Bye-Laws – Global Crossing Ltd.
B Y E - L A W S
of
GLOBAL CROSSING LTD.
I HEREBY CERTIFY that the within written amended and restated Bye-Laws are a
true copy of the Bye-Laws of Global Crossing Ltd. as adopted by the Shareholders
at the Adjournment of the 1999 Annual General Meeting of the Company held on
14th October, 1999 in substitution of the Bye-laws adopted on 22nd September,
1999.
Resident Secretary
I N D E X
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BYE-LAW SUBJECT PAGE
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1 Interpretation 1-6
2 Registered Office 6
3-4 Share Rights 6,7
5-6 Modification of Rights 8,9
7-9 Shares 9,10
10-13 Certificates 10,11
14-17 Lien 11-13
18-23 Calls on Shares 14,15
24-30 Forfeiture of Shares 15-17
31-32 Register of Shareholders 17
33 Register of Directors and Officers 17
34-37 Transfer of Shares 18-21
38-41 Transmission of Shares 21,22
42-44 Increase of Capital 23
45-46 Alteration of Capital 23,24
47-48 Reduction of Capital 24,25
49 General Meetings and Written Resolutions 25,26
50-52 Notice of General Meetings 26,27
53 General Meetings at more than one place 27,28
54-60 Proceedings at General Meetings 28-30
61-71 Voting 30-35
72-77 Proxies and Corporate Representatives 36-38
78-84 Appointment and Removal of Directors 38-42
85 Resignation and Disqualification of Directors 42
86-89 Alternate Directors 42,43
BYE-LAW SUBJECT
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90 Directors' Fees and Additional
Remuneration and Expenses
91 Directors' Interests 44
92-94 Powers and Duties of the Board 45
95 Gratuities, Pensions and Insurance 45-48
96-99 Delegation of the Board's Powers 48
100-111 Proceedings of the Board 49-51
112 Officers 51-54
113-115 Executive Directors 54
116 Minutes 55
117-118 Secretary and Resident Representative 56
119 The Seal 56
120-126 Dividends and Other Payments 57
127 Reserves 57-60
128-129 Capitalisation of Profits 60
130 Record Dates 60,61
131-133 Accounting Records 61
134 Audit 62
135-137 Service of Notices and Other Documents 62
138 Destruction of Documents 63,64
139 Untraced Shareholders 64,65
140 Winding Up 65-67
141-145 Indemnity 67
146 Amalgamation 68-70
147 Continuation 70
148 Alteration of Bye-Laws 70,71
71,72
B Y E - L A W S
of
GLOBAL CROSSING LTD.
INTERPRETATION
1. (1) In these Bye-Laws unless the context otherwise requires: -
"Affiliates or affiliates" means any other person directly or
indirectly controlling, controlled by or under direct or
indirect common control with any other person. For purposes of
this definition, "control" (including, with correlative
meanings, the terms "controlling" "controlled by" and "under
common control with"), as used with respect to any person,
shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management or
policies of such person, whether through the ownership of
voting securities, by agreement or otherwise; provided that
beneficial ownership of 10% or more of the voting stock of a
person shall be deemed to be control;
"Bermuda" means the Islands of Bermuda;
"Board" means the Board of Directors of the Company or the
Directors present at a meeting of Directors at which there is
a quorum;
"CIBC" means Global Crossing Ltd., LDC, Canadian Imperial Bank
of Commerce, CIBC Wood Gundy Capital (SFC) Inc., CIBC WG
Argosy Fund 3 L.P., Co-Investment Merchant Fund LLC, CIBC
Capital Partners (Cayman) No. 1, any Affiliates of Canadian
Imperial Bank of Commerce and all Permitted Transferees (as
defined in the Stockholders Agreement) of each of the
foregoing;
"the Code" means the United States Internal Revenue Code of
1986, as amended from time to time;
"common shares" means all the authorised common shares of par
value US$0.01 each in the capital of the Company;
"the Companies Acts" means every Bermuda statute from time to
time in force concerning companies insofar as the same applies
to the Company;
"Company" means the company incorporated in Bermuda under the
name of Global Crossing Holdings Ltd. (but now named Global
Crossing Ltd.) on 18 March, 1998;
"Continental" means Continental Casualty Company, Continental
Casualty Company on behalf of its subaccount Designated High
Yield, Global Crossing Trust 1998 and Global Crossing
Partners;
"Controlled Shares" in reference to any Shareholder means:
(i) all common shares directly, indirectly, or
constructively owned by such Shareholders within the
meaning of Section 958 of the Code and the Treasury
regulations promulgated thereunder; and
(ii) all common shares directly or indirectly owned as a
result of voting power held or shared by any Person
or "group" of Persons within the meaning of Section
13(d) of the Exchange Act (the "13(d) Formula").
For the purposes of the application of the 13(d) Formula only,
"Person" means any individual, firm, partnership, company,
limited liability company, association or other entity or any
"group" of Persons with respect to the exercise of voting
power within the meaning of Section 13(d) of the Exchange Act;
"the Exchange Act" means the United States Securities Exchange
Act of 1934 as amended, and the rules and regulations
promulgated thereunder;
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"Fair Market Value" means, with respect to a repurchase of any
Shares in accordance with these Bye-Laws, (i) if such Shares
are listed on a United States national securities exchange,
the average closing sale price of such Shares on such
exchange, or, if such Shares are listed on more than one such
exchange, the average closing sale price of the Shares on the
principal securities exchange on which such Shares are then
traded, or, if such Shares are not then listed on a United
States national securities exchange but are traded in the
over-the-counter market, the average of the latest bid and
asked quotations for such Shares in such market, in each case
for the last five trading days immediately preceding the day
on which notice of the repurchase of such Shares is sent
pursuant to these Bye-Laws or (ii) if no such closing sales
prices or quotations are available because such Shares are not
publicly traded or otherwise, the fair value of such Shares as
determined by one independent nationally recognised investment
banking firm chosen by the Company and reasonably satisfactory
to the Shareholder whose shares are to be so repurchased by
the Company. The calculation of the Fair Market Value of the
Shares made by such appointed investment banking firm shall be
final and the fees and expenses stemming from such calculation
shall be borne by the Company or its assignee, as the case may
be. The Fair Market Value of any interest in Shares other than
sole, direct ownership shall be determined by the Company on
the basis of the Fair Market Value of the related Shares;
"GKW" means GKW Unified Holdings, LLC;
"MR Co." means MR Co. Inc.;
"Officer" means a person appointed by the Board pursuant to
Bye-Law 112 of these Bye-Laws and shall not include an auditor
of the Company;
"Pacific Capital" means Pacific Capital Group Inc.;
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"paid up" means paid up or credited as paid up;
"Register" means the Register of Shareholders of the Company;
"Registered Office" means the registered office for the time
being of the Company;
"Repurchase Price" means, with respect to any Shares (or
interest therein), the lesser of (x) the Fair Market Value of
such Shares (or interest therein) on the date the Company
sends the Repurchase Notice and (y) the price paid for such
Shares (or interest therein) by the Shareholder whose Shares
(or interest therein) are to be repurchased, less, in each
case, an amount equal to the amount of all dividends received
or receivable on, or in respect of, such Shares by such
Shareholder;
"Resident Representative" means the person (or, if permitted
in accordance with the Companies Acts, the company) appointed
to perform the duties of resident representative set out in
the Companies Acts and includes any assistant or deputy
Resident Representative appointed by the Board to perform any
of the duties of the Resident Representative;
"Resolution" means a resolution of the Shareholders or, where
required, of a separate class or separate classes of
Shareholders, adopted either in general meeting or by written
resolution, in accordance with the provisions of these
Bye-Laws;
"Seal" means the common seal of the Company and includes any
duplicate thereof;
"Secretary" includes a temporary or assistant or deputy
Secretary and any person appointed by the Board to perform any
of the duties of the Secretary;
"Shares" means all shares in the capital of the Company
whether preferred or common;
"Shareholder" means a shareholder or member of the Company;
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"Stock Exchange" means The Nasdaq National Stock Market, The
Bermuda Stock Exchange or any other stock exchange on which
shares of the Company may be listed from time to time;
"Stockholder Agreement" means the Stockholders Agreement dated
12 August, 1998 and entered into among the Company, CIBC,
Pacific Capital, GKW, Continental, Winnick and MR Co. and the
other parties thereto;
"Specified Place" means the place, if any, specified in the
notice of any meeting of the shareholders, or adjourned
meeting of the shareholders, at which the chairman of the
meeting shall preside;
"these Bye-Laws" means these Bye-Laws in their present form or
as from time to time amended;
"United States person" means (i) an individual who is a
citizen or resident of the United States of America, its
territories or possessions and all areas subject to its
jurisdiction including the Commonwealth of Puerto Rico
("United States"), (ii) a corporation or partnership created
or organised in or under the laws of the United States or any
political subdivision thereof, (iii) an estate, the income of
which is subject to United States federal income taxation
regardless of its source, and (iv) a trust which is subject to
the supervision of a court within the United States and the
control of United States Fiduciary as described in Section
7701(a)(30) of the Code; and "Winnick" means Gary Winnick.
(2) For the purposes of these Bye-Laws a corporation shall be
deemed to be present in person if its representative duly
authorised pursuant to the Companies Acts is present.
(3) Words importing only the singular number include the plural
number and vice versa.
(4) Words importing only the masculine gender include the feminine
and neuter genders respectively.
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(5) Words importing persons include companies or associations or
bodies of persons, whether corporate or un-incorporate.
(6) Reference to writing shall include typewriting, printing,
lithography, photography and other modes of representing or
reproducing words in a legible and non-transitory form.
(7) Any words or expressions defined in the Companies Acts in
force at the date when these Bye-Laws or any part thereof are
adopted shall bear the same meaning in these Bye-Laws or such
part (as the case may be).
(8) In these Bye-Laws, (a) powers of delegation shall not be
restrictively construed but the widest interpretation shall be
given thereto, (b) the word "Board" in the context of the
exercise of any power contained in these Bye-Laws includes any
committee consisting of one or more Directors, any Director
holding executive office and any local or divisional Board,
manager or agent of the Company to which or, as the case may
be, to whom the power in question has been delegated, (c) no
power of delegation shall be limited by the existence of any
other power of delegation, and (d) except where expressly
provided by the terms of delegation, the delegation of a power
shall not exclude the concurrent exercise of that power by any
other body or person who is for the time being authorised to
exercise it under these Bye-Laws or under another delegation
of the powers.
REGISTERED OFFICE
2. The Registered Office shall be at such place in Bermuda as the Board
shall from time to time appoint.
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SHARE RIGHTS
3. (1) Subject to any special rights conferred on the holders of any
share or class of shares, any share in the Company may be
issued with or have attached thereto such preferred, deferred,
qualified or other special rights or such restrictions,
whether in regard to dividends, voting, return of capital or
otherwise, as the Company may by Resolution determine or, if
there has not been any such determination or so far as the
same shall not make specific provision, as the Board may
determine.
(2) If the Company creates, pursuant to Bye-Law 3(1) or otherwise,
any new class or series of voting shares, the Company shall
"impose voting restrictions on any such new class or series of
shares as though such class or series of shares were
additional common shares subject to Bye-Law 63.
4. (1) Subject to the Companies Acts, any preference shares may, with
the sanction of a resolution of the Board, be issued on terms:
(a) that they are to be redeemed on the happening of a
specified event or on a given date; and/or,
(b) that they are liable to be redeemed at the option
of the Company; and/or,
(c) if authorised by the memorandum/Incorporating Act of
the Company, that they are liable to be redeemed at
the option of the holder.
The terms and manner of redemption shall be provided for in
such resolution of the Board and shall be attached to but
shall not form part of these Bye-Laws.
(2) The Board may, at its discretion and without the sanction of a
Resolution, authorise the purchase by the Company of its own
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shares, of any class, at any price (whether at par or above or
below par), and so that any shares to be so purchased may be
selected in any manner whatsoever, upon such terms as the
Board may in its discretion determine; PROVIDED ALWAYS that
such purchase is effected in accordance with the provisions of
the Companies Acts.
