Exhibit 99.1
B Y E - L A W S
of
VIATEL HOLDING (BERMUDA) LIMITED
I HEREBY CERTIFY that the within written Bye-Laws are a true copy of the
Bye-Laws of VIATEL HOLDING (BERMUDA) LIMITED as subscribed by the subscribers to
the Memorandum of Association and approved at the Statutory meeting of the above
Company on the
Director
Prepared by
Appleby Spurling & Kempe
Cedar House
41 Cedar Avenue
Hamilton, Bermuda
INDEX
BYE-LAW SUBJECT PAGE
- ------- --------------------------------------------- ----
1 Interpretation
2 Registered Office
3-4 Share Rights
5-6 Modification of Rights
7-9 Shares
10-13 Certificates
14-17 Lien
18-23 Calls on Shares
24-30 Forfeiture of Shares
31-32 Register of Shareholders
33 Register of Directors and Officers
34-37 Transfer of Shares
38-41 Transmission of Shares
42-44 Increase of Capital
45-46 Alteration of Capital
47-48 Reduction of Capital
49 General Meetings and Written Resolutions
50-52 Notice of General Meetings
53 General Meetings at more than one place
54-60 Proceedings at General Meetings
61-76 Voting
77-82 Proxies and Corporate Representatives
83-90 Appointment and Removal of Directors
91 Resignation and Disqualification of Directors
92-95 Alternate Directors
BYE-LAW SUBJECT PAGE
- ------- --------------------------------------- ----
96 Directors' Fees and Additional
Remuneration and Expenses
97 Directors' Interests
98-100 Powers and Duties of the Board
101 Gratuities, Pensions and Insurance
102-104 Delegation of the Board's Powers
105-117 Proceedings of the Board
118 Officers
119-121 Executive Directors
122 Minutes
123-124 Secretary and Resident Representative
125 The Seal
126-132 Dividends and Other Payments
133 Reserves
134-135 Capitalisation of Profits
136 Record Dates
137-139 Accounting Records
140 Audit
142-143 Service of Notices and Other Documents
144 Destruction of Documents
145 Untraced Shareholders
146 Winding Up
147-151 Indemnity
152 Amalgamation
153 Continuation
154 Alteration of Bye-Laws
155-163 Business Combinations
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B Y E - L A W S
of
INTERPRETATION
1. (1) In these Bye-Laws unless the context otherwise requires -
"BERMUDA" means the Islands of Bermuda;
"BOARD" means the Board of Directors of the Company or the
Directors present at a meeting of Directors at which there is
a quorum;
"COMPANIES ACTS" means every Bermuda statute from time to time
in force concerning companies insofar as the same applies to
the Company;
"COMMON SHARES" means the common shares of the Company;
"COMPANY" means the company incorporated in Bermuda under the
name of Viatel Holding (Bermuda) Limited on the 4th day of
January 2002;
"DIRECTOR" means such person or persons as shall be appointed
to the Board from time to time pursuant to these Bye-Laws;
"OFFICER" means a person appointed by the Board pursuant to
Bye-Law 118 of these Bye-Laws and shall not include an auditor
of the Company;
"PAID UP" means paid up or credited as paid up;
"PREFERRED SHARES" means the preferred shares in the Company
created pursuant to Bye-Law 3 and subject to the rights and
restrictions set out in Schedule 1;
"REGISTER" means the Register of Shareholders of the Company;
"REGISTERED OFFICE" means the registered office for the time
being of the Company;
"RESIDENT REPRESENTATIVE" means the person (or, if permitted
in accordance with the Companies Acts, the company) appointed
to perform the duties of resident representative set out in
the Companies Acts and includes any assistant or deputy
Resident Representative appointed by the Board to perform any
of the duties of the Resident Representative;
"RESOLUTION" means a resolution of the Shareholders or, where
required, of a separate class or separate classes of
Shareholders;
"SEAL" means the common seal of the Company and includes any
duplicate thereof;
"SECRETARY" includes a temporary or assistant or deputy
Secretary and any person appointed by the Board to perform any
of the duties of the Secretary;
"SCHEDULE 1" means schedule 1 to these Bye-Laws;
"SHAREHOLDER" means a shareholder or member of the Company;
"SHARES" means any shares in the share capital of the Company
from time to time;
"SPECIFIED PLACE" means the place, if any, specified in the
notice of any meeting of the shareholders, or adjourned
meeting of the shareholders, at which the chairman of the
meeting shall preside;
"THESE BYE-LAWS" means these Bye-Laws including Schedule 1 in
their present form or as amended from time to time;
(2) For the purposes of these Bye-Laws a corporation shall be
deemed to be present in person if its representative duly
authorised pursuant to the Companies Acts is present;
(3) Words importing only the singular number include the plural
number and vice versa;
(4) Words importing only the masculine gender include the feminine
and neuter genders respectively;
(5) Reference to writing shall include typewriting, printing,
lithography, photography and other modes of representing
or reproducing words in a legible and non-transitory form;
(6) Any words or expressions defined in the Companies Acts in
force at the date when these Bye-Laws or any part thereof are
adopted shall bear the same meaning in these Bye-Laws or such
part (as the case may be);
(7) In these Bye-Laws, (a) powers of delegation shall not be
restrictively construed but the widest interpretation shall be
given thereto; (b) the word "Board" in the context
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of the exercise of any power contained in these Bye-Laws
includes any committee consisting of one or more Directors,
any Director holding executive office and any local or
divisional Board, manager or agent of the Company to which or,
as the case may be, to whom the power in question has been
delegated; (c) no power of delegation shall be limited by the
existence or, except where expressly provided by the terms of
delegation, the exercise of any other power of delegation; and
(d) except where expressly provided by the terms of
delegation, the delegation of a power shall not exclude the
concurrent exercise of that power by any other body or person
who is for the time being authorised to exercise it under
these Bye-Laws or under another delegation of the powers.
REGISTERED OFFICE
2. The Registered Office shall be at such place in Bermuda as the Board
shall from time to time appoint.
SHARE RIGHTS
3.1 Subject to the Companies Acts and to the rights conferred on the
holders of any other class of shares, any share in the Company may be
issued with or have attached to it such preferential, deferred,
qualified or special rights, privileges or conditions as the Company
may by Resolution decide or, if no such Resolution is in effect or
insofar as the Resolution does not make specific provision, as the
Board may from time to time determine.
3.2 Without limiting the foregoing and subject to the Companies Acts, the
Company may issue Preferred Shares (including any Preferred Shares
created pursuant to Bye-Law 3.3) which (i) are liable to be redeemed on
the happening of a specified event or events or on a given date or
dates and/or (ii) are liable to be redeemed at the option of the
Company and/or the holder. The terms and manner of redemption of any
redeemable Preferred Shares created pursuant to Bye-Law 3.3 shall be as
the Board may by resolution determine before the allotment of such
shares and the terms and manner of redemption of any other redeemable
Preferred Shares shall be either (i) as the Company may by Resolution
determine or (ii)
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insofar as the Board is so authorised by any Resolution, as the Board
may by resolution determine, in either case, before the allotment of
such shares. A copy of any such Resolution or resolution of the Board
for the time being in force shall be attached in Schedule 1 to (and
shall form part of) these Bye-Laws.
3.3 The Company may, either by Resolution or by a resolution of the Board,
designate any authorised but unissued shares in the Company as
Preferred Shares. The rights attaching to the Preferred Shares shall be
as follows:
3.3.1 each Preferred Share shall have attached to it such preferred,
qualified or other special rights, privileges and conditions
and be subject to such restrictions, whether in regard to
dividend, return of capital, redemption, conversion into
Common Shares or voting or otherwise, as the Board may
determine on or before its allotment;
3.3.2 the Board may allot the Preferred Shares in more than one
series and, if it does so, may name and designate each series
in such manner as it deems appropriate to reflect the
particular rights and restrictions attached to that series,
which may differ in all or any respects from any other series
of Preferred Shares;
3.3.3 the particular rights and restrictions attached to any
Preferred Share shall be recorded in a resolution of the
Board. The Board may at any time before the allotment of any
Preferred Share by further resolution in any way amend such
rights and restrictions or vary or revoke its designation. A
copy of any such resolution or amending resolution for the
time being in force shall be annexed as Schedule 1 to (and
shall form part of) these Bye-Laws;
3.3.4 the Board shall not attach to any Preferred Share any rights
or restrictions which would alter or abrogate any of the
special rights attached to any other class of series of shares
for the time being in issue without such sanction as is
required for any
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alteration or abrogation of such rights, unless expressly
authorised to do so by the rights attaching to or by the terms
of issue of such shares; and
3.3.5 The special rights conferred upon the holders of any shares or
class of shares shall not, unless otherwise expressly provided
in the rights attaching to or the terms of issue of such
shares, be deemed to be altered or abrogated by (i) the
creation or issue of further shares ranking pari passu with
them, (ii) 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 (iii) the purchase or
redemption by the Company of any of its own shares.
3.4 The terms of any redeemable Preferred Shares (including any redeemable
Preferred Shares created pursuant to Bye-Law 3.3) may provide for the
whole or any part of the amount due on redemption to be paid or
satisfied otherwise than in cash, to the extent permitted by the
Companies Acts.
4. The Company may adopt a scheme or arrangement (hereinafter called a
"shareholder rights plan") providing for the creation and issuance of
rights entitling the Shareholders of the Company, or certain of them,
to purchase from the Company Shares of an class or assets of the
Company or a subsidiary of the Company or otherwise, and the terms and
conditions of such shareholder rights plan and rights may be amended or
modified either (i) as the Company may in general meeting determine or
(ii) as the Directors or any committee thereof may determine, such
shareholder rights plan to be attached as a Schedule to these Bye-Laws.
MODIFICATION OF RIGHTS
5. Subject to the Companies Acts, all or any of the special rights for the
time being attached to any class of shares for the time being issued
may from time to time (whether or not the Company is being wound up) be
altered or abrogated with the consent in writing of the holders of not
less than seventy five percent of the issued shares of that class or
with the
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sanction of a resolution passed at a separate general meeting of the
holders of such shares voting in person or by proxy. To any such
separate general meeting, all the provisions of these Bye-Laws as to
general meetings of the Company shall mutatis mutandis apply, but so
that the necessary quorum shall be two or more persons holding or
representing by proxy the majority of the shares of the relevant class,
that every holder of shares of the relevant class shall be entitled on
a poll to one vote for every such share held by him and that any holder
of shares of the relevant class present in person or by proxy may
demand a poll; provided, however, that if the Company or a class of
Shareholders shall have only one Shareholder, one Shareholder present
in person or by proxy shall constitute the necessary quorum.
6. For the purposes of this Bye-Law, unless otherwise expressly provided
by the rights attached to any shares or class of shares, those rights
attaching to any class of shares for the time being shall be deemed to
be altered by the reduction of the capital paid up on those shares
otherwise than by a purchase or redemption by the Company of such
shares and by the allotment of other shares ranking in priority for
payment of a dividend or in respect of capital or which confer on the
holders voting rights more favourable than those conferred by such
first mentioned shares but shall not otherwise be deemed to be altered
by the creation or issue of further shares ranking pari passu therewith
or by the purchase or redemption by the Company of any of its own
shares.
SHARES
7. Subject to the provisions of these Bye-Laws, the unissued shares of the
Company (whether forming part of the original capital or any increased
capital) shall be at the disposal of the Board, which may offer, allot,
grant options over or otherwise dispose of them to such persons, at
such times and for such consideration and upon such terms and
conditions as the Board may determine.
8. The Board may in connection with the issue of any shares exercise all
powers of paying commission and brokerage conferred or permitted by
law. Subject to the provisions of the
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Companies Acts, any such commission or brokerage may be satisfied by
the payment of cash or by the allotment of fully or partly paid shares
or partly in one way and partly in the other.
9. Except as ordered by a court of competent jurisdiction or as required
by law, no person shall be recognised by the Company as holding any
share upon trust and the Company shall not be bound by or required in
any way to recognise (even when having notice thereof) any equitable,
contingent, future or partial interest in any share or any interest in
any fractional part of a share or (except only as otherwise provided in
these Bye-Laws, or by law) any other right in respect of any share
except an absolute right to the entirety thereof in the registered
holder.
CERTIFICATES
10. Unless the Board resolves otherwise, no certificates shall be issued by
the Company in respect of any class of shares.
11. If a share certificate is defaced, lost or destroyed it may be replaced
without fee but on such terms (if any) as to evidence and indemnity and
to payment of the costs and out of pocket expenses of the Company in
investigating such evidence and preparing such indemnity as the Board
may think fit and, in case of defacement, on delivery of the old
certificate to the Company.
