EXHIBIT 3.2
A M E N D E D A N D R E S T A T E D
B Y E - L A W S
OF
ASPEN INSURANCE HOLDINGS LIMITED
I N D E X
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BYE-LAW SUBJECT PAGE
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1 Interpretation 1
2 Registered Office 6
3 Share Capital 6
4-7 Alteration of Capital 10
8-12 Shares 11
13-14 Modification of Rights 12
15-18 Certificates 12
19-20 Register of Shareholders 13
21 Register of Directors and Officers 13
22-26 Transfer of Shares 14
27-30 Transmission of Shares 15
31-33 General Meetings and Written Resolutions 16
34-38 Notice of General Meetings 17
39-46 Proceedings at General Meetings 17
47 U.S. Periodic Reporting 19
48-62 Voting 20
63-66 Adjustment of Voting Power 22
67 Other Adjustments of Voting Power 24
68 Notification of Voting Power 24
69-75 Requirement to Provide Information and Notice 24
76 Purchase of Shares 26
77-83 Proxies and Corporate Representatives 26
84-85 Certain Subsidiaries 28
86-87 Election of Directors 29
88 Observers' Rights 29
89-90 Removal of Directors 30
91-92 Vacancies on the Board 30
93-97 Alternate Directors 30
98 Remuneration of Directors 31
99 Directors' Interests 32
100-104 Powers and Duties of the Board 32
105-107 Delegation of the Board's Powers 33
108-118 Proceedings of the Board 34
119 Officers 35
120 Minutes 36
121-122 Secretary and Resident Representative 36
123-125 The Seal 36
126-132 Dividends and Other Payments 37
133 Reserves 38
134-135 Capitalisation of Profits 38
136-137 Record Dates 39
138-140 Accounting Records 40
141 Audit 41
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BYE-LAW SUBJECT PAGE
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142-143 Service of Notices and Other Documents 41
144 Winding Up 41
145-154 Indemnity and Insurance 42
155 Alteration of Bye-Laws 44
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A M E N D E D A N D R E S T A T E D B Y E - L A W S
OF
ASPEN INSURANCE HOLDINGS LIMITED
INTERPRETATION
1. 1.1 In these Bye-Laws, unless the context otherwise requires:
1.1.1 "AFFILIATE" means, in relation to any undertaking,
any other undertaking that controls, is controlled
by or is under common control with such first
undertaking. For the purpose of this definition,
the term "control" means the power to direct the
management and policies of an undertaking, directly
or indirectly, whether through the ownership of
voting securities, by contract or otherwise; and,
except when used in the term "Controlled Shares" as
defined in BYE-LAW 66 below, the terms "controlled"
and "controlling" have meanings correlative to the
foregoing;
1.1.2 "BERMUDA" means the Islands of Bermuda;
1.1.3 "BOARD" means the Board of Directors of the Company
or the Directors present at a meeting of Directors at
which there is a quorum;
1.1.4 "BUSINESS DAY" means a day (excluding Saturdays and
Sundays) on which banks generally are open in New
York, London and Bermuda for the transaction of
normal banking business;
1.1.5 "CAUSE" means willful misconduct, fraud, gross
negligence, embezzlement or any criminal conduct;
1.1.6 "CODE" means the Internal Revenue Code of 1986, as
amended, of the United States of America;
1.1.7 "COMPANIES ACT" means the Companies Act 1981 of
Bermuda as amended from time to time and any
legislation enacted to supersede the same and every
Bermuda statute from time to time in force concerning
companies insofar as the same applies to the Company;
1.1.8 "COMPANY" means the company incorporated in Bermuda
under the name of Exali Reinsurance Holdings Limited
on 22 May 2002 which subsequently changed its name to
Aspen Insurance Holdings Limited on 22 November 2002;
1.1.9 "DIRECTOR" means such person or persons as shall be
elected to the Board from time to time pursuant to
BYE-LAWS 86 AND 87 or appointed to the Board from
time to time pursuant to BYE-LAW 91;
1.1.10 "INDEMNIFIED PERSON" means any Director, Officer,
Resident Representative, member of a committee duly
constituted under BYE-LAW 107 and any liquidator,
manager or trustee for the time being acting in
relation to the affairs of the Company, and his
heirs, executors and administrators;
1.1.11 "INVESTMENT DATE" means June 21, 2002;
1.1.12 "LISTING" means (i) the first admission of Ordinary
Shares or any shares for which the Ordinary Shares
have been exchanged or into which the Ordinary Shares
have been converted or any shares in a company of
which the Company is a subsidiary on the London Stock
Exchange, (ii) the sale and issuance of Ordinary
Shares pursuant to the first registered public
offering under the United States securities laws or
(iii) any amalgamation, scheme of arrangement,
consolidation or other business combination
transaction as a result of which the Shareholders
receive as consideration equity securities of a class
or series that is listed on the London Stock Exchange
or publicly traded on a securities exchange in the
United States;
1.1.13 "LLOYD'S" means The Society and Corporation of
Lloyd's incorporated by the Lloyd's Acts 1871-1982
or, as the context may require, the Council of
Lloyd's and any person or delegate acting under its
authority;
1.1.14 "MONTPELIER RE" means Montpelier Reinsurance Ltd;
1.1.15 "NAMES" means the underwriting members of Lloyd's
participating in Syndicate 2020 for the 2002 year of
account (or in respect of those individual who have
died, part of the 2002 year of account),other than
the Wellington Corporate Members;
1.1.16 "NAMES TRUST" means the trust established under
Declaration of Trust between The Names' Trustees
Limited and WUSL for the benefit of the Names;
1.1.17 "NAMES TRUSTEE" means The Names' Trustees Limited
solely as trustee of the Names Trust, including any
successor to The Names' Trustees Limited as Trustee
of the Names Trust;
1.1.18 "NON-VOTING ORDINARY SHARES" means the Ordinary
Shares in the capital of the Company having, inter
alia, the rights and restrictions as set out in
BYE-LAW 3.3;
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1.1.19 "OFFICER" means a person appointed by the Board
pursuant to BYE-LAW 119 and shall not include an
auditor of the Company;
1.1.20 "ORDINARY SHARES" means ordinary shares in the
capital of the Company having the rights and
restrictions contained in these Bye-Laws;
1.1.21 "PAID UP" means paid up or credited as paid up;
1.1.22 "PHOENIX" means Phoenix Equity Partners IV "A" L.P.,
Phoenix Equity Partners IV "B" L.P., Phoenix Equity
Partners IV "C" L.P., Phoenix Equity Partners IV
Co-Investment Plan and Phoenix Equity Partners III
and IV Executive Investment Plan L.P., acting by
their manager (and in respect of the Co-Investment
Plan, its administrator), Phoenix Equity Partners
Limited and Donaldson Lufkin & Jenrette Securities
Corporation.
1.1.23 "PREFERENCE SHARES" means preference shares in the
capital of the Company, which shall have the rights,
terms, restrictions and preferences set out in or
determined in accordance with these Bye-Laws;
1.1.24 "REGISTER" means the Register of Shareholders of the
Company;
1.1.25 "REGISTERED OFFICE" means the registered office for
the time being of the Company;
1.1.26 "RESIDENT REPRESENTATIVE" means (if any) the
individual (or, if permitted in accordance with the
Companies Act, a company) appointed to perform the
duties of resident representative set out in the
Companies Act and includes any assistant or deputy
Resident Representative appointed by the Board to
perform any of the duties of the Resident
Representative;
1.1.27 "RESOLUTION" means a resolution of the Shareholders
or, where required, of a separate class or separate
classes of Shareholders, adopted either in general
meeting or by written resolution, in accordance with
the provisions of these Bye-Laws;
1.1.28 "SALE" means the transfer (whether through a single
transaction or a series of transactions) of 50% or
more of the Ordinary Shares in issue taken together
to a person and its Affiliates or to a group of
persons acting together;
1.1.29 "SEAL" means the common seal of the Company and
includes any authorised duplicate thereof;
1.1.30 "SECRETARY" includes a temporary or assistant or
deputy Secretary and any person appointed by the
Board to perform any of the duties of the Secretary;
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1.1.31 "SHARE" means share in the capital of the Company and
includes a fraction of a share;
1.1.32 "SHAREHOLDER" means a shareholder or member of the
Company;
1.1.33 "SYNDICATE 2020" means Syndicate 2020 at Lloyd's as
managed by Wellington Underwriting Agencies Limited
on 21 June 2002;
1.1.34 "THE BYE-LAWS" means these Bye-Laws in their present
form or as from time to time amended;
1.1.35 "3i" means 3i Group plc;
1.1.36 "TRANSFER" means, in relation to any share, (i) when
used as a verb, to sell, assign, dispose of,
exchange, pledge, hypothecate or otherwise transfer
such share or any beneficial interest therein,
whether directly or indirectly, or agree or commit to
do any of the foregoing and (ii) when used as a noun,
a direct or indirect sale, assignment, disposition,
exchange, pledge, hypothecation or other transfer of
such share or any beneficial interest therein or any
agreement or commitment to do any of the foregoing;
1.1.37 "UNDERTAKING" means a company or partnership or an
unincorporated association situated in any
jurisdiction and, in relation to an undertaking which
is not a company, expressions in these Bye-Laws
appropriate to companies shall be construed as
references to the corresponding persons, officers,
documents or organs (as the case may be) appropriate
to undertakings of that description;
1.1.38 "WELLINGTON CORPORATE MEMBERS" means Premium Alpha
Limited, Premium Beta Limited, Premium Gamma Limited,
Premium Delta Limited, Premium Epsilon Limited,
Premium Eta Limited, Premium Zeta Limited, Wellington
One Limited, Wellington Two Limited, Wellington Three
Limited, Wellington Four Limited and Wellington Five
Limited;
1.1.39 "WELLINGTON ENTITY" means Wellington Underwriting
plc, its subsidiaries or the Names' Trustee solely as
trustee of the Names Trust;
1.1.40 "WELLINGTON OPTION" means the collective reference to
the Option Instrument dated 21 June 2002 issued by
the Company creating options to subscribe for
Non-Voting Ordinary Shares and the Option
Certificates issued thereunder of even date in favor
of WU plc (in respect of 378,112 Non-Voting Ordinary
Shares of the Company) and in favor of the Names'
Trustee (in respect of 300,676 Non-Voting Ordinary
Shares of the Company);
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1.1.41 "WUSL" means Wellington Underwriting Services
Limited, a company incorporated in England and Wales
(registered no. 01949097) whose registered office is
88 Leadenhall Street, London, EC3A 3BA.
1.2 For the purposes of these Bye-Laws:
1.2.1 a corporation shall be deemed to be present in person
if its representative duly authorised pursuant to the
Companies Act is present;
1.2.2 words importing only the singular number include the
plural number and vice versa;
1.2.3 words importing only the masculine gender include the
feminine and neuter genders respectively;
1.2.4 words importing persons include companies or
associations or bodies of persons, whether corporate
or un-incorporate;
1.2.5 a reference to writing shall include typewriting,
printing, lithography, photography and other modes of
representing or reproducing words in a legible and
non-transitory form;
1.2.6 any words or expressions defined in the Companies Act
in force at the date when these Bye-Laws or any part
thereof are adopted shall bear the same meaning in
these Bye-Laws or such part (as the case may be);
1.2.7 a company is a "SUBSIDIARY" of another company, its
"HOLDING COMPANY", if such other company owns either
directly or indirectly through its subsidiaries
shares of stock or other ownership interests having a
majority of the voting power in electing the board of
directors thereof or other persons performing a
similar function; and
1.2.8 a "MEMBER OF THE SAME GROUP" as a body corporate
means a subsidiary or holding company of the body
corporate or a subsidiary of a holding company of the
body corporate.
1.3 A reference to anything being done by electronic means includes
it being done by any electronic or other communications
equipment or facilities and reference to any communication being
delivered or received, or being delivered or received at a
particular place, includes the transmission of an electronic or
similar communication, and to a recipient identified in such
manner or by such means as the Board may from time to time
approve or prescribe, either generally or for a particular
purpose.
1.4 A reference to a signature or to anything being signed or
executed includes such forms of electronic signature or other
means of verifying the authenticity of an electronic or similar
communication as the Board may from time to time approve or
prescribe, either generally or for a particular purpose.
5
1.5 A reference to any statute or statutory provision (whether in
Bermuda or elsewhere) includes a reference to any modification
or re-enactment of it and to every rule, regulation or order
made under it (or under any such modification or re-enactment)
and any reference to any rule, regulation or order made under
any such statute or statutory provision includes a reference to
any modification or replacement of such rule, regulation or
order.
1.6 In these Bye-Laws:
1.6.1 powers of delegation shall not be restrictively
construed but the widest lawful interpretation shall
be given thereto;
1.6.2 the term "Board" in the context of the exercise of
any power contained in these Bye-Laws includes any
committee consisting of one or more Directors, any
Director holding an executive office and any manager
or agent of the Company to which or, as the case may
be, to whom the power in question has been delegated;
1.6.3 no power of delegation shall be limited by the
existence or, except where expressly provided by the
terms of delegation, the exercise of any other power
of delegation; and
1.6.4 except where expressly provided by the terms of
delegation, the delegation of a power shall not
exclude the concurrent exercise of that power by any
other body or person who is for the time being
authorised to exercise it under these Bye-Laws or
under another delegation of the powers by the Board.
