EX-3.2
Published on March 23, 2000
Exhibit 3.2
B Y E - L A W S
of
MARVELL TECHNOLOGY GROUP LTD.
(i)
TABLE OF CONTENTS
Bye-Law
(ii)
(iii)
INTERPRETATION
1. Interpretation
(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 Act 1981 as amended 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) "Company" means the company for which these Bye-laws are
approved and confirmed;
(f) "Director" means a director of the Company and shall
include an Alternate Director;
(g) "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;
(h) "notice" means written notice as further defined in these
Bye-laws unless otherwise specifically stated;
(i) "Officer" means any person appointed by the Board to hold
an office in the Company;
(j) "Register of Directors and Officers" means the Register of
Directors and Officers referred to in these Bye-laws;
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(k) "Register of Members" means the Register of Members
referred to in these Bye-laws; and
(l) "Secretary" means the person appointed to perform any or
all the duties of secretary of the Company and includes any
deputy or assistant secretary.
(2) In these Bye-laws, where not inconsistent with the context:-
(a) words denoting the plural number include the singular
number and vice versa;
(b) words denoting the masculine gender include the feminine
gender;
(c) words importing persons include companies, associations or
bodies of persons whether corporate or not;
(d) the word:-
(i) "may" shall be construed as permissive;
(ii) "shall" shall be construed as imperative; and
(e) unless otherwise provided herein words or expressions
defined in the Act shall bear the same meaning in these
Bye-laws.
(3) Expressions referring to writing or written shall, unless the
contrary intention appears, include facsimile, printing, lithography,
photography 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.
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BOARD OF DIRECTORS
2. Board of Directors
The business of the Company shall be managed and conducted by the Board.
3. Management of the Company
(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 subject, nevertheless, to
these Bye-laws, the provisions of any statute and to such regulations as may be
prescribed by the Company in general meeting.
(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
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.
5. Power to appoint manager
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The Board may appoint a person to act as manager of the Company's day to
day business and may entrust to and confer upon such manager such powers and
duties as it deems appropriate for the transaction or conduct of such business.
6. Power to authorise specific actions
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 on behalf of the Company.
7. Power to appoint attorney
The Board may from time to time and at any time by power of attorney
appoint any company, firm, person or body of persons, whether nominated directly
or indirectly by the Board, to be an attorney of the Company for such purposes
and with such powers, authorities and discretions (not exceeding those vested in
or exercisable by the Board) and for such period and subject to such conditions
as it may think fit and any such power of attorney may contain such provisions
for the protection and convenience of persons dealing with any such attorney as
the Board may think fit and may also authorise any such attorney to sub-delegate
all or any of the powers, authorities and discretions so vested in the attorney.
Such attorney may, if so authorised under the seal of the Company, execute any
deed or instrument under such attorney's personal seal with the same effect as
the affixation of the seal of the Company.
8. Power to delegate to a committee
The Board may delegate any of its powers to a committee appointed by the
Board and every such committee shall conform to such directions as the Board
shall impose on them.
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
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.
11. Exercise of power to purchase shares of or discontinue the Company
(1) The Board may exercise all the powers of the Company to purchase all
or any part of its own shares pursuant to Section 42A of the Act.
(2) The Board may exercise all the powers of the Company to discontinue
the Company to a named country or jurisdiction outside Bermuda pursuant to
Section 132G of the Act.
12. Election of Directors
The Board shall consist of not less than two Directors or such number in
excess thereof as the Members may from time to time determine who shall be
elected or appointed in the first place at the statutory meeting of the Company
and thereafter, except in the case of casual vacancy, at the annual general
meeting or at any special general meeting called for the purpose and who shall
hold office for such term as the Members may determine or, in the absence of
such determination, until the next annual general meeting or until their
successors are elected or appointed or their office is otherwise vacated, and
any general meeting may authorise the Board to fill any vacancy in their number
left unfilled at a general meeting.
13. Defects in appointment of Directors
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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) Any general meeting of the Company 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 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
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(1) Except as provided for in Bye-Law 50, and subject to any provision to
the contrary in these Bye-laws, the Members 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.
(2) Except as provided for in Bye-law 50, a vacancy of 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 at the meeting at which such Director is
removed and, in the absence of such election or appointment, the Board may fill
the vacancy.
16. Vacancies on the Board
(1) Except as provided for in Bye-law 50, 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 the death, disability,
disqualification or resignation of any Director and to appoint an Alternate
Director to any Director so appointed.
(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 act for the purpose of (i) summoning a
general meeting of the Company or (ii) preserving the assets of the Company.
(3) The office of Director shall be vacated if the Director:
(a) is removed from office pursuant to these Bye-laws or is
prohibited from being a Director by law;
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(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.
(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, facsimile or other mode of representing words in a legible and
non-transitory form at such Director's last known address or any other address
given by such Director to the Company for this purpose.
18. Quorum at meetings of the Board
The quorum necessary for the transaction of business at a meeting of the
Board shall be three Directors.
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.
(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
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the resolution shall fail. Notwithstanding the foregoing, a resolution to
approve any of the following shall require the affirmative vote of at least four
directors:
(a) the issue of shares in the capital of the Company or any
obligations, charges or debts convertible into shares or
involving rights to vote under any circumstances;
(b) the winding up, dissolution or termination of the corporate
existence of the Company;
(c) borrowing of any amount by the Company which exceeds in the
aggregate $1,000,000 or the mortgage, pledge or grant of a
security interest in any property of the Company which
exceeds in the aggregate $1,000,000;
(d) entering into or material modification by the Company of
any contract or commitment which requires payment in excess
of $1,000,000 in the aggregate; and
(e) purchasing, acquiring, selling or disposing of any tangible
or intangible asset for amounts in excess of $1,000,000.
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. For the purposes of this
Bye-law only, "Director" shall not include an Alternate Director.
21. Contracts and disclosure of Directors' interests
(1) Any Director, or any Director's firm, partner or any company with
whom any Director is associated, may act in a professional capacity for the
Company and such Director or such Director's firm, partner or such company shall
be entitled to remuneration for professional services as if such Director were
not a Director, provided that nothing herein contained shall authorise a
Director or Director's firm, partner or such company to act as Auditor of the
Company.
