governed by Section 1701.85 of the Ohio General

Corporation Law regarding the rights of dissenting shareholders. Accordingly,

described below are the steps that you must take if you are a Cooper Ohio

shareholder and you wish to exercise dissenters' rights with respect to the

merger.

 

    You should read Section 1701.85 of the Ohio General Corporation Law. This

section is attached as annex IV to this document. Failure to take any one of the

required steps may result in termination of dissenters' rights under the Ohio

General Corporation Law. IF YOU ARE A COOPER OHIO SHAREHOLDER CONSIDERING

DISSENTING, YOU SHOULD CONSULT YOUR OWN LEGAL ADVISOR.

 

    To exercise dissenters' rights, a Cooper Ohio shareholder must satisfy the

following five conditions:

 

    - You must be a shareholder of record. You must be the record holder of the

      dissenting shares as of [month day], 2001. If you have a beneficial

      interest in shares of Cooper Ohio common stock that are held of record in

      the name of another person, you must act promptly to cause the shareholder

      of record to follow the steps described below.

 

    - You must not vote in favor of the merger. You must not vote shares as to

      which you seek fair cash value in favor of adoption of the merger

      agreement at the special shareholders meeting. This requirement will be

      satisfied:

 

      - if you submit a properly executed proxy with instructions to vote

        "AGAINST" the merger or to "ABSTAIN" from this vote;

 

      - if you do not return your proxy and do not vote at the special meeting

        in favor of the merger; or

 

      - if you revoke your proxy and later "ABSTAIN" from or vote "AGAINST" the

        merger.

 

    If you vote "FOR" the merger, you automatically waive your dissenters'

rights. A proxy that is returned signed but on which no voting preference is

indicated will be voted to adopt the merger agreement and will constitute a

waiver of dissenters' rights. The mere failure to vote is not a waiver of

dissenters' rights.

 

    - You must file a written demand. You must serve a written demand for the

      fair cash value of your dissenting shares upon Cooper Ohio on or before

      the tenth day after the shareholder vote approving the merger. Cooper Ohio

      will not inform you of the expiration of the ten-day period. Therefore,

      you should retain this document. The required written demand must include

      your name and address, the number of dissenting shares held of record on

      the record date of the meeting and the amount you claim as the fair cash

      value of the dissenting shares. Voting against the merger is not a written

      demand as required by Section 1701.85 of the Ohio General Corporation Law.

 

    - You must deliver your stock certificates for legending. If requested by

      Cooper Ohio, you must deliver your certificates for dissenting shares to

      Cooper Ohio within 15 days after the company sends its request.

 

                                        17

<PAGE>   24

 

      Cooper Ohio will then place a legend on the certificates that a demand for

      fair cash value has been made. Cooper Ohio will promptly return your

      certificates to you.

 

    - You must file a petition in court. If you and Cooper Ohio cannot agree on

      the fair cash value of your dissenting shares, you must, within three

      months after delivering your demand for fair cash value, file a complaint

      in the Court of Common Pleas of Cuyahoga County, Ohio, for a determination

      of the fair cash value of the dissenting shares. Cooper Ohio is also

      permitted to file a complaint. The court will order that you be paid the

      fair cash value of your shares, if it determines that you are entitled.

      The costs of the proceeding, including reasonable compensation to the

      appraisers, will be assessed as the court considers equitable. "Fair cash

      value" is the amount that a willing seller under no compulsion to sell

      would be willing to accept, and that a willing buyer under no compulsion

      to buy would be willing to pay. The fair cash value will never be more

      than the amount specified in your demand. Fair cash value is determined as

      of the day before the special meeting. The amount of the fair cash value

      excludes any appreciation or depreciation in market value of your shares

      resulting from the merger. The fair cash value of your shares may be

      higher, the same, or lower than the market value of the shares of Cooper

      Ohio common stock on the date of the merger or the date before the merger.

 

      Your right to be paid the fair cash value of the dissenting shares will

      terminate if:

 

        - for any reason the merger does not become effective;

 

        - you fail to make a timely written demand on Cooper Ohio;

 

        - you do not, upon request of Cooper Ohio, timely surrender your stock

          certificates for an endorsement of a legend noting that demand for the

          fair cash value of the dissenting shares has been made;

 

        - you withdraw your demand, with the consent of the Cooper Ohio board;

          or

 

        - Cooper Ohio and you have not come to an agreement as to the fair cash

          value of the dissenting shares and you have not filed a complaint

          within three months after delivering your demand for fair cash value.

 

    From the time you make your demand, your rights as a shareholder of Cooper

Ohio will be suspended. If Cooper Ohio pays a cash dividend during the

suspension, dissenting shareholders will receive the dividend, but the amount of

the fair cash value of the dissenting shares will be reduced by the amount of

the dividend. If your right to receive fair cash value is terminated, all rights

with respect to dissenting shares will be restored to you. Any distribution that

would have been made to you had you not made a demand will be made at the time

of the termination of your dissenters' rights.

 

    The above description of the rights of dissenting shareholders of Cooper

Ohio is not a complete description of these rights or the procedures to be

followed by Cooper Ohio shareholders desiring to receive the fair cash value of

their shares. If you are a Cooper Ohio shareholder and want to receive the fair

cash value of your shares, you should consult Section 1701.85 of the Ohio

General Corporation Law and strictly adhere to all of the provisions of that

section. A copy of Section 1701.85 is attached to this proxy

statement/prospectus as annex IV and the above discussion concerning the rights

of dissenting shareholders is qualified in its entirety by reference to annex

IV.

 

                                        18

<PAGE>   25

 

DIVIDENDS

 

    We have paid quarterly cash dividends of $0.35 per share since the first

quarter of 2000. Although Cooper Bermuda expects to continue to pay these

quarterly cash dividends following the reorganization, any future declaration

and payment of dividends by Cooper Bermuda will continue to be:

 

    - dependent upon its results of operations, financial condition, cash

      requirements and other relevant factors;

 

    - subject to the discretion of its board of directors;

 

    - subject to the ability of its subsidiaries to pay dividends; and

 

    - subject to the reasonable belief by its board of directors that after the

      payment is made, Cooper Bermuda would be able to pay its liabilities as

      they become due or that the realizable value of Cooper Bermuda's assets

      would not be less than the aggregate of its liabilities and its issued

      share capital and share premium account.

 

    The share premium account is made up of the excess of the consideration paid

on the issuance of shares over the aggregate par value of such shares. Share

premium may be distributed in certain limited circumstances. For example, it may

be used to pay-up unissued shares which may be distributed to shareholders in

proportion to their holdings, but is otherwise subject to limitation.

 

STOCK COMPENSATION PLANS

 

    If the reorganization is completed, we will amend and revise our employee

and director stock option and other stock-based plans and arrangements to (1)

provide that Cooper Ohio will continue to sponsor the employee plans and Cooper

Bermuda will assume sponsorship of certain director plans, subject to

reimbursement by Cooper Ohio for certain deferred obligations, (2) provide that

Class A common shares of Cooper Bermuda will be issued upon the exercise of any

options or the payment of any other stock-based awards under the plans and

arrangements and (3) otherwise appropriately reflect the substitution of Class A

common shares of Cooper Bermuda for common stock of Cooper Ohio under the plans

and arrangements and related agreements. Your approval of the merger will also

constitute approval of those amendments and revisions to our stock option and

other stock-based plans and arrangements providing for future use of Cooper

Bermuda Class A common shares in lieu of common stock of Cooper Ohio after the

merger.

 

STOCK EXCHANGE LISTING

 

    Our common stock is currently listed on the New York Stock Exchange. There

is currently no established public trading market for the Class A common shares

of Cooper Bermuda. We have made an application so that, immediately following

the reorganization, the Class A common shares of Cooper Bermuda will be listed

on the New York Stock Exchange under the symbol "CBE," the same symbol under

which Cooper Ohio common stock is currently listed. Because the Cooper Bermuda

Class B common shares will be held only by Cooper Ohio and other wholly-owned

subsidiaries of Cooper Bermuda, they will not be registered with the Securities

and Exchange Commission or publicly traded.

 

ACCOUNTING TREATMENT OF THE REORGANIZATION

 

    The reorganization will be accounted for as a reorganization of entities

under common control which will not result in changes in the historical

consolidated carrying amounts of assets, liabilities and shareholders' equity.

 

                                        19

<PAGE>   26

 

                              THE SPECIAL MEETING

 

    This proxy statement/prospectus is being furnished in connection with the

solicitation of proxies from the holders of Cooper Ohio common stock by the

Cooper Ohio board of directors relating to the merger and other matters to be

voted upon at the special meeting and at any adjournment or postponement of the

meeting. This proxy statement/prospectus is also a prospectus for Cooper Bermuda

Class A common shares to be issued in the merger. Cooper Ohio mailed this proxy

statement/prospectus to shareholders beginning [month, day], 2001. You should

read this proxy statement/prospectus carefully before voting your shares.

 

WHEN AND WHERE THE SPECIAL MEETING WILL BE HELD

 

    The special meeting of shareholders will be held at xx:xx a.m., local time,

on [Month day], 2001, at [Location], Houston, Texas.

 

WHAT WILL BE VOTED UPON

 

    At the special meeting, you will be asked to consider and vote upon the

following items:

 

    - To adopt the Agreement and Plan of Merger, substantially in the form

      attached to the accompanying proxy statement/prospectus as annex I, among

      Cooper Ohio, Cooper Mergerco and Cooper Bermuda, whereby the company will

      effectively change its place of incorporation from Ohio to Bermuda by

      merging Cooper Mergerco with Cooper Ohio, which will be the surviving

      entity and become a wholly-owned, indirect subsidiary of Cooper Bermuda,

      and pursuant to which each share of Cooper Ohio will automatically become

      a share of Cooper Bermuda and all current shareholders of Cooper Ohio will

      become shareholders of Cooper Bermuda; and

 

    - To transact such other business as may properly come before the special

      meeting.

 

ONLY COOPER OHIO SHAREHOLDERS OF RECORD AS OF [MONTH DAY], 2001 ARE ENTITLED TO

VOTE

 

    Only shareholders of record at the close of business on [Month day], 2001,

as shown in our records, will be entitled to vote, or to grant proxies to vote,

at the special meeting. On the record date, there were approximately xxx,xxx,xxx

million shares of Cooper Ohio common stock outstanding and entitled to vote at

the special meeting.

 

MAJORITY OF OUTSTANDING SHARES MUST BE REPRESENTED FOR A VOTE TO BE TAKEN

 

    In order to have a quorum, a majority of the voting power of Cooper Ohio

must be represented in person or by proxy at the special meeting. If a quorum is

not present, a majority of shares that are represented may adjourn or postpone

the special meeting.

 

VOTE REQUIRED FOR APPROVAL

 

    The Agreement and Plan of Merger must be adopted by the affirmative vote of

a majority of the Cooper Ohio voting power entitled to vote at the special

meeting. Each share of Cooper Ohio common stock is entitled to cast one vote. As

of the record date, directors and executive officers of Cooper Ohio owned and

were entitled to vote xxx,xxx shares (or .xx%) of Cooper Ohio common stock.

These persons have advised us that they intend to vote their shares in favor of

the proposal.

 

                                        20

<PAGE>   27

 

VOTING YOUR SHARES AND CHANGING YOUR VOTE

 

  Voting Your Shares

 

    The Cooper Ohio board of directors is soliciting proxies from the Cooper

Ohio shareholders. This will give you the opportunity to vote at the special

meeting. When you deliver a valid proxy, the shares represented by that proxy

will be voted in accordance with your instructions. If you do not vote by proxy

using one of the three methods described below or attend the special meeting and

vote in person, it will have the same effect as voting against the adoption of

the merger agreement.

 

    Shareholders of record and beneficial owners of shares in CO-SAV may vote by

any one of the following methods:

 

    (1) CALL 1-877-779-8683 from the U.S. or Canada (this call is toll free) or

        001-201-536-8073 from all other countries to vote by telephone anytime

        up to 12:00 midnight, New York time on [month day], 2001; or

 

    (2) GO TO THE WEBSITE: http://www.eproxyvote.com/cbe to vote over the

        Internet anytime up to 12:00 midnight, New York time on [month day],

        2001; or

 

    (3) MARK, SIGN AND MAIL your proxy card in the enclosed postage-prepaid

        envelope. If you are voting by telephone or by the Internet, please do

        not return your proxy card.

 

    If you hold your Cooper Ohio shares in the name of a bank, broker or other

nominee, you should follow the instructions provided by your bank, broker or

nominee when voting your shares. To be effective, a form of proxy must be

received by us prior to the beginning of voting at the special meeting.

 

  Changing Your Vote by Revoking Your Proxy

 

    There are three ways in which you may revoke your proxy and change your

vote:

 

    - First, you may send a written notice to our proxy solicitor, Georgeson

      Shareholder Communications, Inc., stating that you would like to revoke

      your proxy. This notice must be received prior to the special meeting.

 

    - Second, you may complete and submit a new later-dated proxy by any of the

      three methods described above. The latest dated proxy actually received by

      the Company prior to the special meeting will be the one that is counted,

      and all earlier proxies will be revoked.

 

    - Third, you may attend the special meeting and vote in person. Simply

      attending the meeting, however, will not revoke your proxy.

 

If you have instructed a broker to vote your shares, you must follow the

directions you receive from your broker to change or revoke your proxy.

 

HOW PROXIES ARE COUNTED

 

    If you return a signed and dated proxy card but do not indicate how the

shares are to be voted, those shares represented by your proxy card will be

voted as recommended by the Cooper Ohio board of directors. A valid proxy also

gives the individuals named as proxies authority to vote in their discretion

when voting the shares on any other matters that are properly presented for

action at the special meeting. A properly executed proxy marked "ABSTAIN" will

not be voted. However, it may be counted to determine whether there is a quorum

present at the special meeting. Accordingly, since the affirmative vote of a

majority of the voting power entitled to vote at the special meeting is required

to adopt the merger agreement, a proxy marked "ABSTAIN" will have the effect of

a vote against this proposal. Broker non-votes (i.e., shares held by brokers or

nominees which are represented at a meeting but with respect to which the broker

or nominee is not empowered to vote on a particular proposal) will be counted

for purposes of determining whether there is a quorum at the special meeting.

The New York Stock Exchange rules do not permit brokers and nominees to vote the

shares that they

 

                                        21

<PAGE>   28

 

hold beneficially either for or against the adoption of the merger agreement

without specific instructions from the person who beneficially owns those

shares. Therefore, if your shares are held by a broker or other nominee and you

do not give them instructions on how to vote your shares, this will have the

same effect as voting against the merger.

 

COST OF SOLICITATION

 

    Cooper Ohio will pay the cost of soliciting proxies. In addition to

solicitation by mail, telephone or other means, Cooper Ohio will make

arrangements with brokerage houses and other custodians, nominees and

fiduciaries to send proxy material to beneficial owners. Cooper Ohio will, upon

request, reimburse these institutions for their reasonable expenses. Cooper Ohio

has retained Georgeson Shareholder Communications, Inc. to aid in the

solicitation of proxies.

 

 COOPER OHIO SHAREHOLDERS SHOULD NOT SEND IN THEIR STOCK CERTIFICATES WITH THE

                                  PROXY CARDS.

 

                                        22

<PAGE>   29

 

                        DESCRIPTION OF AUTHORIZED SHARES

                           OF COOPER INDUSTRIES, LTD.

