Exhibit 1.4
BYE - LAWS
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 effective as from 21st April 2004
pursuant to a resolution passed at the special general meeting of shareholders
held on 6 April 2004.
Director
INDEX
BYE-LAW SUBJECT PAGE
- ------- ------- ----
1 Interpretation 1-3
2 Registered Office 3
3-4 Share Rights 3-5
5-6 Modification of Rights 5,6
7-9 Shares 6,7
10-13 Certificates 7
14-17 Lien 7-10
18-23 Calls on Shares 10,11
24-30 Forfeiture of Shares 11-13
31-32 Register of Shareholders 13
33 Register of Directors and Officers 13
34-37 Transfer of Shares 14,15
38-41 Transmission of Shares 15,16
42-44 Increase of Capital 16,17
45-46 Alteration of Capital 17,18
47-48 Reduction of Capital 18
49 General Meetings and Written Resolutions 18,19
50-52 Notice of General Meetings 19,20
53 General Meetings at more than one place 20,21
54-60 Proceedings at General Meetings 21,22
61-76 Voting 23-26
77-82 Proxies and Corporate Representatives 26-28
83-90 Appointment and Removal of Directors 28-30
91 Resignation and Disqualification of Directors 30
92-95 Alternate Directors 31,32
BYE-LAW SUBJECT PAGE
- ------- ------- ----
96 Directors' Fees and Additional
Remuneration and Expenses 32
97 Directors' Interests 32-34
98-100 Powers and Duties of the Board 34,35
101 Gratuities, Pensions and Insurance 35,36
102-104 Delegation of the Board's Powers 36,37
105-117 Proceedings of the Board 37-39
118 Officers 40
119-121 Executive Directors 40,41
122 Minutes 41
123-124 Secretary and Resident Representative 41,42
125 The Seal 42
126-132 Dividends and Other Payments 42-44
133 Reserves 44,45
134-135 Capitalisation of Profits 45
136 Record Dates 46
137-139 Accounting Records 46,47
140 Audit 47
141-143 Service of Notices and Other Documents 47,48
144 Destruction of Documents 48,49
145 Untraced Shareholders 49-51
146 Winding Up 51
147-151 Indemnity 51-53
152 Amalgamation 53
153 Continuation 53,54
154 Alteration of Bye-Laws 54
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BYE-LAWS
of
Viatel Holding (Bermuda) Limited
INTERPRETATION
1. (1) In these Bye-Laws unless the context otherwise requires -
"AFFILIATED PERSON" means any Director who is designated by or
affiliated with an Investor;
"A/R FACILITY" means such accounts receivable facility as may be
entered into in accordance with the Investment Agreement;
"ALTERNATE DIRECTOR" shall have the meaning set forth in Bye-Law 92;
"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;
"COMMON SHARES" means the common shares of the Company;
"COMPANIES ACTS" means every Bermuda statute from time to time in
force concerning companies insofar as the same applies to the
Company;
"COMPANY" means the company incorporated in Bermuda under the name
of Viatel Holding (Bermuda) Limited on the 4th day of January 2002;
"CONVERSION DATE" means the date that a majority in principal amount
of the Notes issued by the Company on the first date of issuance by
the Company of Notes have been converted into Common Shares;
"DIRECTOR" means such person or persons as shall be appointed to the
Board from time to time pursuant to these Bye-Laws;
"EFFECTIVE DATE" means the date these Bye-laws become effective as
set out on the certification page of these Bye-laws;
"EQUITY PLAN" means the equity compensation plan(s) of the Company
in effect as of, or after, the Effective Date that have been
approved by the Investors prior to, or after, the Effective Date in
accordance with the Investment Agreement;
"HOLDER" means the registered holder of the Special Share;
"INVESTMENT AGREEMENT" means the Investment Agreement entered into
on or prior to the Effective Date between the Company and each of
Morgan Stanley & Co. Incorporated. Ahab Capital Management Inc.,
CFSC Wayland Advisers, Inc., and Varde Partners, Inc. and certain
affiliated entities and/or other potential Investors, relating to
the issuance on the Effective Date of the Notes;
"INVESTOR" means any person who is registered in the Register of
Noteholders as the holder of any Notes;
"INVESTOR-APPOINTED DIRECTORS" means any Directors appointed
pursuant to Bye-Law 83B together with any and all Alternate
Directors thereof and such Directors who, as of the Effective Date,
are Affiliated Persons, excluding the New Independent Directors;
"MINORITY INVESTORS" means Ahab Capital Management, Inc., CFSC
Wayland Advisers, Inc., Varde Partners and certain affiliated
entities who purchase Notes;
"NEW INDEPENDENT DIRECTORS" means such Directors (up to two)
appointed by or on behalf of the Investors pursuant to Bye-Law 83B
