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Exhibit 3
[Reflecting Amendments Through June 27, 2002]
BYE-LAWS
OF
ARCH CAPITAL GROUP LTD.,
A BERMUDA COMPANY
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TABLE OF CONTENTS
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Bye-Law Page
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1. Interpretation..........................................................................................1
2. Management of the Company...............................................................................2
3. Power to appoint managing director or chief executive officer...........................................3
4. Power to appoint manager................................................................................3
5. Power to authorize specific actions.....................................................................3
6. Power to appoint attorney...............................................................................3
7. Power to delegate to a committee........................................................................3
8. Power to appoint and dismiss employees..................................................................4
9. Power to borrow and charge property.....................................................................4
10. Exercise of power to purchase shares of or discontinue the Company......................................4
11. Election of Directors...................................................................................4
12. Defects in appointment of Directors.....................................................................5
13. Notification of nominations.............................................................................5
14. Alternate Directors.....................................................................................5
15. Vacancies on the Board; Removal of Directors, Etc.......................................................5
16. Notice of meetings of the Board; Adjournment............................................................6
17. Quorum at meetings of the Board.........................................................................6
18. Meetings of the Board...................................................................................6
19. Regular Board meetings..................................................................................6
20. Special Board meetings..................................................................................7
21. Chairman of meetings....................................................................................7
22. Unanimous written resolutions...........................................................................7
23. Contracts and disclosure of Directors' interests........................................................7
24. Remuneration of Directors...............................................................................7
25. Register of Directors and Officers......................................................................7
26. Principal Officers......................................................................................8
27. Other Officers..........................................................................................8
28. Remuneration of Officers................................................................................8
29. Duties of Officers......................................................................................8
30. Obligations of Board to keep minutes....................................................................8
31. Right to indemnification................................................................................8
32. Waiver of claims........................................................................................9
33. Indemnification of employees............................................................................9
34. Place of meeting........................................................................................9
35. Annual meeting.........................................................................................10
36. Special general meeting................................................................................10
37. Accidental omission of notice of general meeting.......................................................10
38. Business to be conducted at meetings...................................................................10
39. Notice of general meeting..............................................................................11
40. Postponement of meetings...............................................................................11
41. Quorum for general meeting.............................................................................11
42. Adjournment of meetings................................................................................11
43. Written resolutions....................................................................................11
44. Attendance of Directors................................................................................12
45. Limitation on voting rights of Controlled Shares.......................................................12
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Bye-Law Page
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46. Voting at meetings.....................................................................................13
47. Presiding Officer......................................................................................13
48. Conduct of meeting; Decision of chairman...............................................................13
49. Seniority of joint holders voting......................................................................14
50. Proxies................................................................................................14
51. Representation of corporations at meetings.............................................................14
52. Rights of shares.......................................................................................14
53. Power to issue shares..................................................................................16
54. Variation of rights, alteration of share capital and purchase of shares of the Company.................16
55. Registered holder of shares............................................................................16
56. Death of a joint holder................................................................................17
57. Share certificates.....................................................................................17
58. Determination of record dates..........................................................................17
59. Instrument of transfer.................................................................................17
60. Restriction on transfer................................................................................18
61. Transfers by joint holders.............................................................................18
62. Representative of deceased Member......................................................................18
63. Registration on death or bankruptcy....................................................................18
64. Declaration of dividends by the Board..................................................................18
65. Unclaimed dividends....................................................................................19
66. Undelivered payments...................................................................................19
67. Interest on dividends..................................................................................19
68. Issue of bonus shares..................................................................................19
69. Financial year end.....................................................................................19
70. Appointment of Auditor.................................................................................19
71. Remuneration of Auditor................................................................................19
72. Notices to Members of the Company......................................................................20
73. Notices to joint Members...............................................................................20
74. Service and delivery of notice.........................................................................20
75. Certain Subsidiaries...................................................................................20
76. The seal...............................................................................................20
77. Winding-up/distribution by liquidator..................................................................20
78. Business Combinations..................................................................................21
79. Alteration of Bye-laws, Etc............................................................................25
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1. INTERPRETATION
(1) In these Bye-laws the following words and expressions shall,
where not inconsistent with the context, have the following meanings
respectively:
"ACT" means the Bermuda Companies Act 1981 as amended from
time to time.
"ALTERNATE DIRECTOR" means an alternate Director appointed in
accordance with these Bye-laws and the Act.
"AUDITOR" includes any individual or partnership.
"BOARD" means the board of Directors appointed or elected
pursuant to these Bye-laws and acting by resolution in accordance with
the Act and these Bye-laws or the Directors present at a meeting of
Directors at which there is a quorum.
"COMPANY" means the company for which these Bye-laws are
approved and confirmed.
"CONTROLLED SHARES" has the meaning set forth in Bye-law 45.
"DIRECTOR" means a director of the Company and shall include
an Alternate Director.
"EXCHANGE ACT" means the United States Securities Exchange Act
of 1934, as amended, and the rules and regulations thereunder.
"FAIR MARKET VALUE" means, with respect to a repurchase of any
shares of any class or series of the Company in accordance with
Bye-law 10:
(i) if shares of such class or series are listed on a
securities exchange (or quoted in a securities quotation system),
the average closing sale price of such shares on such exchange (or
in such quotation system), or, if shares of such class or series
are listed on (or quoted in) more than one exchange (or quotation
system), the average closing sale price of such shares on the
principal securities exchange (or quotation system) on which such
shares are then traded, or, if shares of such class or series are
not then listed on a securities exchange (or quotation system) but
are traded in the over-the-counter market, the average of the
latest bid and asked quotations for such shares in such market, in
each case for the last five trading days immediately preceding the
day on which notice of the repurchase of such shares is sent
pursuant to these Bye-laws, or
(ii) if no such closing sales prices or quotations are
available because shares of such class or series are not publicly
traded or otherwise, the fair value of such shares as determined by
one independent internationally recognized investment banking firm
chosen in good faith by the Board, provided that the calculation of
the Fair Market Value of the shares made by such appointed
investment banking firm (x) shall not include any discount relating
to the absence of a public trading market for, or any transfer
restrictions on, such shares, and (y) such calculation shall be
final and the fees and expenses stemming from such calculation
shall be borne by the Company or its assignee, as the case may be.
"GENERAL MEETING" means either an annual general meeting or a
special general meeting of the Members.
"MEMBER" means the person registered in the Register of
Members as the holder of shares in the Company and, when two or more
persons are so registered as joint holders of shares, means the person
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whose name stands first in the Register of Members as one of such
joint holders or all of such persons as the context so requires.
"NOTICE" means written notice as further defined in these
Bye-laws unless otherwise specifically stated.
"OFFICER" means any person appointed by the Board to hold an
office in the Company.
"PERSON" means any individual, partnership, limited liability
company, joint venture, firm, corporation, association, trust, fund or
other enterprise.
"REGISTER OF DIRECTORS AND OFFICERS" means the Register of
Directors and Officers referred to in these Bye-laws.
"REGISTER OF MEMBERS" means the Register of Members referred
to in these Bye-laws.
"RESIDENT REPRESENTATIVE" means any person appointed to act as
resident representative and includes any deputy or assistant resident
representative.
"SECRETARY" means the person appointed to perform any or all the
duties of secretary of the Company and includes any deputy or
assistant secretary.
(2) In these Bye-laws, where not inconsistent with the context:
(a) words denoting the plural number include the singular number
and vice versa;
(b) words denoting the masculine gender include the feminine
gender;
(c) words importing persons include companies, associations or
bodies of persons whether corporate or not;
(d) the word:
(i) "may" shall be construed as permissive;
(ii) "shall" shall be construed as imperative; and
(e) unless otherwise provided herein words or expressions
defined in the Act shall bear the same meaning in these
Bye-laws.
(3) Expressions referring to writing or written shall, unless the
contrary intention appears, include facsimile, printing, lithography,
photography, e-mail and other modes of representing words in a visible form.
(4) Headings used in these Bye-laws are for convenience only and are
not to be used or relied upon in the construction hereof.
BOARD OF DIRECTORS
2. MANAGEMENT OF THE COMPANY
(1) The business of the Company shall be managed and conducted by the
Board. In managing the business of the Company, the Board may exercise all
corporate and other powers of the Company as are not, by
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statute or by these Bye-laws, required to be exercised by the Company in general
meeting, and the business and affairs of the Company shall be so controlled by
the Board. The Board may also present any petition and make any application in
connection with the liquidation or reorganization of the Company.
(2) No regulation or alteration to these Bye-laws made by the Company
in general meeting shall invalidate any prior act of the Board.
(3) The Board may procure that the Company pays all expenses incurred
in promoting and incorporating the Company.
3. POWER TO APPOINT MANAGING DIRECTOR OR CHIEF EXECUTIVE OFFICER
The Board may from time to time appoint one or more persons to the
office of managing director or chief executive officer of the Company who shall,
subject to the control of the Board, supervise and administer all of the general
business and affairs of the Company.