12. All certificates for share or loan capital or other securities of the
Company (other than letters of allotment, scrip certificates and other
like documents) shall, except to the extent that the terms and
conditions for the time being relating thereto otherwise provide, be
issued under the Seal. The Board may by resolution determine, either
generally or in any particular case, that any signatures on any such
certificates need not be autographic but may be affixed to such
certificates by some mechanical means or may be printed thereon or that
such certificates need not be signed by any persons, or may determine
that a representation of the Seal may be printed on any such
certificates.
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13. Nothing in these Bye-Laws shall prevent title to any securities of the
Company from being evidenced and/or transferred without a written
instrument in accordance with regulations made from time to time in
this regard under the Companies Acts, and the Board shall have power to
implement any arrangements which it may think fit for such evidencing
and/or transfer which accord with those regulations.
LIEN
14. The Company shall have a first and paramount lien on every share (not
being a fully paid share) for all moneys, whether presently payable or
not, called or payable, at a date fixed by or in accordance with the
terms of issue of such share in respect of such share, and the Company
shall also have a first and paramount lien on every share (other than a
fully paid share) standing registered in the name of a Shareholder,
whether singly or jointly with any other person, for all the debts and
liabilities of such Shareholder or his estate to the Company, whether
the same shall have been incurred before or after notice to the Company
of any interest of any person other than such Shareholder, and whether
the time for the payment or discharge of the same shall have actually
arrived or not, and notwithstanding that the same are joint debts or
liabilities of such Shareholder or its estate and any other person,
whether a Shareholder or not. The Company's lien on a share shall
extend to all dividends payable thereon. The Board may at any time,
either generally or in any particular case, waive any lien that has
arisen or declare any share to be wholly or in part exempt from the
provisions of this Bye-Law.
15. The Company may sell, in such manner as the Board may think fit, any
share on which the Company has a lien but no sale shall be made unless
some sum in respect of which the lien exists is presently payable nor
until the expiration of fourteen days after a notice in writing,
stating and demanding payment of the sum presently payable and giving
notice of the intention to sell in default of such payment, has been
served on the holder for the time being of the share.
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16. The net proceeds of sale by the Company of any shares on which it has a
lien shall be applied in or towards payment or discharge of the debt or
liability in respect of which the lien exists so far as the same is
presently payable, and any residue shall (subject to a like lien for
debts or liabilities not presently payable as existed upon the share
prior to the sale) be paid to the person who was the holder of the
share immediately before such sale. For giving effect to any such sale
the Board may authorise some person to transfer the share sold to the
purchaser thereof. The purchaser shall be registered as the holder of
the share and he shall not be bound to see to the application of the
purchase money, nor shall his title to the share be affected by any
irregularity or invalidity in the proceedings relating to the sale.
17. Whenever any law for the time being of any country, state or place
imposes or purports to impose any immediate or future or possible
liability upon the Company to make any payment or empowers any
government or taxing authority or government official to require the
Company to make any payment in respect of any shares registered in any
of the Company's registers as held either jointly or solely by any
Shareholder or in respect of any dividends, bonuses or other monies due
or payable or accruing due or which may become due or payable to such
Shareholder by the Company on or in respect of any shares registered as
aforesaid or for or on account or in respect of any Shareholder and
whether in consequence of:-
(a) the death of such Shareholder;
(b) the non-payment of any income tax or other tax by such
Shareholder;
(c) the non-payment of any estate, probate, succession, death,
stamp, or other duty by the executor or administrator of such
Shareholder or by or out of his estate;
(d) any other act or thing;
in every such case (except to the extent that the rights conferred upon
holders of any class of shares render the Company liable to make
additional payments in respect of sums withheld on account of the
foregoing):-
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(i) the Company shall be fully indemnified by such Shareholder or
his executor or administrator from all liability;
(ii) the Company shall have a lien upon all dividends and other
monies payable in respect of the shares registered in any of
the Company's registers as held either jointly or solely by
such Shareholder for all monies paid or payable by the Company
in respect of such shares or in respect of any dividends or
other monies as aforesaid thereon or for or on account or in
respect of such Shareholder under or in consequence of any
such law together with interest at the rate of fifteen percent
per annum thereon from the date of payment to date of
repayment and may deduct or set off against such dividends or
other monies payable as aforesaid any monies paid or payable
by the Company as aforesaid together with interest as
aforesaid;
(iii) the Company may recover as a debt due from such Shareholder or
his executor or administrator wherever constituted any monies
paid by the Company under or in consequence of any such law
and interest thereon at the rate and for the period aforesaid
in excess of any dividends or other monies as aforesaid then
due or payable by the Company;
(iv) the Company may if any such money is paid or payable by it
under any such law as aforesaid refuse to register a transfer
of any shares by any such Shareholder or his executor or
administrator until such money and interest as aforesaid is
set off or deducted as aforesaid or in case the same exceeds
the amount of any such dividends or other monies as aforesaid
then due or payable by the Company until such excess is paid
to the Company.
Subject to the rights conferred upon the holders of any class of shares
nothing herein contained shall prejudice or affect any right or remedy
which any law may confer or purport to confer on the Company and as
between the Company and every such Shareholder as aforesaid, his estate
representative, executor, administrator and estate wheresoever
constituted or situate, any right or remedy which such law shall confer
or purport to confer on the Company shall be enforceable by the
Company.
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CALLS ON SHARES
18. The Board may from time to time make calls upon the Shareholders in
respect of any moneys unpaid on their shares (whether on account of the
par value of the shares or by way of premium) and not by the terms of
issue thereof made payable at a date fixed by or in accordance with
such terms of issue, and each Shareholder shall (subject to the Company
serving upon him at least fourteen days notice specifying the time or
times and place of payment) pay to the Company at the time or times and
place so specified the amount called on his shares. A call may be
revoked or postponed as the Board may determine.
19. A call may be made payable by instalments and shall be deemed to have
been made at the time when the resolution of the Board authorising the
call was passed.
20. The joint holders of a share shall be jointly and severally liable to
pay all calls in respect thereof.
21. If a sum called in respect of the share shall not be paid before or on
the day appointed for payment thereof the person from whom the sum is
due shall pay interest on the sum from the day appointed for the
payment thereof to the time of actual payment at such rate as the Board
may determine, but the Board shall be at liberty to waive payment of
such interest wholly or in part.
22. Any sum which, by the terms of issue of a share, becomes payable on
allotment or at any date fixed by or in accordance with such terms of
issue, whether on account of the nominal amount of the share or by way
of premium, shall for all the purposes of these Bye-Laws be deemed to
be a call duly made, notified and payable on the date on which, by the
terms of issue, the same becomes payable and, in case of non-payment,
all the relevant provisions of these Bye-Laws as to payment of
interest, forfeiture or otherwise shall apply as if such sum had become
payable by virtue of a call duly made and notified.
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23. The Board may on the issue of shares differentiate between the
allottees or holders as to the amount of calls to be paid and the times
of payment.
FORFEITURE OF SHARES
24. If a Shareholder fails to pay any call or instalment of a call on the
day appointed for payment thereof, the Board may at any time thereafter
during such time as any part of such call or instalment remains unpaid
serve a notice on him requiring payment of so much of the call or
instalment as is unpaid, together with any interest which may have
accrued.
25. The notice shall name a further day (not being less than 14 days from
the date of the notice) on or before which, and the place where, the
payment required by the notice is to be made and shall state that, in
the event of non-payment on or before the day and at the place
appointed, the shares in respect of which such call is made or
instalment is payable will be liable to be forfeited. The Board may
accept the surrender of any share liable to be forfeited hereunder and,
in such case, references in these Bye-Laws to forfeiture shall include
surrender.
26. If the requirements of any such notice as aforesaid are not complied
with, any share in respect of which such notice has been given may at
any time thereafter, before payment of all calls or instalments and
interest due in respect thereof has been made, be forfeited by a
resolution of the Board to that effect. Such forfeiture shall include
all dividends declared in respect of the forfeited shares and not
actually paid before the forfeiture.
27. When any share has been forfeited, notice of the forfeiture shall be
served upon the person who was before forfeiture the holder of the
share; but no forfeiture shall be in any manner invalidated by any
omission or neglect to give such notice as aforesaid.
28. A forfeited share shall be deemed to be the property of the Company and
may be sold, re-offered or otherwise disposed of either to the person
who was, before forfeiture, the holder thereof or entitled thereto or
to any other person upon such terms and in such manner as the
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Board shall think fit, and at any time before a sale, re-allotment or
disposition the forfeiture may be cancelled on such terms as the Board
may think fit.
29. A person whose shares have been forfeited shall thereupon cease to be a
Shareholder in respect of the forfeited shares but shall,
notwithstanding the forfeiture, remain liable to pay to the Company all
moneys which at the date of forfeiture were presently payable by him to
the Company in respect of the shares with interest thereon at such rate
as the Board may determine from the date of forfeiture until payment,
and the Company may enforce payment without being under any obligation
to make any allowance for the value of the shares forfeited.
30. An affidavit in writing that the deponent is a Director of the Company
or the Secretary and that a share has been duly forfeited on the date
stated in the affidavit shall be conclusive evidence of the facts
therein stated as against all persons claiming to be entitled to the
share. The Company may receive the consideration (if any) given for the
share on the sale, re-allotment or disposition thereof and the Board
may authorise some person to transfer the share to the person to whom
the same is sold, re-allotted or disposed of, and he shall thereupon be
registered as the holder of the share and shall not be bound to see to
the application of the purchase money (if any) nor shall his title to
the share be affected by any irregularity or invalidity in the
proceedings relating to the forfeiture, sale, re-allotment or disposal
of the share.
REGISTER OF SHAREHOLDERS
31. The Secretary shall establish and maintain the Register at the
Registered Office or at such other place in Bermuda as the Board may
from time to time direct, in the manner prescribed by the Companies
Acts. Unless the Board otherwise determines, the Register shall be open
to inspection in the manner prescribed by the Companies Acts between
9.00 a.m. and 5.00 p.m. in Bermuda, on every working day. Unless the
Board so determines, no Shareholder or intending Shareholder shall be
entitled to have entered in the Register any indication of any trust or
any equitable, contingent, future or partial interest in any share or
any interest in
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any fractional part of a share and if any such entry exists or is
permitted by the Board it shall not be deemed to abrogate any of the
provisions of Bye-Law 9.
32. Subject to the provisions of the Companies Acts, the Company may keep
one or more overseas or branch registers in any place, and the Board
may make, amend and revoke any such regulations as it may think fit
respecting the keeping of such registers.
REGISTER OF DIRECTORS AND OFFICERS
33. The Secretary shall establish and maintain a register of the Directors
and Officers of the Company as required by the Companies Acts. The
register of Directors and Officers shall be open to inspection in the
manner prescribed by the Companies Acts between 9:00 a.m. and 5:00 p.m.
in Bermuda on every working day.
TRANSFER OF SHARES
34. Subject to the Companies Acts and to such of the restrictions contained
in these Bye-Laws as may be applicable, any Shareholder may transfer
all or any of his shares by an instrument of transfer in the usual
common form or in any other form which the Board may approve.
35. The instrument of transfer of a share shall be signed by or on behalf
of the transferor and where any share is not fully-paid, the transferee
and the transferor shall be deemed to remain the holder of the share
until the name of the transferee is entered in the Register in respect
thereof. All instruments of transfer when registered may be retained by
the Company. The Board may, in its absolute discretion and without
assigning any reason therefor, decline to register any transfer of any
share which:
(a) is not a fully-paid share; or
(b) that results in a Shareholder (other than a Shareholder which
is a registered "Investment Company" under the United States
Investment Company Act of 1940, as amended) directly,
indirectly or beneficially owning (within the meaning of
Section 13(d) of the Exchange Act) more than 5% of the
outstanding Shares of the
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Company without the approval of more than 50% of the Directors
then in office shall not be registered in the share register
of the Company and shall be void and of no effect.
The restrictions on transfer authorised by this Bye-Law shall not be
imposed in any circumstances in a way that would interfere with the
settlement of trades or transactions entered into through the
facilities of the Nasdaq National Market (provided that the Company may
decline to register transfers in accordance with these Bye-Laws and
resolutions of the Board after a settlement has taken place) or the
transfer of shares in the Company pursuant to the Plan of Restructuring
of Viatel, Inc. under the Chapter 11 of the United States bankruptcy
code (which was consummated on 7 June 2002) by the disbursing agent
appointed thereunder to the creditors or affiliates of the Company. The
Board may also decline to register any transfer unless:-
(i) the instrument of transfer is duly stamped and lodged with the
Company, at such place as the Board shall appoint for the
purpose, accompanied by the certificate for the shares (if any
has been issued) to which it relates, and such other evidence
as the Board may reasonably require to show the right of the
transferor to make the transfer,
(ii) the instrument of transfer is in respect of only one class of
share,
(iii) where applicable, the permission of the Bermuda Monetary
Authority and any governmental body or agency in the United
States or any other applicable jurisdiction with respect
thereto has been obtained.