 

    The memorandum of association and bye-laws of Cooper Bermuda and The

Companies Act 1981 (Bermuda) (the "Companies Act") govern the terms of the share

capital of Cooper Bermuda. The memorandum of association of Cooper Bermuda is

attached to this proxy statement/prospectus as Annex II. Prior to the completion

of the merger, the memorandum of association of Cooper Bermuda will be amended

to increase its authorized share capital as discussed in the following

paragraph. The amended and restated bye-laws of Cooper Bermuda which will be in

effect upon consummation of the merger are attached to this proxy

statement/prospectus as annex III. The following discussion is a summary of the

terms of the share capital of Cooper Bermuda that will be in effect immediately

following the merger. This summary is not complete and is subject to the

complete text of Cooper Bermuda's memorandum of association and its amended and

restated bye-laws which are attached as annex II and III, respectively, and

incorporated by reference. We encourage you to read those documents carefully.

 

AUTHORIZED SHARE CAPITAL

 

    Prior to the merger, Cooper Bermuda's memorandum of association will be

amended by a memorandum of increase in capital to provide that its authorized

share capital is US$4,100,000 divided into 250,000,000 Class A common shares,

par value US$0.01 per share, 150,000,000 Class B common shares, par value

US$0.01 per share, and 10,000,000 preferred shares, par value US$0.01 per share,

which preferred shares may be designated and created as shares of any other

classes or series of shares with the respective rights and restrictions

determined by action of the board of directors.

 

VOTING

 

    The holders of Cooper Bermuda Class A common shares will be entitled to one

vote per share on all matters submitted to a vote of the shareholders. The

holders of Cooper Bermuda Class B common shares will not be entitled to vote,

except as to matters for which the Companies Act specifically requires voting

rights for otherwise nonvoting shares. Cooper Ohio and Cooper Bermuda will enter

into a voting agreement which will provide that in those limited instances where

the Cooper Bermuda Class B common shares have the right to vote, Cooper Ohio (or

any other Cooper Bermuda subsidiary holding the Cooper Bermuda Class B common

shares) shall vote (or abstain from voting) the shares in the same proportion as

the holders of the Cooper Bermuda Class A common shares. Therefore, the Class B

shares will not dilute the voting power of the Cooper Bermuda Class A common

shares. The voting agreement will also provide that Cooper Ohio, or any other

subsidiary of Cooper Bermuda that holds any Cooper Bermuda Class A common

shares, will vote (or abstain from voting) such shares in the same proportion as

the other holders of the Cooper Bermuda Class A common shares.

 

    Bermuda law does not provide for cumulative voting.

 

    There are no other limitations imposed by Bermuda law or Cooper Bermuda's

amended and restated bye-laws on the right of shareholders who are not Bermuda

residents to hold or vote their Cooper Bermuda Class A common shares.

 

DIVIDEND RIGHTS

 

    Subject to any rights and restrictions of any other class or series of

shares, the board of directors may, from time to time, declare dividends and

other distributions on the issued Cooper Bermuda Class A common shares and

Cooper Bermuda Class B common shares and authorize payment of such dividends and

other distributions. Such dividends or other distributions may be in cash,

shares or property of Cooper Bermuda out of assets or funds legally available

therefor.

 

    If, at any time a dividend or other distribution in cash, shares or other

property is declared or paid on the Cooper Bermuda Class A common shares, a like

dividend or other distribution in cash, shares or other property shall also be

declared and paid on Cooper Bermuda Class B common shares in an equal amount per

share.

 

                                        23

<PAGE>   30

 

REDEMPTION AND CONVERSION

 

    Cooper Bermuda Class A common shares will not be convertible into shares of

any other class or series or be subject to redemption either by Cooper Bermuda

or the holder of the Class A common shares.

 

    Cooper Bermuda Class B common shares will be convertible by the holder

thereof into Cooper Bermuda Class A common shares on a one-to-one basis in the

following circumstances:

 

    - to satisfy the obligations of Cooper Bermuda or any of its affiliates to

      issue Cooper Bermuda Class A common shares with regard to the issuance of

      shares under any stock plans of Cooper Bermuda or any of its affiliates;

      or

 

    - as consideration for any acquisition by the company of stock or assets of

      a third party.

 

    In addition, the Cooper Bermuda bye-laws provide that in the event Cooper

Bermuda Class B common shares are transferred to any person or entity other than

a wholly-owned subsidiary of Cooper Bermuda, the shares so transferred will

convert automatically into Cooper Bermuda Class A common shares on a one-for-one

basis. Cooper Ohio does not currently intend to transfer the Cooper Bermuda

Class B common shares, except to other wholly-owned subsidiaries of Cooper

Bermuda.

 

    Any transfer of Cooper Bermuda Class A common shares following conversion

will only be made in accordance with the applicable rules of the New York Stock

Exchange, including those rules relating to required shareholder approvals.

 

    Cooper Ohio currently has approximately 10.7 million shares of Cooper common

stock reserved for issuance pursuant to certain stock plans. Cooper Ohio

currently expects to convert Cooper Bermuda Class B common shares into Cooper

Bermuda Class A common shares in order to satisfy its obligations under those

plans.

 

    In addition, the holders of Class B common shares will have the right at any

time following the issuance thereof upon notice to Cooper Bermuda to require

Cooper Bermuda to purchase any or all of the Cooper Bermuda Class B common

shares for cash at the per share fair market value of the Cooper Bermuda Class A

common shares as of the date of such notice. The fair market value per share of

the Cooper Bermuda Class A common shares, as of any date, means the average of

the high and low sales prices of a share of the Cooper Bermuda Class A common

shares as reported on the New York Stock Exchange composite tape on the

applicable date. If no sales of Cooper Bermuda Class A common shares were made

on the New York Stock Exchange on that date, the average of the high and low

prices as reported on the composite tape for the most recent preceding day on

which sales of the Cooper Bermuda Class A common shares were made will be the

fair market value. Payment will be made within 180 calendar days of the date of

the notice and will include interest at the prime rate of the Chase Manhattan

Bank from the date of the notice until the date of payment.

 

STOCK EXCHANGE LISTING

 

    Immediately following the merger, Cooper Bermuda's Class A common shares

will be listed on the New York Stock Exchange under the symbol "CBE," the same

symbol under which Cooper Ohio's common stock is currently listed. Because the

Cooper Bermuda Class B common shares will be held only by Cooper Ohio and its

wholly-owned subsidiaries, they will not be registered with the Securities and

Exchange Commission or publicly traded.

 

CHANGES TO RIGHTS OF A CLASS OR SERIES

 

    The Companies Act provides that the rights attached to any class or series

of common shares of Cooper Bermuda, unless otherwise provided by the terms of

that class or series, may be varied only with the consent in writing of the

holders of three-fourths of that class or series or by a resolution passed at a

separate general meeting of holders of the shares of that class or series. Each

holder of shares of the class or series present, in person or by proxy, will

have one vote for each share of the class or series held. Outstanding shares

will not be deemed to be varied by the creation or issue of shares that rank in

any respect prior to or equivalent with those shares.

 

                                        24

<PAGE>   31

 

QUORUM FOR GENERAL MEETINGS

 

    The holders of shares entitling them to exercise a majority of the voting

power of Cooper Bermuda on the relevant record date shall constitute a quorum to

hold a general meeting of the shareholders.

 

RIGHTS UPON LIQUIDATION

 

    Upon the liquidation of Cooper Bermuda, after the full amounts that holders

of any issued shares ranking senior to the common shares as to distribution on

liquidation or winding up are entitled to receive have been paid or set aside

for payment, the holders of Cooper Bermuda's Class A and Class B common shares

are entitled to receive, pro rata, any remaining assets of Cooper Bermuda

available for distribution to the holders of common shares. The liquidator may

deduct from the amount payable in respect of those Class A and Class B common

shares any liabilities the holder has to or with Cooper Bermuda. The assets

received by the holders of Cooper Bermuda Class A and Class B common shares in a

liquidation may consist in whole or in part of property. That property is not

required to be of the same kind for all shareholders.

 

SINKING FUND

 

    Cooper Bermuda's Class A common shares and Class B common shares have no

sinking fund provisions.

 

LIABILITY FOR FURTHER CALLS OR ASSESSMENTS

 

    Cooper Bermuda's Class A common shares to be issued in the merger will be

duly and validly issued, fully paid and nonassessable.

 

PREEMPTIVE RIGHTS

 

    Holders of Cooper Bermuda's Class A common shares and Class B common shares

will have no preemptive or preferential right to purchase any securities of

Cooper Bermuda.

 

REPURCHASE RIGHTS

 

    The board of directors may, at its discretion, authorize the purchase by

Cooper Bermuda of its own shares of any class, at any price (whether at par or

above or below par), as long as such purchase is made in accordance with the

provisions of the Companies Act.

 

RESTRICTIONS ON TRANSFER

 

    Subject to the Companies Act, any shareholder may transfer all or any of the

holder's shares by an instrument of transfer in a usual common form or in

another form which the board of directors or Cooper Bermuda's transfer agent may

approve. The board of directors may, in its absolute discretion, decline to

register any transfer of any share which is not a fully-paid share. The Board

may also decline to register any transfer unless:

 

    - it is accompanied by a duly executed instrument of transfer and by the

      certificate in respect of the shares to which it relates, if a certificate

      has been issued by Cooper Bermuda in respect of the shares to be

      transferred, and by such other evidence as the board of directors may

      reasonably require to show the right of the transferor to make the

      transfer;

 

    - the instrument of transfer is in respect of only one class of share; and

 

    - where applicable, the permission of the Bermuda Monetary Authority has

      been obtained.

 

    It is our intention that the Cooper Bermuda Class B common shares will only

be held by Cooper Ohio and other wholly-owned subsidiaries of Cooper Bermuda,

and as such, would not be transferred out of the Cooper group prior to being

converted to Cooper Bermuda Class A common shares as described above under

"Redemption and Conversion."

 

                                        25

<PAGE>   32

 

COMPULSORY ACQUISITION OF SHARES HELD BY MINORITY HOLDERS

 

    An acquiring party is generally able to acquire compulsorily the common

shares of minority holders in one of the following ways:

 

    - By a procedure under the Companies Act known as a "scheme of arrangement."

      A scheme of arrangement is made by obtaining the consent of Cooper

      Bermuda, the consent of the court and approval of the arrangement by

      holders of the Class A and Class B common shares voting together as a

      class, (1) representing in the aggregate a majority in number of the

      shareholders present at the meeting held to consider the arrangement and

      (2) holding at least 75% of all the issued Class A and Class B common

      shares taken together as a class. If a scheme of arrangement receives all

      necessary consents, all holders of Class A and Class B common shares could

      be compelled to sell their shares under the terms of the scheme of

      arrangement. In the event, however, that the scheme of arrangement were to

      alter the terms of the Class A common shares or Class B common shares,

      then the vote described above would be determined by reference to such

      class of Class A or Class B common shares separately.

 

    - If the acquiring party is a company, by acquiring pursuant to a tender

      offer 90% of the shares or class of shares not already owned by the

      acquiring party (the "offeror"). If an offeror has, within four months

      after the making of an offer for all the shares or class of shares not

      owned by the offeror, obtained the approval of or acquired 90% or more of

      all the shares to which the offer relates, the offeror may, at any time

      within two months after the end of that four month period, require by a

      "Notice of Acquisition" any nontendering shareholder to transfer its

      shares on the same terms as the original offer. In those circumstances,

      nontendering shareholders will be compelled to sell their shares.

      Nontendering shareholders have a one-month period from the date of the

      Notice of Acquisition in which to apply to a court to enjoin the company

      acquisition.

 

    - By acquiring, pursuant to a notice given to the remaining shareholders or

      class of shareholders, where the acquiring party holds not less than 95%

      of the shares or the class of shares of the company, the shares of such

      remaining shareholders or class of shareholders. When such a notice is

      given, the purchaser is entitled and bound to acquire the shares of the

      remaining shareholders on the terms set out in such notice, unless the

      remaining shareholder applies to the court for an appraisal of the value

      of their shares. This provision only applies where the purchaser offers

      the same terms to all holders of shares whose shares are being acquired.

 

TRANSFER AGENT

 

    The transfer agent and registrar for the Class A common shares will be

EquiServe Trust Company, N.A.

 

PREFERRED SHARES

 

    The board of directors of Cooper Bermuda may issue preferred shares in one

or more classes or series, and fix for each such class or series such voting

power, full or limited, or no voting power, and such designations, preferences

and relative, participating, optional or other special rights and such

qualifications, limitations or restrictions thereof, as are provided in the

resolutions adopted by the board of directors providing for the issuance of such

class or series. The Cooper Bermuda board of directors in authorizing such class

or series may provide that any such class or series may be:

 

    - subject to redemption at the option of the company or the holders, or

      both, at such time or times and at such price or prices;

 

    - entitled to receive dividends (which may be cumulative or non-cumulative)

      at such rates, on such conditions, and at such times, and payable in

      preference to, or in such relation to, the dividends payable on any other

      class or classes or any other series;

 

    - entitled to such rights upon the dissolution of, or upon any distribution

      of the assets of, Cooper Bermuda; or

 

                                        26

<PAGE>   33

 

    - convertible into, or exchangeable for, shares of any other class or

      classes of shares, or of any other series of the same or any other class

      or classes of shares, of Cooper Bermuda at such price or prices or at such

      rates of exchange and with such adjustments;

 

    - in each case, as set forth in the resolutions authorizing the class or

      series of preferred shares.

 

ANTI-TAKEOVER PROVISIONS

 

    Cooper Bermuda's amended and restated bye-laws have provisions that could

have an anti-takeover effect. These provisions are intended to replicate

provisions currently in Cooper Ohio's articles of incorporation and regulations.

These provisions are intended to enhance the likelihood of continuity and

stability in the composition of the board of directors and in the policies

formulated by the board of directors and to discourage transactions that may

involve an actual or threatened change of control of Cooper Bermuda.

 

    The bye-laws provide that Cooper Bermuda's board of directors will be

divided into three classes serving staggered three-year terms. Directors can be

removed from office by the affirmative vote of the holders of 80% of the voting

power of Cooper Bermuda, unless a simple majority of the board of directors

voting on the removal has previously voted in favor of removal, in which case

the shareholder voting requirements of the Companies Act will apply and only the

affirmative vote of a simple majority of the votes cast at the general meeting

shall be required for such removal. The board of directors does not have the

power to remove directors. As long as a quorum of directors remains and is

present, vacancies on the board of directors may only be filled by the remaining

directors and not by the shareholders. Each of these provisions can delay a

shareholder from obtaining majority representation on the board of directors.

 

    The bye-laws also provide that the board of directors will consist of not

less than nine nor more than fifteen persons, the exact number to be set from

time to time by a majority of the whole board of directors. Accordingly, the

board of directors, and not the shareholders, has the authority to determine the

number of directors and could delay any shareholder from obtaining majority

representation on the board of directors by enlarging the board of directors and

filling the new vacancies with its own nominees.

 

    The bye-laws of Cooper Bermuda provide that at any annual general meeting,

only such business shall be conducted as shall have been brought before the

meeting by or at the direction of the board of directors, by any shareholder who

complies with certain procedures set forth in the bye-laws or by any shareholder

pursuant to the valid exercise of the power granted under the Companies Act. For

business to be properly brought before an annual general meeting by a

shareholder, the shareholder must have given timely notice thereof in proper

written form to the Secretary of Cooper Bermuda and satisfied all requirements

under applicable rules promulgated by the Securities and Exchange Commission or

by the New York Stock Exchange or any other exchange on which Cooper Bermuda's

securities are traded. To be timely for consideration at the annual general

meeting, a shareholder's notice must be received by the Secretary at Cooper

Bermuda's principal executive offices not less than 45 calendar days, or such

greater length of time as permitted by appropriate rules of the U.S. Securities

and Exchange Commission, in advance of the anniversary of the date that Cooper

Bermuda's proxy statement was released to shareholders in connection with the

previous year's annual general meeting (or no later than January 22, 2002 with

respect to the 2002 annual general meeting).