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(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.
(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
The remuneration, (if any) of the Directors shall be determined by the
Company in general meeting 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.
OFFICERS
23. 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
deemed to be Officers for the purposes of these Bye-laws.
24. Appointment of Officers
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(1) The Board shall, as soon as possible after the statutory meeting of
Members and after each annual general meeting appoint a President and Vice
President or a Chairman and Deputy Chairman who shall be Directors.
(2) The Secretary and additional Officers, if any, shall be appointed by
the Board from time to time.
25. Remuneration of Officers
The Officers shall receive such remuneration as the Board may from time
to time determine.
26. 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.
27. 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.
28. Register of Directors and Officers
(1) The Board shall cause to be kept in one or more books at its
registered office a Register of Directors and Officers and shall enter therein
the following particulars with respect to each Director and the President, each
Vice-President, the Chairman, and each Deputy Chairman, provided that each such
person is a Director and the Secretary, that is to say:
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(a) first name and surname; and
(b) address.
(2) The Board shall, within the period of fourteen days from the
occurrence of-
(a) any change among its Directors, the President, any
Vice-President, the Chairman, and any Deputy Chairman,
provided that each such person is a Director, and in the
Secretary; or
(b) any change in the particulars contained in the Register of
Directors and Officers,
cause to be entered on the Register of Directors and Officers the particulars of
such change and the date on which such change occurred.
(3) The Register of Directors and Officers shall be open to inspection at
the 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.
MINUTES
29. Obligations of Board to keep minutes
The Board shall cause minutes to be duly entered in books provided for
the purpose:-
(a) of all elections and appointments of Officers;
(b) of the names of the Directors present at each meeting of
the Board and of any committee appointed by the Board; and
(c) of all resolutions and proceedings of general meetings of
the Members, meetings of the Board, meetings of managers
and meetings of committees appointed by the Board.
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INDEMNITY
30. Indemnification of Directors and Officers of the Company
The Directors, Secretary and other Officers for the time being of the
Company and the liquidator or trustees (if any) for the time being 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 in or about the execution of their duty, or
supposed duty, or in their respective offices or trusts, and none of them shall
be answerable for the acts, receipts, neglects or defaults of the others of them
or for joining in any receipts for the sake of conformity, or for any bankers or
other persons with whom any moneys or effects belonging to the Company shall or
may be lodged or deposited for safe custody, or for insufficiency or deficiency
of any security upon which any moneys of or belonging to the Company shall be
placed out on or invested, or for any other loss, misfortune or damage which may
happen in the execution of their respective offices or trusts, or in relation
thereto, PROVIDED THAT this indemnity shall not extend to any matter in respect
of any fraud or dishonesty which may attach to any of said persons.
31. Waiver of claim by Member
Each Member agrees to waive any claim or right of action such Member
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.
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MEETINGS
32. Notice of annual general meeting
The annual general meeting of the Company shall be held in each year
other than the year of incorporation at such time and place as the President or
the Chairman or any two Directors or any Director and the Secretary or the Board
shall appoint. At least five days notice of such meeting shall be given to each
Member stating the date, place 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.
33. 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
days' notice which shall state the date, time, place and the general nature of
the business to be considered at the meeting.
34. Accidental omission of notice of general meeting
The accidental omission to give notice of a general meeting to, or the
non-receipt of notice of a general meeting by, any person entitled to receive
notice shall not invalidate the proceedings at that meeting.
35. Meeting called on requisition of Members
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.
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36. Short notice
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.
37. Postponement of meetings
The Board may postpone any general meeting called in accordance with the
provisions of these Bye-laws (other than a meeting requisitioned under these
Bye-laws) provided that notice of postponement is given to each Member before
the time for such meeting. Fresh notice of the date, time and place for the
postponed meeting shall be given to each Member in accordance with the
provisions of these Bye-laws.
38. Quorum for general meeting
At any general meeting of the Company two persons present in person and
representing in person or by proxy in excess of 50% of the total issued voting
shares in the Company throughout the meeting shall form a quorum for the
transaction of business, PROVIDED 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 Board may determine.
39. Adjournment of meetings
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The chairman of a general meeting may, with the consent of the Members at
any general meeting at which 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.
40. 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.
41. 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 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
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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.
(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, 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 Bye-law
15.
42. 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.
43. 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 accordance
with the provisions of these Bye-laws and in the case of an equality of votes
the resolution shall fail.
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(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.
44. 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.
45. 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.
46. 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
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(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 sub-paragraph (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 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 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 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
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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. At the conclusion of the poll, the ballot papers
shall be examined and counted by a committee of not less than two Members or
proxy holders appointed by the chairman for the purpose and the result of the
poll shall be declared by the chairman.
47. 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.
48. Instrument of proxy
The instrument appointing a proxy shall be in writing in the form, or as
near thereto as circumstances admit, of Form "A" in the Schedule hereto, under
the hand of the appointor or of the appointor's attorney duly authorised in
writing, or if the appointor is a corporation, either under its seal, or under
the hand of a duly authorised officer or attorney. The decision of the chairman
of any general meeting as to the validity of any instrument of proxy shall be
final.
49. Representation of corporations at meetings
A corporation which is a Member may, by written instrument, authorise
such person as it thinks fit to act as its representative at any meeting of the
Members and the person so authorised shall be entitled to exercise the same
powers on behalf of the corporation which such person represents as that
corporation could exercise if it were an individual Member. Notwithstanding the
foregoing, the chairman of the meeting may accept such assurances as he or she
thinks fit as to the right of any person to attend and vote at general meetings
on behalf of a corporation which is a Member.