to fill vacancies created by the expansion of the Board upon the
Effective Date in accordance with the terms of the Investment
Agreement, who have no affiliation to any of the Investors other
than having been initially appointed by or on behalf of the
Investors;
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"NOTES" means 8% Convertible Senior Secured Notes due 2014 issued by
the Company pursuant to the Investment Agreement;
"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;
"ORIGINAL INVESTORS" means the persons other than the Company that
are parties to the Investment Agreement and purchasers of Notes
thereunder, and all affiliates of such persons;
"PAID UP" means paid up or credited as paid up;
"PERMITTED LIENS" means such liens or other security interests as
may be permitted under the terms of the Investment Agreement to be
granted with respect to any asset or assets of the Company;
"POST-CONVERSION PERIOD" means the period, if any, commencing on the
Conversion Date and ending on the date on which the Original
Investors collectively own directly or beneficially less than 25% of
the then outstanding Common Shares on a fully diluted basis;
"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;
"QUALIFIED SHAREHOLDER" means a holder of Common Shares that were
issued by the Company immediately upon conversion of Notes held by
such person, including, for the avoidance of doubt direct and
indirect transferees or assignees thereof;
"REDEMPTION DATE" means the date: (i) prior to the Conversion Date
on which the Company has repaid in full all amounts outstanding
under the Notes: or (ii) on which the Company receives from the
Holder a duly authorized written consent to the repurchase by the
Company of the Special Share; or (iii) post the Conversion
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Date, on which the Original Investors directly or beneficially hold
less than 25% of the then outstanding Common Shares;
"REGISTER" means the register of Shareholders of the Company;
"REGISTER OF NOTEHOLDERS" means the register of the holders of Notes
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,
duly passed at either an Annual General Meeting, a Special General
Meeting or in writing in accordance with Bye-Law 49;
"SCHEDULE" means a schedule to these Bye-Laws;
"SEAL" means the common seal of the Company and includes any
duplicate thereof;
"SECRETARY" includes a temporary or assistant or deputy Secretary
and any person appointed by the Board to perform any of the duties
of the Secretary;
"SHAREHOLDER" means a holder of any shares or member of the Company;
"SHARES" means any shares in the share capital of the Company from
time to time, and includes Common Shares, Preferred Shares and the
Special Share;
"SPECIAL SHARE" means the share of par value US $0.01 issued with
the Notes having the rights set out in these Bye-Laws and as further
described in Schedule 2;
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"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 the Schedules 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 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)
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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.
(8) In these Bye-Laws, references to a beneficial owner or person
beneficially owning or holding shares shall be construed by
reference to the definition of beneficial owner as set forth in
Rules 13d-3 and 13d-5 under the Exchange Act, except that such
person shall be deemed to have "beneficial ownership" of all shares
that any such person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time or upon
the occurrence of an event, including all Common Shares issuable
upon conversion of the Notes (even if the Notes are not at that time
convertible). Any underwriters acting on behalf of the Company that
own Common Shares for a limited period of time in the context of an
underwritten distribution of Common Shares shall not be deemed to
beneficially own such Common Shares.
REGISTERED OFFICE
2. The Registered Office shall be at such place in Bermuda as the Board shall
from time to time appoint; provided that the Registered Office may not be
changed unless prior notice of the place of the new Registered Office has
been given to the Holder in writing at least two business days before the
effective date of such change.
SHARE RIGHTS
3.1 Subject to the Companies Acts, and-to-the rights conferred on the holders
of any other class of shares, and to Bye-Law 76A, 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.
