Exhibit 3.2
BYE-L A W S
of
Max Re Capital Ltd.
TABLE OF CONTENTS
Page No.
INTERPRETATION.................................................................1
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1. Interpretation; Shareholders' Agreement..................................1
BOARD OF DIRECTORS.............................................................5
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2. Board of Directors.......................................................5
3. Management of the Company................................................5
4. Power to appoint managing director or chief executive officer............5
5. Power to appoint manager.................................................5
6. Power to authorise specific actions......................................6
7. Power to appoint attorney................................................6
8. Power to delegate to a committee.........................................6
9. Power to appoint and dismiss employees...................................7
10. Power to borrow and charge property......................................7
11. Exercise of power to purchase shares of or discontinue the Company.......7
12. Election of Directors....................................................9
13. Defects in appointment of Directors.....................................11
14. Alternate Directors.....................................................11
15. Removal of Directors....................................................11
16. Vacancies on the Board..................................................12
17. Notice of meetings of the Board.........................................12
18. Quorum at meetings of the Board.........................................13
19. Meetings of the Board...................................................13
20. Unanimous written resolutions...........................................13
21. Contracts and disclosure of Directors' interests........................13
22. Remuneration of Directors...............................................14
23. Other interests of Directors............................................14
OFFICERS......................................................................14
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24. Officers of the Company.................................................14
25. Appointment of Officers.................................................15
26. Remuneration of Officers................................................15
27. Duties of Officers......................................................15
28. Chairman of meetings....................................................15
29. Register of Directors and Officers......................................15
MINUTES.......................................................................15
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30. Obligations of Board to keep minutes....................................15
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Page No.
INDEMNITY.....................................................................16
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31. Indemnification of Directors and Officers of the Company................16
32. Waiver of claim by Member...............................................17
MEETINGS......................................................................17
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33. Notice of annual general meeting........................................17
34. Notice of special general meeting.......................................18
35. Accidental omission of notice of general meeting;
Business to be conducted................................................18
36. Meeting called on requisition of Members................................18
37. Short notice............................................................18
38. Postponement of meetings................................................19
39. Quorum for general meeting..............................................19
40. Adjournment of meetings.................................................19
41. Attendance at meetings..................................................19
42. Written resolutions.....................................................20
43. Attendance of Directors.................................................20
44. Voting at meetings......................................................20
45. Voting on show of hands.................................................21
46. Decision of chairman....................................................21
47. Demand for a poll.......................................................21
48. Seniority of joint holders voting.......................................22
49. Instrument of proxy.....................................................22
50. Representation of corporations at meetings..............................24
SHARE CAPITAL AND SHARES......................................................24
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51. Rights of shares........................................................24
52. Limitation on voting rights of Controlled Shares........................26
53. Power to issue shares...................................................27
54. Variation of rights and alteration of share capital.....................29
55. Registered holder of shares.............................................29
56. Death of a joint holder.................................................29
57. Share certificates......................................................30
58. Calls on shares.........................................................30
59. Forfeiture of shares....................................................30
REGISTER OF MEMBERS...........................................................30
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60. Contents of Register of Members.........................................30
61. Inspection of Register of Members.......................................31
62. Determination of record dates...........................................31
TRANSFER OF SHARES............................................................31
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Page No.
63. Instrument of transfer..................................................31
64. Restriction on transfer.................................................31
65. Transfers by joint holders..............................................33
66. Lien on shares..........................................................33
TRANSMISSION OF SHARES........................................................33
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67. Representative of deceased Member.......................................33
68. Registration on death or bankruptcy.....................................34
DIVIDENDS AND OTHER DISTRIBUTIONS.............................................34
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69. Declaration of dividends by the Board...................................34
70. Other distributions.....................................................34
71. Reserve fund............................................................34
72. Deduction of amounts due to the Company.................................34
73. Unclaimed dividends.....................................................35
74. Interest on dividend....................................................35
CAPITALIZATION................................................................35
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75. Issue of bonus shares...................................................35
ACCOUNTS AND FINANCIAL STATEMENTS.............................................35
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76. Records of account......................................................35
77. Financial year end......................................................36
78. Financial statements....................................................36
AUDIT.........................................................................36
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79. Appointment of Auditor..................................................36
80. Remuneration of Auditor.................................................36
81. Vacation of office of Auditor...........................................36
82. Access to books of the Company..........................................36
83. Report of the Auditor...................................................36
NOTICES.......................................................................37
84. Notices to Members of the Company.......................................37
85. Notices to joint Members................................................37
86. Service and delivery of notice..........................................37
SEAL OF THE COMPANY...........................................................37
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87. The seal................................................................37
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Page No.
88. Manner in which seal is to be affixed...................................37
BENEFITS, PENSIONS AND INSURANCE..............................................38
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89. Benefits................................................................38
90. Insurance...............................................................38
91. Limitation on Accountability............................................38
UNTRACED MEMBERS..............................................................38
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92. Sale of Shares..........................................................38
93. Instrument of Transfer..................................................39
94. Proceeds of Sale........................................................39
WINDING UP....................................................................40
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95. Determination to liquidate..............................................40
96. Winding up/distribution by liquidator...................................40
ALTERATION OF BYE-LAWS........................................................40
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97. Alteration of Bye-laws..................................................40
Schedule - Form A (Bye-law 49)................................................31
Schedule - Form B (Bye-law 59)................................................32
Schedule - Form C (Bye-law 63)................................................33
Schedule - Form D (Bye-law 68)................................................34
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INTERPRETATION
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1. Interpretation; Shareholders' Agreement
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(1) In these Bye-laws the following words and expressions shall, where
not inconsistent with the context, have the following meanings respectively:-
(a) "Act" means the Companies Xxx 0000 as amended and replaced
from time to time;
(b) "Alternate Director" means an alternate Director appointed
in accordance with these Bye-laws;
(c) "Auditor" includes any individual or partnership;
(d) "Board" means the Board of Directors appointed or elected
pursuant to these Bye-laws and acting by resolution in accordance with the Act
and these Bye-laws or the Directors present at a meeting of Directors at which
there is a quorum;
(e) "Business Day" means any day, other than a Saturday, a
Sunday or any day on which banks in Xxxxxxxx, Bermuda or The City of New York,
United States, are authorised or obligated by law or executive or other order to
close;
(f) "Cause" means shall mean (i) habitual drug or alcohol use
which impairs the ability of the Director to perform his/her duties hereunder;
(ii) Director's conviction by a court of competent jurisdiction, or a pleading
of "no contest" or guilty to a felony or the equivalent if outside the United
States; (iii) Director's engaging in fraud, embezzlement or any other illegal
conduct with respect to the Company which acts are materially harmful to, either
financially, or to the business reputation of, the Company; (iv) Director's
wilful failure or refusal to perform his duties as a director, or (vi) the
Director otherwise breaches any material written Company policy regarding the
conduct of its directors and such breach results in material economic or
reputational harm to the Company.
(g) "Code" means the United States Internal Revenue Code of
1986, as amended from time to time, or any federal statute from time to time in
effect that has replaced such statute, and any reference in these Bye-laws to a
provision of the Code or a rule or regulation promulgated thereunder means such
provision, rule or regulation as amended from time to time or any provision of a
federal law, or any federal rule or regulation, from time to time in effect that
has replaced such provision, rule or regulation;
(h) "Common Shares" means the common shares of the Company,
initially having a par value of US$1.00 per share, and includes a fraction of a
Common Share;
(i) "Company" means the company for which these Bye-laws are
approved and confirmed;
(j) "Director" means a director of the Company and shall include an
Alternate Director;
(k) "Dividend" includes a bonus or capitalisation issue of shares;
(l) "Exchange Act" means the United States Securities Exchange Act of
1934, as amended from time to time, or any federal statute from time to time in
effect that has replaced such statute, and any reference in these Bye-laws to a
provision of the Exchange Act or a rule or regulation promulgated thereunder
means such provision, rule or regulation as amended from time to time or any
provision of a federal law, or any federal rule or regulation, from time to time
in effect that has replaced such provision, rule or regulation;
(m) "Fair Market Value" means, with respect to a repurchase of any
shares of the Company in accordance with these Bye-laws, (i) if such shares are
listed on a securities exchange (or quoted in a securities quotation system),
the average closing sale price of such shares on such exchange (or in such
quotation system), or, if such shares are listed on (or quoted in) more than one
exchange (or quotation system), the average closing sale price of the shares on
the principal securities exchange (or quotation system) on which such shares are
then traded, or, if such shares are not then listed on a securities exchange (or
quotation system) but are traded in the over-the-counter market, the average of
the latest bid and asked quotations for such shares in such market, in each case
for the last five trading days immediately preceding the day on which notice of
the repurchase of such shares is sent pursuant to these Bye-laws or (ii) if no
such closing sales prices or quotations are available because such shares are
not publicly traded or otherwise, the fair value of such shares as determined by
one independent nationally recognised investment banking firm chosen by the
Board and reasonably satisfactory to the Member whose shares are to be so
repurchased by the Company, provided that the calculation of the Fair Market
Value of the shares made by such appointed investment banking firm (i) shall not
include any discount relating to the absence of a public trading market for, or
any transfer restrictions on, such shares, and (ii) such calculation shall be
final and the fees and expenses stemming from such calculation shall be borne by
the Company or its assignee, as the case may be;
(n) "general meeting," "general meeting of the Company," "Special
general meeting" and "special general meeting of the Company" each means a
meeting of the Members of the Company having the right to attend and vote
thereat;
(o) "Max Re" means Max Re Ltd., a Subsidiary of the Company.
(p) "Max Re Non-Voting Common Shares" means the Non-Voting Common
Shares, initially having a par value of US$1.00 per share, of Max Re.
(q) "Member" means the Person registered in the Register of Members as
the holder of shares in the Company and, when two or more Persons are so
registered as joint holders of shares, means the Person whose name stands first
in the Register of Members as one of such joint holders or all of such Persons
as the context so requires;
(r) "Notice" means written notice as further defined in these Bye-laws
unless otherwise specifically stated;
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(s) "Officer" means any Person appointed by the Board to hold an office
in the Company;
(t) "Person" means any individual, company, corporation, firm,
partnership, trust or any other business, enterprise, entity or person, whether
or not recognised as constituting a separate legal entity;
(u) "Preferred Shares" means the preferred shares of the Company and
includes a fraction of a Preferred Share;
(v) "Register of Directors and Officers" means the Register of Directors
and Officers referred to in these Bye-laws;
(w) "Register of Members" means the Register of Members referred to in
these Bye-laws;
(x) "Resident Representative" means any Person appointed to act as
resident representative and includes any deputy or assistant resident
representative;
(y) "Secretary" means the person appointed to perform any or all the
duties of secretary of the Company and includes any deputy or assistant
secretary;
(z) "Securities Act" means the United States Securities Act of 1933, as
amended from time to time, or any federal statute from time to time in effect
which has replaced such statute, and any reference in these Bye-laws to a
provision of the Securities Act or a rule or regulation promulgated thereunder
means such provision, rule or regulation as amended from time to time or any
provision of a federal law, or any federal rule or regulation, from time to time
in effect that has replaced such provision, rule or regulation;
(aa) "share" means any share or any class or series of shares in the
share capital of the Company, whether issued and outstanding or not, and
includes a fraction of a share;
(bb) "Subsidiary", with respect to any Person, means a company, more
than fifty percent (50%) (or, in the case of a wholly owned subsidiary, one
hundred percent (100%)) of the outstanding Voting Shares of which are owned,
directly or indirectly, by such Person or by one or more other Subsidiaries of
such Person, or any such Person and one or more other Subsidiaries;
(cc) "Unadjusted Basis", when used with respect to the aggregate voting
rights held by any Member, refers to the determination of such rights without
reference to the provisions relating to the adjustment of voting rights
contained in Bye-law 52;
(dd) "United States" and "U.S." each means the United States of America
and any territory and political subdivision thereof;
(ee) "U.S. Person" means a citizen or resident of the United States; a
corporation, limited liability company, partnership, or other entity or
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enterprise created or organised in the United States or under the laws of the
United States or of any political subdivision thereof; an estate whose income is
includible in gross income for United States Federal income tax purposes
regardless of its source; or any trust if (i) a court within the United States
is able to exercise primary supervision over the administration of the trust and
(ii) one or more U.S. Persons have the authority to control all substantial
decisions of the trust;
(ff) "Voting Share" of any Person means any share in such Person
conferring voting rights on the holder thereof (other than such voting rights as
would exist solely in relation to a proposal to alter or vary the rights
attaching to such shares solely upon the future occurrence of a contingency or
voting rights attaching solely by virtue of the provisions of the Act).