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SHARE CAPITAL AND SHARES
50. Subject to any resolution of the Members to the contrary and without
prejudice to any special rights previously conferred on the holders of any
existing shares or class of shares, the share capital of the Company is divided
into two classes of shares to be designated respectively Common Stock (the
"Common") and Preferred Stock (the "Preferred"). The Preferred may be issued
from time to time in one or more series. The Board of Directors is authorized to
fix the number of shares of any series of the Preferred and to determine or
alter the rights, preferences, privileges, and restrictions granted to or
imposed upon any wholly unissued series of the Preferred and, within the limits
and restrictions stated in any resolution or resolutions of the Board of
Directors originally fixing the number of shares constituting any series of the
Preferred, to increase or decrease (but not below the number of shares of any
such series then outstanding) the number of shares of any such series subsequent
to the issue of shares of that series. The first series of the Preferred shall
be designated Series A Preferred Stock ("Series A Preferred") and shall consist
of up to 525,000 shares. The second series of the Preferred shall be designated
Series B Preferred Stock ("Series B Preferred") and shall consist of up to
1,119,091 shares. The third series of the Preferred shall be designated Series C
Preferred Stock (the "Series C Preferred") and shall consist of up to 2,184,280
shares. The fourth series of the Preferred shall be designated Series D
Preferred Stock (the "Series D Preferred") and shall consist of up to 3,750,000
shares. The fifth series of the Preferred shall be designated Series E Preferred
Stock (the "Series E Preferred") and shall consist of up to 421,629 shares.
The holders of the shares of COMMON STOCK shall, subject to the
provisions of these Bye-laws:
(a) be entitled to one vote per share;
(b) be entitled to such dividends as the Board may from time to time
declare, but only if dividends at the annual rate set forth in (b) below shall
have been paid or declared and set apart upon all shares of Preferred for such
fiscal year, and no dividend shall be declared or paid with respect to the
Common Stock unless at the same time an
- 23 -
equivalent dividend (which shall be in addition to the dividend on the Preferred
referred to immediately previously) is declared or paid with respect to the
Preferred;
(c) in the event of a winding-up or dissolution of the Company, whether
voluntary or involuntary or for the purpose of a reorganization or otherwise or
upon any distribution of capital, be entitled to the surplus assets of the
Company, subject to the rights of the Preferred shares; and
(d) generally be entitled to enjoy all of the rights attaching to shares.
The holders of shares of SERIES A PREFERRED, SERIES B PREFERRED, SERIES C
PREFERRED, SERIES D PREFERRED AND SERIES E PREFERRED shall be subject to the
provisions of these Bye-laws:
(a) Voting Rights; Directors.
1. Except as otherwise required by law, the holder of each share of
Preferred shall be entitled to the number of votes equal to the number of shares
of Common Stock into which such share of Preferred could be converted at the
record date for determination of the shareholders entitled to vote on such
matters, or, if no such record date is established, at the date such vote is
taken or any written consent of shareholders is solicited, such votes to be
counted together with all other shares of stock of the Company having general
voting power and not separately as a class. Fractional votes by the holders of
Preferred shall not, however, be permitted and any fractional voting rights
shall (after aggregating all shares into which shares of the Preferred held by
each holder could be converted) be rounded to the nearest whole number. Holders
of Common Stock and the Preferred shall be entitled to notice of any
shareholders' meeting in accordance with the Bye-laws of the Company.
2. The holders of a majority of the outstanding shares of Series B
Preferred, voting as a class, shall be entitled to elect one (1) member of the
Board of Directors (the "Series B Director").
- 24 -
3. The holders of a majority of the outstanding shares of Series C
Preferred, voting as a class, shall be entitled to one (1) member of the Board
of Directors (the "Series C Director").
a) In the case of a vacancy in the office of the Series B Director, a
majority of the holders of the Series B Preferred shall elect a successor to
serve for the unexpired term of the Series B Director whose office is vacant.
b) The Series B Director may only be removed by the vote or written
consent of the majority of the holders of the Series B Preferred.
c) In the case of a vacancy in the office of the Series C Director, a
majority of the holders of the Series C Preferred shall elect a successor to
serve for the unexpired term of the Series C Director whose office is vacant.
d) The Series C Director may only be removed by the vote or written
consent of the majority of the holders of the Series C Preferred.
(b) Dividends. The holders of outstanding Series A Preferred, Series B
Preferred, Series C Preferred, Series D Preferred and Series E Preferred shall
be entitled to receive in any fiscal year, when, if and as declared by the Board
of Directors, out of any assets at the time legally available therefor,
dividends in cash at an annual rate of $0.047, $0.077 per share, $0.245 per
share, $0.303 per share and $0.70 per share (as appropriately adjusted for any
combinations, consolidations, subdivisions, or stock dividends with respect to
such shares of Preferred), respectively. Such dividends shall be payable, when,
as and if declared by the Board of Directors. The right to such dividends shall
not be cumulative, and no right shall accrue to holders of Series A Preferred,
Series B Preferred, Series C Preferred, Series D Preferred or Series E Preferred
by reason of the fact that dividends on such shares were not declared in any
prior year, nor shall any undeclared or unpaid dividends bear or accrue
interest. Any declared but unpaid dividends on Series A Preferred, Series B
Preferred, Series C Preferred, Series D Preferred or Series E Preferred shall be
paid upon the conversion of such shares into Common Stock either (at the option
of the Company) by payment of cash or by the issuance of additional shares
- 25 -
of Common Stock based upon the fair market value of the Common Stock at the time
of conversion, as determined by the Board of Directors.
(c) Liquidation Preference. In the event of any liquidation, dissolution,
or winding up of the Company, either voluntary or involuntary, distributions to
the shareholders of the Company shall be made in the following manner:
1. The holders of the Series A Preferred, Series B Preferred, Series C
Preferred, Series D Preferred and Series E Preferred shall be entitled, on a
pari passu basis, to receive, prior and in preference to any distribution of any
of the assets or surplus funds of the Company to the holders of the Common Stock
by reason of their ownership of such stock, the amount of $0.667, $1.10, $3.50,
$4.33 and $10.00 per share, respectively, for each share of Series A Preferred,
Series B Preferred, Series C Preferred, Series D Preferred or Series E Preferred
then held by them, (as appropriately adjusted for any combinations,
consolidations, subdivisions, or stock dividends with respect to such shares of
Preferred) and, in addition, an amount equal to all declared but unpaid
dividends on the Series A Preferred (the "Series A Preferred Per Share
Liquidation Preference"), all declared but unpaid dividends on the Series B
Preferred (the "Series B Preferred Per Share Liquidation Preference"), all
declared but unpaid dividends on the Series C Preferred (the "Series C Preferred
Per Share Liquidation Preference"), all declared but unpaid dividends on the
Series D Preferred (the "Series D Preferred Per Share Liquidation Preference")
and all declared but unpaid dividends on the Series E Preferred (the "Series E
Preferred Per Share Liquidation Preference"). If the assets and funds thus
distributed among the holders of Series A Preferred, Series B Preferred, Series
C Preferred, Series D Preferred and Series E Preferred shall be insufficient to
permit the payment to such holders of the full aforesaid respective preferential
amounts for such series of Preferred, then the entire assets and funds of the
Company legally available for distribution shall be distributed ratably among
the holders of Series A Preferred, Series B Preferred, Series C Preferred,
Series D Preferred and Series E Preferred on a pari passu basis, in proportion
to the full
- 26 -
respective preferential amount each such holder is otherwise entitled to receive
with respect to such series of Preferred.