REGISTERED OFFICE
2. The Registered Office shall be at such place in Bermuda as the Board shall
from time to time appoint.
SHARE CAPITAL
3. 3.1 DIVISION OF SHARE CAPITAL
-------------------------
Subject to any special rights previously conferred on the
holders of any existing shares or class of shares, the share
capital of the Company shall be divided into shares of three
classes, being 96,962,903 Ordinary Shares, 678,788 Non-Voting
Ordinary Shares and 10,000,000 Preference Shares, as adjusted in
the event of any share split, stock dividend, subdivision,
combination, reclassification or other similar transaction.
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3.2 ORDINARY SHARES
---------------
The Ordinary Shares shall, subject to the other provisions in
the Bye-Laws, entitle the holders thereof to the following
rights:
3.2.1 as regards dividend:
(subject to the provisions of the Companies Act) after making
all necessary provisions, where relevant, for payment of any
preferred dividend in respect of any Preference Shares then in
issue, the Company shall apply any profits or reserves which the
Board resolves to distribute in paying such profits or reserves
to the holders of the Ordinary Shares in respect of their
holding of such shares pari passu and pro rata to the number of
Ordinary Shares held by each of them;
3.2.2 as regards capital:
on a return of assets on liquidation, reduction of capital or
otherwise, the holders of the Ordinary Shares shall be entitled
to be paid the surplus assets of the Company remaining after
payment of its liabilities (subject to the rights of the holders
of any Preference Shares then in issue having preferred rights
on the return of capital) in respect of their holdings of
Ordinary Shares pari passu and pro rata to the number of
Ordinary Shares held by each of them;
3.2.3 as regards voting in general meetings:
the holders of Ordinary Shares shall be entitled to receive
notice of, and to attend and vote at, general meetings of the
Company; every holder of Ordinary Shares present in person or by
proxy shall on a poll have one vote for each Ordinary Share held
by him (subject to modification to take into account the
provisions of BYE-LAWS 63-67).
3.3 NON-VOTING ORDINARY SHARES
3.3.1 Save as provided in this BYE-LAW 3.3, the Non-Voting
Ordinary Shares shall rank pari passu with the
Ordinary Shares and shall have the same rights and
restrictions as the Ordinary Shares (and for such
purpose, references to Ordinary Shares in these
Bye-Laws shall be deemed to include Non-Voting
Ordinary Shares except to the extent that such
inclusion would conflict with the provisions of this
BYE-LAW 3.3 or except as otherwise expressly provided
in these Bye-Laws).
3.3.2 The Non-Voting Ordinary Shares shall not carry any
voting rights.
3.3.3 The Non-Voting Ordinary Shares shall, in all
circumstances, be treated by the Company as having the
same value as the Ordinary Shares carrying rights to
vote.
7
3.3.4 No resolution which may affect the rights conferred on
Non-Voting Ordinary Shares pursuant to this BYE-LAW
3.3 shall be passed without the prior written consent
of all the holders of Non-Voting Ordinary Shares.
3.3.5 On the first to occur of a Sale or Listing, each
Non-Voting Ordinary Share in issue shall automatically
convert into one Ordinary Share carrying rights to
vote and each Non-Voting Ordinary Share issued at any
time following a Sale or Listing shall automatically
convert, immediately on issue, into one Ordinary Share
carrying rights to vote. Following the conversion, the
holders of Non-Voting Ordinary Shares shall return
their share certificates to the Company and, upon
receipt of each such certificate, the Company shall
issue a replacement certificate representing the same
number of Ordinary Shares carrying rights to vote to
each of the relevant Shareholders.
3.4 PREFERENCE SHARES
3.4.1 The Board is authorized, subject to BYE-LAW 3.4.3 and
any limitations prescribed by applicable law, to issue
Preference Shares in one or more series, and to fix
the rights, preferences, privileges and restrictions
thereof, including but not limited to dividend rates,
conversion rights, voting rights, terms of redemption
(including sinking fund provisions), redemption prices
and liquidation preferences, and the number of shares
constituting and the designation of any such series,
without further vote or action by the Shareholders.
3.4.2 The authority of the Board with respect to each series
of Preference Shares shall include, but not be limited
to, determination of the following:
3.4.2.1 the distinctive designation of such series
and the number of Preference Shares
constituting such series, which number
(except as otherwise provided by the Board
in the resolution establishing such series)
may be increased or decreased (but not below
the number of shares of such series then
outstanding) from time to time by like
action of the Board;
3.4.2.2 the rights in respect of dividends, if any,
of such series of Preference Shares, the
extent of the preference or relation, if
any, of such dividends to the dividends
payable on any other class or classes or any
other series of the same or other class or
classes of shares of the Company, and
whether such dividends shall be cumulative
or non-cumulative;
3.4.2.3 the voting powers, if any, of the holders of
such series of Preference Shares generally
or with respect to any particular
8
matter, which may be less than, equal to or
greater than one vote per share, and which
may, without limiting the generality of the
foregoing, include the right, voting as a
series by itself or together with the
holders of any other series of Preference
Shares or all series of Preference Shares as
a class, or together with the holders of any
other class of the capital stock of the
Company to elect one or more directors of
the Company (which, without limiting the
generality of the foregoing, may include a
specified number or portion of the
then-existing number of authorized
directorships of the Company or a specified
number or portion of directorships in
addition to the then-existing number of
authorized directorships of the Company),
generally or under such specific
circumstances and on such conditions, as
shall be provided in the resolution or
resolutions of the Board adopted pursuant
hereto;
3.4.2.4 whether such series of Preference Shares may
be redeemed and, if so, the terms and
conditions on which they may be redeemed
(including, without limitation, the dates
upon or after which they may be redeemed,
which price or prices may be different in
different circumstances or at different
redemption dates), and whether they may be
redeemed at the option of the Company, at
the option of the holder, or at the option
of both the Company and the holder;
3.4.2.5 the right, if any, of the holders of such
series of Preference Shares to convert the
same into, or exchange the same for, shares
of any other class or classes or of any
other series of the same or any other class
or classes of shares of the Company and the
terms and conditions of such conversion or
exchange, including, without limitation,
whether or not the number of shares of such
other class or series into which shares of
such series may be converted or exchanged
shall be adjusted in the event of any share
split, stock dividend, subdivision,
combination, reclassification or other
transaction or series of transactions
affecting the class or series into which
such series of Preference Shares may be
converted or exchanged;
3.4.2.6 the amounts, if any, payable upon such
series of Preference Shares in the event of
voluntary liquidation, dissolution or
winding up of the Company in preference of
any other class or series of shares or in
the event of any merger or consolidation of
or sale of assets by the Company;
9
3.4.2.7 the terms of any sinking fund or redemption
or purchase account, if any, to be provided
for shares of such series of Preference
Shares; and
3.4.2.8 any other relative rights, preferences,
limitations and powers of such series of
Preference Shares.
3.4.3 Notwithstanding the provisions of BYE-LAW 3.4.2.3, the
Board may issue Preference Shares having voting rights
or powers (other than any mandatory voting rights or
powers under the Companies Act) only if such issuance
is approved by a Resolution of the holders of Ordinary
Shares (but not any other class of shares) then
outstanding (taking into consideration the provisions
of BYE-LAWS 63-67).
ALTERATION OF CAPITAL
4. The Company may from time to time increase its capital by such sum to be
divided into shares of such par value as the Company by Resolution (taking
into consideration the provisions of BYE-LAWS 63-67) shall prescribe and
in any manner permitted by the Companies Act.
5. Subject to the Companies Act, the Memorandum of Association of the Company
and any confirmation or consent required by applicable law or these
Bye-Laws, the Company may from time to time by Resolution (taking into
consideration the provisions of BYE-LAWS 63-67) authorise the reduction of
its issued share capital or any share premium account in any manner. In
relation to any such reduction, the Company may by Resolution (taking into
consideration the provisions of BYE-LAWS 63-67) determine the terms upon
which such reduction is to be effected, provided, that such reduction
shall apply to the entire class or series of shares to be affected.
6. The Company may from time to time by Resolution (taking into consideration
the provisions of BYE-LAWS 63-67) and in any manner permitted by the
Companies Act:
6.1 divide its shares into several classes or series and attach
thereto respectively any preferential, deferred, qualified or
special rights, privileges or conditions;
6.2 consolidate and divide all or any of its share capital into
shares of larger par value than its existing shares;
6.3 sub-divide its shares or any of them into shares of smaller par
value than is fixed by its Memorandum of Association, so,
however, that in the sub-division the proportion between the
amount paid and the amount, if any, unpaid on each reduced share
shall be the same as it was in the case of the share from which
the reduced share is derived;
6.4 make provision for the issue and allotment of shares which do
not carry any voting rights;
10
6.5 cancel shares which, at the date of the passing of the
Resolution in that behalf, have not been taken or agreed to be
taken by any person, and diminish the amount of its share
capital by the amount of the shares so cancelled; and
6.6 change the currency denomination of its share capital.
Where any difficulty arises in regard to any division,
consolidation, or sub-division under this Bye-Law, the Board may
settle the same as it thinks expedient and, in particular, may
arrange for the sale of the shares representing fractions and
the distribution of the net proceeds of sale in due proportion
amongst the Shareholders who would have been entitled to the
fractions, and, in the case where a distribution to the Names'
Trust would result in individual Names having a fractional
beneficial interest, to the Names' Trust in order to adjust the
rights of all parties, and for this purpose the Board may
authorise some person to transfer the shares representing
fractions to the purchaser thereof, who shall not be bound to
see to the application of the purchase money nor shall his title
to the shares be affected by any irregularity or invalidity in
the proceedings relating to the sale.
7. The Board may, without the sanction of a Resolution, authorise the
purchase by the Company of its own shares, of any class or series, at any
price (whether at par or above or below par), and any shares to be so
purchased may be selected in any manner whatsoever, upon such terms as
the Board may in its discretion determine, provided always that such
purchase is effected in accordance with the provisions of the Companies
Act and any other applicable laws. The whole or any part of the amount
payable on any such purchase may be paid or satisfied otherwise than in
cash, to the extent permitted by the Companies Act.
SHARES
8. Subject to the restrictions, if any, that are provided for in these
Bye-Laws from time to time and without prejudice to any special rights
previously conferred on the holders of any existing shares or class or
series of shares, the Board shall have power to issue any unissued shares
of the Company on such terms and conditions as it may determine. Further,
the Board may create and issue shares of any existing class or series of
shares. The Board may also issue options, warrants or other rights to
purchase or acquire shares or, subject to Section 43 of the Companies
Act, securities convertible into or exchangeable for shares (including
any employee benefit plan providing for the issue of shares or options or
rights in respect thereof), at such times, for such consideration and on
such terms and conditions as it may determine.
9. The Board may in connection with the issue of any shares exercise all
powers of paying commission and brokerage conferred or permitted by law.
10. Except as ordered by a court of competent jurisdiction or as required by
applicable law, no person shall be recognised by the Company as holding
any share upon trust and the Company shall not be bound by or required in
any way to recognise (even when having notice thereof) any equitable,
contingent, future or partial interest in any share or in any
11
fractional part of a share or (except only as otherwise provided in these
Bye-Laws or by law) any other right in respect of any share except an
absolute right to the entirety thereof in the registered holder.
11. The Company shall not give, whether directly or indirectly, whether by
means of loan, guarantee, provision of security or otherwise, any
financial assistance for the purpose of a purchase or subscription made
or to be made by any person of or for any shares in the Company, but
nothing in this Bye-Law shall prohibit transactions mentioned in Sections
39A, 39B and 39C of the Companies Act.
12. Notwithstanding BYE-LAW 8, the Board may not grant options, warrants or
other rights to acquire shares to directors, officers or employees of the
Company at an exercise price less than the fair market value of any such
shares on the date of grant.
MODIFICATION OF RIGHTS
13. Subject to the Companies Act, all or any of the special rights for the
time being attached to any class or series of shares for the time being
issued may from time to time (whether or not the Company is being wound
up) be altered or abrogated with the consent in writing of the holders of
not less than seventy-five percent (75%) of the voting power of the
issued shares of that class or series (taking into account the provisions
of BYE-LAWS 63-67) or with the sanction of a Resolution passed by the
holders of not less than seventy-five percent (75%) of the voting power
of the outstanding shares in issue at a separate general meeting (taking
into account the provisions by BYE-LAWS 63-67). In respect of any such
separate general meeting, all the provisions of these Bye-Laws as to
general meetings of the Company shall mutatis mutandis apply, but so that
the necessary quorum shall be one or more persons holding or representing
by proxy any of the shares of the relevant class or series, that every
holder of shares of the relevant class or series shall be entitled on a
poll to one vote for every such share held by him (subject to
modification to take into account the provisions of BYE-LAWS 63-67) and
that any holder of shares of the relevant class or series present in
person or by proxy may demand a poll.
14. For the purpose of this Bye-Law, unless otherwise expressly provided by
the rights attaching to or the terms of issue of such shares or class or
series of shares, such rights or terms, as the case may be, shall not be
deemed altered by:
14.1 the creation or issue of further shares ranking pari passu
therewith;
14.2 the creation or issue for full value (as determined by the
Board) of further shares ranking as regards participation in the
profits or assets of the Company or otherwise in priority to
them; or
14.3 the purchase or redemption by the Company of any of its own
shares.