(2) In these Bye-laws, where not inconsistent with the context:-
(a) words denoting the plural number include the singular number
and vice versa;
(b) words denoting the masculine gender include the feminine
gender;
(c) words importing persons include companies, associations or
bodies of persons whether corporate or not;
(d) the word:
(i) "may" shall be construed as permissive;
(ii) "shall" shall be construed as imperative; and
(e) unless otherwise provided herein words or expressions
defined in the Act shall bear the same meaning in these Bye-laws.
(3) Expressions referring to writing or written shall, unless the
contrary intention appears, include facsimile, printing, lithography,
photography, electronic mail and other modes of representing words in a visible
form.
(4) Headings used in these Bye-laws are for convenience only and are not
to be used or relied upon in the construction hereof.
(5) In these Bye-laws, (i) powers of delegation shall not be
restrictively construed but the widest interpretation shall be given thereto,
(ii) 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 individuals
appointed by the Board, 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 in accordance with these
Bye-laws, (iii) no power of delegation shall be limited by the existence of any
other power of delegation and (iv) 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 Person who is for the time being authorised to
exercise it under Bye-laws or under another delegation of the powers.
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(6) These Bye-laws are to be read subject to the terms of any
Shareholders Agreement made and amended from time to time among the Company and
some or all of the Members, the provisions of which, among other matters, may
regulate the interests and rights of the Members in the Company, especially with
respect to the ability of a Member to transfer shares. To the extent there is
any conflict between the provisions of such Shareholders Agreement and these
Bye-laws, the provisions of such Shareholders Agreement shall prevail for the
duration of such Shareholders Agreement. Such Shareholders Agreement, as it may
stand from time to time, may be exhibited to these Bye-laws and a copy of which
may be certified (for whatever purpose and from time to time) by the Secretary
or other Officer of the Company under the seal of the Company. It is anticipated
that, when and while such Shareholders Agreements exists, any future Member
shall be a party to the Shareholders Agreement and if not a party, the rights
and restrictions attaching to the shares held by such Member, and the regulation
of the same, shall be subject to such Shareholders Agreement in any event. Any
amendment to the Shareholders Agreement shall not be an amendment to these
Bye-laws and shall not require the approval of the Company in general meeting.
BOARD OF DIRECTORS
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2. Board of Directors
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The business of the Company shall be managed and conducted by the
Board.
3. Management of the Company
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(1) In managing the business of the Company, the Board may exercise all
such powers of the Company as are not, by statute or by these Bye-laws, required
to be exercised by the Company in general meeting and the business and affairs
of the Company shall be so controlled by the Board. The Board also may present
any petition and make any application in connection with the winding up or
liquidation of the Company.
(2) No regulation or alteration to these Bye-laws made by the Company in
general meeting shall invalidate any prior act of the Board which would have
been valid if that regulation or alteration had not been made.
(3) The Board may procure that the Company pays all expenses incurred in
promoting and incorporating the Company.
4. Power to appoint managing director or chief executive officer
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The Board may from time to time appoint one or more Directors to the
office of managing director or chief executive officer of the Company who shall,
subject to the control of the Board, supervise and administer all of the general
business and affairs of the Company.
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5. Power to appoint manager
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The Board may appoint a Person or a body of Persons to act as manager
of the Company's day to day business and may entrust to and confer upon such
manager such powers and duties as it deems appropriate for the transaction or
conduct of such business.
6. Power to authorise specific actions
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The Board may from time to time and at any time authorise any company,
firm, person or body of persons to act on behalf of the Company for any specific
purpose and in connection therewith to execute any agreement, document or
instrument in the name and on behalf of the Company.
7. Power to appoint attorney
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The Board may from time to time and at any time by power of attorney
appoint any Person or body of Persons, whether nominated directly or indirectly
by the Board, to be an attorney of the Company for such purposes and with such
powers, authorities and discretions (not exceeding those vested in or
exercisable by the Board) and for such period (or for unspecified length of
time) and subject to such conditions as it may think fit and any such power of
attorney may contain such provisions for the protection and convenience of
Persons dealing with any such attorney as the Board may think fit and may also
authorise any such attorney to sub-delegate all or any of the powers,
authorities and discretions so vested in the attorney. Such attorney may, if so
authorised under the seal of the Company, execute any deed or instrument under
such attorney's personal seal with the same effect as the affixation of the seal
of the Company.
8. Power to delegate to a committee
--------------------------------
The Board may delegate any of its powers to a committee appointed by
the Board (and the Board may appoint alternative committee members or authorise
the committee members to appoint their own alternates), which may consist partly
or entirely of non-Directors. Without limiting the foregoing, such committees
may include:
(a) an Executive Committee, which shall have all of the powers of the
Board between meetings of the Board;
(b) a Finance Committee, which shall, among other things, establish,
review and monitor the investment policies of the Company and the Company's
Subsidiaries or other companies associated with the Company, review investment
decisions and review and monitor any provider of investment services;
(c) an Audit Committee, which shall, among other things, review the
internal administrative and accounting controls of the Company and the Company's
Subsidiaries or other companies associated with the Company and recommend to the
Board the appointment of independent auditors;
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(d) a Compensation Committee, which shall, among other things, establish
and review the compensation policies and procedures of the Company and the
Company's Subsidiaries or other companies associated with the Company and make
recommendations to the Board with respect to compensation of Officers;
(e) a Nominating Committee, which shall, among other things, propose to
the Members or to continuing Directors, before any election of Directors by
Members or the filling of any vacancy by the Board, a slate of director
candidates equal in number to the vacancies to be filled (for purposes of
paragraph (e) of this Bye-law 8 only, "Director" shall not include Alternate
Director);
(f) an Investment Committee, which shall, among other things, review the
opening of bank accounts for the Company, agree investment funding agreements
and enter into any loan or borrowing arrangements with certain financial
institutions as they see fit; and
(g) an Underwriting Committee, which shall, among other things,
establish, review and monitor the underwriting policies of the Company's
Subsidiaries or other companies associated with the Company, review underwriting
decisions, monitor any appointed underwriting services provider, advise the
Board with respect to actuarial services, review actuarial decisions, monitor
any provider of actuarial services and otherwise monitor the risks insured or
reinsured by the Company's Subsidiaries or other companies associated with the
Company.
All Board committees shall conform to such directions as the Board
shall impose on them; provided, that each member shall have one vote, and each
committee shall have the right as it deems appropriate to retain outside
advisors and experts. Each committee may adopt rules for the conduct of its
affairs, including rules governing the adoption of resolutions by unanimous
written consent, and the place, time, and notice of meetings, as shall be
advisable and as shall not be inconsistent with these Bye-laws regarding Board
meetings or with any applicable resolution adopted by the Board. Notwithstanding
the foregoing, no committee may hold a meeting within the United States. Each
committee shall cause minutes to be made of all meetings of such committee and
of the attendance thereat and shall cause such minutes and copies of resolutions
adopted by unanimous consent to be promptly inscribed or incorporated by the
Secretary in the minute book.
9. Power to appoint and dismiss employees
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The Board may appoint, suspend or remove any manager, secretary, clerk,
agent or employee of the Company and may fix their remuneration and determine
their duties.
10. Power to borrow and charge property
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The Board may exercise all the powers of the Company to borrow money
and to mortgage or charge its undertaking, property and uncalled capital, or any
part thereof, and may issue debentures, debenture stock and other securities
whether outright or as security for any debt, liability or obligation of the
Company or any third party.
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11. Exercise of power to purchase shares of or discontinue the Company
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(1) Purchase of Common Shares
-------------------------
(a) The Company shall have the power to purchase its shares. The
Board may exercise all the powers of the Company to purchase all or any part of
its own shares pursuant to Section 42A of the Act. Subject to Section 42A of the
Act, if the Board in its absolute and unfettered discretion, on behalf of the
Company, determines that ownership of shares of the Company by any Person may
result in adverse tax, regulatory or legal consequences to the Company, any of
its Subsidiaries or any of the Members, the Company will have the option, but
not the obligation, to purchase all or part of the shares of the Company held by
such Person (to the extent the Board, in the reasonable exercise of its
discretion, determines it is necessary to avoid or cure such adverse
consequences) for immediately available funds in an amount equal to the Fair
Market Value of such shares on the date the Company sends the Repurchase Notice
referred to below (the "Repurchase Price"); provided, that the Board will use
reasonable efforts to exercise this option equally among similarly situated
Persons (to the extent possible under the circumstances). In that event, the
Company will also be entitled to assign its purchase right to a third party or
parties including one or more of the other Persons, with the consent of such
assignee. Each Person shall be bound by the determination by the Company to
purchase or assign its right to purchase such Person's shares and, if so
required by the Company, shall sell the number of shares of the Company that the
Company requires it to sell.
(b) In the event that the Company or its assignee(s) determines
to purchase any such shares, the Company shall provide each Person concerned
with written notice of such determination (a "Repurchase Notice") at least seven
(7) calendar days prior to such purchase or such shorter period as each such
Person may authorise, specifying the date on which any such shares are to be
purchased and the Repurchase Price. The Company may revoke the Repurchase Notice
at any time before it (or its assignee(s)) pays for the shares. Neither the
Company nor its assignee(s) shall be obliged to give general notice to the
Members of any intention to purchase or the conclusion of any purchase of shares
of the Company. Payment of the Repurchase Price by the Company or its
assignee(s) shall be by wire transfer or certified check and made at a closing
to be held no less than seven (7) calendar days, unless such Person agrees to a
shorter period, after receipt of the Repurchase Notice by the Member.
(2) Mandatory purchase and exchange of Max Re Non-Voting Common
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Shares
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(a) Subject to compliance with this Bye-law 11(2), the Bye-laws
of Max Re provide that Max Re Non-Voting Common Shares may be exchangeable into
Common Shares and accordingly any such issuance of Common Shares in exchange for
Max Re Non-Voting Common Shares is authorised and the Board from time to time,
in its absolute authority and without any approval or consent from or
notification to the holders of Common Shares or other Members, may agree with
any Person on the terms and conditions (including, without limitation, providing
for adjustments in the case of alterations in share capital and class of shares)
on which Common Shares may be exchanged for Max Re Non-Voting Common Shares and
pursuant to such terms and conditions Common Shares shall be issued for Max Re
Non-Voting Common Shares to be exchanged and such terms and conditions may
provide that no cash amount or other consideration need be payable for the said
issuance in addition to the receipt of the Max Re Non-Voting Common Shares;
provided that the Person that beneficially owns such Max Re Non-Voting Common
Shares would not, after such exchange, own more than 9.9% of the total Common
8
Shares issued and outstanding (after application of the U.S. tax attribution and
constructive ownership rules under the Code), unless such restriction is waived
by the unanimous consent of all of the Directors then in office. Notwithstanding
the foregoing, to the extent that after an exchange a Person would own more than
9.9% of the total Common Shares issued and outstanding, the number of Common
Shares that will be entitled to vote will be limited to that number that would
equal no more than 9.9% of the total Common Shares issued and outstanding,
unless such voting restriction is waived by the unanimous consent of all of the
Directors then in office.