2. If the assets and funds of the Company available for distribution to
shareholders exceed the aggregate amount of the Series A Preferred Per Share
Liquidation Preference, the Series B Preferred Per Share Liquidation Preference,
the Series C Preferred Per Share Liquidation Preference, the Series D Preferred
Per Share Liquidation Preference and the Series E Preferred Per Share
Liquidation Preference payable with respect to all shares of Series A Preferred,
Series B Preferred, Series C Preferred, Series D Preferred and Series E
Preferred, respectively, then, after payment required by paragraph (1) above
shall have been made or irrevocably set aside, the remaining assets of the
Company available for distribution to shareholders shall be distributed among
the holders of Series A Preferred, Series B Preferred, Series C Preferred,
Series D Preferred, Series E Preferred and Common Stock pro rata based on the
number of shares of Common Stock then outstanding and the number of shares of
Common Stock into which the outstanding shares of Preferred are then
convertible; provided, however, that such pro rata participation by the Series A
Preferred shall cease upon the receipt by the holders of the Series A Preferred
(pursuant to this Section (c)(2)) of an amount equal to $1.667 per share of the
Series A Preferred (as appropriately adjusted for any combinations,
consolidations, subdivisions, or stock dividends with respect to such shares of
Preferred), and further provided, that such pro rata participation by the Series
B Preferred shall cease upon the receipt by the holders of the Series B
Preferred (pursuant to this Section (c)(2)) of an amount equal to $2.750 per
share of the Series B Preferred (as appropriately adjusted for any combinations,
consolidations, subdivisions, or stock dividends with respect to such shares of
Preferred), and further provided, that such pro rata participation by the Series
C Preferred shall cease upon the receipt by the holders of the Series C
Preferred (pursuant to this Section (c)(2)) of an amount equal to $8.75 per
share of the Series C Preferred (as appropriately adjusted for any combinations,
consolidations, subdivisions, or stock dividends with respect to such shares of
Preferred), and further provided, that such pro rata participation by the Series
D Preferred shall cease upon receipt by the holders of the Series D Preferred
(pursuant to this Section (c)(2)) of an
- 27 -
amount equal to $10.833 per share of the Series D Preferred (as appropriately
adjusted for any combinations, consolidations, subdivisions, or stock dividends
with respect to such shares of Preferred), and further provided, that such pro
rata participation by the Series E Preferred shall cease upon receipt by the
holders of the Series E Preferred (pursuant to this Section (c)(2)) of an amount
equal to $25.00 per share of the Series E Preferred (as appropriately adjusted
for any combinations, consolidations, subdivisions, or stock dividends with
respect to such shares of Preferred), and thereafter the holders of Common Stock
shall be entitled to receive all remaining assets of the Company available for
distribution to shareholders pro rata based on the number of shares of Common
Stock then outstanding.
3. For purposes of this Section (c), an amalgamation, merger or
consolidation of the Company with or into any other company or companies, or the
amalgamation, merger or consolidation of any other company or companies into the
Company, which results in the shareholders of the Company prior to the
transaction owing less than 50% of the voting power of the surviving entity or a
sale of all or substantially all the assets of the Company unless the
stockholders prior to the sale own at least 50% of the surviving entity receive
distributions in cash or securities of another company or companies as a result
of such amalgamation, consolidation or merger, or a sale of all or substantially
all of the assets of the Company shall be treated as a liquidation, dissolution
or winding up of the Company.
4. If any of the assets of the Company are to be distributed other than
in cash under this Section (c) or for any purpose, then the Board of Directors
of the Company shall in good faith determine the value of such assets to be
distributed to the holders of Series A Preferred, Series B Preferred, Series C
Preferred, Series D Preferred, Series E Preferred and Common Stock.
(d) Conversion. The holders of the Preferred have conversion rights as
follows (the "Conversion Rights"):
- 28 -
1. Right to Convert. Each share of Series A Preferred shall be
convertible, at the option of the holder thereof, at any time after the date of
issuance of such share at the office of the Company or any transfer agent for
the Series A Preferred, into such number of fully paid and nonassessable shares
of Common Stock as is determined by dividing the Series A Conversion Value per
share of the Series A Preferred by the Conversion Price for the Series A
Preferred (determined as hereinafter provided) in effect at the time of the
conversion. Each share of Series B Preferred shall be convertible, at the option
of the holder thereof, at any time after the date of issuance of such share at
the office of the Company or any transfer agent for the Series B Preferred, into
such number of fully paid and nonassessable shares of Common Stock as is
determined by dividing the Series B Conversion Value per share of the Series B
Preferred by the Conversion Price for the Series B Preferred (determined as
hereinafter provided) in effect at the time of the conversion. Each share of
Series C Preferred shall be convertible, at the option of the holder thereof, at
any time after the date of issuance of such share at the office of the Company
or any transfer agent for the Series C Preferred, into such number of fully paid
and nonassessable shares of Common Stock as is determined by dividing the Series
C Conversion Value per share of the Series C Preferred by the Conversion Price
for the Series C Preferred (determined as hereinafter provided) in effect at the
time of the conversion. Each share of Series D Preferred shall be convertible,
at the option of the holder thereof, at any time after the date of issuance of
such share at the office of the Company or any transfer agent for the Series D
Preferred, into such number of fully paid and nonassessable shares of Common
Stock as is determined by dividing the Series D Conversion Value per share of
the Series D Preferred by the Conversion Price for the Series D Preferred
(determined as hereinafter provided) in effect at the time of the conversion.
