AMENDED AND RESTATED BYE - LAWS
of
ENDURANCE SPECIALTY HOLDINGS LTD.
I HEREBY CERTIFY that the within written Bye-Laws are a true copy of the Amended
and Restated Bye-Laws of Endurance Specialty Holdings Ltd. as adopted by the
shareholders thereof at the Annual General Meeting held on 27 April 2005 in
place of those originally adopted on 19 July, 2002 as subsequently amended on 25
February 2003.
Prepared by
Messrs Appleby Spurling Hunter
Canon's Court
22 Victoria Street
Hamilton, Bermuda
I N D E X
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<TABLE>
BYE-LAW SUBJECT PAGE
- ------- ------- ----
1 Interpretation 1
2 Registered Office 8
3,4 Share Rights 9
5,6 Modification of Rights 10
7-11 Shares 11
12-15 Certificates 14
16-19 Lien 16
20-25 Calls on Shares 19
26-32 Forfeiture of Shares 20
33 Required Sale of Shares 22
34,35 Register of Shareholders 23
36 Register of Directors and Officers 23
37-39 Transfer of Shares 24
40-43 Transmission of Shares 25
44-46 Increase of Capital 27
47,48 Alteration of Capital 28
49,50 Reduction of Capital 29
51 General Meetings and Written Resolutions 29
52-55 Notice of General Meetings 30
56-62 Proceedings at General Meetings 31
63-66 Votes of Shareholders 33
67 Shareholder Disclosure 37
BYE-LAW SUBJECT PAGE
- ------- ------- ----
68-79 Voting Procedures 40
80-86 Proxies and Corporate Representatives 43
87-90 Appointment and Removal of Directors 46
91 Resignation and Disqualification of Directors 49
92-94 Alternate Directors 50
95 Observers 51
96 Directors' Fees and Additional
Remuneration and Expenses 51
97 Directors' Interests 52
98-102 Powers and Duties of the Board 53
103-105 Delegation of the Board's Powers 55
106-114 Proceedings of the Board 56
115 Officers 58
116 Minutes 59
117,118 Secretary and Resident Representative 60
119 The Seal 60
120-126 Dividends and Other Payments 61
127 Reserves 63
128 Capitalisation of Profits 63
130,131 Record Dates 64
132-134 Accounting Records 66
135 Audit 67
136-138 Service of Notices and Other Documents 67
139 Winding Up 68
140-146 Indemnity 69
147 Amalgamation 72
BYE-LAW SUBJECT PAGE
- ------- ------- ----
148 Continuation 72
149 Alteration of Bye-Laws 72
150 Certain Subsidiaries 73
</TABLE>
AMENDED AND RESTATED BYE - LAWS
of
ENDURANCE SPECIALTY HOLDINGS LTD.
INTERPRETATION
1. (1) In these Bye-Laws unless the context otherwise requires - "AFFILIATE"
means, with respect to any specified person, a person that directly or
indirectly controls, is controlled by or is under common control with
such person. For the purpose of this definition, the term "control" means
the power to direct the management of an entity, directly or indirectly,
whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlled" and "controlling" have meanings
correlative to the foregoing.
"ALTERNATE DIRECTOR" means an Alternate Director appointed in accordance
with Bye-Law 92.
"APPRAISED VALUE" with respect to any Ordinary Share means, as of any
specified date, the value of such Ordinary Share as of such date as
determined by an investment bank of nationally recognised standing
selected by the Shareholder and reasonably acceptable to the Company. If
the investment bank selected by the Shareholder is not reasonably
acceptable to the Company, and the Company and the Shareholder cannot
agree on a mutually acceptable investment bank, then the Company and the
Shareholder shall each choose one such investment bank and the respective
chosen firms shall jointly select a third investment bank, which shall
make the determination. The Company shall pay the costs and fees of each
such investment bank (including any such investment bank selected by the
Shareholder), and the decision of the investment bank making such
determination of Appraised Value shall be final and binding on the
Company and the Shareholder. Such Appraised Value shall be determined as
a pro rata portion of the value of the Company taken as a whole, based on
the higher of (A) the value derived from a hypothetical sale of the
Company as a going concern by a willing seller to a willing buyer
(neither acting under any compulsion) and (B) the liquidation value of
the Company. No discount shall be applied on account of (i) the purchased
Shares representing a minority interest, (ii) any lack of liquidity of
the purchased Shares, (iii) the fact that the purchased Shares may
constitute "restricted securities" for securities law purposes, (iv) the
existence of the Company's right, as set forth in these Bye-Laws and the
Shareholders Agreement, to require Shareholders to sell Shares to the
Company or to one or more third parties designated by the Company or (v)
the existence of the possibility of a reduction in voting power pursuant
to these Bye-Laws. The Appraised Value per Class A Share as of any
specified date shall be identical to the Appraised Value per Ordinary
Share on such date.
"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.
"BUSINESS DAY" means any day except a Saturday, Sunday or other day on
which banks in any of Hamilton, Bermuda, or New York, New York are
authorised or obligated by law or executive order to close.
"CLASS A SHARES" shall mean the Class A shares, par value $1.00 per
share, of the Company.
2
"CLASS A WARRANT" means a warrant, dated July 22, 2002, granting to the
holder thereof the right to purchase Class A Shares from the Company on
the terms and subject to the conditions therein.
"CODE" means the United States Internal Revenue Code of 1986, as amended,
or any United States federal statute then in effect that has replaced
such statute, and a reference to a particular section thereof shall be
deemed to include a reference to the comparable section, if any, of any
such replacement United States federal statute.
"CONFIDENTIAL INFORMATION" shall have meaning given to such term in
Bye-Law 67(2).
"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
Endurance Specialty Holdings Ltd. on 27 June 2002.
"CONTROL GROUP" means, with respect to any person, all Shares directly
owned by such person and all Shares directly owned by each other
Shareholder any of whose Shares are included in the Controlled Shares of
such person.
"CONTROLLED SHARES" in reference to any person means all Shares that such
person is deemed to own directly, indirectly (within the meaning of
Section 958(a) of the Code) or, in the case of any U.S. Person,
constructively (within the meaning of Section 958(b) of the Code).
"CONVERSION REQUEST" shall have the meaning given such term in Bye-Law 8.
"CONVERTIBLE SECURITIES" means evidences of indebtedness, shares
(including without limitation the Class A Shares (notwithstanding any
limitations on conversion thereof)), or other securities that are
convertible into or exchangeable for, with or without payment of
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additional consideration in cash or property, Ordinary Shares, either
immediately or upon the occurrence of a specified date or a specified
event.
"CONVERTING SHAREHOLDER" shall have the meaning given such term in
Bye-Law 7.
"CURRENT MARKET PRICE" with respect to any Ordinary Share means, as of
any specified date, the average of the daily market prices of the
Ordinary Shares for the twenty (20) consecutive Business Days immediately
preceding such date. The "daily market price" for each such Business Day
shall be: (1) if the Ordinary Shares are then listed on a national
securities exchange or on Nasdaq, the last sale price, regular way, on
such day on the principal stock exchange or market system on which the
Ordinary Shares are then listed or admitted to trading, or, if no such
sale takes place on such day, the average of the closing bid and asked
prices for the Ordinary Shares on such day as reported on such stock
exchange or market system or (2) if the Ordinary Shares are not then
listed or admitted to trading on any national securities exchange or on
Nasdaq but are traded over-the-counter, the average of the closing bid
and asked prices for the Ordinary Shares as reported on Nasdaq or the
Electronic Bulletin Board or in the National Daily Quotation Sheets, as
applicable.
"DESIGNATED COMPANIES" shall have the meaning given such term in Bye-Law
150.
"DESIGNATED COMPANY DIRECTORS" shall have the meaning given such term in
Bye-Law 150.
"DIRECTOR" means such person or persons as shall be appointed to the
Board from time to time pursuant to Bye-Law 87.
"EXCHANGE ACT" means the United States Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated thereunder.
4
"FAIR VALUE" with respect to any Ordinary Share means, as of any
specified date, (1) if the Ordinary Shares are publicly traded on such
date, the Current Market Price per Ordinary Share or (2) if the Ordinary
Shares are not publicly traded on such date, (A) the fair market value
per Ordinary Share as determined in good faith by the Board and set forth
in the Purchase Notice or (B) if the Shareholder objects in writing to
such price as determined by the Board within thirty (30) days after
receiving notice of same, the Appraised Value per Ordinary Share as of
such date. The Fair Value per Class A Share as of any specified date
shall be identical to the Fair Value per Ordinary Share on such date.