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3.2 Without limiting the foregoing and subject to the Companies Acts and
Bye-Law 76A, 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) 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 Subject to Bye-Law 76A, 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
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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 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 Subject to Bye-Law 76A, 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. Subject to Bye-Law 76A, 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 a 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
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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 (75%) percent of the issued shares of that class or
with the sanction of a resolution passed at a separate general meeting of
the holders of such shares voting in person or by proxy. To any such
separate general meeting, all the provisions of these Bye-Laws as to
general meetings of the Company shall mutatis mutandis apply, but so that
the necessary quorum shall be two or more persons holding or representing
by proxy the holder(s) of twenty (20%)percent or more 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.
5A. For the purposes of this Bye-Law, those rights attaching to any class
of shares for the time being shall not be deemed to be altered by the
exercise of the rights, including without limitation the voting rights, of
the Special Share as set forth in these Bye-Laws.
6. For the purposes of this Bye-Law but subject to Bye-Law 5A, 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.
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SHARES
7. Subject to the provisions of these Bye-Laws, including without limitation
Bye-Law 76A, the unissued shares of the Company (whether forming part of
the original capital or any increased capital)shall be at the disposal of
the Board, which may offer, allot, grant options over or otherwise dispose
of them to such persons, at such times and for such consideration and upon
such terms and conditions as the Board may determine.
8. The Board may in connection with the issue of any shares exercise all
powers of paying commission and brokerage conferred or permitted by law.
Subject to the provisions of the Companies Acts, any such commission or
brokerage may be satisfied by the payment of cash or by the allotment of
fully or partly paid shares or partly in one way and partly in the other.
9. Except as ordered by a court of competent jurisdiction, as required by
law, or with respect to the Special Share, 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.
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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.
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. The Special Share and
all shares (and
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replacements thereof) issued upon conversion of the Notes shall be deemed
to be fully paid and, accordingly, 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 pursuant to Bye-Law 14 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.
16. The net proceeds of sale by the Company of any shares on which it has a
lien pursuant to Bye-Law 14 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;
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(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):-
(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
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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.
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. The Special Share and all shares
(and replacements thereof) issued upon conversion of the Notes shall be
issued as fully paid as set out in Bye-Law 14, and therefore are not
subject to the provisions of Bye-Laws 18-30.
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 a 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
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Board may determine, but the Board shall be at liberty to waive payment of
such interest wholly or in part.
22. Any sum which, by the terms of issue of a share, becomes payable on
allotment or at any date fixed by or in accordance with such terms of
issue, whether on account of the nominal amount of the share or by way of
premium, shall for all the purposes of these Bye-Laws be deemed to be a
call duly made, notified and payable on the date on which, by the terms of
issue, the same becomes payable and, in case of non-payment, all the
relevant provisions of these Bye-Laws as to payment of interest,
forfeiture or otherwise shall apply as if such sum had become payable by
virtue of a call duly made and notified.
23. The Board may on the issue of shares differentiate between the allottees
or holders as to the amount of calls to be paid and the times of payment.
FORFEITURE OF SHARES
24. If a Shareholder fails to pay any call or instalment of a call on the day
appointed for payment thereof, the Board may at any time thereafter during
such time as any part of such call or instalment remains unpaid serve a
notice on him requiring payment of so much of the call or instalment as is
unpaid, together with any interest which may have accrued.
25. The notice shall name a further day (not being less than 14 days from the
date of the notice) on or before which, and the place where, the payment
required by the notice is to be made and shall state that, in the event of
non-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
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resolution of the Board to that effect. Such forfeiture shall include all
dividends declared in respect of the forfeited shares and not actually
paid before the forfeiture.
27. When any share has been forfeited, notice of the forfeiture shall be
served upon the person who was before forfeiture the holder of the share;
but no forfeiture shall be in any manner invalidated by any omission or
neglect to give such notice as aforesaid.
28. A forfeited share shall be deemed to be the property of the Company and
may be sold, re-offered or otherwise disposed of either to the person who
was, before forfeiture, the holder thereof or entitled thereto or to any
other person upon such terms and in such manner as the Board shall think
fit, and at any time before a sale, re-allotment or disposition the
forfeiture may be cancelled on such terms as the Board may think fit.
29. A person whose shares have been forfeited shall thereupon cease to be a
Shareholder in respect of the forfeited shares but shall, notwithstanding
the forfeiture, remain liable to pay to the Company all 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.