Subject to any directions of the Board from time to time in force, the
Secretary may exercise the powers and discretions of the Board under
this Bye-Law and Bye-Laws 34 and 36.
36. If the Board declines to register a transfer it shall, within three
months after the date on which the instrument of transfer was lodged,
send to the transferee notice of such refusal.
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37. No fee shall be charged by the Company for registering any transfer or
for making any entry in the Register concerning any other document
relating to or affecting the title 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
38. In the case of the death of a Shareholder, the survivor or survivors,
where the deceased was a joint holder, and the estate representative,
where he was sole holder, shall be the only person recognised by the
Company as having any title to his shares; but nothing herein contained
shall release the estate of a deceased holder (whether the sole or
joint) from any liability in respect of any share held by him solely or
jointly with other persons. For the purpose of this Bye-Law, estate
representative means the person to whom probate or letters of
administration has or have been granted in Bermuda or, failing any such
person, such other person as the Board may in its absolute discretion
determine to be the person recognised by the Company for the purpose of
this Bye-Law.
39. Any person becoming entitled to a share in consequence of the death of
a Shareholder or otherwise by operation of applicable law may, subject
as hereafter provided and upon such evidence being produced as may from
time to time be required by the Board as to his entitlement, either be
registered himself as the holder of the share or elect to have some
person nominated by him registered as the transferee thereof. If the
person so becoming entitled elects to be registered himself, he shall
deliver or send to the Company a notice in writing signed by him
stating that he so elects. If he shall elect to have his nominee
registered, he shall signify his election by signing an instrument of
transfer of such share in favour of his nominee. All the limitations,
restrictions and provisions of these Bye-Laws relating to the right to
transfer and the registration of transfer of shares shall be applicable
to any such notice or instrument of transfer as aforesaid as if the
death of the Shareholder or other event giving rise to the transmission
had not occurred and the notice or instrument of transfer was an
instrument of transfer signed by such Shareholder.
16
40. A person becoming entitled to a share in consequence of the death of a
Shareholder or otherwise by operation of applicable law shall (upon
such evidence being produced as may from time to time be required by
the Board as to his entitlement) be entitled to receive and may give a
discharge for any dividends or other moneys payable in respect of the
share, but he shall not be entitled in respect of the share to receive
notices of or to attend or vote at general meetings of the Company or,
save as aforesaid, to exercise in respect of the share any of the
rights or privileges of a Shareholder until he shall have become
registered as the holder thereof. The Board may at any time give notice
requiring such person to elect either to be registered himself or to
transfer the share and, if the notice is not complied with within sixty
days, the Board may thereafter withhold payment of all dividends and
other moneys payable in respect of the shares until the requirements of
the notice have been complied with.
41. Subject to any directions of the Board from time to time in force, the
Secretary may exercise the powers and discretions of the Board under
Bye-Laws 38, 39 and 40.
INCREASE OF CAPITAL
42. The Company may from time to time increase its capital by such sum to
be divided into shares of such par value as the Company by Resolution
shall prescribe.
43. The Company may, by the Resolution increasing the capital, direct that
the new shares or any of them shall be offered in the first instance
either at par or at a premium or (subject to the provisions of the
Companies Acts) at a discount to all the holders for the time being of
shares of any class or classes in proportion to the number of such
shares held by them respectively or make any other provision as to the
issue of the new shares.
44. The new shares shall be subject to all the provisions of these Bye-Laws
with reference to lien, the payment of calls, forfeiture, transfer,
transmission and otherwise.
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ALTERATION OF CAPITAL
45. The Company may from time to time by Resolution:-
(1) divide its shares into several classes and attach thereto
respectively any preferential, deferred, qualified or special
rights, privileges or conditions;
(2) consolidate and divide all or any of its share capital into
shares of larger par value than its existing shares;
(3) sub-divide its shares or any of them into shares of smaller
par value than is fixed by its memorandum, so, however, that
in the sub-division the proportion between the amount paid and
the amount, if any, unpaid on each reduced share shall be the
same as it was in the case of the share from which the reduced
share is derived;
(4) NOT USED;
(5) cancel shares which, at the date of the passing of the
resolution in that behalf, have not been taken or agreed to be
taken by any person, and diminish the amount of its share
capital by the amount of the shares so cancelled; and
(6) change the currency denomination of its share capital.
Where any difficulty arises in regard to any division, consolidation,
or sub-division under this Bye-Law, the Board may settle the same as it
thinks expedient and, in particular, may arrange for the sale of the
shares representing fractions and the distribution of the net proceeds
of sale in due proportion amongst the Shareholders who would have been
entitled to the fractions, and for this purpose the Board may authorise
some person to transfer the shares representing fractions to the
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.
45A. The Company shall not issue and allot any shares which do not carry any
voting rights.
46. Subject to the Companies Acts and to any confirmation or consent
required by law or these Bye-Laws, the Company may by Resolution from
time to time convert any preference shares into redeemable preference
shares.
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REDUCTION OF CAPITAL
47. Subject to the Companies Acts, its memorandum and any confirmation or
consent required by law or these Bye-Laws, the Company may from time to
time by resolution authorise the reduction of its issued share capital
or any share premium or contributed surplus account in any manner.
48. In relation to any such reduction, the Company may by Resolution
determine the terms upon which such reduction is to be effected
including, in the case of a reduction of part only of a class of
shares, those shares to be affected.
GENERAL MEETINGS AND WRITTEN RESOLUTIONS
49. (1) The Board shall convene and the Company shall hold general
meetings as Annual General Meetings in accordance with the
requirements of the Companies Acts at such times and places as
the Board shall appoint. The Board may, whenever it thinks
fit, and shall, when requisitioned by shareholders pursuant to
the provisions of the Companies Acts, convene general meetings
other than Annual General Meetings which shall be called
Special General Meetings.
(2) Except in the case of the removal of auditors and Directors,
anything which may be done by resolution 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 their proxies, or in the case of a
Shareholder that is a corporation (whether or not a company
within the meaning of the Companies Acts) on behalf of such
Shareholder, being all of the Shareholders of the Company who
at the date of the resolution in writing would be entitled to
attend a meeting and vote on the resolution. Such resolution
in writing may be signed in as many counterparts as may be
necessary.
(3) For the purposes of this Bye-Law, the date of the resolution
in writing is the date when the resolution is signed by or on
behalf of, the last Shareholder to sign and any reference in
any enactment to the date of passing of a resolution is, in
relation to a resolution in writing made in accordance with
this section, a reference to such date.
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(4) A resolution in writing made in accordance with this Bye-Law
is as valid as if it had been passed by the Company in general
meeting or, if applicable, by a meeting of the relevant class
of Shareholders of the Company, as the case may be. A
resolution in writing made in accordance with this section
shall constitute minutes for the purposes of the Companies
Acts and these Bye-Laws.
NOTICE OF GENERAL MEETINGS
50. An Annual General Meeting shall be called by not less than thirty days
notice in writing and a Special General Meeting shall be called by not
less than thirty days notice in writing. The notice shall be exclusive
of the day on which it is served or deemed to be served and of the day
for which it is given, and shall specify the place, day and time of the
meeting, and, the nature of the business to be considered. Notice of
every general meeting shall be given in any manner permitted by
Bye-Laws 141 and 142 to all Shareholders other than such as, under the
provisions of these Bye-Laws or the terms of issue of the shares they
hold, are not entitled to receive such notice from the Company and to
each Director, and to any Resident Representative who or which has
delivered a written notice upon the Registered Office requiring that
such notice be sent to him or it.
Any Shareholder may request that a matter (other than the appointment
of a new Director, the procedure for which is prescribed by Bye-Law 86)
be considered at an Annual General Meeting and such matter shall be
included in any notice of, and shall be considered at, an Annual
General Meeting provided that: (i) the request is in writing signed by
the Shareholder; (ii) the request is delivered to the Secretary at
least (5) business days prior to the Board meeting convening the Annual
General Meeting; and (iii) the matter to be considered is clear from
the language of the request and would not, if approved, contravene the
Memorandum of Association of the Company or the Bye-Laws.
51. The accidental omission to give notice of a meeting or (in cases where
instruments of proxy are sent out with the notice) the accidental
omission to send such instrument of proxy to, or
20
the non-receipt of notice of a meeting or such instrument of proxy by,
any person entitled to receive such notice shall not invalidate the
proceedings at that meeting.
52. A Shareholder present, either in person or by proxy, at any meeting of
the Company or of the holders of any class of shares in the Company
shall be deemed to have received notice of the meeting and, where
requisite, of the purposes for which it was called.
GENERAL MEETINGS AT MORE THAN ONE PLACE
53. (1) The provisions of this Bye-Law shall apply if any general
meeting is convened at or adjourned to more than one place.
(2) The notice of any meeting or adjourned meeting may specify the
Specified Place and the Board shall make arrangements for
simultaneous attendance and participation at other places
(whether adjoining the Specified Place or in a different and
separate place or places altogether or otherwise) by
Shareholders, provided that persons attending at any
particular place shall be able to see and hear, and be seen
and heard (whether by audio visual links or otherwise
howsoever enabling the same) by, persons attending at the
other places at which the meeting is convened.
(3) The Board may from time to time make such arrangements for the
purpose of controlling the level of attendance at any such
place (whether involving the issue of tickets or the
imposition of some means of selection or otherwise) as they
shall in their absolute discretion consider appropriate, and
may from time to time vary any such arrangements or make new
arrangements in place of them, provided that a Shareholder who
is not entitled to attend, in person or by proxy, at any
particular place shall be entitled so to attend at one of the
other places; and the entitlement of any Shareholder so to
attend the meeting or adjourned meeting at such place shall be
subject to any such arrangements as may be for the time being
in force and by the notice of meeting or adjourned meeting
stated to apply to the meeting.
(4) For the purposes of all other provisions of these Bye-Laws any
such meeting shall be treated as being held at the Specified
Place.
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(5) If a meeting is adjourned to more than one place, notice of
the adjourned meeting shall be given, in the manner required
by Bye-Law 50.
PROCEEDINGS AT GENERAL MEETINGS
54. No business shall be transacted at any general meeting unless a quorum
is present when the meeting proceeds to business, but the absence of a
quorum shall not preclude the appointment, choice or election of a
chairman which shall not be treated as part of the business of the
meeting. Save as otherwise provided by these Bye-Laws, at least two
Shareholders present in person or by proxy and entitled to vote
representing the holders of more than 50.1% of the issued shares shall
be a quorum for all purposes; provided, however, that if the Company or
a class of Shareholders shall have only one Shareholder, one
Shareholder present in person or by proxy shall constitute the
necessary quorum.
55. If within five minutes (or such longer time as the chairman of the
meeting may determine to wait) after the time appointed for the
meeting, a quorum is not present, the meeting, if convened on the
requisition of Shareholders, shall be dissolved. In any other case, it
shall stand adjourned to such other day and such other time and place
as the chairman of the meeting may determine and at such adjourned
meeting two Shareholders present in person or by proxy and entitled to
vote and representing the holders of more than 50.1% of the issued
shares shall be a quorum, provided that if the Company or a class of
Shareholders shall have only one Shareholder, one Shareholder present
in person or by proxy shall constitute the necessary quorum. The
Company shall give not less than 10 clear days notice of any meeting
adjourned through want of a quorum and such notice shall state that the
sole Shareholder or, if more than one, two Shareholders present in
person or by proxy and entitled to vote and representing the holders of
more than 50.1% of the issued shares shall be a quorum. If at the
adjourned meeting a quorum is not present within fifteen minutes after
the time appointed for holding the meeting, the meeting shall be
dissolved.
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56. A meeting of the Shareholders or any class thereof may be held by means
of such telephone, electronic or other communication facilities as
permit all persons participating in the meeting to communicate with
each other simultaneously and instantaneously and participation in such
a meeting shall constitute presence in person at such meeting.
57. The Resident Representative, if any, upon giving the notice referred to
in Bye-Law 50 above, shall be entitled to attend any general meeting of
the Company and each Director shall be entitled to attend and speak at
any general meeting of the Company.
58. The Chairman (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 ten minutes after the time appointed
for holding the meeting, or if neither of them is willing to act as
chairman, the Directors present shall choose one of their number to act
or if one Director only is present he shall preside as chairman if
willing to act. If no Director is present, or if each of the Directors
present declines to take the chair, the persons present and entitled to
vote on a poll shall elect one of their number to be chairman.