"FULLY DILUTED BASIS" means assuming the exercise, conversion or exchange
of all Share Purchase Rights, other than unvested Options, at the time
outstanding.
"INDEMNIFIED PERSON" shall have the meaning given such term in Bye-Law
140.
"INITIAL WARRANT" means a warrant, dated as of July 22, 2002, granting to
the holder thereof the right to purchase Ordinary Shares and/or Class A
Shares from the Company on the terms and subject to the conditions set
forth therein.
"9.5% SHAREHOLDER" means a person that owns Shares (within the meaning of
Section 958 (a) of the Code) and owns or is deemed to own Controlled
Shares which confer votes in excess of 9.5% (or such other percentage as
determined under Bye-Law 69(3)) of the votes conferred by all of the
issued and outstanding Shares.
"MEETING DATE" shall have the meaning given such term in Bye-Law 131.
"MEMORANDUM" means the Memorandum of Association of the Company in its
present form or as from time to time amended.
"OBSERVER" means an Observer appointed in accordance with Bye-Law 95.
5
"OFFICER" means a person appointed by the Board pursuant to Bye-Law 115
and shall not include an auditor of the Company.
"OPTIONS" means options to purchase Shares, including options to purchase
Shares that may be granted to certain directors, officers and employees
of the Company.
"ORDINARY SHARES" shall mean the ordinary shares, par value $1.00 per
share, of the Company.
"PAID UP" means paid up or credited as paid up.
"PUBLICLY TRADED SHARES" means (i) any Shares that (A) have been issued
pursuant to an effective registration statement under the Securities Act
or (B) have been sold to the public pursuant to Rule 144 under the
Securities Act or any similar successor rule; (ii) any Shares that have
been sold to the public outside the United States pursuant to the
statutes applicable to such sale in the country or jurisdiction in which
such Shares were sold; or (iii) any Shares issued upon the registration
of transfer of another Share that is a Publicly Traded Share.
"RECORD DATE" shall have the meaning given such term in Bye-Law 131.
"RECORD DATE HOLDER" shall have the meaning given such term in Bye-Law
131.
"REGISTER" means the Register of Shareholders of the Company.
"REGISTERED OFFICE" means the registered office for the time being of the
Company.
"RELATED GROUP" means a group of Shareholders that are investment
vehicles and are under common control or management.
"RELEVANT SHARES" shall have the meaning given such term in Bye-Law 131.
"REMOVED COMPANY DIRECTORS" share the meaning given such term in Bye-Law
150.
6
"RESIDENT REPRESENTATIVE" means the individual (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.
"SECURITIES ACT" means the United States Securities Act of 1933, as
amended, or any United States federal statute then in effect that has
replaced such statute.
"SERVICE" shall have the meaning given such term in Bye-Law 67(2).
"SHAREHOLDER" means a shareholder or member of the Company.
"SHAREHOLDERS AGREEMENT" means that certain Amended and Restated
Shareholders Agreement, dated as of January 30, 2003, as amended from
time to time, among the Company, Endurance Specialty Insurance Ltd. and
each of the Shareholders and Warrant Holders listed on Schedule A
thereto.
"SHARE PURCHASE RIGHTS" means any options, warrants or other securities
or rights to subscribe to or exercisable for the purchase of Shares or
Convertible Securities, whether or not immediately exercisable.
"SHARES" means any shares in the share capital of the Company.
7
"SPONSOR" has the meaning assigned such term in the Shareholders
Agreement.
"THESE BYE-LAWS" means these Amended and Restated Bye-Laws in their
present form or as from time to time amended.
"TRANSFER" when used with respect to Shares, includes granting security
interests in Shares, pledging Shares, or otherwise transferring or
disposing of any interest in Shares.
"U.S. PERSON" means a "United States person" as defined in Section 957(c)
of the Code.
"UNITED STATES" means the United States of America and dependent
territories or any part thereof.
"WARRANT" means an Initial Warrant or a Class A Warrant.
"WARRANT HOLDER" has the meaning assigned such term in the Shareholders
Agreement.
(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;
(5) Words importing persons include any individual, partnership, corporation,
limited liability company, joint venture, joint stock company, trust,
unincorporated organization, government (or an agency or political
subdivision thereof) or other entity;
(6) Reference to writing shall include typewriting, printing,
lithography, photography, telecopy 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
REGISTERED OFFICE
2. The Registered Office shall be at such place in Bermuda as the Board shall
from time to time appoint.
SHARE RIGHTS
3. 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 dividend, 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.
4. (1) Subject to the Companies Acts, any redeemable 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, 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.
9
(2) The Board may, at its discretion and without the sanction of a
Resolution, authorise the purchase by the Company of its own Shares, of
any class, at any price (whether at par or above or below par), and any
Shares to be so purchased may be selected in any manner, 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. To the extent permitted by the Companies Acts, the whole or any
part of the amount payable on any such purchase may be paid or satisfied
otherwise than in cash.
MODIFICATION OF RIGHTS
5. Subject to the Companies Acts, all or any of the special rights for the
time being attached to any class of 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 consent in writing of the holders of not less than
seventy-five percent (75%) of the issued Shares of that class or with the
sanction of a resolution passed at a separate general meeting of the holders
of such Shares voting in person or by proxy. 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 more than fifty
percent (50%) of the aggregate voting power of the Shares of the relevant
class, that every holder of Shares of the relevant class shall be entitled on
a poll to one vote for every such Share held by him (subject to any
adjustments made to the voting power of the Shares of any Shareholder
pursuant to Bye-Law 64) 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 Shareholders shall have only one Shareholder, one
Shareholder present in person or by proxy shall constitute the necessary
quorum.
10
6. For the purpose of this Bye-Law, unless otherwise expressly provided by
the rights attaching to or the terms of issue of such Shares or class
of Shares, such rights or terms, as the case may be, shall not be
deemed to be altered by:
(1) the creation or issue of further Shares ranking pari passu therewith;
(2) the creation or issue for full value (as determined by the Board) of
further Shares ranking as regards participation in the profits or assets
of the Company or otherwise in priority to them; or
(3) the purchase or redemption by the Company of any of its own Shares.
SHARES
7. The share capital of the Company shall consist of Ordinary Shares and
Class A Shares.
(1) All Ordinary Shares shall have the voting power determined pursuant to
Bye-Law 64.
(2) All Class A Shares shall have all of the rights of, and shall
be treated identically in all respects with, Ordinary Shares
(including with respect to dividends and other distributions,
whether of cash or other property (including securities),
stock splits, subdivisions and combinations, reorganizations,
reclassifications, amalgamations, mergers, consolidations,
liquidations, distributions or the like or the granting of
Share Purchase Rights), except that they shall carry no voting
rights other than such voting rights as may be required from
time to time by the Companies Acts, these Bye-Laws or the
Shareholders Agreement.
(3) Subject to paragraphs (4) and (5) of this Bye-Law, at any time
and from time to time, any holder of Class A Shares (a
"Converting Shareholder") may convert all or any portion of
its Class A Shares
11
into Ordinary Shares on a one-for-one basis in accordance with the
procedures set forth in Bye-Law 8, unless (i) the Board reasonably
determines that such conversion of all or any part of such Class A Shares
may cause adverse tax consequences, determined after giving effect to the
reduction in voting power pursuant to the provisions of Bye Laws 64, to
the Company, any of its subsidiaries or any U.S. Person as to which the
Shares held by such Shareholder constitute Controlled Shares or (ii) in
the case of Class A Shares except those initially issued upon the
exercise of an Initial Warrant, the Ordinary Shares held by such holder
after such a conversion would not have voting power greater than the
Ordinary Shares, if any, held by such holder before such a conversion
(after giving effect to any reduction in voting power imposed in
accordance with Bye-Laws 64). The Board may elect to accept only a
portion of the total Class A Shares requested to be converted if such
partial conversion is acceptable to the Converting Shareholder and if the
Board reasonably determines that the conversion of a greater amount may
cause adverse tax consequences to the Company, any of its subsidiaries or
any U.S. Person as to which the Shares held by such Shareholder
constitute Controlled Shares. In the event that the Board declines to
accept all or a portion of the total Class A Shares requested to be
converted by multiple Shareholders, the Board will use its best efforts
to treat similarly situated Shareholders equitably (to the extent
possible under the circumstances).