(b) On an exchange of Common Shares for Max Re Non-Voting Common Shares
under paragraph (a) of this Bye-law 11(2), any excess value of the Max Re
Non-Voting Common Shares being acquired over the nominal or par value of the
Common Shares being issued shall be credited to the contributed surplus of the
Company as permitted under section 40(1) of the Act, unless otherwise determined
by the Board.
(c) The Company will not close its books against the exchange of Max Re
Non-Voting Common Shares or Common Shares issued or issuable upon exchange of
Max Re Non-Voting Common Shares in any manner which would interfere with the
timely exchange of Max Re Non-Voting Common Shares.
(3) Power to Discontinue the Company
--------------------------------
The Board may exercise all the powers of the Company to discontinue the
Company to a named country or jurisdiction outside Bermuda pursuant to Section
132G of the Act.
(4) Restrictions on repurchases and exchanges
-----------------------------------------
If the Company redeems, purchases or exchanges shares pursuant to this
Bye-law 11, it shall do so only in a manner that the Board believes would not
result, upon consummation of such redemption or purchase, in the number of total
Common Shares of any Person, as a percentage of the shares of the Company,
increasing to more than 9.9% on an Unadjusted Basis. Notwithstanding the
foregoing, the Board, in its sole discretion and by unanimous consent of all of
the Directors then in office, may waive the applicability of subparagraph (4) of
this Bye-law.
12. Election of Directors
---------------------
(1) The Board shall consist of at least six (6) and no more than
twenty-one (21) Directors, the exact number to be determined from time to time
by resolution adopted by the affirmative vote of at least sixty-six and
two-thirds percent (66-2/3%) of the Directors then in office; provided, however,
that if no such resolution shall be in effect the number of Directors shall be
eleven (11) Directors. Any increase in the size of the Board pursuant to this
Bye-law 12(1) shall be deemed to be a vacancy and may be filled in accordance
with Bye-law 16 hereof. Directors shall be elected, except in the case of a
vacancy (as provided for in Bye-law 15 or 16, as the case may be), by the
Members in the manner set forth in paragraph (2) of this Bye-law 12 at an annual
general meeting or any special general meeting called for the purpose and who
shall hold office for the term set forth in paragraph (3) of this Bye-law 12.
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(2) Subject to the terms of any class or series of shares issued by the
Company, no Person other than a Director retiring at the meeting shall, unless
recommended by the Board or a committee thereof for election, be eligible for
election as a Director at any general meeting unless not less than 120 days
before the date appointed for the meeting there shall have been lodged at the
Company notice in writing signed by Members holding at least 70% of the issued
and outstanding shares entitled to vote at the meeting for which such notice is
given of their intention to propose such person for election and also notice in
writing signed by the person to be proposed of his or her willingness to be
elected. Each such notice shall also include (i) the names and addresses, as
they appear in the Register of Members, of the Members who intend to make the
nomination and of the person or persons to be nominated, (ii) a representation
that the Members are holders of record of shares entitled to vote at such
meeting and intend to appear in person or by proxy at the meeting to nominate
the person or persons specified in the notice, (iii) the class and number of
shares which are beneficially owned by the Members, (iv) a description of all
arrangements or understandings between the Members and each nominee and any
other person or persons nominations are to be made by the Members and (v) such
other information regarding each nominee proposed by such Members as would be
required to be included in a proxy statement filed pursuant to Regulation 14A
under the Exchange Act, whether or not the Company is then subject to such
regulation.
(3) At the first annual general meeting following the adoption of these
Bye-laws, the Board shall be divided into three classes of Directors, namely
Class 1, Class 2 and Class 3, each class to have approximately the same number
of Directors as determined by the Board or any Nominating Committee of the
Board. The initial term of the Class 1 Directors shall expire at the second
annual general meeting following the adoption of these Bye-laws. The initial
term of the Class 2 Directors shall expire at the third annual general meeting
following the adoption of these Bye-laws. The initial term of the Class 3
Directors shall expire at the fourth annual general meeting following adoption
of these Bye-laws. Following their initial terms, all classes of Directors shall
be elected to three-year terms. Each Director shall serve until the expiration
of such Director's term or until such Director's successor shall have been duly
elected or appointed or until such Director's office is otherwise vacated.
(4) Subject to Bye-Law 52 and at the discretion and upon unanimous
consent of all of the Directors then in office, no Member of the Company shall
be permitted to select Directors of the Company if such selection would cause
such Member to own or be deemed to own more than 9.9% of the total combined
voting rights attaching to the Common Shares of the Company (after application
of U.S. tax attribution and constructive ownership rules under the Code).
(5) Notwithstanding the foregoing, whenever the holders of any one or
more classes or series of Preferred Shares issued by the Company shall have the
right, voting separately by class or series, to elect Directors at an annual or
special general meeting, the election, term of office, filling of vacancies and
other features of such directorships shall be governed by the terms of the Board
resolution creating such classes or series of Preferred Shares, and such
Directors so elected shall not be divided into classes pursuant to this Bye-law
12 unless expressly provided by such terms.
(6) For the purposes of this Bye-law 12 only, "Director" shall not
include an Alternate Director.
10
13. Defects in appointment of Directors
-----------------------------------
All acts done bona fide by any meeting of the Board or by a committee
of the Board or by any person acting as a Director shall, notwithstanding that
it be afterwards discovered that there was some defect in the appointment of any
Director or person acting as aforesaid, or that they or any of them were
disqualified, be as valid as if every such person had been duly appointed and
was qualified to be a Director.
14. Alternate Directors
-------------------
(1) At any general meeting of the Company Members holding at least 70%
of the issued and outstanding shares entitled to vote at such meeting may elect
a person or persons to act as a Director in the alternative to any one or more
of the Directors of the Company or may authorise the Board to appoint such
Alternate Directors. Unless the Members otherwise resolve, any Director may
appoint a person or persons to act as a Director in the alternative to himself
or herself by notice in writing deposited with the Secretary. Any person so
elected or appointed shall have all the rights and powers of the Director or
Directors for whom such person is appointed in the alternative provided that
such person shall not be counted more than once in determining whether or not a
quorum is present.
(2) An Alternate Director shall be entitled to receive notice of all
meetings of the Board and to attend and vote at any such meeting at which a
Director for whom such Alternate Director was appointed in the alternative is
not personally present and generally to perform at such meeting all the
functions of such Director for whom such Alternate Director was appointed.
(3) An Alternate Director shall cease to be such if the Director for
whom such Alternate Director was appointed ceases for any reason to be a
Director but may be re-appointed by the Board as alternate to the person
appointed to fill the vacancy in accordance with these Bye-laws.
15. Removal of Directors
--------------------
(1) Subject to any provision to the contrary in these Bye-laws, Members
holding a majority of the issued and outstanding shares entitled to vote at a
general meeting or special meeting or conferring the right to vote on a
resolution to remove a or such Director may, at any special general meeting
convened and held in accordance with these Bye-laws, remove a Director provided
that the notice of any such meeting convened for the purpose of removing a
Director shall contain a statement of the intention so to do and be served on
such Director not less than 14 days before the meeting and at such meeting such
Director shall be entitled to be heard on the motion for such Director's
removal. A Director may only be removed pursuant to this Bye-law 15 for Cause.
(2) A vacancy on the Board created by the removal of a Director under
the provisions of subparagraph (1) of this Bye-law may be filled by the Members
holding at least 70% of the issued and outstanding shares entitled to vote at a
general meeting or special meeting or conferring the right to vote on such
resolution and, in the absence of such election or appointment, the Board may
fill the vacancy in accordance with Bye-law 16. A Director so appointed
11
shall hold office for the balance of the term of such vacant Board position, or
until such Director's successor is elected or appointed or such Director's
office is otherwise vacated.
16. Vacancies on the Board
----------------------
(1) The Board shall have the power from time to time and at any time to
appoint any person as a Director to fill a vacancy on the Board occurring as the
result of an increase in the size of the Board pursuant to Bye-law 12(1), the
death, disability, disqualification, resignation or removal of any Director or
if such Director's office is otherwise vacated and to appoint an Alternate
Director to any Director so appointed. A Director so appointed shall hold office
for the balance of the term of such vacant Board position, or until such
Director's successor is elected or appointed or such Director's office is
otherwise vacated.
(2) The Board may act notwithstanding any vacancy in its number but, if
and so long as its number is reduced below the number fixed by these Bye-laws as
the quorum necessary for the transaction of business at meetings of the Board,
the continuing Directors or Director may, notwithstanding that the number of
Directors is below the number fixed by or in accordance with these Bye-laws as
the quorum or that there is only one continuing Director, act for the purpose of
(i) filling vacancies on the Board, (ii) summoning a general meeting of the
Company or circulating a proposed written resolution of the Members or (iii)
preserving the assets of the Company.
(3) The office of Director shall be deemed to be vacated if the
Director:-
(a) is removed from office pursuant to these Bye-laws or is
prohibited from being a Director by law;
(b) is or becomes bankrupt or makes any arrangement or
composition with his creditors generally;
(c) is or becomes of unsound mind or dies;
(d) resigns his or her office by notice in writing to the
Company.
17. Notice of meetings of the Board
-------------------------------
(1) A Director may, and the Secretary on the requisition of a Director
shall, at any time summon a meeting of the Board. Notice of a meeting of the
Board must be provided at least five (5) days in advance of such meeting, and
must state the date, time, place (which shall not be in the United States) and
the general nature of the business to be considered at the meeting unless the
Directors unanimously agree to waive notice of such meeting. Notwithstanding the
foregoing, shorter notice shall be valid if it is reasonable under the
circumstances.
(2) Notice of a meeting of the Board shall be deemed to be duly given to
a Director if it is given to such Director verbally in person or by telephone or
otherwise communicated or sent to such Director by post, cable, telex,
telecopier, electronic mail, facsimile or other mode of representing words in a
visible form at such Director's last known address or any other address given by
such Director to the Company for this purpose.
12
18. Quorum at meetings of the Board
-------------------------------
The quorum necessary for the transaction of business at a meeting of
the Board shall be a majority of the Directors then in office, present in person
or represented by an Alternate Director or another Director appointed in
accordance with the provisions of Section 91A of the Act.
19. Meetings of the Board
---------------------
(1) The Board may meet for the transaction of business, adjourn and
otherwise regulate its meetings as it sees fit.
(2) Directors may participate in any meeting of the Board 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; provided, however, that no
Director may participate in any meeting of the Board while physically present in
the United States.
(3) A resolution put to the vote at a meeting of the Board shall be
carried by the affirmative votes of a majority of the votes cast and in the case
of an equality of votes the resolution shall fail.
20. Unanimous written resolutions
-----------------------------
A resolution in writing signed by all the Directors which may be in
counterparts, shall be as valid as if it had been passed at a meeting of the
Board duly called and constituted, such resolution to be effective on the date
on which the last Director signs the resolution, provided that no such
resolution shall be valid unless the last signature of a Director is affixed
outside the United States (but, notwithstanding Bye-law 19(2) hereof, a Director
who is not the last Director to sign may sign a resolution in writing even
though he or she is in the United States). Such resolution shall be deemed to be
adopted as an act of the Board, at the place where, and at the time when, the
last signature of a Director is affixed thereto. For the avoidance of doubt, the
use of the term "Director" in this Bye-law shall include an Alternate Director
signing on behalf of a Director for whom such Alternate Director was appointed
in the alternative.
21. Contracts and disclosure of Directors' interests
------------------------------------------------
(1) Any Director, or any Person associated, related or affiliated with
whom any Director is associated, may act in a professional capacity for the
Company and such Director or such Person shall be entitled to remuneration for
professional services as if such Director were not a Director, provided that
nothing herein contained shall authorise a Director or Director's firm, partner
or such company to act as Auditor of the Company.
(2) A Director who is directly or indirectly interested in a contract or
proposed contract or arrangement with the Company shall declare the nature of
such interest as required by the Act.
13
(3) Following a declaration being made pursuant to this Bye-law, and
unless disqualified by the chairman of the relevant Board meeting, a Director
may vote in respect of any contract or proposed contract or arrangement in which
such Director is interested and may be counted in the quorum at such meeting.