4. POWER TO APPOINT MANAGER
The Board may appoint a person to act as manager of the Company's day
to day business and may entrust to and confer upon such manager such powers and
duties as it deems appropriate for the transaction or conduct of such business.
5. POWER TO AUTHORIZE SPECIFIC ACTIONS
The Board may from time to time and at any time authorize any person
to act on behalf of the Company for any specific purpose and in connection
therewith to execute any agreement, document or instrument on behalf of the
Company.
6. POWER TO APPOINT ATTORNEY
The Board may from time to time and at any time by power of attorney
appoint any company, firm, person or body of persons, whether nominated directly
or indirectly by the Board, to be an attorney of the Company for such purposes
and with such powers, authorities and discretions (not exceeding those vested in
or exercisable by the Board) 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 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 so vested in the attorney.
Such attorney may, if so authorised under the seal of the Company, execute any
deed or instrument under such attorney's personal seal with the same effect as
the affixation of the seal of the Company.
7. POWER TO DELEGATE TO A COMMITTEE
(1) The Board may appoint Board Committees from among its members to
consist of not less than one (1) Director for each Board Committee. The Board
may designate one or more Directors as alternate members of any Board Committee,
who may replace any absent or disqualified members at a meeting of such Board
Committee. The Board Committees shall have such of the powers and authority of
the Board in the management of the business and affairs of the Company as shall,
from time to time, so be delegated to them by the Board.
(2) The Board may appoint other committees to consist of such number
of members as may be fixed by the Board, none of whom need be a member of the
Board, and may prescribe the powers and authority of such committees.
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(3) Meetings and actions of Board Committees and other committees of
the Company shall be governed by, held and taken in accordance with these
Bye-laws, with such changes in the context of those Bye-laws as are necessary to
substitute the committee and its members for the Board and its members, except
that the time of regular meetings of committees may also be determined by
resolution of the Board and notice of special meetings of committees shall also
be given to all alternate members, who shall have the right to attend all
meetings of the committee. Further, the Board or the committee may adopt rules
for the governance of any committee not inconsistent with the provisions of
these Bye-laws.
8. POWER TO APPOINT AND DISMISS EMPLOYEES
The Board may appoint, suspend or remove any manager, secretary,
clerk, agent or employee of the Company and may fix their remuneration and
determine their duties.
9. POWER TO BORROW AND CHARGE PROPERTY
The Board may exercise all the powers of the Company to borrow money
and to mortgage or charge its undertaking, property and uncalled capital, or any
part thereof, and may issue debentures, debenture stock and other securities
whether outright or as security for any debt, liability or obligation of the
Company or any third party.
10. EXERCISE OF POWER TO PURCHASE SHARES OF OR DISCONTINUE THE COMPANY
(1) The Board may exercise all the powers of the Company to purchase
all or any part of its own shares pursuant to Section 42A of the Act.
(2) The Board may exercise all the powers of the Company to
discontinue the Company to a named country or jurisdiction outside Bermuda
pursuant to Section 132G of the Act.
11. ELECTION OF DIRECTORS
(1) The Board shall consist of not less than three Directors nor more
than eighteen Directors with the exact number of Directors to be determined from
time to time by resolution adopted by the affirmative vote of a majority of the
Board.
(2) The Directors shall be divided into three classes designated
Class I, Class II and Class III. Each class shall consist, as nearly as may be
possible, of one-third of the total number of Directors constituting the entire
Board. At the date these Bye-laws become effective, (i) the Class I directors,
with a term ending in 2002, are Thomas V. A. Kelsey, Robert F. Works and Philip
L. Wroughton, (ii) the Class II directors, with a term ending in 2003, are Peter
A. Appel, Lewis L. Glucksman and Ian R. Heap and (iii) the Class III directors,
with a term ending in 2001, are Robert Clements, Michael P. Esposito, Jr. and
Mark D. Mosca. At each succeeding annual general meeting beginning in 2001,
successors to the class of directors whose term expires at that annual general
meeting shall be elected for a three-year term. If the number of Directors is
changed, any increase or decrease shall be apportioned among the classes so as
to maintain the number of Directors in each class as nearly equal as possible,
and any additional Director of any class elected to fill a vacancy resulting
from an increase in such class shall hold office for a term that shall coincide
with the remaining term of that class, but in no case will a decrease in the
number of Directors shorten the term of any incumbent Director. A Director shall
hold office until the annual general meeting for the year in which his term
expires and until his successor shall be elected and shall qualify, subject,
however, to prior death, resignation, retirement, disqualification or removal
from office.
(3) Notwithstanding the foregoing, whenever the holders of any one or
more classes or series of Preference Shares issued by the Company shall have the
right, voting separately by class or series, to elect Directors
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at an annual or special general meeting, the election, term of office, filling
of vacancies and other features of such directorships shall be governed by the
terms of the Board resolution creating such classes or series of Preference
Shares, and such directors so elected shall not be divided into classes pursuant
to this Bye-law 11 unless expressly provided by such terms.
12. DEFECTS IN APPOINTMENT OF DIRECTORS
All acts done bona fide by any meeting of the Board or by a committee
of the Board or by any person acting as a Director shall, notwithstanding that
it be afterwards discovered that there was some defect in the appointment of any
Director or person acting as aforesaid, or that they or any of them were
disqualified, be as valid as if every such person had been duly appointed and
was qualified to be a Director.
13. NOTIFICATION OF NOMINATIONS
Subject to the rights of the holders of any class or series of
Preference Shares, nominations for the election of Directors may be made by the
Board or by any Member entitled to vote for the election of Directors. Any
Member entitled to vote for the election of Directors may nominate persons for
election as Directors only if written notice of such Member's intent to make
such nomination is delivered to the Secretary of the Company not later than (i)
with respect to an election to be held at an annual general meeting, 50 days
prior to the date of the meeting at which such nominations are proposed to be
voted upon (or if less than 55 days' notice of the meeting is given, not later
than the close of business on the seventh day following the day notice of the
meeting is first given to Members) and (ii) with respect to an election to be
held at a special general meeting for the election of Directors, the close of
business on the seventh day following the date on which notice of such meeting
is first given to Members. Each such notice shall set forth: (a) the name and
address of the Member who intends to make the nomination and of the person or
persons to be nominated; (b) a representation that the Member is a holder of
record of shares of the Company entitled to vote at such meeting and intends to
appear in person or by proxy at the meeting to nominate the person or persons
specified in the notice; (c) a description of all arrangements or understandings
between the Member and each such nominee and any other person or persons (naming
such person or persons) pursuant to which the nomination or nominations are to
be made by the Member; (d) such other information regarding each nominee
proposed by such Member as would have been required to be included in a proxy
statement filed pursuant to the proxy rules of the United States Securities and
Exchange Commission had each such nominee been nominated, or intended to be
nominated, by the Board; and (e) the consent of each such nominee to serve as a
director of the Company if so elected. The Chairman of the meeting may refuse to
acknowledge the nomination of any person not made in compliance with the
foregoing procedure.
14. ALTERNATE DIRECTORS
An individual may be appointed an Alternate Director by or in
accordance with a resolution of the members. Unless otherwise determined by the
Board (and subject to such limitations as may be set by the Board), no Director
shall have the right to appoint another person to act as his Alternate Director.
15. VACANCIES ON THE BOARD; REMOVAL OF DIRECTORS, ETC.
(1) Except in the case of vacancies on the Board that under
applicable law must be filled by the Members, any vacancy on the Board that
results from an increase in the number of directors shall be filled by a
majority of the Directors then in office, provided that a quorum is present, and
any other vacancy occurring in the Board shall be filled by a majority of the
Directors then in office, even if less than a quorum, or a sole remaining
director and the Board shall have the power to appoint an Alternate Director for
any Director appointed to fill a vacancy. Any Director elected to fill a vacancy
not resulting from an increase in the number of directors shall have the same
remaining term as that of his predecessor. If the number of Directors is
changed, any increase or decrease shall be apportioned among the three classes
so as to make all classes as nearly equal in number as possible. No decrease in
the number of Directors shall shorten the term of any incumbent Director.
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(2) A Director may be removed only for cause as determined by the
affirmative vote of the holders of at least a majority of the shares then
entitled to vote generally in an election of Directors, which vote may only be
taken at a special general meeting of the Members called expressly for that
purpose. Cause for removal shall be deemed to exist only if the Director whose
removal is proposed has been convicted of a felony by a court of competent
jurisdiction or has been adjudged by a court of competent jurisdiction to be
liable for gross negligence or misconduct in the performance of such Director's
duty to the Company and such adjudication is no longer subject to direct appeal.
16. NOTICE OF MEETINGS OF THE BOARD; ADJOURNMENT
(1) Notice of the time and place of each meeting of the Board shall
be served upon or telephoned or telegraphed or transmitted by facsimile or
e-mail to each Director at his residence or usual place of business, at least
two (2) business days before the time fixed for the meeting, or so mailed at
least five (5) business days before the time fixed for the meeting.