(4) Class A Shares obtained by a Shareholder upon exercise of an Initial
Warrant pursuant to Section 4.1 thereof may, when held by the Warrant
Holder that exercised such Initial Warrant or any Affiliate of such
Warrant Holder, be converted into Ordinary Shares only if such conversion
would not cause any Person to become a 9.5% Shareholder (without giving
effect to any provisions of these Bye-Laws that might limit the voting
power of such Ordinary Shares).
12
(5) Class A Shares issued by the Company other than pursuant to the exercise
of an Initial Warrant may not be converted into Ordinary Shares by the
Shareholder to whom such Class A Shares were originally issued nor by any
Affiliate of such Shareholder.
8. (1) Subject to the last sentence of this paragraph (1), in order to
convert Class A Shares, a Converting Shareholder shall deliver to the
Company a written request (a "Conversion Request") and share
certificate(s) representing the Class A Shares to be converted. The Board
shall determine whether to accept the Conversion Request within ten (10)
Business Days of receipt of such request. If the Board elects to reject
the Conversion Request which it may do only if it reasonably determines
that the Conversion may cause adverse tax consequences as determined in
subsection 3(i) of Bye-Law 7, or if the Converting Shareholder fails to
meet the requirements of subsections 3(ii), (4) or (5) of Bye-Law 7, the
Company will return the certificates promptly. The Board may delegate the
decision whether to accept the Conversion Request to a committee of the
Board, an Officer or other persons. In connection with the exercise of an
Initial Warrant, a Shareholder may request a prospective conversion of
the Class A Shares to be issued upon exercise thereof, such that the
exercise and conversion may occur simultaneously.
(2) Notwithstanding any other provision hereof, if a conversion of Class A
Shares is to be made in connection with any public offering of Ordinary
Shares or in connection with any transfer of Shares approval of which is
required pursuant to Bye-Laws 37 through 39, at the election of the
Converting Shareholder the conversion of Class A Shares may be
conditioned upon the consummation of such public offering or transfer
(with such conversion to occur simultaneously therewith).
13
(3) Within five (5) Business Days after a Conversion Request is
accepted by the Board (or simultaneously with a public
offering or other transfer if made in connection therewith),
the Company shall deliver to the Converting Shareholder (or,
if applicable, to its transferee):
(a) a certificate representing the Ordinary Shares into which the number
of Class A Shares accepted for conversion have been converted; and
(b) a certificate representing the Class A Shares, if any, that were
represented by the certificate delivered to the Company but were not
converted.
(4) The issuance of certificates for Ordinary Shares upon any conversion of
Class A Shares shall be made without charge to the Converting
Shareholders for any issuance tax in respect thereof or other cost
incurred by the Company in connection with such conversion. The Ordinary
Shares into which such Class A Shares shall have been converted shall be
validly issued and fully paid.
9. 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.
10. Shares may be issued in fractional denominations and in such event the
Company shall deal with such fractions to the same extent as its whole
shares, so that a share in a fractional denomination shall have, in
proportion to the fraction of a whole share that it represents, all the
rights of a whole share, including (but without limiting the generality
of the foregoing) the right to vote (subject to any adjustments made
pursuant to Bye-Law 64), to receive dividends and distributions and to
participate in a winding-up.
14
11. Except as ordered by a court of competent jurisdiction or as required
by law, no person shall be recognised by the Company as holding any
Share upon trust and the Company shall not be bound by or required in
any way to recognise (even when having notice thereof) any equitable,
contingent, future or partial interest in any Share or any interest in
any fractional part of a Share or (except only as otherwise provided in
these Bye-Laws, or by law) any other right in respect of any Share
except an absolute right to the entirety thereof in the registered
holder.
CERTIFICATES
12. 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.
13. 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.
14. 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 in such form as
the Board may determine and issued under the Seal. The Board may by
resolution determine, either generally or in any particular case, that
any signatures on
15
any such certificates need not be autographic but may be affixed to such
certificates by some mechanical means or may be printed thereon or that
such certificates need not be signed by any persons, and may determine
that a representation of the Seal may be printed on any such
certificates. If any person holding an office in the Company who has
signed, or whose facsimile signature has been used on any certificate,
ceases for any reason to hold his office, such certificate may
nevertheless be issued as though that person had not ceased to hold such
office.
15. 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 (i) 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 and (ii)
any such transfer shall be subject to the applicable provisions of
Bye-Law 37.
LIEN
16. The Company shall have a first and paramount lien on every Share (not being
a fully paid Share) for all moneys, 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, and the Company shall also
have a first and paramount lien on every Share (other than a fully paid
Share) standing registered in the name of a Shareholder, whether singly or
jointly with any other person, for all the debts and liabilities of such
Shareholder or his estate to the Company, whether the same shall have been
incurred before or after notice to the Company of any interest of any
person other
16
than such Shareholder, and whether the time for the payment or discharge of
the same shall have actually arrived or not, and notwithstanding that the
same are joint debts or liabilities of such Shareholder or his estate and
any other person, whether a Shareholder or not. 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.
17. 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 fourteen (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.
18. 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
19. (1) 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; or
(d) any other act or thing;
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
18
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 thereon (at a rate not exceeding that permissible
under the Interest and Credit Charges (Regulation) Act 1975 of
Bermuda) from the date of payment to the 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 monies as aforesaid then due or payable by the
Company, until such excess is paid to the Company.
(2) 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 estate
representative, 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.
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CALLS ON SHARES
20. The Board may from time to time make calls upon the Shareholders in
respect of any moneys 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 (14) 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.
21. 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.
22. The joint holders of a Share shall be jointly and severally liable to
pay all calls in respect thereof.
23. 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.
24. 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
20
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.
25. 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
26. 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.
27. The notice shall name a further day (not being less than fourteen (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-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.
28. 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.
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29. 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.
30. 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.
31. 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
moneys 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 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.
32. 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
22
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.
REQUIRED SALE OF SHARES
33. If the Board reasonably determines, upon the written advice of counsel,
that Share ownership by any person may result in any non-de minimis adverse
tax, legal or regulatory consequences to the Company, any subsidiary of the
Company, or any other holder of Shares (including if such consequence
arises as a result of any Person owning Controlled Shares of 9.5% or more
of the value of the Company or the voting Shares (after giving effect to
any adjustment to voting power required by Bye-Law 64)), the Company will
have the option but not the obligation to purchase or assign to a third
party or one or more other Shareholders the right to purchase the minimum
number of Shares held by such person which is necessary to eliminate such
non-de minimis adverse tax, legal or regulatory consequence at a price
determined in the good faith discretion of the Board to represent such
Shares' fair market value; provided that if the Shares are traded on a
securities exchange in or outside the United States, the fair market value
per Share shall be determined by the Board based on the average of the last
sales price per Share or if there is none, the average of the bid and asked
price per Share, in each case for the ten business days prior to the
repurchase date. The determinations by the Board pursuant to this Bye-Law
33 shall be final and binding. The Board will use reasonable efforts to
ensure equal treatment to similarly situated Shareholders to the extent
possible under the circumstances in connection with the application of this
Bye-Law 33.
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REGISTER OF SHAREHOLDERS
34. The Register shall be kept at the Registered Office or at such other
place in Bermuda as the Board may from time to time direct, in the
manner prescribed by the Companies Acts. Subject to the provisions of
the Companies Acts, the Company may keep one or more branch registers
in any place, and the Board may make, amend and revoke any resolutions
as it may think fit respecting the keeping of such registers.
35. The Register or any branch register may be closed at such times and for
such period as the Board may from time to time decide, subject to the
Companies Acts. Except during such time as it is closed, the Register and
each branch register shall be open to inspection in the manner prescribed
by the Companies Acts between 10:00 a.m. and 12:00 noon (or between such
other times as the Board from time to time determines) on every working
day. Unless the Board so determines, no Shareholder or intending
Shareholder shall be entitled to have entered in the Register or any branch
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 11.
REGISTER OF DIRECTORS AND OFFICERS
36. The Secretary 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 10:00 a.m. and 12:00
noon on every working day.
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TRANSFER OF SHARES
37. (1) Subject to the Companies Acts and to such of the restrictions
contained in these Bye-Laws as may be applicable, including,
without limitation, the provisions of this Bye-Law, 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 or by any other
method permissible under applicable law, in either case as may be
approved by the Board.