 

    Subject to the terms of any other class of shares in issue, any action

required or permitted to be taken by the holders of Cooper Bermuda's common

shares must be taken at a duly called annual or special general meeting of

shareholders unless taken by written consent of all holders of common shares

required or permitted to take such action. Under the bye-laws, special general

meetings may be called at any time by any of the Chairman of the board of

directors, the Deputy Chairman, the President, or the board of directors, or

when requisitioned by shareholders pursuant to the provisions of the Companies

Act. The Companies Act currently permits shareholders holding 10% of the shares

of a company entitled to vote at general meeting to requisition a special

general meeting.

 

    The board of directors is authorized, without obtaining any vote or consent

of the holders of any class or series of shares unless expressly provided by the

terms of issue of a class or series, to from time to time issue any authorized

and unissued shares on such terms and conditions as it may determine. For

example, the board

 

                                        27

<PAGE>   34

 

of directors could authorize the issuance of preferred shares with terms and

conditions that could discourage a takeover or other transaction that holders of

some or a majority of the Cooper Bermuda Class A common shares might believe to

be in their best interests or in which holders might receive a premium for their

shares over the then market price of the shares.

 

    As a Bermuda company, Cooper Bermuda is not subject to Section 1701.831 of

the Ohio General Corporation Law, which prohibits the acquisition of 20%,

33 1/3% or 50% of a company's shares without the prior approval of a majority of

the outstanding shares and a majority of the shares not owned by the acquirer,

officers or employee directors. However, the Cooper Bermuda bye-laws contain the

same "fair price to shareholders in business combinations" provision currently

in Cooper Ohio's articles of incorporation. The "fair price" provision provides

that in the event any "business combination" (as defined) is proposed, the

affirmative vote of at least 80% of the voting power of Cooper Bermuda is

required for its approval. However, the 80% requirement is not applicable, if

(x) "continuing directors" of Cooper Bermuda approved the combination by a

two-thirds vote, or (y) the aggregate amount of cash or other consideration to

be received in the business combination by holders of the Class A common shares

of Cooper Bermuda, other than the "related person" involved in the business

combination, is not less than the highest per share price paid by the "related

person" involved in the business combination in acquiring any of its holdings of

Cooper Bermuda's Class A common shares, as determined by two-thirds of the

"continuing directors" and further, a proxy statement which includes the opinion

of the "continuing directors" as to the advisability of the transaction and, if

deemed appropriate, the opinion of an investment banking firm as to the fairness

of the terms, has been mailed to all shareholders at least 30 days prior to the

vote on the business combination. For purposes of this "fair price" provision,

(i) "related person" means any entity or person that together with its

affiliates and associates beneficially owns 20% or more of the outstanding Class

A common shares of Cooper Bermuda, and (ii) "continuing directors" means

directors who either were members of the board immediately prior to the time

that a "related person" involved in a business combination became a "related

person" or were designated before his or her initial election as director as a

"continuing director" by two-thirds of the "continuing directors." This "fair

price" provision could act as a disincentive to any acquiror wishing to acquire

Cooper Bermuda or delay the ability of such acquiror to acquire the company.

 

    Immediately following the merger, Cooper Bermuda will have in place a

shareholder rights plan substantially similar to the Cooper Ohio shareholder

rights plan currently in place. The operation of the shareholder rights plan

could result in the possible dilution of a potential acquiror's interest in

Cooper Bermuda. Consequently, the provisions of the shareholder rights plan

could discourage unsolicited takeover bids for Cooper Bermuda from third

parties. See "Comparison of Rights of Shareholders -- Rights Agreements."

 

                      COMPARISON OF RIGHTS OF SHAREHOLDERS

 

    Your rights as a shareholder of Cooper Ohio are governed by the Ohio law and

Cooper Ohio's articles of incorporation and regulations. After the merger, you

will become a holder of Cooper Bermuda Class A common shares and your rights

will be governed by the Companies Act and Cooper Bermuda's memorandum of

association, as amended by the memorandum of increase in capital, and amended

and restated bye-laws.

 

    The principal attributes of the Cooper Ohio common stock and the Cooper

Bermuda Class A common shares will be similar; however, there are certain

differences between your rights as a shareholder under Ohio law and Bermuda law,

which is modeled after that of England. In addition, there are certain

differences between Cooper Ohio's articles of incorporation and regulations and

Cooper Bermuda's memorandum of association and bye-laws. It is our intention

that your rights as a shareholder be substantially the same before and after the

merger and, accordingly, the principal differences will arise as a consequence

of the difference between Bermuda and Ohio law. The following is a comparison of

the material rights of holders of Cooper Ohio common stock and Cooper Bermuda

common shares.

 

                                        28

<PAGE>   35

 

    The current memorandum of association and the amended and restated bye-laws

of Cooper Bermuda, as they will be in effect immediately following the merger,

are included in this proxy statement/prospectus as annexes II and III and are

incorporated by reference herein. The articles of association and regulations of

Cooper Ohio can be found with Cooper Ohio's filings with the Securities and

Exchange Commission and are also incorporated by reference in this proxy

statement/prospectus. See "Where You Can Find More Information."

 

                 COMPARISON OF CORPORATE GOVERNANCE PROVISIONS

 

<TABLE>

<CAPTION>

-----------------------------------------------------------------------------------------------------------

         PROVISION                           COOPER BERMUDA                           COOPER OHIO

-----------------------------------------------------------------------------------------------------------

<S>                             <C>                                         <C>                             <C>

 BOARD OF DIRECTORS

-----------------------------------------------------------------------------------------------------------

 

 Size of Board                  Board must contain not less than nine       The provisions of Cooper Ohio's

                                nor more than fifteen directors, as         organizational documents are

                                determined by the board pursuant to a       substantially similar, however

                                resolution adopted by the affirmative       a majority of the shareholders

                                vote of a majority of the directors in      are also empowered to fix and

                                office.                                     change the number of directors

                                                                            by the affirmative vote of a

                                                                            majority of the shares present

                                                                            or represented and entitled to

                                                                            vote for directors at a duly

                                                                            called and held meeting.

-----------------------------------------------------------------------------------------------------------

 

 Classified Board               Directors are divided into three            The provisions of Cooper Ohio's

                                classes, each class to consist, as          organizational documents are

                                nearly as possible, of one-third of the     substantially similar.

                                total number of directors constituting

                                the entire board of directors. If the

                                number of directors is changed, any

                                increase or decrease will be apportioned

                                among the classes so as to maintain each

                                class as nearly equal as possible. No

                                reduction shall have the effect of

                                shortening the term of any incumbent

                                director.

-----------------------------------------------------------------------------------------------------------

 

 Term of Office                 Except for two classes of directors         The provisions of Cooper Ohio's

                                which shall initially hold one and two      organizational documents are

                                year terms expiring at the annual           substantially similar.

                                general meetings in 2002 and 2003,

                                respectively, the term of office of each

                                director shall be until the third annual

                                meeting following his or her election

                                and until the election and qualification

                                of his or her successor.

-----------------------------------------------------------------------------------------------------------

</TABLE>

 

                                        29

<PAGE>   36

 

<TABLE>

<CAPTION>

-----------------------------------------------------------------------------------------------------------

         PROVISION                           COOPER BERMUDA                           COOPER OHIO

-----------------------------------------------------------------------------------------------------------

<S>                             <C>                                         <C>                             <C>

 

 Vacancies                      Any vacancy among directors of any          The provisions of Cooper Ohio's

                                class, including a vacancy that results     organizational documents are

                                from an increase in the number of           substantially similar, except

                                directors, may be filled for the            vacancies on the board may be

                                unexpired term by a vote of the majority    filled by a vote of the

                                of remaining directors, regardless of       majority of remaining directors

                                class, provided, that a quorum is           regardless of whether a quorum

                                present. During any vacancy the             is present.

                                remaining directors shall have full

                                power to act as the board of directors

                                of Cooper Bermuda.

-----------------------------------------------------------------------------------------------------------

 

 Removal of Directors           Directors can be removed from office        The provisions of Cooper Ohio's

                                only by the affirmative vote of the         organizational documents are

                                holders of 80% of the voting power of       substantially similar.

                                Cooper Bermuda on the relevant record

                                date, unless a simple majority of the

                                board of directors voting on the removal

                                has previously voted in favor of

                                removal, in which case a simple majority

                                of the votes cast by shareholders at the

                                general meeting can remove a director.

-----------------------------------------------------------------------------------------------------------

 

 Indemnification of             - Cooper Bermuda shall indemnify any        The provisions of Cooper Ohio's

 Directors, Officers and          current or former director, officer,      organizational documents are

 Employees                        resident representative, or any person    substantially similar.

                                  serving or who has served at the

                                  request of the company as a director,

                                  officer or trustee of another

                                  corporation, joint venture, trust or

                                  other enterprise, against expenses

                                  actually and reasonably incurred in

                                  connection with any threatened,

                                  pending or completed action, suit or

                                  proceeding.

 

                                - No indemnification if the individual

                                  is adjudged to be liable for fraud or

                                  dishonesty in the performance of his

                                  or her duties to Cooper Bermuda

                                  (unless a court determines otherwise).

 

                                - The indemnification provided for in

                                  the bye-laws is not exclusive of other

                                  rights to which a director or officer

                                  may be entitled, including rights

                                  provided pursuant to the memorandum of

                                  association, bye-laws, any agreement,

                                  any insurance purchased by Cooper

                                  Bermuda, vote of shareholders or

                                  disinterested directors, or otherwise.

-----------------------------------------------------------------------------------------------------------

</TABLE>

 

                                        30

<PAGE>   37

 

<TABLE>

<CAPTION>

-----------------------------------------------------------------------------------------------------------

         PROVISION                           COOPER BERMUDA                           COOPER OHIO

-----------------------------------------------------------------------------------------------------------

<S>                             <C>                                         <C>                             <C>

 SHAREHOLDER MEETINGS

-----------------------------------------------------------------------------------------------------------

 

 Calling a Special Meeting      May be called by the Chairman of the        May be called by the Chairman

                                board, the Deputy Chairman, the             of the board, the President, a

                                President, the board of directors or the    Vice President, by action of

                                shareholders when requisitioned by the      the directors at a meeting, by

                                holders of 10% of the Cooper Bermuda        a writing signed by a majority

                                Class A common shares as provided by the    of the directors in office, by

                                Companies Act.                              shareholders holding 25% or

                                                                            more of the outstanding shares

                                                                            entitled to vote thereat, or as

                                                                            provided in the articles.

-----------------------------------------------------------------------------------------------------------

 

 Quorum Requirements            Holders of shares entitling them to         At any meeting duly called,

                                exercise a majority of the voting power     whether or not a quorum is

                                of Cooper Bermuda on the relevant record    present, holders of a majority

                                date constitutes a quorum. At any           of the voting shares

                                meeting duly called, holders of a           represented at the meeting may

                                majority of the voting shares               adjourn the meeting.

                                represented at the meeting may adjourn

                                the meeting if a quorum is present, and

                                if not present, the meeting must be

                                adjourned and Cooper Bermuda must

                                provide notice to shareholders in the

                                event the meeting is to be reconvened.

-----------------------------------------------------------------------------------------------------------

 

 Action by Written Consent      The Companies Act provides that             Ohio law has a substantially

                                shareholders may take action by written     similar provision.

                                consent with 100% shareholder consent

                                required.

-----------------------------------------------------------------------------------------------------------

</TABLE>

 

                                        31

<PAGE>   38

 

<TABLE>

<CAPTION>

-----------------------------------------------------------------------------------------------------------

         PROVISION                           COOPER BERMUDA                           COOPER OHIO

-----------------------------------------------------------------------------------------------------------

<S>                             <C>                                         <C>                             <C>

 Advanced Notice                At any annual general meeting, only such    There are no similar provisions

 Requirements for Matters to    business shall be conducted as shall        in Cooper Ohio's organizational

 be Considered at a General     have been brought before the meeting (1)    documents.

 Meeting                        by or at the direction of the board of

                                directors, (2) by any shareholder who

                                complies with certain procedures set

                                forth in the bye-laws, or (3) by any

                                shareholders pursuant to the valid

                                exercise of power under the Companies

                                Act. The bye-laws provide that for

                                business to be properly brought before

                                an annual general meeting by a

                                shareholder, the shareholder must have

                                given timely notice thereof in proper

                                written form to the Secretary of Cooper

                                Bermuda and satisfied all requirements

                                under applicable rules promulgated by

                                the U.S. Securities and Exchange

                                Commission or by the New York Stock

                                Exchange or any other exchange on which

                                the Company's securities are traded. To

                                be timely for consideration at the

                                annual general meeting, a shareholder's

                                notice must be received by the Secretary

                                at Cooper Bermuda's principal executive

                                offices not less than 45 calendar days,

                                or such greater length of time as

                                permitted by appropriate rules of the

                                U.S. Securities and Exchange Commission,

                                in advance of the anniversary of the

                                date that the Company's proxy statement

                                was released to shareholders in

                                connection with the previous year's

                                annual general meeting (or no later than

                                January 22, 2002 with respect to the

                                2002 annual general meeting).

-----------------------------------------------------------------------------------------------------------

 AMENDMENTS TO

 ORGANIZATIONAL DOCUMENTS

-----------------------------------------------------------------------------------------------------------

 Memorandum of                  The memorandum may be amended in            The Cooper Ohio articles may be

 Association/Articles of        accordance with the Companies Act which     amended by the affirmative vote

 Incorporation                  allows the memorandum to be amended by      of a majority of the

                                the affirmative vote of a simple            outstanding shares, however any

                                majority of the shareholders voting on      amendment or change to the

                                the amendment.                              provisions regarding the fair

                                                                            price to shareholders in

                                                                            business combinations requires

                                                                            an 80% favorable vote of all

                                                                            voting power at a meeting of

                                                                            the shareholders; but such 80%

                                                                            vote is not required if the

                                                                            amendment is recommended by

                                                                            two-thirds of the continuing

                                                                            directors.

-----------------------------------------------------------------------------------------------------------

</TABLE>

 

                                        32

<PAGE>   39

 

<TABLE>

<CAPTION>

-----------------------------------------------------------------------------------------------------------

         PROVISION                           COOPER BERMUDA                           COOPER OHIO

-----------------------------------------------------------------------------------------------------------

<S>                             <C>                                         <C>                             <C>

 

                                                                            Furthermore, the articles shall

                                                                            not be amended in any manner

                                                                            which would materially alter or

                                                                            change the powers, preferences

                                                                            or special rights of any class

                                                                            of preferred stock so as to

                                                                            affect them adversely without

                                                                            the affirmative vote of the

                                                                            holders of two-thirds or more

                                                                            of the outstanding shares of

                                                                            such preferred stock, voting

                                                                            separately as a class.