MODIFICATION OF RIGHTS
5. Subject to the Companies Acts and except as otherwise set forth in
these Bye-Laws, all or any of the special rights for the time being
attached to any class of common shares for the time being issued may
from time to time (whether or not the Company is being wound up) be
altered or abrogated with the sanction of a resolution passed at a
separate general meeting of the holders of common shares of that class,
voting in person or by proxy and representing at least a majority of
the votes cast by holders of common shares of that class at such
separate general meeting. To any such separate general meeting, all the
provisions of these Bye-Laws as to general meetings of the Company
shall mutatis mutandis apply, but so that the necessary quorum shall be
two or more persons holding or representing by proxy shares of the
relevant class representing a majority of the votes that may be cast by
all holders of shares of that class, that every holder of shares of the
relevant class shall be entitled on a poll to the number of votes for
every such share held by him determined in accordance with Bye-Laws 62
and 63 and that any holder of shares of the relevant class present in
person or by proxy may demand a poll; provided, however, that if the
Company or a class of common shares shall have only one Shareholder,
one Shareholder present in person or by proxy shall constitute the
necessary quorum. Subject to the Companies Acts and except as otherwise
set forth in these Bye-Laws, all or any of the special rights for the
time being attached to any class or series of preferred shares for the
time being issued may from time to time (whether or
8
not the Company is being wound up) be altered or abrogated with the
requisite consent or vote of the holders of such class or series as
will be set forth in a schedule to the Bye-Laws relating to such class
or series at the time when such class or series is issued.
6. For the purposes of this Bye-Law, unless otherwise expressly provided
by the rights attached to any shares or class of shares, those rights
shall be deemed to be altered by the reduction of the capital paid up
on those shares otherwise than by a purchase or redemption by the
Company of its own shares and by the allotment of other shares ranking
in priority for payment of a dividend or in respect of capital or which
confer on the holders voting rights more favourable than those
conferred by such first mentioned shares but shall not otherwise be
deemed to be altered by the creation or issue of further shares ranking
pari passu therewith or by the purchase or redemption by the Company of
any of its own shares.
SHARES
7. Subject to the provisions of these Bye-Laws, the unissued shares of the
Company (whether forming part of the original capital or any increased
capital) shall be at the disposal of the Board, which may offer, allot,
grant options over or otherwise dispose of them to such persons, at
such times and for such consideration and upon such terms and
conditions as the Board may determine.
8. The Board may in connection with the issue of any shares exercise all
powers of paying commission and brokerage conferred or permitted by
law. Subject to the provisions of the Companies Acts, any such
commission or brokerage may be satisfied by the payment of cash or by
the allotment of fully or partly paid shares or partly in one way and
partly in the other.
9
9. Except as ordered by a court of competent jurisdiction or as required
by law or as specifically provided in these Bye-Laws, 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.
CERTIFICATES
10. The preparation, issue and delivery of certificates shall be governed
by the Companies Acts. In the case of a share held jointly by several
persons, delivery of a certificate to one of several joint holders
shall be sufficient delivery to all.
11. If a share certificate is defaced, lost or destroyed it may be replaced
without fee but on such terms (if any) as to evidence and indemnity and
to payment of the costs and out of pocket expenses of the Company in
investigating such evidence and preparing such indemnity as the Board
may think fit and, in case of defacement, on delivery of the old
certificate to the Company.
12. All certificates for share or loan capital or other securities of the
Company (other than letters of allotment, scrip certificates and other
like documents) shall, except to the extent that the terms and
conditions for the time being relating thereto otherwise provide, be
issued under the Seal. The Board may by resolution determine, either
generally or in any particular case, that any signatures on any such
certificates need not be autographic but may be affixed to such
certificates by some mechanical means or may be printed
10
thereon or that such certificates need not be signed by any persons, or
may determine that a representation of the Seal may be printed on any
such certificates.
13. Nothing in these Bye-Laws shall prevent title to any securities of the
Company from being evidenced and/or transferred without a written
instrument in accordance with regulations made from time to time in
this regard under the Companies Acts, and the Board shall have power to
implement any arrangements which it may think fit for such evidencing
and/or transfer which accord with those regulations.
LIEN
14. The Company shall have a first and paramount lien on every share (not
being a fully paid share) for all monies, whether presently payable or
not, called or payable, at a date fixed by or in accordance with the
terms of issue of such share in respect of such share. The Company's
lien on a share shall extend to all dividends payable thereon. The
Board may at any time, either generally or in any particular case,
waive any lien that has arisen or declare any share to be wholly or in
part exempt from the provisions of this Bye-Law.
15. The Company may sell, in such manner as the Board may think fit, any
share on which the Company has a lien but no sale shall be made unless
some sum in respect of which the lien exists is presently payable nor
until the expiration of 14 days after a notice in writing, stating and
demanding payment of the sum presently payable and giving notice of the
intention to sell in default of such payment, has been served on the
holder for the time being of the share.
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16. The net proceeds of sale by the Company of any shares on which it has a
lien shall be applied in or towards payment or discharge of the debt or
liability in respect of which the lien exists so far as the same is
presently payable, and any residue shall (subject to a like lien for
debts or liabilities not presently payable as existed upon the share
prior to the sale) be paid to the person who was the holder of the
share immediately before such sale. For giving effect to any such sale
the Board may authorise some person to transfer the share sold to the
purchaser thereof. The purchaser shall be registered as the holder of
the share and he shall not be bound to see to the application of the
purchase money, nor shall his title to the share be affected by any
irregularity or invalidity in the proceedings relating to the sale.
17. Whenever any law for the time being of any country, state or place
imposes or purports to impose any immediate or future or possible
liability upon the Company to make any payment or empowers any
government or taxing authority or government official to require the
Company to make any payment in respect of any shares registered in any
of the Company's registers as held either jointly or solely by any
Shareholder or in respect of any dividends, bonuses or other monies due
or payable or accruing due or which may become due or payable to such
Shareholder by the Company on or in respect of any shares registered as
aforesaid or for or on account or in respect of any Shareholder and
whether in consequence of:-
(a) the death of such Shareholder;
(b) the non-payment of any income tax or other tax by such
Shareholder;
(c) the non-payment of any estate, probate, succession,
death, stamp, or other duty by the executor or
administrator of such Shareholder or by or out of his
estate;
(d) any other act or thing;
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in every such case (except to the extent that the rights conferred upon
holders of any class of shares render the Company liable to make
additional payments in respect of sums withheld on account of the
foregoing):-
(i) the Company shall be fully indemnified by such Shareholder or
his executor or administrator from all liability;
(ii) the Company shall have a lien upon all dividends and other
monies payable in respect of the shares registered in any of
the Company's registers as held either jointly or solely by
such Shareholder for all monies paid or payable by the Company
in respect of such shares or in respect of any dividends or
other monies as aforesaid thereon or for or on account or in
respect of such Shareholder under or in consequence of any
such law together with interest at the rate of fifteen percent
per annum thereon from the date of payment to date of
repayment and may deduct or set off against such dividends or
other monies payable as aforesaid any monies paid or payable
by the Company as aforesaid together with interest as
aforesaid;
(iii) the Company may recover as a debt due from such Shareholder or
his executor or administrator wherever constituted any monies
paid by the Company under or in consequence of any such law
and interest thereon at the rate and for the period aforesaid
in excess of any dividends or other monies as aforesaid then
due or payable by the Company; and
(iv) the Company may if any such money is paid or payable by it
under any such law as aforesaid refuse to register a transfer
of any shares by any such Shareholder or his executor or
administrator until such money and interest as aforesaid is
set off or deducted as aforesaid or in case the same exceeds
the amount of any such dividends or other
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monies as aforesaid then due or payable by the Company until
such excess is paid to the Company.
Subject to the rights conferred upon the holders of any class of
shares, nothing herein contained shall prejudice or affect any right or
remedy which any law may confer or purport to confer on the Company and
as between the Company and every such Shareholder as aforesaid, his
executor, administrator and estate wheresoever constituted or situate,
any right or remedy which such law shall confer or purport to confer on
the Company shall be enforceable by the Company.
CALLS ON SHARES
18. The Board may from time to time make calls upon the Shareholders in
respect of any monies unpaid on their shares (whether on account of the
par value of the shares or by way of premium) and not by the terms of
issue thereof made payable at a date fixed by or in accordance with
such terms of issue, and each Shareholder shall (subject to the Company
serving upon him at least fourteen days notice specifying the time or
times and place of payment) pay to the Company at the time or times and
place so specified the amount called on his shares. A call may be
revoked or postponed as the Board may determine.
19. A call may be made payable by instalments and shall be deemed to have
been made at the time when the resolution of the Board authorising the
call was passed.
20. The joint holders of a share shall be jointly and severally liable to
pay all calls in respect thereof.
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21. If a sum called in respect of the share shall not be paid before or on
the day appointed for payment thereof the person from whom the sum is
due shall pay interest on the sum from the day appointed for the
payment thereof to the time of actual payment at such rate as the Board
may determine, but the Board shall be at liberty to waive payment of
such interest wholly or in part.
22. Any sum which, by the terms of issue of a share, becomes payable on
allotment or at any date fixed by or in accordance with such terms of
issue, whether on account of the nominal amount of the share or by way
of premium, shall for all the purposes of these Bye-Laws be deemed to
be a call duly made, notified and payable on the date on which, by the
terms of issue, the same becomes payable and, in case of non-payment,
all the relevant provisions of these Bye-Laws as to payment of
interest, forfeiture or otherwise shall apply as if such sum had become
payable by virtue of a call duly made and notified.
23. The Board may on the issue of shares differentiate between the
allottees or holders as to the amount of calls to be paid and the times
of payment.
FORFEITURE OF SHARES
24. If a Shareholder fails to pay any call or instalment of a call on the
day appointed for payment thereof, the Board may at any time thereafter
during such time as any part of such call or instalment remains unpaid
serve a notice on him requiring payment of so much of the call or
instalment as is unpaid, together with any interest which may have
accrued.
25. The notice shall name a further day (not being less than 14 days from
the date of the notice) on or before which, and the place where, the
payment required by the notice is to be made and shall state that, in
the event of non-
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payment on or before the day and at the place appointed, the shares in
respect of which such call is made or instalment is payable will be
liable to be forfeited. The Board may accept the surrender of any share
liable to be forfeited hereunder and, in such case, references in these
Bye-Laws to forfeiture shall include surrender.
26. If the requirements of any such notice as aforesaid are not complied
with, any share in respect of which such notice has been given may at
any time thereafter, before payment of all calls or instalments and
interest due in respect thereof has been made, be forfeited by a
resolution of the Board to that effect. Such forfeiture shall include
all dividends declared in respect of the forfeited shares and not
actually paid before the forfeiture.
27. When any share has been forfeited, notice of the forfeiture shall be
served upon the person who was before forfeiture the holder of the
share; but no forfeiture shall be in any manner invalidated by any
omission or neglect to give such notice as aforesaid.
28. A forfeited share shall be deemed to be the property of the Company and
may be sold, re-offered or otherwise disposed of either to the person
who was, before forfeiture, the holder thereof or entitled thereto or
to any other person upon such terms and in such manner as the Board
shall think fit, and at any time before a sale, re-allotment or
disposition the forfeiture may be cancelled on such terms as the Board
may think fit.
29. A person whose shares have been forfeited shall thereupon cease to be a
Shareholder in respect of the forfeited shares but shall,
notwithstanding the forfeiture, remain liable to pay to the Company all
monies which at the date of forfeiture were presently payable by him to
the Company in respect of the shares with interest thereon at such rate
as the Board may determine from
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the date of forfeiture until payment, and the Company may enforce
payment without being under any obligation to make any allowance for
the value of the shares forfeited.
30. An affidavit in writing that the deponent is a Director of the Company
or the Secretary and that a share has been duly forfeited on the date
stated in the affidavit shall be conclusive evidence of the facts
therein stated as against all persons claiming to be entitled to the
share. The Company may receive the consideration (if any) given for the
share on the sale, re-allotment or disposition thereof and the Board
may authorise some person to transfer the share to the person to whom
the same is sold, re-allotted or disposed of, and he shall thereupon be
registered as the holder of the share and shall not be bound to see to
the application of the purchase money (if any) nor shall his title to
the share be affected by any irregularity or invalidity in the
proceedings relating to the forfeiture, sale, re-allotment or disposal
of the share.
REGISTER OF SHAREHOLDERS
31. The Company shall establish and maintain the Register in the manner
prescribed by the Companies Acts. Unless the Board otherwise
determines, the Register shall be open to inspection in the manner
prescribed by the Companies Acts between 9.00 a.m. and 5.00 p.m. in
Bermuda, on every working day. Unless the Board so determines, no
Shareholder or intending Shareholder shall be entitled to have entered
in the Register any indication of any trust or any equitable,
contingent, future or partial interest in any share or any interest in
any fractional part of a share and if any such entry exists or is
permitted by the Board it shall not be deemed to abrogate any of the
provisions of Bye-Law 9.