(2) A majority of the Directors present, whether or not a quorum is
present, may adjourn any Directors meeting to another time and place. Notice of
the time and place of holding an adjourned meeting need not be given to absent
Directors if the time and place be fixed at the meeting adjourned.
(3) Notice of any meeting or any irregularity in any notice may be
waived by any Director before the meeting is held. Attendance of a Director at a
meeting shall constitute a waiver of notice of such meeting by such Director.
17. QUORUM AT MEETINGS OF THE BOARD
At all meetings of the Board, one half (1/2) of the Directors then in
office (but not less than two (2) Directors) if present in person at such
meeting shall be sufficient to constitute a quorum a meeting of Directors.
18. MEETINGS OF THE BOARD
(1) All meetings of the Directors shall be held at the registered
office of the Company or at such other place either within or without Bermuda as
shall be designated by the Board.
(2) The Board may meet for the transaction of business, adjourn and
otherwise regulate its meetings as it sees fit.
(3) Directors may participate in a meeting of the Board through use
of conference telephone or similar communications equipment, so long as all
Directors participating in such meeting can hear one another. Participation in a
meeting of the Board by this means constitutes presence in person at such
meeting.
(4) Unless a greater number is otherwise expressly required by
statute or these Bye-laws, every act or decision done or made by a majority of
the Directors present at a meeting duly held, at which a quorum is present,
shall be regarded as the act of the Board.
19. REGULAR BOARD MEETINGS
The next meeting of the Board subsequent to the annual general meeting
shall be held for the purpose of organizing the Board, electing officers and
transacting such other business as may come before the meeting. Thereafter
regular meetings of the Board shall be held at such time as may be designated by
the Board. If the day fixed for any regular meeting shall fall on a holiday, the
meeting shall take place on the next business day, unless otherwise determined
by the Board.
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20. SPECIAL BOARD MEETINGS
Special meetings of the Board may be called by the Chairman of the
Board, or by the President, or by three Directors or a majority of the total
number of Directors (whichever is fewer), upon the notice specified in Bye-law
16(1).
21. CHAIRMAN OF MEETINGS
The Chairman of the Board, or in the Chairman's absence, any Director
selected by the Directors present, shall preside as chairman at meetings of the
Board.
22. UNANIMOUS WRITTEN RESOLUTIONS
Any action required or permitted to be taken by the Board may be taken
without a meeting if all members of the Board shall consent thereto in writing.
Such written consent or consents shall be filed with the minutes of the
proceedings of the Board. For the purposes of this Bye-law, "Director" shall not
include an Alternate Director.
23. CONTRACTS AND DISCLOSURE OF DIRECTORS' INTERESTS
(1) Any Director, or any Director's firm, partner or any company with
whom any Director is associated, may act in a professional capacity for the
Company and such Director or such Director's firm, partner or such company shall
be entitled to remuneration for professional services as if such Director were
not a Director.
(2) A Director who is directly or indirectly interested in a contract
or proposed contract or arrangement with the Company shall declare the nature of
such interest.
(3) Following a declaration being made pursuant to this Bye-law, and
unless disqualified by the chairman of the relevant Board meeting, a Director
may vote in respect of any contract or proposed contract or arrangement in which
such Director is interested and may be counted in the quorum at such meeting.
24. REMUNERATION OF DIRECTORS
(1) The remuneration (if any) of the Directors shall be as determined
by the Directors and shall be deemed to accrue from day to day. The Directors
shall also be paid all travel, hotel and other expenses properly incurred by
them in attending and returning from meetings of the Board, any committee
appointed by the Board, general meetings of the Company, or in connection with
the business of the Company or their duties as Directors generally.
(2) The Directors may by resolution award special remuneration to any
Director of the Company undertaking any special work or services for, or
undertaking any special mission on behalf of, the Company other than his
ordinary routine work as a Director. Any fees paid to a Director who is also
counsel or solicitor to the Company, or otherwise serves it in a professional
capacity, shall be in addition to his remuneration as a Director.
25. REGISTER OF DIRECTORS AND OFFICERS
The Board shall cause to be kept in one or more books at the
registered office of the Company a Register of Directors and Officers and shall
enter therein the particulars required by the Act.
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OFFICERS
26. PRINCIPAL OFFICERS
The principal Officers of the Company shall be a President, one or
more Vice Presidents, a Secretary and such officers as the Board may determine.
Any two or more of such offices, except those of President and Secretary, may be
held by the same person except as prohibited by the Act. The Chairman of the
Board need not be an executive officer of the Company.
27. OTHER OFFICERS
The Board, the Chairman of the Board or the President may appoint such
other Officers as the conduct of the business of the Company may require, each
of whom shall hold office for such period as the Board, the Chairman of the
Board or the President may from time to time determine.
28. REMUNERATION OF OFFICERS
The Officers shall receive such remuneration as the Board may from
time to time determine.
29. DUTIES OF OFFICERS
Each Officer shall have such powers and perform such duties in the
management, business and affairs of the Company as may be delegated to him by
the Board, or, if such Officer was appointed by the Chairman of the Board or the
President, as may be delegated to him by either such person, from time to time.
MINUTES
30. OBLIGATIONS OF BOARD TO KEEP MINUTES
(1) The Board shall cause minutes to be duly entered in books
provided for the purpose:
(a) of all elections and appointments of Officers;
(b) of the names of the Directors present at each meeting of the
Board and of any committee appointed by the Board; and
(c) of all resolutions and proceedings of general meetings of
the Members, meetings of the Board and meetings of
committees appointed by the Board.
(2) Minutes prepared in accordance with the Act and these Bye-laws
shall be kept by the Secretary at the registered office of the Company.
INDEMNITY
31. RIGHT TO INDEMNIFICATION
(1) The Company shall indemnify its officers and directors to the
fullest extent possible except as prohibited by the Act. Without limiting the
foregoing, the Directors, Secretary and other Officers (such term to include,
for the purposes of this Bye-law, any Alternate Director or any person appointed
to any committee by the Board or any person who is or was serving at the request
of the Company as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise (including, without
limitation, any employee benefit plan)) and every one of them, and their heirs,
executors and administrators, shall be indemnified
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and secured harmless out of the assets of the Company from and against all
actions, costs, charges, losses, damages and expenses which they or any of them,
their heirs, executors or administrators, shall or may incur or sustain by or by
reason of any act done, concurred in or omitted (actual or alleged) in or about
the execution of their duty, or supposed duty, or in their respective offices or
trusts, and none of them shall be answerable for the acts, receipts, neglects or
defaults of the others of them or for joining in any receipts for the sake of
conformity, or for any bankers or other persons with whom any moneys or effects
belonging to the Company shall or may be lodged or deposited for safe custody,
or for insufficiency or deficiency of any security upon which any moneys of or
belonging to the Company shall be placed out on or invested, or for any other
loss, misfortune or damage which may happen in the execution of their respective
offices or trusts, or in relation thereto, provided that this indemnity shall
not extend to any matter in respect of which such person is, or may be, found
guilty of fraud or dishonesty.
(2) The Company may purchase and maintain insurance to protect itself
and any Director, Officer or other person entitled to indemnification pursuant
to this Bye-law to the fullest extent permitted by law.
(3) All reasonable expenses incurred by or on behalf of any person
entitled to indemnification pursuant to Bye-law 31(1) in connection with any
proceeding shall be advanced to such person by the Company within twenty (20)
business days after the receipt by the Company of a statement or statements from
such person requesting such advance or advances from time to time, whether prior
to or after final disposition of such proceeding. Such statement or statements
shall reasonably evidence the expenses incurred by such person and, if required
by law or requested by the Company at the time of such advance, shall include or
be accompanied by an undertaking by or on behalf of such person to repay the
amounts advanced if it should ultimately be determined that such person is not
entitled to be indemnified against such expenses pursuant to this Bye-law.
(4) The right of indemnification and advancement of expenses provided
in this Bye-law shall not be exclusive of any other rights to which those
seeking indemnification may otherwise be entitled, and the provisions of this
Bye-law shall inure to the benefit of the heirs and legal representatives of any
person entitled to indemnity under this Bye-law and shall be applicable to
proceedings commenced or continuing after the adoption of this Bye-law, whether
arising from acts or omissions occurring before or after such adoption. Any
repeal or modification of the foregoing provisions of this section shall not
adversely affect any right or protection existing at the time of such repeal or
modification.
32. WAIVER OF CLAIMS
The Company and each Member agrees to waive any claim or right of
action it might have, whether individually or by or in the right of the Company,
against any Director or Officer, and no Director or Officer shall have any
liability for monetary damages, on account of any action taken by such Director
or Officer, or the failure of such Director or Officer to take any action in the
performance of his duties with or for the Company, provided that such waiver
shall not extend to any matter in respect of which such person is, or may be,
found guilty of fraud or dishonesty.
33. INDEMNIFICATION OF EMPLOYEES
The Board may provide indemnification and advancement of expenses to
the employees of the Company for their acts or omissions as the Board may, from
time to time, determine.
MEMBERS MEETINGS
34. PLACE OF MEETING
All meetings of Members shall be held either at the registered office
of the Company or at any other place within or without Bermuda as may be
designated by the Board.