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CERTIFICATES
15. The preparation, issue and delivery of certificates shall be governed by
the Companies Act. In the case of a share held jointly by several
persons, delivery of a certificate to one of several joint holders shall
be sufficient delivery to all.
16. If a share certificate is defaced, lost or destroyed, it may be replaced
without fee but on such terms (if any) as to evidence and indemnity and
to payment of the costs and out of pocket expenses of the Company in
investigating such evidence and preparing such indemnity as the Board may
think fit and, in case of defacement, on delivery of the old certificate
to the Company.
17. All certificates for share or loan capital or other securities of the
Company (other than letters of allotment, scrip certificates and other
like documents) shall, except to the extent that the terms and conditions
for the time being relating thereto otherwise provide, be in such form as
the Board may determine and issued under the Seal. The Board may by
resolution determine, either generally or in any particular case, that
any signatures on any such certificates need not be autographic but may
be affixed to such certificates by some mechanical means or may be
printed thereon or that such certificates need not be signed by any
persons and may determine that a representation of the Seal may be
printed on any such certificates. If any person holding an office in the
Company who has signed, or whose facsimile signature has been used on any
certificate, ceases for any reason to hold his office, such certificate
may nevertheless be issued as though that person had not ceased to hold
such office.
18. Nothing in these Bye-Laws shall prevent title to any securities of the
Company from being evidenced and/or transferred without a written
instrument in accordance with regulations made from time to time in this
regard under the Companies Act, and (i) the Board shall have power to
implement any arrangements which it may think fit for such evidencing
and/or transfer which accord with those regulations and (ii) any such
transfer shall be subject to the applicable provisions of BYE-LAW 22.
REGISTER OF SHAREHOLDERS
19. The Register shall be kept at the Registered Office or at such other
place in Bermuda as the Board may from time to time direct, in the manner
prescribed by the Companies Act. Subject to the provisions of the
Companies Act, the Company may keep one or more branch registers in any
place, and the Board may make, amend and revoke any resolutions as it may
think fit respecting the keeping of such registers.
20. The Register or any branch register may be closed at such times and for
such period as the Board may from time to time decide, subject to the
Companies Act and any other applicable law. Except during such time as it
is closed, the Register and each branch register shall be open to
inspection in the manner prescribed by the Companies Act between 10:00
a.m. and 12:00 noon (or between such times as the Board from time to time
determines) on every Business Day. Unless the Board so determines, no
Shareholder or intending Shareholder shall be entitled to have entered in
the Register or
13
any branch register any indication of any trust or any equitable,
contingent, future or partial interest in any share or fractional part of
a share and if any such entry exists or is permitted by the Board it
shall not be deemed to abrogate any of the provisions of BYE-LAW 10.
REGISTER OF DIRECTORS AND OFFICERS
21. The Secretary shall establish and maintain a register of the Directors
and Officers of the Company as required by the Companies Act. The
register of Directors and Officers shall be open to inspection in the
manner prescribed by the Companies Act between 10:00 a.m. and 12:00 noon
on every Business Day.
TRANSFER OF SHARES
22. Subject to the Companies Act and to such of the restrictions contained in
these Bye-Laws as may be applicable, any Shareholder may transfer all or
any of its shares by an instrument of transfer in the usual common form
or by any other method permissible under applicable law, in either case
as may be approved by the Board. No such instrument shall be required on
the redemption of a share or on the purchase by the Company of a share.
23. The instrument of transfer of legal title in a share shall be signed by
or on behalf of the transferor and where any share is not fully-paid, the
transferee. The transferor shall be deemed to remain the holder of the
share until the name of the transferee is entered in the Register in
respect thereof. All instruments of transfer when registered may be
retained by the Company. The Board may, in its absolute discretion and
without assigning any reason therefor, decline to register any transfer
of any share which is not a fully-paid share. The Board may also decline
to register any transfer unless:
23.1 the instrument of transfer is duly stamped and lodged with the
Company, at such place as the Board shall appoint for the
purpose, accompanied by the certificate for the shares to which
it relates, and such other evidence as the Board may reasonably
require to show the right of the transferor to make the
transfer;
23.2 the instrument of transfer is in respect of only one class or
series of shares;
23.3 the instrument of transfer does not result in joint holders of
the shares to be transferred; and
23.4 it is satisfied that all applicable consents, authorisations,
permissions or approvals of any governmental body or agency in
Bermuda or any other applicable jurisdiction required to be
obtained under relevant law prior to such transfer have been
obtained.
Subject to any directions of the Board from time to time in
force, the Secretary may exercise the powers and discretions of
the Board under this Bye-Law and BYE-LAWS 22 AND 25.
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24. The Board may decline to approve or register any transfer of shares to
the extent that the Board determines, in its sole discretion, after
taking into account, among other things, the limitation on voting rights
contained in these Bye-Laws, that any non-de minimis adverse tax,
regulatory or legal consequences to the Company, any subsidiary of the
Company, or any other Shareholder or its Affiliates would result from
such transfer (including, without limitation, if such consequence arises
as a result of any U.S. person becoming a 9.5% U.S. Shareholder (as
defined in BYE-LAW 66), provided, however, that (i) such determination
shall only be made after giving effect to BYE-LAWS 63-67, (ii) prior to
declining to approve or register such transfer, the Board shall first
have consulted with the relevant Shareholder and explored alternatives to
avoid such consequences and (iii) the power of the Board to decline to
approve or register such transfer shall be applied only to the extent,
and for such number of shares, as is necessary to avoid such non-de
minimis adverse tax, regulatory or legal consequences. The Board shall
have the authority to request from any Shareholder, and each such
Shareholder shall provide such information as the Board may reasonably
request for the purpose of determining whether any transfer should be
permitted.
25. If the Board declines to register a transfer it shall, within one (1)
month after the date on which the instrument of transfer was lodged, send
to the transferee notice of such refusal.
26. No fee shall be charged by the Company for registering any transfer,
probate, letters of administration, certificate of death or marriage,
power of attorney, order of court or other instrument relating to or
affecting the title to any share, or otherwise making an entry in the
Register relating to any share (except that the Company may require
payment of a sum sufficient to cover any tax or other governmental charge
that may be imposed on it in connection with such transfer or entry).
TRANSMISSION OF SHARES
27. In the case of the death of an individual Shareholder, the survivor or
survivors, where the deceased was a joint holder, and the estate
representative, where he was sole holder, shall be the only person
recognised by the Company as having any title to his shares; but nothing
herein contained shall release the estate of a deceased holder (whether
the sole or joint) from any liability in respect of any share held by him
solely or jointly with other persons. For the purpose of this Bye-Law,
estate representative means the person to whom probate or letters of
administration has or have been granted in Bermuda or, failing any such
person, such other person as the Board may in its absolute discretion
determine to be the person recognised by the Company for the purpose of
this Bye-Law. For greater certainty, where two or more persons are
registered as joint holders of a share or shares, then in the event of
the death of any joint holder or holders, the remaining joint holder or
holders shall be absolutely entitled to the said share or shares and the
Company shall recognize no claim in respect of the estate of any joint
holder except in the case of the last survivor of such joint holders.
28. Any person becoming entitled to a share in consequence of the death of a
Shareholder or otherwise by operation of applicable law may, subject as
hereafter provided and upon such evidence being produced as may from time
to time be required by the Board as to
15
his entitlement, either be registered himself as the holder of the share
or elect to have some person nominated by him registered as the
transferee thereof. If the person so becoming entitled elects to be
registered himself, he shall deliver or send to the Company a notice in
writing signed by him stating that he so elects. If he shall elect to
have his nominee registered, he shall signify his election by signing an
instrument of transfer of such share in favour of his nominee. All the
limitations, restrictions and provisions of these Bye-Laws relating to
the right to transfer and the registration of transfer of shares shall be
applicable to any such notice or instrument of transfer as aforesaid as
if the death of such Shareholder or other event giving rise to the
transmission had not occurred and the notice or instrument of transfer
was an instrument of transfer signed by such Shareholder.
29. A person becoming entitled to a share in consequence of the death of an
individual Shareholder or otherwise by operation of applicable law shall
(upon such evidence being produced as may from time to time be required
by the Board as to his entitlement) be entitled to receive and may give a
discharge for any dividends or other monies payable in respect of the
share, but he shall not be entitled in respect of the share to receive
notices of or to attend or vote at general meetings of the Company or,
save as aforesaid, to exercise in respect of the share any of the rights
or privileges of a Shareholder until he shall have become registered as
the holder thereof. The Board may at any time give notice requiring such
person to elect either to be registered himself or to transfer the share
and, if the notice is not complied with within sixty days, the Board may
thereafter withhold payment of all dividends and other monies payable in
respect of the shares until the requirements of the notice have been
complied with.
30. Subject to any directions of the Board from time to time in force, the
Secretary may exercise the powers and discretions of the Board under
BYE-LAWS 27-29.
GENERAL MEETINGS AND WRITTEN RESOLUTIONS
31. The Board shall convene and the Company shall hold general meetings as
Annual General Meetings in accordance with the requirements of the
Companies Act at such times and places as the Board shall appoint.
32. The Board may, whenever it thinks fit, and shall, when required by the
provisions of Companies Act, convene general meetings other than Annual
General Meetings which shall be called Special General Meetings.
33. 33.1 Except in the case of the removal of auditors or Directors,
anything which may be done by Resolution in general meeting may,
without a meeting and without any previous notice being
required, be done by Resolution in writing, signed by all of the
Shareholders or any class or series thereof or their proxies, or
in the case of a Shareholder that is a corporation (whether or
not a company within the meaning of the Companies Act) on behalf
of such Shareholder, being all of the Shareholders or any class
or series thereof who at the date of the Resolution in writing
would be entitled to attend a meeting and vote on the
Resolution. Such Resolution in writing may be signed in as many
counterparts as may be necessary.
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33.2 For the purposes of this Bye-Law, the date of the Resolution in
writing is the date when the Resolution is signed by, or on
behalf of, the last Shareholder to sign and any reference in any
enactment to the date of passing of a Resolution is, in relation
to a Resolution in writing made in accordance with this section,
a reference to such date.
33.3 A Resolution in writing made in accordance with this Bye-Law is
as valid as if it had been passed by the Company in general
meeting or, if applicable, by a meeting of the relevant class or
series of Shareholders, as the case may be. A Resolution in
writing made in accordance with this section shall constitute
minutes for the purposes of the Companies Act and these
Bye-Laws.
NOTICE OF GENERAL MEETINGS
34. An Annual General Meeting shall be called by not less than twenty-one
(21) days notice in writing and a Special General Meeting shall be called
by not less than twenty-one (21) days notice in writing. The notice
period shall be exclusive of the day on which it is served or deemed to
be served and of the day for which it is given, and the notice shall
specify the place, day and time of the meeting, and, the nature of the
business to be considered. Notice of every general meeting shall be given
in any manner permitted by BYE-LAWS 142-143 to all Shareholders other
than such as, under the provisions of these Bye-Laws or the terms of
issue of the shares they hold, are not entitled to receive such notice
from the Company and every Director and to any Resident Representative
who or which has delivered a written notice upon the Registered Office
requiring that such notice be sent to him or it.
35. Notwithstanding that a meeting of the Company is called by shorter notice
than that specified in this Bye-Law, it shall be deemed to have been duly
called if it is so agreed:
35.1 in the case of a meeting called as an Annual General Meeting, by
all the Shareholders entitled to attend and vote thereat;
35.2 in the case of any other meeting, by a majority in number of the
Shareholders having the right to attend and vote at the meeting,
being a majority together holding not less than ninety-five
percent (95%) in nominal value of the shares giving that right.
36. A Shareholder present, either in person or by proxy, at any meeting of
the Company or of the holders of any class or series of shares present in
person or by proxy shall be deemed to have received notice of the meeting
and, where requisite, of the purposes for which it was called.
37. Subject to the Companies Act, the Board may cancel or postpone a meeting
of the Shareholders after it has been convened and notice of such
cancellation or postponement shall be served in accordance with BYE-LAW
142 upon all Shareholders entitled to notice of the meeting so cancelled
or postponed setting out, where the meeting is postponed to a specific
date, notice of the new meeting in accordance with BYE-LAW 34.
17
38. The accidental omission to give notice of a meeting or (in cases where
instruments of proxy are sent out with the notice) the accidental
omission to send such instrument of proxy to, or the non-receipt of
notice of a meeting or such instrument of proxy by, any person entitled
to receive such notice shall not invalidate the proceedings at that
meeting.
PROCEEDINGS AT GENERAL MEETINGS
39. No business shall be transacted at any general meeting unless a quorum is
present when the meeting proceeds to business, but the absence of a
quorum shall not preclude the appointment, choice or election of a
chairman, which shall not be treated as part of the business of the
meeting. Save as otherwise provided by these Bye-Laws, one or more
Shareholders holding at least fifty percent (50%) of the voting power of
the Ordinary Shares (taking into account the provisions of BYE-LAWS
63-67) in issue present in person or by proxy and entitled to vote shall
be a quorum for all purposes.