59. The chairman of the meeting may, with the consent of any meeting at
which a quorum is present (and shall if so directed by the meeting),
adjourn the meeting from time to time and from place to place but no
business shall be transacted at any adjourned meeting except business
which might lawfully have been transacted at the meeting from which the
adjournment took place. In addition, the chairman may adjourn the
meeting to another time and place without such consent if it appears to
him that it is likely to be impracticable to hold or continue that
meeting because of the number of members wishing to attend who are not
present. When a meeting is adjourned for three months or more or for an
indefinite period, at least 10 clear days' notice shall be given of the
adjourned meeting.
60. Save as expressly provided by these Bye-Laws, it shall not be necessary
to give any notice of an adjournment or of the business to be
transacted at an adjourned meeting.
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VOTING
61. Save where a greater majority is required by the Companies
Acts or these Bye-Laws, any question proposed for
consideration at any general meeting shall be decided on by a
simple majority of votes cast.
62. Subject to any rights or restrictions attached to any class of
shares, at any meeting of the Company, each Shareholder
present in person shall be entitled to one vote on any
question to be decided on a show of hands and each Shareholder
present in person or by proxy shall be entitled on a poll to
one vote for each share held by him provided that, if a record
date is specified in any notice of a general meeting, in
accordance with these Bye-Laws, no person other than
Shareholders of record on such specified date (or their
proxies) shall have the right to vote at the general meeting.
63. At any general meeting, a resolution put to the vote of the
meeting shall be decided on a show of hands unless (before or
on the declaration of the result of the show of hands or on
the withdrawal of any other demand for a poll) a poll is
demanded by:-
(1) the chairman of the meeting; or
(2) at least three Shareholders present in person or represented
by proxy; or
(3) any Shareholder or Shareholders present in person or
represented by proxy and holding between them not less than
one tenth of the total voting rights of all the Shareholders
having the right to vote at such meeting; or
(4) a Shareholder or Shareholders present in person or represented
by proxy holding shares conferring the right to vote at such
meeting, being shares on which an aggregate sum has been paid
up equal to not less than one tenth of the total sum paid up
on all such shares conferring such right.
The demand for a poll may, before the poll is taken, be withdrawn but
only with the consent of the chairman and a demand so withdrawn shall
not be taken to have invalidated
24
the result of a show of hands declared before the demand was made. If
the demand for a poll is withdrawn, the chairman or any other
Shareholder entitled may demand a poll.
65. 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.
66. 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.
67. 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 (being not later than three months after the date of the demand)
and place as the chairman shall direct and he 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.
68. 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.
69. On a poll, votes may be cast either personally or by proxy.
70. 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.
25
71. 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.
72. 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.
73. 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.
74. 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.
75. If;
(1) any objection shall be raised to the qualification of any
voter; or,
(2) any votes have been counted which ought not to have been
counted or which might have been rejected; or,
(3) any votes are not counted which ought to have been counted,
the objection or error shall not vitiate the decision of the meeting or
adjourned meeting on any resolution unless the same is raised or
pointed out at the meeting or, as the case may be, the adjourned
meeting at which the vote objected to is given or tendered or at which
the
26
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.
76. If an amendment shall be proposed to any resolution under consideration
but shall in good faith be ruled out of order by the chairman of the
meeting, the proceedings on the substantive resolution shall not be
invalidated by any error in such ruling. With the consent of the
chairman of the meeting, an amendment may be withdrawn by its proposer
before it is voted upon.
PROXIES AND CORPORATE REPRESENTATIVES
77. The instrument appointing a proxy shall be in writing under the hand of
the appointor or of his attorney authorised by him in writing or, if
the appointor is a corporation, either under its seal or under the hand
of an officer, attorney or other person authorised to sign the same.
78. Any Shareholder may appoint a standing proxy or (if a corporation)
representative by depositing at the Registered Office, or at such place
or places as the Board may otherwise specify for the purpose, a proxy
or (if a corporation) an authorisation and such proxy or authorisation
shall be valid for all general meetings and adjournments thereof or,
resolutions in writing, as the case may be, until notice of revocation
is received at the Registered Office, or at such place or places as the
Board may otherwise specify for the purpose. Where a standing proxy or
authorisation exists, its operation shall be deemed to have been
suspended at any general meeting or adjournment thereof at which the
Shareholder is present or in respect to which the Shareholder has
specially appointed a proxy or representative. The Board may from time
to time require such evidence as it shall deem necessary as to the due
execution and continuing validity of any such standing proxy or
authorisation and the operation of any such standing proxy or
authorisation shall be deemed to be suspended until such time as the
Board determines that it has received the requested evidence or other
evidence satisfactory to it. A person so authorised as a representative
of a corporation shall
27
be entitled to exercise the same power on behalf of the grantor of the
authority as the grantor could exercise if it were an individual
Shareholder of the Company and the grantor shall for the purposes of
these Bye-Laws be deemed to be present in person at any such meeting if
a person so authorised is present at it.
79. Subject to Bye-Law 78, the instrument appointing a proxy together with
such other evidence as to its due execution as the Board may from time
to time require, shall be delivered at the Registered Office (or at
such place or places as may be specified in the notice convening the
meeting or in any notice of any adjournment or, in either case or the
case of a written resolution, in any document sent therewith) not less
than two hours, or such other period as the Board may determine, prior
to the holding of the relevant meeting or adjourned meeting at which
the person named in the instrument proposes to vote or, in the case of
a poll taken subsequently to the date of a meeting or adjourned
meeting, before the time appointed for the taking of the poll, or, in
the case of a written resolution, prior to the effective date of the
written resolution and in default the instrument of proxy shall not be
treated as valid.
80. Instruments of proxy shall be in any common form or in such other form
as the Board may approve and the Board may, if it thinks fit, send out
with the notice of any meeting or any written resolution forms of
instruments of proxy for use at that meeting or in connection with that
written resolution. The instrument of proxy shall be deemed to confer
authority to demand or join in demanding a poll and to vote on any
amendment of a written resolution or amendment of a resolution put to
the meeting for which it is given as the proxy thinks fit. The
instrument of proxy shall unless the contrary is stated therein be
valid as well for any adjournment of the meeting as for the meeting to
which it relates.
81. A vote given in accordance with the terms of an instrument of proxy
shall be valid notwithstanding the previous death or unsoundness of
mind of the principal, or revocation of the instrument of proxy or of
the authority under which it was executed, provided that no intimation
in writing of such death, insanity or revocation shall have been
received by the
28
Company at the Registered Office (or such other place as may be
specified for the delivery of instruments of proxy in the notice
convening the meeting or other documents sent therewith) one hour at
least before the commencement of the meeting or adjourned meeting, or
the taking of the poll, or the day before the effective date of any
written resolution at which the instrument of proxy is used.
82. Subject to the Companies Acts, the Board may at its discretion waive
any of the provisions of these Bye-Laws related to proxies or
authorisations and, in particular, may accept such verbal or other
assurances as it thinks fit as to the right of any person to attend and
vote on behalf of any Shareholder at general meetings or to sign
written resolutions.
APPOINTMENT AND REMOVAL OF DIRECTORS
83. The number of Directors constituting the Board shall be not less than
two (2) nor more than seven (7), the exact number to be determined from
time to time by resolution adopted by the affirmative vote of more than
fifty percent (50%) of the Directors then in office; provided, however,
that if no such resolution shall be in effect, the number of Directors
shall be seven (7).
84. The Board shall be divided into three classes, with the term of the
office of one class expiring each year. Each class shall consist, as
nearly as possible, of one-third of the total number of Directors
constituting the entire Board. Upon the adoption of this Bye-Law, Class
I Directors shall be those Directors elected to hold office for a term
expiring at the next annual general meeting; Class II Directors shall
be those Directors elected to hold office for a term expiring at the
next annual general meeting in the year after the Class I Directors'
terms expire; and Class III Directors shall be those Directors elected
to hold office for a term expiring at the next annual general meeting
in the year after the Class II Directors' terms expire. At each annual
general meeting of Shareholders, successors to Directors whose terms
expire at that annual general meeting shall be of the same class as the
Directors they succeed and shall be elected to hold office for a full
three (3) year term. If the number of Directors is altered by
resolution of the Board pursuant to this Bye-Law,
29
such resolution shall apportion any increase or decrease among the
classes so as to maintain the number of Directors in each class as
equal as possible, but in no case shall a decrease in the number of
Directors shorten the term of any incumbent Director.
85. If the Company, at the meeting at which a Director retires by rotation
or otherwise, does not fill the vacancy, the retiring Director shall,
if willing to act, be deemed to have been reappointed unless at the
meeting it is resolved not to fill the vacancy or unless a resolution
for the reappointment of the Director is put to the meeting and lost.
86. No person other than a Director retiring by rotation shall be appointed
a Director at any general meeting unless:-
(a) he is recommended by the Board; or
(b) not less than 5 business days prior to the Board meeting
convening the meeting, notice executed by a Shareholder
qualified to vote at the meeting (not being the person to be
proposed) has been given to the Company of the intention to
propose that person for appointment setting forth as to each
person whom the Shareholders proposed to nominate for election
or re-election as a Director, (i) the name, age, business
address and residence address of the person, (ii) the
principal occupation or employment of the person, (iii) the
class, series and number of shares of the Company which are
beneficially owned by the person, (iv) particulars which
would, if he were so appointed, be required to be included in
the Company's register of Directors and Officers, and (v) all
other information relating to that person that is required to
be disclosed in solicitations for proxies for the election of
Directors pursuant to the Rules and Regulations of the
Securities and Exchange Commission under Section 14 of the
Securities Exchange Act of 1934 of the United States of
America as amended, together with notice executed by that
person of his willingness to serve as a Director if so
elected.
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87. Except as otherwise authorised by the Companies Acts, the appointment
of any person proposed as a Director shall be effected by a separate
resolution.
88. All Directors, upon election or appointment, except upon re-election at
an Annual General Meeting, must provide written acceptance of their
appointment, in such form as the Board may think fit, by notice in
writing to the Registered Office within thirty days of their
appointment.
89. The Company shall at the Annual General Meeting and may by resolution
determine the minimum number of Directors, which shall be not less than
two and the maximum number of Directors, who shall be not more than
seven, and may by resolution determine that one or more vacancies in
the Board shall be deemed casual vacancies for the purposes of these
Bye-Laws. Without prejudice to the power of the Company by resolution
in pursuance of any of the provisions of these Bye-Laws to appoint any
person to be a Director, the Board, so long as a quorum of Directors
remains in office, shall have power at any time and from time to time
to appoint any individual to be a Director so as to fill a casual
vacancy. A Director so appointed shall hold office only until the next
following Annual General Meeting and shall not be taken into account in
determining the Directors who are to retire by rotation at the meeting.
If not reappointed at such Annual General Meeting, he shall vacate
office at the conclusion thereof.
90. The Company may in a Special General Meeting called for that purpose
remove a Director provided notice of any such meeting shall be served
upon the Director concerned not less than fourteen days before the
meeting and he shall be entitled to be heard at that meeting. Any
vacancy created by the removal of a Director at a Special General
Meeting may be filled at the Meeting by the election of another
Director in his place or, in the absence of any such election, by the
Board.
RESIGNATION AND DISQUALIFICATION OF DIRECTORS
91. The office of a Director shall be vacated upon the happening of any of
the following events:
31
(1) if he resigns his office by notice in writing delivered to the
Registered Office or tendered at a meeting of the Board;
(2) if he becomes of unsound mind or a patient for any purpose of
any statute or applicable law relating to mental health and
the Board resolves that his office is vacated;
(3) if he becomes bankrupt under the laws of any country or
compounds with his creditors;
(4) if he is prohibited by law from being a Director;
(5) if he ceases to be a Director by virtue of the Companies Acts
or these Bye-Laws or is removed from office pursuant to these
Bye-Laws;
(6) he shall for more than six consecutive months have been absent
without permission of the Board from meetings of the Board
held during that period and his Alternate Director (if any)
shall not during such period have attended in his stead and
the Board resolves that his office be vacated.
ALTERNATE DIRECTORS
92. Any Director (other than an Alternate Director) may appoint any other
Director, or any other person approved by resolution of the Board and
willing to act, to be an Alternate Director and may remove from office
an Alternate Director so appointed by him. Any appointment or removal
of an Alternate Director by a Director shall be effected by depositing
a notice of appointment or removal with the Secretary at the Registered
Office, signed by such Director, and such appointment or removal shall
become effective on the date of receipt by the Secretary. Any Alternate
Director may also be removed by resolution of the Board. An Alternate
Director may also be a Director in his own right and may act as
alternate to more than one Director.