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35. ANNUAL MEETING
The annual general meeting shall be held on such date, at such time
and at such place as shall be designated by the Board and any annual general
meeting may be adjourned as provided by law or pursuant to these Bye-laws. At
each annual general meeting there shall be elected Directors to serve for the
designated term, and such other business shall be transacted as shall properly
come before the meeting.
36. SPECIAL GENERAL MEETING
(1) Special general meetings for any purpose or purposes may be
called only (i) by the Chairman of the Board; (ii) by the President; (iii) by a
majority of the Directors in office or (iv) as required by the Act.
(2) Only such business as is specified in the notice of any special
general meeting shall come before such meeting.
37. ACCIDENTAL OMISSION OF NOTICE OF GENERAL MEETING
The accidental omission to give notice of a general meeting to, or the
non-receipt of notice of a general meeting by, any person entitled to receive
notice shall not invalidate the proceedings at that meeting.
38. BUSINESS TO BE CONDUCTED AT MEETINGS
(1) At any general meeting, only such business shall be conducted as
shall have been properly brought before such meeting.
(2) To be properly brought before an annual general meeting, business
must be (1) specified in the notice of meeting (or any supplement thereto) given
by or at the direction of the Board, (2) otherwise properly brought before the
meeting by or at the direction of the Board or (3) otherwise properly brought
before the meeting by a Member. For business to be properly brought before an
annual general meeting by a Member, the Member must have given timely notice
thereof in writing to the Secretary of the Company. To be timely, a Member's
notice must be received not later than 50 days prior to the date of the meeting
(or if less than 55 days' notice of the meeting is given, not later than the
close of business on the seventh day following the day notice of the meeting is
first given to Members).
(3) To be properly brought before a special general meeting, business
must be (i) specified in the notice of meeting (or any supplement thereto) given
by or at the direction of the person or persons calling such meeting in
accordance with Bye-law 36 or (ii) otherwise properly brought before the meeting
by or at the direction of such person or persons. Members may not bring matters
before a special general meeting except as specified under the Act. To the
extent any Member or Members are specifically permitted under the Act to bring
matters before a special meeting, such Member or Members must give timely notice
thereof in writing to the Secretary of the Company to properly bring business
before a special general meeting and satisfy applicable requirements of the Act.
To be timely, a Member's notice must be received no later than the close of
business on the seventh day following the date notice of the meeting is first
given to Members.
(4) Each such notice shall set forth as to each matter the Member
proposes to bring before the meeting: (a) a brief description of the business
desired to be brought before the meeting and the reasons for conducting such
business at the meeting, (b) the name and address, as they appear on the
Company's books, of the Member proposing such business, (c) a representation
that the Member is a holder of record of stock of the Company entitled to vote
at the meeting and intends to appear in person or by proxy at the meeting to
bring such business before the meeting, (d) the class, series and number of
shares of the Company which are beneficially owned by the Member, (e) any
material interest of the Member in such business, and (f) such other information
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regarding the business to be brought before the meeting by such Member as would
be required to be included in a proxy statement filed pursuant to the proxy
rules of the United States Securities and Exchange Commission.
(5) No business shall be conducted at any meeting of the Members
except in accordance with the procedures set forth in the preceding paragraph.
The chairman of the meeting shall, if the facts warrant, determine and declare
to the meeting that business was not properly brought before the meeting and in
accordance with the provisions of these Bye-laws and applicable law, and if he
or she should so determine, any such business not properly brought before the
meeting shall not be transacted.
39. NOTICE OF GENERAL MEETING
Notice of each general meeting, whether annual or special, shall be
given in writing to the Members entitled to vote thereat, not less than then
(10) nor more than sixty (60) days before such meeting. Notice of any meeting of
Members shall specify the place, the day, and the hour of the meeting, as well
as the general nature of the business to be transacted. A notice may be given by
the Company to any Member either personally or by mail or other means of written
communication addressed to the Member at his address appearing on the Register
of Members.
40. POSTPONEMENT OF MEETINGS
The Secretary may postpone any general meeting called in accordance
with the provisions of these Bye-laws (other than a meeting requisitioned under
these Bye-laws) provided that notice of postponement is given to each Member
before the time for such meeting. Fresh notice of the date, time and place for
the postponed meeting shall be given to each Member in accordance with the
provisions of these Bye-laws.
41. QUORUM FOR GENERAL MEETING
The presence of two or more persons representing, in person or by
proxy, not less than a majority of the voting power represented by the shares
entitled to vote thereat shall constitute a quorum for the transaction of
business at any general meeting.
42. ADJOURNMENT OF MEETINGS
(1) Any general meeting, annual or special, whether or not a quorum
is present, may be adjourned from time to time by the vote of the majority of
the voting power represented by the shares represented at the meeting, either in
person or by proxy, but in the absence of a quorum no other business may be
transacted at that meeting.
(2) When any general meeting, either annual or special, is adjourned
to another time or place, notice need not be given of the adjourned meeting if
the date, time and place are announced at a meeting at which the adjournment
occurs, unless a new record date for the adjourned meeting is fixed, or unless
the adjournment is for more than thirty (30) days from the date set for the
original meeting, in which case the Board shall set a new record date. Notice of
any such adjourned meeting, if required, shall be given to each Member of record
entitled to vote at the adjourned meeting in accordance with the provisions of
Bye-law 37. At any adjourned meeting the Company may transact any business that
might have been transacted at the original meeting.
43. WRITTEN RESOLUTIONS
Subject to applicable law, the Members shall have the power to consent
in writing, without a meeting, to the taking of any action.
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44. ATTENDANCE OF DIRECTORS
The Directors of the Company shall be entitled to receive notice of
and to attend and be heard at any general meeting.
45. LIMITATION ON VOTING RIGHTS OF CONTROLLED SHARES
(1) Except as provided in the other paragraphs of this Bye-law 45,
every Member of record owning shares conferring the right to vote present in
person or by proxy shall have one vote, or such other number of votes as may be
specified in the terms of the issue and rights and privileges attaching to such
shares or in these Bye-laws, for each such share registered in such Member's
name.
(2) If, as a result of giving effect to the foregoing provisions of
this Bye-law 45 or otherwise, the votes conferred by the Controlled Shares,
directly or indirectly or by attribution, to any U.S. Person would otherwise
represent more than 9.9% of the voting power of all shares entitled to vote
generally at an election of Directors, the votes conferred by the Controlled
Shares on such U.S. Person shall be reduced by whatever amount is necessary so
that after any such reduction the votes conferred by the Controlled Shares to
such U.S. Person shall constitute 9.9% of the total voting power of all shares
of the Company entitled to vote generally at any election of Directors
(provided, however, that (a) votes shall be reduced only (i) in shares of the
Company, if any, held by such U.S. Person within the meaning of Section 958(a)
of the Internal Revenue Code of 1986, as amended (the "CODE") and (ii) in shares
of the Company if any (other than shares held directly by the H&F Funds or the
WP Funds) held by such U.S. Person within the meaning of Section 958(b) of the
Code, (b) votes shall be reduced in shares of the Company held directly by the
H&F Funds and the WP Funds only if and to the extent that reductions in the vote
of other shares do not result in satisfaction of the 9.9% threshold set forth in
this paragraph (2), (c) such reduction (or portion thereof) in votes conferred
by shares held directly by an H&F Fund shall not be effective on or after such
date, if any, as such H&F Fund reasonably objects in writing to such reduction
(or portion thereof) after reasonable notice given to such H&F Fund in advance
(to the extent feasible) of any meeting of shareholders (which notice the
Company shall provide in writing) and (d) such reduction (or portion thereof) in
votes conferred by shares held directly by a WP Fund shall not be effective on
or after such date, if any, as such WP Fund reasonably objects in writing to
such reduction (or portion thereof) after reasonable notice given to such WP
Fund in advance (to the extent feasible) of any meeting of shareholders (which
notice the Company shall provide in writing)).
(3) (a) "CONTROLLED SHARES" in reference to any person means all
shares of the Company directly, indirectly or constructively owned by such
person within the meaning of Section 958 of the Code;
(b) "U.S. PERSON" means a United States person as defined in
Section 7701(a)(30) of the Code;
(c) "H&F FUND" means the Hellman & Friedman parties to the
Shareholders Agreement by and among the Company and certain investors dated as
of November 20, 2001 (the "Shareholders Agreement"); and
(d) "WP FUND" means the Warburg Pincus parties to the
Shareholders Agreement.
(4) Upon written notification by a Member to the Board, the number of
votes conferred by the total number of shares held directly by such Member shall
be reduced to that percentage of the total voting power of the Company, as so
designated by such Member (subject to acceptance of such reduction by the Board
in its sole discretion), so that (and to the extent that) such Member may meet
any applicable insurance or other regulatory requirement or voting threshold or
limitation that may be applicable to such Member or to evidence that such
person's voting power is no greater than such threshold.