40. If within five minutes (or such longer time as the chairman of the
meeting may determine to wait) after the time appointed for the meeting,
a quorum is not present in person or by proxy, the meeting, if convened
on the requisition of Shareholders, shall be dissolved. In any other
case, it shall stand adjourned to such other day and such other time and
place as the chairman of the meeting may determine and at such adjourned
meeting two Shareholders present in person or by proxy and holding at
least ten percent (10%) in aggregate of the voting power of shares
entitled to vote at such meeting (taking into account the provisions of
BYE-LAWS 63-67) shall be a quorum. The Company shall give not less than
twenty-one (21) days notice of any meeting adjourned through want of a
quorum and such notice shall state that two Shareholders present in
person or by proxy and holding at least ten percent (10%) of the voting
power of shares entitled to vote at such meeting (taking into account the
provisions of BYE-LAWS 63-67) shall be a quorum.
41. In accordance with section 71(5) of the Companies Act, a general meeting
may be held with only one (1) individual present provided that the
requirement for a quorum is satisfied.
42. A meeting of the Shareholders or any class or series thereof may be held
by means of such telephone, electronic or other communication facilities
(including, without limiting the generality of the foregoing, by
telephone, or by video conferencing) as permit all persons participating
in the meeting to communicate with each other simultaneously and
instantaneously, and participation in such a meeting shall constitute
presence in person at such meeting.
43. 43.1 Subject to the Companies Act, a Resolution may only be put to a
vote at a general meeting of the Company or of any class or
series of Shareholders if:
43.1.1 it is proposed by or at the direction of the Board; or
43.1.2 it is proposed at the direction of a court of
competent jurisdiction; or
18
43.1.3 it is proposed on the requisition in writing of such
number of Shareholders as is prescribed by, and is
made in accordance with, the relevant provisions of
the Companies Act; or
43.1.4 the chairman of the meeting in his absolute discretion
decides that the Resolution may properly be regarded
as within the scope of the meeting; or
43.1.5 the Resolution concerns a matter described in BYE-LAW
84.
43.2 No amendment may be made to a Resolution, at or before the time
when it is put to a vote, unless the chairman of the meeting in
his absolute discretion decides that the amendment or the
amended Resolution may properly be put to a vote at that
meeting.
43.3 If the chairman of the meeting rules a Resolution or an
amendment to a Resolution admissible or out of order (as the
case may be), the proceedings of the meeting or on the
Resolution in question shall not be invalidated by any error in
his ruling. Any ruling by the chairman of the meeting in
relation to a Resolution or an amendment to a Resolution shall
be final and conclusive.
44. Each Director, and upon giving the notice referred to in BYE-LAW 34
above, the Resident Representative, if any, shall be entitled to attend
and speak at any general meeting of the Company.
45. The Chairman (if any) of the Board or, in his absence, the President
shall preside as chairman at every general meeting. If there is no such
Chairman or President, or if at any meeting neither the Chairman nor the
President is present within five minutes after the time appointed for
holding the meeting, or if neither of them is willing to act as chairman,
the Directors present shall choose one of their number to act or if only
one Director is present he shall preside as chairman if willing to act.
If no Director is present, or if each of the Directors present declines
to take the chair, the persons present and entitled to vote on a poll
shall elect one of their number to be chairman.
46. The chairman of the meeting may, with the consent by Resolution of the
persons present at any meeting at which a quorum is present (and shall if
so directed by the meeting), adjourn the meeting from time to time and
from place to place but no business shall be transacted at any adjourned
meeting except business which might lawfully have been transacted at the
meeting from which the adjournment took place. Subject to the Companies
Act, in addition to any other power of adjournment conferred by law, the
chairman of the meeting may at any time without consent of the persons
present at the meeting adjourn the meeting (whether or not it has
commenced or a quorum is present) to another time and/or place if, in his
opinion, it would facilitate the conduct of the business of the meeting
to do so or if he is so directed (prior to or at the meeting) by the
Board. When a meeting is adjourned for three (3) months or more, notice
of the adjourned meeting shall be given as in the case of an original
meeting. Save as expressly provided
19
by these Bye-Laws, it shall not be necessary to give any notice of an
adjournment or of the business to be transacted at an adjourned meeting.
U.S. PERIODIC REPORTING
47. For so long as the Company is required to maintain the registration of
any of its shares under Section 12 of the Securities Exchange Act of 1934
(the "EXCHANGE ACT"), the Company shall file with the U.S. Securities and
Exchange Commission all annual reports on Form 10-K, quarterly reports on
Form 10-Q and current reports with respect to specified events on Form
8-K (as would be required of a United States domestic private issuer
subject to those particular informational requirements of the Exchange
Act). The audited financial information contained in such annual reports
and unaudited quarterly financial information contained in such quarterly
reports will be prepared in accordance with United States generally
accepted accounting principles.
VOTING
48. Except as otherwise required by the Companies Act and these Bye-Laws, any
question proposed for the consideration of the Shareholders at any
general meeting shall be decided by the affirmative vote of a majority of
the voting power of votes cast at such meeting (taking into account the
provisions of BYE-LAWS 63-67) and in the case of an equality of voting
power of votes cast, the Resolution shall fail. Any amendment to this
BYE-LAW 48 shall be approved by the affirmative vote of at least a
majority of the voting power of shares entitled to vote at a meeting of
Shareholders (taking into account the provisions of BYE-LAWS 63-67).
49. Notwithstanding the provisions of BYE-LAWS 48 AND 50, the following
actions shall be approved by the affirmative vote of at least
seventy-five percent (75%) of the voting power of shares entitled to vote
at a meeting of Shareholders (taking into account the provisions of
BYE-LAWS 63-67): any amendment to BYE-LAWS 13 (FIRST SENTENCE), 24, 63,
64, 65, 66, 67, 76, 84 OR 85; provided, however, that in the case of any
amendments to BYE-LAWS 24, 63, 64, 65, 66, 67 OR 76, such amendment shall
only be subject to this BYE-LAW 49 if the Board determines, in its sole
discretion, that such amendment could adversely affect any Shareholder in
any non-de minimis respect. Any amendment to this BYE-LAW 49 shall be
approved by the affirmative vote of at least seventy-five percent (75%)
of the voting power of shares entitled to vote at a meeting of
Shareholders (taking into account the provisions of BYE-LAWS 63-67).
50. Notwithstanding the provisions of BYE-LAWS 48-49 (in addition to any
approval requirements set out in the Companies Act), the following
actions shall be approved by the affirmative vote of at least sixty-six
percent (66%) of the voting power of shares entitled to vote at a meeting
of Shareholders (taking into account the provisions of BYE-LAWS 63-67):
(i) a merger or amalgamation with, or a sale, lease or transfer of all or
substantially all of the assets of the Company to, a third party, where
any Shareholder does not have the same right to receive the same
consideration as all other Shareholders in such transaction; or (ii)
discontinuance of the Company out of Bermuda to another jurisdiction. Any
amendment to this BYE-LAW 50 shall be approved by the affirmative
20
vote of at least sixty-six percent (66%) of the voting power of shares
entitled to vote at a meeting of Shareholders (taking into account the
provisions of BYE-LAWS 63-67).
51. At any general meeting, a Resolution put to the vote of the meeting shall
be decided on a show of hands unless (before or on the declaration of the
result of the show of hands or on the withdrawal of any other demand for
a poll) a poll is demanded by:
51.1 the chairman of the meeting; or
51.2 at least three (3) Shareholders present in person or represented
by proxy; or
51.3 any Shareholder or Shareholders present in person or represented
by proxy and holding between them not less than one tenth of the
total voting power of shares entitled to vote at such meeting
(taking into account the provisions of BYE-LAWS 63-67); or
51.4 a Shareholder or Shareholders present in person or represented
by proxy holding shares conferring the right to vote at such
meeting, being shares on which an aggregate sum has been paid up
equal to not less than one tenth of the total sum paid up on all
such shares conferring such right.
52. The demand for a poll may be withdrawn by the person or any of the
persons making it at any time prior to the declaration of the result but
only with the consent of the chairman and a demand so withdrawn shall not
be taken to have invalidated the result of a show of hands declared
before a poll was made. Unless a poll is so demanded and the demand is
not withdrawn, a declaration by the chairman that a Resolution has, on a
show of hands, been carried or carried unanimously or by a particular
majority or not carried by a particular majority or lost shall be final
and conclusive, and an entry to that effect in the minute book of the
Company shall be conclusive evidence of the fact without proof of the
number or proportion of votes recorded for or against such Resolution.
53. If a poll is duly demanded, the result of the poll shall be deemed to be
the Resolution of the meeting at which the poll is demanded.
54. A poll demanded on the election of a chairman, or on a question of
adjournment, shall be taken forthwith. A poll demanded on any other
question shall be taken in such manner and either forthwith or at such
time later in the meeting as the chairman shall direct and the chairman
may appoint scrutineers (who need not be Shareholders) and fix a time and
place for declaring the result of the poll. It shall not be necessary
(unless the chairman otherwise directs) for notice to be given of a poll.
55. The demand for a poll shall not prevent the continuance of a meeting for
the transaction of any business other than the question on which the poll
has been demanded and it may be withdrawn at any time before the close of
the meeting or the taking of the poll, whichever is the earlier.
56. On a poll, votes may be cast either personally or by proxy.
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57. A person entitled to more than one vote on a poll need not use all his
votes or cast all the votes he uses in the same way.
58. In the case of an equality of votes at a general meeting, whether on a
show of hands or on a poll, the chairman of such meeting shall not be
entitled to a second or casting vote and the Resolution shall fail.
59. In the case of joint holders of a share, the vote of the senior who
tenders a vote, whether in person or by proxy, shall be accepted to the
exclusion of the votes of the other joint holders, and for this purpose
seniority shall be determined by the order in which the names stand in
the Register in respect of the joint holding.
60. A Shareholder who is a patient for any purpose of any statute or
applicable law relating to mental health or in respect of whom an order
has been made by any Court having jurisdiction for the protection or
management of the affairs of persons incapable of managing their own
affairs may vote, whether on a show of hands or on a poll, by his
receiver, committee, curator bonis or other person in the nature of a
receiver, committee or curator bonis appointed by such Court and such
receiver, committee, curator bonis or other person may vote on a poll by
proxy, and may otherwise act and be treated as such Shareholder for the
purpose of general meetings.
61. No Shareholder shall, unless the Board otherwise determines, be entitled
to vote at any general meeting unless all calls or other sums presently
payable by him in respect of shares in the Company have been paid.
62. If:
62.1 any objection shall be raised to the qualification of any voter;
or,
62.2 any votes have been counted which ought not to have been counted
or which might have been rejected; or,
62.3 any votes are not counted which ought to have been counted,
the objection or error shall not vitiate the decision of the
meeting or adjourned meeting on any Resolution unless the same
is raised or pointed out at the meeting or, as the case may be,
the adjourned meeting at which the vote objected to is given or
tendered or at which the error occurs. Any objection or error
shall be referred to the chairman of the meeting and shall only
vitiate the decision of the meeting on any Resolution if the
chairman decides that the same may have affected the decision of
the meeting. The decision of the chairman on such matters shall
be final and conclusive.
ADJUSTMENT OF VOTING POWER
63. The voting power of all shares is hereby adjusted (and shall be
automatically adjusted in the future) to the extent necessary so that
there is no 9.5% U.S. Shareholder. The Board shall implement the
foregoing in the manner provided herein.
22
64. The Board shall from time to time, including prior to any time at which a
vote of Shareholders is taken, take all reasonable steps necessary to
ascertain, including those specified in BYE-LAW 68, through
communications with Shareholders or otherwise, whether there exists, or
will exist at the time any vote of Shareholders is taken, a Tentative
9.5% U.S. Shareholder.
65. In the event that a Tentative 9.5% U.S. Shareholder exists, the aggregate
votes conferred by shares held by a Shareholder and treated as Controlled
Shares of that Tentative 9.5% U.S. Shareholder shall be reduced to the
extent necessary such that the Controlled Shares of the Tentative 9.5%
U.S. Shareholder will constitute less than 9.5% of the voting power of
all shares. In applying the previous sentence where shares held by more
than one Shareholder are treated as Controlled Shares of such Tentative
9.5% U.S. Shareholder, the reduction in votes shall apply to such
Shareholders in descending order according to their respective
Attribution Percentages, provided that, in the event of a tie, the
reduction shall apply first to the Shareholder whose shares are
Controlled Shares of the Tentative 9.5% U.S. Shareholder by virtue of the
Tentative 9.5% U.S. Shareholder's economic interest in (as opposed to
voting control with respect to) such shares. The votes of Shareholders
owning no shares treated as Controlled Shares of any Tentative 9.5% U.S.
Shareholder shall, in the aggregate, be increased by the same number of
votes subject to reduction as described above. Such increase shall apply
to all such Shareholders in proportion to their voting power at that
time, provided that such increase shall be limited to the extent
necessary to avoid causing any person to be a 9.5% U.S. Shareholder, and
provided, further, that (x) no portion of such increase shall apply to
the shares held by any Wellington Entity or the Names Trust, and (y) such
increase shall be limited in the case of 3i, Phoenix and Montpelier Re so
that no such increase would cause the voting power of 3i, Phoenix or
Montpelier Re to increase to 10% or more except, in the case of either
(x) or (y), where the failure to apply such increase to the shares of any
such Shareholders would result in any person becoming a 9.5% U.S.