22. Remuneration of Directors
-------------------------
(1) The remuneration and benefits (if any) of the Directors, including
without limitation, participation in any share option or incentive plan and
loans (with the general or specific consent required by Section 96 of the Act)
in connection therewith, shall be determined by the Board and shall be deemed to
accrue from day to day. The Directors may also be paid all travel, hotel and
other expenses properly incurred by them in attending and returning from
meetings of the Board, any committee appointed by the Board, general meetings of
the Company, or in connection with the business of the Company or their duties
as Directors generally.
(2) A Director may hold any other office or place of profit under the
Company (other than the office of Auditor) in conjunction with his or her office
of Director for such period on such terms as to remuneration and otherwise as
the Board may determine.
(3) The Board may award special remuneration and benefits to any
Director undertaking any special work or services for, or undertaking any
special mission on behalf of, the Company other than his or her ordinary routine
work as a Director. Any fees paid to a Director who is also counsel or attorney
to the Company, or otherwise serves it in a professional capacity, shall be in
addition to his or her remuneration as a Director.
23. Other interests of Directors
----------------------------
A Director may be or become a director or other officer of or otherwise
interested in any company or Person promoted by the Company or in which the
Company may be interested as member or otherwise, and no such Director shall be
accountable to the Company for any remuneration or other benefits received by
him or her as a director or officer of, or from his or her interest in, such
other company or Person. The Board may also cause the voting power conferred by
the shares in any other company or Person held or owned by the Company to be
exercised in such manner in all respects as the Board 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 Person, or voting or
providing for the payment of remuneration to the directors or officers of such
other company or Person.
OFFICERS
--------
24. Officers of the Company
-----------------------
The Officers of the Company shall consist of a President and a Vice
President or a Chairman and a Deputy Chairman, a Secretary and such additional
Officers, as the Board may from time to time determine all of whom shall be
14
deemed to be Officers for the purposes of these Bye-laws. Subject to compliance
with any requirement of the Act, the same individual may hold two (2) or more
offices in the Company.
25. Appointment of Officers
-----------------------
(1) The Board shall, as soon as possible after the statutory meeting of
Members and after each annual general meeting, appoint a President and a Vice
President or a Chairman and a Deputy Chairman who shall be Directors.
(2) The Secretary and additional Officers, if any, shall be appointed by
the Board from time to time.
26. Remuneration of Officers
------------------------
The Officers shall receive such remuneration and benefits, including,
without limitation, participation in any share option or incentive plan and
loans (with the general or specific consent required by Section 96 of the Act)
in connection therewith as the Board may from time to time determine.
27. Duties of Officers
------------------
The Officers shall have such powers and perform such duties in the
management, business and affairs of the Company as may be delegated to them by
the Board from time to time.
28. Chairman of meetings
--------------------
Unless otherwise agreed by a majority of those attending and entitled
to attend and vote thereat, the Chairman, if there be one, and, if not, the
President shall act as chairman at all meetings of the Members and of the Board
at which such person is present. In their absence the Deputy Chairman or Vice
President, if present, shall act as chairman and in the absence of all of them a
chairman shall be appointed or elected by those present at the meeting and
entitled to vote.
29. Register of Directors and Officers
----------------------------------
The Board shall cause to be kept in one or more books at the registered
office of the Company a Register of Directors and Officers and shall enter
therein the particulars required by the Act.
MINUTES
-------
30. Obligations of Board to keep minutes
------------------------------------
(1) The Board shall cause minutes to be duly entered in books provided
for the purpose:-
15
(a) of all elections and appointments of Officers;
(b) of the names of the Directors present at each meeting of the
Board and of any committee appointed by the Board; and
(c) of all resolutions and proceedings of general meetings of
the Members, meetings of the Board, and meetings of committees appointed by the
Board.
(2) Minutes prepared in accordance with the Act and these Bye-laws shall
be kept by the Secretary at the registered office of the Company.
INDEMNITY
---------
31. Indemnification of Directors and Officers of the Company
--------------------------------------------------------
(1) The Directors, Secretary and other Officers (such term to include,
for the purposes of Bye-laws 31 and 32, any person appointed to any committee by
the Board) and employees and agents of the Company who has acted or is acting in
relation to any of the affairs of the Company and the liquidator or trustees (if
any) who has acted or is acting in relation to any of the affairs of the
Company, and every one of them, and their heirs, executors and administrators,
shall be indemnified and secured harmless out of the assets of the Company from
and against all actions, costs, charges, losses, damages and expenses which they
or any of them, their heirs, executors or administrators, shall or may incur or
sustain by or by reason of any act done, concurred in or omitted (actual or
alleged) in or about the execution of their duty, or supposed duty, or in their
respective offices or trusts, and none of them shall be answerable for the acts,
receipts, neglects or defaults of the others of them or for joining in any
receipts for the sake of conformity, or for any bankers or other persons with
whom any moneys or effects belonging to the Company shall or may be lodged or
deposited for safe custody, or for insufficiency or deficiency of any security
upon which any moneys of or belonging to the Company shall be placed out on or
invested, or for any other loss, misfortune or damage which may happen in the
execution of their respective offices or trusts, or in relation thereto,
provided, that, this indemnity shall not extend to any matter prohibited by the
Act.
(2) Any indemnification under this Bye-law 31, unless ordered by a
court, shall be made by the Company only as authorised in the specific case upon
a determination that indemnification of such Person is proper in the
circumstances because such Person has met the applicable standard of conduct set
forth in paragraph (1) of this Bye-law 31. Such determination shall be made (i)
by the Board by a majority vote of disinterested Directors or (ii) if a majority
of the disinterested Directors so directs, by independent legal counsel in a
written opinion or (iii) by the Members. The Company may purchase and maintain
insurance to protect itself and any Director, Officer or other Person entitled
to indemnification pursuant to this Bye-law 31, to the fullest extent permitted
by law.
(3) Expenses (including, without limitation, attorneys' fees) actually
and reasonably incurred by any Director, Secretary, other Officer or employee of
the Company in defending any civil, criminal, administrative or investigative
action, suit or proceeding or threat thereof for which indemnification is sought
pursuant to paragraph (a) of this Bye-law 31 shall be
16
paid by the Company in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of such Person to
repay such amount if it shall be ultimately determined that such Person is not
entitled to be indemnified by the Company as authorised in these Bye-laws or
otherwise pursuant to applicable law; provided, that if it is determined by
either (i) a majority vote of Directors who were not parties to such action,
suit or proceeding or (ii) if a majority of the disinterested Directors so
directs, by independent legal counsel in a written opinion, that there is no
reasonable basis to believe that such Person is entitled to be indemnified by
the Company as authorised in these Bye-laws or otherwise pursuant to applicable
law, then no expense shall be advanced in accordance with this paragraph (c) of
this Bye-law 31. Such expenses (including attorneys' fees) incurred by agents of
the Company may be paid upon the receipt of the aforesaid undertaking and such
terms and conditions, if any, as the Board deems appropriate.
(4) The indemnification and advancement of expenses provided in these
Bye-laws shall not be deemed exclusive of any other rights to which those
seeking indemnification and advancement of expenses may now or hereafter be
entitled under any statute, agreement, vote of Members or otherwise, both as to
action in an official capacity and as to action in another capacity while
holding such office.
(5) The indemnification and advancement of expenses provided by, or
granted pursuant to, this Bye-law 31 shall, unless otherwise provided when
authorised or ratified, continue as to a Person who has ceased to hold the
position for which such Person is entitled to be indemnified or advanced
expenses and shall inure to the benefit of the heirs, executors and
administrators of such a Person.
(6) No amendment or repeal of any provision of this Bye-law 31 shall
alter, to the detriment of any Person, the right of such Person to the
indemnification or advancement of expenses related to a claim based on an act or
failure to act which took place prior to such amendment, repeal or termination.
32. Waiver of claim by Member
-------------------------
The Company and each Member agrees to waive any claim or right of action
it might have, whether individually or by or in the right of the Company,
against any Director or Officer on account of any action taken by such Director
or Officer, or the failure of such Director or Officer to take any action in the
performance of his duties with or for the Company, provided, that, such waiver
shall not extend to any matter in respect of any fraud or dishonesty which may
attach to such Director or Officer.
MEETINGS
--------
33. Notice of annual general meeting
--------------------------------
The annual general meeting of the Company shall be held in each year
(including within the first year of incorporation) at such time and place (which
shall not be in the United States) as the President or the Chairman or any two
Directors or any Director and the Secretary or the Board shall appoint. At least
five (5) days' notice of such meeting shall be given to each Member entitled to
17
vote thereat as at the relevant record date determined pursuant to Bye-law 62
stating the date, place (which shall not be in the United States) and time at
which the meeting is to be held, that the election of Directors will take place
thereat, and as far as practicable, the other business to be conducted at the
meeting.
34. Notice of special general meeting
---------------------------------
The President or the Chairman or any two Directors or any Director and
the Secretary or the Board may convene a special general meeting of the Company
whenever in their judgment such a meeting is necessary, upon not less than five
(5) days' notice to each Member entitled to vote thereat as at the relevant
record date determined pursuant to Bye-law 62 which shall state the date, time,
place (which shall not be in the United States) and the general nature of the
business to be considered at the meeting.
35. Accidental omission of notice of general meeting; Business to be
-----------------------------------------------------------------------
conducted
---------
(1) The accidental omission to give notice of a general meeting to, or
the non-receipt of notice of a general meeting by, any Person entitled to
receive notice shall not invalidate the proceedings at that meeting.
(2) Subject to the Act, business to be brought before a general meeting
of the Company must be specified in the notice of the meeting. Only business
that the Board has determined can be properly brought before a general meeting
in accordance with these Bye-laws and applicable law shall be conducted at any
general meeting, and the chairman of the general meeting may refuse to permit
any business to be brought before such meeting that has not been properly
brought before it in accordance with these Bye-laws and applicable law.
36. Meeting called on requisition of Members
----------------------------------------
Subject to the terms of any class or series of shares issued by the
Company and notwithstanding anything herein, the Board shall, on the requisition
of Members holding at the date of the deposit of the requisition not less than
one-tenth of such of the paid-up share capital of the Company as at the date of
the deposit carries the right to vote at general meetings of the Company,
forthwith proceed to convene a special general meeting of the Company and the
provisions of Section 74 of the Act shall apply.
37. Short notice
------------
Subject to the terms of any class or series of shares issued by the
Company, a general meeting of the Company shall, notwithstanding that it is
called by shorter notice than that specified in these Bye-laws, be deemed to
have been properly called if it is so agreed by (i) all the Members entitled to
attend and vote thereat in the case of an annual general meeting; and (ii) by a
majority in number of the Members having the right to attend and vote at the
meeting, being a majority together holding not less than 95% in nominal value of
the shares giving a right to attend and vote thereat in the case of a special
general meeting.
18
38. Postponement of meetings
------------------------
The Secretary or any Director may postpone any general meeting called
in accordance with the provisions of these Bye-laws (other than a meeting
requisitioned under these Bye-laws) provided that notice of postponement is
given to each Member entitled to vote thereat as at the relevant record date
determined pursuant to Bye-law 62 before the time for such meeting. Fresh notice
of the date, time and place for the postponed meeting shall be given to each
Member entitled to vote thereat as at the relevant record date determined
pursuant to Bye-law 62 in accordance with the provisions of these Bye-laws.