(2) 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.
(3) The Board may, in its absolute discretion and without
assigning any reason therefor, decline to register any
transfer of any Share which is not a fully paid Share.
(4) The Board may refuse to recognise an instrument of transfer
unless 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 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.
(5) The Board may refuse to recognise an instrument of transfer unless
the instrument of transfer is in respect of only one class of
Share.
(6) The Board may decline to register any transfer unless the
instrument of transfer is in favour of less than five persons
jointly.
(7) The Board may also decline to register any transfer unless it
is satisfied that all applicable consents, authorisations,
permissions or approvals of any governmental body or agency in
Bermuda or any other applicable jurisdiction required to be
obtained under relevant law prior to such transfer have been
obtained.
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(8) All instruments of transfer when registered may be retained by
the Company.
(9) No fee shall 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.
(10) 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 under Bye-Law 38.
38. If the Board declines to register a transfer it shall, within thirty
(30) days after the date on which the notice or instrument of transfer
was delivered to the Board, send to the transferee notice of such
refusal.
39. The transferor of a Share shall be deemed to remain the holder of the
Share until the name of the transferee is entered in the Register in
respect thereof. Any purported transfer of any Share in contravention
of any of the restrictions on transfer contained in these Bye-Laws
shall be void and of no effect and shall not be entered in the
Register.
TRANSMISSION OF SHARES
40. 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,
26
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. For greater certainty, where two or more persons
are registered as joint holders of a Share or Shares, then in the event of
the death of any joint holder or holders the remaining joint holder or
holders shall be absolutely entitled to the said Share or Shares and the
Company shall recognise no claim in respect of the estate of any joint
holder except in the case of the last survivor of such joint holders.
41. Any person becoming entitled to a Share in consequence of the death of
a Shareholder or otherwise by operation of applicable law may, 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. The
rights of any person becoming entitled to a Share under Bye-Laws 40 through
42 shall be subject to the Company's right to require a Shareholder to sell
Shares in accordance with Bye-Law 33.
42. 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
27
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 moneys 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 moneys payable in respect of the Shares until
the requirements of the notice have been complied with.
43. 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 40 through 42.
INCREASE OF CAPITAL
44. 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 and in any manner permitted by the Companies Acts.
45. 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 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.
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46. 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
47. The Company may from time to time by Resolution and in any manner permitted
by the Companies Acts:-
(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 the 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.
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
29
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.
48. 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
49. Subject to the Companies Acts, the 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.
50. 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
51. (1) The Board shall convene and the Company shall hold general
meetings as Annual General Meetings in accordance with the requirements
of the Companies Acts at such times and places as the Board shall
appoint. The Board or the President of the Company may, whenever it or
he thinks fit, and shall, when required by the Companies Acts, convene
general meetings other than Annual General Meetings which shall be
called Special General Meetings.
30
(2) Except in the case of the removal of auditors or Directors,
anything which may be done by resolution in general meeting may,
without a meeting and without any previous notice being required, be
done by resolution in writing, signed by all of the Shareholders or any
class thereof 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 or any class thereof 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 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 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, 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
52. An Annual General Meeting shall be called by not less than ten (10) days'
notice in writing and a Special General Meeting shall be called by not less
than ten (10) days' notice in writing. The notice shall be exclusive of the
day on which it is served or deemed to be served and of the day for which it
is given, and shall specify the place, day and time of the meeting, and, the
31
nature of the business to be considered. Notice of every general meeting
shall be given in any manner permitted by Bye-Laws 136 and 137 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 any Director or Resident Representative who
or which has delivered a written notice upon the Registered Office requiring
that such notice be sent to him or it.
53. A Shareholder present, either in person or by proxy, at any meeting of
the Company or of the holders of any class of Shares of the Company
present in person or by proxy shall be deemed to have received notice
of the meeting and, where requisite, of the purposes for which it was
called.
54. Subject to the Companies Acts, the Board may cancel or postpone a
meeting of the Shareholders after it has been convened and notice of
such cancellation or postponement shall be served in accordance with
Bye-Law 136 upon all Shareholders entitled to notice of the meeting so
cancelled or postponed setting out, where the meeting is postponed to a
specific date, notice of the new meeting in accordance with Bye-Law 52.
55. 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.
PROCEEDINGS AT GENERAL MEETINGS
56. 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
32
shall not be treated as part of the business of the meeting. Save as
otherwise provided by these Bye-Laws, at least four Shareholders present in
person or by proxy and representing more than fifty percent (50%) of the
aggregate voting power of the Company 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.
57. If within fifteen (15) 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 in person or by proxy, 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. The
Company shall give not less than ten (10) days' notice of any meeting
adjourned through want of a quorum.
58. 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.
59. Each Director upon giving the notice referred to in Bye-Law 52, and the
Resident Representative, if any, shall be entitled to attend and speak
at any general meeting of the Company.
60. The Chairman (if any) of the Board or, in his absence, the President
shall preside as chairman at every general meeting. If there is no such
Chairman or President, or if at any meeting neither the Chairman nor
the President is present within five (5) minutes after the time
appointed for holding the
33
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.
61. 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.
Subject to the Companies Acts, in addition to any other power of adjournment
conferred by law the chairman of the meeting may at any time without consent
of the meeting adjourn the meeting (whether or not it has commenced or a
quorum is present) to another time and/or place if, in his opinion, it would
facilitate the conduct of the business of the meeting to do so or if he is
so directed (prior to or at the meeting) by the Board. When a meeting is
adjourned for three months or more, notice of the adjourned meeting shall be
given as in the case of an original meeting.
62. 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.
VOTES OF SHAREHOLDERS
63. Subject to the provisions of Bye-Laws 64 and 65, and subject to any rights
and restrictions for the time being attached to any class or classes of
Shares, every Shareholder and every person representing a Shareholder by
proxy shall have one vote for each Share carrying the right to vote on the
34
matter in question of which he or the person represented by proxy is shown
in the Register as the holder. All matters in these Bye-Laws that are
subject to a vote or approval of Shareholders shall be based upon the voting
power of such Shareholders' Shares as determined pursuant to Bye-Laws 63
through 66. For the avoidance of doubt, in applying the provisions of these
Bye-Laws, a Share may carry a fraction of a vote.
64. (1) If, as a result of giving effect to the provisions of Bye-Law 63 or
otherwise, the votes conferred by the Controlled Shares of any person
would otherwise cause such person to be treated as a 9.5% Shareholder,
the votes conferred by the Shares of such person's Control Group are
hereby reduced (and shall be automatically reduced in the future) by
whatever amount is necessary so that after any such reduction the votes
conferred by the Controlled Shares of such person shall not exceed 9.5%
(or such other percentage as determined under Bye-Law 64(3)) of the
total voting power of all of the Shares entitled to vote on the matter
in question.
(2) The reduction in votes pursuant to Bye-Law 64(1) shall be determined as
follows:
(a) Beginning with the Control Group of the person whose Controlled
Shares have the largest number of votes and continuing, as required,
with the Control Group of each person whose Controlled Shares
successively have a smaller number of votes (after giving effect to
prior reductions), the reduction in votes conferred by the Shares of
a Control Group shall be effected proportionately among all the
Shares of such Control Group in accordance with the relative voting
power of such Shares, provided, however, that the votes conferred by
the Shares directly owned by Capital Z Financial Services Fund II,
L.P. and Capital Z Financial Services Private Fund II, L.P. shall
not be reduced below one vote per share pursuant to this Bye-Law
64(2).
35
(b) After all required reductions to Shares of Control Groups are
effected pursuant to subparagraph (a), the amount of any reduction
in the votes of the Shares held by each Shareholder effected by
application of subparagraph (a) above shall be (i) reallocated among
and conferred on the Shares held directly by such Shareholder,
proportionately in accordance with the reduction in voting power of
such Shares pursuant to subparagraph (a) above, to the extent that
so doing does not cause any person to be treated as a 9.5%
Shareholder and (ii) the amount of any remaining reduction in votes
shall then be allocated and conferred proportionately among the
Shares held directly by all other Shareholders in accordance with
the relative voting power of such Shares; provided, however, that no
Shares shall be conferred votes to the extent that so doing shall
cause any person to be treated as a 9.5% Shareholder.