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(5) Notwithstanding the foregoing provisions of this Bye-law 45,
after having applied such provisions as best as they consider reasonably
practicable, the Board may make such final adjustments to the aggregate number
of votes conferred, directly or indirectly or by attribution, by the Controlled
Shares on any U.S. Person that they consider fair and reasonable in all the
circumstances to ensure that such votes represent 9.9% (or the percentage
designated by a Member pursuant to paragraph (4) of this Bye-law 45) of the
aggregate voting power of the votes conferred by all the shares of the Company
entitled to vote generally at any election of Directors. Such adjustments
intended to implement the 9.9% limitation set forth in paragraph (2) of this
Bye-law 45 shall be subject to the proviso contained in such paragraph (2), but
adjustments intended to implement the limitation set forth in a notification
pursuant to paragraph (4) of this Bye-law 45 shall not be subject to the proviso
contained in paragraph (2).
(6) Each Member shall provide the Company with such information as
the Company may reasonably request so that the Company and the Board may make
determinations as to the ownership (direct or indirect or by attribution) of
Controlled Shares to such Member or to any person to which Shares may be
attributed as a result of the ownership of Shares by such Member.
46. VOTING AT MEETINGS
(1) Unless a different number is otherwise expressly required by
statute (without modification of these Bye-laws) or these Bye-laws, every act or
decision (including any act or resolution regarding any amalgamation, scheme of
arrangement, merger, consolidation or sale or transfer of assets that has been
approved by the affirmative vote of at least two-thirds of the Directors in
office) done or made by a majority of the voting power held by the Members
present in person or by proxy at a meeting duly held, at which a quorum is
present, shall be regarded as the act or resolution of the Members. At any
election of Directors, nominees shall be elected by a plurality of the votes
cast.
(2) No Member shall be entitled to vote at any general meeting unless
he or she is a Member on the record date for such meeting.
(3) No objection shall be raised to the qualification of any voter
except at the general meeting or adjourned general meeting at which the vote
objected to is given or tendered and every vote not disallowed at such general
meeting shall be valid for all purposes. Any such objection made in due time
shall be referred to the Chairman of the general meeting whose decisions shall
be final and conclusive. Notwithstanding, however, the foregoing or any other
provision in these Bye-laws, the Chairman of the general meeting may, in his
discretion, whether or not an objection has been raised, and if the Chairman
considers that such action is necessary to determine accurately the vote count,
defer until after the conclusion of the general meeting a decision as to the
proper application of Bye-law 45 to any vote at such meeting. If the decision
has been so deferred, then the Chairman of the general meeting or, failing such
decision within ninety (90) days of the general meeting, the Board, shall make
such decision and such decision shall be final and conclusive.
47. PRESIDING OFFICER
The Chairman of the Board, the President, or another person selected
by the Board shall act as chairman of general meetings. The Secretary of the
Company, or, in the Secretary's absence, an Assistant Secretary of the Company,
shall act as secretary of every meeting, but if neither the Secretary nor an
Assistant Secretary is present, the Board shall choose any person present to act
as secretary of the meeting.
48. CONDUCT OF MEETING; DECISION OF CHAIRMAN
(1) The chairman shall conduct each general meeting in a manner
consistent with the Act and these Bye-laws, but shall not be obligated to follow
any technical, formal or parliamentary rules or principles of procedure.
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Except as otherwise provided by law, the chairman's rulings on procedural
matters shall be conclusive and binding on all Members.
(2) At any general meeting if an amendment shall be proposed to any
resolution under consideration but shall be ruled out of order by the chairman
of the meeting the proceedings on the substantive resolution shall not be
invalidated by any error in such ruling.
(3) At any general meeting a declaration by the chairman of the
meeting that a question proposed for consideration has, on a show of hands, been
carried, or carried unanimously, or by a particular majority, or lost, and an
entry to that effect in a book containing the minutes of the proceedings of the
Company shall, subject to the provisions of these Bye-laws, be conclusive
evidence of that fact.
49. SENIORITY OF JOINT HOLDERS VOTING
In the case of joint holders 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 of Members.
50. PROXIES
Every person entitled to vote shares has the right to do so either in
person or by one or more persons authorized by a written proxy executed by such
Member and filed with the Secretary. Any proxy duly executed shall continue in
full force and effect unless revoked by the person executing it by a writing
delivered to the Company stating that the proxy is revoked or by a subsequent
proxy executed by such Member presented to the meeting or by attendance at a
meeting and voting in person by such Member. However, no proxy shall be valid
after the expiration of eleven (11) months from the date of its execution unless
otherwise provided in the proxy. The decision of the chairman of any general
meeting as to the validity of any instrument of proxy shall be final.
51. REPRESENTATION OF CORPORATIONS AT MEETINGS
A corporation which is a Member may, by written instrument, authorize
such person as it thinks fit to act as its representative at any general meeting
and the person so authorized shall be entitled to exercise the same powers on
behalf of the corporation which such person represents as that corporation could
exercise if it were an individual Member. Notwithstanding the foregoing, the
chairman of the meeting may accept such assurances as he or she thinks fit as to
the right of any person to attend and vote at general meetings on behalf of a
corporation which is a Member.
SHARE CAPITAL AND SHARES
52. RIGHTS OF SHARES
(1) At the date these Bye-laws become effective, the total number of
authorized common shares is two hundred million (200,000,000) common shares
having a par value of U.S. $0.01 per share (the "COMMON SHARES"), and the total
number of authorized preference shares is fifty million (50,000,000) preference
shares having a par value of U.S. $0.01 per share (the "PREFERENCE SHARES").
(2) The holders of Common Shares shall, subject to the provisions of
these Bye-laws:
(a) be entitled (subject to Bye-law 45) to one vote per share;
(b) be entitled to such dividends as the Board may from time to
time declare;
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(c) in the event of a winding-up or dissolution of the Company,
whether voluntary or involuntary or for the purpose of a
reorganisation or otherwise or upon any distribution of
capital, be entitled to the surplus assets of the Company;
and
(d) generally be entitled to enjoy all of the rights attaching
to shares.
(3) The Board shall have the full power to issue any unissued shares
of the Company on such terms and conditions as it may, in its absolute
discretion, determine. The Board is authorized to provide for the issuance of
the Preference Shares in one or more series, and to establish from time to time
the number of shares to be included in each such series, and to fix the
designation, powers, preferences and rights of the shares of each such series
and the qualifications, limitations or restrictions thereof.
The authority of the Board with respect to each series shall include,
but not be limited to, determination of the following:
(a) The number of shares constituting that series and the
distinctive designation of that series;
(b) The dividend rate on the shares of that series, whether
dividends shall be cumulative, and, if so, from which date
or dates, and the relative rights of priority, if any, of
payment of dividends on shares of that series;
(c) Whether that series shall have voting rights, in addition to
the voting rights provided by law, and, if so, the terms of
such voting rights;
(d) Whether that series shall have conversion or exchange
privileges (including, without limitation, conversion into
Common Shares), and, if so, the terms and conditions of such
conversion or exchange, including provision for adjustment
of the conversion or exchange rate in such events as the
Board shall determine;
(e) Whether or not the shares of that series shall be
redeemable, and, if so, the terms and conditions of such
redemption, including the manner of selecting shares for
redemption if less than all shares are to be redeemed, the
date or dates upon or after which they shall be redeemable,
and the amount per share payable in case of redemption,
which amount may vary under different conditions and at
different redemption dates;
(f) Whether that series shall have a sinking fund for the
redemption or purchase of shares of that series, and, if so,
the terms and amount of such sinking fund;
(g) The right of the shares of that series to the benefit of
conditions and restrictions upon the creation of
indebtedness of the Company or any subsidiary, upon the
issue of any additional shares (including additional shares
of such series or any other series) and upon the payment of
dividends or the making of other distributions on, and the
purchase, redemption or other acquisition by the Company or
any subsidiary of any outstanding shares of the Company;
(h) The rights of the shares of that series in the event of
voluntary or involuntary liquidation, dissolution or winding
up of the Company, and the relative rights of priority, if
any, of payment of shares of that series; and
(i) Any other relative participating, optional or other special
rights, qualifications, limitations or restrictions of that
series.
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53. POWER TO ISSUE SHARES
(1) The issuance of any authorized Common Shares or Preference
Shares and any other actions permitted to be taken by the Board pursuant to
Bye-law 52 must be authorized by the Board.
(2) Any Preference Shares of any series which have been redeemed
(whether through the operation of a sinking fund or otherwise) or which, if
convertible or exchangeable, have been converted into or exchanged for shares of
any other class or classes shall have the status of authorized and unissued
Preference Shares of the same series and may be reissued as a part of the series
of which they were originally a part or may be reclassified and reissued as part
of a new series of Preference Shares to be created by resolution or resolutions
of the Board or as part of any other series of Preference Shares, all subject to
the conditions and the restrictions on issuance set forth in the resolution or
resolutions adopted by the Board providing for the issue of any series of
Preference Shares.