93. An Alternate Director shall cease to be an Alternate Director:-
(a) if his appointor ceases to be a Director; but, if a Director
retires by rotation or otherwise but is reappointed or deemed
to have been reappointed at the meeting at
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which he retires, any appointment of an Alternate Director
made by him which was in force immediately prior to his
retirement shall continue after his reappointment;
(b) on the happening of any event which, if he were a Director,
would cause him to vacate his office as Director;
(c) if he is removed from office pursuant to Bye-Law 92; or
(d) if he resigns his office by notice to the Company.
94. 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.
95. Every person acting as an Alternate Director shall (except as regards
powers to appoint an alternate and remuneration) be subject in all
respects to the provisions of these Bye-Laws relating to Directors and
shall alone be responsible to the Company for his acts and defaults and
shall not be deemed to be the agent of or for any Director for whom he
is alternate. An Alternate Director may be paid expenses and shall be
entitled to be indemnified by the Company to the same extent mutatis
mutandis as if he were a Director. Every person acting as an Alternate
Director shall have one vote for each Director for whom he acts as
alternate (in addition to his own vote if he is also a Director). The
signature of an Alternate Director to any resolution in writing of the
Board or a committee of the Board shall, unless the terms of his
appointment provides to the contrary, be as effective as the signature
of the Director or Directors to whom he is alternate.
DIRECTORS' FEES AND ADDITIONAL REMUNERATION AND EXPENSES
96. The ordinary remuneration of the Directors who do not hold executive
office for their services (excluding amounts payable under any other
provision of these Bye-Laws) shall not exceed in aggregate US$210,000
per annum or such higher amount as the Board may from time to time by
resolution determine. Subject thereto, each such Director shall be paid
a fee (which shall be deemed to accrue from day to day) at such rate as
may from time to time be
33
determined by the Board. Each Director may be paid his reasonable
travel, hotel and incidental expenses in attending and returning from
meetings of the Board or committees constituted pursuant to these
Bye-Laws or general meetings and shall be paid all expenses properly
and reasonably incurred by him in the conduct of the Company's business
or in the discharge of his duties as a Director. Any Director who, by
request, goes or resides abroad for any purposes of the Company or who
performs services which in the opinion of the Board go beyond the
ordinary duties of a Director may be paid such extra remuneration
(whether by way of salary, commission, participation in profits or
otherwise) as the Board may determine, and such extra remuneration
shall be in addition to any remuneration provided for by or pursuant to
any other Bye-Law.
DIRECTORS' INTERESTS
97. (1) A Director may hold any other office or place of profit with
the Company (except that of auditor) in conjunction with his
office of Director for such period and upon such terms as the
Board may determine, and may be paid such extra remuneration
therefor (whether by way of salary, commission, participation
in profits or otherwise) as the Board may determine, and such
extra remuneration shall be in addition to any remuneration
provided for by or pursuant to any other Bye-Law.
(2) A Director may act by himself or his firm in a professional
capacity for the Company (otherwise than as auditor) and he or
his firm shall be entitled to remuneration for professional
services as if he were not a Director.
(3) Subject to the provisions of the Companies Acts, a Director
may notwithstanding his office be a party to, or otherwise
interested in, any transaction or arrangement with the Company
or in which the Company is otherwise interested; and be a
director or other officer of, or employed by, or a party to
any transaction or arrangement with, or otherwise interested
in, any body corporate promoted by the Company or in which the
Company is interested. The Board may also cause the voting
power conferred by the shares in any other company held or
owned by the Company to be exercised in such manner in all
respects as it thinks fit, including the exercise thereof in
favour of any resolution appointing the Directors or any of
them
34
to be directors or officers of such other company, or voting
or providing for the payment of remuneration to the directors
or officers of such other company.
(4) So long as, where it is necessary, he declares the nature of
his interest at the first opportunity at a meeting of the
Board or by writing to the Directors as required by the
Companies Acts, a Director shall not by reason of his office
be accountable to the Company for any benefit which he derives
from any office or employment to which these Bye-Laws allow
him to be appointed or from any transaction or arrangement in
which these Bye-Laws allow him to be interested, and no such
transaction or arrangement shall be liable to be avoided on
the ground of any interest or benefit.
(5) A Director who has disclosed his interest in a transaction or
arrangement with the Company, or in which the Company is
otherwise interested, may be counted in the quorum and vote at
any meeting at which such transaction or arrangement is
considered by the Board.
(6) Subject to the Companies Acts and any further disclosure
required thereby, a general notice to the Directors by a
Director or Officer declaring that he is a director or officer
or has an interest in a person and is to be regarded as
interested in any transaction or arrangement made with that
person, shall be a sufficient declaration of interest in
relation to any transaction or arrangement so made.
(7) For the purposes of these Bye-Laws, without limiting the
generality of the foregoing, a Director is deemed to have an
interest in a transaction or arrangement with the Company if
he is the holder of or beneficially interested in one per cent
or more of any class of the equity share capital of any body
corporate (or any other body corporate through which his
interest is derived) or of the voting rights available to
members of the relevant body corporate with which the Company
is proposing to enter into a transaction or arrangement,
provided that there shall be disregarded any shares held by
such Director as bare or custodian trustee and in which he has
no beneficial interest, any shares comprised in a trust in
which the Director's interest is in reversion or remainder if
and so long as some other person is entitled to receive the
income thereof, and any shares comprised in an
35
authorised unit trust in which the Director is only interested
as a unit holder. For the purposes of this Bye-Law, an
interest of a person who is connected with a Director shall be
treated as an interest of the Director.
POWERS AND DUTIES OF THE BOARD
98. Subject to the provisions of the Companies Acts and these Bye-Laws and
to any directions given by the Company by Resolution, the Board shall
manage the business of the Company and may pay all expenses incurred in
promoting and incorporating the Company and may exercise all the powers
of the Company. No alteration of these Bye-Laws and no such direction
shall invalidate any prior act of the Board which would have been valid
if that alteration had not been made or that direction had not been
given. The powers given by this Bye-Law shall not be limited by any
special power given to the Board by these Bye-Laws and a meeting of the
Board at which a quorum is present shall be competent to exercise all
the powers, authorities and discretions for the time being vested in or
exercisable by the Board.
99. The Board may exercise all the powers of the Company to borrow money
and to mortgage or charge all or any part of the undertaking, property
and assets (present and future) and uncalled capital of the Company and
to issue debentures and other securities, whether outright or as
collateral security for any debt, liability or obligation of the
Company or of any other persons.
100. All cheques, promissory notes, drafts, bills of exchange and other
instruments, whether negotiable or transferable or not, and all
receipts for money paid to the Company shall be signed, drawn,
accepted, endorsed or otherwise executed, as the case may be, in such
manner as the Board shall from time to time by resolution determine.
GRATUITIES, PENSIONS AND INSURANCE
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101. (1) The Board may (by establishment of or maintenance of schemes
or otherwise) provide benefits, whether by the payment of
gratuities or pensions or by insurance or otherwise, for any
past or present Director or employee of the Company or any of
its subsidiaries or any body corporate associated with, or any
business acquired by, any of them, and for any member of his
family (including a spouse and a former spouse) or any person
who is or was dependent on him, and may (as well before as
after he ceases to hold such office or employment) contribute
to any fund and pay premiums for the purchase or provision of
any such benefit.
(2) Without prejudice to the provisions of Bye-Laws 147 and 148,
the Board shall have the power to purchase and maintain
insurance for or for the benefit of any persons who are or
were at any time Directors, Officers, or employees of the
Company, or of any other company which is its holding company
or in which the Company or such holding company has any
interest whether direct or indirect or which is in any way
allied to or associated with the Company, or of any subsidiary
undertaking of the Company or any such other company, or who
are or were at any time trustees of any pension fund in which
employees of the Company or any such other company or
subsidiary undertaking are interested, including (without
prejudice to the generality of the foregoing) insurance
against any liability incurred by such persons in respect of
any act or omission in the actual or purported execution or
discharge of their duties or in the exercise or purported
exercise of their powers or otherwise in relation to their
duties, powers or offices in relation to the Company or any
such other company, subsidiary undertaking or pension fund.
(3) No Director or former Director shall be accountable to the
Company or the Shareholders for any benefit provided pursuant
to this Bye-Law and the receipt of any such benefit shall not
disqualify any person from being or becoming a Director of the
Company.
DELEGATION OF THE BOARD'S POWERS
37
102. The Board may by power of attorney appoint any company, firm or person
or any fluctuating body of persons, whether nominated directly or
indirectly by the Board, to be the attorney or attorneys of the Company
for such purposes and with such powers, authorities and discretions
(not exceeding those vested in or exercisable by the Board under these
Bye-Laws) and for such period and subject to such conditions as it may
think fit, and any such power of attorney may contain such provisions
for the protection and convenience of persons dealing with any such
attorney and of such attorney as the Board may think fit, and may also
authorise any such attorney to sub-delegate all or any of the powers,
authorities and discretions vested in him.
103. The Board may entrust to and confer upon any Director, Officer or,
without prejudice to the provisions of Bye-Law 104, 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.
104. 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
105. The Board shall hold regular quarterly meetings, although it may
additionally 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. The
Chairman or any two Directors
38
may, and the Secretary on the requisition of the Chairman or any two
Directors shall, at any time summon a meeting of the Board.
106. Notice of a meeting of the Board shall be deemed to be duly given to a
Director if it is given to him personally or by word of mouth or sent
to him by post, cable, telex, telecopier or other mode of representing
or reproducing words in a legible and non-transitory form at his last
known address or any other address given by him to the Company for this
purpose provided that such notice shall be given at least 24 hours
prior to the time of a meeting. A Director may retrospectively waive
the requirement for notice of any meeting by consenting in writing to
the business conducted at the meeting.
107. The quorum necessary for the transaction of the business of the Board
may be fixed by the affirmative vote of more than fifty percent of the
Directors then in office and, unless so fixed, shall be the lesser of
three or fifty percent of the Directors in office. 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.
108. The Resident Representative shall, upon delivering written notice of an
address for the purposes of receipt of notice, to the Registered
Office, be entitled to receive notice of, attend and be heard at and to
receive minutes of all meetings of the Board.
109. So long as a quorum of Directors remains in office, the continuing
Directors may act notwithstanding any vacancy in the Board but, if no
such quorum remains, the continuing Directors or a sole continuing
Director may act only for the purpose of calling a general meeting.
110. The Chairman (or President) or, in his absence, the Deputy Chairman (or
Vice-President), shall preside as chairman at every meeting of the
Board. If at any meeting the Chairman or Deputy Chairman (or the
President or Vice-President) is not present within ten minutes after
39
the time appointed for holding the meeting, or is not willing to act as
chairman, the Directors present may choose one of their number to be
chairman of the meeting.
111. The meetings and proceedings of any committee consisting of two or more
members shall be governed by the provisions contained in these Bye-Laws
for regulating the meetings and proceedings of the Board so far as the
same are applicable and are not superseded by any regulations imposed
by the Board.
112. A resolution in writing signed by all the Directors for the time being
entitled to receive notice of a meeting of the Board or by all the
members of a committee for the time being shall be as valid and
effectual as a resolution passed at a meeting of the Board or, as the
case may be, of such committee duly called and constituted. Such
resolution may be contained in one document or in several documents in
the like form each signed by one or more of the Directors or members of
the committee concerned.
113. A meeting of the Board or a committee appointed by the Board may be
held by means of such telephone, electronic or other communication
facilities as permit all persons participating in the meeting to
communicate with each other simultaneously and instantaneously and
participation in such a meeting shall constitute presence in person at
such meeting. Such a meeting shall be deemed to take place where the
largest group of those participating in the meeting is physically
assembled, or, if there is no such group, where the chairman of the
meeting then is.
114. All acts done by the Board or by any committee or by any person acting
as a Director or member of a committee or any person duly authorised by
the Board or any committee, shall, notwithstanding that it is
afterwards discovered that there was some defect in the appointment of
any member of the Board or such committee or person acting as aforesaid
or that they or any of them were disqualified or had vacated their
office, be as valid as if every such person had been duly appointed and
was qualified and had continued to be a Director, member of such
committee or person so authorised.
40
115. The Company may by resolution suspend or relax to any extent, either
generally or in respect of any particular matter, any provision of
these Bye-Laws prohibiting a Director from voting at a meeting of the
Board or of a committee of the Board, or ratify any transaction not
duly authorised by reason of a contravention of any such provisions.