(3) Upon written notification by a Shareholder to the Board,
(a) such Shareholder shall be entitled to direct that the Board (x)
treat it (and/or any specified Affiliate to whom Shares owned by
such Shareholder could be attributed pursuant to Section 958(a) of
the Code) as a U.S. Person, and/or (y) treat it, together with other
related Shareholders so designated by such Shareholder, as one
person for purposes of determining such Shareholder's Control Group;
or
(b) the number of votes conferred by the total number of Shares held by
such Shareholder shall be reduced to that percentage of the total
voting power of the Company, as so designated by such Shareholder
(subject to acceptance of such reduction by the Board in its sole
discretion) so that
36
(and to the extent that) such Shareholder may satisfy any applicable
insurance or other regulatory requirement (including tax regulatory)
or voting threshold or limitation that may be applicable to such
Shareholder.
(4) If, after giving effect to the provisions of Bye-Laws 64(1) and (2),
the votes conferred by the Shares directly held by any Related Group
would otherwise represent more than 9.5% of the votes conferred by all
of the issued and outstanding Shares, the votes conferred by such Shares
are hereby reduced (and shall be automatically reduced in the future)
proportionately among all the Shares directly held by such Related Group
in accordance with the relative voting power of such Shares, by whatever
amount is necessary so that after any such reduction the votes conferred
by the Shares directly held by such Related Group shall not exceed 9.5%
of the votes conferred by all of the issued and outstanding Shares. The
amount of any reduction in votes pursuant to this Bye-Law 64(4) shall
then be allocated and conferred proportionately among the Shares held
directly by all Shareholders who are not in such Related Group in
accordance with the relative voting power of such Shares; provided,
however, that no Shares shall be conferred votes to the extent that so
doing shall cause any person to be treated as a 9.5% Shareholder.
(5) Notwithstanding anything to the contrary in this Bye-Law 64, the votes
conferred by the Controlled Shares of any Shareholder shall not exceed
such amount as would result in any U.S. Person that owns Shares of the
Company (within the meaning of Section 958(a) of the Code) being treated
as owning (within the meaning of Section 958 of the Code) more than 9.5%
(or such lower percentage designated by a Shareholder pursuant to
Bye-Law provision 64(3) hereof) of the aggregate voting power of the
votes conferred by all the Shares of the Company entitled to vote on a
particular matter in question.
37
(6) The Board shall implement the foregoing in the manner set forth in this
Bye-Law. In addition to any other provision of this Bye-Law 64, any
Shares shall not carry rights to vote or shall have reduced voting
rights to the extent that the Board reasonably determines in good faith
that it is necessary that such Shares should not carry the right to vote
or shall have reduced voting rights in order to avoid adverse tax
consequences or materially adverse legal or regulatory treatment to the
Company, any subsidiary of the Company or any Shareholder or its
affiliates; provided, that the Board will use reasonable efforts to
exercise such discretion equally among similarly situated Shareholders
to the extent possible under the circumstances and provided further,
that the Board shall reallocate the amount of any reduction in vote in
the manner described in Bye-Law 64(2)(b).
65. The determination by the Board, made in good faith, upon the written
advice of counsel, as to any adjustments to voting power of any Share
made pursuant to Bye-Law 64 shall be final and binding.
66. Prior to any vote being cast on a resolution proposed at a meeting, the
Board of Directors shall notify the Shareholders of the voting power
conferred by their Shares at such meeting determined in accordance with
Bye-Laws 63 and 64 hereof.
SHAREHOLDER DISCLOSURE
67. (1) Subject to the provisions of this Bye-Law 67, the Company shall
have the authority to request from any Shareholder, and such Shareholder
shall provide to the Company, such information as the
38
Company may reasonably request for the purpose of (i) determining
whether any Shareholder's voting rights are to be adjusted pursuant to
Bye-Law 64, (ii) conducting the analysis required by Bye-Law 33, (iii)
determining whether the Company would realize any income that would be
included in the income of any Shareholder (or any interest holder,
whether direct or indirect, of any Shareholder) by operation of Section
953(c) of the Code and (iv) determining whether the Company or any of
its subsidiaries would be entitled to the benefits of a tax treaty.
(2) Any information provided by each Shareholder to the Company pursuant to
this Bye-Law 67 shall be deemed "confidential information" (the
"Confidential Information") and shall be used by the Company solely for
the purposes contemplated by this Bye-Law (except as may be required
otherwise by applicable law or regulation). The Company shall hold such
Confidential Information in strict confidence and shall not disclose any
Confidential Information that it receives, except (i) to the Internal
Revenue Service (the "Service") if and to the extent the Confidential
Information is required by the Service, (ii) to any outside legal
counsel or accounting firm engaged by the Company to make determinations
regarding the relevant Bye-Laws (iii) to officers and employees of the
Company or its Affiliates, subject to Bye-Law 67(3), or (iv) as
otherwise required by law or regulation.
(3) The Company shall take all measures practicable to ensure the
continued confidentiality of the Confidential Information and
shall grant the persons referred to in Bye-law 67(2)(ii) and
(iii) above access to the Confidential Information only to the
extent necessary to allow them to assist the Company in any
analysis required by Bye-Law 33, or 64, to determine whether
the Company would realize any income that would be included in
the income of any Shareholder (or any interest holder, whether
direct or indirect, of
39
any Shareholder) by operation of Section 953(c) of the Code or to
determine whether the Company or any of its subsidiaries would be
entitled to the benefits of a tax treaty. Prior to granting access to
the Confidential Information to such persons, the Company shall inform
them of its confidential nature and of the provisions of this Bye-Law
and shall require them to abide by all the provisions hereof. The
Company shall not disclose the Confidential Information to any Director
(other than a Director that is also either the Chief Executive Officer,
Chairman, Deputy Chairman, President or Vice President, except as
required by law or regulation, upon request to the Company). For the
avoidance of doubt, the Company shall be permitted to disclose to the
Shareholders and others the relative voting percentages of the
Shareholders after application of Bye-Law 64. At the written request of
a Shareholder, the Confidential Information of such Shareholder shall be
destroyed or returned to such Shareholder after the later to occur of
(i) such Shareholder no longer being a Shareholder or (ii) the
expiration of the applicable statute of limitations with respect to any
Confidential Information obtained for purposes of engaging in any tax
related analysis.
(4) The Company shall (i) notify a Shareholder immediately of the
existence, terms and circumstances surrounding any request made to the
Company to disclose any Confidential Information provided by or with
respect to such Shareholder and, prior to such disclosure, shall permit
such Shareholder a reasonable period of time to seek a protective order
or other appropriate remedy and/or waive compliance with the provisions
of this Bye-Law, and (ii) if, in the absence of a protective order, such
disclosure is required in the opinion of counsel to the Company, the
Company shall make such disclosure without liability hereunder, provided
that the Company shall furnish only that portion of the Confidential
40
Information which is legally required, shall give such Shareholder
notice of the information to be disclosed as far in advance of its
disclosure as practicable and, upon the request of such Shareholder and
at its expense, shall use best efforts to ensure that confidential
treatment will be accorded to all such disclosed information.
(5) If a Shareholder fails to respond to a request for information
from the Company pursuant to this Bye-Law or submits incomplete or
inaccurate information in response to such a request, the Company may in
its reasonable discretion (after considering the circumstances described
in any response to the request by the Shareholder and providing such
Shareholder with a cure period of such length, if any, as the Company in
its reasonable discretion shall determine to be reasonable under the
circumstances) determine that such Shareholder's Shares shall carry no
or reduced, as the case may be, voting rights until otherwise determined
by the Company in its reasonable discretion.
(6) The Board may rely exclusively on the analysis, deliberation,
reports and other communications of those persons specified in (i)-(iii)
of Bye-Law 67(2) above with respect to the collection, disclosure or use
of the Confidential Information, including, but not limited to
determining whether the Company would realize any income that would be
included in the income of any Shareholder (or any interest holder,
whether direct or indirect, of any Shareholder) by operation of Section
953(c) of the Code, implementing Bye-Law 33, or 64, or determining
whether the Company or any of its subsidiaries would be entitled to the
benefits of a tax treaty.