Shareholder. The adjustments of voting power described in this Bye-Law
shall apply repeatedly until there is no 9.5% U.S. Shareholder. The Board
may deviate from any of the principles described in this Bye-Law and
determine that shares held by a Shareholder shall carry different voting
rights as it determines appropriate (1) to avoid the existence of any
9.5% U.S. Shareholder or (2) to avoid adverse tax, legal or regulatory
consequences to the Company, any subsidiary of the Company, or any other
Shareholder or its Affiliates. For the avoidance of doubt, in applying
the provisions of BYE-LAWS 63-75, a share may carry a fraction of a vote.
66. In these Bye-Laws:
(i) "CONTROLLED SHARES" in reference to any person means
all shares of the Company directly, indirectly or
constructively owned by such person as determined
pursuant to Sections 957 and 958 of the Code.
(ii) "9.5% U.S. SHAREHOLDER" means a "United States person"
as defined in the Code (a "U.S. PERSON") whose
Controlled Shares constitute nine and one-half percent
(9.5%) or more of the voting power of all shares of
the Company and who would be generally required to
recognize income with
23
respect to the Company under Section 951(a)(1) of the
Code, if the Company were a controlled foreign
corporation as defined in Section 957 of the Code and
if the ownership threshold under Section 951(b) of the
Code were 9.5%.
(iii) "TENTATIVE 9.5% U.S. SHAREHOLDER" means a U.S. person
that, but for adjustments to the voting rights of
shares pursuant to BYE-LAWS 63-67, would be a 9.5%
U.S. Shareholder.
(iv) "ATTRIBUTION PERCENTAGE" shall mean, with respect to a
Shareholder and a Tentative 9.5% U.S. Shareholder, the
percentage of the Shareholders' shares that are
treated as Controlled Shares of such Tentative 9.5%
U.S. Shareholder.
OTHER ADJUSTMENTS OF VOTING POWER
67. In addition to the provisions of BYE-LAWS 63-66, any shares shall not
carry any right to vote to the extent that the Board unanimously
determines, in its sole discretion, that it is necessary that such shares
should not carry the right to vote in order to avoid material adverse
tax, legal or regulatory consequences to the Company or any of its
subsidiaries or any other Shareholder or its Affiliates, provided that
(i) no adjustment pursuant to this sentence shall be made if it would
cause any person to become a 9.5% U.S. Shareholder or the Company to
become a United Kingdom controlled foreign corporation and (ii) prior to
making such determination, the Board shall first have consulted with the
relevant Shareholder and explored alternatives to avoid such
consequences.
NOTIFICATION OF VOTING POWER
68. Prior to any date on which Shareholders shall vote on any matter, the
Board shall (i) if it considers it necessary or appropriate (x) retain
the services of an internationally recognised accounting firm or
organisation with comparable professional capabilities in order to assist
the Company in applying the principles of BYE-LAWS 63 THROUGH 75 and (y)
obtain from such firm or organisation a statement setting forth the
information obtained, procedures followed and determinations made with
respect to BYE-LAWS 63 THROUGH 75, and (ii) notify each Shareholder of
the voting power conferred by its shares determined in accordance with
BYE-LAWS 63 THROUGH 75.
REQUIREMENT TO PROVIDE INFORMATION AND NOTICE
69. The Company shall have the authority to request from any holder of
shares, and such holder of shares shall provide, such information as the
Company may reasonably request for the purpose of determining whether any
holder's voting rights are to be adjusted pursuant to these Bye-Laws. If
a Shareholder fails to respond to a request for information from the
Company pursuant to this Bye-Law, or submits incomplete or inaccurate
information in response to such a request, the Company may in its
reasonable discretion (after considering the circumstances described in
any response to the request by the Shareholder and providing such
Shareholder with a cure period of such length, if any, as
24
the Company in its reasonable discretion shall determine to be reasonable
under the circumstances) determine that such Shareholder's shares shall
carry no or reduced, as the case may be, voting rights until otherwise
determined by the Company in its reasonable discretion.
70. Any holder of shares shall give notice to the Company within ten days
following the date that such holder acquires actual knowledge that it is,
or caused another person to become, a Tentative 9.5% U.S. Shareholder.
71. Notwithstanding the foregoing, no Shareholder shall be liable to any
other Shareholder or the Company for any losses or damages resulting from
such Shareholder's failure to respond to, or submission of incomplete or
inaccurate information in response to, a request under BYE-LAW 69 or from
such Shareholder's failure to give notice under BYE-LAW 70.
72. Any information provided by a Shareholder to the Company pursuant to this
Bye-Law, or other information provided pursuant to this Bye-Law or for
purposes of making the analysis required by, for purposes of
implementing, BYE-LAWS 24 AND 63 THROUGH 75, shall be deemed confidential
information (the "CONFIDENTIAL INFORMATION") and shall be used by the
Company solely for the purposes contemplated by those Bye-Laws (except as
may be required otherwise by applicable law or regulation). The Company
shall hold such Confidential Information that it receives in strict
confidence and shall not disclose any Confidential Information that it
receives, except (i) to the United States Internal Revenue Service (the
"SERVICE") if and to the extent the Confidential Information is required
by the Service, (ii) to any outside legal counsel or accounting firm
engaged by the Company to make determinations regarding the relevant
Bye-Laws, or (iii) as otherwise required by applicable law or regulation.
73. The Company shall take all measures practicable to ensure the continued
confidentiality of the Confidential Information and shall grant the
persons referred to in BYE-LAW 72(II) above access to the Confidential
Information only to the extent necessary to allow them to assist the
Company in any analysis required by, or for purposes of implementing,
BYE-LAWS 24 AND 63 THROUGH 75 or to determine whether the Company would
realise any income that would be included in the income of any
Shareholder (or any interest holder, whether direct or indirect, of any
Shareholder) by operation of Section 953(c) of the Code. Prior to
granting access to the Confidential Information to such persons or to any
officer or employee as set forth below, the Company shall inform them of
its confidential nature and of the provisions of this Bye-Law and shall
require them to abide by all the provisions hereof. The Company shall not
disclose the Confidential Information to any Director, except following
compliance with BYE-LAW 74 to the extent required under applicable law or
regulation. For the avoidance of doubt, the Company shall be permitted to
disclose to the Shareholders and others the relative voting percentages
of the Shareholders after application by BYE-LAWS 63-67. At the written
request of a Shareholder, the Confidential Information of such
Shareholder shall be destroyed or returned to such Shareholder after the
later to occur of (i) such Shareholder no longer being a Shareholder or
(ii) the expiration of the applicable statute of limitations with
25
respect to any Confidential Information for purposes of engaging in any
tax related analysis.
74. The Company (i) shall notify a Shareholder immediately of the existence,
terms and circumstances surrounding any request made to the Company to
disclose any Confidential Information provided by or with respect to such
Shareholder and, prior to such disclosure, shall permit such Shareholder
a reasonable period of time to seek a protective order or other
appropriate remedy and/or waive compliance with the provisions of BYE-LAW
73, and (ii) may, in the absence of a protective order, make such
disclosure without liability hereunder, provided that the Company shall
furnish only that portion of the Confidential Information which is
legally required, shall give such Shareholder notice of the information
to be disclosed as far in advance of its disclosure as practicable and,
upon the request of such Shareholder and at its expense, shall use best
efforts to ensure that confidential treatment will be accorded all such
disclosed information.
75. The Company and the Board may rely exclusively on the analysis,
deliberation, reports and other communications of the persons specified
in (ii) of BYE-LAW 72 above with respect to the collection, disclosure or
use of the Confidential Information, including, but not limited to
implementing BYE-LAWS 24, 84 OR 85 or determining whether the Company
would realize any income that would be included in the income of any
Shareholder (or any interest holder, whether direct or indirect, of any
Shareholder) by operation of Section 953(c) of the Code.
PURCHASE OF SHARES
76. If the Board unanimously determines that share ownership by any person
may result in material adverse tax consequences to the Company, any
subsidiary of the Company, or any other holder of shares or its
Affiliates (including if such consequence arises as a result of any such
U.S. person owning Controlled Shares of 9.5% or more of the value of the
Company or the voting shares of the Company (provided that this Bye-Law
shall only apply after the application of the provisions of BYE-LAWS 63
THROUGH 75), the Company will have the option but not the obligation to
purchase or assign to a third party the right to purchase the minimum
number of shares held by such person solely to the extent, and for the
number of shares, that it is necessary to eliminate such material adverse
tax consequence at a price determined in the good faith discretion of the
Board to represent such shares' fair market value; provided that (i) if
the shares are not traded on a securities exchange in or outside the
United States, the fair market value per share shall be determined by the
Board without a minority discount but with an appropriate liquidity
discount, such value and liquidity discount, if any, as determined by the
Board, or (ii) if the shares are traded on a securities exchange in or
outside the United States, the fair market value per share shall be
determined by the Board based on the average of the last sales price per
share or if there is none, the average of the bid and asked price per
share, without a minority discount or a liquidity discount, in each case
for the eight business days prior to the repurchase date. If a
Shareholder disagrees with the price so determined by the Board, the fair
market value per share and the liquidity discount, if any, will be
determined by an independent firm of internationally recognised chartered
accountants
26
acting as experts and not arbiters ("EXPERT") and retained jointly by the
Company and the Shareholder at the expense of the Company and if they
cannot agree within 10 days of such disagreement such Expert shall be
appointed by the president for the time being of the Institute of
Chartered Accountants.
PROXIES AND CORPORATE REPRESENTATIVES
77. A Shareholder may appoint one or more persons as his proxy, with or
without the power of substitution, to represent him and vote on his
behalf in respect of all or some of his shares at any general meeting
(including an adjourned meeting). A proxy need not be a Shareholder. The
instrument appointing a proxy or corporate representative shall be in
writing executed by the appointor or his attorney authorised by him in
writing or, if the appointor is a corporation, either under its seal or
executed by an officer, attorney or other person authorised to sign the
same.
78. A Shareholder which is a corporation may, by written authorisation,
appoint any person (or two or more persons in the alternative) as its
representative to represent it and vote on its behalf at any general
meeting (including an adjourned meeting) and such a corporate
representative may exercise the same powers on behalf of the corporation
which he represents as that corporation could exercise if it were an
individual Shareholder and the Shareholder shall for the purposes of
these Bye-Laws be deemed to be present in person at any such meeting if a
person so authorised is present at it. Notwithstanding the foregoing, the
chairman of the meeting may accept such assurances as he thinks fit as to
the right of any person to attend and vote at general meetings on behalf
of a corporation that is a Shareholder.
79. Any Shareholder may appoint a proxy or (if a corporation) representative
for a specific general meeting, and adjournments thereof, or may appoint
a standing proxy or (if a corporation) representative, by serving on the
Company, in accordance with the manner provided for in BYE-LAW 142 at the
Registered Office, or at such place or places as the Board may otherwise
specify for the purpose, a proxy or (if a corporation) an authorisation.
For purposes of service on the Company pursuant to this Bye-Law, the
provisions of BYE-LAW 142 as to service on Shareholders shall mutatis
mutandis apply to service on the Company. Any standing proxy or
authorisation shall be valid for all general meetings and adjournments
thereof or Resolutions in writing, as the case may be, until notice of
revocation is received at the Registered Office or at such place or
places as the Board may otherwise specify for the purpose. Where a
standing proxy or authorisation exists, its operation shall be deemed to
have been suspended at any general meeting of the Company or adjournment
thereof at which the Shareholder is present or in respect to which the
Shareholder has specially appointed a proxy or representative. The Board
may from time to time require such evidence as it shall deem necessary as
to the due execution and continuing validity of any standing proxy or
authorisation and the operation of any such standing proxy or
authorisation shall be deemed to be suspended until such time as the
Board determines that it has received the requested evidence or other
evidence satisfactory to it.
27
80. Subject to BYE-LAWS 78 AND 79, the instrument appointing a proxy or
corporate representative together with such other evidence as to its due
execution as the Board may from time to time require, shall be delivered
at the Registered Office (or at such place as may be specified in the
notice convening the meeting or in any notice of any adjournment or, in
either case or the case of a written Resolution, in any document sent
therewith) by such date and time specified in the notice prior to the
holding of the relevant meeting or adjourned meeting at which the person
named in the instrument proposes to vote or, in the case of a poll taken
subsequently to the date of a meeting or adjourned meeting, before the
time appointed for the taking of the poll, or, in the case of a written
Resolution, prior to the effective date of the written Resolution and in
default the instrument of proxy or authorisation shall not be treated as
valid.
81. Instruments of proxy or authorisation shall be in any common form or in
such other form as the Board may approve and the Board may, if it thinks
fit, send out with the notice of any meeting or any written Resolution
forms of instruments of proxy or authorisation for use at that meeting or
in connection with that written Resolution. The instrument of proxy shall
be deemed to confer authority to demand or join in demanding a poll, to
speak at the meeting and to vote on any amendment of a written Resolution
or amendment of a Resolution put to the meeting for which it is given as
the proxy thinks fit. The instrument of proxy or authorisation shall,
unless the contrary is stated therein, be valid as well for any
adjournment of the meeting as for the meeting to which it relates. If the
terms of the appointment of a proxy include a power of substitution, any
proxy appointed by substitution under such power shall be deemed to be
the proxy of the Shareholder who conferred such power. All the provisions
of these Bye-Laws relating to the execution and delivery of an instrument
or other form of communication appointing or evidencing the appointment
of a proxy shall apply, mutates mutandis, to the instrument or other form
of communication effecting or evidencing such an appointment by
substitution.