116. Where proposals are under consideration concerning the appointment
(including fixing or varying the terms of appointment) of two or more
Directors to offices or employments with the Company or any body
corporate in which the Company is interested, the proposals may be
divided and considered in relation to each Director separately and in
such cases each of the Directors concerned (if not debarred from voting
under the provisions of paragraph (5) of Bye-Law 97) shall be entitled
to vote and be counted in the quorum in respect of each resolution
except that concerning his own appointment.
117. If a question arises at a meeting of the Board or a committee of the
Board as to the entitlement of a Director to vote or be counted in a
quorum, the question may, before the conclusion of the meeting, be
referred to the chairman of the meeting and his ruling in relation to
any Director other than himself shall be final and conclusive except in
a case where the nature or extent of the interests of the Director
concerned have not been fairly disclosed. If any such question arises
in respect of the chairman of the meeting, it shall be decided by
resolution of the Board (on which the chairman shall not vote) and such
resolution will be final and conclusive except in a case where the
interests of the chairman have not been fairly disclosed.
OFFICERS
118. The Officers of the Company shall include a President and a
Vice-President or a Chairman and a Deputy Chairman who shall be
Directors and shall be elected by the Board, subject to Bye-Law 116, 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
41
appointed pursuant to this Bye-Law shall hold office for such period
and upon such terms as the Board may determine and the Board may revoke
or terminate any such election or appointment. Any such revocation or
termination shall be without prejudice to any claim for damages that
such Officer may have against the Company or the Company may have
against such Officer for any breach of any contract of service between
him and the Company which may be involved in such revocation or
termination. Save as provided in the Companies Acts or these Bye-Laws,
the powers and duties of the Officers of the Company shall be such (if
any) as are determined from time to time by the Board.
EXECUTIVE DIRECTORS
119. (1) Subject to the provisions of the Companies Acts and to Bye-Law
116, the Board may appoint one or more of its body to be the
holder of any executive office (except that of auditor) under
the Company and may enter into any agreement or arrangement
with any Director for his employment by the Company or for the
provision by him of any services outside the scope of the
ordinary duties of a Director. Any such appointment, agreement
or arrangement may be made upon such terms, including terms as
to remuneration, as the Board determines, and any remuneration
which is so determined may be in addition to or in lieu of any
ordinary remuneration as a Director. The Board may revoke or
vary any such appointment but without prejudice to any rights
or claims which the person whose appointment is revoked or
varied may have against the Company by reason thereof.
(2) Any Director holding an executive office shall not be subject
to retirement by rotation. Any Director who is not subject to
retirement by rotation shall be disregarded in determining
which Directors are subject to retirement by rotation under
the provisions of these Bye-Laws.
120. A Director appointed to an executive office shall not ipso facto cease
to be a Director if his appointment to such executive office
terminates.
42
121. The emoluments of any Director holding executive office for his
services as such shall be determined by the Board, and may be of any
description, and (without limiting the generality of the foregoing) may
include admission to or continuance of membership of any scheme
(including any share acquisition scheme) or fund instituted or
established or financed or contributed to by the Company for the
provision of pensions, life assurance or other benefits for employees
or their dependants, or the payment of a pension or other benefits to
him or his dependants on or after retirement or death, apart from
membership or any such scheme or fund.
MINUTES
122. The Board shall cause minutes to be made and books kept for the purpose
of recording -
(1) all appointments of Officers made by the Board;
(2) the names of the Directors and other persons (if any) present
at each meeting of the Board and of any committee;
(3) of all proceedings at meetings of the Company, of the holders
of any class of shares in the Company, of the Board and of
committees appointed by the Board or the Shareholders;
(4) of all proceedings of its managers (if any).
Shareholders shall only be entitled to see the Register of Directors
and Officers, the Register, the financial information provided for in
Bye-Law 139 and the minutes of meetings of the Shareholders of the
Company.
SECRETARY AND RESIDENT REPRESENTATIVE
123. The Secretary (including one or more deputy or assistant secretaries)
and, if required, the Resident Representative, shall be appointed by
the Board at such remuneration (if any) and upon such terms as it may
think fit and any Secretary and Resident Representative so appointed
may be removed by the Board. The duties of the Secretary and the duties
of the Resident Representative shall be those prescribed by the
Companies Acts together with such other duties as shall from time to
time be prescribed by the Board.
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124. A provision of the Companies Acts or these Bye-Laws requiring or
authorising a thing to be done by or to a Director and the Secretary
shall not be satisfied by its being done by or to the same person
acting both as Director and as, or in the place of, the Secretary.
THE SEAL
125. (1) The Seal shall consist of a circular metal device with the
name of the Company around the outer margin thereof and the
country and year of incorporation across the centre thereof.
Should the Seal not have been received at the Registered
Office in such form at the date of adoption of this Bye-Law
then, pending such receipt, any document requiring to be
sealed with the Seal shall be sealed by affixing a red wafer
seal to the document with the name of the Company, and the
country and year of incorporation type written across the
centre thereof.
(2) The Board shall provide for the custody of every Seal. A Seal
shall only be used by authority of the Board or of a committee
constituted by the Board. Subject to these Bye-laws, any
instrument to which a Seal is affixed shall be signed by
either two Directors, or by the Secretary and one Director, or
by the Secretary or by any one person whether or not a
Director or Officer, who has been authorised either generally
or specifically to affirm the use of a Seal; provided that the
Secretary or a Director may affix a Seal over his signature
alone to authenticate copies of these Bye-Laws, the minutes of
any meeting or any other documents requiring authentication.
DIVIDENDS AND OTHER PAYMENTS
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
44
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:-
(1) all dividends or distributions out of contributed surplus may
be declared and paid according to the amounts paid up on the
shares in respect of which the dividend or distribution is
paid, and an amount paid up on a share in advance of calls may
be treated for the purpose of this Bye-Law as paid-up on the
share;
(2) dividends or distributions out of contributed surplus may be
apportioned and paid pro rata according to the amounts paid-up
on 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 moneys
payable to a Shareholder by the Company on or in respect of any shares
all sums of money (if any) presently payable by him to the Company on
account of calls or otherwise in respect of shares of the Company.
129. No dividend, distribution or other moneys 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 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
45
holder or, in the case of joint holders, to the order of the holder
whose name stands first in the Register in respect of such shares, and
shall be sent at his or their risk and payment of the cheque or warrant
by the bank on which it is drawn shall constitute a good discharge to
the Company. Any one of two or more joint holders may give effectual
receipts for any dividends, distributions or other moneys payable or
property distributable in respect of the shares held by such joint
holders.
131. Any dividend or distribution out of contributed surplus unclaimed for a
period of six years from the date of declaration of such dividend or
distribution shall be forfeited and shall revert to the Company and the
payment by the Board of any unclaimed dividend, distribution, interest
or other sum payable on or in respect of the share into a separate
account shall not constitute the Company a trustee in respect thereof.
132. 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 recommending or declaring any dividend or
distribution out of contributed surplus, set aside such sums as it
thinks proper as reserves which shall, at the discretion of the Board,
be applicable for any purpose of the Company and pending such
46
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.
CAPITALIZATION 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 of Shareholders who
would be entitled thereto if distributed by way of dividend and in the
same proportions, on the footing that the same be not paid in cash but
be applied either in or towards paying up amounts for the time being
unpaid on any shares in the Company held by such Shareholders
respectively or in payment up in full of unissued shares, debentures or
other obligations of the Company, to be allotted and distributed
credited as fully paid amongst such Shareholders, or partly in one way
and partly in the other, provided that for the purpose of this Bye-Law,
a share premium account may be applied only in paying up of unissued
shares to be issued to such Shareholders credited as fully paid and
provided further that any sum standing to the credit of a share premium
account may only be applied in crediting as fully paid shares of the
same class as that from which the relevant share premium was derived.
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 Shareholders in order to adjust the
rights of all parties, as may seem expedient to the Board. The Board
may appoint any person to sign on behalf of the persons entitled to
participate in the distribution any contract necessary or desirable for
giving effect thereto and such appointment shall be effective and
binding upon the Shareholders.
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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 not more than
sixty days before any date on which such dividend, distribution,
allotment or issue is declared, paid or made or not more than sixty
days nor less than ten days before the date of any such meetings.
In relation to any general meeting of the Company or of any class of
Shareholders or to any 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") which is not
more than sixty days before the date fixed for the meeting (the
"meeting date") and, notwithstanding any provisions in these Bye-Laws
to the contrary, in any such case:
(1) each person entered in the Register at the record date as a
Shareholder, or a Shareholder of the relevant class, (a
"record date holder") shall be entitled to attend and to vote
at the relevant meeting and to exercise all of the rights or
privileges of a Shareholder, or a Shareholder of the relevant
class, in relation to that meeting in respect of the shares,
or the shares of the relevant class, registered in his name at
the record date; and
(2) accordingly, a Shareholder who is entered in the Register who
became a Shareholder after the record date shall not be
entitled to attend or to vote at the relevant meeting, or to
exercise any of the rights or privileges of a Shareholder, or
a Shareholder of the relevant class, in respect of his shares
at that meeting.
ACCOUNTING RECORDS
48
137. The Board shall cause to be kept accounting records sufficient to give
a true and fair view of the state of the Company's affairs and to show
and explain its transactions, in accordance with the Companies Acts.
138. 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.
139. A copy of every balance sheet and statement of income and expenditure,
including every document required by law to be annexed thereto, which
is to be laid before the Company in general meeting, together with a
copy of the auditors' report, shall be sent to each person entitled
thereto in accordance with the requirements of the Companies Acts.
AUDIT
140. Save and to the extent that an audit is waived in the manner permitted
by the Companies Acts, auditors shall be appointed and their duties
regulated in accordance with the Companies Acts, any other applicable
law and such requirements not inconsistent with the Companies Acts as
the Board may from time to time determine.
SERVICE OF NOTICES AND OTHER DOCUMENTS
141. Any notice or other document (including a share certificate) may be
served on or delivered to any Shareholder by the Company either
personally or by sending it through the post (by airmail where
applicable) in a pre-paid letter addressed to such Shareholder at his
address as appearing in the Register or by delivering it to or leaving
it at such registered address. In the case of joint holders of a share,
service or delivery of any notice or other document on or to
49
one of the joint holders shall for all purposes be deemed as sufficient
service on or delivery to all the joint holders. Any notice or other
document if sent by post shall be deemed to have been served or
delivered seven days after it was put in the post, and in proving such
service or delivery, it shall be sufficient to prove that the notice or
document was properly addressed, stamped and put in the post.
142. Any notice of a general meeting of the Company shall be deemed to be
duly given to a Shareholder, or other person entitled to it, if it is
sent to him by cable, telex, telecopier or other mode of representing
or reproducing words in a legible and non-transitory form at his
address as appearing in the Register or any other address given by him
to the Company for this purpose. Any such notice shall be deemed to
have been served twenty-four hours after its despatch.
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.
DESTRUCTION OF DOCUMENTS
144. The Company shall be entitled to destroy all instruments of transfer of
shares which have been registered, and all other documents on the basis
of which any entry is made in the register, at any time after the
expiration of six years from the date of registration thereof and all
dividends mandates or variations or cancellations thereof and
notifications of change of address at any time after the expiration of
two years from the date of recording thereof and
50
all share certificates which have been cancelled at any time after the
expiration of one year from the date of cancellation thereof and all
paid dividend warrants and cheques at any time after the expiration of
one year from the date of actual payment thereof and all instruments of
proxy which have been used for the purpose of a poll at any time after
the expiration of one year from the date of such use and all
instruments of proxy which have not been used for the purpose of a poll
at any time after one month from the end of the meeting to which the
instrument of proxy relates and at which no poll was demanded. It shall
conclusively be presumed in favour of the Company that every entry in
the register purporting to have been made on the basis of an instrument
of transfer or other document so destroyed was duly and properly made,
that every instrument of transfer so destroyed was a valid and
effective instrument duly and properly registered, that every share
certificate so destroyed was a valid and effective certificate duly and
properly cancelled and that every other document hereinbefore mentioned
so destroyed was a valid and effective document in accordance with the
recorded particulars thereof in the books or records of the Company,
provided always that:-
(a) the provisions aforesaid shall apply only to the destruction
of a document in good faith and without notice of any claim
(regardless of the parties thereto) to which the document
might be relevant;
(b) nothing herein contained shall be construed as imposing upon
the Company any liability in respect of the destruction of any
such document earlier than as aforesaid or in any other
circumstances which would not attach to the Company in the
absence of this Bye-Law; and
(c) references herein to the destruction of any document include
references to the disposal thereof in any manner.