39. Quorum for general meeting
--------------------------
At any general meeting of the Company two or more persons present in
person and representing in person or by proxy in excess of 60% of the total
issued and outstanding voting shares in the Company as at the relevant record
date determined pursuant to Bye-law 62 throughout the meeting shall form a
quorum for the transaction of business, provided, however, that if the Company
shall at any time have only one Member, one Member present in person or by proxy
shall form a quorum for the transaction of business at any general meeting of
the Company held during such time. If within half an hour from the time
appointed for the meeting a quorum is not present, the meeting shall stand
adjourned to the same day one week later, at the same time and place or to such
other day, time or place as the Secretary may determine. Unless the meeting is
so adjourned to a specific date and time, fresh notice of the date, time and
place for the resumption of the adjourned meeting shall be given to each Member
in accordance with the provisions of these Bye-laws. No business shall be
transacted at any general meeting unless a quorum is present when the meeting
proceeds to business and continues throughout the meeting, but the absence of a
quorum shall not preclude the appointment, choice or election of a chairman of
the meeting which shall not be treated as part of the business of the meeting.
40. Adjournment of meetings
-----------------------
The chairman of a general meeting may, with the consent of 50% of the
Members present in person or by proxy at any general meeting whether or not a
quorum is present (and shall if so directed), adjourn the meeting. Unless the
meeting is adjourned to a specific date and time, fresh notice of the date, time
and place for the resumption of the adjourned meeting shall be given to each
Member in accordance with the provisions of these Bye-laws with respect to a
special general meeting of the Company.
41. Attendance at meetings
----------------------
Members may participate in any general meeting 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, provided, however, that no Member may participate in
any general meeting while that Member (or, if any Member is an entity, its
representative) is physically present in the United States.
19
42. Written resolutions
-------------------
(1) Subject to subparagraph (6), anything which may be done by
resolution of the Company in general meeting or by resolution of a meeting of
any class of the Members of the Company, may, without a meeting and without any
previous notice being required, be done by resolution in writing signed by, or,
in the case of a Member that is a corporation whether or not a company within
the meaning of the Act, on behalf of, all the Members who at the date of the
resolution or the record date determined pursuant to Bye-law 62 (if earlier)
would be entitled to attend the meeting and vote on the resolution.
(2) A resolution in writing may be signed by, or, in the case of a
Member that is a corporation whether or not a company within the meaning of the
Act, on behalf of, all the Members, or any class thereof, in as many
counterparts as may be necessary.
(3) For the purposes of this Bye-law, the date of the resolution is the
date when the resolution is signed by, or, in the case of a Member that is a
corporation whether or not a company within the meaning of the Act, on behalf
of, the last Member to sign and any reference in any Bye-law to the date of
passing of a resolution is, in relation to a resolution made in accordance with
this Bye-law, a reference to such date. Any resolution in writing may be signed
within or outside the United States; provided, that the last Member to sign the
resolution must sign such resolution outside of the United States.
(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 by a meeting
of the relevant class of Members, as the case may be, provided that no such
resolution shall be valid unless the last signature of a Member is offered
outside the United States, and any reference in any Bye-law to a meeting at
which a resolution is passed or to Members voting in favour of a resolution
shall be construed accordingly.
(5) A resolution in writing made in accordance with this Bye-law shall
constitute minutes for the purposes of Sections 81 and 82 of the Act.
(6) This Bye-law shall not apply to:-
(a) a resolution passed pursuant to Section 89(5) of the Act; or
(b) a resolution passed for the purpose of removing a Director
before the expiration of his term of office under these Bye-laws.
43. Attendance of Directors
-----------------------
The Directors of the Company shall be entitled to receive notice of and
to attend and be heard at any general meeting.
44. Voting at meetings
------------------
(1) Subject to the provisions of the Act and these Bye-laws, any
question proposed for the consideration of the Members at any general meeting
shall be decided by the affirmative votes of a majority of the votes cast in
20
accordance with the provisions of these Bye-laws and in the case of an equality
of votes the resolution shall fail.
(2) No Member shall be entitled to vote at any general meeting unless
such Member has paid all the calls on all shares held by such Member.
45. Voting on show of hands
-----------------------
At any general meeting a resolution put to the vote of the meeting
shall, in the first instance, be voted upon by a show of hands and, subject to
any rights or restrictions for the time being lawfully attached to any class of
shares and subject to the provisions of these Bye-laws, every Member present in
person and every person holding a valid proxy at such meeting shall be entitled
to one vote and shall cast such vote by raising his or her hand.
46. Decision of chairman
--------------------
At any general meeting a declaration by the chairman of the meeting
that a question proposed for consideration has, on a show of hands, been
carried, or carried unanimously, or by a particular majority, or lost, and an
entry to that effect in a book containing the minutes of the proceedings of the
Company shall, subject to the provisions of these Bye-laws, be conclusive
evidence of that fact.
47. Demand for a poll
-----------------
(1) Notwithstanding the provisions of the immediately preceding two
Bye-laws, at any general meeting of the Company, in respect of any question
proposed for the consideration of the Members (whether before or on the
declaration of the result of a show of hands as provided for in these Bye-laws),
a poll may be demanded by any of the following persons:-
(a) the chairman of such meeting; or
(b) at least three Members present in person or represented by
proxy; or
(c) any Member or Members present in person or represented by
proxy and holding between them not less than one-tenth of the total voting
rights of all the Members having the right to vote at such meeting; or
(d) any Member or Members present in person or represented by
proxy holding shares in the Company 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.
(2) Where, in accordance with the provisions of subparagraph (1) of this
Bye-law, a poll is demanded, subject to any rights or restrictions for the time
being lawfully attached to any class of shares, every person present at such
meeting shall have one vote for each share of which such person is the holder or
for which such person holds a proxy and such vote shall be counted in the manner
set out in subparagraph (4) of this Bye-law or in the case of a general meeting
at which one or more Members are present by telephone in such
21
manner as the chairman of the meeting may direct and the result of such poll
shall be deemed to be the resolution of the meeting at which the poll was
demanded and shall replace any previous resolution upon the same matter which
has been the subject of a show of hands.
(3) A poll demanded in accordance with the provisions of subparagraph
(1) of this Bye-law, for the purpose of electing a chairman of the meeting or on
a question of adjournment, shall be taken forthwith and a poll demanded on any
other question shall be taken in such manner and at such time and place as the
Chairman (or acting chairman) may direct and any business other than that upon
which a poll has been demanded may be proceeded with pending the taking of the
poll.
(4) Where a vote is taken by poll, each Person present and entitled to
vote shall be furnished with a ballot paper on which such person shall record
his or her vote in such manner as shall be determined at the meeting having
regard to the nature of the question on which the vote is taken, and each ballot
paper shall be signed or initialled or otherwise marked so as to identify the
voter and the registered holder in the case of a proxy. The Board may appoint
one or more inspectors to act at any general meeting where a vote is taken by a
poll. Each inspector shall take and sign an oath faithfully to exercise the
duties of inspector at such meeting with strict impartiality and according to
the best of his, her or its ability. The inspectors shall determine the number
of shares issued and outstanding and the voting power of each, by reference to
the Register of Members as at the relevant record date determined pursuant to
Bye-law 62, the number of shares represented at the meeting, the existence of a
quorum, the validity and effect of proxies and examine and count all ballots and
determine the results of any vote. The inspector shall also hear and determine
challenges and questions arising in connection with the right to vote. No
Director or candidate for the office of Director shall act as an inspector. The
determination and decision of the inspectors shall be final and binding.
48. Seniority of joint holders voting
---------------------------------
In the case of joint holders the vote of the senior who tenders a vote,
whether in person or by proxy, shall be accepted to the exclusion of the votes
of the other joint holders, and for this purpose seniority shall be determined
by the order in which the names stand in the Register of Members.
49. Instrument of proxy
-------------------
(1) Every Member entitled to vote has the right to do so either in
person or by one or more Persons authorised by a written proxy executed and
delivered in accordance with these Bye-laws. The instrument appointing a proxy
shall be in writing under the hand of the appointor or of his or her attorney
authorised by him or her 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.
(2) Any Member may appoint one or more Persons a standing proxy or (if a
corporation) a standing 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) a written authorisation. Such proxy or authorisation
shall be valid for all general meetings and adjournments thereof
22
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 Member is present or in respect to
which the Member 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 Member and the grantor shall for the
purposes of these Bye-laws be deemed to be present in person at any such meeting
if the Person so authorised is present at the meeting.
(3) Subject to paragraph (2) of this Bye-law 49, 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 24 hours
or such other period as the Board may determine, prior to the holding of the
relevant meeting or adjourned meeting at which the individual named in the
instrument proposes to vote or, in the case of a poll taken subsequently to the
date of a meeting or adjourned meeting, before the time appointed for the taking
of the poll, or, in the case of a written resolution, prior to the effective
date of the written resolution and in default the instrument of proxy shall not
be treated as valid.
(4) Instruments of proxy shall be in any common form or 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.
(5) 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)
at least one hour before the commencement of the meeting or adjourned meeting,
or the taking of the poll, or the day before the effective date of any written
resolution at which the instrument of proxy is used.
(6) Subject to the Act, the Board may, or the chairman of the relevant
meeting may at his or her discretion (with respect to such meeting only) 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
23
it thinks fit as to the right of any person to attend and vote on behalf of any
Member at general meetings or to sign written resolutions.
50. Representation of corporations at meetings
------------------------------------------
A corporation which is a Member may, by written instrument, authorise
one or more Persons as it thinks fit to act as its representative at any meeting
of the Members and the Person or Persons so authorised shall be entitled to
exercise the same powers on behalf of the corporation which such Person or
Persons represent as that corporation could exercise if it were an individual
Member. Such corporation 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
the meeting. Notwithstanding the foregoing, the chairman of the meeting may
accept such assurances as he or she thinks fit as to the right of any Person to
attend and vote at general meetings on behalf of a corporation which is a
Member.
SHARE CAPITAL AND SHARES
------------------------
51. Rights of shares
----------------
(1) Upon adoption of these Bye-laws, the share capital of the Company
shall initially be divided into two classes of shares consisting of (i)
200,000,000 Common Shares, and (ii) 20,000,000 Preferred Shares. The Board may
create classes and series of shares and may increase or decrease the number of
shares of any class or series as it sees fit. The Board also may, subject to the
Act and to any rights attaching to the issued and outstanding shares, cancel,
redeem or purchase any shares and shares of any class or series and further
terminate any class or series of shares.
(2) The holders of Common Shares shall be entitled to one vote per
Common Share, or in the case of Controlled Shares, if applicable, a fraction of
a vote per Controlled Share as determined pursuant to Bye-Law 52. However, the
Board may issue non-voting Common Shares which will not entitle the holders
thereof to such voting rights. The Common Shares shall entitle the holders
thereof, subject to the provisions of these Bye-laws:
(a) to share equally share for share in dividends (whether
payable in cash, property or securities of the Company) as the Board may from
time to time declare;
(b) in the event of a liquidation, winding-up or dissolution of
the Company, whether voluntary or involuntary or for the purpose of an
amalgamation, reorganisation or otherwise or upon any distribution of share
capital and surplus, be entitled to share equally and ratably in the assets of
the Company, if any, remaining after the payment of all debts and liabilities of
the Company and the liquidation preference of any issued and outstanding
Preferred Shares; and
(c) generally be entitled to enjoy all of the rights attaching
to shares.
(3) The Board is authorised, subject to limitations prescribed by law,
to issue the Preferred Shares in classes or series, to establish from time to
time the number of Preferred Shares to be included in each such class or
24
series, and to fix the designation, powers, preferences redemption provisions,
restrictions and rights to the Preferred Shares of each such class or series and
the qualifications, limitations or restrictions thereof. The terms of any class
or series of Preferred Shares shall be set forth in a Certificate of Designation
in the minutes of the Board authorising the issuance of such Preferred Shares
and such Certificate of Designations shall be attached as an exhibit to these
Bye-laws, but shall not form part of these Bye-laws, and may be examined by any
Member on request. The rights attaching to any Common Share or other share shall
be deemed not to be altered by the allotment of any Preferred Share even if such
Preferred Share does or will rank in priority for payment of a dividend or in
respect of capital or surplus or which confer on the holder thereof voting
rights more favourable than those conferred by such Common Share and shall not
otherwise be deemed to be altered by the creation or issue of further shares
ranking pari passu therewith.