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32. Subject to the provisions of the Companies Acts, the Company may keep
one or more overseas or branch registers in any place, and the Board
may make, amend and revoke any such regulations as it may think fit
respecting the keeping of such registers.
REGISTER OF DIRECTORS AND OFFICERS
33. The Company shall establish and maintain a register of the Directors
and Officers of the Company as required by the Companies Acts. The
register of Directors and Officers shall be open to inspection in the
manner prescribed by the Companies Acts between 9:00 a.m. and 5:00 p.m.
in Bermuda on every working day.
TRANSFER OF SHARES
34. (1) Subject to the Companies Acts, to the provisions of
Bye-Laws 34(2) and 34(3) and to such of the restrictions
contained in these Bye-Laws as may be applicable, any
Shareholder may transfer all or any of his shares by an
instrument of transfer in the usual common form or in any
other form which the Board may approve.
(2) Any transfer of shares (or any interest therein) that results
in (i) any Shareholder (regardless of whether such Shareholder
is a natural person) (other than Pacific Capital, GKW, CIBC,
Continental or MR Co., or their Affiliates or, solely upon a
foreclosure on the Shares constituting collateral for a loan,
any bona fide third party lender to any of them) beneficially
owning (within the provisions of Section 13(d) of the Exchange
Act), directly or indirectly, Controlled Shares in excess of
the Maximum Percentage of the outstanding common
18
shares of the Company, or (ii) in the case of any Shareholder
who is a natural person, any such Shareholder beneficially
owning, directly, indirectly or constructively (within the
meaning of Section 544 of the Code and Treasury Regulations
promulgated thereunder) common shares in excess of the Maximum
Percentage of the outstanding common shares of the Company, in
either case without the approval of a majority of the members
of the Board and without the approval of a majority of the
votes cast by Shareholders at a General Meeting called to
approve that transfer, shall not be registered in the share
register of the Company and shall be void and of no effect.
(3) The restrictions on transfer authorised or imposed by these
Bye-Laws shall not be imposed in any circumstances in a way
that would interfere with the settlement of trades or
transactions entered into through the facilities of a Stock
Exchange; provided, however, that the Company may decline to
register transfers in accordance with these Bye-Laws and
resolutions of the Board after a settlement has taken place.
(4) For the purposes of this Bye-Law 34, "Maximum Percentage"
means (x) in the case of a natural person, 5% measured by vote
or value, and (y) in the case of any Shareholder (other than a
natural person) or any group (as used in Section 13(d) of the
Exchange Act), 9.5% measured by vote or value.
(5) Subject to Section 42(A) of the Companies Act 1981, upon the
occurrence of any transfer or purported transfer of Shares (or
any interest therein) in violation of Bye-Law 34(2), the
Company will have the option, but not the obligation, to
repurchase from the transferee all or part of such Shares (or
interest therein) for immediately available funds in an amount
equal to the Repurchase Price; provided that the Board will
use its best efforts to exercise this option equally among
similarly situated Shareholders (to the extent
19
possible under the circumstances). The Company may assign its
repurchase right to a third party or parties including the
other Shareholders, with the consent of such assignee. Each
Shareholder shall be bound by the determination by the Company
to repurchase or assign its right to repurchase such Shares
(or interest therein) and, if so required by the Company shall
sell the number of Shares (or interest therein) that the
Company requires to sell.
(6) In the event that the Company or its assignee(s) determines to
repurchase any such shares (or interest therein), the Company
shall provide each Shareholder concerned with written notice
of such determination ("Repurchase Notice") at least seven (7)
calendar days prior to such repurchase or such shorter period
as each such Shareholder may authorise, specifying the date on
which any such Shares (or interest therein) are to be
repurchased and the Repurchase Price. The Company may revoke
the Repurchase Notice at any time before it (or its assignee)
pays for the Shares (or interest therein). Neither the Company
nor its assignee(s) shall be obliged to give general notice to
the Shareholders of any intention to purchase or the
conclusion of any purchase of Shares (or interest therein).
Payment of the Repurchase Price by the Company of its
assignee(s) shall be by wire transfer and made at a closing to
be held no less than seven (7) calendar days after receipt of
the Repurchase Notice by the Shareholder.
35. 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 transferee
and the transferor shall be deemed to remain the holder of the share
until the name of the transferee is entered in the Register in respect
thereof. All instruments of transfer when registered may be retained by
the Company. The Board may, in its absolute discretion and without
assigning any reason therefor,
20
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:-
(1) 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;
(2) the instrument of transfer is in respect of only one class of
share; and
(3) all applicable consents, authorisations, permissions or
approvals of any governmental body or agency in Bermuda, the
United States or any other applicable jurisdiction required to
be obtained prior to such transfer shall have been obtained.
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 and Bye-Law 36.
36. If the Board declines to register a transfer it shall, within ten (10)
days after the date on which the instrument of transfer was lodged,
send to the transferor and the transferee notice of such refusal.
37. A fee may be charged by the Company for registering any transfer,
probate, letters of administration, certificate of death or marriage,
power of attorney, distringas or stop notice, order of court or other
instrument relating to or affecting the title to any share, or
otherwise making an entry in the Register relating to any share.
21
TRANSMISSION OF SHARES
38. In the case of the death of a Shareholder, the survivor or survivors,
where the deceased was a joint holder, and the estate representative,
where he was sole holder, shall be the only person recognised by the
Company as having any title to his shares; but nothing herein contained
shall release the estate of a deceased holder (whether the sole or
joint) from any liability in respect of any share held by him solely or
jointly with other persons. For the purpose of this Bye-Law, estate
representative means the person to whom probate or letters of
administration has or have been granted in Bermuda or, failing any such
person, such other person as the Board may in its absolute discretion
determine to be the person recognised by the Company for the purpose of
this Bye-Law.
39. Any person becoming entitled to a share in consequence of the death of
a Shareholder or otherwise by operation of applicable law may, subject
to Bye-Laws 34 and 35, and subject as hereafter provided and upon such
evidence being produced as may from time to time be required by the
Board as to his entitlement, either be registered himself as the holder
of the share or elect to have some person nominated by him registered
as the transferee thereof. If the person so becoming entitled elects to
be registered himself, he shall deliver or send to the Company a notice
in writing signed by him stating that he so elects. If he shall elect
to have his nominee registered, he shall signify his election by
signing an instrument of transfer of such share in favour of his
nominee. All the limitations, restrictions and provisions of these Bye-
Laws relating to the right to transfer and the registration of transfer
of shares shall be applicable to any such notice or instrument of
transfer as aforesaid as if the death of the Shareholder or other event
giving rise to the transmission had not occurred and the notice or
instrument of transfer was an instrument of transfer signed by such
Shareholder.
22
40. 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 as to his entitlement) be entitled to receive and may give a
discharge for any dividends or other monies payable in respect of the
share, but he shall not be entitled in respect of the share to receive
notices of or to attend or vote at general meetings of the Company or,
save as aforesaid, to exercise in respect of the share any of the
rights or privileges of a Shareholder until he 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 monies payable in respect of the shares until the requirements of
the notice have been complied with.
41. 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
Bye-Laws 38, 39 and 40.
INCREASE OF CAPITAL
42. The Company may from time to time increase its capital by such sum to
be divided into shares of such par value as the Company by Resolution
shall prescribe.
43. The Company may, by the Resolution increasing the capital, direct that
the new shares or any of them shall be offered in the first instance
either at par or at a premium or (subject to the provisions of the
Companies Acts) at a discount to all the holders for the time being of
shares of any class or classes
23
in proportion to the number of such shares held by them respectively or
make any other provision as to the issue of the new shares.
44. Except as otherwise determined by the Company (but subject always to
Bye-Law 3(2)), the new shares shall be subject to all the provisions of
these Bye-Laws with reference to lien, the payment of calls,
forfeiture, transfer, transmission and otherwise.
ALTERATION OF CAPITAL
45. The Company may from time to time by Resolution:-
(1) divide its shares into several classes and attach thereto
respectively any preferential, deferred, qualified or special
rights, privileges or conditions;
(2) consolidate and divide all or any of its share capital into
shares of larger par value than its existing shares;
(3) sub-divide its shares or any of them into shares of smaller
par value than is fixed by its memorandum, so, however, that
in the sub-division the proportion between the amount paid and
the amount, if any, unpaid on each reduced share shall be the
same as it was in the case of the share from which the reduced
share is derived;
(4) make provision for the issue and allotment of shares which do
not carry any voting rights;
(5) 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 so cancelled; and
(6) change the currency denomination of its share capital.
24
Where any difficulty arises in regard to any division, consolidation,
or sub-division under this Bye-Law, the Board may settle the same as it
thinks expedient and, in particular, may arrange for the sale of the
shares representing fractions and the distribution of the net proceeds
of sale in due proportion amongst the Shareholders who would have been
entitled to the fractions, and for this purpose the Board may authorise
some person to transfer the shares representing fractions to the
purchaser thereof, who shall not be bound to see to the application of
the purchase money nor shall his title to the shares be affected by any
irregularity or invalidity in the proceedings relating to the sale.
46. Subject to the Companies Acts and to any confirmation or consent
required by law or these Bye-Laws, the Company may by Resolution from
time to time convert any preference shares into redeemable preference
shares.
REDUCTION OF CAPITAL
47. Subject to the Companies Acts, its memorandum and any confirmation or
consent required by law or these Bye-Laws, the Company may from time to
time by Resolution authorise the reduction of its issued share capital
or any share premium or contributed surplus account in any manner.
48. In relation to any such reduction, the Company may by Resolution
determine the terms upon which such reduction is to be effected
including in the case of a reduction of part only of a class of shares,
those shares to be affected.
GENERAL MEETINGS AND WRITTEN RESOLUTIONS
49. (1) The Board shall convene, and the Company shall hold, general
meetings as Annual General Meetings in accordance with the
25
requirements of the Companies Acts at such times and places as
the Board shall appoint. The Board or the Chairman or Co-
Chairman of the Board may, whenever each thinks fit, and
shall, when requisitioned by shareholders pursuant to the
provisions of the Companies Acts, convene general meetings
other than Annual General Meetings which shall be called
Special General Meetings.
(2) Except in the case of the removal of auditors and Directors,
anything which may be done by resolution of the Company in
general meeting or by resolution of a meeting of any class of
the Shareholders of the Company may, without a meeting and
without any previous notice being required, be done by
resolution in writing, signed by all of the Shareholders or
their proxies, or in the case of a Shareholder that is a
corporation (whether or not a company within the meaning of
the Companies Acts) on behalf of such Shareholder, being all
of the Shareholders of the Company who at the date of the
resolution in writing would be entitled to attend a meeting
and vote on the resolution. Such resolution in writing may be
signed by, or in the case of a Shareholder that is a
corporation (whether or not a company within the meaning of
the Companies Acts), on behalf of, all the Shareholders of the
Company, or any class thereof, in as many counterparts as may
be necessary.
(3) For the purposes of this Bye-Law, the date of the resolution
in writing is the date when the resolution is signed by, or in
the case of a Shareholder that is a corporation (whether or
not a company within the meaning of the Companies Acts), on
behalf of, the last Shareholder to sign and any reference in
any enactment to the date of passing of a resolution is, in
relation to a resolution in writing made in accordance with
this section, a reference to such date.
(4) A resolution in writing made in accordance with this Bye-Law
is as valid as if it had been passed by the Company in general
meeting or,
26
if applicable, by a meeting of the relevant class of
Shareholders of the Company, as the case may be. A resolution
in writing made in accordance with this section shall
constitute minutes for the purposes of the Companies Acts and
these Bye-Laws.
NOTICE OF GENERAL MEETINGS
50. An Annual General Meeting shall be called by not less than 30 days
notice in writing, and a Special General Meeting shall be called by not
less than 10 days notice in writing. The notice shall specify the
place, day and time of the meeting and the nature of the business to be
considered. Notice of every General Meeting shall be given in any
manner permitted by Bye-Laws 135 and 136 to all Shareholders other than
such as, under the provisions of these Bye-Laws or the terms of issue
of the shares they hold, are not entitled to receive such notice from
the Company and to each Director, and to any Resident Representative
who or which has delivered a written notice upon the Registered Office
requiring that such notice be sent to him or it.
51. The accidental omission to give notice of a meeting or (in cases where
instruments of proxy are sent out with the notice) the accidental
omission to send such instrument of proxy to, or the non-receipt of
notice of a meeting or such instrument of proxy by, any person entitled
to receive such notice shall not invalidate the proceedings at that
meeting.
52. A Shareholder present, either in person or by proxy, at any meeting of
the Company or of the holders of any class of shares in the Company
shall be deemed to have received notice of the meeting and, where
requisite, of the purposes for which it was called.