-----------------------------------------------------------------------------------------------------------

 

 Bye-Laws/Code of               The bye-laws may be amended by the board    The regulations may be amended

 Regulations                    of directors, subject to approval by the    by the affirmative vote of a

                                affirmative vote of holders of record       majority of the voting power of

                                entitling them to exercise a majority of    Cooper Ohio at an annual or

                                the voting power of Cooper Bermuda on       special meeting called for such

                                the relevant record date at an annual or    purpose, or without a meeting

                                special meeting called for such purpose,    by the written consent of

                                or without a meeting by the written         holders of record of shares

                                consent of all the holders of record of     entitling them to exercise

                                shares. However, the affirmative vote of    two-thirds of the Company's

                                the holders of at least 80% of the          voting power. However, the

                                Company's voting power is required to       affirmative vote of the holders

                                amend provisions relating to the number,    of at least 80% of Cooper

                                election and term of the directors, the     Ohio's voting power shall be

                                "fair price to shareholders in business     required to alter, amend or

                                combinations' provision (unless, in the     repeal provisions relating to

                                case of such fair price provisions, the     the number, election and term

                                amendment is approved by 2/3 of the         of directors.

                                "continuing directors") and the

                                provision relating to amending these

                                bye-law provisions.

-----------------------------------------------------------------------------------------------------------

 

 VOTING REQUIREMENT FOR         Except as otherwise specifically            Except as specifically provided

 SHAREHOLDER ACTION             provided in the bye-laws or the             in the articles, any action to

                                Companies Act, any action to be taken by    be taken by the shareholders

                                the shareholders may be taken by the        under the Ohio General

                                affirmative vote of a simple majority of    Corporation Law, including any

                                the shares voting at a general meeting      action which would require the

                                of Cooper Bermuda.                          affirmative vote of two-thirds

                                                                            of the voting power unless

                                                                            otherwise provided in the

                                                                            articles, may be taken by the

                                                                            affirmative vote of a majority

                                                                            of the voting power of Cooper

                                                                            Ohio.

-----------------------------------------------------------------------------------------------------------

</TABLE>

 

                                        33

<PAGE>   40

 

<TABLE>

<CAPTION>

-----------------------------------------------------------------------------------------------------------

         PROVISION                           COOPER BERMUDA                           COOPER OHIO

-----------------------------------------------------------------------------------------------------------

<S>                             <C>                                         <C>                             <C>

 

 FAIR PRICE TO SHAREHOLDERS     The affirmative vote of at least 80% of     The provisions of Cooper Ohio's

 IN BUSINESS COMBINATIONS       the voting power of Cooper Bermuda is       organizational documents are

                                required for the approval of any            substantially similar.

                                business combination, but this 80%

                                requirement is not applicable, if:

 

                                - "Continuing directors' of Cooper

                                  Bermuda approved the combination

                                  by a two-thirds vote, or

 

                                - the aggregate amount of cash or other

                                  consideration to be received in the

                                  business combination by holders of the

                                  common shares of Cooper Bermuda, other

                                  than the "related person' involved in

                                  the business combination, is not less

                                  than the highest per share price paid

                                  by the "related person" involved in

                                  the business combination in acquiring

                                  any of its holdings of Cooper

                                  Bermuda's common shares, as determined

                                  by two-thirds of the "continuing

                                  directors";

 

                                and a proxy statement which includes the

                                opinion of the "continuing directors" as

                                to the advisability of the transaction

                                and, if deemed appropriate, the opinion

                                of an investment banking firm as to the

                                fairness of the terms, has been mailed

                                to all shareholders at least 30 days'

                                prior to the vote on the business

                                combination. "Continuing directors"

                                means directors who either were a member

                                of the board immediately prior to the

                                time that a "related person" involved in

                                a business combination became a "related

                                person," or who were designated before

                                his or her initial election as director

                                as a "continuing director" by two-thirds

                                of the "continuing directors." "Related

                                person" means any person or entity,

                                other than Cooper Bermuda or its

                                subsidiaries, which, together with its

                                affiliates, are beneficial owners of 20%

                                or more of the outstanding Cooper

                                Bermuda Class A common shares.

-----------------------------------------------------------------------------------------------------------

 

 PURCHASE OF SHARES             Any issued shares may be purchased by       The provisions of Cooper Ohio's

                                Cooper Bermuda, to the extent not           organizational documents are

                                prohibited by applicable law, by action     substantially similar.

                                of the board.

-----------------------------------------------------------------------------------------------------------

</TABLE>

 

                                        34

<PAGE>   41

 

<TABLE>

<CAPTION>

-----------------------------------------------------------------------------------------------------------

         PROVISION                           COOPER BERMUDA                           COOPER OHIO

-----------------------------------------------------------------------------------------------------------

<S>                             <C>                                         <C>                             <C>

 

 OPTIONS AND WARRANTS           Directors may, in their discretion,         The provisions of Cooper Ohio's

                                grant options for any class or series of    organizational documents are

                                class, to any persons for any period and    substantially similar.

                                upon such terms as the board may deem

                                advisable, and to cause warrants or

                                other appropriate instruments evidencing

                                such options to be issued.

-----------------------------------------------------------------------------------------------------------

 

 RIGHTS AGREEMENTS

-----------------------------------------------------------------------------------------------------------

 

 Terms of Rights                The terms of the rights associated with     Cooper Ohio's Rights Agreement,

                                the Cooper Bermuda Class A common shares    dated August 5, 1997, has

                                are presented in the form of a Rights       substantially similar

                                Agreement attached as an exhibit to the     provisions.

                                registration statement of which this

                                proxy statement/ prospectus forms a

                                part. Cooper Bermuda will enter into the

                                Rights Agreement prior to the effective

                                date of the merger and in the merger

                                each right issued under Cooper Ohio's

                                Rights Agreement will be converted into

                                a right of Cooper Bermuda. Initially the

                                rights will be attached to all Cooper

                                Bermuda Class A common shares. The

                                rights will separate from the Cooper

                                Bermuda Class A common shares on the

                                earlier of (1) 10 business days after

                                the public announcement that a third

                                person (an "acquiring person") has

                                acquired beneficial ownership of 15% or

                                more of the outstanding Cooper Bermuda

                                Class A common shares or (2) 10 business

                                days (or later if the Board so

                                determines) after the date that a tender

                                or exchange offer is first published or

                                given, that would result in a third

                                person beneficially owning 15% or more

                                of Cooper Bermuda's Class A common

                                shares (a "distribution date").

 

                                Each right will initially represent the

                                right to purchase 1/100 of a Series A

                                Participating Preferred Share and will

                                not be exercisable until the

                                distribution date. If an acquiring

                                person becomes the beneficial holder of

                                15% or more of the then outstanding

                                Cooper Bermuda Class A common shares,

                                except in specified circumstances, each

                                holder of a right will have the right to

                                receive upon exercise Cooper Bermuda

                                Class A common shares having a value

                                equal to two times the number of Cooper

                                Bermuda Class A common shares associated

                                with the right.

-----------------------------------------------------------------------------------------------------------

</TABLE>

 

                                        35

<PAGE>   42

 

<TABLE>

<CAPTION>

-----------------------------------------------------------------------------------------------------------

         PROVISION                           COOPER BERMUDA                           COOPER OHIO

-----------------------------------------------------------------------------------------------------------

<S>                             <C>                                         <C>                             <C>

                                If, after a third person becomes the

                                beneficial owner of 15% or more of the

                                Cooper Bermuda Class A common shares,

                                Cooper Bermuda is acquired in a merger

                                or other business combination, each

                                holder of a right will have the right to

                                receive common stock of the acquired

                                company having value equal to two times

                                the exercise price of a right. The final

                                expiration date is August 5, 2007. The

                                exercise price was initially set at $225

                                for each 1/100 of a Series A

                                Participating Preferred Share, subject

                                to adjustment. The board may redeem all

                                but not less than all of the outstanding

                                rights for $.01 per right, at the close

                                of business on the tenth day following

                                the stock acquisition date or the final

                                expiration date.

-----------------------------------------------------------------------------------------------------------

 

 ALTERATION OF CAPITAL          Cooper Bermuda may, by resolution of the    Cooper Ohio's regulations do

                                shareholders or where required, of a        not contain a similar

                                separate class of shareholders: increase    provision, but similar rights

                                its authorized share capital and par        are provided under Ohio law.

                                value; divide its shares into several

                                classes and attach thereto respectively

                                any preferential, deferred, qualified or

                                special rights, privileges or

                                conditions; consolidate and divide its

                                share capital into shares of larger par

                                value; subdivide its shares into shares

                                of smaller par value than is fixed by

                                the memorandum of association; make

                                provision for the issue and allotment of

                                shares which do not carry any voting

                                rights; cancel shares which, at the date

                                of the passing of the resolution in that

                                behalf, have not been taken or agreed to

                                be taken by any person, and diminish the

                                amount of its share capital by the

                                amount of the shares cancelled and

                                change the currency denomination of its

                                share capital.

-----------------------------------------------------------------------------------------------------------

</TABLE>

 

                                        36

<PAGE>   43

 

                 INCOME TAX CONSEQUENCES OF THE REORGANIZATION

 

U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE REORGANIZATION

 

    The following general discussion summarizes the anticipated principal U.S.

federal income tax consequences of the receipt of Cooper Bermuda Class A common

shares by certain holders of Cooper Ohio common stock pursuant to the

reorganization. This discussion does not address all of the U.S. federal income

tax consequences that may be relevant to particular Cooper Ohio shareholders in

light of their individual circumstances or to shareholders who, for U.S. federal

income tax purposes, are subject to special rules, such as:

 

    - dealers or traders in securities or currencies;

 

    - tax-exempt entities;

 

    - banks, financial institutions, or insurance companies;

 

    - grantor trusts;

 

    - real estate investment trusts or regulated investment companies;

 

    - holders who hold Cooper Ohio common stock as part of a position in a

      straddle or as part of a hedging or conversion transaction for U.S.

      federal income tax purposes;

 

    - investors whose functional currency is not the U.S. dollar;

 

    - holders who acquired their Cooper Ohio common stock within twelve months

      of the effective date of the merger pursuant to the exercise of employee

      stock options or otherwise as compensation;

 

    - holders that, for U.S. federal income tax purposes, are nonresident alien

      individuals, foreign corporations, foreign partnerships, foreign trusts,

      or foreign estates; and

 

    - holders who own, or are deemed to own, 10% or more, determined by voting

      power or value, of Cooper Ohio common stock or Cooper Bermuda Class A

      common shares.

 

    Further, this discussion does not address any U.S. federal estate and gift

or alternative minimum tax consequences or any state, local, or foreign tax

consequences relating to the reorganization or the ownership and disposition of

Cooper Bermuda Class A common shares.

 

    EACH COOPER OHIO SHAREHOLDER IS STRONGLY URGED TO CONSULT HIS OR HER OWN TAX

ADVISOR AS TO THE PARTICULAR TAX CONSEQUENCES TO HIM OR HER OF THE RECEIPT OF

COOPER BERMUDA CLASS A COMMON SHARES PURSUANT TO THE REORGANIZATION CONTEMPLATED

BY THIS PROXY STATEMENT/PROSPECTUS AND THE OWNERSHIP AND DISPOSITION OF COOPER

BERMUDA CLASS A COMMON SHARES, INCLUDING THE APPLICABILITY AND EFFECT OF

FEDERAL, STATE, LOCAL, AND FOREIGN INCOME AND OTHER TAX LAWS IN HIS OR HER

PARTICULAR CIRCUMSTANCES.

 

    This discussion is based on the Internal Revenue Code of 1986, as amended

(the "Code"), the Treasury regulations promulgated thereunder, and judicial and

administrative interpretations thereof, including IRS Notice 94-93, 1994-2 C.B.

563, in each case as in effect and available on the date of this proxy

statement/ prospectus. All of the foregoing are subject to change, which change

could apply with retroactive effect and could affect the tax consequences

described below. Neither Cooper Ohio nor Cooper Bermuda will request any ruling

from the IRS as to the U.S. federal income tax consequences of the

reorganization.

 

    This discussion is also based on certain assumptions regarding the factual

circumstances that will exist at the time of the reorganization, including

certain representations made or to be made by Cooper Ohio and Cooper Bermuda.

Any change in the truth, accuracy or completeness of any of the facts,

assumptions or representations on which this discussion is based could affect

the tax consequences described below. This discussion assumes that Cooper Ohio

shareholders hold their Cooper Ohio common stock and will hold Cooper Bermuda

Class A common shares as capital assets.

 

                                        37

<PAGE>   44

 

    For purposes of this discussion, a U.S. holder is a beneficial owner of

Cooper Ohio common stock that, for U.S. federal income tax purposes, is:

 

    - a citizen or resident of the U.S.;

 

    - a corporation or partnership created or organized in or under the laws of

      the U.S. or any State thereof, including the District of Columbia;

 

    - an estate, the income of which is subject to U.S. federal income taxation

      regardless of its source;

 

    - a trust, if such trust validly has elected to be treated as a U.S. person

      for U.S. federal income tax purposes or if (1) a U.S. court can exercise

      primary supervision over its administration and (2) one or more U.S.

      persons have the authority to control all of the substantial decisions of

      such trust; or

 

    - otherwise subject to U.S. federal income taxation on a net income basis on

      their shares of Cooper Ohio common stock.

 

  THE REORGANIZATION

 

    Receipt of Cooper Bermuda Class A Common Shares.  Each U.S. holder will

recognize gain, but not loss, on the receipt of Cooper Bermuda Class A common

shares in exchange for Cooper Ohio common stock pursuant to the reorganization

in an amount equal to the difference, if any, between (1) the fair market value

of the Cooper Bermuda Class A common shares received by such U.S. holder and (2)

such U.S. holder's adjusted tax basis in its Cooper Ohio common stock

surrendered in exchange therefor. Any gain recognized will be capital gain and

will be long-term capital gain if the Cooper Ohio common stock has been held for

more than one year at the time of the reorganization. A U.S. holder that

recognizes gain with respect to the reorganization will have an aggregate

adjusted tax basis in its Cooper Bermuda Class A common shares equal to the

aggregate adjusted tax basis in the Cooper Ohio common stock exchanged therefor,

increased by the amount of gain recognized. A U.S. holder will not be permitted

to recognize any loss realized on the exchange of his or her shares of Cooper

Ohio common stock in the reorganization, but the aggregate adjusted tax basis of

the Cooper Bermuda Class A common shares received by a U.S. holder with a loss

on its Cooper Ohio common stock will be equal to such U.S. holder's aggregate

adjusted tax basis in its Cooper Ohio common stock surrendered in exchange

therefor. Thus, any loss would be preserved. The holding period for any Cooper

Bermuda Class A common shares received by a U.S. holder recognizing gain with

respect to the reorganization will begin at the effective date of the

reorganization. The holding period for any Cooper Bermuda Class A common shares

received by U.S. holders with a loss on their Cooper Ohio common stock will

include the holding period of the Cooper Ohio common stock exchanged therefor.

 

  COOPER BERMUDA CLASS A COMMON SHARES

 

    Distributions.  Subject to the discussion below under "-- Passive Foreign

Investment Company Considerations," the gross amount of any distribution by

Cooper Bermuda of cash or property (other than certain distributions, if any, of

common shares distributed pro rata to all shareholders of Cooper Bermuda) with

respect to common shares will be includible in income by a U.S. holder as

dividend income to the extent such distributions are paid out of the current or

accumulated earnings and profits of Cooper Bermuda as determined under U.S.

federal income tax principles. Such dividends will not be eligible for the

dividends received deduction generally allowed to U.S. holders that are

corporations. Subject to the discussion below under "-- Passive Foreign

Investment Company Considerations," to the extent, if any, that the amount of

any distribution by Cooper Bermuda exceeds Cooper Bermuda's current and

accumulated earnings and profits as determined under U.S. federal income tax

principles, it will be treated first as a tax-free return of the U.S. holder's

adjusted tax basis in the common shares and thereafter as capital gain. Cooper

Bermuda will maintain calculations of its earnings and profits under U.S.

federal income tax principles.