16
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 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, except the Holder
in respect of the Special Share, 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; provided, however, the Special Share shall be
transferable to any party acting with respect to the Special Share solely
in the capacity of trustee for the Original Investors, Qualified
Shareholders and their respective transferees, as appropriate.
17
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 is not a
fully-paid share.
The restrictions on transfer authorised by this Bye-Law and Bye-Law 34
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 of 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.
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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.
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
19
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.
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. Subject to Bye-Law 76A, 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.
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46. Subject to the Companies Acts and to any confirmation or consent required
by law or these Bye-Laws, the Company may by Resolution from time to time
convert any preference shares into redeemable preference shares.
REDUCTION OF CAPITAL
47. Subject to the Companies Acts, its memorandum and any confirmation or
consent required by law or these Bye-Laws, the Company may from time to
time by Resolution authorise the reduction of its issued share capital or
any share premium or contributed surplus account in any manner.
48. In relation to any such reduction, the Company may by Resolution determine
the terms upon which such reduction is to be effected including, in the
case of a reduction of part only of a class of shares, those shares to be
affected.
GENERAL MEETINGS AND WRITTEN RESOLUTIONS
49. (1) The Board shall convene and the Company shall hold general meetings
as Annual General Meetings in accordance with the 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. Notwithstanding the foregoing, to the extent a
22
matter requires action by or the approval of the Holder but not the
other Shareholders, the Holder, as the holder of all of the shares
of the relevant class (i.e. the Special Share), may take such action
or provide its consent without a meeting by written notice or
written consent, as applicable.
(3) For the purposes of this Bye-Law, the date of the resolution in
writing is the date when the resolution is signed by or on behalf
of, the last Shareholder to sign and any reference in any enactment
to the date of passing of a resolution is, in relation to a
resolution in writing made in accordance with this section, a
reference to such date.
(4) A resolution in writing made in accordance with this Bye-Law is as
valid as if it had been passed by the Company in general meeting or,
if applicable, by a meeting of the relevant class of Shareholders of
the Company, as the case may be. A resolution in writing made in
accordance with this section shall constitute minutes for the
purposes of the Companies Acts and these Bye-Laws.
NOTICE OF GENERAL MEETINGS
50. An Annual General Meeting shall be called by not less than twenty-one days
notice in writing and a Special General Meeting shall be called by not
less than ten days notice in writing; provided that any Special General
Meeting called for the purpose of removing a Director shall be called by
not less than twenty-one days notice. 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
23
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 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
24
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.
(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. Subject to
Bye-Law 76A and save as otherwise provided by these Bye-Laws, at least two
Shareholders present in person or by proxy and entitled to vote
representing the holder(s) of twenty (20%) percent or more of the issued
shares shall be a quorum for all purposes; provided, however, that (i) 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 and (ii) to the extent permissible under Bermuda law and
solely with respect to meetings at which any matter on which the vote of
the Special Share would be controlling is proposed to be considered, the
presence of the Holder (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, subject to
compliance with the requirement as to minimum notice provided below, stand
adjourned to such other day and such other time and place as the chairman
of the meeting
25
may determine and at such adjourned meeting two Shareholders present in
person or by proxy and entitled to vote and representing the holder(s)
of ten (10%) percent or more 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
twenty-one 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 ten (10%) percent or more 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. To the extent permissible
under Bermuda law, solely for the purposes of determining quorum in
accordance with this Bye-Law and solely with respect to meetings and at
which any matter on which the vote of the Special Share would be
controlling is proposed to be considered, the Holder (in person or by
proxy) shall be deemed to represent a holder of ten (10%) percent or more
of the issued shares.
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. The Chairman may invite any person to
attend and speak at a general meeting of the Company where he considers
this will assist in the deliberations of the meeting; provided, however,
each Shareholder, including without limitation the Holder, shall be
entitled to attend and speak at all general meetings 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
26
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 Holder (if present)
together with the persons present and entitled to vote on a poll shall
elect by vote on a poll one of their number to be chairman; provided that
the weighted voting rights of the Special Share as provided for under
Bye-Law 76A(1) shall apply in the context of any such poll.
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.
VOTING
61. Save where a greater majority or other vote 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 Bye-Laws 76A, 83A, 83B and 83C and to Schedule 2 to these
Bye-Laws, and subject to any rights or restrictions attached to any class
of shares, including without limitation, the Special Share, 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
27
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 the Holder; 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 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.