(4) The authority of the Board with respect to each class or series of
Preferred Shares shall include, but not be limited to, determination of the
following:
(a) the number of Preferred Shares constituting that class or
series and the distinctive designation of that class or series;
(b) the rate of dividend, and whether (and if so, on what terms
and conditions) dividends shall be cumulative (and if so, whether unpaid
dividends shall compound or accrue interest) or shall be payable in preference
or in any other relation to the dividends payable on any other class or classes
of shares or any other class or series of the Preferred Shares;
(c) whether that class or series shall have voting rights in
addition to the voting rights provided by law and, if so, the terms and extent
of such voting rights, provided that if the Preferred Shares shall have voting
rights, such Preferred Shares shall be included in the number of Voting Shares
of the Company held by any Person for the purposes of Bye-law 52(2) hereof;
(d) the par value of such Preferred Shares;
(e) whether such Preferred Shares may be redeemed and, if so,
the terms and conditions on which they may be redeemed (including, without
limitation, the dates upon or after which they may be redeemed and the price or
prices at which they may be redeemed, which price or prices may be different in
different circumstances or at different redemption dates);
(f) whether such Preferred Shares shall be issued with the
privilege of conversion or exchange and, if so, the terms and conditions of such
conversion or exchange (including, without limitation the price or prices or the
rate or rates of conversion or exchange or any terms for adjustment thereof);
(g) the amounts, if any, payable upon such Preferred Shares in
the event of voluntary liquidation, dissolution or winding up of the Company in
preference of shares of any other class or series and whether such Preferred
Shares shall be entitled to participate generally in distributions on the Common
Shares under such circumstances;
25
(h) the amounts, if any, payable upon such Preferred Shares in
the event of involuntary liquidation, dissolution or winding up of the Company
in preference of shares of any other class or series and whether the Preferred
Shares shall be entitled to participate generally in distributions on the Common
Shares under such circumstances;
(i) sinking and fund provisions, if any, for the redemption or
purchase of the Preferred Shares (the term "sinking fund" being understood to
include any similar fund, however designated); and
(j) any other relative rights, preferences, limitations and
powers of that class or series.
(5) The rights attaching to any Preferred Shares, or any class or series
of Preferred Shares, shall be deemed not to be altered by the allotment of any
other class or series of Preferred Shares even if such class or series does or
will rank in priority for payment of a dividend or in respect of capital or
surplus or which confer on the holder thereof voting rights more favorable than
those conferred by such existing Preferred Shares or class or series of
Preferred Shares and shall not otherwise be deemed to be altered by the creation
or issue of further shares ranking pari passu therewith.
52. Limitation on voting rights of Controlled Shares.
---------------------------------------------------
(1) At the discretion of the Board, if and for as long as the number of
Controlled Shares (as defined below) of any Member (together with Persons whose
shares would be attributable to such Member under applicable U.S. tax
attribution and constructive ownership rules under the Code) would constitute
9.9% or more of the combined voting power of the issued and outstanding Voting
Shares of the Company (after giving effect to any prior reduction in voting
power as described below), each such issued Controlled Share regardless of the
identity of the registered holder thereof, will confer only a fraction of a vote
as determined by the following formula (the "Formula") :
(T - C) / (9.1 X C)
Where: "T" is the aggregate number of votes conferred by all the issued and
outstanding Voting Shares of the Company immediately prior to that
application of the Formula with respect to any particular Member,
adjusted to take into account any prior reduction taken with respect to
any other shareholder pursuant to the "sequencing provision" described
below; and
"C" is the number of issued Controlled Shares attributable to such
Member.
"Controlled Shares" of any Member refers to all Voting Shares of the
Company owned by such Member, whether (i) directly, (ii) by application of the
attribution and constructive ownership rules of Sections 958(a) and 958(b) of
the Code or (iii) beneficially, directly or indirectly, within the meaning of
Section 13(d)(3) of the Exchange Act, and the rules and regulations thereunder.
26
(2) At the discretion of the Board, the Formula will be applied
successively as many times as may be necessary to ensure that no Member will be
a Controlling Shareholder (as defined below) at any time (the "sequencing
provision"). For the purposes of determining the votes exercisable by Members as
of any date, the Formula, at the discretion of the Board, will be applied to the
Voting Shares of the Company of each Member in declining order based on the
respective numbers of total Controlled Shares attributable to each Member. Thus,
the Formula, at the discretion of the Board, will be applied first to the votes
of Voting Shares of the Company held by the Member to whom the largest number of
total Controlled Shares is attributable and thereafter sequentially with respect
to the Member with the next largest number of total Controlled Shares. In each
case, calculations are made on the basis of the aggregate number of votes
conferred by the issued and outstanding Voting Shares of the Company as of such
date, as reduced by the application of the Formula to any issued voting shares
of any Member with a larger number of total Controlled Shares as of such date.
"Controlling Shareholder" means a Member who owns, in aggregate, (i) directly,
(ii) by application of the attribution and constructive ownership rules of
Sections 958(a) and 958(b) of the Code or (iii) beneficially, directly or
indirectly, within the meaning of Section 13(d)(3) of the Exchange Act, issued
and outstanding Voting Shares of the Company carrying more than 9.9% of the
total combined voting rights attaching to all issued shares.
(3) The Directors may, by notice in writing, require any Member to
provide within not less than ten (10) Business Days, complete and accurate
information to the registered office or such other place as the Directors may
designate in respect of any or all of the following matters:
(a) the number of shares in which such Member is legally or
beneficially interested;
(b) the Persons who are beneficially interested in shares in
respect of which such Member is the registered holder;
(c) the relationship, association or affiliation of such Member
with any other Member or Person whether by means of common control or ownership
or otherwise; or
(d) any other facts or matters which the Directors may consider
relevant to the determination of the number of Controlled Shares attributable to
any Person.
(4) If any Member does not respond to any notice given pursuant to
Bye-law 52(3) above within the time specified therein or the Directors shall
have reason to believe that any information provided in relation thereto is
incomplete or inaccurate, the Directors may determine that the votes attaching
to any Voting Shares registered in the name of such Member shall be disregarded
for all purposes until such time as a response (or additional response) to such
notice reasonably satisfactory to the Directors has been received as specified
therein.
53. Power to issue shares
---------------------
(1) Subject to the provisions of these Bye-laws and to any rights
attaching to issued and outstanding shares, the unissued shares (whether forming
27
part of the original share capital or any increased share capital) shall be at
the disposal of the Board, which may issue, offer, allot, exchange or otherwise
dispose of shares or options, warrants or other rights to purchase shares or
securities convertible into or exchangeable for shares (including any employee
benefit plan providing for the issuance of shares or options, warrants or other
rights in respect thereof), at such times, for such consideration and on such
terms and conditions as it may determine (including, without limitation, such
preferred or other special rights or restrictions with respect to dividend,
voting, liquidation or other rights of the shares as may be determined by the
Board). The Board may issue shares as a new or existing class or series of
shares.
(2) At the discretion of the Board, the Company shall not issue any
shares in a manner that the Board believes would cause, by reason of such
issuance, the total Common Shares (excluding any non-voting Common Shares) of
any Person to exceed nine and nine tenths percent (9.9%) of the total shares of
Common Shares (excluding any non-voting Common Shares) of the Company then
issued and outstanding. Notwithstanding the foregoing, the Board in its sole
discretion by unanimous consent of all Directors then in office, may waive the
applicability of subparagraph (2) of this Bye-law.
Notwithstanding the foregoing provisions of this Bye-law, the
restrictions of this Bye-law 53(2) shall not apply to any issuance of shares to
a person acting as an underwriter in the ordinary course of its business,
purchasing such shares pursuant to a purchase agreement to which the Company is
a party, for resale.
(3) The Board shall, in connection with the issue of any share, have the
power to pay such commission and brokerage as may be permitted by law.
(4) The Company shall not give, whether directly or indirectly, whether
by means of loan, guarantee, provision of security or otherwise, any financial
assistance for the purpose of or in connection with a purchase or subscription
made or to be made by any Person of or for any shares in the Company, but
nothing in this Bye-law shall prohibit transactions permitted pursuant to
Sections 39A, 39B, and 39C of the Act.
(5) The Company may from time to time do any one or more of the
following things:
(i) make arrangements on the issue of shares for a
difference between the Members in the amounts and times
of payments of calls on their shares;
(ii) accept from any Member the whole or a part of the amount
remaining unpaid on any shares held by such Member,
although no part of that amount has been called up;
(iii) pay dividends in proportion to the amount paid up on
each share where a larger amount is paid up on some
shares than on others; and
(iv) issue its shares in fractional denominations and deal
with such fractions to the same extent as its whole
shares and shares in fractional denominations shall have
in proportion to the respective fractions represented
28
thereby all of the rights of whole shares including (but
without limiting the generality of the foregoing) the
right to vote, to receive dividends and distributions
and to participate in a winding up.
54. Variation of rights and alteration of share capital
---------------------------------------------------
(1) While the share capital is divided into different classes of shares,
the rights attached to any class (unless otherwise provided by the terms of
issue of the shares of that class) may, whether or not the Company is being
wound-up, be varied with the consent in writing of the holders of three-fourths
of the issued and outstanding shares of that class or with the sanction of a
resolution passed by a majority of the votes cast at a separate general meeting
of the holders of the shares of the class in accordance with Section 47(7) of
the Act. The rights conferred upon the holders of the shares of any class issued
with preferred or other rights shall not, unless otherwise expressly provided by
the terms of issue of the shares of that class, be deemed to be varied by the
creation or issue of further shares ranking pari passu therewith.
(2) The Company may from time to time by resolution of the Company in
general meeting alter the conditions of its Memorandum of Association by all or
any of those actions listed in Section 45(1) of the Act and accordingly may
change the currency denomination of, increase, alter or reduce its share capital
in accordance with the provisions of Sections 45 and 46 of the Act. Where, on
any alteration of share capital, fractions of shares or some other difficulty
would arise, the Board may deal with or resolve the same in such manner as it
thinks fit including, without limiting the generality of the foregoing, the
issue to Members, as appropriate, of fractions of shares and/or arranging for
the sale or transfer of the fractions of shares of Members.
55. Registered holder of shares
---------------------------
(1) The Company shall be entitled to treat the registered holder of any
share as the absolute owner thereof and accordingly shall not be bound to
recognise any equitable or other claim to, or interest in, such share on the
part of any other person.
(2) Any dividend, interest or other moneys payable in cash in respect of
shares may be paid by cheque or draft sent through the post directed to the
Member at such Member's address in the Register of Members or, in the case of
joint holders, to such address of the holder first named in the Register of
Members, or to such person and to such address as the holder or joint holders
may in writing direct. If two or more persons are registered as joint holders of
any shares any one can give an effectual receipt for any dividend paid in
respect of such shares.
56. Death of a joint holder
-----------------------
Where two or more persons are registered as joint holders of a share or
shares then in the event of the death of any joint holder or holders the
remaining joint holder or holders shall be absolutely entitled to the said share
or shares and the Company shall recognise no claim in respect of the estate of
any joint holder except in the case of the last survivor of such joint holders.
29
57. Share certificates
------------------
(1) Every Member shall be entitled to a share certificate under the seal
of the Company (or a facsimile or representation thereof as the Board may
determine) specifying the number and, where appropriate, the class of shares
held by such Member and whether the same are fully paid up and, if not, how much
has been paid thereon. The Board may by resolution determine, either generally
or in a particular case, that any or all signatures on certificates may be
printed thereon or affixed by mechanical means. Notwithstanding the foregoing
and the provisions of Bye-law 88 (Manner in which seal is affixed), the Board
may determine that a share certificate need not be signed on behalf of the
Company.
(2) The Company shall be under no obligation to complete and deliver a
share certificate unless specifically called upon to do so by the person to whom
such shares have been allotted.
(3) If any such certificate shall be proved to the satisfaction of the
Board to have been worn out, lost, mislaid or destroyed the Board may cause a
new certificate to be issued and request an indemnity for the lost certificate
it sees fit.