 

    The amount of any distribution of property other than cash will be the fair

market value of such property on the date of distribution.

 

    It is anticipated that only a portion of the dividends received by a U.S.

holder with respect to Cooper Bermuda Class A common shares will be treated as

foreign source income for purposes of calculating such holder's foreign tax

credit limitation. This is because it is anticipated that (1) U.S. persons will

own a majority

 

                                        38

<PAGE>   45

 

of the Cooper Bermuda common shares after the reorganization and (2) a portion

of the income derived by Cooper Bermuda will be U.S. source income. To the

extent that dividends distributed by Cooper Bermuda are treated as foreign

source income, they generally will constitute passive income, or, in the case of

certain U.S. holders, financial services income.

 

    Sale or Exchange of Common Shares.  Subject to the discussion below under

"-- Passive Foreign Investment Company Considerations," a U.S. holder generally

will recognize gain or loss on the sale or exchange of Cooper Bermuda Class A

common shares equal to the difference between the amount realized on such sale

or exchange and the U.S. holder's adjusted tax basis in such Cooper Bermuda

Class A common shares. Such gain or loss will be capital gain or loss. In the

case of a noncorporate U.S. holder, the maximum marginal U.S. federal income tax

rate applicable to such gain will be lower than the maximum marginal U.S.

federal income tax rate applicable to ordinary income if such U.S. holder's

holding period for such common shares exceeds one year. Gain or loss, if any,

recognized by a U.S. holder generally will be treated as U.S. source income or

loss for U.S. foreign tax credit purposes. The deductibility of capital losses

is subject to limitations.

 

    Passive Foreign Investment Company Considerations.  A non-U.S. corporation

will be classified as a passive foreign investment company (a "PFIC") for U.S.

federal income tax purposes in any taxable year in which, after applying certain

look-through rules, either (1) at least 75 percent of its gross income is

passive income or (2) at least 50 percent of the gross value of its assets is

attributable to assets that produce passive income or are held for the

production of passive income. Passive income for this purpose generally includes

dividends, interest, royalties, rents, and gains from commodities and securities

transactions.

 

    Based on certain estimates of its gross income and gross assets and the

nature of its business, Cooper Bermuda believes that it will not be classified

as a PFIC for its current taxable year. Cooper Bermuda's status in future years

will depend on its assets and activities in those years. Cooper Bermuda has no

reason to believe that its assets or activities will change in a manner that

would cause it to be classified as a PFIC. If Cooper Bermuda were a PFIC, a U.S.

holder of common shares generally would be subject to imputed interest charges

and other disadvantageous tax treatment with respect to any gain from the sale

or exchange of, and certain distributions with respect to, the Cooper Bermuda

Class A common shares.

 

    If Cooper Bermuda were a PFIC, a U.S. holder of common shares could make a

variety of elections that may alleviate the tax consequences referred to above,

and one of these elections may be made retroactively. U.S. holders should

consult their own tax advisors regarding the tax consequences that would arise

if Cooper Bermuda were treated as a PFIC.

 

    Backup Withholding Tax and Information Reporting Requirements.  Currently,

distributions with respect to Cooper Ohio common stock and proceeds from the

sale or redemption of Cooper Ohio common stock are subject to U.S. backup

withholding tax and information reporting rules. After the reorganization, it is

anticipated that the same rules will apply to distributions with respect to

Cooper Bermuda Class A common shares and to proceeds from the sale or redemption

of Cooper Bermuda Class A common shares.

 

    U.S. backup withholding tax and information reporting requirements generally

apply to certain payments to certain noncorporate holders of stock. Information

reporting generally will apply to payments of dividends on, and to proceeds from

the sale or redemption of, Cooper Bermuda Class A common shares made within the

U.S. to a holder of Cooper Bermuda Class A common shares (other than an "exempt

recipient," including a corporation, a payee that is not a U.S. person that

provides an appropriate certification and certain other persons). A payor will

be required to withhold 31% of any payments of dividends on, or proceeds from

the sale or redemption of Cooper Bermuda Class A common shares within the U.S.

to a holder (other than an "exempt recipient") if such holder fails to furnish

its correct taxpayer identification number or otherwise fails to comply with, or

establish an exemption from, such backup withholding tax requirements. In the

case of such payments by a payor or middleman within the U.S. to a foreign

simple trust, a foreign grantor trust, or a foreign partnership (other than

payments to a foreign simple trust, a foreign grantor trust, or a foreign

partnership that qualifies as a "withholding foreign trust" or a "withholding

foreign partnership" within the meaning of such U.S. Treasury regulations and

payments to a foreign simple trust, a foreign grantor trust, or a foreign

partnership that are effectively connected with the conduct of a trade or

business in the U.S.), the beneficiaries of the foreign simple trust, the

persons treated as the owners of the foreign grantor trust, or the partners of

the foreign

 

                                        39

<PAGE>   46

 

partnership, as the case may be, will be required to provide the certification

discussed above in order to establish an exemption from backup withholding tax

and information reporting requirements. Moreover, a payor or middleman may rely

on a certification provided by a payee that is not a U.S. person only if such

payor or middleman does not have actual knowledge or a reason to know that any

information or certification stated in such certificate is incorrect.

 

  BERMUDA INCOME TAX CONSEQUENCES OF THE REORGANIZATION

 

    Under current Bermuda law, Cooper Bermuda is not subject to tax on income or

capital gains. Furthermore, Cooper Bermuda has obtained from the Minister of

Finance of Bermuda under the Exempted Undertakings Tax Protection Act 1966 (as

amended), an undertaking that, in the event that Bermuda enacts any legislation

imposing tax computed on profits, income, any capital asset, gain or

appreciation, or any tax in the nature of estate duty or inheritance tax, then

the imposition of such tax will not be applicable to Cooper Bermuda or to any of

its operations, or the shares, capital or common shares of Cooper Bermuda, until

March 28, 2016. This undertaking does not, however, prevent the imposition of

property taxes on Cooper Bermuda to the extent that it owns real property or

leasehold interests in Bermuda or certain other taxes on Cooper Bermuda if it

were to employ persons in Bermuda.

 

    Cooper Bermuda believes that no significant portion of its income or capital

gains will be subject to tax in Bermuda, which currently has no corporate income

tax. However, this belief is based upon the anticipated nature and conduct of

the business of Cooper Bermuda, which may change, and upon Cooper Bermuda's

understanding of its position under the tax laws of Bermuda and other countries,

which position is subject to review and possible challenge by taxing authorities

and to possible changes in law (which may have retroactive effect). The extent

to which certain taxing jurisdictions may require Cooper Bermuda to pay tax or

to make payments in lieu of tax cannot be determined in advance. There can be no

assurance that these factors will not have a material adverse effect on Cooper

Bermuda.

 

    Under existing Bermuda law, there will be no Bermuda income or withholding

tax on dividends paid by Cooper Bermuda to its shareholders. Furthermore, no

Bermuda tax or other levy is payable on the sale or other transfer (including by

gift or on the death of the shareholder) of Cooper Bermuda common stock (other

than by shareholders resident in Bermuda).

 

                                    EXPERTS

 

    The consolidated financial statements of Cooper Industries, Inc.

incorporated by reference in Cooper Industries, Inc.'s Annual Report (Form 10-K)

for the year ended December 31, 2000, have been audited by Ernst & Young LLP,

independent auditors, as set forth in their report thereon incorporated by

reference therein and incorporated herein by reference. Such consolidated

financial statements are incorporated herein by reference in reliance upon such

report given on the authority of such firm as experts in accounting and

auditing.

 

                                 LEGAL MATTERS

 

    Certain legal matters in connection with the Cooper Bermuda common shares

have been passed upon for Cooper Bermuda by its Bermuda counsel, Appleby,

Spurling & Kempe. Appleby, Spurling & Kempe has also rendered an opinion to

Cooper Bermuda regarding Bermuda tax consequences of the reorganization

described in "Income Tax Consequences of the Reorganization -- Bermuda Income

Tax Consequences of the Reorganization." Skadden, Arps, Slate, Meagher & Flom

LLP has rendered an opinion to Cooper Bermuda regarding United States federal

income tax consequences of the reorganization to shareholders of Cooper Ohio

described in "Income Tax Consequences of the Reorganization -- U.S. Federal

Income Tax Consequences of the Reorganization." Ernst & Young LLP has also

rendered an opinion to Cooper Bermuda regarding United States federal income tax

consequences of the reorganization to shareholders of Cooper Ohio described in

"Income Tax Consequences of the Reorganization -- U.S. Federal Income Tax

Consequences of the Reorganization."

 

                           PROPOSALS OF SHAREHOLDERS

 

    The board of directors of Cooper Ohio is not aware of any matters that are

expected to come before the special meeting other than those referred to in this

proxy statement/prospectus. If other matters should properly

 

                                        40

<PAGE>   47

 

come before the meeting, the persons named in the proxy intend to vote the

proxies in accordance with their best judgment.

 

    If the reorganization is approved by the shareholders, Cooper Bermuda's

bye-laws will require that shareholders who wish to nominate persons for

election to the board of directors must submit their nominations to Cooper

Bermuda no later than November 8, 2001 to be considered at the 2002 Annual

Meeting of Shareholders. Nominations must include certain information concerning

the nominee and the proponent's ownership of common shares of Cooper Bermuda.

Nominations not meeting these requirements will not be entertained at the Annual

Meeting. The Secretary of Cooper Bermuda can be contacted at the same address

listed above for the Secretary of Cooper Ohio. Any other shareholder proposals

intended to be presented or for consideration at the 2002 Annual Meeting of

Shareholders must also be received by the Secretary of Cooper Bermuda no later

than November 8, 2001, to be included in the proxy materials relating to that

meeting. If timely notice is not given of a shareholder proposal, then the

proxies named on the proxy cards distributed by Cooper Bermuda for the Annual

Meeting may use the discretionary voting authority granted them by the proxy

cards if the proposal is raised at the meeting, whether or not there is any

discussion of the matter in the proxy statement/prospectus. In any event, all

shareholder proposals to be presented for consideration at the 2002 Annual

Meeting of Shareholders must be received by the Secretary of Cooper Bermuda no

later than January 22, 2002.

 

                      WHERE YOU CAN FIND MORE INFORMATION

 

    Cooper Bermuda has filed with the Securities and Exchange Commission (the

"Commission") a registration statement on Form S-4 (herein, together with all

amendments and exhibits, referred to as the "Registration Statement") under the

Securities Act of 1933, as amended (the "Securities Act"). This proxy

statement/prospectus, which constitutes a part of the Registration Statement,

does not contain all of the information set forth in the Registration Statement,

certain parts of which are omitted as permitted by the rules and regulations of

the Commission. For further information, reference is hereby made to the

Registration Statement. Statements made in this proxy statement/prospectus as to

the contents of any contract, agreement or other document are not necessarily

complete. With respect to each such contract, agreement or other document filed

as an exhibit to the Registration Statement or otherwise filed with the

Commission, reference is made to the copy so filed, and each such statement

shall be deemed qualified in its entirety by such reference.

 

    Cooper Ohio is, and after the reorganization Cooper Bermuda will be, subject

to the informational requirements of the Securities Exchange Act of 1934, as

amended (the "Exchange Act"), and in accordance therewith files and will file

reports, proxy and information statements, and other information with the

Commission. Such reports, proxy and information statements, and other

information filed with the Commission, can be inspected and copied at the public

reference facilities maintained by the Commission at 450 Fifth Street, N.W.,

Washington, D.C. 20549, and at the regional offices of the Securities and

Exchange Commission at 7 World Trade Center, Suite 1300, New York, New York

10048 and Citicorp Center, 500 West Madison Street, Chicago, Illinois 60661. You

may obtain information on the operation of the Public Reference Room by calling

the Commission at 1-800-SEC-0330. Copies of reports, proxy and information

statements and other information regarding registrants that file electronically

(including Cooper Industries, Inc.) are available on the Commission's Web Site

at http://www.sec.gov.

 

    Upon completion of the reorganization, Cooper Bermuda common shares will be

traded on the New York Stock Exchange. At the time of commencement of such

trading, Cooper Ohio common stock will be delisted and will no longer be

registered pursuant to Section 12 of the Exchange Act. At such time, your shares

will have automatically converted into shares of Cooper Bermuda and Cooper

Bermuda will be registered pursuant to Section 12 of the Exchange Act.

 

                INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

 

    The following documents filed by Cooper Ohio with the Commission pursuant to

the Exchange Act are hereby incorporated by reference in this proxy

statement/prospectus:

 

        (1) Annual Report on Form 10-K for the fiscal year ended December 31,

            2000 (File No. 1-1175);

 

                                        41

<PAGE>   48

 

        (2) Quarterly Report on Form 10-Q for the quarter ended March 31, 2001

            (File No. 1-1175);

 

        (3) Current Reports on Form 8-K dated April 24, 2001, April 30, 2001 and

            May 23, 2001 (File No. 1-1175).

 

    Each document filed by Cooper Ohio pursuant to Section 13(a), 13(c), 14 or

15(d) of the Exchange Act subsequent to the date of this proxy

statement/prospectus and prior to the date of the special meeting shall be

deemed to be incorporated by reference in this proxy statement/prospectus and to

be a part of this proxy statement/prospectus from the date of filing of such

document. Any statement contained in this proxy statement/prospectus or in a

document incorporated or deemed to be incorporated by reference in this proxy

statement/prospectus shall be deemed to be modified or superseded for purposes

of the Registration Statement and this proxy statement/prospectus to the extent

that a statement contained in this proxy statement/prospectus or in any

subsequently filed document that also is or is deemed to be incorporated by

reference in this proxy statement/prospectus modifies or supersedes such

statement. Any such statement so modified or superseded shall not be deemed,

except as so modified or superseded, to constitute a part of the Registration

Statement or this proxy statement/prospectus.

 

    THIS PROXY STATEMENT/PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH

ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. COPIES OF THE INCORPORATED

DOCUMENTS (OTHER THAN EXHIBITS TO SUCH DOCUMENTS, UNLESS SUCH EXHIBITS ARE

SPECIFICALLY INCORPORATED BY REFERENCE THEREIN) WILL BE FURNISHED UPON REQUEST

WITHOUT CHARGE TO EACH PERSON TO WHOM THIS PROXY STATEMENT/PROSPECTUS IS

DELIVERED. WRITTEN REQUESTS SHOULD BE MADE BY [MONTH, DAY], 2001 AND SHOULD BE

DIRECTED TO COOPER INDUSTRIES, INC., 600 TRAVIS, SUITE 5800, HOUSTON, TEXAS

77002 ATTENTION: OFFICE OF THE SECRETARY.

 

    NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY

INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED OR INCORPORATED BY

REFERENCE IN THIS PROXY STATEMENT/PROSPECTUS AND, IF GIVEN OR MADE, SUCH

INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.

THIS PROXY STATEMENT/PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A

SOLICITATION OF ANY OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY

JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE SUCH AN OFFER OR SOLICITATION.

COOPER BERMUDA IS PROHIBITED FROM MAKING ANY INVITATION TO THE PUBLIC IN BERMUDA

TO SUBSCRIBE FOR ANY OF ITS SHARES.