Each share of Series E Preferred shall be convertible, at the option of the
holder thereof, at any time after the date of issuance of such share at the
office of the Company or any transfer agent for the Series E Preferred, into
such number of fully paid and nonassessable shares of Common Stock as is
determined by dividing the Series E Conversion Value per share of the Series E
Preferred by the Conversion Price for the Series E Preferred (determined as
hereinafter provided)
- 29 -
in effect at the time of the conversion. The initial Conversion Price per share
of Series A Preferred shall be $0.667. The Series A Conversion Value per share
of Series A Preferred shall be $0.667. The initial Conversion Price per share of
Series B Preferred shall be $1.10. The Series B Conversion Value per share of
Series B Preferred shall be $1.10. The initial Conversion Price per share of
Series C Preferred shall be $3.50. The Series C Conversion Value per share of
Series C Preferred shall be $3.50. The initial Conversion Price per share of
Series D Preferred shall be $4.333. The Series D Conversion Value per share of
Series D Preferred shall be $4.333. The Series E Conversion Value per share of
Series E Preferred shall be $10.00. The initial Conversion Price per share of
Series E Preferred shall be $10.00. The initial Conversion Price of each of the
Series A Preferred, Series B Preferred, Series C Preferred, Series D Preferred
and Series E Preferred shall be subject to adjustment as hereinafter provided.
2. Automatic Conversion. Each share of Series A Preferred, Series B
Preferred, Series C Preferred, Series D Preferred and Series E Preferred shall
automatically be converted into shares of Common Stock at the then effective
Conversion Price (i) upon the closing of a firm commitment underwritten public
offering pursuant to an effective registration statement under the Securities
Act of 1933, as amended, covering the offer and sale of Common Stock for the
account of the Company to the public at a price per share (prior to deduction of
underwriter commissions and offering expenses) of not less than $13.00 per share
(appropriately adjusted for any recapitalizations, combinations, stock
dividends, subdivisions or split-ups) and an aggregate offering price to the
public of not less than $10,000,000 (prior to deduction of underwriter
commissions and offering expenses), (ii) in respect of the Series A Preferred,
upon the Company's receipt of the written consent of the holders of greater than
one-half (1/2) of the then outstanding shares of Series A Preferred to the
conversion of all then outstanding Series A Preferred under this Section (d),
(iii) in respect of the Series B Preferred, upon the Company's receipt of the
written consent of the holders of greater than one-half (1/2) of the then
outstanding shares of Series B Preferred to the conversion of all then
outstanding Series B Preferred under this Section (d), (iv) in respect of the
Series C Preferred, upon the Company's receipt of the written consent of the
holders of greater than one-half (1/2) of the then outstanding
- 30 -
shares of Series C Preferred to the conversion of all then outstanding Series C
Preferred under this Section (d), (v) in respect of the Series D Preferred, upon
the Company's receipt of the written consent of the holders of greater than
one-half (1/2) of the then outstanding shares of Series D Preferred to the
conversion of all then outstanding Series D Preferred under this Section (d) or
(vi) in respect of the Series E Preferred, upon the Company's receipt of the
written consent of the holders of greater than one-half (1/2) of the then
outstanding shares of Series E Preferred to the conversion of all then
outstanding Series E Preferred under this Section (d). In the event of the
automatic conversion of the Preferred upon a public offering as aforesaid, the
person(s) entitled to receive the Common Stock issuable upon such conversion of
the Preferred shall not be deemed to have converted such shares of Preferred
until immediately prior to the closing of such sale of securities.
3. Mechanics of Conversion. No fractional shares of Common Stock shall be
issued upon conversion of shares of Preferred. In lieu of any fractional shares
to which the holder would otherwise be entitled, the Company shall pay cash
equal to such fraction multiplied by the then effective Conversion Price for
such series of Preferred. Before any holder of Preferred shall be entitled to
convert the same into full shares of Common Stock and to receive certificates
therefor, such holder shall surrender the certificate or certificates therefor,
duly endorsed, at the office of the Company or of any transfer agent for the
Preferred, and shall give written notice to the Company at such office that such
holder elects to convert the same; provided, however, that in the event of an
automatic conversion pursuant to Section (d)(2), the outstanding shares of
Preferred that is the subject of such automatic conversion shall be converted
automatically without any further action by the holders of such shares and
whether or not the certificates representing such shares are surrendered to the
Company or its transfer agent, and provided further that the Company shall not
be obligated to issue certificates evidencing the shares of Common Stock
issuable upon such automatic conversion unless the certificates evidencing such
shares of Preferred are either delivered to the Company or its transfer agent as
provided above, or the holder notifies the Company or its transfer agent that
such certificates have been lost, stolen or destroyed and executes an agreement
- 31 -
satisfactory to the Company to indemnify the Company from any loss incurred by
it in connection with such certificates. The Company shall, as soon as
practicable after delivery of such certificate, or such agreement and
indemnification in the case of a lost certificate, issue and deliver at such
office to such holder of Preferred, a certificate or certificates for the number
of shares of Common Stock to which such holder shall be entitled as aforesaid
and a check payable to the holder in the amount of any cash amounts payable as
the result of a conversion into fractional shares of Common Stock. Such
conversion shall be deemed to have been made immediately prior to the close of
business on the date of such surrender of the shares of Preferred to be
converted, or in the case of automatic conversion on the date of closing of the
offering or the effective date of such written consent, and the person or
persons entitled to receive the shares of Common Stock issuable upon such
conversion shall be treated for all purposes as the record holder or holders of
such shares of Common Stock on such date.
4. Adjustments to Conversion Price.
(a) Adjustments for Stock Dividends, Subdivisions, Combinations or
Consolidation of Common Stock. In the event the outstanding shares of Common
Stock shall be subdivided (by stock split, or otherwise), into a greater number
of shares of Common Stock, or the Company shall declare or pay any dividend on
the Common Stock payable in Common Stock, the applicable Conversion Price for
the Series A Preferred, Series B Preferred, Series C Preferred, Series D
Preferred and Series E Preferred then in effect shall, concurrently with the
effectiveness of such subdivision or stock dividend, be proportionately
decreased based on the ratio of (i) the number of shares of Common Stock
outstanding immediately prior to such subdivision or stock dividend to (ii) the
number of shares of Common Stock outstanding immediately after such subdivision
or stock dividend. In the event the outstanding shares of Common Stock shall be
combined or consolidated, by reclassification or otherwise, into a lesser number
of shares of Common Stock, the applicable Conversion Price for the Series A
Preferred, Series B Preferred, Series C Preferred, Series D Preferred and Series
E Preferred then in effect
- 32 -
shall, concurrently with the effectiveness of such combination or consolidation,
be proportionately increased on the same basis as set forth above.