82. A vote given in accordance with the terms of an instrument of proxy or
authorisation shall be valid notwithstanding the previous death or
unsoundness of mind of the principal, or revocation of the instrument of
proxy or of the corporate authority, provided that no intimation in
writing of such death, unsoundness of mind or revocation shall have been
received by the Company at the Registered Office (or such other place as
may be specified for the delivery of instruments of proxy or
authorisation in the notice convening the meeting or other documents sent
therewith) at least one hour before the commencement of the meeting or
adjourned meeting, or the taking of the poll, or the day before the
effective date of any written Resolution at which the instrument of proxy
or authorisation is used.
83. Subject to the Companies Act, the Board may at its discretion waive any
of the provisions of these Bye-Laws related to proxies or authorisations
and, in particular, may accept such verbal or other assurances as it
thinks fit as to the right of any person to attend, speak and vote on
behalf of any Shareholder at general meetings or to sign written
Resolutions.
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CERTAIN SUBSIDIARIES
84. Voting of Subsidiary Shares
Notwithstanding any other provision of these Bye-Laws to the contrary, if
the Company is required or entitled to vote at a general meeting of any
subsidiary of the Company organized under the laws of a jurisdiction
outside the United States of America (each, a "Non-U.S. Subsidiary"), the
Directors shall refer the subject matter of the vote to the Shareholders
of the Company on a poll (subject to BYE-LAWS 48-75) and seek authority
from the Shareholders in a general meeting of the Company for the
Company's corporate representative or proxy to vote in favor of the
resolution proposed by the Non-U.S. Subsidiary. The Directors shall cause
the Company's corporate representative or proxy to vote the Company's
shares in the Non-U.S. Subsidiary pro rata to the votes received at the
general meeting of the Company, with votes for or against the directing
resolution being taken, respectively, as an instruction for the Company's
corporate representative or proxy to vote the appropriate proportion of
its shares for and the appropriate proportion of its shares against the
resolution proposed by the Non-U.S. Subsidiary.
85. Bye-Laws or Articles of Association of Certain Subsidiaries
The Board shall ensure (subject to the laws of the relevant jurisdiction)
that the bye-laws, articles of association or other constitutive
documents of each Non-U.S. Subsidiary (for the purpose of this Bye-Law
85, a "Relevant Subsidiary") contain provisions substantially similar to
BYE-LAWS 84-85 herein (provided that the bye-laws, articles of
association or other constitutive documents of such Non-U.S. Subsidiary
need not necessarily include provisions substantially similar to BYE-LAWS
48-75 herein) requiring all shares held by such Relevant Subsidiary in
any other Non-U.S. Subsidiary to be voted in the appropriate proportions
to the votes received from the shareholders of such Relevant Subsidiary
at its general meeting for or against the resolution instructing such
Relevant Subsidiary.
ELECTION OF DIRECTORS
86. The Board shall consist of not less than six (6) and not more than
fifteen (15) Directors (as determined by resolution of the Board of
Directors) or such number as the Shareholders may from time to time
determine. The Board of Directors shall initially consist of eleven (11)
Directors.
87. The Directors shall be divided by the Board into three classes,
designated Class I, Class II and Class III. The terms of the initial
Directors shall be as follows (i)Directors initially designated as Class
I Directors shall serve for an initial term ending on the date of the
third annual general meeting of Shareholders following the Investment
Date, (ii) Directors initially designated as Class II Directors shall
serve for an initial term ending on the fourth annual general meeting
following the Investment Date, and (iii) Directors initially designated
as Class III Directors shall serve for an initial term ending on the
fifth annual general meeting following the Investment Date. After the
expiration of the respective terms of the initial Directors as set forth
above, Directors of each class shall be elected by the Shareholders and
shall serve a term ending on the date of the third annual
29
general meeting of Shareholders next following the annual general meeting
at which such Director was elected. Notwithstanding the foregoing, each
Director shall hold office until such Director's successor shall have
been duly elected or until such Director is removed from office pursuant
to BYE-LAW 89 or such office is otherwise vacated. In the event of any
change in the number of Directors, the Board shall apportion any newly
created directorships among, or reduce the number of directorships in,
such class or classes as shall equalize, as nearly as possible, the
number of Directors in each class. In no event will a decrease in the
number of Directors shorten the term of any incumbent Director.
OBSERVERS' RIGHTS
88. The Board may grant, in its discretion and to Shareholders who so
request, the right to designate persons to attend meetings of the Board
or committees appointed by the Board, in each case as non-voting
observers. Any such observers shall be reasonably acceptable to the
Board. The Board may establish such procedures and requirements as it
deems appropriate in connection the observers' rights set forth in this
BYE-LAW 88 and may require observers to comply with any such procedures
or requirements as a condition to attending any meetings of the Board or
committees appointed by the Board. The Board may authorize the Company to
reimburse the reasonable travel or other expenses incurred by any such
observer. Such grant of observers' rights by the Board may be revoked by
the Board, subject to any relevant contract in which the Company has
agreed to grant observer rights. No breach of any observer's rights shall
invalidate any proceeding or resolution of the Board.
REMOVAL OF DIRECTORS
89. The Shareholders may, at any general meeting convened and held in
accordance with these Bye-Laws, remove a Director only for Cause by the
affirmative vote of Shareholders holding at least a majority of the total
combined voting power of all of the issued and outstanding shares of the
Company (taking into account the provisions of BYE-LAWS 63-67); provided
that the notice of any such meeting convened for the purpose of removing
a Director shall contain a statement of the intention so to do and be
served upon such Director not less than 14 days before the meeting and at
such meeting such Director shall be entitled to be heard on the motion
for such Director's removal.
90. A vacancy on the Board created by the removal of a Director under the
provisions of BYE-LAW 89 may be filled by the Shareholders at the meeting
at which such Director is removed or, in the absence of such election or
appointment, the Board may fill the vacancy in accordance with the
provisions of BYE-LAW 91. A Director so elected or appointed by the
Shareholders or, in absence thereof, the Board pursuant to this BYE-LAW
90 shall hold office until the next annual general meeting or until such
Director's office is otherwise vacated and shall serve within the same
class of Directors as the predecessor. At such next annual general
meeting, the Shareholders shall elect a Director to fill such vacancy to
serve the remaining term, if any, of such predecessor.
30
VACANCIES ON THE BOARD
91. The Board shall have the power from time to time and at any time, by the
affirmative vote of at least a majority of the Directors then in office,
to appoint any person as a Director to fill a vacancy on the Board. A
Director so appointed shall hold office until the next annual general
meeting or until such Director's office is otherwise vacated and shall
serve within the same class of Directors as the predecessor. At such next
annual general meeting, the Shareholders shall elect a Director to fill
such vacancy to serve the remaining term, if any, of such predecessor.
92. The office of a Director shall be vacated upon the happening of any of
the following events:
92.1 if he resigns his office by notice in writing delivered to the
Registered Office or tendered at a meeting of the Board;
92.2 if he becomes of unsound mind or a patient for any purpose of
any statute or applicable law relating to mental health and the
Board resolves that his office is vacated;
92.3 if he becomes bankrupt under the laws of any country or
compounds with his creditors;
92.4 if he is prohibited by law from being a Director;
92.5 if he ceases to be a Director by virtue of the Companies Act or
is removed from office pursuant to these Bye-Laws.
ALTERNATE DIRECTORS
93. A Director (other than an Alternate Director) may appoint and remove his
own Alternate Director. Any appointment or removal of an Alternate
Director by a Director shall be effected by depositing a notice of
appointment or removal with the Secretary at the Registered Office,
signed by such Director, and such appointment or removal shall become
effective on the date of receipt by the Secretary. Any Alternate Director
may be removed by resolution of the Board. Subject as aforesaid, the
office of Alternate Director shall continue until the next annual
election of Directors or, if earlier, the date on which the relevant
Director ceases to be a Director. An Alternate Director may also be a
Director in his own right and may act as alternate to more than one
Director.
94. An Alternate Director shall cease to be an Alternate Director:
94.1 if his appointor ceases to be a Director; but, if a Director
retires by rotation or otherwise but is reappointed or deemed to
have been reappointed at the meeting at which he retires, any
appointment of an Alternate Director made by him which was in
force immediately prior to his retirement shall continue after
his reappointment;
31
94.2 on the happening of any event which, if he were a Director,
would cause him to vacate his office as Director;
94.3 if he is removed from office pursuant to BYE-LAW 93; or
94.4 if he resigns his office by notice to the Company.
95. An Alternate Director shall be entitled to receive notices of all
meetings of Directors, to attend, be counted in the quorum and vote at
any such meeting at which any Director to whom he is alternate is not
personally present, and generally to perform all the functions of any
Director to whom he is alternate in his absence.
96. Every person acting as an Alternate Director shall (except as regards
powers to appoint an alternate and remuneration) be subject in all
respects to the provisions of these Bye-Laws relating to Directors and
shall alone be responsible to the Company for his acts and defaults and
shall not be deemed to be the agent of or for any Director for whom he is
alternate. An Alternate Director may be paid expenses and shall be
entitled to be indemnified by the Company to the same extent mutatis
mutandis as if he were a Director.
97. Every person acting as an Alternate Director shall have one vote for each
Director for whom he acts as alternate (in addition to his own vote if he
is also a Director). The signature of an Alternate Director to any
resolution in writing of the Board or a committee of the Board shall,
unless the terms of his appointment provide to the contrary, be as
effective as the signature of the Director or Directors to whom he is
alternate.
REMUNERATION OF DIRECTORS
98. The remuneration (if any) of the Directors shall be determined by the
Board and shall be deemed to accrue from day to day. The Directors may
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.
DIRECTORS' INTERESTS
99. Contracts and Disclosure of Directors' Interests
99.1 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, provided that nothing herein contained shall authorise
a Director or Director's firm, partner or such company to act as
Auditor of the Company.
99.2 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 as required by the
Companies Act.
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99.3 Following a declaration being made pursuant to this Bye-Law, and
unless disqualified by a majority of the disinterested Directors
present at 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.
POWERS AND DUTIES OF THE BOARD
100. Subject to the provisions of the Companies Act and these Bye-Laws the
Board shall manage and control all of the business of the Company in
Bermuda and may pay all expenses incurred in promoting and incorporating
the Company and may exercise all the powers of the Company. No alteration
of these Bye-Laws and no such direction shall invalidate any prior act of
the Board which would have been valid if that alteration had not been
made or that direction had not been given. The powers given by this
Bye-Law shall not be limited by any special power given to the Board by
these Bye-Laws and a meeting of the Board at which a quorum is present
shall be competent to exercise all the powers, authorities and
discretions for the time being vested in or exercisable by the Board,
provided all meetings of the Board are held in Bermuda.
101. The Board may exercise all the powers of the Company to borrow money and
to mortgage or charge all or any part of the undertaking, property and
assets (present and future) and uncalled capital of the Company and to
issue debentures and other securities, whether outright or as collateral
security for any debt, liability or obligation of the Company or of any
other persons.
102. All cheques, promissory notes, drafts, bills of exchange and other
instruments, whether negotiable or transferable or not, and all receipts
for money paid to the Company shall be signed, drawn, accepted, endorsed
or otherwise executed, as the case may be, in such manner as the Board
shall from time to time by resolution determine.
103. The Board on behalf of the Company may provide benefits, whether by the
payment of gratuities or pensions or otherwise, for any person including
any Director or former Director who has held any executive office or
employment with the Company or with any body corporate which is or has
been a subsidiary or Affiliate of the Company or a predecessor in the
business of the Company or of any such subsidiary or Affiliate, and to
any member of his family or any person who is or was dependent on him,
and may contribute to any fund and pay premiums for the purchase or
provision of any such gratuity, pension or other benefit, or for the
insurance of any such person.
104. The Board may from time to time appoint one or more of its body to be a
managing director, joint managing director or an assistant managing
director or to hold any other employment or executive office with the
Company for such period and upon such terms as the Board may determine
and may revoke or terminate any such appointments. Any such revocation or
termination as aforesaid shall be without prejudice to any claim for
damages that such Director may have against the Company or the Company
may have against such Director for any breach of any contract of service
between him and the Company which may be involved in such revocation or
termination. Any person so
33
appointed shall receive such remuneration (if any) (whether by way of
salary, commission, participation in profits or otherwise) as the Board
may determine, and either in addition to or in lieu of his remuneration
as a Director.
DELEGATION OF THE BOARD'S POWERS
105. The Board may by proxy or power of attorney appoint any company, firm or
person or any fluctuating body of persons, provided that he or it is
resident outside the United Kingdom whether nominated directly or
indirectly by the Board, to be the attorney or attorneys of the Company
for such purposes and with such powers, authorities and discretions (not
exceeding those vested in or exercisable by the Board under these
Bye-Laws) and for such period and subject to such conditions as it may
think fit, and any such proxy or power of attorney may contain such
provisions for the protection and convenience of persons dealing with any
such proxy/attorney and of such proxy/attorney as the Board may think
fit, and may also authorise any such proxy/attorney to sub-delegate all
or any of the powers, authorities and discretions vested in him. Such
attorney may, if so authorised under the Seal, execute any deed or
instrument under the personal seal of such proxy or attorney, with the
same effect as the affixation of the Seal.