UNTRACED SHAREHOLDERS
145. (1) The Company shall be entitled to sell, at the best price
reasonably obtainable, the shares of a Shareholder or the
shares to which a person is entitled by virtue of transmission
on death, bankruptcy, or otherwise by operation of law if and
provided that:-
51
(a) during the period of twelve years prior to the date
of the publication of the advertisements referred to
in paragraph (b) below (or, if published on different
dates, the first thereof) at least three dividends in
respect of the shares in question have been declared
and all dividend warrants and cheques which have been
sent in the manner authorised by these Bye-Laws in
respect of the shares in question have remained
uncashed; and
(b) the Company shall as soon as practicable after expiry
of the said period of twelve years have inserted
advertisements both in a Bermuda daily newspaper and
in a newspaper circulating in the area of the last
known address of such Shareholder or other person
giving notice of its intention to sell the shares;
and
(c) during the said period of twelve years and the period
of three months following the publication of the said
advertisements the Company shall have received no
indication either of the whereabouts or of the
existence of such Shareholder or person; and
(d) if the shares are listed on a Stock Exchange and such
notification is required by the rules and regulations
of such Stock Exchange, notice shall have been given
to the Quotations Department of such Stock Exchange
of the Company's intention to make such sale prior to
the publication of advertisements.
If during any twelve year period referred to in paragraph (a)
above, further shares have been issued in right of those held
at the beginning of such period or of any previously issued
during such period and all the other requirements of this
Bye-Law (other than the requirement that they be in issue for
twelve years) have been satisfied in regard to the further
shares, the Company may also sell the further shares.
(2) To give effect to any such sale, the Board may authorise some
person to execute an instrument of transfer of the shares sold
to, or in accordance with the directions of, the purchaser and
an instrument of transfer executed by that person shall be as
effective as if it had been executed by the holder of, or
person entitled by
52
transmission to, the shares. The transferee shall not be bound
to see to the application of the purchase money, nor shall his
title to the shares be affected by any irregularity in, or
invalidity of, the proceedings in reference to the sale.
(3) The net proceeds of sale shall belong to the Company which
shall be obliged to account to the former Shareholder or other
person previously entitled as aforesaid for an amount equal to
such proceeds and shall enter the name of such former
Shareholder or other person in the books of the Company as a
creditor for such amount. No trust shall be created in respect
of the debt, no interest shall be payable in respect of the
same and the Company shall not be required to account for any
money earned on the net proceeds, which may be employed in the
business of the Company or invested in such investments as the
Board from time to time thinks fit.
WINDING UP
146. If the Company shall be wound up, the liquidator may, with the sanction
of a Resolution of the Company and any other sanction required by the
Companies Acts, divide amongst the Shareholders in specie or kind the
whole or any part of the assets of the Company (whether they shall
consist of property of the same kind or not) and may for such purposes
set such values as he deems fair upon any property to be divided as
aforesaid and may determine how such division shall be carried out as
between the Shareholders or different classes of Shareholders. The
liquidator may, with the like sanction, vest the whole or any part of
such assets in trustees upon such trust for the benefit of the
contributories as the liquidator, with the like sanction, shall think
fit, but so that no Shareholder shall be compelled to accept any shares
or other assets upon which there is any liability.
INDEMNITY
147. Subject to the proviso below, every Director, Officer of the Company
and member of a committee constituted under Bye-Law 104 and any
Resident Representative shall be indemnified out of the funds of the
Company against all liabilities, loss, damage or expense (including but
not limited to liabilities under contract, tort and statute or any
applicable foreign law or regulation and all reasonable legal and other
costs and expenses properly
53
payable) incurred or suffered by him as such Director, Officer,
committee member or Resident Representative and the indemnity contained
in this Bye-Law shall extend to any person acting as a Director,
Officer, committee member or Resident Representative in the reasonable
belief that he has been so appointed or elected notwithstanding any
defect in such appointment or election PROVIDED ALWAYS that the
indemnity contained in this Bye-Law shall not extend to any matter
which would render it void pursuant to the Companies Acts.
148. Every Director, Officer, member of a committee duly constituted under
Bye-Law 104 or Resident Representative of the Company shall be
indemnified out of the funds of the Company against all liabilities
incurred by him as such Director, Officer, committee member or Resident
Representative in defending any proceedings, whether civil or criminal,
in which judgement is given in his favour, or in which he is acquitted,
or in connection with any application under the Companies Acts in which
relief from liability is granted to him by the court.
149. To the extent that any Director, Officer, member of a committee duly
constituted under Bye-Law 104 or Resident Representative is entitled to
claim an indemnity pursuant to these Bye-Laws in respect of amounts
paid or discharged by him, the relative indemnity shall take effect as
an obligation of the Company to reimburse the person making such
payment or effecting such discharge.
150. Each Shareholder and the Company agree to waive any claim or right of
action he or it may at any time have, whether individually or by or in
the right of the Company, against any Director, Officer, or member of a
committee duly constituted under Bye-Law 104 on account of any action
taken by such Director, Officer, or member of a committee or the
failure of such Director, Officer, or member of a committee to take any
action in the performance of his duties with or for the Company
PROVIDED HOWEVER that such waiver shall not apply to any claims or
rights of action arising out of the fraud of such Director, Officer, or
member of a committee duly constituted under Bye-Law 104 or to
54
recover any gain, personal profit or advantage to which such Director,
Officer, or member of a committee duly constituted under Bye-Law 104 is
not legally entitled.
151. Subject to the Companies Acts, expenses incurred in defending any civil
or criminal action or proceeding for which indemnification is required
pursuant to Bye-Laws 147 and 148 shall be paid by the Company in
advance of the final disposition of such action or proceeding upon
receipt of an undertaking by or on behalf of the indemnified party to
repay such amount if it shall ultimately be determined that the
indemnified party is not entitled to be indemnified pursuant to
Bye-Laws 147 and 148 provided that no monies shall be paid hereunder
unless payment of the same shall be authorised in the specific case
upon a determination that indemnification of the Director or officer
would be proper in the circumstances because he has met the standard of
conduct which would entitle him to the indemnification thereby provided
and such determination shall be made:
(a) by the Board, by a majority vote at a meeting duly constituted
by a quorum of Directors not party to the proceedings or
matter with regard to which the indemnification is, or would
be, claimed; or
(b) in the case such a meeting cannot be constituted by lack of a
disinterested quorum, by independent legal counsel in a
written opinion; or
(c) by a majority vote of the Shareholders.
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
Director, Officer, or member of a committee duly constituted under
Bye-Law 104 to properly perform his or her duties as an officer of the
Company.
AMALGAMATION
55
152. Any resolution proposed for consideration at any general meeting to
approve the amalgamation of the Company with any other company,
wherever incorporated, shall require the approval of the majority
provided for in Bye-Law 156 at such meeting and the quorum for such
meeting shall be that required in Bye-Law 54 and a poll may be demanded
in respect of such resolution in accordance with the provisions of
Bye-Law 64.
CONTINUATION
153. Subject to the Companies Acts, the Shareholder may, by Resolution,
which shall require the approval of the majority provided for in
Bye-Law 156 at the general meeting, approve the discontinuation of the
Company in Bermuda and the continuation of the Company in a
jurisdiction outside Bermuda. The Shareholder, having resolved to
approve the discontinuation of the Company, may by resolution further
resolve not to proceed with any application to discontinue the Company
in Bermuda or may vary such application as they see fit.
ALTERATION OF BYE-LAWS
154. Subject to Bye-Law 163, these Bye-Laws may be amended, from time to
time by resolution of the Board, subject to approval by resolution at a
General Meeting of the Shareholders (except where an amendment is made
to these Bye-Laws pursuant to Bye-Law 3.3 in which case the approval of
the Shareholders shall not be required).
BUSINESS COMBINATIONS
155. The following definitions shall apply with respect to the provisions of
Bye-Laws 155 to 163 inclusive:
(1) "the Act" means the Securities Exchange Act of 1934 of the
United States of America, as amended, and the rules and
regulations thereunder (or any subsequent provisions replacing
the Act, rules or regulations).
56
(2) "Affiliate" or "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Act, as in effect on November 8, 1990
(the term "registrant" in said Rule 12b-2 meaning in this case
the Company).
(3) A person shall be a "beneficial owner" of any Voting Shares:
(a) which such person or any of its Affiliates or Associates
beneficially owns, directly or indirectly; (b) which such
person or any of its Affiliates or Associates has, directly or
indirectly, (i) the right to acquire (whether such rights is
exercisable immediately or subject only to the passage of
time), pursuant to any agreement, arrangement or understanding
or upon the exercise of conversion rights, exchange rights,
warrants or options, or otherwise, or (ii) the right to vote
pursuant of any agreement, arrangement or understanding; or
(c) beneficially owned, directly or indirectly, by any other
person with which such person or any of its Affiliates or
Associates has any agreement, arrangement or understanding of
the purpose of acquiring, holding, voting or disposing of any
shares of Capital Stock. For the purposes of determining
whether a person is an Interested Shareholder pursuant to this
paragraph (3) of this Bye-Law 155, the number of Capital
Shares deemed to be outstanding shall include shares deemed
beneficially owned by such person through application of this
paragraph (3) of this Bye-Law 155, but shall not include any
other Capital Shares that may be issuable pursuant to an
agreement, arrangement or understanding, or upon exercise of
conversion rights, warrants or options, or otherwise.
(4) "Business Combination" means:
(a) any merger, consolidation or amalgamation of the
Company or any Subsidiary (as hereinafter defined)
with (i) any Interested Shareholder or (ii) any other
company (whether or not itself an Interested
Shareholder) which is or after such merger,
consolidation or amalgamation would be an Affiliate
or Associates of an Interested Shareholder; or
57
(b) any sale, lease, exchange, mortgage, pledge, transfer
or other disposition or security arrangement,
investment, loan, advance, guarantee, agreement to
purchase, agreement to pay, extension of credit,
joint venture participation or other arrangement (in
one transaction or a series of transactions) with or
for the benefit of any Interested Shareholder or any
Affiliate or Associate of any Interested Shareholder
involving any assets, securities or commitments of
the Company, any Subsidiary or any Interested
Shareholder or any Affiliate or Associate of any
Interested Shareholder (except for any arrangement,
whether as employee, consultant or otherwise, other
than as a Director, pursuant to which any Interested
Shareholder or any Affiliate or Associate thereof
shall, directly or indirectly, have any control over
or responsibility for the management of any aspect of
the business or affairs of the Company, with respect
to which arrangements the value tests set forth below
shall not apply), together with all other such
arrangements (including all contemplated future
events), has an aggregate Fair Market Value and/or
involves aggregate commitments of $5,000,000 or more
or constitutes more than 5 percent of the book value
of the total assets (in the case of transactions
involving assets or commitments other than capital
shares) or 5 percent of the Shareholders' equity (in
the case of transactions in Capital Shares) of the
entity in question (the "Substantial Part"), as
reflected in the most recent fiscal year and
consolidated balance sheet of such entity existing at
the time the Shareholders of the Company would be
required to approve or authorize the Business
Combinations involving the assets, securities and/or
commitments constituting any Substantial Part; or
(c) the adoption of any plan or proposal for the
liquidation or dissolution of the Company or for the
discontinuation into another jurisdiction or for any
amendment to the Company's Bye-Laws; or
(d) any reclassification of shares or other securities
(including any reverse stock split), or
recapitalization of the Company, or any merger,
consolidation or amalgamation of the Company with any
of its Subsidiaries or any other
58
transaction (whether or not with or into or otherwise
involving an Interested Shareholder) that has the
effect, directly or indirectly, of increasing the
proportionate share of any class or series of Capital
Shares, or any securities convertible into Capital
Shares or into equity securities of any Subsidiary,
that is beneficially owned by an Interested
Shareholder or any Affiliate or Associate of any
Interested Shareholder; or
(e) any agreement, contract or other arrangement
providing for any one or more of the actions
specified in the foregoing clauses (a) to (d).
(5) "Capital Shares" means all the authorised shares in the
capital of the Company.
(6) "Continuing Director" means any member of the Board while such
person is a member of the Board who is not an Affiliate or
Associate or representative of the Interested Shareholder and
was a member of the Board prior to the time that the
Interested Shareholder became an Interested Shareholder, and
any successor of a Continuing Director while such successor is
a member of the Board of Directors, who is not an Affiliate or
Associate or representative of the Interested Shareholder and
is recommended or elected to succeed the Continuing Director
by a majority of Continuing Directors.