(b) Adjustments for Other Distributions. In the event the Company
at any time or from time to time makes, or fixes a record date for the
determination of holders of Common Stock entitled to receive any distribution
payable in securities of the Company other than shares of Common Stock, and
other than as otherwise adjusted for in this Section (d)(4), then and in each
such event provision shall be made so that the holders of Preferred shall
receive upon conversion thereof, in addition to the number of shares of Common
Stock receivable thereupon, the amount of securities of the Company which they
would have received had their shares of Preferred been converted into Common
Stock on the date of such event and had they thereafter, during the period from
the date of such event to and including the date of conversion, retained such
securities receivable by them as aforesaid during such period, subject to all
other adjustments called for during such period under this Section (d)(4) with
respect to the rights of the holders of such series of Preferred.
(c) Adjustments for Reclassification, Exchange and Substitution.
If the Common Stock issuable upon conversion of shares of Preferred shall be
changed into the same or a different number of shares of any other class or
classes of stock, whether by capital reorganization, reclassification or
otherwise (other than a subdivision or combination of shares provided for
above), the applicable Conversion Price of the Series A Preferred, Series B
Preferred, Series C Preferred, Series D Preferred and Series E Preferred then in
effect shall, concurrently with the effectiveness of such reorganization or
reclassification, be proportionately adjusted such that the shares of Series A
Preferred, Series B Preferred, Series C Preferred, Series D Preferred and Series
E Preferred shall be convertible into, in lieu of the number of shares of Common
Stock which the holders would otherwise have been entitled to receive, a number
of shares of such other class or classes of stock equivalent to the number of
shares of Common Stock that would be subject to receipt by the holders upon
conversion of the Series A Preferred,
- 33 -
Series B Preferred, Series C Preferred, Series D Preferred and Series E
Preferred, respectively, immediately prior to such reclassification or capital
reorganization.
(d) Preferred Conversion Price Adjustments. The Conversion Price
for the Series A Preferred, Conversion Price for the Series B Preferred, the
Conversion Price for the Series C Preferred, the Conversion Price for the Series
D Preferred and the Conversion Price for the Series E Preferred shall be subject
to adjustment from time to time as follows:
(i) Special Definitions. For purposes of this Section 4(d),
the following definitions shall apply:
(1) "Options" shall mean rights, options or warrants
to subscribe for, purchase or otherwise acquire either Common or Convertible
Securities.
(2) "Series A Original Issue Date" shall mean the
date on which the first share of Series A Preferred was first issued.
(3) "Series B Original Issue Date" shall mean the
date on which the first share of Series B Preferred was first issued.
(4) "Series C Original Issue Date" shall mean the
date on which the first share of Series C Preferred was first issued.
(5) "Series D Original Issue Date" shall mean the
date on which the first share of Series D Preferred was first issued.
(6) "Series E Original Issue Date" shall mean the
date on which the first share of Series E Preferred was first issued.
- 34 -
(7) "Convertible Securities" shall mean any
evidences of indebtedness, shares or other securities convertible into or
exchangeable for Common.
(8) "Additional Shares of Common" shall mean all
shares of Common issued (or, pursuant to Section 4(d)(iii) below, deemed to be
issued) by the Company after the Series E Original Issue Date, other than shares
of Common issued or issuable:
(a) upon conversion of shares of the Preferred.
(b) up to 6,475,000 shares issued or issuable to
officers, directors, employees and consultants of the Company pursuant to
incentive plans or arrangements, including the Company's 1995 Stock Option Plan
and 1997 Director's Stock Option Plan (as amended from time to time), or other
stock arrangements which have been approved by the Board;
(c) up to 150,000 shares issued or issuable to
commercial banking or equipment leases financing entities in connection with
such commercial transactions as the Board shall approve, or issued or issuable
to corporations or other entities in connection with such strategic or
commercial transactions as the Board shall approve, provided that the Board
shall also approve the grant of shares or other securities exercisable for such
shares in connection therewith;
(d) pursuant to any event for which adjustment has
already been made pursuant to this Section (d)(4); or
(e) as a dividend or distribution on the Preferred.
(ii) No Adjustment of Conversion Price. No adjustment in
the Series A Conversion Price, Series B Conversion Price , Series C Conversion
Price, Series D Conversion Price or Series E Conversion Price shall be made in
respect of the
- 35 -
issuance of Additional Shares of Common unless the consideration per share for
an Additional Share of Common issued or deemed to be issued by the Company is
less than the Series A Conversion Price, Series B Conversion Price, Series C
Conversion Price, Series D Conversion Price or Series E Conversion Price, as
applicable, in effect on the date of and immediately prior to such issue.
(iii) Deemed Issue of Additional Shares of Common. Except
as provided in Section 4(b) above, in the event the Company at any time or from
time to time after the Series A Original Issue Date with respect to the Series A
Preferred, after the Series B Original Issue Date with respect to the Series B
Preferred, after the Series C Original Issue Date with respect to the Series C
Preferred, after the Series D Original Issue Date with respect to the Series D
Preferred and after the Series E Original Issue Date with respect to the Series
E Preferred, shall issue any Options or Convertible Securities or shall fix a
record date for the determination of holders of any class of securities entitled
to receive any such Options or Convertible Securities, then the maximum number
of shares (as set forth in the instrument relating thereto without regard to any
provisions contained therein for a subsequent adjustment of such number) of
Common issuable upon the exercise of such Options or, in the case of Convertible
Securities and Options therefor, the conversion or exchange of such Convertible
Securities, shall be deemed to be Additional Shares of Common issued as of the
time of such issue or, in case such a record date shall have been fixed, as of
the close of business on such record date, provided that in any such case in
which Additional Shares of Common are deemed to be issued:
(1) no further adjustment in the Series A Conversion
Price, or Series B Conversion Price, Series C Conversion Price, Series D
Conversion Price or Series E Conversion Price, as applicable, shall be made upon
the subsequent issue of Convertible Securities or shares of Common upon the
exercise of such Options or conversion or exchange of such Convertible
Securities.