58. Calls on shares
---------------
The Board may from time to time make such calls as it thinks fit
upon the Members in respect of any monies unpaid on the shares allotted to or
held by such Members.
59. Forfeiture of shares
--------------------
(1) If any Member fails to pay, on the day appointed for payment
thereof, any call in respect of any share allotted to or held by such Member,
the Board may, at any time thereafter during such time as the call remains
unpaid, direct the Secretary to forward to such Member a notice in the form, or
as near thereto as circumstances admit, of Form "B" in the Schedule hereto.
(2) If the requirements of such notice are not complied with, any such
share may at any time thereafter before the payment of such call and the
interest due in respect thereof be forfeited by a resolution of the Board to
that effect, and such share shall thereupon become the property of the Company
and may be disposed of as the Board shall determine.
(3) A Member whose share or shares have been forfeited as aforesaid
shall, notwithstanding such forfeiture, be liable to pay to the Company all
calls owing on such share or shares at the time of the forfeiture and all
interest due thereon.
REGISTER OF MEMBERS
-------------------
60. Contents of Register of Members
-------------------------------
The Board shall cause to be kept in one or more books a Register
of Members and shall enter therein the particulars required by the Act.
30
61. Inspection of Register of Members
---------------------------------
(1) The Register of Members shall be open to inspection at the
registered office of the Company on every business day, subject to such
reasonable restrictions as the Board may impose, so that not less than two hours
in each business day be allowed for inspection. The Register of Members may,
after notice has been given by advertisement in an appointed newspaper to that
effect, be closed for any time or times not exceeding in the whole thirty days
in each year.
(2) Subject to the provisions of the Act, 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 and the contents thereof.
62. Determination of record dates
-----------------------------
Notwithstanding any other provision of these Bye-laws, the Board may
fix any date as the record date for:-
(a) determining the Members entitled to receive any dividend;
(b) determining the Members entitled to receive notice of and to
vote at any general meeting of the Company (and the Board may determine a
different record date for any adjournment or postponement thereof) ;
(c) determining the Members entitled to execute a resolution in
writing; and
(d) determining the number of issued and outstanding shares for
or in connection with any purpose.
TRANSFER OF SHARES
------------------
63. Instrument of transfer
----------------------
(1) An instrument of transfer shall be in the form or as near thereto as
circumstances admit of Form "C" in the Schedule hereto or in such other common
form as the Board may accept. Such instrument of transfer shall be signed by or
on behalf of the transferor and transferee provided that, in the case of a fully
paid share, the Board may accept the instrument signed by or on behalf of the
transferor alone. The transferor shall be deemed to remain the holder of such
share until the same has been transferred to the transferee in the Register of
Members.
(2) The Board may refuse to recognise any instrument of transfer unless
it is accompanied by the certificate in respect of the shares to which it
relates and by such other evidence as the Board may reasonably require to show
the right of the transferor to make the transfer.
31
64. Restriction on transfer
-----------------------
(1) Subject to the Act, this Bye-law 64 and such other of the
restrictions contained in these Bye-laws and elsewhere as may be applicable, and
except, in the case of any shares other than the Common Shares, as may otherwise
be provided by the terms of issuance thereof, any Member may sell, assign,
transfer or otherwise dispose of shares of the Company at the time owned by it
and, upon receipt of a duly executed form of transfer in writing, the Directors
shall procure the timely registration of the same. If the Directors refuse to
register a transfer for any reason they shall notify the proposed transferor and
transferee within thirty days of such refusal.
(2) At the sole discretion of the Board, the Company may decline to
register a transfer of shares if the Board has reason to believe that the effect
of such transfer would be to increase the number of total Controlled Shares of
any Person to more than nine and nine-tenths percent (9.9%) or any higher
percentage of the shares of the Company on an Unadjusted Basis.
(3) The Board may, in its absolute and unfettered discretion, decline to
register the transfer of any shares if the Board has reason to believe (i) that
such transfer may expose the Company, any subsidiary thereof, any Member or any
Person ceding insurance to the Company or any such Subsidiary to adverse tax or
regulatory treatment in any jurisdiction or (ii) that registration of such
transfer under the Securities Act or under any blue sky or other United States
state securities laws or under the laws of any other jurisdiction is required
and such registration has not been duly effected (provided, however, that in
this case (ii) the Board shall be entitled to request and rely on an opinion of
counsel to the transferor or the transferee, in form and substance satisfactory
to the Board, that no such approval or consent is required and no such violation
would occur, and the Board shall not be obligated to register any transfer
absent the receipt of such an opinion).
(4) Without limiting the foregoing, the Board shall decline to approve
or register a transfer of shares unless all applicable consents, authorisations,
permissions or approvals of any governmental body or agency in Bermuda, the
United States or any other applicable jurisdiction required to be obtained prior
to such transfer shall have been obtained.
(5) The registration of transfers may be suspended at such time and for
such periods as the Board may from time to time determine; provided, however,
that such registration shall not be suspended for more than forty-five (45) days
in any period of three hundred and sixty five (365) consecutive days.
(6) The Board may require any Member, or any Person proposing to acquire
shares, to certify or otherwise provide information in writing as to such
matters as the Board may request for the purpose of giving effect to Bye-laws
11(2), 11(3), 52(2), 64(2) and 64(3), including as to such Person's status, its
Controlled Shares and other matters of the kind contemplated by Bye-law 52. Such
request shall be made by written notice and the certification or other
information requested shall be provided to such place and within such period
(not less than ten (10) Business Days after such notice is given unless the
Board and such Member or proposed acquiror otherwise agree) as the Board may
designate in such request. If any Member or proposed acquiror does not respond
to any such request by the Board as requested, or if the Board has reason to
believe that any certification or other information provided pursuant to any
such request is inaccurate or incomplete, the Board may decline to register any
transfer or to effect any issuance or purchase of shares to which such request
relates.
32
65. Transfers by joint holders
--------------------------
The joint holders of any share or shares may transfer such share or
shares to one or more of such joint holders, and the surviving holder or holders
of any share or shares previously held by them jointly with a deceased Member
may transfer any such share to the executors or administrators of such deceased
Member.
66. Lien on shares
--------------
(1) The Company shall have a first and paramount lien and charge on all
shares (whether fully paid-up or not or whether subject to a condition or
contingency) registered in the name of a Member (whether solely or jointly with
others) for all debts, liabilities or engagements to or with the Company
(whether presently payable or not or whether subject to a condition or
contingency) by such Member or his or her estate, either alone or jointly with
any other Person, whether a Member or not, but the Board may at any time declare
any share to be wholly or in part exempt from the provisions of this Bye-law.
The registration of a transfer of any such share shall operate as a waiver of
the Company's lien (if any) thereon. The Company's lien (if any) on a share
shall extend to all dividends or other monies payable in respect thereof.
(2) The Company may sell or purchase, in such manner and on such terms
(including price) as the Board think fit, any shares on which the Company has a
lien, but no sale or purchase shall be made unless a sum in respect of which the
lien exists is then presently payable, nor until the expiration of fourteen days
after a notice in writing stating and demanding payment of such part of the
amount in respect of which the lien exists as is presently payable, has been
given to the relevant Member, or the Person, of which the Company has notice,
entitled thereto by reason of such Member's death or bankruptcy. Effective upon
such sale or purchase, any certificate representing such shares prior to such
sale shall become null and void, whether or not it was actually delivered to the
Company.
(3) To give effect to any such sale the Board may authorise some Person
to transfer the shares sold to the purchaser thereof. The purchaser shall be
registered as the holder of the shares comprised in any such transfer, and he
shall not be bound to see to the application of the purchase money, nor shall
his or her title to the shares be affected by any irregularity or invalidity in
the proceedings in reference to the sale.
(4) The proceeds of such sale or purchase shall be received by the
Company and applied in payment of such part of the amount in respect of which
the lien exists as is presently payable and the residue, if any, shall (subject
to a like lien for sums not presently payable as existed upon the shares before
the sale) be paid to the relevant Member or the Person entitled to the shares at
the date of the sale.
TRANSMISSION OF SHARES
----------------------
67. Representative of deceased Member
---------------------------------
In the case of the death of a Member, the survivor or survivors where
the deceased Member was a joint holder, and the legal personal representatives
33
of the deceased Member where the deceased Member was a sole holder, shall be the
only persons recognised by the Company as having any title to the deceased
Member's interest in the shares. Nothing herein contained shall release the
estate of a deceased joint holder from any liability in respect of any share
which had been jointly held by such deceased Member with other persons. Subject
to the provisions of Section 52 of the Act, for the purpose of this Bye-law,
legal personal representative means the executor or administrator of a deceased
Member or such other person as the Board may in its absolute discretion decide
as being properly authorised to deal with the shares of a deceased Member.
68. Registration on death or bankruptcy
-----------------------------------
Any person becoming entitled to a share in consequence of the death or
bankruptcy of any Member may be registered as a Member upon such evidence as the
Board may deem sufficient or may elect to nominate some person to be registered
as a transferee of such share, and in such case the person becoming entitled
shall execute in favour of such nominee an instrument of transfer in the form,
or as near thereto as circumstances admit, of Form "D" in the Schedule hereto.
On the presentation thereof to the Board, accompanied by such evidence as the
Board may require to prove the title of the transferor, the transferee shall be
registered as a Member but the Board shall, in either case, have the same right
to decline or suspend registration as it would have had in the case of a
transfer of the share by that Member before such Member's death or bankruptcy,
as the case may be.
DIVIDENDS AND OTHER DISTRIBUTIONS
---------------------------------
69. Declaration of dividends by the Board
-------------------------------------
The Board may, subject to any rights or restrictions at the time
lawfully attached to any class or series of shares and subject to these Bye-laws
and in accordance with Section 54 of the Act, declare a dividend to be paid to
the Members, in proportion to the number of shares held by them, and such
dividend may be paid in cash or wholly or partly in specie in which case the
Board may fix the value for distribution in specie of any assets.
70. Other distributions
-------------------
The Board may declare and make such other distributions (in cash or in
specie) to the Members as may be lawfully made out of the assets of the Company.
71. Reserve fund
------------
The Board may from time to time before declaring a dividend set aside,
out of the surplus or profits of the Company, such sum as it thinks proper as a
reserve to be used to meet contingencies or for equalising dividends or for any
other special or general purpose.
72. Deduction of amounts due to the Company
---------------------------------------
The Board may deduct from the dividends or distributions payable to any
Member all monies due from such Member to the Company on account of calls or
otherwise.
34
73. Unclaimed dividends
-------------------
Any dividend or distribution unclaimed for a period of six years from
the date of declaration of such dividend or distribution shall be forfeited and
shall revert and belong to the Company and the payment by the Board of any
unclaimed dividend or 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.
74. Interest on dividend
--------------------
No dividend or distribution shall bear interest against the Company.
CAPITALIZATION
--------------
75. Issue of bonus shares
---------------------
(1) The Board may resolve to capitalise any part of the amount for the
time being standing to the credit of any of the Company's share premium or other
reserve accounts or funds or to the credit of the profit and loss account or
otherwise available for distribution by applying such sum in paying up unissued
shares to be allotted as fully paid bonus shares pro rata to the Members.
(2) The Company may capitalise any sum standing to the credit of a
reserve account or fund or sums otherwise available for dividend or distribution
by applying such amounts in paying up in full partly paid shares of those
Members who would have been entitled to such sums if they were distributed by
way of dividend or distribution.
ACCOUNTS AND FINANCIAL STATEMENTS
---------------------------------
76. Records of account
------------------
The Board shall cause to be kept proper records of account with respect
to all transactions of the Company and in particular with respect to:-
(a) all sums of money received and expended by the Company and the
matters in respect of which the receipt and expenditure relates;
(b) all sales and purchases of goods by the Company; and
(c) the assets and liabilities of the Company.