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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 the Holder, 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.
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
29
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. The
Special Share and all shares (and replacements thereof) issued upon
conversion of the Notes shall be issued as fully paid as set out in
Bye-Law 14, and therefore are not subject to the provisions of this
Bye-Law 74.
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 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
30
of the chairman of the meeting, an amendment may be withdrawn by its
proposer before it is voted upon.
76A
(1) Notwithstanding anything to the contrary in these Bye-Laws, prior to
the Conversion Date and from and after the Conversion Date during
the Post-Conversion Period, the Company will not be able to
undertake any of the actions set out in subparagraph (3)(e) or (j)
below, without the sanction of a Resolution passed in a general
meeting at which meeting the Holder must be present in person or by
proxy in order for such meeting to be quorate. In addition, at any
such meeting, and without prejudice to the Holder's rights under
Bye-Laws 83A, 83B and 83C, the Holder shall be entitled to vote only
on such actions as are set out in sub-paragraphs (3)(e) and (j)
below and as provided by Bye-Law 58, and the Special Share shall
carry nine votes for every one vote cast by a holder of any other
shares on any vote on a poll.
(2) Notwithstanding anything to the contrary in these Bye-Laws, prior to
the Conversion Date and from and after the Conversion Date during
the Post-Conversion Period, the Company will not be able to
undertake any of the actions set out in sub-paragraphs (3)(a) to (d)
inclusive, (3)(f) to (i) inclusive and (3)(k) to (m) inclusive, and
neither the Board nor any Shareholder (other than the Holder) shall
have the ability to increase the exact number of Directors
constituting the Board or to elect or appoint any Director to
replace any Investor-Appointed Director (whether such
Investor-Appointed Director vacated office as a result of death,
disability, removal, resignation, retirement, expiration of term or
any other reason), in each case without the prior consent in
writing; of the Holder, such actions being deemed to be a variation
of the class rights of the Special Share.
(3) (a) Any offer, sale or issuance of any debt or equity securities of
the Company or any of its subsidiaries, other than the:
(i) exercise of options outstanding under the Equity Plan;
31
(ii) entry into the A/R Facility;
(iii) issuance of shares on conversion of the Notes.
(b) Any repurchase or redemption of equity securities of the Company or
any of its subsidiaries, or declaration or payment of any dividend
on the Company's or any subsidiary's equity securities (other than
dividends to the Company from direct or indirect wholly-owned
subsidiaries) or any increase in the number of shares reserved under
the Company's option plans.
(c) Incurrence by the Company or any of its subsidiaries of indebtedness
for borrowed money, or guarantees by the Company or any of its
subsidiaries of indebtedness for borrowed money, that would cause
the consolidated indebtedness of the Company and its subsidiaries to
exceed the sum of amounts that would be permitted under the A/R
Facility and the then-outstanding principal amount of the Notes; or
the repayment of the outstanding indebtedness of the Company or any
of its subsidiaries other than in accordance with the terms thereof.
(d) Transactions between the Company or any subsidiary, on the one hand,
and any affiliate of the Company or any subsidiary (other than the
Company or any other subsidiary), on the other hand, other than
compensation of directors, officers and employees that has been
approved by the Board (in the case of directors and executive
officers) or pursuant to Board approved plans (in the case of other
employees).
(e) Any merger, amalgamation, consolidation, recapitalization,
reorganization, consolidation, division or sub-division of shares,
change in denomination of share capital conversion of shares into
redeemable shares, adoption of any "shareholder rights plan",
liquidation or dissolution of the Company or any subsidiary (other
than any such transaction involving solely an internal
reorganization) or any other transactions involving the sale,
transfer or
32
other disposition of all or any substantial portion of the assets of
the Company or any of its subsidiaries.
(f) Any sale, lease, transfer or other disposition or transfer of assets
of the Company or any subsidiary, in one or a series of related
transactions, having a value in excess of US$1 million individually
or US$5 million in the aggregate in any fiscal year.
(g) The grant by the Company or any of its subsidiaries of a security
interest in any assets, including any pledge, except for Permitted
Liens and any security interest granted pursuant to, or contemplated
under, the Investment Agreement.
(h) Any acquisition by the Company or any of its subsidiaries of assets,
in one or a series of related transactions, having a value in excess
of US$2 million.