 

                                        42

<PAGE>   49

 

                                                                         ANNEX I

 

                          AGREEMENT AND PLAN OF MERGER

 

                                     AMONG

 

                            COOPER INDUSTRIES, LTD.,

 

                            COOPER INDUSTRIES, INC.

 

                                      AND

 

                             COOPER MERGERCO, INC.

 

                           DATED AS OF JUNE 11, 2001

<PAGE>   50

 

                               TABLE OF CONTENTS

 

<TABLE>

<CAPTION>

                                                              PAGE

                                                              ----

<S>                                                           <C>

ARTICLE I MERGER............................................   I-1

  1.1 Merger................................................   I-1

  1.2 Effective Time........................................   I-1

  1.3 Effects of the Merger.................................   I-1

ARTICLE II NAME, ARTICLES OF INCORPORATION, DIRECTORS AND

  EXECUTIVE OFFICERS........................................   I-2

  2.1 Name of Surviving Corporation.........................   I-2

  2.2 Articles of Incorporation; Regulations................   I-2

  2.3 Directors.............................................   I-2

  2.4 Officers..............................................   I-2

ARTICLE III CONVERSION AND EXCHANGE OF STOCK................   I-2

  3.1 Conversion............................................   I-2

  3.2 Exchange of Stock.....................................   I-3

  3.3 Dissenters' Rights....................................   I-3

ARTICLE IV BENEFIT AND COMPENSATION PLANS...................   I-4

  4.1 Plans.................................................   I-4

  4.2 Reimbursement for Certain Deferred Compensation.......   I-4

ARTICLE V CONDITIONS PRECEDENT..............................   I-5

  5.1 Conditions to Each Party's Obligation to Effect the

     Merger.................................................   I-5

ARTICLE VI TERMINATION, AMENDMENT AND WAIVER................   I-5

  6.1 Termination...........................................   I-5

  6.2 Effect of Termination.................................   I-5

  6.3 Amendment.............................................   I-5

  6.4 Waiver................................................   I-6

  6.5 Procedure for Termination, Amendment, Extension or

     Waiver.................................................   I-6

ARTICLE VII GENERAL PROVISIONS..............................   I-6

  7.1 Notices...............................................   I-6

  7.2 Entire Agreement; No Third-party Beneficiaries........   I-6

  7.3 Governing Law.........................................   I-6

</TABLE>

 

                                       I-i

<PAGE>   51

 

                          AGREEMENT AND PLAN OF MERGER

 

    AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of June [11],

2001, among Cooper Industries, Ltd., a Bermuda company ("Cooper Bermuda"),

Cooper Industries, Inc., an Ohio corporation ("Cooper Ohio"), and Cooper

Mergerco, Inc., an Ohio corporation ("Merger Sub") and a newly formed, indirect

wholly-owned subsidiary of Cooper Bermuda.

 

    WHEREAS, the respective Boards of Directors of Cooper Bermuda, Cooper Ohio

and Merger Sub deem it advisable and in the best interests of their respective

shareholders to reorganize such that the company will effectively change its

place of incorporation from Ohio to Bermuda by merging Merger Sub with and into

Cooper Ohio;

 

    WHEREAS, the respective Boards of Directors of Cooper Bermuda, Cooper Ohio

and Merger Sub have each approved the merger of Merger Sub with and into Cooper

Ohio, pursuant to which Cooper Ohio will be the surviving company in the merger

and become a wholly-owned, indirect subsidiary of Cooper Bermuda, upon the terms

and subject to the conditions set forth in this Agreement (the "Merger"), and

whereby each outstanding share of common stock, par value $5.00 per share, of

Cooper Ohio (together with the rights associated with such shares (the "Cooper

Ohio Rights") issued pursuant to the Rights Agreement (the "Rights Agreement"),

dated as of August 5, 1997, between Cooper Ohio and First Chicago Trust Company

of New York, as Rights Agent, ("Cooper Ohio Common Stock"), other than those

shares of Cooper Ohio Common Stock held by Cooper Ohio or any direct or indirect

wholly-owned subsidiary of Cooper Ohio and Dissenting Shares, shall be

automatically converted into one Class A common share, par value $.01 per share,

of Cooper Bermuda ("Cooper Bermuda Class A Common Share"); and

 

    WHEREAS, the consummation of the Merger requires, among other things, the

adoption of this Agreement by the affirmative vote of a majority of the voting

power of Cooper Ohio (the "Cooper Ohio Shareholder Approval");

 

    NOW, THEREFORE, the parties agree as follows:

 

                                   ARTICLE I

 

                                     MERGER

 

    1.1  MERGER

 

    Upon the terms and subject to the conditions set forth in this Agreement,

and in accordance with the Ohio General Corporation Law (the "OGCL"), Merger Sub

shall be merged with and into Cooper Ohio at the Effective Time of the Merger.

Following the Effective Time of the Merger, the separate corporate existence of

Merger Sub shall cease and Cooper Ohio shall continue as the surviving

corporation (the "Surviving Corporation"), becoming a wholly-owned, indirect

subsidiary of Cooper Bermuda, and shall succeed to and assume all the rights and

obligations of Merger Sub in accordance with the OGCL.

 

    1.2  EFFECTIVE TIME

 

    Subject to the provisions of this Agreement, as soon as practicable

following the satisfaction or waiver of the conditions set forth in Section 5.1,

the parties shall duly prepare, execute and file a certificate of merger (the

"Ohio Certificate of Merger") in accordance with Section 1701.81 of the OGCL

with the Secretary of State of Ohio. The Merger shall become effective upon the

filing of the Ohio Certificate of Merger (or at such later time reflected in

such Certificate of Merger as shall be agreed to by Cooper Bermuda and Cooper

Ohio). The date and time when the Merger shall become effective is hereinafter

referred to as the "Effective Time."

 

    1.3  EFFECTS OF THE MERGER

 

        (a) General Effects.  The Merger shall have the effects set forth in

    Section 1701.82 of the OCGL.

 

        (b) Assumptions of Obligations.  The Surviving Corporation specifically

    assumes any obligation of Merger Sub which requires that such obligation is

    specifically assumed by the Surviving Corporation.

 

                                       I-1

<PAGE>   52

 

                                   ARTICLE II

 

                        NAME, ARTICLES OF INCORPORATION,

                        DIRECTORS AND EXECUTIVE OFFICERS

 

    2.1  NAME OF SURVIVING CORPORATION

 

    The name of the Surviving Corporation shall be "Cooper Industries, Inc."

 

    2.2  ARTICLES OF INCORPORATION; REGULATIONS

 

        (a) The Articles of Incorporation of the Surviving Corporation shall be

    amended as of the Effective Time pursuant to the Certificate of Merger to

    contain the provisions in the Articles of Incorporation of Merger Sub in

    effect immediately prior to the Effective Time, except that Article FIRST of

    such Articles shall provide that the name of the Surviving Corporation shall

    be "Cooper Industries, Inc."

 

        (b) The Regulations of the Merger Sub in effect immediately prior to the

    Effective Time shall be the regulations of the Surviving Corporation until

    amended in accordance with applicable law.

 

    2.3  DIRECTORS

 

    The directors of Merger Sub immediately prior to the Effective Time shall be

the directors of the Surviving Corporation, until his or her successor shall be

elected and qualify, subject to prior death, resignation or removal in

accordance with the Articles of Incorporation and Regulations of the Surviving

Corporation, or as otherwise provided by applicable law.

 

    2.4  OFFICERS

 

    The officers of Cooper Ohio immediately prior to the Effective Time shall be

the officers of the Surviving Corporation, until his or her successor shall be

elected and qualify, subject to prior death, resignation or removal in

accordance with the Articles of Incorporation and Regulations of the Surviving

Corporation, or as otherwise provided by applicable law.

 

                                  ARTICLE III

 

                        CONVERSION AND EXCHANGE OF STOCK

 

    3.1  CONVERSION

 

    At the Effective Time, by virtue of the Merger and without any action on the

part of the holder of any shares:

 

        (a) Conversion of Cooper Ohio Common Stock.  Each issued and outstanding

    share of Cooper Ohio Common Stock, other than shares cancelled in accordance

    with 3.1(b) and Dissenting Shares, shall be converted into and become one

    fully paid and nonassessable Cooper Bermuda Class A Common Share.

 

        (b) Cancellation of Cooper Ohio-Owned Stock.  Each issued share of

    Cooper Ohio Common Stock that is owned by Cooper Ohio or by any direct or

    indirect wholly-owned subsidiary of Cooper Ohio prior to the Effective Time

    shall automatically be canceled and retired and shall cease to exist, and no

    Cooper Bermuda Class A Common Shares or other consideration shall be

    delivered or deliverable in exchange for such shares of Cooper Ohio Common

    Stock.

 

        (c) CONVERSION OF MERGER SUB COMMON STOCK.  Each issued and outstanding

    share of common stock, par value $1.00 per share, of Merger Sub, shall be

    converted into and become one share of common stock of the Surviving

    Corporation with the same rights, power and privileges as the shares so

    converted and shall constitute the only outstanding shares of capital stock

    of the Surviving Corporation.

 

        (d) STOCK OPTION AND AWARD PLANS.  Cooper Ohio currently maintains and

    sponsors the Employee Stock Purchase Plan, UK Employee Share Purchase Plan,

    Stock Incentive Plan, Management Annual Incentive Plan and certain other

    plans and agreements providing for the grant or award to its

 

                                       I-2

<PAGE>   53

 

    employees of options or other rights to purchase or receive Cooper Ohio

    Common Stock (the "Employee Stock Plans"). Cooper Ohio also maintains and

    sponsors the Directors' Stock Plan, Directors' Retainer Fee Stock Plan and

    certain other plans and agreements providing for the grant or award to its

    directors of options or other rights to purchase or receive Cooper Ohio

    Common Stock (the "Director Stock Plans"). Cooper Ohio shall continue to

    maintain and sponsor the Employee Stock Plans and Cooper Bermuda shall

    assume the rights and obligations of Cooper Ohio under the Director Stock

    Plans, subject to Cooper Ohio's obligation to reimburse Cooper Bermuda for

    payments to directors representing deferred shares accrued as of the

    Effective Time pursuant to Section 4.2. The outstanding options and other

    awards under the Employee Stock Plans and Director Stock Plans shall be

    exercisable or issuable upon the same terms and conditions as under such

    plans and the agreements relating thereto immediately prior to the Effective

    Time of the Merger, except that upon the exercise or issuance of such

    options or awards, Cooper Bermuda Class A Common Shares shall be issuable in

    lieu of shares of Cooper Ohio Common Stock. The number of Cooper Bermuda

    Class A Common Shares issuable upon the exercise or issuance of such an

    option or award immediately after the Effective Time and the option price of

    each such option or award shall be the number of shares and option price in

    effect immediately prior to the Effective Time. All options or awards issued

    under the Employee Stock Plans and Director Stock Plans after the Effective

    Time shall entitle the holder thereof to purchase Cooper Bermuda Class A

    Common Shares in accordance with the terms of the Employee Stock Plans and

    Director Stock Plans.

 

        (e) Dividend Reinvestment Plan.  At the Effective Time, Cooper Bermuda

    shall assume all the rights and obligations of Cooper Ohio under the Cooper

    Industries, Inc. Dividend Reinvestment and Stock Purchase Plan and such Plan

    shall be deemed to provide for the issuance or purchase of, or otherwise

    relate to, Cooper Bermuda Class A Common Shares.

 

        (f) Rights.  Each Cooper Ohio Right shall automatically be converted

    into one right issued pursuant to the Rights Agreement, to be entered into

    prior to the Merger between Cooper Bermuda and EquiServe Trust Company,

    N.A., as Rights Agent, containing terms and conditions substantially similar

    to the Rights Agreement.

 

    3.2  EXCHANGE OF STOCK

 

        (a) Exchange Procedures.  At the Effective Time, each outstanding

    certificate theretofore representing shares of Cooper Ohio Common Stock

    (other than shares to be cancelled as set forth in Section 3.1(b) and

    Dissenting Shares) shall automatically represent the same number of Cooper

    Bermuda Class A Common Shares, and therefore do not need to be exchanged for

    certificates representing Class A Common Shares. Following the Merger,

    certificates bearing the name of Cooper Bermuda will be issued in the normal

    course upon surrender of certificates bearing the name of Cooper Ohio for

    exchange or transfer.

 

        (b) No Further Ownership Rights in Cooper Ohio Common Stock.  All Cooper

    Bermuda Class A Common Shares issued upon the Merger, including any

    certificates issued upon the surrender for exchange of certificates in

    accordance with the terms of this Article III, shall be deemed to have been

    issued (and paid) in full satisfaction of all rights pertaining to the

    shares of Cooper Ohio Common Stock theretofore represented by such

    certificates, subject, however, to the Surviving Corporation's obligation

    (if any) to pay any dividends or make any other distributions with a record

    date prior to the Effective Time which may have been declared or made by

    Cooper Ohio on such shares of Cooper Ohio Common Stock in accordance with

    the terms of this Agreement or prior to the date of this Agreement and which

    remain unpaid at the Effective Time, and there shall be no further

    registration of transfers on the stock transfer books of the Surviving

    Corporation of the shares of Cooper Ohio Common Stock which were outstanding

    immediately prior to the Effective Time. If, after the Effective Time,

    certificates are presented to the Surviving Corporation they shall be

    canceled and exchanged as provided in this Article III, except as otherwise

    provided by law.

 

    3.3  DISSENTERS' RIGHTS

 

    Anything contained in this Agreement to the contrary notwithstanding, if any

person shall perfect dissenter's rights in respect of one or more shares of

Cooper Ohio Common Stock, in accordance with

                                       I-3

<PAGE>   54

 

Section 1701.85 of the OGCL, then all of the rights accruing from the shares of

Cooper Ohio Common Stock which are outstanding immediately before the Effective

Time and which are held by any shareholders who have not voted such shares in

favor of the adoption of this Agreement and who shall have delivered to Cooper

Ohio a written demand for appraisal of such shares in the manner provided in

Section 1701.85 of the OGCL shall be suspended at the Effective Time; provided,

however that (i) the holders of such shares shall be entitled ("Dissenting

Shares") upon compliance with the provisions of Section 1701.85 of the OGCL to

payment of the appraised value of such Dissenting Shares in accordance with

Section 1701.85 of the OGCL and (ii) the rights accruing from the Dissenting

Shares shall remain suspended until the earlier of (A) the date on which such

holder, upon compliance with the provisions of Section 1701.85 of the OGCL,

establishes the right to payment of the appraised value of such Dissenting

Shares in accordance with the provisions of Section 1701.85 of the OGCL and such

value is paid to such holder, at which time such Dissenting Shares shall be

cancelled and extinguished in consideration and exchange for such payment; and

(B) the date on which either the demand for appraisal of such Dissenting Shares

is withdrawn with the consent of Cooper Ohio or such holder forfeits the rights

of appraisal of such Dissenting Shares by failing to establish such holder's

entitlement to appraisal rights in accordance with Section 1701.85 of the OGCL,

at which time each such Dissenting Share shall be converted into and become one

fully paid and nonassessable Cooper Bermuda Class A Common Share.