(3) At the discretion of the Board, whether or not in connection with
the issuance and sale of any of its shares or other securities, the Company may
issue securities, contracts, warrants or other instruments evidencing any
shares, option rights, securities having conversion or option rights, or
obligations on such terms, conditions and other provisions as are fixed by the
Board, including, without limiting the generality of this authority, conditions
that preclude or limit any person or persons owning or offering to acquire a
specified number or percentage of the outstanding Common Shares, other shares,
option rights, securities having conversion or option rights, or obligations of
the company or transferee of the person or persons from exercising, converting,
transferring or receiving the shares, option rights, securities having
conversion or option rights, or obligations.
54. VARIATION OF RIGHTS, ALTERATION OF SHARE CAPITAL AND PURCHASE OF
SHARES OF THE COMPANY
(1) If at any time the share capital is divided into different
classes of shares, the rights attached to any class (unless otherwise provided
by the terms of issue of the shares of that class) may, whether or not the
Company is being wound-up, be varied with the consent in writing of the holders
of a majority of the voting power represented by the issued shares of that class
or with the sanction of a resolution passed by a majority of the voting power
represented by the votes cast at a separate general meeting of the holders of
the shares of the class in accordance with Section 47(7) of the Act. The rights
conferred upon the holders of the shares of any class issued with preferred or
other rights shall not, unless otherwise expressly provided by the terms of
issue of the shares of that class, be deemed to be varied by the creation or
issue of further shares ranking pari passu therewith.
(2) The Company may from time to time if authorized by resolution of
the Members change the currency denomination of, increase, alter or reduce its
share capital in accordance with the provisions of Sections 45 and 46 of the
Act. Where, on any alteration of share capital, fractions of shares or some
other difficulty would arise, the Board may deal with or resolve the same in
such manner as it thinks fit including, without limiting the generality of the
foregoing, the issue to Members, as appropriate, of fractions of shares and/or
arranging for the sale or transfer of the fractions of shares of Members.
(3) The Company may from time to time, acting through the Board,
purchase its own shares in accordance with the provisions of Section 42A of the
Act.
55. REGISTERED HOLDER OF SHARES
(1) The Company shall be entitled to treat the registered holder of
any share as the absolute owner thereof and accordingly shall not be bound to
recognise any equitable or other claim to, or interest in, such share on the
part of any other person.
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(2) Any dividend, interest or other moneys payable in cash in respect
of shares may be paid by cheque or draft sent through the post directed to the
Member at such Member's address in the Register of Members or, in the case of
joint holders, to such address of the holder first named in the Register of
Members, or to such person and to such address as the holder or joint holders
may in writing direct. If two or more persons are registered as joint holders of
any shares any one can give an effectual receipt for any dividend paid in
respect of such shares.
56. DEATH OF A JOINT HOLDER
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.
57. SHARE CERTIFICATES
(1) Share certificates shall be in such form as shall be required by
law and as shall be approved by the Board. Each certificate shall have the
corporate seal affixed thereto by impression or in facsimile and shall be signed
by the Chairman of the Board, the President, or any Vice President, and
countersigned by the Secretary or any Assistant Secretary; provided that
certificates may be signed, countersigned or authenticated by facsimile
signatures as provided by law.
(2) Except as provided in this Bye-law 57, new certificates for
shares shall not be issued to replace an old certificate unless the latter is
surrendered to the Company and cancelled at the same time. The Board may, in
case any share certificate or certificate for any other security is lost,
stolen, or destroyed, authorize the issuance of a replacement certificate on
such terms and conditions as the Board may require, including provision for
indemnification of the Company secured by a bond or other adequate security
which the Board deems sufficient to protect the Company against any claim that
may be made against it, including any expense or liability, on account of the
alleged loss, theft, or destruction of the certificate or the issuance of the
replacement certificate.
RECORD DATES
58. DETERMINATION OF RECORD DATES
Notwithstanding any other provision of these Bye-laws, the Board may fix any
date as the record date for:
(a) determining the Members entitled to receive any dividend;
and
(b) determining the Members entitled to receive notice of and to
vote at any general meeting of the Company.
TRANSFER OF SHARES
59. INSTRUMENT OF TRANSFER
(1) An instrument of transfer shall be in such common form as the
Board may accept. Such instrument of transfer shall be signed by or on behalf of
the transferor. The transferor shall be deemed to remain the holder of such
share until the same has been transferred to the transferee in the Register of
Members.
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(2) The Board may refuse to recognize any instrument of transfer
unless it is accompanied by the certificate in respect of the shares to which it
relates and by such other evidence as the Board may reasonably require to show
the right of the transferor to make the transfer.
60. RESTRICTION ON TRANSFER
(1) The Board shall refuse to register a transfer unless all
applicable consents, authorisations and permissions of any governmental body or
agency in Bermuda have been obtained.
(2) If the Board refuses to register a transfer of any share the
Secretary shall, within three months after the date on which the transfer was
lodged with the Company, send to the transferor and transferee notice of the
refusal.
61. TRANSFERS BY JOINT HOLDERS
The joint holders of any share or shares may transfer such share or
shares to one or more of such joint holders, and the surviving holder or holders
of any share or shares previously held by them jointly with a deceased Member
may transfer any such share to the executors or administrators of such deceased
Member.
TRANSMISSION OF SHARES
62. REPRESENTATIVE OF DECEASED MEMBER
In the case of the death of a Member, the survivor or survivors where
the deceased Member was a joint holder, and the legal personal representatives
of the deceased Member where the deceased Member was a sole holder, shall be the
only persons recognized by the Company as having any title to the deceased
Member's interest in the shares. Nothing herein contained shall release the
estate of a deceased joint holder from any liability in respect of any share
which had been jointly held by such deceased Member with other persons. Subject
to the provisions of Section 52 of the Act, for the purpose of this Bye-law,
legal personal representative means the executor or administrator of a deceased
Member or such other person as the Board may in its absolute discretion decide
as being properly authorized to deal with the shares of a deceased Member.
63. REGISTRATION ON DEATH OR BANKRUPTCY
Any person becoming entitled to a share in consequence of the death or
bankruptcy of any Member may be registered as a Member upon such evidence as the
Board may deem sufficient or may elect to nominate some person to be registered
as a transferee of such share, and in such case the person becoming entitled
shall execute in favour of such nominee an instrument of transfer satisfactory
to the Board. On the presentation thereof to the Board, accompanied by such
evidence as the Board may require to prove the title of the transferor, the
transferee shall be registered as a Member but the Board shall, in either case,
have the same right to decline or suspend registration as it would have had in
the case of a transfer of the share by that Member before such Member's death or
bankruptcy, as the case may be.
DIVIDENDS AND OTHER DISTRIBUTIONS
64. DECLARATION OF DIVIDENDS BY THE BOARD
The Board may declare and make such dividends or other distributions
(in each case in cash or in specie, as valued by the Board, or a combination
thereof) to the Members as may be lawfully made out of the assets of the
Company.
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65. UNCLAIMED DIVIDENDS
Any dividend or other monies payable in respect of a share which has
remained unclaimed for 5 years from the date when it became due for payment
shall, if the Board so resolves, be forfeited and cease to remain owing by the
Company. The payment of any unclaimed dividend or other moneys payable in
respect of a share may (but need not) be paid by the Company into an account
separate from the Company's own account. Such payment shall not constitute the
Company a trustee in respect thereof.
66. UNDELIVERED PAYMENTS
The Company shall be entitled to cease sending dividend payments and
cheques by post or otherwise to a Member if those instruments have been returned
undelivered to, or left uncashed by, that Member on at least two consecutive
occasions, or, following one such occasion, reasonable enquiries have failed to
establish the Member's new address. The entitlement conferred on the Company by
this Bye-law in respect of any Member shall cease if the Member claims a
dividend or cashes a dividend warrant or cheque.
67. INTEREST ON DIVIDENDS
No dividend or distribution shall bear interest against the Company.
CAPITALIZATION
68. ISSUE OF BONUS SHARES
The Board may resolve to capitalize any part of the amount for the
time being standing to the credit of any of the Company's share premium or other
reserve accounts or to the credit of the profit and loss account or otherwise
available for distribution by applying such sum in paying up unissued shares to
be allotted as fully paid bonus shares to the Members.
FISCAL YEAR
69. FINANCIAL YEAR END
The financial year end of the Company may be determined by resolution
of the Board and failing such resolution shall be 31st December in each year.
AUDIT
70. APPOINTMENT OF AUDITOR
Subject to Section 88 of the Act, at the annual general meeting or at
a subsequent special general meeting in each year, an independent representative
of the Members shall be appointed by them as Auditor of the accounts of the
Company.
71. REMUNERATION OF AUDITOR
The Board may fix the remuneration of the Auditor as it may determine.
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NOTICES
72. NOTICES TO MEMBERS OF THE COMPANY
A notice may be given by the Company to any Member either by
delivering it to such Member in person or by sending it to such Member's address
in the Register of Members or to such other address given for the purpose. For
the purposes of this Bye-law, a notice may be sent by mail, courier service,
cable, telex, telecopier, facsimile, e-mail or other mode of representing words
in a legible and non-transitory form.