- 36 -
(2) if such Options or Convertible Securities by
their terms provide, with the passage of time or otherwise, for any increase or
decrease in the consideration payable to the Company, or increase or decrease in
the number of shares of Common issuable upon the exercise, conversion or
exchange thereof, the Series A Conversion Price, Series B Conversion Price,
Series C Conversion Price, Series D Conversion Price or Series E Conversion
Price, as applicable, computed upon the initial conversion prices thereof set
forth in Section (d)(1) above (or upon the occurrence of a record date with
respect thereto), and any subsequent adjustments based thereon, shall, upon any
such increase or decrease becoming effective, be recomputed to reflect such
increase or decrease insofar as it affects such Options or the rights of
conversion or exchange under such Convertible Securities; and
(3) upon the expiration of any such Options or any
rights of conversion or exchange under such Convertible Securities which shall
not have been exercised, the Series A Conversion Price, Series B Conversion
Price, Series C Conversion Price, Series D Conversion Price or Series E
Conversion Price, as applicable, computed upon the initial conversion prices set
forth in Section (d)(1) above, and any subsequent adjustments based thereon,
shall, upon such expiration, be recomputed as if:
(a) in the case of Convertible Securities or
Options for Common, the only Additional Shares of Common issued were shares of
Common, if any, actually issued upon the exercise of such Options or the
conversion or exchange of such Convertible Securities, and the consideration
received therefor was the consideration actually received by the Company for the
issue of all such Options, whether or not exercised, plus the consideration
actually received by the Company upon such exercise, or for the issue of all
such Convertible Securities which were actually converted or exchanged plus the
consideration actually received by the Company upon such conversion or exchange,
if any, and
(b) in the case of Options for
- 37 -
Convertible Securities, only the Convertible Securities, if any, actually issued
upon the exercise thereof were issued at the time of issue of such Options and
the consideration received by the Company for the Additional Shares of Common
deemed to have been then issued was the consideration actually received by the
Company for the issue of all such Options, whether or not exercised, plus the
consideration deemed to have been received by the Company upon the issue of the
Convertible Securities with respect to which such Options were actually
exercised; and
(4) no readjustment pursuant to clause (2) or (3)
above shall have the effect of: (v) increasing the Series A Conversion Price to
an amount which exceeds the initial Series A Conversion Price set forth in
Section (d)(1) above, (w) increasing the Series B Conversion Price to an amount
which exceeds the initial Series B Conversion Price set forth in Section (d)(1)
above, (x) increasing the Series C Conversion Price to an amount which exceeds
the initial Series C Conversion Price set forth in Section (d)(1) above, (y)
increasing the Series D Conversion Price to an amount which exceeds the initial
Series D Conversion Price set forth in Section (d)(1) above or (z) increasing
the Series E Conversion Price to an amount which exceeds the initial Series E
Conversion Price set forth in Section (d)(1) above.
(iv) Adjustment of Conversion Price Upon Issuance of
Additional Shares of Common. In the event this Company shall issue Additional
Shares of Common (including Additional Shares of Common deemed to be issued
pursuant to Section 4(d)(iii) but excluding stock dividends, subdivisions or
split-ups that are the subject of adjustment pursuant to Section 4(a)) without
consideration or for a consideration per share less than the Series A Conversion
Price, Series B Conversion Price, Series C Conversion Price, Series D Conversion
Price and/or Series E Conversion Price applicable on and immediately prior to
such issue, then and in such event, the Series A Conversion Price, Series B
Conversion Price, Series C Conversion Price, Series D Conversion Price and/or
Series E Conversion Price as applicable, shall be reduced, concurrently with
such issue, to a price (calculated to the nearest cent) determined by
multiplying the Series A Conversion Price, Series B Conversion Price, Series C
Conversion Price, Series D Conversion Price and/or Series E Conversion Price, as
applicable, in effect on the date of and immediately prior to such issue by a
fraction, the numerator of which shall be the number of shares of Common Stock
issuable upon conversion of any class or series of Preferred Stock (or shares
issued upon conversion thereof) outstanding immediately prior to such issue,
plus 10,600,000 shares (as appropriately adjusted for any combinations,
consolidations, subdivisions, or stock dividends with respect to such shares of
Common) of Common, plus the number of shares of Common which the aggregate
consideration received by the Company for the total number of Additional Shares
of Common so issued would purchase at the Series A Conversion Price, Series B
Conversion Price, Series C Conversion Price, Series D
- 38 -
Conversion Price, and/or Series E Conversion Price, as applicable, in effect on
the date of and immediately prior to such issue; and the denominator of which
shall be the number of shares of Common Stock issuable upon conversion of any
class or series of Preferred Stock (or shares issued upon conversion thereof)
outstanding immediately prior to such issue, plus 10,600,000 shares (as
appropriately adjusted for any combinations, consolidations, subdivisions, or
stock dividends with respect to such shares of Common) of Common, plus the
number of such Additional Shares of Common so issued.
(v) Determination of Consideration. For purposes of this
Section 4(d), the consideration received by the Company for the issue of any
Additional Shares of Common shall be computed as follows:
(1) Cash and Property. Such consideration shall:
(a) insofar as it consists of cash, be
computed at the aggregate amount of cash received by the Company;
(b) insofar as it consists of property other
than cash, be computed at the fair value thereof at the time of such issue, as
determined in good faith by the Board; and
- 39 -
(c) in the event Additional Shares of Common
are issued together with other shares or securities or other assets of the
Company for consideration which covers both, be the proportion of such
consideration so received, computed as provided in clauses (A) and (B) above, as
determined in good faith by the Board.