 

                                   ARTICLE IV

 

                         BENEFIT AND COMPENSATION PLANS

 

    4.1  PLANS

 

    At the Effective Time, (i) Cooper Ohio shall continue to sponsor and

maintain each employee benefit and deferred compensation plan and program to

which Cooper Ohio is then a party (the "Employee Benefit Plans") and the

Directors Retirement Plan, and (ii) subject to Section 4.2, Cooper Bermuda shall

assume the rights and obligations of Cooper Ohio under each director benefit and

deferred compensation plan and program to which Cooper Ohio is then a party (the

"Director Benefit Plans") other than the Directors Retirement Plan. To the

extent any Employee Benefit Plan or Director Benefit Plan provides for the

issuance or purchase of, or otherwise relates to, Cooper Ohio Common Stock,

after the Effective Time, such plan shall be deemed to provide for the issuance

or purchase of, or otherwise relate to, Cooper Bermuda Class A Common Shares.

Cooper Bermuda shall offer to enter into management continuity agreements (the

"New Change of Control Agreements") with each executive officer and key employee

of Cooper Ohio who, immediately prior to the Effective Time, is a party to a

management continuity agreement with Cooper Ohio (each a "Change of Control

Agreement") and the terms and conditions of the New Change of Control Agreements

shall be substantially similar to those set forth in the Change of Control

Agreements.

 

    4.2  REIMBURSEMENT FOR CERTAIN DEFERRED COMPENSATION

 

    Cooper Ohio shall reimburse Cooper Bermuda for payments to directors or

former directors representing deferred compensation in the form of cash or

shares accrued as of the Effective Time plus any interest or dividend

equivalents accruing thereon after the Effective Time under the Directors'

Deferred Compensation Plan, Directors' Stock Plan and Directors' Retainer Fee

Stock Plan. Such reimbursement shall be due to Cooper Bermuda at the time the

deferred compensation is paid by Cooper Bermuda to the director or former

director. Cooper Ohio's reimbursement obligation with respect to the payment of

deferred shares to a director or former director may, at Cooper Ohio's option,

be satisfied either: (i) by delivering to Cooper Bermuda the equivalent number

of Cooper Bermuda Class A Common Shares, or (ii) by paying cash to Cooper

Bermuda in an amount equal to the product of number of shares distributed

multiplied by the average of the per share high and low sales prices of a Class

A Common Share on the New York Stock Exchange composite tape on the day that

payment is made (or if no Class A Common Shares traded on such day, then on the

next preceding trading day). Distributions of deferred account balances shall be

deemed to be made first from balances for which Cooper Ohio is obligated to

reimburse Cooper Bermuda under this Section 4.2 and thereafter from additional

accruals for which Cooper Bermuda is responsible without reimbursement.

 

                                       I-4

<PAGE>   55

 

                                   ARTICLE V

 

                              CONDITIONS PRECEDENT

 

    5.1  CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER

 

    The respective obligation of each party to effect the Merger is subject to

the satisfaction or waiver of the following conditions:

 

        (a) Shareholder Approval.  The Cooper Ohio Shareholder Approval shall

    have been obtained.

 

        (b) Form S-4.  The registration statement on Form S-4 filed with the

    Securities and Exchange Commission by Cooper Bermuda in connection with the

    issuance of the Cooper Bermuda Class A Common Shares in the Merger shall

    have become effective under the Securities Act of 1933, as amended, and

    shall not be the subject of any stop order or proceedings seeking a stop

    order.

 

        (c) NYSE Approval.  The New York Stock Exchange (the "NYSE") shall have

    confirmed that the Cooper Bermuda Class A Common Shares have been approved

    for listing on the NYSE, subject to notice of issuance, and may trade on the

    NYSE and succeed to the ticker symbol "CBE."

 

        (d) Governmental, Regulatory and Other Material Third-Party

    Consents.  All filings required to be made prior to the Effective Time of

    the Merger with, and all material consents, approvals, permits and

    authorizations required to be obtained prior to the Effective Time from, any

    court or governmental or regulatory authority or agency, domestic or

    foreign, or other person in connection with the execution and delivery of

    this Agreement and the consummation of the transactions contemplated hereby

    will have been made or obtained (as the case may be).

 

        (e) No Injunctions or Restraints.  No temporary restraining order,

    preliminary or permanent injunction or other order issued by any court of

    competent jurisdiction or other legal restraint or prohibition preventing

    the consummation of the Merger or any of the other transactions contemplated

    hereby shall be in effect.

 

                                   ARTICLE VI

 

                       TERMINATION, AMENDMENT AND WAIVER

 

    6.1  TERMINATION

 

    This Agreement may be terminated at any time prior to the Effective Time,

whether before or after the Cooper Ohio Shareholder Approval, by action of the

Board of Directors of Cooper Bermuda, Cooper Ohio or Merger Sub.

 

    6.2  EFFECT OF TERMINATION

 

    In the event of termination of this Agreement as provided in Section 6.1,

this Agreement shall forthwith become void and have no effect, without any

liability or obligation on the part of Cooper Ohio, Merger Sub or Cooper

Bermuda, other than the provisions of this Article VI and Article VII.

 

    6.3  AMENDMENT

 

    This Agreement may be amended by the parties at any time before or after the

Cooper Ohio Shareholder Approval; provided, however, that after any such

approval, there shall not be made any amendment that alters or changes the

amount or kind of shares to be received by shareholders in the Merger; alters or

changes any term of the articles of the Surviving Corporation, except for

alterations or changes that could otherwise be adopted by the directors of the

Surviving Corporation; or alters or changes any other terms and conditions of

this Agreement if any of the alterations or changes, alone or in the aggregate,

would materially adversely affect the holders of shares of Cooper Ohio Common

Stock. This Agreement may not be amended except by an instrument in writing

signed on behalf of each of the parties.

 

                                       I-5

<PAGE>   56

 

    6.4  WAIVER

 

    At any time prior to the Effective Time, the parties may waive compliance by

the other parties with any of the agreements or conditions contained in this

Agreement. Any agreement on the part of a party to any such waiver shall be

valid only if set forth in an instrument in writing signed on behalf of such

party. The failure of any party to this Agreement to assert any of its rights

under this Agreement or otherwise shall not constitute a waiver of such rights.

 

    6.5  PROCEDURE FOR TERMINATION, AMENDMENT, EXTENSION OR WAIVER

 

    A termination of this Agreement pursuant to Section 6.1, an amendment of

this Agreement pursuant to Section 6.3 or a waiver pursuant to Section 6.4

shall, in order to be effective, require action by the Board of Directors of

Cooper Ohio, Cooper Bermuda and Merger Sub.

 

                                  ARTICLE VII

 

                               GENERAL PROVISIONS

 

    7.1  NOTICES

 

    All notices, requests, claims, demands and other communications under this

Agreement shall be in writing and shall be deemed given if delivered personally,

telecopied (which is confirmed) or sent by overnight courier (providing proof of

delivery) to the parties at the following addresses (or at such other address

for a party as shall be specified by like notice):

 

       (a) if to Cooper Bermuda:

 

       Cooper Industries, Ltd.

       600 Travis, Suite 5800

       Houston, Texas 77002-1001

       Attention: Office of the Secretary

 

       (b) if to Cooper Ohio:

 

       Cooper Industries, Inc.

       600 Travis, Suite 5800

       Houston, Texas 77002-1001

       Attention: General Counsel

 

       (c) if to Merger Sub:

 

       Cooper Mergerco, Inc.

       c/o Cooper Industries, Inc.

       600 Travis, Suite 5800

       Houston, Texas 77002-1001

       Attention: General Counsel

 

    7.2  ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARIES

 

    This Agreement (including the documents and instruments referred to herein)

(a) constitutes the entire agreement and supersedes all prior agreements and

understandings, both written and oral, among the parties with respect to the

subject matter of this Agreement and (b) except for the provisions of Article

III, is not intended to confer upon any person other than the parties any rights

or remedies.

 

    7.3  GOVERNING LAW

 

    This Agreement shall be governed by, and construed in accordance with, the

laws of the State of Ohio regardless of the laws that might otherwise govern

under applicable principles of conflicts of laws thereof.

 

                                       I-6

<PAGE>   57

 

    IN WITNESS WHEREOF, Cooper Ohio, Cooper Bermuda and Merger Sub have caused

this Agreement to be signed by their respective officers thereunto duly

authorized, all as of the date first written above.

 

                                            COOPER INDUSTRIES, LTD.

 

                                            By:  /s/ DIANE K. SCHUMACHER

                                             -----------------------------------

                                                Name:   Diane K. Schumacher

                                                Title:  Senior Vice President

                                                        and General Counsel

 

                                            COOPER MERGERCO, INC.

 

                                            By: /s/ D. BRADLEY MCWILLIAMS

                                             -----------------------------------

                                                Name:   D. Bradley McWilliams

                                                Title:  Vice President and

                                                        Treasurer

 

                                            COOPER INDUSTRIES, INC.

 

                                            By:   /s/ H. JOHN RILEY, JR.

                                             -----------------------------------

                                                Name:   H. John Riley, Jr.

                                                Title:  Chairman, President and

                                                        Chief Executive Officer

 

                                       I-7

<PAGE>   58

 

                                                                        ANNEX II

 

                                     [LOGO]

 

                                    BERMUDA

 

                             THE COMPANIES ACT 1981

 

             MEMORANDUM OF ASSOCIATION OF COMPANY LIMITED BY SHARES

                              SECTION 7(1) AND (2)

 

                           MEMORANDUM OF ASSOCIATION

 

                                       OF

 

                            COOPER INDUSTRIES, INC.

                   (hereinafter referred to as "the Company")

 

    1. The liability of the members of the Company is limited to the amount (if

any) for the time being unpaid on the shares respectively held by them.

 

    2. We, the undersigned, namely,

 

<TABLE>

<CAPTION>

                                                                         NUMBER OF          BERMUDIAN

                                                                          SHARES              STATUS

NAME AND ADDRESS                                       NATIONALITY      SUBSCRIBED         (YES OR NO)

----------------                                       -----------   -----------------   ----------------

<S>                                                    <C>           <C>                 <C>

Alison R. Dyer.......................................    British             1                 Yes

  Cedar House

  41 Cedar Avenue

  Hamilton HM 12, Bermuda

Ruby L. Rawlins......................................    British             1                 Yes

  Cedar House

  41 Cedar House

  Hamilton HM 12, Bermuda

Angela R. B. Browne..................................    British             1                 Yes

  Cedar Houst

  41 Cedar House

  Hamilton HM 12, Bermuda

Joy F. Thompson......................................    British             1                 Yes

  Cedar Houst

  41 Cedar House

  Hamilton HM 12, Bermuda

</TABLE>

 

do hereby respectively agree to take such number of shares of the Company as may

be allotted to us respectively subscribed, and to satisfy such calls as may be

made by the directors, provisional directors or promoters of the Company in

respect of the shares allotted to us respectively.

 

    3. The Company is to be Exempted Company as defined by the Companies Act

1981.

 

    4. The Company, with the consent of the Minister of Finance, has power to

hold land situate in Bermuda not exceeding   in all, including the following

parcels:

 

    Not applicable.

 

                                       II-1

<PAGE>   59

 

    5. The authorised share capital of the Company is US$12,000.00 divided into

1,200,000 shares of $0.01 each. The minimum subscribed share capital of the

Company is $12,000.00 in United States currency.

 

    6. The objects for which the Company is formed and incorporated are:

 

        (a) To carry on business as a holding company and to acquire and hold

    shares, stocks, debenture stock, bonds, mortgages, obligations and

    securities of any kind issued or guaranteed by any company, corporation or

    undertaking of whatever nature and wherever constituted or carrying on

    business, and shares, stock, debentures, debenture stock, bonds, obligations

    and other securities issued or guaranteed by any government, sovereign

    ruler, commissioners, trust, local authority or other public body, whether

    in Bermuda or elsewhere, and to vary, transpose, dispose of or otherwise

    deal with from time to time as may be considered expedient any of the

    Company's investments for the time being;

 

        (b) To acquire any such shares and other securities as are mentioned in

    the preceding paragraph by subscription, syndicate participation, tender,

    purchase, exchange or otherwise and to subscribe for the same, either

    conditionally or otherwise, and to guarantee the subscription thereof and to

    exercise and enforce all rights and powers conferred by or incident to the

    ownership thereof;

 

        (c) To co-ordinate the administration, policies, management,

    supervision, control, research, planning, trading and any and all other

    activities of any company or companies now or hereafter incorporated or

    acquired which may be or may become a Group Company (which expression, in

    this and the next following paragraphs means a company, wherever

    incorporated, which is or becomes a holding company or a subsidiary of, or

    affiliated with, the Company within the meanings respectively assigned to

    those terms in The Companies Act 1981) or, with the prior written approval

    of the Minister of Finance, any company or companies now or hereafter

    incorporated or acquired with which the Company may be or may become

    associated;

 

        (d) To provide financing and financial investment, management and

    advisory services to any Group Company, which shall include but not be

    limited to granting or providing credit and financial accommodation, lending

    and making advances with or without interest to any Group Company and

    lending to or depositing with any bank funds or other assets to provide

    security (by way of mortgage, charge, pledge, lien or otherwise) for loans

    or other forms of financing granted to such Group Company by such bank;

 

        Provided that the Company shall not be deemed to have the power to act

    as executor or administrator, or as trustee, except in connection with the

    issue of bonds and debentures by the Company or any Group Company or in

    connection with a pension scheme for the benefit of employees or former

    employees of the Company or a Group Company or their respective

    predecessors, or the dependents or connections of such employees or former

    employees; and

 

        (e) the packaging of goods of all kinds;

 

        (f) The buying, selling and dealing in goods of all kinds;

 

        (g) The designing and manufacturing goods of all kinds;

 

        (h) Scientific research including the improvement, discovery and

    development of processes, inventions, patents and designs and the

    construction, maintenance and operation of laboratories and research

    centers;

 

        (i) All forms of engineering;

 

        (j) The acquiring by purchase or otherwise and holding as an investment

    inventions, patents, trade marks, trade names, trade secrets, designs and

    the like;

 

        (k) The buying, selling, hiring, letting and dealing in conveyances of

    any sort;

 

        (l) To acquire by purchase or otherwise and hold, sell, dispose of and

    deal in real property situated outside Bermuda and in personal property of

    all kinds wheresoever situated; and

 

                                       II-2

<PAGE>   60

 

        (m) To enter into any guarantee, contract of indemnity or suretyship and

    to assure, support or secure with our without consideration or benefit the

    performance of any obligations of any person or persons and to guarantee the

    fidelity of individuals filling or about to fill situations of trust or

    confidence.

 

    7. The Company has the following powers:

 

        (a) to borrow and raise money in any currency or currencies and to

    secure or discharge any debt or obligation in any manner and in particular

    (without prejudice to the generality of the foregoing) by mortgages of or

    charges upon all or any part of the undertaking, property and assets

    (present and future) and uncalled capital of the Company or by the creation

    and issue of securities;

 

        (b) to enter into any guarantee, contract of indemnity or suretyship and

    in particular (without prejudice to the generality of the foregoing) to

    guarantee, support or secure, with or without consideration, whether by

    personal obligation or by mortgaging or charging all or any part of the

    undertaking, property and assets (present and future) and uncalled capital

    of the Company or by both such methods or in any other manner, the

    performance of any obligations or commitments of, and the repayment or

    payment of the principal amounts of and any premiums, interest, dividends

    and other moneys payable on or in respect of any securities or liabilities

    of, any person, including (without prejudice to the generality of the

    foregoing) any company which is for the time being a subsidiary or a holding

    company of the Company or another subsidiary of a holding company of the

    Company or otherwise associated with the Company;

 

        (c) to accept, draw, make, create, issue, execute, discount, endorse,

    negotiate and deal in bills of exchange, promissory notes, and other

    instruments and securities, whether negotiable or otherwise.