(i) The appointment, replacement or removal of any person as the
Company's chief executive officer.
(j) Any amendment of the Bye-Laws or Memorandum of Association.
(k) Any changes to the size of the Board (other than as contemplated in
Bye-Law 83A, 83B or 83C).
(l) Any capital expenditures exceeding US$2 million individually or in
excess of US$6 million in any fiscal year.
(m) Any action permitted to be taken by the Company, the Shareholders
and/or by Resolution in accordance with any of Bye-Laws 46, 47,
151(c) or 153.
This Bye-Law 76A shall continue to apply for so long as the Special Share is
outstanding.
33
PROXIES AND CORPORATE REPRESENTATIVES
77. The instalment 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 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
34
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 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
83A. The number of Directors constituting the Board shall be not less than two
(2) nor more than thirteen (13). Prior to the Conversion Date and from and
after the Conversion Date
35
during the Post-Conversion Period (x) the Holder alone may by and upon
written notice to the Company Secretary increase the exact number of
Directors constituting the Board from time to time to any number up to
thirteen (with such notice, and such increase, being effective immediately
upon receipt of such notice either at the office at which the Secretary of
the Company normally resides or at the office referred to in Bye-Law 2)
and (y) neither the Board nor Shareholders other than the Holder shall
have the authority to increase the exact number of Directors constituting
the Board. Following the Post-Conversion Period, the exact number of
Directors constituting the Board shall 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.
The Bye-Law 83A shall continue to apply for so long as the Special Share
is outstanding.
83B. Prior to the Conversion Date and from and after the Conversion Date during
the Post-Conversion Period, the Holder alone will be entitled by and upon
written notice to the Secretary of the Company, to elect or appoint any
Directors ("Investor Designees") to fill the vacancies created by an
increase in the total number of Directors on the Board made by it in
accordance with Bye-Law 83A or to elect or appoint any Director to replace
or fill any vacancy created by the death, disability, removal,
resignation, retirement, expiration of the term or other vacancy from
office of any such Investor Designee or any Investor-Appointed Director.
Any such notice, and any such election or appointment, shall become
effective immediately upon receipt thereof either at the office at which
the Secretary of the Company normally resides or at the office referred to
in Bye-Law 2.
This Bye-Law 83B shall continue to apply for so long as the Special Share
is outstanding.
83C. Prior to the Conversion Date and from and after the Conversion Date during
the Post-Conversion Period, the Holder alone will be entitled by and upon
written notice to the Secretary of the Company to remove any
Investor-Appointed Directors, with such notice and such removal to become
effective immediately upon receipt thereof either at the office at which
the Secretary of the Company normally resides or at the office referred to
36
in Bye-Law 2; provided, however, that the Holder (in its capacity as such)
shall not be entitled to remove any non-Investor-Appointed Directors.
This Bye-Law 83C shall continue to apply for so long as the Special Share
is outstanding.
83D Prior to the Conversion Date and from and after the Conversion Date during
the Post-Conversion Period, the provisions of Bye-Laws 84 and 85 shall not
apply to the Company.
This Bye-Law 83D shall continue to apply for so long as the Special Share
is outstanding.
83E Until such time as the Minority Investors collectively beneficially own
less than ten (10%) percent of the then outstanding Common Shares, each of
the Minority Investors that is a beneficial owner of shares shall have the
right to appoint one non-voting representative who shall be allowed to
attend all meetings of the Board.
84. At the second Annual General Meeting all of the Directors shall retire
from office, and at every subsequent Annual General Meeting one-half of
the Directors who are subject to retirement by rotation or, if their
number is not two or a multiple of two, the number nearest to but not more
than one-half shall retire from office; but if there is only one director
who is subject to retirement by rotation, he shall retire.
The Directors to retire by rotation shall be those who have been longest
in office since their last appointment or reappointment, but as between
persons who became or were last reappointed Directors on the same day
those to retire shall (unless they otherwise agree among themselves) be
determined by lot.
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. Except as permitted in Bye-Laws 83A and 83B, no person other than a
Director retiring by rotation shall be appointed a Director at any general
meeting unless:-
37
(a) he is recommended by the Board or recommended, appointed or elected
by the Holder; or
(b) not less than five nor more than twenty-five clear days before the
date appointed for 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.