106. The Board may entrust to and confer upon any Director, Officer or,
without prejudice to the provisions of BYE-LAW 105, other individual any
of the powers exercisable by it upon such terms and conditions with such
restrictions as it thinks fit, and either collaterally with, or to the
exclusion of, its own powers, and may from time to time revoke or vary
all or any of such powers but no person dealing in good faith and without
notice of such revocation or variation shall be affected thereby.
107. The Board may delegate any of its powers, authorities and discretions to
committees, consisting of such person or persons (whether a member or
members of its body or not) as it thinks fit. Any committee so formed
shall, in the exercise of the powers, authorities and discretions so
delegated, and in conducting its proceedings conform to any regulations
which may be imposed upon it by the Board. If no regulations are imposed
by the Board the proceedings of a committee with two or more members
shall be, as far as is practicable, governed by the Bye-Laws regulating
the proceedings of the Board.
PROCEEDINGS OF THE BOARD
108. The Board may meet for the despatch of business, adjourn and otherwise
regulate its meetings as it thinks fit. Questions arising at any meeting
shall be determined by a majority of votes. In the case of an equality of
votes, the motion shall be deemed to have been lost. A Director may, and
the Secretary on the requisition of a Director shall, at any time summon
a meeting of the Board.
109. Notice of a meeting of the Board shall be deemed to be duly given to a
Director if it is given to him personally or by word of mouth or sent to
him by post, cable, telex, telecopier, email or other mode of
representing or reproducing words in a legible and non-transitory form at
his last known address or any other address given by him to the Company
for this purpose and the provisions of BYE-LAW 142 shall apply to any
notice
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so given as to the deemed date of service of such notice. A Director may
retrospectively waive the requirement for notice of any meeting by
consenting in writing to the business conducted at the meeting.
110. The quorum necessary for the transaction of the business of the Board may
be fixed by the Board and, unless so fixed at any other number, shall be
a majority of Directors in office from time to time and in no event shall
be less than two Directors. Any Director who ceases to be a Director at a
meeting of the Board may continue to be present and to act as a Director
and be counted in the quorum until the termination of the meeting if no
other Director objects and if otherwise a quorum of Directors would not
be present. No meetings of the Board shall be quorate if the majority of
the Directors present consist of persons who are resident in the United
Kingdom for United Kingdom tax purposes.
111. The Resident Representative shall, upon delivering written notice of an
address for the purposes of receipt of notice to the Registered Office,
be entitled to receive notice of, attend and be heard at, and to receive
minutes of all meetings of the Board.
112. So long as a quorum of Directors remains in office, the continuing
Directors may act notwithstanding any vacancy in the Board but, if no
such quorum remains, the continuing Directors or a sole continuing
Director may act only for the purpose of calling a general meeting.
113. The Chairman (or President) or, in his absence, the Deputy Chairman (or
Vice-President), shall preside as chairman at every meeting of the Board.
If at any meeting the Chairman or Deputy Chairman (or the President or
Vice-President) is not present within five minutes after the time
appointed for holding the meeting, or is not willing to act as chairman,
the Directors present may choose one of their number to be chairman of
the meeting.
114. The meetings and proceedings of any committee consisting of two or more
members shall be governed by the provisions contained in these Bye-Laws
for regulating the meetings and proceedings of the Board so far as the
same are applicable and are not superseded by any regulations imposed by
the Board.
115. A resolution in writing signed by all the Directors for the time being
entitled to receive notice of a meeting of the Board (or by an Alternate
Director, as provided for in BYE-LAW 93) or by all the members of a
committee for the time being shall be as valid and effectual as a
resolution passed at a meeting of the Board or, as the case may be, of
such committee duly called and constituted. Such resolution may be
contained in one document or in several documents in the like form each
signed by one or more of the Directors or members of the committee
concerned. The terms of this Bye-Law shall be subject to the requirement
that any Director or Alternate Director signing a written resolution
shall be physically outside the United Kingdom and United States when
signing the document.
116. A meeting of the Board or a committee appointed by the Board may be held
by means of such telephone, electronic or other communication facilities
(including, without limiting
35
the generality of the foregoing, by telephone or by video conferencing)
as permit all persons participating in the meeting to communicate with
each other simultaneously and instantaneously and participation in such a
meeting shall constitute presence in person at such meeting provided that
such person is physically outside the United Kingdom and United States.
Such a meeting shall be deemed to take place outside the United Kingdom
and United States where the largest group of those Directors
participating in the meeting is physically assembled, or, if there is no
such group, where the chairman of the meeting then is.
117. All acts done by the Board or by any committee or by any person acting as
a Director or member of a committee or any person duly authorised by the
Board or any committee shall, notwithstanding that it is afterwards
discovered that there was some defect in the appointment of any member of
the Board or such committee or person acting as aforesaid or that they or
any of them were disqualified or had vacated their office, be as valid as
if every such person had been duly appointed and was qualified and had
continued to be a Director, member of such committee or person so
authorised.
118. If a question arises at a meeting of the Board or a committee of the
Board as to the entitlement of a Director (including the chairman) to
vote or be counted in a quorum, the question may, before the conclusion
of the meeting, be determined by a resolution of the Board (on which such
Director shall not vote) and such resolution shall be final and
conclusive except in a case where the nature or extent of the interests
of the Director concerned have not been fairly disclosed.
OFFICERS
119. The Officers of the Company must include either a President and a
Vice-President, or a Chairman and a Deputy Chairman who must be Directors
and shall be elected by the Board as soon as possible after the statutory
meeting and each Annual General Meeting. In addition, the Board may
appoint any person whether or not he is a Director to hold such office as
the Board may from time to time determine. Any person elected or
appointed pursuant to this Bye-Law shall hold office for such period and
upon such terms as the Board may determine and the Board may revoke or
terminate any such election or appointment. Any such revocation or
termination shall be without prejudice to any claim for damages that such
Officer may have against the Company or the Company may have against such
Officer for any breach of any contract of service between him and the
Company which may be involved in such revocation or termination. Save as
provided in the Companies Act or these Bye-Laws, the powers and duties of
the Officers of the Company shall be such (if any) as are determined from
time to time by the Board.
MINUTES
120. The Board shall cause minutes to be made and books kept for the purpose
of recording:
120.1 all appointments of Officers made by the Board;
120.2 the names of the Directors and other persons (if any) present at
each meeting of the Board;
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120.3 all proceedings at meetings of the Company, of the holders of
any class or series of shares in the Company and of the Board;
120.4 all proceedings of its managers (if any).
Shareholders shall only be entitled to see the Register of
Directors and Officers, the Register, the financial information
provided for in BYE-LAW 140 and the minute books relating to
meetings of the Shareholders of the Company. Such minute books
shall be maintained outside the United Kingdom and outside the
United States.
SECRETARY AND RESIDENT REPRESENTATIVE
121. The Secretary (including one or more deputy or assistant secretaries)
and, if required, the Resident Representative, shall be appointed by the
Board at such remuneration (if any) and upon such terms as it may think
fit and any Secretary and Resident Representative so appointed may be
removed by the Board. The duties of the Secretary and the duties of the
Resident Representative shall be those prescribed by the Companies Act
together with such other duties as shall from time to time be prescribed
by the Board.
122. A provision of the Companies Act or these Bye-Laws requiring or
authorising a thing to be done by or to a Director and the Secretary
shall not be satisfied by its being done by or to the same person acting
both as Director and as, or in the place of, the Secretary.
THE SEAL
123. The Seal shall consist of a circular metal device with the name of the
Company around the outer margin thereof and the country and year of
registration in Bermuda across the centre thereof. Should the Seal not
have been received at the Registered Office in such form at the date of
adoption of this Bye-Law then, pending such receipt, any document
requiring to be sealed with the Seal shall be sealed by affixing a red
wafer seal to the document with the name of the Company, and the country
and year of registration in Bermuda type written across the centre
thereof.
124. The Board may authorise the production of one or more duplicate seals.
125. The Board shall provide for the custody of every Seal. A Seal shall only
be used by authority of the Board or of a committee constituted by the
Board. Subject to these Bye-Laws, any instrument to which a Seal is
affixed shall be signed by either two Directors, or by the Secretary and
one Director, or by the Secretary, or by one of the Directors or by any
one person whether or not a Director or Officer, who has been authorised
either generally or specifically to affirm the use of a Seal; provided
that the Secretary or a Director may affix a Seal over his signature
alone to authenticate copies of these Bye-Laws, the minutes of any
meeting or any other documents requiring authentication
37
DIVIDENDS AND OTHER PAYMENTS
126. The Board may from time to time declare dividends or distributions out of
contributed surplus to be paid to the Shareholders according to their
rights and interests, including such interim dividends as appear to the
Board to be justified by the position of the Company. The Board, in its
discretion, may determine that any dividend shall be paid in cash or
shall be satisfied, subject to BYE-LAW 134, in paying up in full shares
in the Company to be issued to the Shareholders credited as fully paid or
partly paid or partly in one way and partly the other. The Board may also
pay any fixed cash dividend which is payable on any shares of the Company
half yearly or on such other dates, whenever the position of the Company,
in the opinion of the Board, justifies such payment.
127. Except insofar as the rights attaching to, or the terms of issue of, any
share otherwise provide:
127.1 all dividends or distributions out of contributed surplus may be
declared and paid according to the amounts paid up on the shares
in respect of which the dividend or distribution is paid, and an
amount paid up on a share in advance of calls may be treated for
the purpose of this Bye-Law as paid-up on the share;
127.2 dividends or distributions out of contributed surplus may be
apportioned and paid pro rata according to the amounts paid-up
on the shares during any portion or portions of the period in
respect of which the dividend or distribution is paid.
128. The Board may deduct from any dividend, distribution or other monies
payable to a Shareholder by the Company on or in respect of any shares
all sums of money (if any) presently payable by him to the Company on
account of calls or otherwise in respect of shares of the Company.
129. No dividend, distribution or other monies payable by the Company on or in
respect of any share shall bear interest against the Company.
130. Any dividend, distribution or interest, or part thereof payable in cash,
or any other sum payable in cash to the holder of shares may be paid by
cheque or warrant sent through the post or by courier addressed to the
holder at his address in the Register or, in the case of joint holders,
addressed to the holder whose name stands first in the Register in
respect of the shares at his registered address as appearing in the
Register or addressed to such person at such address as the holder or
joint holders may in writing direct. Every such cheque or warrant shall,
unless the holder or joint holders otherwise direct, be made payable to
the order of the holder or, in the case of joint holders, to the order of
the holder whose name stands first in the Register in respect of such
shares, and shall be sent at his or their risk and payment of the cheque
or warrant by the bank on which it is drawn shall constitute a good
discharge to the Company. Any one of two or more joint holders may give
effectual receipts for any dividends, distributions or other monies
payable or property distributable in respect of the shares held by such
joint holders.
131. Any dividend or distribution out of contributed surplus unclaimed for a
period of six (6) years from the date of declaration of such dividend or
distribution shall be forfeited and
38
shall revert to the Company and the payment by the Board of any unclaimed
dividend, distribution, interest or other sum payable on or in respect of
the share into a separate account shall not constitute the Company a
trustee in respect thereof.
132. Subject to approval by a Resolution, the Board may also, in addition to
its other powers, direct payment or satisfaction of any dividend or
distribution out of contributed surplus wholly or in part by the
distribution of specific assets, and in particular of paid-up shares or
debentures of any other company, and where any difficulty arises in
regard to such distribution or dividend, the Board may settle it as it
thinks expedient, and in particular, may authorise any person to sell and
transfer any fractions or may ignore fractions altogether, and may fix
the value for distribution or dividend purposes of any such specific
assets and may determine that cash payments shall be made to any
Shareholders upon the footing of the values so fixed in order to secure
equality of distribution and may vest any such specific assets in
trustees as may seem expedient to the Board, provided that such dividend
or distribution may not be satisfied by the distribution of any partly
paid shares or debentures of any company without the sanction of a
Resolution.
RESERVES
133. The Board may, before declaring any dividend or distribution out of
contributed surplus, set aside such sums as it thinks proper as reserves
which shall, at the discretion of the Board, be applicable for any
purpose of the Company and pending such application may, also at such
discretion, either be employed in the business of the Company or be
invested in such investments as the Board may from time to time think
fit. The Board may also without placing the same to reserve carry forward
any sums which it may think it prudent not to distribute.
CAPITALISATION OF PROFITS
134. The Board may from time to time resolve to capitalise all or any part of
any amount for the time being standing to the credit of any reserve or
fund which is available for distribution or to the credit of any share
premium account and accordingly that such amount be set free for
distribution amongst the Shareholders or any class or series of
Shareholders or holders of any options over shares who would be entitled
thereto if distributed by way of dividend and in the same proportions, on
the footing that the same shall not be paid in cash but be applied either
in or towards paying up amounts for the time being unpaid on any shares
in the Company held by such Shareholders respectively or in payment up in
full of unissued shares, debentures or other obligations of the Company,
to be allotted and distributed credited as fully paid amongst such
Shareholders, or partly in one way and partly in the other, provided that
for the purpose of this Bye-Law, a share premium account may be applied
only in paying up of unissued shares to be issued to such Shareholders
credited as fully paid and provided further that any sum standing to the
credit of a share premium account may only be applied in crediting as
fully paid shares of the same class or series as that from which the
relevant share premium was derived.