27
GENERAL MEETINGS AT MORE THAN ONE PLACE
53. (1) The provisions of this Bye-Law shall apply if any general
meeting is convened at or adjourned to more than one place.
(2) The notice of any meeting or adjourned meeting may specify the
Specified Place and the Board shall make arrangements for
simultaneous attendance and participation at other places
(whether adjoining the Specified Place or in a different and
separate place or places altogether or otherwise) by
Shareholders, provided that persons attending at any
particular place shall be able to see and hear and be seen and
heard (whether by audio visual links or otherwise howsoever
enabling the same) by persons attending at the other places at
which the meeting is convened.
(3) The Board may from time to time make such arrangements for the
purpose of controlling the level of attendance at any such
place (whether involving the issue of tickets or the
imposition of some means of selection or otherwise) as they
shall in their absolute discretion consider appropriate, and
may from time to time vary any such arrangements or make new
arrangements in place of them, provided that a Shareholder who
is not entitled to attend, in person or by proxy, at any
particular place shall be entitled so to attend at one of the
other places; and the entitlement of any Shareholder so to
attend the meeting or adjourned meeting at such place shall be
subject to any such arrangements as may be for the time being
in force and by the notice of meeting or adjourned meeting
stated to apply to the meeting.
(4) For the purposes of all other provisions of these Bye-Laws any
such meeting shall be treated as being held at the Specified
Place.
28
(5) If a meeting is adjourned to more than one place, notice of
the adjourned meeting shall be given notwithstanding any other
provision of these Bye-Laws.
PROCEEDINGS AT GENERAL MEETINGS
54. No business shall be transacted at any general meeting unless a quorum
is present when the meeting proceeds to business, but the absence of a
quorum shall not preclude the appointment, choice or election of a
chairman which shall not be treated as part of the business of the
meeting. Save as otherwise provided by these Bye-Laws, at least two
Shareholders present in person or by proxy and entitled to vote and
holding shares representing more than 50% of the votes that may be cast
by all holders of shares shall be a quorum for all purposes; provided,
however, that if the Company or a class of Shareholders shall have only
one Shareholder, one Shareholder present in person or by proxy shall
constitute the necessary quorum.
55. If within five minutes (or such longer time as the chairman of the
meeting may determine to wait) after the time appointed for the
meeting, a quorum is not present, the meeting, if convened on the
requisition of Shareholders, shall be dissolved. In any other case, it
shall stand adjourned to such other day and such other time and place
as the chairman of the meeting may determine and at such adjourned
meeting two Shareholders present in person or by proxy and entitled to
vote and holding shares representing more than 50% of the votes that
may be cast by all holders of shares shall be a quorum, provided that
if the Company or a class of Shareholders shall have only one
Shareholder, one Shareholder present in person or by proxy shall
constitute the necessary quorum. The Company shall give not less than 7
days notice of any meeting adjourned through want of a quorum and such
notice shall state that the sole Shareholder or, if more than one, two
Shareholders present
29
in person or by proxy and entitled to vote and holding shares
representing more than 50% of the votes that may be cast by all holders
of shares shall be a quorum. If at the adjourned meeting a quorum is
not present within fifteen minutes after the time appointed for holding
the meeting, the meeting shall be dissolved.
56. A meeting of the Shareholders or any class thereof may be held by means
of such telephone, electronic or other communication facilities as
permit all persons participating in the meeting to communicate with
each other simultaneously and instantaneously and participation in such
a meeting shall constitute presence in person at such meeting.
57. The Resident Representative, if any, upon giving the notice referred to
in Bye-Law 50 above, shall be entitled to attend any general meeting of
the Company and each Director shall be entitled to attend and speak at
any general meeting of the Company.
58. The Chairman or Co-Chairman (if any) of the Board or, in their absence,
the President or Chief Executive Officer shall preside as chairman at
every general meeting. If there is no such Chairman or Co-Chairman or
President or Chief Executive Officer, or if at any meeting none of the
Chairman, Co-Chairman, Chief Executive Officer or President is present
within five minutes after the time appointed for holding the meeting,
or if neither of them is willing to act as chairman, the Directors
present shall choose one of their number to act or if one Director only
is present he shall preside as chairman if willing to act. If no
Director is present, or if each of the Directors present declines to
take the chair, the persons present and entitled to vote on a poll
shall elect one of their number to be chairman.
30
59. The chairman of the meeting may, with the consent of any meeting at
which a quorum is present (and shall if so directed by the meeting),
adjourn the meeting from time to time and from place to place but no
business shall be transacted at any adjourned meeting except business
which might lawfully have been transacted at the meeting from which the
adjournment took place. In addition, the chairman may adjourn the
meeting to another time and place without such consent if it appears to
him that it is likely to be impracticable to hold or continue that
meeting because of the number of members wishing to attend who are not
present. When a meeting is adjourned for three months or more or for an
indefinite period, at least seven clear days' notice shall be given of
the adjourned meeting as in the case of an original meeting.
60. Save as expressly provided by these Bye-Laws, it shall not be necessary
to give any notice of an adjournment or of the business to be
transacted at an adjourned meeting.
VOTING
61. If an amendment shall be proposed to any resolution under consideration
but shall in good faith be ruled out of order by the chairman of the
meeting, the proceedings on the substantive resolution shall not be
invalidated by any error in such ruling. With the consent of the
chairman of the meeting, an amendment may be withdrawn by its proposer
before it is voted upon.
62. Save where a greater percentage is required by the Companies Acts or
these Bye-Laws, any question proposed for consideration at any General
Meeting shall be decided on by a simple majority of votes cast at such
meeting; provided, however, that a resolution to remove any director
pursuant to Bye-Law 85 must be approved by the vote of at least a
majority of all issued and outstanding capital shares of the Company
eligible to vote thereon.
31
63. (1) Subject to Bye-Law 63(2) and to the limitations imposed by
the Board on voting under Bye-law 130, and subject to any
rights or restrictions attached to any class of shares, at any
meeting of the Company, each Shareholder present in person or
by proxy shall vote on a poll and shall be entitled on a poll
to one vote for each share held by him.
(2) In the case of a Shareholder who is an Over-the-Threshold
Shareholder as defined below, each issued common share
constituting a part of the Controlled Shares of such
Shareholder held by such Shareholder shall, in the context of
a particular meeting of shareholders, confer only a fraction
of a vote according to the following formula (the "Cut-back
Formula"): AV multiplied by the applicable percentage set
forth in the definition of "Maximum Vote" divided by CS.
Where; "AV" is the aggregate number of issued and
outstanding common shares represented at the
applicable meeting (without regard to any
limitation on the number of votes any such
shares may cast).
"CS" is the number of Controlled Shares of
such Shareholder.
In determining the votes allocable to common
shares beneficially owned by CIBC, the
preceding formula shall be applied to all of
the common shares beneficially owned by
persons constituting a part of CIBC, in the
aggregate. In determining the votes
allocable to common shares beneficially
owned by any member of a group (within the
meaning of
32
Section 13(d) of the Exchange Act), the
preceding formula shall be applied to all of
the common shares beneficially owned by
persons constituting a part of the group, in
the aggregate. Any person (a "Related
Holder") who owns Controlled Shares which
are deemed to be owned directly, indirectly
or constructively (within the meaning of
Section 958 of the Code and the Treasury
Regulations promulgated thereunder) by one
or more Over-the-Threshold Shareholders
shall have the vote allocable to such
Controlled Shares held by the Related Holder
reduced, in a manner consistent with this
Bye-Law 63(2), so as to prevent the
Over-the-Threshold Shareholders from having
voting power greater than the Maximum Vote
applicable to such Over-the-Threshold
Shareholders.
A number of votes equal to the excess (the
"Re-allocable Votes") of (i) the number of
votes that could have been cast by the
Controlled Shares held by all
Over-the-Threshold Shareholders if the
Cut-back Formula were not applicable over
(ii) the number of votes that may be cast by
such Controlled Shares after application of
the Cut-back Formula shall be reallocated
among the common shares that are (a)
represented at the applicable meeting, (b)
not included in such Controlled Shares and
(c) not held by other Over-the-Threshold
Shareholders in accordance with the
following formula (the "Reallocation
Formula"):
33
RV
---------------
AV-ACS
Where: "RV" is the Re-allocable Votes
"AV" is used in the manner defined in the
Cut-back Formula
"ACS" is the aggregate number of Controlled
Shares of all Over-the-Threshold
Shareholders
If the application of the Reallocation
Formula causes any Shareholder to become an
Over-the-Threshold Shareholder, the Cut-back
Formula shall be applied to such
Shareholder's Controlled Shares (taking into
account the additional votes of such shares
after the application of the Reallocation
Formula), and the Cut-back Formula and the
Reallocation Formula shall continue to be
applied until there are no
Over-the-Threshold Shareholders.
(3) The Board shall have the power and authority to make all
determinations that may be required to effectuate the
provisions of this Bye-Law, including any required
determination of the number of Shares that may be deemed to be
held by any Shareholder, and such determinations shall be
conclusive in the absence of manifest error. All record and
beneficial owners of Shares (and all potential transferees of
Shares) shall be deemed to have agreed, by virtue of their
ownership thereof, to provide to the Board, at such times and
in such detail as the Board may reasonably request, any
information that the Board may require in order to make such
determinations.
(4) The following definitions shall apply for the purposes of this
Bye-Law:
34
"Maximum Vote" means (x) in the case of all
Shareholders other than CIBC, 9.5% of the total votes
cast by holders of common shares of the Company in
connection with any matter being voted on and (y) in
the case of CIBC in the aggregate, 20% of the total
votes cast by holders of common shares of the Company
in connection with any matter being voted on.
An "Over-the-Threshold Shareholder" for the purposes
of this Bye-Law is a Shareholder in respect of whom,
by virtue of their holding of Controlled Shares
would, upon giving effect to the principle that
holders of common shares shall have one vote for each
common share so registered, have greater than the
Maximum Vote.
64. At any general meeting, a resolution put to the vote of the meeting
shall be decided on a poll.
65. On a poll, votes may be cast either personally or by proxy.
66. A person entitled to more than one vote on a poll need not use all his
votes or cast all the votes he uses in the same way.
67. In the case of an equality of votes, the chairman of such meeting shall
not be entitled to a second or casting vote and the resolution shall
fail.
68. In the case of joint holders of a share, the vote of the senior who
tenders a vote, whether in person or by proxy, shall be accepted to the
exclusion of the votes of the other joint holders, and for this purpose
seniority shall be
35
determined by the order in which the names stand in the Register in
respect of the joint holding.
69. A Shareholder who is a patient for any purpose of any statute or
applicable law relating to mental health or in respect of whom an order
has been made by any Court having jurisdiction for the protection or
management of the affairs of persons incapable of managing their own
affairs may vote, whether on a show of hands or on a poll, by his
receiver, committee, curator bonis or other person in the nature of a
receiver, committee or curator bonis appointed by such Court and such
receiver, committee, curator bonis or other person may vote on a poll
by proxy, and may otherwise act and be treated as such Shareholder for
the purpose of general meetings.
70. No Shareholder shall, unless the Board otherwise determines, be
entitled to vote at any general meeting unless all calls or other sums
presently payable by him in respect of shares in the Company have been
paid.
71. If:
(1) any objection shall be raised to the qualification of any
voter; or,
(2) any votes have been counted which ought not to have been
counted or which might have been rejected; or,
(3) any votes are not counted which ought to have been counted,
the objection or error shall not vitiate the decision of the meeting or
adjourned meeting on any resolution unless the same is raised or
pointed out at the meeting or, as the case may be, the adjourned
meeting at which the vote objected to is given or tendered or at which
the error occurs. Any objection or error shall be referred to the
chairman of the meeting and shall only vitiate the decision of the
meeting on any resolution if the chairman decides that the same may
have affected the decision of the meeting. The decision of the chairman
on such matters shall be final and conclusive.
36
PROXIES AND CORPORATE REPRESENTATIVES
72. The instrument appointing a proxy shall be in writing under the hand of
the appointor or of his attorney authorised by him in writing or, if
the appointor is a corporation, either under its seal or under the hand
of an officer, attorney or other person authorised to sign the same.