41
VOTING PROCEDURES
68. Save where a greater majority 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.
69. Subject to any rights or restrictions for the time being lawfully
attached to any class of Shares and subject to the provisions of these
Bye-Laws including any adjustments made to the voting power of the
Shares of any Shareholder pursuant to Bye-Law 64, at any general
meeting, a resolution put to the vote of the meeting shall be decided
on a show of hands unless (before or on the declaration of the result
of the show of hands or on the withdrawal of any other demand for a
poll) a poll is demanded by:
(1) the chairman of the meeting; or
(2) at least three Shareholders present in person or represented
by proxy; or
(3) any Shareholder or Shareholders present in person or
represented by proxy and holding between them not less than
one eleventh of the total voting rights of all the
Shareholders having the right to vote at such meeting; or
(4) a Shareholder or Shareholders present in person or represented
by proxy holding Shares conferring the right to vote at such
meeting, being Shares on which an aggregate sum has been paid
up equal to not less than one eleventh of the total sum paid
up on all such Shares conferring such right.
The demand for a poll may be withdrawn by the person or any of the
persons making it at any time prior to the declaration of but only with
the consent of the chairman and a demand so withdrawn shall not be
taken to have invalidated the result of a show of hands declared before
the demand for a poll was made. Unless a poll is so demanded and the
demand is not
42
withdrawn, a declaration by the chairman that a resolution has, on a show of
hands, been carried or carried unanimously or by a particular majority or
not carried by a particular majority or lost shall be final and conclusive,
and an entry to that effect in the minute book of the Company shall be
conclusive evidence of the fact without proof of the number or proportion of
votes recorded for or against such resolution.
70. If a poll is duly demanded, the result of the poll shall be deemed to be the
resolution of the meeting at which the poll is demanded.
71. A poll demanded on the election of a chairman, or on a question of
adjournment, shall be taken forthwith. A poll demanded on any other
question shall be taken in such manner and either forthwith or at such
time later in the meeting as the chairman shall direct. It shall not be
necessary (unless the chairman otherwise directs) for notice to be
given of a poll.
72. The demand for a poll shall not prevent the continuance of a meeting
for the transaction of any business other than the question on which
the poll has been demanded and it may be withdrawn at any time before
the close of the meeting or the taking of the poll, whichever is the
earlier.
73. On a poll, votes may be cast either personally or by proxy.
74. 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.
75. In the case of an equality of votes at a general meeting, whether on a
show of hands or on a poll, the chairman of such meeting shall not be
entitled to a second or casting vote and the resolution shall fail.
43
76. 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 determined by the order in which the names stand in
the Register in respect of the joint holding.
77. 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.
78. 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.
79. 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.
44
PROXIES AND CORPORATE REPRESENTATIVES
80. A Shareholder may appoint one or more persons as his proxy, with or
without the power of substitution, to represent him and vote on his
behalf in respect of all or some of his shares at any general meeting
(including an adjourned meeting). A proxy need not be a Shareholder.
81. The instrument appointing a proxy shall be in writing executed by the
appointor or his attorney authorised by him in writing or, if the
appointor is a corporation, either under its seal or executed by an
officer, attorney or other person authorised to sign the same.
82. Any Shareholder may appoint a proxy or(if a corporation) representative
for a specific general meeting, and adjournments thereof, or may appoint a
standing proxy or (if a corporation) representative, by serving on the
Company 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. For the purposes of service on the Company pursuant to this
Bye-Law, the provisions of Bye-Law 136 as to service on Shareholders shall
mutatis mutandis apply to service on the Company. Any standing 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
45
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.
83. Subject to Bye-Law 82, the instrument appointing a proxy or authorisation,
as the case may be, 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 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) by such
date and time specified in the notice 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 or
authorisation, as the case may be, shall not be treated as valid.
84. Instruments of proxy or authorisation, as the case may be, 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 or authorisation, as the
case may be, for use at that meeting or in connection with that written
resolution. The instrument of proxy or authorisation, as the case may be,
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 or authorisation, as the case may be, 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.
46
85. A vote given in accordance with the terms of an instrument of proxy or
authorisation, as the case may be, shall be valid notwithstanding the
previous death or unsoundness of mind of the principal, or revocation of the
instrument of proxy or authorisation, as the case may be, or of the
authority under which it was executed, provided that no intimation in
writing of such death, unsoundness of mind 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 or authorisation, as
the case may be, 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 or
authorisation, as the case may be, is used.
86. 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, as the case may be, 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
87. (1) The number of Directors constituting the Board shall be not less than
two (2) nor more than twenty (20), the exact number to be determined
from time to time by the Company by Resolution; PROVIDED, HOWEVER, that
if no such Resolution shall be in effect the number of Directors shall
be twelve (12).
47
(2) The Board shall be divided into three classes, with the term
of the office of one class expiring each year. Each class
shall consist, as nearly as possible, of one-third of the
total number of Directors constituting the entire Board. There
is no distinction in the voting or other powers and
authorities of Directors of different classes; the
classifications are solely for the purposes of the retirement
by rotation provisions set out in this Bye-Law 87. All
Directors will be designated as either class I, class II or
class III Directors. The Board shall from time to time by
resolution determine the respective numbers of class I
Directors, class II Directors and class III Directors.
(3) Each class I Director shall (unless his office is vacated in
accordance with these Bye-Laws) serve until the conclusion of
the Annual General Meeting of the Company held in the calendar
year 2006 and subsequently shall (unless his office is vacated
in accordance with these Bye-Laws) serve for three-year terms,
each concluding at the third Annual General Meeting after the
class I Directors together were last appointed or
re-appointed.
(4) Each class II Director shall (unless his office is vacated in
accordance with these Bye-Laws) serve until the conclusion of
the Annual General Meeting of the Company held in the calendar
year 2007 and subsequently shall (unless his office is vacated
in accordance with these Bye-Laws) serve for three-year terms,
each concluding at the third Annual General Meeting after the
class II Directors together were last appointed or
re-appointed.
(5) Each class III Director shall (unless his office is vacated in
accordance with these Bye-Laws) serve until the conclusion of
the Annual General Meeting of the Company held in the calendar
year 2005 and subsequently shall (unless his office is vacated
in accordance with these Bye-Laws) serve for three-year terms,
each concluding at the third Annual General Meeting after the
class III Directors together were last appointed or
re-appointed.
48
(6) If the number of Directors is altered by Resolution pursuant
to this Bye-Law, such Resolution shall apportion any increase
or decrease among the classes so as to maintain the number of
Directors in each class as equal as possible, but in no case
shall a decrease in the number of Directors shorten the term
of any incumbent Director. All Directors, upon election or
appointment (except upon election at an Annual General
Meeting), 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 thirty days
of their appointment.
88. The Company shall at the Annual General Meeting and may by Resolution
determine the minimum and the maximum number of Directors and may by
Resolution determine that one or more vacancies in the Board shall be deemed
casual 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 elect 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 fill the vacancy arising and
shall, for the purposes of these Bye-Laws, constitute a member of the class
of Directors represented by the person that he replaces and shall hold
office for the balance of the term of such vacant Board position or until
such Director's successor is elected or appointed or such Director's office
is otherwise vacated.
89. The Company 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 fourteen (14) days before the
meeting
49
and he shall be entitled to be heard at that meeting. Notice of every
general meeting shall be given in any manner permitted by Bye-Law 136 and
137. 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. A Director
so elected or appointed shall hold office for the balance of the term of
such vacant Board position or until such Director's successor is elected or
appointed or such Director's office is otherwise vacated.
90. If a Shareholder desires to nominate one or more individuals for election as
Directors at any general meeting duly called for the election of Directors,
written notice of such Shareholder's intent to make such a nomination must
be received by the Company at the Registered Office (or at such other place
or places as the Board may otherwise specify from time to time for this
purpose) not less than 120 days nor more than 150 days before the first
anniversary of the date of the notice convening the Company's annual general
meeting of shareholders for the prior year. Such notice shall set forth (i)
the name and address, as it appears in the Register, of the Shareholder who
intends to make such nomination; (ii) a representation that the Shareholder
is a holder of record of Shares entitled to vote at such meeting and intends
to appear in person or by proxy at the meeting to make such nomination;
(iii) the class and number of Shares which are held by the Shareholder; (iv)
the name and address of each individual to be nominated; (v) a description
of all arrangements or understandings between the Shareholder and any such
nominee and any other person or persons (naming such person or persons)
pursuant to which such nomination is to be made by the Shareholder; (vi) a
description of all material personal and business relationships between the
Shareholder and any such nominee during the preceding ten (10) years; (vii)
such other information regarding any such nominee that would be required to
be included in a proxy statement filed pursuant to Regulation
50
14A under the Exchange Act, whether or not the Company is then subject to
such Regulation; (viii) the consent of any such nominee to serve as a
Director, if so elected; and (ix) the certification of any such nominee as
to the accuracy and completeness of the information set forth in such
notice. The Company will send copies of such notice to all Shareholders with
the notice of the Annual General Meeting at which Directors will be elected.