39
135. Where any difficulty arises in regard to any distribution under the last
preceding Bye-Law, the Board may settle the same as it thinks expedient
and, in particular, may authorise any person to sell and transfer any
fractions or may resolve that the distribution should be as nearly as may
be practicable in the correct proportion but not exactly so or may ignore
fractions altogether, and may determine that cash payments should be made
to any Shareholder and, in the case where a distribution to the Names'
Trust would result in individual Names having a fractional beneficial
interest, to the Names' Trust in order to adjust the rights of all
parties, as may seem expedient to the Board. The Board may appoint any
person to sign on behalf of the persons entitled to participate in the
distribution any contract necessary or desirable for giving effect
thereto and such appointment shall be effective and binding upon the
Shareholders.
RECORD DATES
136. Notwithstanding any other provisions of these Bye-Laws, the Company may
(by resolution of the Board) fix any date as the record date for any
dividend, distribution, allotment or issue and for the purpose of
identifying the persons entitled to receive notices of general meetings.
Any such record date may be on or at any time before or after any date on
which such dividend, distribution, allotment or issue is declared, paid
or made or such notice is despatched.
137. In relation to any general meeting of the Company or of any class or
series of Shareholder or to any adjourned meeting or any poll taken at a
meeting or adjourned meeting of which notice is given, the Board may
specify in the notice of meeting or adjourned meeting or in any document
sent to Shareholders by or on behalf of the Board in relation to the
meeting, a time and date (a "record date") prior to the date fixed for
the meeting (the "meeting date") and, notwithstanding any provision in
these Bye-Laws to the contrary, in such case:
137.1 each person entered in the Register at the record date as a
Shareholder, or a Shareholder of the relevant class or series (a
"record date holder") shall be entitled to attend and to vote at
the relevant meeting and to exercise all of the rights or
privileges of a Shareholder, or a Shareholder of the relevant
class or series (in each case subject to BYE-LAWS 63-67) in
relation to that meeting in respect of the shares, or the shares
of the relevant class or series, registered in his name at the
record date;
137.2 as regards any shares, or shares of the relevant class or
series, which are registered in the name of a record date holder
at the record date but are not so registered at the meeting date
("relevant shares"), each holder of any relevant shares at the
meeting date shall be deemed to have irrevocably appointed that
record date holder as his proxy for the purpose of attending and
voting in respect of those relevant shares at the relevant
meeting (with power to appoint, or to authorise the appointment
of, some other person as proxy), in such manner as the record
date holder in his absolute discretion may determine; and
40
137.3 accordingly, except through his proxy pursuant to BYE-LAW 137.2,
a holder of relevant shares at the meeting date shall not be
entitled to attend or to vote at the relevant meeting, or to
exercise any of the rights or privileges of a Shareholder, or a
Shareholder of the relevant class or series, in respect of the
relevant shares at that meeting.
The entry of the name of a person in the Register as a record date holder
shall be sufficient evidence of his appointment as proxy in respect of
any relevant shares for the purposes of this paragraph, but all the
provisions of these Bye-Laws relating to the execution and deposit of an
instrument appointing a proxy or any ancillary matter (including the
Board's powers and discretions relevant to such matter) shall apply to
any instrument appointing any person other than the record date holder as
proxy in respect of any relevant shares.
ACCOUNTING RECORDS
138. The Board shall cause to be kept accounting records sufficient to give a
true and fair view of the state of the Company's affairs and to show and
explain its transactions, in accordance with the Companies Act.
139. The records of account shall be kept at the Registered Office or at such
other place or places as the Board thinks fit, and shall at all times be
open to inspection by the Directors, provided that if the records of
account are kept at some place outside Bermuda, there shall be kept at an
office of the Company in Bermuda such records as will enable the
Directors to ascertain with reasonable accuracy the financial position of
the Company at the end of each three month period. No Shareholder (other
than an Officer of the Company) shall have any right to inspect any
accounting record or book or document of the Company except as conferred
by law or authorised by the Board or by Resolution.
140. A copy of every balance sheet and statement of income and expenditure,
including every document required by law to be annexed thereto, which is
to be laid before the Company in general meeting, together with a copy of
the auditors' report, shall be sent to each person entitled thereto in
accordance with the requirements of the Companies Act.
AUDIT
141. Save and to the extent that an audit is waived in the manner permitted by
the Companies Act, auditors shall be appointed and their duties regulated
in accordance with the Companies Act, any other applicable law and such
requirements not inconsistent with the Companies Act as the Board may
from time to time determine.
SERVICE OF NOTICES AND OTHER DOCUMENTS
142. Any notice or other document (including a share certificate) may be
served on or delivered to any Shareholder (or other person to whom notice
shall or may be made hereunder) by the Company either personally or by
sending it through the post (by airmail where applicable) in a pre-paid
letter addressed to such Shareholder at his address as appearing in the
Register or by sending it by courier to such registered address, or by
41
sending it by fax to a fax number supplied by such Shareholder for the
purpose of the receipt of notices or documents, or by delivering it to or
leaving it at such address as appears in the Register for such
Shareholder. In the case of joint holders of a share, service or delivery
of any notice or other document on or to one of the joint holders shall
for all purposes be deemed as sufficient service on or delivery to all
the joint holders. Any notice or other document if sent by post shall be
deemed to have been served or delivered forty-eight (48) hours after it
was put in the post, and when sent by courier, the next Business Day
after sending, or, when sent by fax, at the time of confirmation of
transmission on the sender's equipment, and in proving such service or
delivery, it shall be sufficient to prove that the notice or document was
properly addressed and stamped and put in the post, sent by courier or
sent by fax, as the case may be.
143. Any notice or other document delivered, sent or given to a Shareholder in
any manner permitted by these Bye-Laws shall, notwithstanding that such
Shareholder is then dead or bankrupt or that any other event has
occurred, and whether or not the Company has notice of the death or
bankruptcy or other event, be deemed to have been duly served or
delivered in respect of any share registered in the name of such
Shareholder as sole or joint holder unless his name shall, at the time of
the service or delivery of the notice or document, have been removed from
the Register as the holder of the share, and such service or delivery
shall for all purposes be deemed as sufficient service or delivery of
such notice or document on all persons interested (whether jointly with
or as claiming through or under him) in the share.
WINDING UP
144. If the Company shall be wound up, the liquidator may, with the sanction
of a Resolution and any other sanction required by the Companies Act,
divide amongst the Shareholders in specie or kind the whole or any part
of the assets of the Company (whether they shall consist of property of
the same kind or not) and may for such purposes set such values as he
deems fair upon any property to be divided as aforesaid and may determine
how such division shall be carried out as between the Shareholders or
different classes or series of Shareholders. The liquidator may, with the
like sanction, vest the whole or any part of such assets in trustees upon
such trust for the benefit of the contributories as the liquidator, with
the like sanction, shall think fit, but so that no Shareholder shall be
compelled to accept any shares or other assets upon which there is any
liability.
INDEMNITY AND INSURANCE
145. Subject to the proviso below, every Indemnified Person shall be
indemnified and held harmless out of the assets of the Company against
all actions, costs, charges, liabilities, loss, damage or expense
(including but not limited to liabilities under contract, tort and
statute or any applicable foreign law or regulation and all reasonable
legal and other costs and expenses properly payable) incurred or suffered
by him by or by reason of any act done, conceived in or omitted in the
conduct of the Company's business or in the discharge of his duties and
the indemnity contained in this Bye-Law shall extend to any Indemnified
Person acting in any office or trust in the reasonable belief that he has
been appointed or elected to such office or trust notwithstanding any
defect in such
42
appointment or election provided always that the indemnity contained in
this Bye-Law shall not extend to any matter which would render it void
pursuant to the Companies Act.
146. No Indemnified Person shall be liable to the Company for the acts,
defaults or omissions of any other Indemnified Person.
147. Without limiting the generality of BYE-LAW 145, every Indemnified Person
shall be indemnified out of the funds of the Company against all
liabilities incurred by him by or by reason of any act done, conceived in
or omitted in the conduct of the Company's business or in the discharge
of his duties in defending any proceedings, whether civil or criminal, in
which judgement is given in his favour, or in which he is acquitted, or
in connection with any application under the Companies Act in which
relief from liability is granted to him by the court.
148. To the extent that any Indemnified Person is entitled to claim an
indemnity pursuant to these Bye-Laws in respect of amounts paid or
discharged by him, the relative indemnity shall take effect as an
obligation of the Company to reimburse the person making such payment or
effecting such discharge.
149. Each Shareholder and the Company agree to waive any claim or right of
action he or it may at any time have, whether individually or by or in
the right of the Company, against any Indemnified Person on account of
any action taken by such Indemnified Person or the failure of such
Indemnified Person to take any action in the performance of his duties
with or for the Company provided however that such waiver shall not apply
to any claims or rights of action arising out of the fraud of such
Indemnified Person or to recover any gain, personal profit or advantage
to which such Indemnified Person is not legally entitled.
150. Subject to the Companies Act, expenses incurred in defending any civil or
criminal action or proceeding for which indemnification is required
pursuant to BYE-LAWS 145 AND 147 shall be paid by the Company in advance
of the final disposition of such action or proceeding upon receipt of an
undertaking by or on behalf of the Indemnified Person to repay such
amount if it shall ultimately be determined that the Indemnified Person
is not entitled to be indemnified as a result of the provisions of
BYE-LAW 145 provided, that, no monies shall be paid hereunder unless
payment of the same shall be authorized in the specific case upon a
determination that indemnification of the Director or Officer would be
proper in the circumstances because he has met the standard of conduct
which would entitle him to the indemnification thereby provided and such
determination shall be made:
150.1 by the Board, by a majority vote at a meeting duly constituted
by a quorum of Directors not party to the proceedings or matter
with regard to which the indemnification is, or would be,
claimed; or
150.2 in the case such a meeting cannot be constituted by lack of
disinterested quorum, by independent legal counsel in a written
opinion; or
150.3 by a Resolution of the Shareholders.
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151. Each Shareholder of the Company, by virtue of its acquisition and
continued holding of a share, shall be deemed to have acknowledged and
agreed that the advances of funds may be made by the Company as
aforesaid, and when made by the Company under this BYE-LAW 151 are made
to meet expenditures incurred for the purpose of enabling such
Indemnified Person to properly perform his or her duties to the Company.
152. Without prejudice to the provisions of BYE-LAWS 145 AND 147, the Board
shall have the power to purchase and maintain insurance for or for the
benefit of any Indemnified Person or any persons who are or were at any
time Directors, Officers, or employees of the Company, or of any other
company which is its holding company or in which the Company or such
holding company has any interest whether direct or indirect or which is
in any way allied to or associated with the Company, or of any subsidiary
undertaking of the Company or any such other company, or who are or were
at any time trustees of any pension fund in which employees of the
Company or any such other company or subsidiary undertaking are
interested, including (without prejudice to the generality of the
foregoing) insurance against any liability incurred by such persons in
respect of any act or omission in the actual or purported execution or
discharge of their duties or in the exercise or purported exercise of
their powers or otherwise in relation to their duties, powers or offices
in relation to the Company or any such other company, subsidiary
undertaking or pension fund.
153. These BYE-LAWS 145-154 shall provide the broadest indemnity allowable at
law, and to the extent any indemnification hereunder is prohibited,
unenforceable or not authorized under applicable law, BYE-LAWS 145-154
shall be interpreted as broadly as possible without invalidating the
remaining provisions hereof. Specifically, to the extent prohibited by
Bermuda law, these Bye-Laws shall not result in indemnification of any
person, including an Indemnified Person, to the extent he is guilty of
fraud or dishonesty.
154. No amendment or repeal of any provision of these BYE-LAWS 145-154 shall
alter, to the detriment of any Indemnified Person, the rights of such
Indemnified Person to the advancement of expenses or indemnification
related to a claim based on an act or failure to act which took place
prior to such amendment, repeal or termination.
ALTERATION OF BYE-LAWS
155. These Bye-Laws may be revoked or amended by the Board, which may from
time to time revoke or amend them in any way by a resolution of the Board
passed by a majority of the Directors then in office and eligible to vote
on the resolution, but no revocation or amendment shall be operative
unless and until it is approved at a subsequent general meeting of the
Company by the Shareholders by Resolution passed by an affirmative vote
of a majority of the voting power of votes cast at such meeting (taking
into account the provisions of BYE-LAWS 63-67) or such greater majority
as required by BYE-LAWS 13, 48, 49 OR 50 (as applicable).
44
ASPEN INSURANCE HOLDINGS LIMITED
I, Frances Chatterjee, Secretary of ASPEN INSURANCE HOLDINGS LIMITED, a Company
incorporated and existing under the laws of the Islands of Bermuda,
DO HERBY CERTIFY that the document attached hereto is a true and correct copy
of the Bye-Laws of the Comapny, as adopted by the Shareholders at a Special
General Meeting held on 22 September, 2003.
IN WITNESS WHEREOF I have hereunto sent my signature and affixed the seal of
APEN INSURANCE HOLDINGS LIMITED this 22nd day of September, 2003.
/s/ Frances Chaterjee [SEAL OMITTED]
- -------------------------------
Secretary
ASPEN INSURANCE HOLDINGS LIMITED