73. Any Shareholder may appoint a standing proxy or (if a corporation)
representative by depositing at the Registered Office, or at such place
or places as the Board may otherwise specify for the purpose, a proxy
or (if a corporation) an authorisation and such proxy or authorisation
shall be valid for all general meetings and adjournments thereof or,
resolutions in writing, as the case may be, until notice of revocation
is received at the Registered Office, or at such place or places as the
Board may otherwise specify for the purpose. Where a standing proxy or
authorisation exists, its operation shall be deemed to have been
suspended at any general meeting or adjournment thereof at which the
Shareholder is present or in respect to which the Shareholder has
specially appointed a proxy or representative. The Board may from time
to time require such evidence as it shall deem necessary as to the due
execution and continuing validity of any such standing proxy or
authorisation and the operation of any such standing proxy or
authorisation shall be deemed to be suspended until such time as the
Board determines that it has received the requested evidence or other
evidence satisfactory to it. A person so authorised as a representative
of a corporation shall be entitled to exercise the same power on behalf
of the grantor of the authority as the grantor could exercise if it
were an individual Shareholder of the Company and the grantor shall for
the purposes of these Bye-Laws be deemed to be present in person at any
such meeting if a person so authorised is present at it.
37
74. Subject to Bye-Law 73, the instrument appointing a proxy together with
such other evidence as to its due execution as the Board may from time
to time require, shall be delivered at the Registered Office (or at
such place or places as may be specified in the notice convening the
meeting or in any notice of any adjournment or, in either case or the
case of a written resolution, in any document sent therewith) not less
than 24 hours or such other period as the Board may determine, prior to
the holding of the relevant meeting or adjourned meeting at which the
person named in the instrument proposes to vote or, in the case of a
poll taken subsequently to the date of a meeting or adjourned meeting,
before the time appointed for the taking of the poll, or, in the case
of a written resolution, prior to the effective date of the written
resolution and in default the instrument of proxy shall not be treated
as valid.
75. Instruments of proxy shall be in any common form or in such other form
as the Board may approve and the Board may, if it thinks fit, send out
with the notice of any meeting or any written resolution forms of
instruments of proxy for use at that meeting or in connection with that
written resolution. The instrument of proxy shall be deemed to confer
authority to demand or join in demanding a poll and to vote on any
amendment of a written resolution or amendment of a resolution put to
the meeting for which it is given as the proxy thinks fit. The
instrument of proxy shall unless the contrary is stated therein be
valid as well for any adjournment of the meeting as for the meeting to
which it relates.
76. A vote given in accordance with the terms of an instrument of proxy
shall be valid notwithstanding the previous death or unsoundness of
mind of the principal, or revocation of the instrument of proxy or of
the authority under which it was executed, provided that no intimation
in writing of such death,
38
insanity or revocation shall have been received by the Company at the
Registered Office (or such other place as may be specified for the
delivery of instruments of proxy in the notice convening the meeting or
other documents sent therewith) one hour at least before the
commencement of the meeting or adjourned meeting, or the taking of the
poll, or the day before the effective date of any written resolution at
which the instrument of proxy is used.
77. Subject to the Companies Acts, the Board may at its discretion waive
any of the provisions of these Bye-Laws related to proxies or
authorisations and, in particular, may accept such verbal or other
assurances as it thinks fit as to the right of any person to attend and
vote on behalf of any Shareholder at general meetings or to sign
written resolutions.
APPOINTMENT AND REMOVAL OF DIRECTORS
78. (1) At the date of adoption of these Bye-Laws, the Board shall
consist of the following persons: -
Jay R. Bloom
Abbott L. Brown
William E. Conway
Lodwrick Cook
Dean C. Kehler
Geoffrey J.W. Kent
David L. Lee
Jay R. Levine
Toshiaki Ogasawara
William D. Phoenix
Barry Porter
Bruce Raben
Jack M. Scanlon
Michael R. Steed
Hillel Weinberger
Gary Winnick
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(2) [Intentionally Left Blank]
(3) Each of Abbott Brown, William Conway, Jay Levine, William
Phoenix and Barry Porter are hereby designated as "A"
Directors for the purposes of this Bye-Law. Each of Lodwrick
Cook, Jeffrey Kent, David Lee, Bruce Raben, and Jack Scanlon
are hereby designated "B" Directors, and each of Jay Bloom,
Dean Kehler, Toshiaki Ogasawara, Michael Steed, Hillel
Weinberger and Gary Winnick are hereby designated as "C"
Directors. The Board of Directors shall from time to time by
resolution determine the number of A Directors, B Director and
C Directors.
(4) Upon the resignation or removal of a Director, if any new
Director shall be appointed to the Board they shall be
designated to fill the vacancy arising and shall, for the
purposes of these Bye-Laws, constitute a member of the class
represented by the person that they replaced. If there are
more than two vacancies on the Board, then the Shareholders or
the Directors, when appointing a person to fill a vacancy,
shall designate the class of director they shall belong to by
the resolution appointing such person.
79. (1) The A Directors shall serve initially until the conclusion
of the Annual General Meeting of the Company held in the
calendar year 2000, at which consideration is made of
financial statements for the period ending 31 December 1999,
and thereafter shall serve for a three-year terms, concluding
at the third Annual General Meeting after his appointment or
reappointment.
(2) The B Directors shall serve initially until the conclusion of
the Annual General Meeting of the Company held in the calendar
year
40
2001, at which consideration is made of financial statements
for the period ending 31 December 2000, and thereafter shall
serve for a three-year terms, concluding at the third Annual
General Meeting after his appointment or reappointment.
(3) The C Directors shall serve initially until the conclusion of
the Annual General Meeting of the Company held in the calendar
year 2002, at which consideration is made of financial
statements for the period ending December 31, 2001, and
thereafter shall serve for a three-year terms, concluding at
the third Annual General Meeting after his appointment or
reappointment.
80. If the Company, at the meeting at which a Director retires by rotation
or otherwise, does not fill the vacancy, the retiring Director shall,
if willing to act, be deemed to have been reappointed unless at the
meeting it is resolved not to fill the vacancy or unless a resolution
for the reappointment of the Director is put to the meeting and lost.
81. No person shall be appointed a Director, unless:-
(a) In the case of an Annual or Special General Meeting, such
person is recommended by the Board; or
(b) In the case of an Annual General Meeting, not less than 120
nor more than 150 days before the date of the Company's proxy
statement released to Shareholders in connection with the
prior year's Annual General Meeting, notice executed by a
Shareholder (not being the person to be proposed) has been
received by the Secretary of the Company of the intention to
propose such person for appointment, setting forth as to each
person whom the Shareholder proposes to nominate for election
or re-election as a Director (i) the name, age, business
address and residence address of such person,
41
(ii) the principal occupation or employment of such person,
(iii) the class, series and number of shares of the Company
which are beneficially owned by such person, (iv) particulars
which would, if he were so appointed, be required to be
included in the Company's register of Directors and Officers
and (v) all other information relating to such person that is
required to be disclosed in solicitations for proxies for the
election of Directors pursuant to the Rules and Regulations of
the Securities and Exchange Commission under Section 14 of the
Securities Exchange Act of 1934 of the United States of
America, as amended, together with notice executed by such
person of his willingness to serve as a Director if so
elected; provided, however, that no Shareholder shall be
entitled to propose any person to be appointed, elected or re-
elected Director at any Special General Meeting.
82. Except as otherwise required by the Companies Acts, the appointment of
any person proposed as a Director shall be effected by a separate
resolution voted on at a General Meeting pursuant to Bye-Law 62 herein.
83. All Directors (other then the initial Directors set forth herein), upon
election or appointment, must provide written acceptance of their
appointment, in such form as the Board may think fit, by notice in
writing to the Registered Office within 30 days of their appointment.
84. The Company may by Resolution determine (i) the minimum number of
Directors, which shall be not less than 11 and which is hereby set at
11 until such number is amended by a further Resolution and (ii) the
maximum number of Directors, which shall not be more than 20 and which
is hereby set at 20 until such number is amended by a further
Resolution, and any vacancies on the Board shall be deemed casual
42
vacancies for the purposes of these Bye-Laws. Without prejudice to the
power of the Company by Resolution in pursuance of any of the
provisions of these Bye-Laws to appoint any person to be a Director,
the Board, so long as a quorum of Directors remains in office, shall
have power at any time and from time to time to appoint any individual
to be a Director so as to fill a casual vacancy. A Director so
appointed shall hold office only until the next following Annual
General Meeting and shall not be taken into account in determining the
Directors who are to retire by rotation at the meeting. If not
reappointed at such Annual General Meeting, he shall vacate office at
the conclusion thereof.
85. The Shareholders may in a Special General Meeting called for that
purpose remove a Director provided notice of any such meeting shall be
served upon the Director concerned not less than 14 days before the
meeting and he shall be entitled to be heard at that meeting. Any
vacancy created by the removal of a Director at a Special General
Meeting may be filled at the Meeting by the election of another
Director in his place or, in the absence of any such election, by the
Board.
RESIGNATION AND DISQUALIFICATION OF DIRECTORS
86. The office of a Director shall be vacated upon the happening of any of
the following events:
(1) if he resigns his office by notice in writing delivered to the
Registered Office or tendered at a meeting of the Board;
(2) if he becomes of unsound mind or a patient for any purpose of
any statute or applicable law relating to mental health and
the Board resolves that his office is vacated;
(3) if he becomes bankrupt under the laws of any country or
compounds with his creditors;
43
(4) if he is prohibited by law from being a Director;
(5) if he ceases to be a Director by virtue of the Companies Acts
or these Bye-Laws or is removed from office pursuant to these
Bye-Laws;
(6) he shall for more than six consecutive months have been absent
without permission of the Board from meetings of the Board
held during that period and his Alternate Director (if any)
shall not during such period have attended in his stead and
the Board resolves that his office be vacated; or
(7) after the initial term he is requested to resign in writing by
not less than three quarters of the other Directors. In
calculating the number of Directors who are required to make
such a request to the Director, (i) there shall be excluded
any Alternate Director appointed by him acting in his capacity
as such; and (ii) a Director and any Alternate Director
appointed by him and acting in his capacity as such shall
constitute a single Director for this purpose, so that the
signature of either shall be sufficient.
ALTERNATE DIRECTORS
87. Any Director (other than an Alternate Director) may appoint any other
Director, or any other person approved by resolution of the Board and
willing to act, to be an Alternate Director and may remove from office
an Alternate Director so appointed by him. Any appointment or removal
of an Alternate Director by a Director shall be effected by depositing
a notice of appointment or removal with the Secretary at the Registered
Office, signed by such Director, and such appointment or removal shall
become effective on the date of receipt by the Secretary. Any Alternate
Director may also be removed by resolution of the Board. An Alternate
Director may also be a Director in his own right and may act as
alternate to more than one Director.
44
88. An Alternate Director shall cease to be an Alternate Director:-
(a) if his appointor ceases to be a Director; but, if a Director
retires by rotation or otherwise but is reappointed or deemed
to have been reappointed at the meeting at which he retires,
any appointment of an Alternate Director made by him which was
in force immediately prior to his retirement shall continue
after his reappointment;
(b) on the happening of any event which, if he were a Director,
would cause him to vacate his office as Director;
(c) if he is removed from office pursuant to Bye-Law 85; or
(d) if he resigns his office by notice to the Company.
89. An Alternate Director shall be entitled to receive notices of all
meetings of Directors, to attend, be counted in the quorum and vote at
any such meeting at which any Director to whom he is alternate is not
personally present, and generally to perform all the functions of any
Director to whom he is alternate in his absence.
90. Every person acting as an Alternate Director shall (except as regards
powers to appoint an alternate and remuneration) be subject in all
respects to the provisions of these Bye-Laws relating to Directors and
shall alone be responsible to the Company for his acts and defaults and
shall not be deemed to be the agent of or for any Director for whom he
is alternate. An Alternate Director may be paid expenses and shall be
entitled to be indemnified by the Company to the same extent mutatis
mutandis as if he were a Director. Every person acting as an Alternate
Director shall have one vote for each Director for whom he acts as
alternate (in addition to his own vote if he is also a Director). The
signature of an Alternate Director to any resolution in writing of the
Board or a committee of the Board shall, unless
45
the terms of his appointment provides to the contrary, be as effective
as the signature of the Director or Directors to whom he is alternate.
DIRECTORS' FEES AND
ADDITIONAL REMUNERATION AND EXPENSES
91. The ordinary remuneration of the Directors who do not hold executive
office for their services (excluding amounts payable under any other
provision of these Bye-Laws) shall be such amount as the Board may from
time to time by resolution determine and in the absence of a
determination to the contrary such fees shall be deemed to accrue from
day to day. Subject thereto, each such Director shall be paid a fee
(which shall be deemed to accrue from day to day) at such rate as may
from time to time be determined by the Board. Each Director may be paid
his reasonable travel, hotel and incidental expenses in attending and
returning from meetings of the Board or committees constituted pursuant
to these Bye-Laws or General Meetings and shall be paid all expenses
properly and reasonably incurred by him in the conduct of the Company's
business or in the discharge of his duties as a Director. Any Director
who, by request, goes or resides abroad for any purposes of the Company
or who performs services which in the opinion of the Board go beyond
the ordinary duties of a Director may be paid such extra remuneration
(whether by way of salary, commission, participation in profits or
otherwise) as the Board may determine, and such extra remuneration
shall be in addition to any remuneration provided for by or pursuant to
any other Bye-Law.