The chairman of such meeting shall, if the facts reasonably warrant, refuse
to acknowledge a nomination that is not made in compliance with the
procedure specified in this Bye-Law, and any such nomination not properly
brought before the meeting shall not be considered.
RESIGNATION AND DISQUALIFICATION OF DIRECTORS
91. 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;
(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 is
removed from office pursuant to these Bye-Laws.
ALTERNATE DIRECTORS
92. A Director may appoint and remove his own Alternate Director. Any
appointment or removal of an Alternate Director by a Director shall be
effected by depositing a notice of appointment or removal with the
51
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 be removed by resolution of
the Board. Subject as aforesaid, the office of Alternate Director shall
continue until the next annual election of Directors or, if earlier,
the date on which the relevant Director ceases to be a Director. An
Alternate Director may also be a Director in his own right and may act
as alternate to more than one Director.
93. 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.
94. 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
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.
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OBSERVERS
95. Pursuant to the provisions of the Shareholders Agreement, certain
Shareholders may have the right to designate or remove an Observer who shall
(1) have the right to receive due notice of and to attend and participate in
(but not vote at) all meetings of the Board and all meetings of committees
of the Board other than the Nominating Committee, (2) have the right to
receive copies of all documents and other information furnished to Directors
and to members of committees of the Board other than the Nominating
Committee, (3) have the same rights as any Director to review the books and
records of the Company and to make inquiries of and meet with its Officers
and employees, (4) have the same rights that a Director has pursuant to
Bye-Law 92 mutatis mutandis to appoint and remove a person to act as an
Observer in the alternative to himself and (5) be entitled to be indemnified
by the Company pursuant to Bye-Laws 140 through 145 to the same extent
mutatis mutandis as if he were a Director.
DIRECTORS' FEES AND ADDITIONAL REMUNERATION AND EXPENSES
96. The amount, if any, of Directors' fees shall from time to time be
determined by the Board and in the absence of a determination to the
contrary such fees shall be deemed to accrue from day to day. 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
53
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
97. (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
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 (except to the
extent provided in Bye-Law 150 with respect to a Designated 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
54
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 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) 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.
POWERS AND DUTIES OF THE BOARD
98. 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.
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99. 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.
100. All cheques, promissory notes, drafts, bills of exchange and other
instruments, whether negotiable or transferable or not, and all
receipts for 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.
101. The Board on behalf of the Company may provide benefits, whether by the
payment of gratuities or pensions or otherwise, for any person
including any Director or former Director who has held any executive
office or employment with the Company or with any body corporate which
is or has been a subsidiary or affiliate of the Company or a
predecessor in the business of the Company or of any such subsidiary or
affiliate, and to any member of his family or any person who is or was
dependent on him, and may contribute to any fund and pay premiums for
the purchase or provision of any such gratuity, pension or other
benefit, or for the insurance of any such person.
102. The Board may from time to time appoint one or more of its body to be a
managing director, joint managing director or an assistant managing
director or to hold any other employment or executive office with the
Company for such period and upon such terms as the Board may determine and
may revoke or terminate any such appointments. Any such revocation
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or termination as aforesaid shall be without prejudice to any claim for
damages that such Director may have against the Company or the Company may
have against such Director for any breach of any contract of service
between him and the Company which may be involved in such revocation or
termination. Any person so appointed shall receive such remuneration (if
any) (whether by way of salary, commission, participation in profits or
otherwise) as the Board may determine, and either in addition to or in lieu
of his remuneration as a Director.
DELEGATION OF THE BOARD'S POWERS
103. 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.
104. The Board may entrust to and confer upon any Director, Officer or,
without prejudice to the provisions of Bye-Law 105, 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.
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105. When required under the requirements from time to time of any stock
exchange on which the Shares of the Company are listed, the Board shall
appoint an Audit Committee, Compensation Committee, and Nominating and
Corporate Governance Committee in accordance with the requirements of such
stock exchange. The Board may also delegate any of its powers, authorities
and discretions to any other 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
106. The Board may meet for the despatch of business, adjourn and
otherwise regulate its meetings as it thinks fit, unless
otherwise required by these Bye-Laws. Questions arising at any
meeting shall be determined by a majority of votes. 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.
107. 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 sent
to him by post, cable, telex, telecopier, email, 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.
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108. (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 a majority of Directors in office
from time to time and in no event shall be less than two
Directors. Any Director who ceases to be a 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) A Director who to his knowledge is in any way, whether
directly or indirectly, interested in a contract or proposed
contract, transaction or arrangement with the Company and has
complied with the provisions of the Companies Acts and these
Bye-Laws with regard to disclosure of his interest shall be
entitled to vote in respect of any contract, transaction or
arrangement in which he is so interested, and he shall be
taken into account in ascertaining whether a quorum is
present, but the resolution with respect to the contract,
transaction or arrangement will fail unless it is approved by
a majority of the disinterested Directors voting on the
resolution.
(3) 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.
109. 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.
110. The Chairman (or President) or, in his absence, the Deputy 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-
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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.
111. 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.
112. 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 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.
113. 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.
114. 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.
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OFFICERS
115. The Officers of the Company shall include a President and a Vice-President
or a 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 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.
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) of 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;
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(4) of 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 141 and the minutes of meetings of the Shareholders of the
Company.
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.
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(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 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;
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(2) dividends, or distributions out of contributed surplus, may be
apportioned and paid pro rata according to the amounts paid-up
on 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 moneys
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 moneys 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 moneys payable or property distributable in respect
of the Shares held by such joint holders.
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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
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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CAPITALISATION 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
66
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
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 general
meetings. Any such record date may be on or at any time before or after
any date on which such dividend, distribution, allotment or issue is
declared, paid or made or such notice is despatched.
131. In relation to any general meeting of the Company or of any class of
Shareholder or to any adjourned meeting or any poll taken at a meeting
or adjourned meeting of which notice is given, the Board may specify in
the notice of meeting or adjourned meeting or in any document sent to
Shareholders by or on behalf of the Board in relation to the meeting, a
time and date (a "Record Date") prior to the date fixed for the meeting
(the "Meeting Date") and, notwithstanding any provision in these
Bye-Laws to the contrary, in such case:
(1) each person entered in the Register at the Record Date as a
Shareholder, or a Shareholder of the relevant class (a "Record
Date Holder") shall be entitled to attend and to vote at the
relevant meeting and to exercise all of the rights or
privileges of a Shareholder, or a Shareholder of the relevant
class (in each case subject to Bye-Law 64), in relation to
that meeting in respect of the Shares, or the Shares of the
relevant class, registered in his name at the Record Date;
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(2) as regards any Shares, or Shares of the relevant class, which
are registered in the name of a Record Date Holder at the
record date but are not so registered at the meeting date
("Relevant Shares"), each holder of any Relevant Shares at the
meeting date shall be deemed to have irrevocably appointed
that Record Date Holder as his proxy for the purpose of
attending and voting in respect of those relevant Shares at
the relevant meeting (with power to appoint, or to authorise
the appointment of, some other person as proxy), in such
manner as the Record Date Holder in his absolute discretion
may determine; and
(3) accordingly, except through his proxy pursuant to paragraph
(2) of this Bye-Law, a holder of relevant Shares at the
meeting date shall not be entitled to attend or to vote at the
relevant meeting, or to exercise any of the rights or
privileges of a Shareholder, or a Shareholder of the relevant
class, in respect of the relevant Shares at that meeting.
The entry of the name of a person in the Register as a Record Date
Holder shall be sufficient evidence of his appointment as proxy in
respect of any relevant Shares for the purposes of this paragraph, but
all the provisions of these Bye-Laws relating to the execution and
deposit of an instrument appointing a proxy or any ancillary matter
(including the Board's powers and discretions relevant to such matter)
shall apply to any instrument appointing any person other than the
record date holder as proxy in respect of any relevant Shares.
ACCOUNTING RECORDS
132. 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.
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133. 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) 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, Resolution.