73. NOTICES TO JOINT MEMBERS
Any notice required to be given to a Member shall, with respect to any
shares held jointly by two or more persons, be given to whichever of such
persons is named first in the Register of Members and notice so given shall be
sufficient notice to all the holders of such shares.
74. SERVICE AND DELIVERY OF NOTICE
Any notice shall be deemed to have been served at the time when the
same would be delivered in the ordinary course of transmission and, in proving
such service, it shall be sufficient to prove that the notice was properly
addressed and prepaid, if posted, and the time when it was posted, delivered to
the courier or to the cable company or transmitted by telex, facsimile or other
method as the case may be.
CERTAIN SUBSIDIARIES
75. CERTAIN SUBSIDIARIES
With respect to any company incorporated under the laws of Bermuda,
Barbados or the Cayman Islands all of the voting shares of which are owned
(directly or indirectly through subsidiaries) by the Company, and any other
subsidiary of the Company designated by the Board of the Company (together, the
"DESIGNATED COMPANIES"), the board of directors of each such Designated Company
shall consist of the persons who have been elected by the Members as Designated
Company Directors. Notwithstanding the general authority set out in Bye-law
2(1), the Board shall vote all shares owned by the Company in each Designated
Company to ensure the constitutional documents of such Designated Company
require such Designated Company Directors to be elected as the directors of such
Designated Company, and to elect such Designated Company Directors as the
directors of such Designated Company. The Company shall enter into agreements
with each such Designated Company to effectuate or implement this Bye-law.
SEAL OF THE COMPANY
76. THE SEAL
The seal of the Company shall be in such form as the Board may from
time to time determine. The Board may adopt one or more duplicate seals for use
outside Bermuda.
WINDING-UP
77. WINDING-UP/DISTRIBUTION BY LIQUIDATOR
If the Company shall be wound up the liquidator may, with the sanction
of a resolution of the Members, divide amongst the Members in specie or in 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 purpose, set such value
as he or she deems fair upon any property to be divided as aforesaid and may
determine how such division shall be carried
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out as between the Members or different classes of Members. The liquidator may,
with the like sanction, vest the whole or any part of such assets in trustees
upon such trusts for the benefit of the Members as the liquidator shall think
fit, but so that no Member shall be compelled to accept any shares or other
securities or assets whereon there is any liability.
BUSINESS COMBINATIONS
78. BUSINESS COMBINATIONS
(1) The Company shall not engage in any business combination with any
Interested Member for a period of three years following the time that such
Member became an Interested Member, unless:
(a) prior to such time the Board approved either the business
combination or the transaction which resulted in the Member
becoming an Interested Member, or
(b) upon consummation of the transaction which resulted in the
Member becoming an Interested Member, the Interested Member
owned at least 85% of the voting shares of the Company
outstanding at the time the transaction commenced, excluding
for purposes of determining the number of shares outstanding
those shares owned (i) by persons who are Directors and also
officers and (ii) employee share plans in which employee
participants do not have the right to determine
confidentially whether shares held subject to the plan will
be tendered in a tender or exchange offer, or
(c) at or subsequent to such time the business combination is
approved by the Board and authorized at an annual or special
general meeting, and not by written consent, by the
affirmative vote of holders of shares representing at least
662/3% of the outstanding voting power of the shares of the
Company entitled to vote generally at an election of
Directors (excluding shares owned by the Interested Member).
(2) The restrictions contained in this Bye-law shall not apply if:
(a) a Member becomes an Interested Member inadvertently and (i)
as soon as practicable divests itself of ownership of
sufficient shares so that the Member ceases to be an
Interested Member and (ii) would not, at any time within the
3 year period immediately prior to a business combination
between the Company and such Member, have been an Interested
Member but for the inadvertent acquisition of ownership; or
(b) the business combination is proposed prior to the
consummation or abandonment of and subsequent to the earlier
of the public announcement or the notice required hereunder
of a proposed transaction which (i) constitutes one of the
transactions described in the second sentence of this
paragraph; (ii) is with or by a person who either was not an
Interested Member during the previous 3 years or who became
an Interested Member with the approval of the Board; and
(iii) is approved or not opposed by a majority of the
members of the Board then in office (but not less than 1)
who were Directors prior to any person becoming an
Interested Member during the previous 3 years or were
recommended for election or elected to succeed such
Directors by a majority of such Directors. The proposed
transactions referred to in the preceding sentence are
limited to (x) an amalgamation, scheme of arrangement,
merger, consolidation or similar transaction involving the
Company (except for any such transaction in respect of which
no vote of the Members of the Company is required); (y) a
sale, lease, exchange, mortgage, pledge, transfer or other
disposition (in one transaction or a series of
transactions), whether as part of a dissolution or
otherwise, of assets of the Company or of any direct or
indirect subsidiary of the Company
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(other than to any direct or indirect wholly-owned
subsidiary of the Company or to the Company) having an
aggregate market value equal to 50% or more of either that
aggregate market value of all of the assets of the Company
determined on a consolidated basis or the aggregate market
value of all the outstanding shares of the Company; or (z) a
proposed tender or exchange offer for 50% or more of the
outstanding voting shares of the Company. The Company shall
give not less than 20 days notice to all Interested Members
prior to the consummation of any of the transactions
described in clauses (x) or (y) of the second sentence of
this paragraph.
(3) As used in this Bye-law only, the term:
(a) "AFFILIATE" means a person that directly, or indirectly
through one or more intermediaries, controls, or is
controlled by, or is under common control with, another
person.
(b) "ASSOCIATE," when used to indicate a relationship with any
person, means (i) any corporation, partnership,
unincorporated association or other entity of which such
person is a director, officer or partner or is, directly or
indirectly, the owner of 20% or more of any class of voting
shares, (ii) any trust or other estate in which such person
has at least a 20% beneficial interest or as to which such
person serves as trustee or in a similar fiduciary capacity,
and (iii) any relative or spouse of such person, or any
relative of such spouse, who has the same residence as such
person.
(c) "BUSINESS COMBINATION," when used in reference to the
Company and any Interested Member of the Company, means:
(i) any amalgamation, scheme of arrangement, merger,
consolidation or similar transaction involving the
Company or any direct or indirect subsidiary of the
Company with (A) the Interested Member, or (B) with
any other corporation, partnership, unincorporated
association or other entity if such transaction is
caused by the Interested Member and as a result of
such transaction subsection (a) of this section is not
applicable to the surviving entity;
(ii) any sale, lease, exchange, mortgage, pledge, transfer
or other disposition (in one transaction or a series
of transactions), except proportionately as a Member
of such Company, to or with the Interested Member,
whether as part of a dissolution or otherwise, of
assets of the Company or of any direct or indirect
subsidiary of the Company which assets have an
aggregate market value equal to 10% or more of either
the aggregate market value of all the assets of the
Company determined on a consolidated basis or the
aggregate market value of all the outstanding shares
of the Company;
(iii) any transaction which results in the issuance or
transfer by the Company or by any direct or indirect
subsidiary of the Company of any shares of the Company
or of such subsidiary to the Interested Member, except
(A) pursuant to the exercise, exchange or conversion
of securities exercisable for, exchangeable for or
convertible into shares of the Company or any such
subsidiary which securities were outstanding prior to
the time that the Interested Member became such, (B)
pursuant to a Subsidiary Amalgamation; (C) pursuant to
a dividend or distribution paid or made, or the
exercise, exchange or conversion of securities
exercisable for, exchangeable for or convertible into
shares of the Company or any such subsidiary which
security is distributed, pro rata to all holders of a
class or series of shares of the Company subsequent to
the time the Interested Member became
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such, (D) pursuant to an exchange offer by the Company
to purchase shares made on the same terms to all
holders of said shares, or (E) any issuance or
transfer of shares by the Company, provided however,
that in no case under (C)-(E) above shall there be an
increase in the Interested Member's proportionate
share of the shares of any class or series of the
Company or of the voting shares of the Company;
(iv) any transaction involving the Company or any direct or
indirect subsidiary of the Company which has the
effect, directly or indirectly, of increasing the
proportionate share of the shares of any class or
series, or securities convertible into the shares of
any class or series, of the Company or of any such
subsidiary which is owned by the Interested Member,
except as a result of immaterial changes due to
fractional share adjustments or as a result of any
purchase or redemption of any shares of stock not
caused, directly or indirectly, by the Interested
Member; or
(v) any receipt by the Interested Member of the benefit,
directly or indirectly (except proportionately as a
Member of the Company) of any loans, advances,
guarantees, pledges, or other financial benefits
(other than those expressly permitted in subparagraphs
(i)-(iv) above) provided by or through the Company or
any direct or indirect subsidiary.
(d) "CONTROL," including the term "CONTROLLING," "CONTROLLED BY"
and "UNDER COMMON CONTROL WITH," means the possession,
directly or indirectly, of the power to direct or cause the
direction of the management and policies of a person,
whether through the ownership of voting stock, by contract,
or otherwise. A person who is the owner of 20% or more of
the outstanding voting stock of any corporation,
partnership, unincorporated association or other entity
shall be presumed to have control of such entity, in the
absence of proof by a preponderance of the evidence to the
contrary. Notwithstanding the foregoing, a presumption of
control shall not apply where such person holds voting
stock, in good faith and not for the purpose of
circumventing this Bye-law, as an agent, bank, broker,
nominee, custodian or trustee for one or more owners who do
not individually or as a group have control of such entity.