87. Subject to Bye-Laws 83A and 83B, except as otherwise authorised by the
Companies Acts, the appointment of any person proposed as a Director at a
general meeting 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. Subject to Bye-Laws 83A, 83B and 83C, the Company shall at the Annual
General Meeting and may by resolution determine the minimum number of
Directors, which shall not be less than two (2) and the maximum number of
Directors, which shall not be more than thirteen (13), and may by
resolution determine that one or more vacancies in the
38
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 any vacancy on the Board
resulting from the resignation or removal of a Director except a vacancy
resulting from the increase in the size of the Board pursuant to Bye-Law
83A, or the death, disability, resignation, retirement, removal,
expiration of term or any other vacancy of office of an Investor-Appointed
Director which vacancy must be filled in accordance with Bye-Law 83C. 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, subject to Bye-Law 83C, in a Special General Meeting
called for that purpose remove a Director (other than an
Investor-Appointed Director for so long as Bye-Law 83C continues to
apply) 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. Except with respect to
Investor-Appointed Directors, for so long as Bye-Laws, 83B and 83C apply,
any vacancy created by the removal of a Director at a Special General
Meeting may be filled at the Meeting by the election or appointment of
another Director in his place or, in the absence of any such election or
appointment, by the Board. Prior to the Conversion Date, and after the
Conversion Date during the Post Conversion Period (for so long as Bye-Laws
83A, 83B and 83C continue to apply) vacancies created by the death,
disability, removal, resignation, retirement, expiration of the term or
other vacancy of office of any Investor-Appointed Director may not be
filled by the Board or by Shareholders other than the Holder.
RESIGNATION AND DISQUALIFICATION OF DIRECTORS
91. The office of a Director shall be vacated upon the happening of any of the
following events:
39
(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 ("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 (other than one deemed to be an
Investor-Appointed 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:-
40
(a) if his appointor ceases to be a Director; but, if a Director retires
by rotation or otherwise but is reappointed or deemed to have been
reappointed at the meeting at which he retires, any appointment of
an Alternate Director made by him which was in force immediately
prior to his retirement shall continue after his reappointment;
(b) on the happening of any event which, if he were a Director, would
cause him to vacate his office as Director;
(c) if he is removed from office pursuant to Bye-Law 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.
41
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 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.
42
(3) Subject to the provisions of the Companies Acts, a Director may
notwithstanding his office be a party to, or otherwise interested
in, any transaction or arrangement with the Company or in which the
Company is otherwise interested; and be a director or other officer
of, or employed by, or a party to any transaction or arrangement
with, or otherwise interested in, any body corporate promoted by the
Company or in which the Company is interested. The Board may also
cause the voting power conferred by the shares in any other company
held or owned by the Company to be exercised in such manner in all
respects as it thinks fit, including the exercise thereof in favour
of any resolution appointing the Directors or any of them to be
directors or officers of such other company, or voting or providing
for the payment of remuneration to the directors or officers of such
other company.
(4) So long as, where it is necessary, he declares the nature of his
interest at the first opportunity at a meeting of the Board or by
writing to the Directors as required by the Companies Acts, a
Director shall not by reason of his office be accountable to the
Company for any benefit which he derives from any office or
employment to which these Bye-Laws allow him to be appointed or 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) 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.
43
(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 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, to Bye-Law 76A, and
generally to 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. Subject to Bye-Law 76A, 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
44
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
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
45
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
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
46
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 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, fax, email or other mode of
representing or reproducing words in a legible and non-transitory form at
his last known address or any other address given by him to the Company
for this purpose 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
47
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 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
48
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.
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 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
49
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.
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
50
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.
51
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.
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.
52
DIVIDENDS AND OTHER PAYMENTS
126. Subject to Bye-Law 76A, the Board may from time to time declare dividends
or distributions out of contributed surplus to be paid to the Shareholders
according to their rights and interests including such interim dividends
as appear to the Board to be justified by the position of the Company. The
Board, in its discretion, may determine that any dividend shall be paid in
cash or shall be satisfied, subject to Bye-Law 134, in paying up in full
shares in the Company to be issued to the Shareholders credited as fully
paid or partly paid or partly in one way and partly the other. The Board
may also pay any fixed cash dividend which is payable on any shares of the
Company half yearly or on such other dates, whenever the position of the
Company, in the opinion of the Board, justifies such payment.