134. 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
135. 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
136. 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
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appearing in the Register or by sending it by courier to such registered
address, or by sending it by email to an address supplied by such
Shareholder for the purpose of the receipt of notices or documents in
electronic form, or by delivering it to or leaving it at such address as
appears in the Register for such Shareholder. 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
forty-eight (48) hours after it was put in the post, and when sent by
courier, twenty-four (24) hours after sending or, when sent by email,
twelve (12) hours after sending and in proving such service or delivery, it
shall be sufficient to prove that the notice or document was properly
addressed and stamped and put in the post, sent by courier or sent by
email, as the case may be.
137. 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 courier, cable, telex, telecopier, email 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 (24) hours after its despatch,
when sent by courier, cable, telex or telecopier and twelve (12) hours
after its despatch when sent by email.
138. 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
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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.
WINDING UP
139. 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 and may
determine how such division shall be carried out as between the
Shareholders or different classes of Shareholders. 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
140. Subject to the proviso below, every Director, Officer of the Company and
member of a committee constituted under Bye-Law 105 and any Resident
Representative and their respective heirs, executors and administrators
(any of the foregoing, an "Indemnified Person") shall be indemnified and
held harmless out of the assets of the Company against all actions, costs,
charges, liabilities, loss, damage or expense to the full extent permitted
by law (including but not limited to liabilities under contract, tort,
fiduciary duties
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and statute or any applicable foreign law or regulation and all reasonable
legal and other costs and expenses properly payable) incurred or suffered
by him by or by reason of any act done, conceived in or omitted in the
conduct of the Company's business or in the discharge of his duties and the
indemnity contained in this Bye-Law shall extend to any Indemnified Person
acting in any office or trust in the reasonable belief that he has been
appointed or elected to such office or trust 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.
141. No Indemnified Person shall be liable to the Company for the acts,
neglects, defaults or omission of any other Indemnified Person 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 Indemnified Person shall be indemnified out of the funds of the
Company against all liabilities incurred by him by or by reason of any
act done, conceived in or omitted in the conduct of the Company's
business or in the discharge of his duties, in defending any
proceedings, whether civil or criminal, in which judgment 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 Indemnified Person 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.
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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 Indemnified Person on account of
any action taken by such Indemnified Person or the failure of such
Indemnified Person 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 claim or right of action which would render the waiver
void pursuant to the Companies Acts and shall not apply to any claims
or rights of action arising out of the fraud or dishonesty of such
Indemnified Person or to recover any gain, personal profit or advantage
to which such Indemnified Person 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 140, 141 and 144 shall be paid by the Company in
advance of the final disposition of such action or proceeding (including
any cost or expense incurred in obtaining such advance or indemnification)
upon receipt of an undertaking by or on behalf of the Indemnified Person to
repay such amount if it shall ultimately be determined that the Indemnified
Person is not entitled to be indemnified pursuant to Bye-Laws 140, 141 and
144 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:
(1) 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
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(2) in the case such a meeting cannot be constituted by lack of a
disinterested quorum, by independent legal counsel in a written
opinion; or
(3) by a majority vote of the Shareholders (after giving effect to any
adjustments to the voting power imposed pursuant to Bye-Law 64).
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 are made to meet expenditures
incurred for the purpose of enabling such Indemnified Person to properly
perform his or her duties to the Company.
146. The purpose of Bye-laws 140-145 as a whole is to provide the broadest
indemnity allowable at law, and to the extent any indemnification
hereunder is prohibited, unenforceable or not authorized under
applicable law, it is the intent of these Bye-Laws that such
indemnification be interpreted as broadly as possible without
invalidating the remaining provisions hereof. Specifically, to the
extent prohibited by Bermuda law, these Bye-laws shall not result in
indemnification of any person, including an Indemnified Person, to the
extent he engaged in fraud or dishonesty.
AMALGAMATION
147. 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 56 and a poll may be demanded in respect of
such resolution in accordance with the provisions of Bye-Law 69.
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CONTINUATION
148. Subject to the Companies Acts, the Board may approve the discontinuation
of the Company in Bermuda and the continuation of the Company in a
jurisdiction outside Bermuda. The Board, having resolved to approve the
discontinuation of the Company, may further resolve not to proceed with any
application to discontinue the Company in Bermuda or may vary such
application as it sees fit.
ALTERATION OF BYE-LAWS
149. (1) These Bye-Laws may be revoked or amended by the Board, which may from
time to time revoke or amend them in any way by a resolution of the
Board passed by a majority of the Directors then in office and eligible
to vote on that resolution, but no such revocation or amendment shall
be operative unless and until it is approved at a subsequent general
meeting of the Company by the Shareholders (a) by Resolution passed by
a majority of votes cast (after giving effect to any adjustments to
voting power imposed pursuant to Bye-Law 64) whenever it is proposed by
the Board to repeal, alter or amend any of the Bye-Laws except Bye-Laws
140-146 or (b) by Resolution of eighty five percent (85%) of the total
votes cast (after giving effect to any adjustments to voting power
imposed pursuant to Bye-Law 64) whenever it is proposed by the Board to
repeal, alter or amend Bye-Laws 140-146 or adopt any provision
inconsistent therewith .
(2) Any repeal, alteration or amendment of Bye-Laws 140-146 or adoption of
any provision inconsistent therewith shall not adversely affect any
rights to indemnification and to the advancement of expenses thereunder
existing at the time of such
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repeal, alteration, amendment or adoption with respect to any acts or
omissions occurring immediately prior to such repeal, alteration,
amendment or adoption.
CERTAIN SUBSIDIARIES
150. (1) Except to the extent otherwise provided in Bye-Law 150(3), with respect
to any subsidiary of the Company that is not a U.S. corporation or that
is not treated as a pass-through or disregarded entity for U.S. federal
income tax purposes (unless such disregarded entity owns, directly or
indirectly, any subsidiary that is organized under the laws of a
jurisdiction outside of the United States that is treated as a
corporation for U.S. federal income tax purposes) (together, the
"Designated Companies"), subject to any applicable mandatory law of the
relevant jurisdiction (i) the board of directors of each such
Designated Company shall consist of the persons, a majority of whom are
Directors of the Company, who have been elected as director designees
with respect to such Designated Company by the Shareholders of the
Company ("Designated Company Directors") in a general meeting of the
Shareholders by resolution, which resolution directs the Company to
vote its shares in such Designated Company to ensure that the board of
directors of such Designated Company consists of the Designated Company
Directors designated with respect to such Designated Company, and (ii)
the Shareholders of the Company in a general meeting may designate the
persons to be removed as directors of any Designated Company (the
"Removed Company Directors") by resolution, which resolution directs
the Company to vote its shares in the Designated Company to effect the
removal of the Removed Company Directors from the board of directors of
the applicable Designated Company, subject to the requirement that a
majority of the directors of each Designated Company are directors of
the Company.
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(2) Notwithstanding the general authority of the Board set out in
Bye-Law 97(3), the Company shall vote all shares owned by the Company
in each Designated Company (i) to elect the Designated Company
Directors with respect to each Designated Company as the directors of
such Designated Company and to remove the Removed Company Directors
with respect to each Designated Company as directors of such Designated
Company and (ii) to ensure that the constitutional documents of such
Designated Company require such Designated Company Directors to be
elected and such Removed Company Directors to be removed as provided in
this Bye-Law. The Board and the Company shall ensure that the
constitutional documents of each such Designated Company shall
effectuate or implement this Bye-Law and, subject to any applicable
mandatory law of the relevant jurisdiction, contain a provision
substantially similar to this Bye-Law 150 governing the election,
appointment and removal of its direct subsidiaries' directors. The
Company shall also enter into agreements with each such Designated
Company to effectuate or implement this Bye-Law and take such other
actions as are necessary to effectuate or implement this Bye-Law.
(3) The provisions set forth in Bye-Law 150 shall not apply with respect to
any subsidiary of the Company that is not a U.S. corporation if a
substantial portion of the income of such corporation is from U.S.
sources and is effectively connected with the conduct by such
corporation of a trade or business or permanent establishment within
the United States (unless either (a) such income is exempt from
taxation, or otherwise subject to a
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reduced rate of tax, pursuant to a treaty obligation of the United
States or (b) such corporation owns, directly or indirectly, any
subsidiary that is not a U.S. corporation that does not earn a
substantial portion of its income from U.S. sources or the income is
not effectively connected with the conduct by such subsidiary of a
trade or business or permanent establishment within the United States)
and any other income of such corporation does not, and is not expected
to, constitute subpart F income as defined in Section 952(a) of the
Code.
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