Such records of account shall be kept at the registered office of the Company
or, subject to Section 83 (2) of the Act, at such other place as the Board
thinks fit and shall be available for inspection by the Directors during normal
business hours. No Member in its capacity as a Member shall have any right to
inspect any accounting record or book or document of the Company except as
conferred by the Act or as authorised by the Board.
35
77. Financial year end
------------------
The financial year end of the Company may be determined by the Board
and failing such resolution shall be 31st December in each year.
78. Financial statements
--------------------
Subject to any rights to waive laying of accounts pursuant to Section
88 of the Act, financial statements as required by the Act shall be laid before
the Members in general meeting.
AUDIT
-----
79. Appointment of Auditor
----------------------
Subject to Section 88 of the Act, at the annual general meeting or at a
subsequent special general meeting in each year, an independent representative
of the Members shall be appointed by them as Auditor of the accounts of the
Company. Such Auditor may be a Member but no Director, Officer or employee of
the Company shall, during his or her continuance in office, be eligible to act
as an Auditor of the Company.
80. Remuneration of Auditor
-----------------------
The remuneration of the Auditor shall be fixed by the Company in
general meeting or in such manner as the Members may determine.
81. Vacation of office of Auditor
-----------------------------
If the office of Auditor becomes vacant by the resignation or death of
the Auditor, or by the Auditor becoming incapable of acting by reason of illness
or other disability at a time when the Auditor's services are required, the
Board may fill the vacancy thereby created.
82. Access to books of the Company
------------------------------
The Auditor shall at all reasonable times have access to all books kept
by the Company and to all accounts and vouchers relating thereto, and the
Auditor may call on the Directors or Officers of the Company for any information
in their possession relating to the books or affairs of the Company.
83. Report of the Auditor
---------------------
(1) Subject to any rights to waive laying of accounts or appointment of
an Auditor pursuant to Section 88 of the Act, the accounts of the Company shall
be audited at least once in every year.
(2) The financial statements provided for by these Bye-laws shall be
audited by the Auditor in accordance with generally accepted auditing standards.
The Auditor shall make a written report thereon in accordance with generally
accepted auditing standards and the report of the Auditor shall be submitted to
the Members in general meeting.
36
(3) The generally accepted auditing standards referred to in
subparagraph (2) of this Bye-law may be those of a country or jurisdiction other
than Bermuda. If so, the financial statements and the report of the Auditor must
disclose this fact and name such country or jurisdiction.
NOTICES
-------
84. Notices to Members of the Company
---------------------------------
A notice may be given by the Company to any Member either by delivering
it to such Member in person or by sending it to such Member's address in the
Register of Members or to such other address given for the purpose. For the
purposes of this Bye-law, a notice may be sent by mail, courier service, cable,
telex, telecopier, facsimile, electronic mail or other mode of representing
words in a legible and non-transitory form. If such notice is sent by next-day
courier, cable, telex, telecopier, facsimile or electronic-mail, it shall be
deemed to have been given the Business Day following the sending thereof and, if
by registered mail, three Business Days following the sending thereof.
85. Notices to joint Members
------------------------
Any notice required to be given to a Member shall, with respect to any
shares held jointly by two or more persons, be given to whichever of such
persons is named first in the Register of Members and notice so given shall be
sufficient notice to all the holders of such shares.
86. Service and delivery of notice
------------------------------
Subject to Bye-law 85 any notice shall be deemed to have been served at
the time when the same would be delivered in the ordinary course of transmission
and, in proving such service, it shall be sufficient to prove that the notice
was properly addressed and prepaid, if posted, and the time when it was posted,
delivered to the courier or to the cable company or transmitted by telex,
facsimile or other method as the case may be.
SEAL OF THE COMPANY
-------------------
87. The seal
--------
The seal of the Company shall be in such form as the Board may from
time to time determine. The Board may adopt one or more duplicate seals for use
outside Bermuda.
88. Manner in which seal is to be affixed
-------------------------------------
Subject to Bye-law 57 (Share certificates), the seal of the Company
shall not be affixed to any instrument except attested by the signature of a
Director and the Secretary or any two Directors, or any person appointed by the
Board for the purpose, provided that any Director, Officer or Resident
Representative, may affix the seal of the Company attested by such Director,
Officer or Resident Representative's signature to any authenticated copies of
37
these Bye-laws, the incorporating documents of the Company, the minutes of any
meetings or any other documents required to be authenticated by such Director,
Officer or Resident Representative. Any such signature may be printed or affixed
by mechanical means on any share certificate, debenture, stock certificate or
other security certificate.
BENEFITS, PENSIONS AND INSURANCE
--------------------------------
89. Benefits
--------
The Board may (by establishment of or maintenance of schemes or
otherwise) provide benefits, whether by share options or incentive plans and
loans to acquire shares (subject to obtaining any general or specific consent
under the provision of Section 96 of the Act), the payment of gratuities or
pensions or by insurance or otherwise, for any past or present Director, Officer
or employee of the Company or any of its Subsidiaries or affiliates and for any
member of his or her family (including a spouse and a former spouse) or any
individual who is or was dependent on him or her, 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.
90. Insurance
---------
Without prejudice to the provisions of Bye-laws 31 and 32, the Board
shall have the power to purchase and maintain insurance for or for the benefit
of any individuals who are or were at any time Directors, Officers or employees
of the Company, or of any of its Subsidiaries or affiliates, or who are or were
at any time trustees of any pension fund in which Directors, Officers or
employees of the Company or any such Subsidiary or affiliate are interested,
including (without prejudice to the generality of the foregoing) insurance
against any liability incurred by such individuals in respect of any act or
omission in the actual or purported execution or discharge of their duties or in
the exercise or purported exercise of their powers or otherwise in relation to
their duties, powers or offices in relation to the Company or any such other
company, Subsidiary, affiliate or pension fund.
91. Limitation on Accountability
----------------------------
No Director or former Director shall be accountable to the Company or
the Members for any remuneration or benefit provided pursuant to Bye-laws 22, 89
or 90 and the receipt of any such benefit shall not disqualify any individual
from being or becoming a Director of the Company.
38
UNTRACED MEMBERS
----------------
92. Sale of Shares
--------------
The Company shall be entitled to sell at the best price reasonably
obtainable, or if the shares are listed on a stock exchange to purchase at the
trading price on the date of purchase, the shares of a Member or the shares to
which a Person is entitled by virtue of transmission on death, bankruptcy or
otherwise by operation of law; provided, that:
(a) during the period of 12 years prior to the date of the
publication of the advertisements referred to in paragraph (b)
of this Bye-law 92 (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 dividends, warrants and
checks (cheques) that have been sent in the manner authorised by
these Bye-laws in respect of the shares in question have
remained uncashed;
(b) the Company shall as soon as practicable after expiry of the
said period of 12 years have inserted advertisements both in a
national daily newspaper and in a newspaper circulating in the
area of the last known address of such Member or other Person
giving notice of its intention to sell or purchase the shares;
(c) during the said period of 12 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 Member or Person; and
(d) if the shares are listed on a stock exchange, notice shall have
been given to the relevant department of such stock exchange of
the Company's intention to make such sale or purchase prior to
the publication of advertisements.
If during any 12-year period referred to 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 92
(other than the requirement that they be in issue for 12 years) have been
satisfied in regard to the further shares, the Company may also sell or purchase
the further shares.
93. Instrument of Transfer
----------------------
To give effect to any such sale or purchase under Bye-law 92, the Board
may authorise some person to execute an instrument of transfer of the shares
sold or purchased 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 of any shares sold 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 relating to the sale.
94. Proceeds of Sale
----------------
The net proceeds of sale or purchase of shares pursuant to Bye-law 92
shall belong to the Company which, for the period of six years after the
transfer or purchase, shall be obliged to account to the former Member or other
Person previously entitled as aforesaid for an amount equal to such proceeds and
shall enter the name of such former Member or other Person in the books of the
39
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. After the said six-year period has
passed, the net proceeds of share shall become the property of the Company,
absolutely, and any rights of the former Member or other Person previously
entitled as aforesaid shall terminate completely.
WINDING UP
----------
95. Determination to liquidate
--------------------------
Subject to the Act, the Company may be wound up voluntarily by
resolution of the Members. However, the Board shall have the power to present
any petition and make any application in connection with the winding up or
liquidation of the Company.
96. Winding up/distribution by liquidator
-------------------------------------
If the Company shall be wound up the liquidator may, with the sanction
of a resolution of the Members, divide amongst the Members in specie or in kind
the whole or any part of the assets of the Company (whether they shall consist
of property of the same kind or not) and may, for such purpose, set such value
as he or she deems fair upon any property to be divided as aforesaid and may
determine how such division shall be carried out as between the Members or
different classes of Members. The liquidator may, with the like sanction, vest
the whole or any part of such assets in trustees upon such trusts for the
benefit of the Members as the liquidator shall think fit, but so that no Member
shall be compelled to accept any shares or other securities or assets whereon
there is any liability.
ALTERATION OF BYE-LAWS
----------------------
97. Alteration of Bye-laws
----------------------
No Bye-law shall be rescinded, altered or amended and no new Bye-law
shall be made until the same has been approved by a resolution of the Board and
by a resolution adopted by at least 50% of the Members entitled to vote at any
special or general meeting of the Company.
******
***
*
40
SCHEDULE - FORM A (Bye-law 49)
..............................................
P R O X Y
I/We
of
the holder(s) of share(s) in the above-named company hereby appoint
......................... or failing him/her ..............................or
failing him/her ............................................ as my/our proxy to
vote on my/our behalf at the general meeting of the Company to be held on the
day of , 19 , and at any adjournment thereof.
Dated this day of , 19
*GIVEN under the seal of the Company
*Signed by the above-named
.....................................
.....................................
Witness
*Delete as applicable.
SCHEDULE - FORM B (Bye-law 59)
------------------------------
NOTICE OF LIABILITY TO FORFEITURE FOR NON PAYMENT OF CALL
You have failed to pay the call of [amount of call] made on the ......
day of ........, 19.. last, in respect of the [number] share(s) [numbers in
figures] standing in your name in the Register of Members of the Company, on the
...... day of ........., 19.. last, the day appointed for payment of such call.
You are hereby notified that unless you pay such call together with interest
thereon at the rate of .......... per annum computed from the said ....... day
of ........., 19... last, on or before the ....... day of ........., 19... next
at the place of business of the Company the share(s) will be liable to be
forfeited.
Dated this ....... day of .............., 19...
[Signature of Secretary]
By order of the Board
SCHEDULE - FORM C (BYE-LAW 63)
------------------------------
TRANSFER OF A SHARE OR SHARES
-----------------------------
FOR VALUE RECEIVED .................................................... [amount]
................................................................................
[transferor]
hereby sell assign and transfer unto ...............................[transferee]
of ....................................................................[address]
......................................................................[number of
shares]
shares of ..............................................................[name of
Company]
Dated .....................................
....................................
(Transferor)
In the presence of:
................................................
(Witness)
.....................................
(Transferee)
In the presence of:
.................................................
(Witness)
SCHEDULE - FORM D (Bye-law 68)
------------------------------
TRANSFER BY A PERSON BECOMING ENTITLED ON DEATH/BANKRUPTCY
----------------------------------------------------------
OF A MEMBER
-----------
I/We having become entitled in consequence of the [death/bankruptcy] of
[name of the deceased Member] to [number] share(s) standing in the register of
members of [Company] in the name of the said [name of deceased Member] instead
of being registered myself/ourselves elect to have [name of transferee] (the
"Transferee") registered as a transferee of such share(s) and I/we do hereby
accordingly transfer the said share(s) to the Transferee to hold the same unto
the Transferee his or her executors administrators and assigns subject to the
conditions on which the same were held at the time of the execution thereof; and
the Transferee does hereby agree to take the said share(s) subject to the same
conditions.
WITNESS our hands this ........ day of ..........., 19...
Signed by the above-named.. )
[person or persons entitled] )
in the presence of:........ )
Signed by the above-named.. )
[transferee] ......... )
in the presence of:........ )