127. Except insofar as the rights attaching to, or the terms of issue of, any
share otherwise provide:-
(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.
53
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 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
54
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 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
55
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.
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
56
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
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
57
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 (by private air
courier where applicable). In the case of joint holders of a share,
service or delivery of any notice or other document on or to one of the
joint holders shall for all purposes be deemed as sufficient service on or
delivery to all the joint holders. Any notice or other document if sent by
post shall be deemed to have been served or delivered seven days after it
was put in the post, and in proving such service or delivery, it shall be
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
58
register, at any time after the expiration of six years from the date of
registration thereof and all dividends mandates or variations or
cancellations thereof and notifications of change of address at any time
after the expiration of two years from the date of recording thereof and
all share certificates which have been cancelled at any time after the
expiration of one year from the date of cancellation thereof and all paid
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
59
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:-
(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
60
(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 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.
61
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 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
62
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 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:
63
(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
152. Subject to Bye-Law 76A, any resolution proposed for consideration at any
general meeting to approve the amalgamation of the Company with any other
company, wherever incorporated, shall require the approval of a simple
majority of the votes cast at the general meeting.
CONTINUATION
153. Subject to the Companies Acts, the Shareholders may, by Resolution, which
shall require the affirmative vote of the simple majority of the votes
cast at a general meeting, approve the discontinuation of the Company in
Bermuda and the continuation of the Company in a jurisdiction outside
Bermuda. The Shareholders, having resolved to approve the discontinuation
of the Company, may by resolution further resolve not to proceed with any
application to discontinue the Company in Bermuda or may vary such
application as they see fit.
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ALTERATION OF BYE-LAWS
154. 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, but in any event subject to Bye-Law 76A (and to the extent any
such matters may be considered voting, as provided in Bye-Laws 83A, 83B
and 83C).
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[SCHEDULE 1
RIGHTS OF THE PREFERRED SHARES]
[TO BE COMPLETED UPON ISSUANCE OF PREFERRED SHARES]
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SCHEDULE 2
RIGHTS OF SPECIAL SHARE
1. The Special Share shall not be entitled to vote at, or be required to
count towards the quorum of any meeting of the Shareholders, or a Class
Meeting of Shareholders except as provided in the Bye-Laws, including
without limitation Bye-Laws 54, 55, 58 and 76A.
2. The Special Share is being held in trust by the Holder for the benefit of
the Investors, the Qualified Shareholders and their respective direct or
indirect transferees, as appropriate. The Special Share shall not be
transferable except to a party acting with respect to the Special Share
solely in the capacity of trustee for the Investors, Qualified
Shareholders and their respective transferees, as appropriate.
3. The Special Share shall not be entitled to participate in dividends and,
on the winding up of the Company, the Holder shall only be entitled to the
return of the par value that has been paid in respect of the Special
Share.
4. The Holder shall be entitled:
(a) prior to the Conversion Date and from and after the Conversion Date
during the Post-Conversion Period, to vote on the matters provided
for in Bye-Laws 76A(3)(e) and (j) (and to the extent any such
matters may be considered voting, as provided in Bye-Laws 83A, 83B
83C); and
(b) prior to the Conversion Date and from and after the Conversion Date
during the Post-Conversion Period, to vote on any of the matters set
out in Bye-Laws 76A(3)(a) to (d) inclusive, 76A(3)(f) to (i)
inclusive and 76A(3)(k) to (m) inclusive, all of which require its
prior consent in writing pursuant to Bye-Law 76A(2); and
(c) before the Conversion Date and from and after the Conversion Date
during the Post-Conversion Period to increase the exact number of
Directors constituting the Board
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from time to time to any number up to thirteen and to appoint,
remove and replace Directors, in the manner provided for in Bye-Laws
83A, 83B and 83C.
5. The Special Share may be repurchased at par, at the option of the Company,
upon 15 days notice in writing to the Holder, at any time on and from a
Redemption Date.
6. Subject to the Bermuda Companies Acts, any vote of the Special Share may
be expressed in the form of a written consent.
7. The Special Share, and the Holder, shall also have all such other rights,
privileges and remedies as are specifically provided therefore in the
Bye-Laws.
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