(7) "Fair Market Value" means: (a) in the case of cash, the amount
of such cash; (b) in the case of shares (i) if there should be
a public market for the Shares on such date, the arithmetic
mean of the high and low prices of the Shares as reported on
such date on the composite tape of the principal national
securities exchange on which such Shares are listed or
admitted to trading, or, if the Shares are not listed or
admitted on any national securities exchange, the arithmetic
mean of the per Share closing bid price and per Share closing
asked price on such date as quoted on the National Association
of Securities Dealers Automated Quotation System (or such
market in which such prices are regularly quoted) (the
"Nasdaq"), or, if no sale of Shares shall have been reported
on the composite tape of any national
59
securities exchange or quoted on the Nasdaq on such date, then
the immediately preceding date on which sales of the Shares
have been so reported or quoted shall be used. In the event
the Shares are not publicly traded, the Fair Market Value of
the Shares will be determined in good faith by the Board of
Directors.
(8) "Interested Shareholder" means any person (other than the
Company or any Subsidiary and other than any profit sharing,
employee share ownership or other employee benefit plan of the
Company or any Subsidiary or any trustee of a fiduciary with
respect to any such plan when acting in such capacity) who (a)
is or has announced or publicly disclosed a plan or intention
to become the beneficial owner of Voting Shares representing
ten percent (10%) or more of the vote entitled to be case by
the holders of all then outstanding shares of Voting Shares,
or (b) is an Affiliate or Associate of the Company and at any
time within the two year period immediately prior to the date
in question was the beneficial owner of Voting Shares
representing ten percent (10%) or more of the votes entitled
to be case by the holders of all then outstanding shares of
Voting Shares.
(9) "person" means any individual, firm, company or other entity
and shall include any group comprised of any person and any
other person with whom such person or any Affiliate or
Associate of such person has any agreement, arrangement or
understanding directly or indirectly, for the purpose of
acquiring, holding, voting or disposing of Capital Shares.
(10) "Proposed Action" means a Business Combination or any proposal
to amend, repeal or adopt any provision of these Bye-Laws
inconsistent with these Bye-Laws 155 through 163.
(11) "Subsidiary" means any company, wherever organised, of which a
majority of any class of equity security is beneficially owned
by the Company; provided, however, that for the purposes of
the definition of Interested Shareholder set forth in
60
paragraph (8) of this Bye-Law 155, the term "Subsidiary" shall
mean only a company of which a majority of each class of
equity security is beneficially owned by the Company.
(12) The term "Voting Shares" shall mean all Capital Shares which
by their terms may be voted on all matters submitted to
Shareholders of the Company generally.
156. In addition to any affirmative vote required by law or these Bye-Laws,
and except as otherwise expressly provided in Bye-Law 157, a Business
Combination with, or proposed by or on behalf of, any Interested
Shareholder or any Affiliate or Associate of any Interested Shareholder
or any person who thereafter would be an Affiliate or Associate of such
Interested Shareholder shall require the affirmative vote of not less
than sixty-six and two-thirds percent (66 2/3%) of the votes entitled
to be cast by the holders of all the then outstanding Voting Shares,
voting together as a single class, excluding Voting Shares beneficially
owned by any Interested Shareholder or any Affiliate or Associate of
such Interested Shareholders. Such affirmative vote shall be required
notwithstanding the fact that no vote may be required, or that a lesser
percentage or separate class vote may be specified, by law or in any
agreement with any national securities exchange or otherwise.
157. The provisions of Bye-Law 156 shall not be applicable to any particular
Business Combination, and such Business Combination shall require only
such affirmative vote, if any, as is required by law or any other
provision of the Bye-Laws of the Company, if all of the conditions
specified in either of the following paragraphs (1) or (2) are met:
(1) The Business Combination shall have been approved by a
majority of the Continuing Directors.
(2) All of the following conditions shall have been met:
(a) the aggregate amount of the cash and the Fair Market
Value as of the date of the consummation of the
Business Combination of consideration other than cash
to be received per share by holders of Common Shares
in such
61
Business Combination shall be at least equal to the
highest amount determined under clauses (i) and (ii)
below:
(i) (if applicable) the highest per share price
(including any brokerage commissions,
transfer taxes and soliciting dealers' fees)
paid by or on behalf of the Interested
Shareholders for beneficial ownership of
Common Shares acquired by it (x) within the
two year period immediately prior to the
first public announcement of the proposed
Business Combination (the "Announcement
Date") or (y) in the transaction in which it
became an Interested Shareholder, whichever
is higher, in either case as adjusted for
any subsequent stock split, stock dividend,
subdivision or reclassification with respect
to the Common Shares; and
(ii) the Fair Market Value per share of Common
Shares on the Announcement Date or on the
date on which the Interested Shareholder
became an Interested Shareholder (the
"Determination Date"), whichever is higher,
as adjusted for any subsequent stock split,
stock dividend, subdivision or
reclassification with respect to the Common
Shares.
(b) The aggregate amount of the cash and the Fair Market
Value as of the date of the consummation of the
Business Combination, of consideration other than
cash to be received per share by holders of shares of
any class or series of outstanding Capital Shares,
other than Common Shares, shall be at least equal to
the highest amount determined under clauses (i), (ii)
and (iii) below:
(i) (if applicable) the highest per share price
(including any brokerage commissions,
transfer taxes and soliciting dealers' fees)
paid by or on behalf of the Interested
Shareholder for any such class or series of
Capital Shares in connection with the
acquisition by the Interested Shareholder of
beneficial ownership of shares of such class
or series of Capital Shares (x) within the
two year period immediately prior to the
Announcement Date or (y) in the transaction
in which it became
62
an Interested Shareholder, whichever is
higher, in either case as adjusted for any
subsequent share split, share dividend,
subdivision or reclassification with respect
to such class or series of Capital Shares;
(ii) the Fair Market Value per share of such
class or series of Capital Shares on the
Announcement Date or on the Determination
Date, whichever is higher, as adjusted for
any subsequent share split, subdivision or
reclassification with respect to such class
or series of Capital Shares; and
(iii) (if applicable) the highest preferential
amount per share to which the holders of
shares of such class or series of Capital
Shares would be entitled in the event of any
voluntary or involuntary liquidation,
dissolution or winding up of the affairs of
the Company regardless of whether the
Business Combination to be consummated
constitutes such an event.
(c) The consideration to be received by holders of a
particular class or series of outstanding Capital
Shares shall be in cash or in the same form as
previously has been paid by or on behalf of the
Interested Shareholder in connection with its direct
or indirect acquisition of beneficial ownership of
shares of such class or series of Capital Shares. If
the consideration so paid for shares of any class or
series of Capital Shares varied as to form, the form
of consideration for such class or series of Capital
Shares shall be either cash or the form used to
acquire beneficial ownership of the largest number of
shares of such class or series of Capital Shares
previously acquired by the Interested Shareholder.
(d) After the Determination Date and prior to the
consummation of such Business Combination; (i) except
as approved by a majority of the Continuing
Directors, there shall have been no failure to
declare and pay at the regular date therefor any full
quarterly dividends (whether or not cumulative)
payable in accordance with the terms of any
outstanding Capital
63
Shares; (ii) there shall have been no reduction in
the annual rate of dividends paid on the Common
Shares (except as necessary to reflect any stock
split, stock dividend or subdivision of the Common
Shares), except as approved by a majority of the
Common Shares), except as approved by a majority of
the Continuing Directors; (iii) there shall have been
an increase in the annual rate of dividends paid on
the Common Shares as necessary to reflect any
reclassification (including any reverse stock split),
recapitalization, reorganization or any similar
transaction that has the effect of reducing the
number of outstanding Common Shares, unless the
failure so to increase such annual rate is approved
by a majority of the Continuing Directors; and (iv)
such Interested Shareholders shall not have become
the beneficial owner of any additional Capital Shares
except as part of the transaction that results in
such Interested Shareholder becoming an Interested
Shareholder and except in a transaction that; after
giving effect thereto, would not result in any
increase in the Interested Shareholder's percentage
beneficial ownership of any class or series of
Capital Shares.
(e) A proxy or information statement describing the
proposed Business Combination and complying with the
requirements of the Act shall be mailed to all
Shareholders of the Company at least 30 days prior to
the consummation of such Business Combination
(whether or not such proxy or information statement
is required to be mailed pursuant to such Act or
subsequent provisions). The proxy or information
statement shall contain on the first page thereof, in
a prominent place, any statement as to the
advisability (or inadvisability) of the Business
Combination that the Continuing Directors, or any of
them, may choose to make and, if deemed advisable by
a majority of the Continuing Directors, an opinion of
an investment banking firm selected by a majority of
the Continuing Directors as to the fairness (or
unfairness) of the terms of the Business Combination
from a financial point of view to the holders of the
outstanding shares of Capital Shares other than the
Interested Shareholder and its Affiliates or
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Associates, such investment banking firm to be paid a
reasonable fee for its services by the Company.
(f) Such Interested Shareholder shall not have any major
change in the Company's business or equity capital
structure without the approval of a majority of the
Continuing Directors.
The provisions of this paragraph 157 (2) shall be required to
be met with respect to every class or series of outstanding
Capital Shares, whether or not the Interested Shareholder has
previously acquired beneficial ownership of any shares of a
particular class or series of Capital Shares.
158. In the event of any Business Combination in which the Company survives,
the phrase "consideration other than cash to be received" as used in
paragraphs (2)(a) and (2)(b) of Bye-Law 157 shall include the Common
Shares and/or the shares of any other class or series of Capital Shares
retained by the holders of such shares.
159. A majority of the Continuing Directors shall have power and duty to
determine for the purpose of these Bye-Laws 155 through 163, on the
basis of information known to them after reasonable inquiry, all
questions arising under these Bye-Laws 155 through 163 including,
without limitation, (a) whether a person is an Interested Shareholder,
(b) the number of shares of Capital Shares or other securities
beneficially owned by any person, (c) whether a person is an Affiliate
or Associate of another, (d) whether a Proposed Action is with, or
proposed by, or on behalf of an Interested Shareholder or an Affiliate
or Associate of an Interested Shareholder, (e) whether the assets that
are the subject of any Business Combination have, or the consideration
to be received for the issuance or transfer of securities by the
Company or any Subsidiary in any Business Combination has, an aggregate
Fair Market Value of $5,000,000 or more and (f) whether the assets or
securities that are the subject of any Business Combination constitute
a Substantial Part (as such term is defined in Bye-law 155 (4) (b)
above). Any such determination made in good faith shall be binding and
conclusive on all parties. The good faith determination of a majority
of the
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Continuing Directors on such matters shall be conclusive and binding
for all purposes of these Bye-Laws 155 through 163.
160. Nothing contained in these Bye-Laws 155 through 163 shall be construed
to relieve any Interested Shareholder from any fiduciary obligation
imposed by law.
161. The fact that any Business Combination complies with the provisions of
these Bye-Laws 155 through 163 shall not be construed to impose any
fiduciary duty, obligation or responsibility on the Board or any member
thereof, to approve such Business Combination or recommend its adoption
or approval to the Shareholders of the Company, nor shall such
compliance limit, prohibit or otherwise restrict in any manner the
Board or any member thereof, with respect to evaluations of or actions
and responses taken with respect to such Business Combination.
162. A Proposed Action is presumed to have been proposed by, or on behalf
of, an Interested Shareholder or a person who thereafter would become
such if (1) after the Interested Shareholder became such, the Proposed
Action is proposed following the election of any Director who with
respect to such Interested Shareholder, would not qualify to serve as a
Continuing Director or (2) such Interested Shareholder, Affiliate,
Associate or person votes for or consents to the adoption of any such
Proposed Action, unless as to such Interested Shareholder, Affiliate,
Associate or person a majority of the Continuing Directors makes a good
faith determination that such Proposed Action is not proposed by or on
behalf of such Interested Shareholder, Affiliate, Associate or person,
based on information known to them after reasonable inquiry.
163. Notwithstanding any other provisions of these Bye-Laws (and
notwithstanding the fact that a lesser percentage or separate class
vote may be specified by law or these Bye-Laws) any proposal to amend,
repeal or adopt any provision of these Bye-Laws inconsistent with these
Bye-Laws 155 through 163 which is proposed by or on behalf of an
Interested Shareholder or an Affiliate or Associate of an Interested
Shareholder shall require the affirmative vote of
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the holders of not less than sixty-six and two-thirds percent (66 2/3%)
of the votes entitled to be cast by the holders of all the then
outstanding shares of Voting Stock, voting together as a single class,
excluding Voting Stock beneficially owned by such Interested
Shareholder; provided, however, that this Bye-Law 163 shall not apply
to, and such sixty-six and two-thirds percent (66 2/3%) vote shall not
be required for, any amendment, repeal or adoption unanimously
recommended by the Board if all of the Directors on the Board are
persons who would be eligible to serve as Continuing Directors within
the meaning of Bye-Law 155(6).
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