DIRECTORS' INTERESTS
92. (1) A Director may hold any other office or place of profit with
the Company (except that of auditor) in conjunction with his
office of
46
Director for such period and upon such terms as the Board may
determine, and may be paid such extra remuneration therefor
(whether by way of salary, commission, participation in
profits or otherwise) as the Board may determine, and such
extra remuneration shall be in addition to any remuneration
provided for by or pursuant to any other Bye-Law.
(2) A Director may act by himself or his firm in a professional
capacity for the Company (otherwise than as auditor) and he or
his firm shall be entitled to remuneration for professional
services as if he were not a Director.
(3) Subject to the provisions of the Companies Acts, a Director
may notwithstanding his office be a party to, or otherwise
interested in, any transaction or arrangement with the Company
or in which the Company is otherwise interested; and be a
director or other officer of, or employed by, or a party to
any transaction or arrangement with, or otherwise interested
in, any body corporate promoted by the Company or in which the
Company is interested. The Board may also cause the voting
power conferred by the shares in any other company held or
owned by the Company to be exercised in such manner in all
respects as it thinks fit, including the exercise thereof in
favour of any resolution appointing the Directors or any of
them to be directors or officers of such other company, or
voting or providing for the payment of remuneration to the
directors or officers of such other company.
(4) So long as, where it is necessary, he declares the nature of
his interest at the first opportunity at a meeting of the
Board or by writing to the Directors as required by the
Companies Acts, a Director shall not by reason of his office
be accountable to the Company for any benefit which he derives
from any office or employment to which these Bye-Laws allow
him to be appointed or
47
from any transaction or arrangement in which these Bye-Laws
allow him to be interested, and no such transaction or
arrangement shall be liable to be avoided on the ground of any
interest or benefit.
(5) A Director who has disclosed his interest in a transaction or
arrangement with the Company, or in which the Company is
otherwise interested, may be counted in the quorum and vote at
any meeting at which such transaction or arrangement is
considered by the Board; provided that, notwithstanding the
foregoing, (i) when the Board is considering a resolution to
fill a vacancy on the Board or (ii) the Board is voting on a
resolution for the nomination or recommendation of the slate
of Directors as required under Bye-Law 81, Gary Winnick, so
long as he is a Director, shall not be entitled to vote on any
of such resolutions and may not be counted in the quorum of
the meeting.
(6) Subject to the Companies Acts and any further disclosure
required thereby, a general notice to the Directors by a
Director or Officer declaring that he is a director or officer
or has an interest in a person and is to be regarded as
interested in any transaction or arrangement made with that
person, shall be a sufficient declaration of interest in
relation to any transaction or arrangement so made.
(7) For the purposes of these Bye-Laws, without limiting the
generality of the foregoing, a Director is deemed to have an
interest in a transaction or arrangement with the Company if
he is the holder of or beneficially interested in five per
cent or more of any class of the equity share capital of any
body corporate (or any other body corporate through which his
interest is derived) or of the voting rights available to
members of the relevant body corporate with which the Company
is proposing to enter into a transaction or arrangement,
provided that there shall be disregarded any shares held by
such Director as bare or custodian trustee and in which he has
no
48
beneficial interest, any shares comprised in a trust in
which the Director's interest is in reversion or remainder if
and so long as some other person is entitled to receive the
income thereof, and any shares comprised in an authorised unit
trust in which the Director is only interested as a unit
holder. For the purposes of this Bye-Law, an interest of a
person who is connected with a Director shall be treated as an
interest of the Director.
POWERS AND DUTIES OF THE BOARD
93. Subject to the provisions of the Companies Acts and these Bye-Laws and
to any directions given by the Company by Resolution, the Board shall
manage the business of the Company and may pay all expenses incurred in
promoting and incorporating the Company and may exercise all the powers
of the Company. No alteration of these Bye-Laws and no such direction
shall invalidate any prior act of the Board which would have been valid
if that alteration had not been made or that direction had not been
given. The powers given by this Bye-Law shall not be limited by any
special power given to the Board by these Bye-Laws and a meeting of the
Board at which a quorum is present shall be competent to exercise all
the powers, authorities and discretions for the time being vested in or
exercisable by the Board.
94. The Board may exercise all the powers of the Company to borrow money
and to mortgage or charge all or any part of the undertaking, property
and assets (present and future) and uncalled capital of the Company and
to issue debentures and other securities, whether outright or as
collateral security for any debt, liability or obligation of the
Company or of any other persons.
95. All cheques, promissory notes, drafts, bills of exchange and other
instruments, whether negotiable or transferable or not, and all
receipts for
49
money paid to the Company shall be signed, drawn, accepted, endorsed or
otherwise executed, as the case may be, in such manner as the Board
shall from time to time by resolution determine.
GRATUITIES, PENSIONS AND INSURANCE
96. (1) The Board may (by establishment of or maintenance of schemes
or otherwise) provide benefits, whether by the payment of
gratuities or pensions or by insurance or otherwise, for any
past or present Director or employee of the Company or any of
its subsidiaries or any body corporate associated with, or any
business acquired by, any of them, and for any member of his
family (including a spouse and a former spouse) or any person
who is or was dependent on him, and may (as well before as
after he ceases to hold such office or employment) contribute
to any fund and pay premiums for the purchase or provision of
any such benefit.
(2) Without prejudice to the provisions of Bye-Laws 141 and 142,
the Board shall have the power to purchase and maintain
insurance for or for the benefit of any persons who are or
were at any time Directors, Officers, or employees of the
Company, or of any other Company which is its holding company
or in which the Company or such holding company has any
interest whether direct or indirect or which is in any way
allied to or associated with the Company, or of any subsidiary
undertaking of the Company or any such other company, or who
are or were at any time trustees of any pension fund in which
employees of the Company or any such other company or
subsidiary undertaking are interested, including (without
prejudice to the generality of the foregoing) insurance
against any liability incurred by such persons in respect of
any act or omission in the actual or purported execution or
discharge of their duties or in the
50
exercise or purported exercise of their powers or otherwise in
relation to their duties, powers or offices in relation to the
Company or any such other company, subsidiary undertaking or
pension fund.
(3) No Director or former Director shall be accountable to the
Company or the Shareholders for any benefit provided pursuant
to this Bye-Law and the receipt of any such benefit shall not
disqualify any person from being or becoming a Director of the
Company.
DELEGATION OF THE BOARD'S POWERS
97. The Board may by power of attorney appoint any company, firm or person
or any fluctuating body of persons, whether nominated directly or
indirectly by the Board, to be the attorney or attorneys of the Company
for such purposes and with such powers, authorities and discretions
(not exceeding those vested in or exercisable by the Board under these
Bye-Laws) and for such period and subject to such conditions as it may
think fit, and any such power of attorney may contain such provisions
for the protection and convenience of persons dealing with any such
attorney and of such attorney as the Board may think fit, and may also
authorise any such attorney to sub-delegate all or any of the powers,
authorities and discretions vested in him.
98. The Board may entrust to and confer upon any Director, Officer or,
without prejudice to the provisions of Bye-Law 99, other individual any
of the powers exercisable by it upon such terms and conditions with
such restrictions as it thinks fit, and either collaterally with, or to
the exclusion of, its own powers, and may from time to time revoke or
vary all or any of such powers but no person dealing in good faith and
without notice of such revocation or variation shall be affected
thereby.
51
99. The Board may delegate any of its powers, authorities and discretions
to committees, consisting of such person or persons (whether a member
or members of its body or not) as it thinks fit. Any committee so
formed shall, in the exercise of the powers, authorities and
discretions so delegated, and in conducting its proceedings conform to
any regulations which may be imposed upon it by the Board. If no
regulations are imposed by the Board the proceedings of a committee
with two or more members shall be, as far as is practicable, governed
by the Bye-Laws regulating the proceedings of the Board.
PROCEEDINGS OF THE BOARD
100. The Board may meet for the despatch of business, adjourn and otherwise
regulate its meetings as it thinks fit. Questions arising at any
meeting shall be determined by the affirmative vote of a majority of
the Directors then in office. In the case of an equality of votes the
motion shall be deemed to have been lost. A Director may, and the
Secretary on the requisition of a Director shall, at any time summon a
meeting of the Board.
101. Notice of a meeting of the Board shall be deemed to be duly given to a
Director if it is given to him personally or by word of mouth or sent
to him by post, cable, telex, telecopier or other mode of representing
or reproducing words in a legible and non-transitory form at his last
known address or any other address given by him to the Company for this
purpose. A Director may retrospectively waive the requirement for
notice of any meeting by consenting in writing to the business
conducted at the meeting.
102. (1) The quorum necessary for the transaction of the business
of the Board may be fixed by the Board and, unless so fixed at
any other number, shall be two individuals. Any Director who
ceases to be a
52
Director at a meeting of the Board may continue to be present
and to act as a Director and be counted in the quorum until
the termination of the meeting if no other Director objects
and if otherwise a quorum of Directors would not be present.
(2) The Resident Representative shall, upon delivering written
notice of an address for the purposes of receipt of notice, to
the Registered Office, be entitled to receive notice of,
attend and be heard at, and to receive minutes of all meetings
of the Board.
103. So long as a quorum of Directors remains in office, the continuing
Directors may act notwithstanding any vacancy in the Board but, if no
such quorum remains, the continuing Directors or a sole continuing
Director may act only for the purpose of calling a general meeting.
104. The Chairman or Co-Chairman (or President) or, in his absence, the
Deputy Chairman or Co-Chairman (or Vice-President), shall preside as
chairman at every meeting of the Board. If at any meeting the Chairman
or Deputy Chairman (or the President or Vice-President) is not present
within five minutes after the time appointed for holding the meeting,
or is not willing to act as chairman, the Directors present may choose
one of their number to be chairman of the meeting.
105. The meetings and proceedings of any committee consisting of two or more
members shall be governed by the provisions contained in these Bye-Laws
for regulating the meetings and proceedings of the Board so far as the
same are applicable and are not superseded by any regulations imposed
by the Board.
106. A resolution in writing signed by all the Directors for the time being
entitled to receive notice of a meeting of the Board or by all the
members of a
53
committee for the time being shall be as valid and effectual as a
resolution passed at a meeting of the Board or, as the case may be, of
such committee duly called and constituted. Such resolution may be
contained in one document or in several documents in the like form each
signed by one or more of the Directors or members of the committee
concerned.
107. A meeting of the Board or a committee appointed by the Board may be
held by means of such telephone, electronic or other communication
facilities as permit all persons participating in the meeting to
communicate with each other simultaneously and instantaneously and
participation in such a meeting shall constitute presence in person at
such meeting. Such a meeting shall be deemed to take place where the
largest group of those participating in the meeting is physically
assembled, or, if there is no such group, where the chairman of the
meeting then is. The word "meeting" in these Bye-Laws shall be
construed accordingly.
108. All acts done by the Board or by any committee or by any person acting
as a Director or member of a committee or any person duly authorised by
the Board or any committee, shall, notwithstanding that it is
afterwards discovered that there was some defect in the appointment of
any member of the Board or such committee or person acting as aforesaid
or that they or any of them were disqualified or had vacated their
office, be as valid as if every such person had been duly appointed and
was qualified and had continued to be a Director, member of such
committee or person so authorised.
109. The Company may by Resolution suspend or relax to any extent, either
generally or in respect of any particular matter, any provision of
these Bye-Laws prohibiting a Director from voting at a meeting of the
Board or of a committee of the Board, or ratify any transaction not
duly authorised by reason of a contravention of any such provisions.
54
110. Where proposals are under consideration concerning the appointment
(including fixing or varying the terms of appointment) of two or more
Directors to offices or employments with the Company or any body
corporate in which the Company is interested, the proposals may be
divided and considered in relation to each Director separately and in
such cases each of the Directors concerned (if not debarred from
voting) provision of paragraph 5 of Bye-Law 97 shall be entitled to
vote and be counted in the quorum in respect of each resolution except
that concerning his own appointment.