 

        (d) to sell, exchange, mortgage, charge, let on rent, share of profit,

    royalty or otherwise, grant licences, easements, options, servitudes and

    other rights over, and in any other manner deal with or dispose of, all or

    any part of the undertaking, property and assets (present and future) of the

    Company for any consideration and in particular (without prejudice to the

    generality of the foregoing) for any securities;

 

        (e) to issue and allot securities of the Company for cash or in payment

    or part payment for any real or personal property purchased or otherwise

    acquired by the Company or any services rendered to the Company or as

    security for any obligation or amount (even if less than the nominal amount

    of such securities) or for any other purpose;

 

        (f) to grant pensions, annuities, or other allowances, including

    allowances on death, to any directors, officers or employees or former

    directors, officers or employees of the Company or any company which at any

    time is or was a subsidiary or a holding company or another subsidiary of a

    holding company of the Company or otherwise associated with the Company or

    any predecessor in business of any of them, and to the relations,

    connections or dependants of any such persons, and to other persons whose

    service or services have directly or indirectly been of benefit to the

    Company or whom the Company considers have any moral claim on the Company or

    to their relations connections or dependants, and to establish or support

    any associations, institutions, clubs, schools, building and housing

    schemes, funds and trusts, and to make payment towards insurance or other

    arrangements likely to benefit any such persons or otherwise advance the

    interests of the Company or of its members or for any national, charitable,

    benevolent, educational, social, public, general or useful object;

 

        (g) subject to the provisions of Section 42 of the Companies Act 1981,

    to issue performance shares which at the option of the holders thereof are

    to be liable to be redeemed; and

 

        (h) to purchase its own shares in accordance with the provisions of

    Section 42A of the Companies Act 1981.

 

                                       II-3

<PAGE>   61

 

    Signed by each subscriber in the presence of at least one witness attesting

the signature thereof:

 

    /s/ ALISON R. DYER

------------------------------------------------------

 

    /s/ RUBY L. RAWLINS

------------------------------------------------------

 

    /s/ ANGELA R.B. BROWNE

------------------------------------------------------

 

    /s/ JOY F. THOMPSON

------------------------------------------------------

                                 (Subscribers)

 

    /s/ [ILLEGIBLE]

------------------------------------------------------

 

    /s/ [ILLEGIBLE]

------------------------------------------------------

 

    /s/ [ILLEGIBLE]

------------------------------------------------------

 

    /s/ [ILLEGIBLE]

------------------------------------------------------

                                  (Witnesses)

 

    SUBSCRIBED this 18th day of May 2001.

 

STAMP DUTY (To be affixed)

 

NOT APPLICABLE

 

                                       II-4

<PAGE>   62

 

                                                                       ANNEX III

 

                         AMENDED AND RESTATED BYE-LAWS

 

                                       OF

 

                            COOPER INDUSTRIES, LTD.

 

    I HEREBY CERTIFY that the within written Amended and Restated Bye-laws are a

true copy of the Amended and Restated Bye-laws of COOPER INDUSTRIES, LTD. as

approved at the meeting of the above Company on the     day of            ,

2001.

 

                                            ------------------------------------

                                                          Director

 

                                      III-1

<PAGE>   63

 

                                     INDEX

 

<TABLE>

<CAPTION>

           BYE-LAW                                    SUBJECT

           -------                                    -------

   <C>                      <S>

 

              1-7           -- Share Capital, Rights and Voting

 

                8           -- Transfer of Shares

 

             9-13           -- Transmission of Shares

 

               14           -- Alteration of Capital

 

               15           -- Seal of the Company

 

            16-25           -- General Meetings of Shareholders

 

            26-34           -- Board of Directors

 

               35           -- Committees

 

            36-50           -- Officers

 

               51           -- Accounting Records

 

               52           -- Appointment of Auditor

 

            53-56           -- Indemnity

 

            57-59           -- Fair Price to Shareholders in Business Combinations

 

            60-61           -- Amendments

</TABLE>

 

                                      III-2

<PAGE>   64

 

                        AMENDED AND RESTATED BYE -- LAWS

                                       OF

                            COOPER INDUSTRIES, LTD.

 

                        SHARE CAPITAL, RIGHTS AND VOTING

 

 1. Share Capital and Rights.  The authorized share capital of the Company is

    U.S.$4,100,000 divided into 250,000,000 Class A common shares par value

    U.S.$.01 per share (the "Class A Common Shares"), 150,000,000 Class B common

    shares par value U.S.$.01 per share (the "Class B Common Shares") and

    10,000,000 Preferred Shares par value U.S.$.01 per share (the "Preferred

    Shares").

 

    A. Terms of the Class A Common Shares.

 

       Subject to these Bye-laws, holders of the Class A Common Shares shall:

 

       1. be entitled to one vote for each Class A Common Share held by such

          holder, on the relevant record date, on all matters submitted to a

          vote of the shareholders;

 

       2. be entitled to such dividends and other distributions in cash, shares

          or property of the Company out of assets or funds of the Company

          legally available therefor, as the Board of Directors may from time to

          time declare; and

 

       3. generally be entitled to enjoy all of the rights attaching to shares

          under the Companies Act (as used herein, the "Companies Act" means

          every Bermuda Statute from time to time in force concerning companies

          insofar as the same applies to the Company).

 

    B. Terms of the Class B Common Shares.

 

       Subject to these Bye-laws, the holders of the Class B Common Shares shall

       have all of the rights of the holders of the Class A Common Shares,

       except that:

 

       1. the holders of the Class B Common Shares shall not be entitled to

          vote, except as to matters for which the Companies Act specifically

          requires voting rights for otherwise nonvoting shares;

 

       2. if, at any time, a dividend or other distribution in cash, shares or

          other property is declared or paid on the Class A Common Shares, a

          like dividend or other distribution in kind and amount shall also be

          declared and paid on the Class B Common Shares;

 

       3. the holders of the Class B Common Shares shall have the right to

          convert their shares into Class A Common Shares on a one-for-one basis

          in the following circumstances:

 

         (a) to satisfy the obligations of the Company or its subsidiaries or

             affiliated companies to issue Class A Common Shares with regard to

             the exercise of share options or grants of shares pursuant to share

             incentive plans, employee share purchase plans or other stock

             compensation plans sponsored by the Company or its subsidiaries or

             affiliated companies; or

 

         (b) as consideration for any acquisition of stock or assets of a third

             party;

 

       4. in the event of transfer of Class B Common Shares to any person other

          than a wholly-owned subsidiary of the Company, the Class B Common

          Shares so transferred shall automatically be converted into Class A

          Common Shares on a one-for-one basis; and

 

       5. the holders of the Class B Common Shares shall have the right upon

          written notice to require the Company, subject to section 42A of the

          Companies Act, to purchase for cash the number of Class B Common

          Shares stated in such notice at the fair market value per share of the

          Class A Common Shares on the date of such notice. Any such purchase

          shall be settled within 180 calendar days of the day such notice is

          given and shall include simple interest from the date of the notice to

          but not including the payment date at a rate equal to the prime rate

          charged by the Chase Manhattan Bank or its successor. For purposes of

          this paragraph, the fair market value per share of the Class A Common

          Shares, as of any date, means the average of the high and low sales

          prices of a share of the Class A Common Shares as reported on the New

          York Stock Exchange composite tape on the

                                      III-3

<PAGE>   65

 

          applicable date, or if no sales of the Class A Common Shares were made

          on the Stock Exchange on that date, the average of the high and low

          prices as reported on the composite tape for the most recent preceding

          day on which sales of the Class A Common Shares were made. No

          dividends shall be declared on any Class B Common Shares for which

          notice has been given under this paragraph.

 

    C. Rights of Common Shares Upon Issuance of Additional Shares.  For the

       purposes of these Bye-laws, the rights attaching to any of the Class A

       Common Shares or the Class B Common Shares shall be deemed not to be

       altered by the allotment or issue by the Company of other shares ranking

       in priority for payment of dividends or with respect to capital, or which

       confer on the holders voting rights more favourable than those conferred

       on the Class A Common Shares or Class B Common Shares, and shall not

       otherwise be deemed to be altered by the creation or issue of further

       shares ranking pari pasu with such Common Shares, or by the purchase or

       redemption by the Company of any of its own shares.

 

    D. Preferred Shares.  The Board of Directors is hereby expressly authorized

       to provide for the issuance of all or any of the Preferred Shares in one

       or more classes or series, and to fix for each such class or series such

       voting power, full or limited, or no voting power, and such designations,

       preferences and relative, participating, optional or other special rights

       and such qualifications, limitations or restrictions thereof, as shall be

       stated and expressed in the resolution or resolutions adopted by the

       Board of Directors providing for the issuance of such class or series,

       including, without limitation, the authority to provide that any such

       class or series may be: (a) subject to redemption at the option of the

       Company or the holders, or both, at such time or times and at such price

       or prices; (b) entitled to receive dividends (which may be cumulative or

       non-cumulative) at such rates, on such conditions, and at such times, and

       payable in preference to, or in such relation to, the dividends payable

       on any other class or classes or any other series; (c) entitled to such

       rights upon the dissolution of, or upon any distribution of the assets

       of, the Company; or (d) convertible into, or exchangeable for, shares of

       any other class or classes of shares, or of any other series of the same

       or any other class or classes of shares, of the Company at such price or

       prices or at such rates of exchange and with such adjustments; all as may

       be stated in such resolution or resolutions.

 

 2. Options and Warrants.  The Board of Directors is authorized, from time to

    time, in its discretion, to grant such persons, for such periods and upon

    such terms as the Board deems advisable, options to purchase such number of

    shares of any class or classes or of any series of any class as the Board

    may deem advisable, and to cause warrants or other appropriate instruments

    evidencing such options to be issued.

 

 3. Purchase of Shares by Company.  The Board of Directors may, at its

    discretion, authorize the purchase by the Company of its own shares of any

    class upon such terms as the Board may determine, at any price (whether at

    par or above or below par), provided always that such purchase is effected

    in accordance with the provisions of the Companies Act.

 

 4. No Preemptive Rights.  No holder of shares of any class or other securities

    of the Company shall as such holder have any preemptive right to purchase

    shares of any class or other securities of the Company or shares or other

    securities convertible into or exchangeable for or carrying rights or

    options to purchase shares of any class of the Company, whether such shares

    or other securities are now or hereafter authorized, which at any time may

    be proposed to be issued by the Company or subjected to rights or options to

    purchase granted by the Company.

 

 5. Power to Issue Shares.  Subject to these Bye-laws, the Board of Directors

    shall have power to issue any authorized and unissued shares of the Company

    on such terms and conditions as it may determine. The Company may from time

    to time issue its shares in fractional denominations and deal with such

    fractions to the same extent as its whole shares and shares in fractional

    denominations shall have in proportion to the respective fractions

    represented thereby all of the rights of whole shares including but not

    limited to the right to vote, to receive dividends and distributions and to

    participate in a winding up.

 

 6. Dividends and Other Payments.  The Board of Directors may from time to time

    declare dividends or distributions out of assets or funds of the Company

    legally available therefor, including distributions out of contributed

    surplus, to be paid to the shareholders according to their rights and

    interests including such

 

                                      III-4

<PAGE>   66

 

    interim dividends as appear to the Board to be justified by the position of

    the Company. The Company may deduct from any dividend, distribution or other

    monies payable to a shareholder by the Company on or in respect of any

    shares all sums of money (if any) presently payable by the shareholder to

    the Company on account of calls or otherwise in respect of shares of the

    Company. No dividend, distribution or other monies payable by the Company on

    or in respect of any share shall bear interest against the Company.

 

 7. Certificates.  At the discretion of the Board of Directors or the Secretary,

    the Company may issue shares including Class A Common Shares, Class B Common

    Shares and Preferred Shares in uncertificated form upon the initial issuance

    of such shares or thereafter upon surrender of the certificates representing

    such shares.

 

                               TRANSFER OF SHARES

 

 8. Transfer of Shares.  Subject to the Companies Act and these Bye-laws, any

    shareholder may transfer all or any of the holder's shares by an instrument

    of transfer in the usual common form or in any other form which the Board of

    Directors or the Company's transfer agent may approve. The instrument of

    transfer of a share shall be signed by or on behalf of the transferor and

    where any share is not fully paid, the instrument of transfer shall also be

    signed by or on behalf of the transferee. The Board may decline to register

    any transfer unless:

 

    (a) the instrument of transfer is duly stamped and lodged with the Company,

        at such place as the Board shall appoint for the purpose, accompanied by

        the certificate for the shares (if any has been issued) to which it

        relates, and such other evidence as the Board may reasonably require to

        show the right of the transferor to make the transfer;

 

    (b) the instrument of transfer is in respect of only one class of share; and

 

    (c) where applicable, the permission of the Bermuda Monetary Authority with

        respect thereto has been obtained.

 

    Subject to any directions of the Board from time to time in force, the

    Secretary may exercise the powers and discretions of the Board under this

    Bye-law 8.

 

                             TRANSMISSION OF SHARES

 

 9. Representative of a Deceased Shareholder.  If a shareholder dies, the

    survivor or survivors, where the deceased was a joint holder, and the legal

    personal representative, where the deceased was a sole holder, shall be the

    only person recognised by the Company as having any title to the deceased

    holder's shares. Nothing herein contained shall release the estate of a

    deceased holder from any liability in respect of any share held by such

    deceased holder solely or jointly with other persons. For the purpose of

    this Bye-law, the legal personal representative means the person to whom

    probate or letters of administration has or have been granted, or failing

    any such person, such other person as the Board of Directors may in it is

    absolute discretion determine to be the person recognised by the Company for

    the purpose of this Bye-law.

 

10. Registration on Death or Transfer by Operation of Law.  Any person becoming

    entitled to a share in consequence of the death of a shareholder or

    otherwise by operation of applicable law, may be registered as a shareholder

    or may elect to nominate some person to be registered as a transferee of

    such share upon such evidence being produced as may from time to time be

    required by the Board of Directors or the Company's transfer agent. In

    either case, the Company shall have the same right to decline or suspend

    registration as it would have had in the case of a transfer of the share by

    that shareholder before such shareholder's death or transfer by operation of

    law, as the case may be.

 

11. Dividend Entitlement of Transferee.  A person becoming entitled to a share

    in consequence of the death of a shareholder or otherwise by operation of

    applicable law shall (upon such evidence being produced as may from time to

    time be required by the Board of Directors as to such entitlement) be

    entitled to receive and may give a discharge for any dividends or other

    monies payable in respect of the share, but such person

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    shall not be entitled in respect of the share to receive notices of or to

    attend or vote at general meetings of the Company (whether annual or

    special) or, except as aforesaid, to exercise in respect of the share any of

    the rights or privileges of a shareholder until such person shall have

    become registered as the holder thereof. The Board may at any time give

    notice requiring such person to elect either to be registered himself or to

    transfer the share and, if the notice is not complied with within sixty

    days, the Board may thereafter withhold payment of all dividends and other

    moneys payable in respect of the shares until the requirements of the notice

    have been complied with.

 

12. Ownership of Shares.  Except as ordered by a court of competent jurisdiction

    or as required by law, no person shall be recognised by the Company as

    holding any share upon trust and the Company shall not be bound by or

    required in any way to recognise (even when having notice thereof) any

    equitable, contingent, future or partial interest in any share or any

    interest in any fractional part of a share or (except only as otherwise

    provided in these Bye-laws or by law) any other right in respect of any

    share except an absolute right to the entirety thereof in the registered

    holder.

 

13. Exercise of Power by Secretary.