(e) "INTERESTED MEMBER" means any person (other than the Company
and any direct or indirect subsidiary of the Company) that
(i) is the owner of 15% or more of the outstanding voting
shares of the Company, or (ii) is an affiliate or associate
of the Company and was the owner of 15% or more of the
outstanding voting shares of the Company at any time within
the 3-year period immediately prior to the date on which it
is sought to be determined whether such person is an
Interested Member, and the affiliates and associates of such
person; provided, however, that the term "Interested Member"
shall not include any person whose ownership of shares in
excess of the 15% limitation set forth herein is the result
of action taken solely by the Company provided that such
person shall be an Interested Member if thereafter such
person acquires additional shares of voting shares of the
Company, except as a result of further corporate action not
caused, directly or indirectly, by such person. For the
purpose of determining whether a person is an Interested
Member, the voting shares of the Company deemed to be
outstanding shall include shares deemed to be owned by the
person through application of Paragraph (h) of this
subsection but shall not include any other unissued shares
of such Company which may be issuable pursuant to any
agreement, arrangement or understanding, or upon exercise of
conversion rights, warrants or options, or otherwise.
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(f) "STOCK" means, with respect to any corporation, capital
stock and, with respect to any other entity, any equity
interest.
(g) "VOTING STOCK" means, with respect to any corporation, stock
of any class or series entitled to vote generally in the
election of directors and, with respect to any entity that
is not a corporation, any equity interest entitled to vote
generally in the election of the governing body of such
entity.
(h) "OWNER" including the terms "OWN" and "OWNED" when used with
respect to any stock means a person that individually or
with or through any of its affiliates or associates:
(i) beneficially owns such stock, directly or indirectly;
or
(ii) has (A) the right to acquire such stock (whether such
right is exercisable immediately or only after the
passage of time) pursuant to any agreement,
arrangement or understanding, or upon the exercise of
conversion rights, exchange rights, warrants or
options, or otherwise; provided, however, that a
person shall not be deemed the owner of stock tendered
pursuant to a tender or exchange offer made by such
person or any of such person's affiliates or
associates until such tendered stock is accepted for
purchase or exchange; or (B) the right to vote such
stock pursuant to any agreement, arrangement or
understanding; provided, however, that a person shall
not be deemed the owner of any stock because of such
person's right to vote such stock if the agreement,
arrangement or understanding to vote such stock arises
solely from a revocable proxy or consent given in
response to a proxy or consent solicitation made to 10
or more persons; or
(iii) has any arrangement or understanding for the purpose
of acquiring, holding, voting (except voting pursuant
to a revocable proxy or consent as described in item
(B) of clause (ii) of this paragraph), or disposing of
such stock with any other person that beneficially
owns, or whose affiliates or associates beneficially
own, directly or indirectly, such stock.
(i) "SUBSIDIARY AMALGAMATION" means an amalgamation, scheme of
arrangement, merger, consolidation or similar transaction
with or into a single direct or indirect wholly-owned
subsidiary of the Company if: (1) the Company and the direct
or indirect wholly-owned subsidiary of the Company are the
only constituent companies to such transaction; (2) each
share or fraction of a share of the Company outstanding
immediately prior to the effective time of such transaction
is converted in such transaction into a share or equal
fraction of a share of shares of a holding company having
the same designations, rights, powers and preferences, and
the qualifications, limitations and restrictions thereof, as
the share of the constituent company being converted in such
transaction; (3) the holding company and each of the
constituent companies to such transaction are companies
incorporated in Bermuda; (4) the memorandum of association
and bye-laws of the holding company immediately following
the effective time of such transaction contain provisions
identical to the memorandum of continuance and bye-laws of
the Company immediately prior to the effective time of such
transaction (other than provisions, if any, regarding the
incorporator or incorporators, the corporate name, the
registered office and agent, the initial board of directors
and the initial subscribers for shares and such provisions
contained in any amendment to the charter documents as were
necessary to effect a change, exchange, reclassification or
cancellation of shares, if such change, exchange,
reclassification or cancellation has become effective); (5)
as a result of such transaction the Company
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or its successor or continuing company becomes or remains a
direct or indirect wholly-owned subsidiary of the holding
company; (6) the directors of the Company become or remain
the directors of the holding company upon the effective time
of such transaction; (7) the memorandum of association and
bye-laws of the surviving or continuing company immediately
following the effective time of such transaction are
identical to the memorandum of association and bye-laws of
the Company immediately prior to the effective time of such
transaction (other than provisions, if any, regarding the
incorporator or incorporators, the corporate name, the
registered office and agent, the initial board of directors
and the initial subscribers for shares and such provisions
contained in any amendment to the charter documents as were
necessary to effect a change, exchange, reclassification or
cancellation of shares, if such change, exchange,
reclassification or cancellation has become effective);
provided, however, that (i) the memorandum of association
and bye-laws of the surviving or continuing company shall be
amended in such transaction to contain a provision requiring
that any act or transaction by or involving the surviving or
continuing company that requires for its adoption under the
Act or its bye-laws the approval of the Members of the
surviving or continuing company shall, by specific reference
to this subsection, require, in addition, the approval of
the Members of the holding company (or any successor), by
the same vote as is required by the Act and/or by its
bye-laws of the surviving or continuing company, and (ii)
the bye-laws of the surviving or continuing company may be
amended in such transaction to reduce the number of classes
and shares of capital stock that the surviving or continuing
company is authorized to issue; and (8) the Members of the
Company do not recognize gain or loss for United States
federal income tax purposes as determined by the board of
directors of the constituent company.
(4) Notwithstanding any other provisions of these Bye-laws (and
notwithstanding the fact that a lesser percentage or separate class vote may be
specified by law or these Bye-laws), the affirmative vote of the holders of
shares representing not less than sixty-six and two-thirds percent (66 2/3%) of
the voting power of all the then outstanding voting shares voting together as a
single class, excluding voting shares beneficially owned by any Interested
Member, shall be required to amend, alter, change, or repeal, or adopt any
provision as part of these Bye-laws inconsistent with the purpose and intent of,
this Bye-law 76; PROVIDED, HOWEVER, that this Bye-law 78(4) shall not apply to,
and such sixty-six and two-thirds percent (66 2/3%) vote shall not be required
for, any such amendment, repeal or adoption recommended by the affirmative vote
of at least seventy-five percent (75%) of the Directors in office (not including
Directors who are affiliates of any Interested Member).
ALTERATION OF BYE-LAWS, ETC.
79. ALTERATION OF BYE-LAWS, ETC.
(1) No Bye-law shall be rescinded, altered or amended and no new
Bye-law shall be made until the same has been approved both by a resolution of
the Board and by a resolution of the Members.
(2) Notwithstanding any other provisions of these Bye-laws:
(a) the affirmative vote of the holders of at least sixty-five
percent (65%) of the voting power of the shares entitled to
vote generally at an election of directors shall be required
to amend, alter, change or repeal, or adopt any provision
inconsistent with the purpose or intent of, Bye-laws 10(2),
11, 15, 31, 32, 33, 39, 45, 46(3), 52, 53, 79(1) and 79(2);
and
(b) the affirmative vote set forth in Bye-law 78(4) shall be
required to amend, alter, change or repeal, or adopt any
provision inconsistent with the purpose or intent of,
Bye-law 78.
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(3) In addition to any affirmative vote required by law, by these
Bye-laws or otherwise, and except as otherwise expressly provided by the last
sentence of this Bye-law 79:
(i) the adoption of any agreement for, or the approval of,
any amalgamation, merger or consolidation of the
Company or any subsidiary with or into any person or
group that is the beneficial owner of 10% or more of
the then outstanding shares of voting stock of the
Company ("Non-exempted Beneficial Owner") or any
affiliate thereof;
(ii) the sale, lease, transfer or other disposition of all
or any portion of the assets of the Company or any
subsidiary (other than in the ordinary course of
business) to any Non-exempted Beneficial Owner or its
affiliates;
(iii) the issuance or transfer by the Company or any
subsidiary of voting securities of the Company or any
subsidiary to a Non-exempted Beneficial Owner or any
affiliate thereof; or
(iv) any amendment of this Bye-law 79(3).
shall require the affirmative vote of the holders of at least 80% of the voting
power of the shares of the Company entitled to vote generally at an election of
Directors (including a majority of the voting power of such shares held by
Members other than Non-exempted Beneficial Owners).
The requirements of Bye-law 79(3) shall not apply to any transaction
which is approved by the Board; PROVIDED, HOWEVER, that a majority of the
Directors voting in favor thereof were duly elected and acting members of the
Board prior to the time such person or group or affiliate thereof became a
Non-exempted Beneficial Owner.
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