111. If a question arises at a meeting of the Board or a committee of the
Board as to the entitlement of a Director to vote or be counted in a
quorum, the question may, before the conclusion of the meeting, be
referred to the chairman of the meeting and his ruling in relation to
any Director other than himself shall be final and conclusive except in
a case where the nature or extent of the interests of the Director
concerned have not been fairly disclosed. If any such question arises
in respect of the chairman of the meeting, it shall be decided by
resolution of the Board (on which the chairman shall not vote) and such
resolution will be final and conclusive except in a case where the
interests of the chairman have not been fairly disclosed.
OFFICERS
112. The Officers of the Company shall include a President and a Vice-
President or a Chairman and Co-Chairman and a Deputy Chairman who shall
be Directors and shall be elected by the Board as soon as possible
after the statutory meeting and each Annual General Meeting. In
addition, the Board may appoint any person whether or not he is a
Director to hold such office as
55
the Board may from time to time determine. Any person elected or
appointed pursuant to this Bye-Law shall hold office for such period
and upon such terms as the Board may determine and the Board may revoke
or terminate any such election or appointment. Any such revocation or
termination shall be without prejudice to any claim for damages that
such Officer may have against the Company or the Company may have
against such Officer for any breach of any contract of service between
him and the Company which may be involved in such revocation or
termination. Save as provided in the Companies Acts or these Bye-Laws,
the powers and duties of the Officers of the Company shall be such (if
any) as are determined from time to time by the Board.
EXECUTIVE DIRECTORS
113. Subject to the provisions of the Companies Acts, the Board may appoint
one or more of its body to be the holder of any executive office
(except that of auditor) under the Company and may enter into any
agreement or arrangement with any Director for his employment by the
Company or for the provision by him of any services outside the scope
of the ordinary duties of a Director. Any such appointment, agreement
or arrangement may be made upon such terms, including terms as to
remuneration, as the Board determines, and any remuneration which is so
determined may be in addition to or in lieu of any ordinary
remuneration as a Director. The Board may revoke or vary any such
appointment but without prejudice to any rights or claims which the
person whose appointment is revoked or varied may have against the
Company by reason thereof.
114. Any appointment of a Director to an executive office shall terminate if
he ceases to be a Director but without prejudice to any rights or
claims which he may have against the Company by reason of such cesser.
A Director
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appointed to an executive office shall not ipso facto cease to be a
Director if his appointment to such executive office terminates.
115. The emoluments of any Director holding executive office for his
services as such shall be determined by the Board, and may be of any
description, and (without limiting the generality of the foregoing) may
include admission to or continuance of membership of any scheme
(including any share acquisition scheme) or fund instituted or
established or financed or contributed to by the Company for the
provision of pensions, life assurance or other benefits for employees
or their dependants, or the payment of a pension or other benefits to
him or his dependants on or after retirement or death, apart from
membership or any such scheme or fund.
MINUTES
116. The Board shall cause minutes to be made and books kept for the purpose
of recording -
(1) all appointments of Officers made by the Board;
(2) the names of the Directors and other persons (if any) present at
each meeting of the Board and of any committee;
(3) all proceedings at meetings of the Company, of the holders of any
class of shares in the Company, of the Board and of committees
appointed by the Board or the Shareholders;
(4) all proceedings of its managers (if any).
Shareholders shall only be entitled to see the register of Directors
and Officers, the Register, the financial information provided for in
Bye-Law 132 and the minutes of meetings of the Shareholders of the
Company.
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SECRETARY AND RESIDENT REPRESENTATIVE
117. The Secretary (including one or more deputy or assistant secretaries)
and, if required, the Resident Representative, shall be appointed by
the Board at such remuneration (if any) and upon such terms as it may
think fit and any Secretary and Resident Representative so appointed
may be removed by the Board. The duties of the Secretary and the duties
of the Resident Representative shall be those prescribed by the
Companies Acts together with such other duties as shall from time to
time be prescribed by the Board.
118. A provision of the Companies Acts or these Bye-Laws requiring or
authorising a thing to be done by or to a Director and the Secretary
shall not be satisfied by its being done by or to the same person
acting both as Director and as, or in the place of, the Secretary.
THE SEAL
119. (1) The Seal shall consist of a circular metal device with the
name of the Company around the outer margin thereof and the
country and year of incorporation across the centre thereof.
Should the Seal not have been received at the Registered
Office in such form at the date of adoption of this Bye-Law
then, pending such receipt, any document requiring to be
sealed with the Seal shall be sealed by affixing a red wafer
seal to the document with the name of the Company, and the
country and year of incorporation type written across the
centre thereof.
(2) The Board shall provide for the custody of every Seal. A Seal
shall only be used by authority of the Board or of a committee
constituted by the Board. Subject to these Bye-Laws, any
instrument to which a Seal is affixed shall be signed by
either two Directors, or by the
58
Secretary and one Director, or by the Secretary or by any one
person whether or not a Director or Officer, who has been
authorised either generally or specifically to affirm the use
of a Seal; provided that the Secretary or a Director may affix
a Seal over his signature alone to authenticate copies of
these Bye-Laws, the minutes of any meeting or any other
documents requiring authentication.
DIVIDENDS AND OTHER PAYMENTS
120. The Board may from time to time declare dividends or distributions out
of contributed surplus to be paid to the Shareholders according to
their rights and interests including such interim dividends as appear
to the Board to be justified by the position of the Company. The Board,
in its discretion, may determine that any dividend shall be paid in
cash or shall be satisfied, subject to Bye-Law 128, in paying up in
full shares in the Company to be issued to the Shareholders credited as
fully paid or partly paid or partly in one way and partly the other.
The Board may also pay any fixed cash dividend which is payable on any
shares of the Company half yearly or on such other dates, whenever the
position of the Company, in the opinion of the Board, justifies such
payment.
121. Except insofar as the rights attaching to, or the terms of issue of,
any share otherwise provide:-
(1) all dividends or distributions out of contributed surplus may
be declared and paid according to the amounts paid up on the
shares in respect of which the dividend or distribution is
paid, and an amount paid up on a share in advance of calls may
be treated for the purpose of this Bye-Law as paid-up on the
share;
(2) dividends or distributions out of contributed surplus may be
apportioned and paid pro rata according to the amounts paid-up
on
59
the shares during any portion or portions of the period in
respect of which the dividend or distribution is paid.
122. The Board 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 him to the Company on
account of calls or otherwise in respect of shares of the Company.
123. No dividend, distribution or other monies payable by the Company on or
in respect of any share shall bear interest against the Company.
124. Any dividend, distribution or interest, or part thereof payable in
cash, or any other sum payable in cash to the holder of shares may be
paid by cheque or warrant sent through the post addressed to the holder
at his address in the Register or, in the case of joint holders,
addressed to the holder whose name stands first in the Register in
respect of the shares at his registered address as appearing in the
Register or addressed to such person at such address as the holder or
joint holders may in writing direct. Every such cheque or warrant
shall, unless the holder or joint holders otherwise direct, be made
payable to the order of the holder or, in the case of joint holders, to
the order of the holder whose name stands first in the Register in
respect of such shares, and shall be sent at his or their risk and
payment of the cheque or warrant by the bank on which it is drawn shall
constitute a good discharge to the Company. Any one of two or more
joint holders may give effectual receipts for any dividends,
distributions or other monies payable or property distributable in
respect of the shares held by such joint holders.
125. Any dividend or distribution out of contributed surplus unclaimed for a
period of six years from the date of declaration of such dividend or
distribution shall be forfeited and shall revert to the Company and the
60
payment by the Board of any unclaimed dividend, distribution, interest
or other sum payable on or in respect of the share into a separate
account shall not constitute the Company a trustee in respect thereof.
126. The Board may also, in addition to its other powers, direct payment or
satisfaction of any dividend or distribution out of contributed surplus
wholly or in part by the distribution of specific assets, and in
particular of paid-up shares or debentures of any other company, and
where any difficulty arises in regard to such distribution or dividend
the Board may settle it as it thinks expedient, and in particular, may
authorise any person to sell and transfer any fractions or may ignore
fractions altogether, and may fix the value for distribution or
dividend purposes of any such specific assets and may determine that
cash payments shall be made to any Shareholders upon the footing of the
values so fixed in order to secure equality of distribution and may
vest any such specific assets in trustees as may seem expedient to the
Board provided that such dividend or distribution may not be satisfied
by the distribution of any partly paid shares or debentures of any
company without the sanction of a Resolution.
RESERVES
127. The Board may, before recommending or declaring any dividend or
distribution out of contributed surplus, set aside such sums as it
thinks proper as reserves which shall, at the discretion of the Board,
be applicable for any purpose of the Company and pending such
application may, also at such discretion, either be employed in the
business of the Company or be invested in such investments as the Board
may from time to time think fit. The Board may also without placing the
same to reserve carry forward any sums which it may think it prudent
not to distribute.
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CAPITALIZATION OF PROFITS
128. The Board may, from time to time, resolve to capitalise all or any part
of any amount for the time being standing to the credit of any reserve
or fund which is available for distribution or to the credit of any
share premium account and accordingly that such amount be set free for
distribution amongst the Shareholders or any class of Shareholders who
would be entitled thereto if distributed by way of dividend and in the
same proportions, on the footing that the same be not paid in cash but
be applied either in or towards paying up amounts for the time being
unpaid on any shares in the Company held by such Shareholders
respectively or in payment up in full of unissued shares, debentures or
other obligations of the Company, to be allotted and distributed
credited as fully paid amongst such Shareholders, or partly in one way
and partly in the other, provided that for the purpose of this Bye-Law,
a share premium account may be applied only in paying up of unissued
shares to be issued to such Shareholders credited as fully paid and
provided further that any sum standing to the credit of a share premium
account may only be applied in crediting as fully paid shares of the
same class as that from which the relevant share premium was derived.
129. Where any difficulty arises in regard to any distribution under the
last preceding Bye-Law, the Board may settle the same as it thinks
expedient and, in particular, may authorise any person to sell and
transfer any fractions or may resolve that the distribution should be
as nearly as may be practicable in the correct proportion but not
exactly so or may ignore fractions altogether, and may determine that
cash payments should be made to any Shareholders in order to adjust the
rights of all parties, as may seem expedient to the Board. The Board
may appoint any person to sign on behalf of the persons entitled to
participate in the distribution any contract
62
necessary or desirable for giving effect thereto and such appointment
shall be effective and binding upon the Shareholders.
RECORD DATES
130. Notwithstanding any other provisions of these Bye-Laws, the Company may
by Resolution or the Board may fix any date as the record date for any
dividend, distribution, allotment or issue and for the purpose of
identifying the persons entitled to receive notices of, and entitled to
vote at, General Meetings or entitled to express consent to corporate
action in writing without a meeting. Any such record date may be on or
at any time (i) not more than 60 days before any date on which such
dividend, distribution, allotment or issue is declared, paid or made,
(ii) not more than 60 days nor less than 10 days before the date of any
such meetings and (iii) not more than 10 days after the date on which
the resolution fixing the record date for a shareholder action by
written consent is adopted by the Board.
ACCOUNTING RECORDS
131. The Board shall cause to be kept accounting records sufficient to give
a true and fair view of the state of the Company's affairs and to show
and explain its transactions, in accordance with the Companies Acts.
132. The records of account shall be kept at the Registered Office or at
such other place or places as the Board thinks fit, and shall at all
times be open to inspection by the Directors; PROVIDED that if the
records of account are kept at some place outside Bermuda, there shall
be kept at an office of the Company in Bermuda such records as will
enable the Directors to ascertain with reasonable accuracy the
financial position of the Company at the end of each three month
period. No Shareholder (other than an Officer of the
63
Company) shall have any right to inspect any accounting record or book
or document of the Company except as conferred by law or authorised by
the Board or by Resolution.
133. A copy of every balance sheet and statement of income and expenditure,
including every document required by law to be annexed thereto, which
is to be laid before the Company in general meeting, together with a
copy of the auditors' report, shall be sent to each person entitled
thereto in accordance with the requirements of the Companies Acts.
AUDIT
134. Save and to the extent that an audit is waived in the manner permitted
by the Companies Acts, auditors shall be appointed and their duties
regulated in accordance with the Companies Acts, any other applicable
law and such requirements not inconsistent with the Companies Acts as
the Board may from time to time determine.
SERVICE OF NOTICES AND OTHER DOCUMENTS
135. Any notice or other document (including a share certificate) may be
served on or delivered to any Shareholder by the Company either
personally or by sending it through the post (by airmail where
applicable) in a pre-paid letter addressed to such Shareholder at his
address as appearing in the Register or by delivering it to or leaving
it at such registered address. In the case of joint holders of a share,
service or delivery of any notice or other document on or to one of the
joint holders shall for all purposes be deemed as sufficient service on
or delivery to all the joint holders. Any notice or other document if
sent by post shall be deemed to have been served or delivered seven
days after it was put in the post, and in proving such service or
delivery, it shall be
64
sufficient to prove that the notice or document was properly addressed,
stamped and put in the post. In counting the period of notice that may
be served on or delivered to any Shareholder by the Company pursuant to
these Bye-laws, the date of posting and the date of receipt of the
applicable notice shall be included in such period of notice.
136. Any notice of a general meeting of the Company shall be deemed to be
duly given to a Shareholder, or other person entitled to it, if it is
sent to him by cable, telex, telecopier or other mode of representing
or reproducing words in a legible and non-transitory form at his
address as appearing in the Register or any other address given by him
to the Company for this purpose. Any such notice shall be deemed to
have been served twenty-four hours after its despatch.
137. Any notice or other document delivered, sent or given to a Shareholder
in any manner permitted by these Bye-Laws shall, notwithstanding that
such Shareholder is then dead or bankrupt or that any other event has
occurred, and whether or not the Company has notice of the death or
bankruptcy or other event, be deemed to have been duly served or
delivered in respect of any share registered in the name of such
Shareholder as sole or joint holder unless his name shall, at the time
of the service or delivery of the notice or document, have been removed
from the Register as the holder of the share, and such service or
delivery shall for all purposes be deemed as sufficient service or
delivery of such notice or document on all persons interested (whether
jointly with or as claiming through or under him) in the share.
DESTRUCTION OF DOCUMENTS
138. The Company shall be entitled to destroy all instruments of transfer of
shares which have been registered, and all other documents on the basis
of
65
which any entry is made in the Register, at any time after the
expiration of six years from the date of registration thereof and all
dividends mandates or variations or cancellations thereof and
notifications of change of address at any time after the expiration of
two years from the date of recording thereof and all share certificates
which have been cancelled at any time after the expiration of one year
from the date of cancellation thereof and all paid dividends, warrants
and cheques at any time after the expiration of one year from the date
of actual payment thereof and all instruments of proxy which have been
used for the purpose of a poll at any time after the expiration of one
year from the date of such use and all instruments of proxy which have
not been used for the purpose of a poll at any time after one month
from the end of the meeting to which the instrument of proxy relates
and at which no poll was demanded. It shall conclusively be presumed in
favour of the Company that every entry in the Register purporting to
have been made on the basis of an instrument of transfer or other
document so destroyed was duly and properly made, that every instrument
of transfer so destroyed was a valid and effective instrument duly and
properly registered, that every share certificate so destroyed was a
valid and effective certificate duly and properly cancelled and that
every other document hereinbefore mentioned so destroyed was a valid
and effective document in accordance with the recorded particulars
thereof in the books or records of the Company, provided always that:-
(a) the provisions aforesaid shall apply only to the destruction
of a document in good faith and without notice of any claim
(regardless of the parties thereto) to which the document
might be relevant;
(b) nothing herein contained shall be construed as imposing upon
the Company any liability in respect of the destruction of any
such document earlier than as aforesaid or in any other
circumstances which would not attach to the Company in the
absence of this Bye-Law; and
66
(c) references herein to the destruction of any document include
references to the disposal thereof in any manner.
UNTRACED SHAREHOLDERS
139. (1) The Company shall be entitled to sell at the best price
reasonably obtainable, or if the shares are listed on a Stock
Exchange to purchase at the trading price on the date of
purchase, the shares of a Shareholder or the shares to which a
person is entitled by virtue of transmission on death,
bankruptcy, or otherwise by operation of law if and provided
that:-
(a) during the period of 12 years prior to the date of
the publication of the advertisements referred to in
paragraph (b) below (or, if published on different
dates, the first thereof) at least three dividends in
respect of the shares in question have been declared
and all dividends, warrants and cheques which have
been sent in the manner authorised by these Bye-Laws
in respect of the shares in question have remained
uncashed; and
(b) the Company shall as soon as practicable after expiry
of the said period of 12 years have inserted
advertisements both in a national daily newspaper and
in a newspaper circulating in the area of the last
known address of such Shareholder or other person
giving notice of its intention to sell or purchase
the shares; and
(c) during the said period of 12 years and the period of
three months following the publication of the said
advertisements the Company shall have received no
indication either of the whereabouts or of the
existence of such Shareholder or person; and
67
(d) if the shares are listed on a Stock Exchange, notice
shall have been given to the relevant department of
such Stock Exchange of the Company's intention to
make such sale or purchase prior to the publication
of advertisements.
If during any 12-year period referred to in paragraph (a)
above, further shares have been issued in right of those held
at the beginning of such period or of any previously issued
during such period and all the other requirements of this
Bye-Law (other than the requirement that they be in issue for
12 years) have been satisfied in regard to the further shares,
the Company may also sell or purchase the further shares.
(2) To give effect to any such sale or purchase, the Board may
authorise some person to execute an instrument of transfer of
the shares sold or purchased to, or in accordance with the
directions of, the purchaser and an instrument of transfer
executed by that person shall be as effective as if it had
been executed by the holder of, or person entitled by
transmission to, the shares. The transferee of any shares sold
shall not be bound to see to the application of the purchase
money, nor shall his title to the shares be affected by any
irregularity in, or invalidity of, the proceedings in
reference to the sale.
(3) The net proceeds of sale or purchase of shares shall belong to
the Company which, for the period of six years after the
transfer or purchase, shall be obliged to account to the
former Shareholder or other person previously entitled as
aforesaid for an amount equal to such proceeds and shall enter
the name of such former Shareholder or other person in the
books of the Company as a creditor for such amount. No trust
shall be created in respect of the debt, no interest shall be
payable in respect of the same and the Company shall not be
required to account for any money earned on the net proceeds,
which
68
may be employed in the business of the Company or invested in
such investments as the Board from time to time thinks fit.
After the said six-year period has passed, the net proceeds of
share shall become the property of the Company, absolutely,
and any rights of the former Shareholder or other person
previously entitled as aforesaid shall terminate completely.
WINDING UP
140. If the Company shall be wound up, the liquidator may, with the sanction
of a Resolution of the Company and any other sanction required by the
Companies Acts, divide amongst the Shareholders in specie or kind the
whole or any part of the assets of the Company (whether they shall
consist of property of the same kind or not) and may for such purposes
set such values as he deems fair upon any property to be divided as
aforesaid. Following settlement by the liquidator of the liabilities of
the Company, the remaining assets of the Company shall be distributed
to the Shareholders pro rata their shareholdings. The liquidator may,
--------
with the like sanction, vest the whole or any part of such assets in
trustees upon such trust for the benefit of the contributories as the
liquidator, with the like sanction, shall think fit, but so that no
Shareholder shall be compelled to accept any shares or other assets
upon which there is any liability.
INDEMNITY
141. Subject to the proviso below, every Director, Officer, member of a
committee constituted under Bye-Law 99 and any Resident Representative
of the Company shall be indemnified out of the funds of the Company
against all liabilities, loss, damage or expense (including but not
limited to liabilities under contract, tort and statute or any
applicable foreign law or
69
regulation and all reasonable legal and other costs and expenses
properly payable) incurred or suffered by him as such Director,
Officer, committee member or Resident Representative and the indemnity
contained in this Bye-Law shall extend to any person acting as a
Director, Officer, committee member or Resident Representative in the
reasonable belief that he has been so appointed or elected
notwithstanding any defect in such appointment or election; PROVIDED
ALWAYS that the indemnity contained in this Bye-Law shall not extend to
any matter which would render it void pursuant to the Companies Acts.
142. Every Director, Officer, member of a committee duly constituted under
Bye-Law 99 or Resident Representative of the Company shall be
indemnified out of the funds of the Company against all liabilities
incurred by him as such Director, Officer, committee member or Resident
Representative in defending any proceedings, whether civil or criminal,
in which judgement is given in his favour, or in which he is acquitted,
or in connection with any application under the Companies Acts in which
relief from liability is granted to him by the court.
143. To the extent that any Director, Officer, member of a committee duly
constituted under Bye-Law 99 or Resident Representative is entitled to
claim an indemnity pursuant to these Bye-Laws in respect of amounts
paid or discharged by him, the relative indemnity shall take effect as
an obligation of the Company to reimburse the person making such
payment or effecting such discharge.
144. Each Shareholder and the Company agree to waive any claim or right of
action he or it may at any time have, whether individually or by or in
the right of the Company, against any Director, Officer or member of a
committee duly constituted under Bye-Law 99 on account of any action
70
taken by such Director, Officer or member of a committee or the failure
of such Director, Officer or member of a committee to take any action
in the performance of his duties with or for the Company; PROVIDED
HOWEVER that such waiver shall not apply to any claims or rights of
action arising out of the fraud of such Director, Officer or member of
a committee duly constituted under Bye-Law 99 or to recover any gain,
personal profit or advantage to which such Director, Officer or member
of a committee duly constituted under Bye-Law 99 is not legally
entitled.
145. Subject to the Companies Acts, expenses incurred in defending any civil
or criminal action or proceeding for which indemnification is required
pursuant to Bye-Laws 141 and 142 shall be paid by the Company in
advance of the final disposition of such action or proceeding upon
receipt of an undertaking by or on behalf of the indemnified party to
repay such amount if it shall ultimately be determined that the
indemnified party is not entitled to be indemnified pursuant to Bye-
Laws 142 and 143 provided that no monies shall be paid hereunder unless
payment of the same shall be authorised in the specific case upon a
determination that indemnification of the Director or officer would be
proper in the circumstances because he has met the standard of conduct
which would entitle him to the indemnification thereby provided and
such determination shall be made:
(a) by the Board, by a majority vote at a meeting duly constituted
by a quorum of Directors not party to the proceedings or
matter with regard to which the indemnification is, or would
be, claimed; or
(b) in the case such a meeting cannot be constituted by lack of a
disinterested quorum, by independent legal counsel in a
written opinion; or
(c) by a majority vote of the Shareholders.
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Each Shareholder of the Company, by virtue of its acquisition and
continued holding of a share, shall be deemed to have acknowledged and
agreed that the advances of funds may be made by the Company as
aforesaid, and when made by the Company under this Bye-Law 145 are made
to meet expenditures incurred for the purpose of enabling such
Director, Officer, or member of a committee duly constituted under
Bye-Law 99 to properly perform his or her duties as an officer of the
Company.
AMALGAMATION
146. Any Resolution proposed for consideration at any general meeting to
approve the amalgamation of the Company with any other company,
wherever incorporated, shall require the approval of a simple majority
of votes cast at such meeting and the quorum for such meeting shall be
that required in Bye-Law 54 and a poll may be demanded in respect of
such Resolution in accordance with the provisions of Bye-Law 64.
CONTINUATION
147. Subject to the Companies Act, the Shareholders may by Resolution
approve the discontinuation of the Company in Bermuda and the
continuation of the Company in a jurisdiction outside Bermuda. The
Shareholders, having resolved to approve the discontinuation of the
Company, may by Resolution further resolve not to proceed with any
application to discontinue the Company in Bermuda or may vary such
application as they see fit.
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ALTERATION OF BYE-LAWS
148. (1) These Bye-Laws may be amended, from time to time, by
resolution of the Board, subject to approval by Resolution at
a General Meeting of the Shareholders.
(2) The vote or consent of the holders of 75% of the outstanding
capital shares of the Company entitled to vote and the
approval of a majority of the Board shall be required to
effect:-
(a) any amendments to the provisions of Bye-Laws 3, 34,
62, 63, 85, 86, 91, 92, 141 and this Bye-Law 148,
provided that if the provisions of Bye-Law 3, 34 or
63 are so amended or the Board and Shareholders upon
receipt of a written request for approval approve, by
an actual vote as described in Bye-Law 34(2), an
otherwise prohibited transfer under Bye-Law 34(2),
the Company will indemnify each holder of shares who
becomes subject to treatment as a "United States
shareholder" for purposes of Section 951 et. seq. of
the Code as a result of such amendment from and
against any and all losses, costs, damages,
liabilities and expenses arising out of, directly or
indirectly, such treatment. Notwithstanding the
foregoing provisions of Bye-Law 148(2)(a), in no
event shall the Company have any indemnity obligation
under this Bye-Law with respect to any transfer of
shares for which approval was required (whether or
not granted) pursuant to Bye-Law 34(2) to any holder
of shares who either (i) received such shares in
connection with such transfer or (ii) voted in favour
of such transfer; and
(b) any amendment to the maximum or minimum number of
Directors specified in Bye-Law 84.
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