(2) Options and Convertible Securities. The
consideration per share received by the Company for Additional Shares of Common
deemed to have been issued pursuant to Section 4(d)(iii), relating to Options
and Convertible Securities, shall be determined by dividing
(a) the total amount, if any, received or
receivable by the Company as consideration for the issue of such Options or
Convertible Securities, plus the minimum aggregate amount of additional
consideration (as set forth in the instruments relating thereto, without regard
to any provision contained therein for a subsequent adjustment of such
consideration) payable to the Company upon the exercise of such Options or the
conversion or exchange of such Convertible Securities, or in the case of Options
for Convertible Securities, the exercise of such options for Convertible
Securities and the conversion or exchange of such Convertible Securities by
(b) the maximum number of shares of Common
(as set forth in the instruments relating thereto, without regard to any
provision contained therein for a subsequent adjustment of such number) issuable
upon the exercise of such Options or the conversion or exchange of such
Convertible Securities.
5. No Impairment. The Company will not, by amendment of its Memorandum of
Association or Bye-laws or through any reorganization, transfer of assets,
consolidation, amalgamation, merger, dissolution, issue or sale of securities or
any other voluntary action, avoid or seek to avoid the observance or performance
of any of the terms to be observed or performed hereunder by the Company but
will at all times in good faith
- 40 -
assist in the carrying out of all the provisions of this Section (d) and in the
taking of all such action as may be necessary or appropriate in order to protect
the conversion rights of the holders of Preferred against impairment.
6. Certificate as to Adjustments. Upon the occurrence of each adjustment
or readjustment of the then applicable Conversion Price for the Series A
Preferred, Series B Preferred, Series C Preferred, Series D Preferred and/or
Series E Preferred pursuant to Section (d)(4), the Company at its expense shall
promptly compute such adjustment or readjustment in accordance with the terms
hereof and furnish to each holder of such series of Preferred a certificate
setting forth such adjustment or readjustment and showing in detail the facts
upon which such adjustment or readjustment is based. The Company shall, upon the
written request at any time of any holder of Preferred, furnish or cause to be
furnished to such holder a like certificate setting forth (i) such adjustments
and readjustments, (ii) the applicable Conversion Price in effect at the time
for such series, and (iii) the number of shares of Common Stock and the amount,
if any, of other property which at the time would be received upon the
conversion of such shares of Preferred.
7. Notices of Record Date. In the event that the Company shall propose at
any time:
a) to declare any dividend or distribution upon its Common Stock,
whether in cash, property, stock or other securities, whether or not a regular
cash dividend and whether or not out of earnings or earned surplus;
b) to offer for subscription pro rata to the holders of any class
or series of its stock any additional shares of stock of any class or series or
any other similar rights;
c) to effect any reclassification or recapitalization of its
Common Stock outstanding which results in a change in the Common Stock; or
- 41 -
d) to merge or consolidate with or into any other corporation, or
sell, lease or convey all or substantially all its property or business, or to
liquidate, dissolve or wind up;
Then, in connection with each such event, the Company shall send
to the holders of the Series A Preferred, Series B Preferred, Series C
Preferred, Series D Preferred and Series E Preferred:
(i) at least 20 days' prior written notice of the date on
which a record shall be taken for such dividend, distribution or subscription
offer (and specifying the date on which the holders of Common Stock shall be
entitled thereto) or for determining rights to vote on the matters referred to
in (c) and (d) above; and
(ii) in the case of the matters referred to in (c) and
(d) above, at least 20 days' prior written notice of the date when the same
shall take place and specifying the date on which the holders of Common Stock
shall be entitled to exchange their Common Stock for securities or other
property deliverable upon the occurrence of such event or the record date for
the determination of such holders if such record date is earlier.
Each such written notice shall be delivered personally or given by first
class mail, postage prepaid, addressed to the holders of the Series A Preferred,
the Series B Preferred, the Series C Preferred, the Series D Preferred and the
Series E Preferred at the address for each such holder as shown on the books of
the Company.
8. Certain Covenants.
a) In addition to any other rights provided by law, so long as
any shares of Series A Preferred, Series B Preferred, Series C Preferred, Series
D Preferred
- 42 -
and Series E Preferred shall be outstanding, the Company shall not, without
first obtaining the affirmative vote or written consent of the holders of not
less than a majority of the outstanding shares of the Series A Preferred, Series
B Preferred, Series C Preferred, Series D Preferred and Series E Preferred
(voting together as a single class):
(i) authorize or issue (i) any additional shares of
Series A Preferred, (ii) any additional shares of Series B Preferred, (iii) any
additional shares of Series C Preferred, (iv) any additional shares of Series D
Preferred or (v) any additional shares of Series E Preferred;
(ii) declare or pay any dividend on shares of Common Stock,
other than such dividends as are payable solely in shares of Common Stock, or
repurchase or redeem any shares of Common Stock or Preferred other than such
repurchases or redemptions of shares made from employees, officers, directors or
consultants upon their termination at their original issue price;
(iii) authorize or issue any series or class of shares
having rights or preferences superior to the Series A Preferred, Series B
Preferred, Series C Preferred, Series D Preferred or Series E Preferred as to
dividend rights or liquidation preferences, or having redemption rights, ratchet
or narrower-based weighted average anti-dilution protection than that afforded
the Series A Preferred, Series B Preferred, Series C Preferred, Series D
Preferred or Series E Preferred or a liquidation preference per share that
exceeds two times the aggregate amount invested per share with respect to such
series or class of shares, or that is afforded separate voting rights with
respect to subject matters in addition to those set forth in this Section 8 (or
afforded by operation of law) for which Series A Preferred, Series B Preferred,
Series C Preferred, Series D Preferred or Series E Preferred has such voting
rights or other extraordinary voting rights not afforded the Series A Preferred,
Series B Preferred, Series C Preferred, Series D Preferred or Series E Preferred
herein or by operation of law;
- 43 -
(iv) merge or consolidate with or into, or permit
subsidiary to merge with into, any other corporation, corporations or other
entity or entities unless shareholders of the Company immediately prior to such
merger or consolidation continue to hold not less than fifty percent of the
outstanding voting power of the surviving corporation or entity, or sell or
otherwise dispose of all or substantially all of its assets; or
(v) adversely alter or change any of the powers,
preferences, privileges or rights of the Series A Preferred, Series B Preferred,
Series C Preferred, Series D Preferred or Series E Preferred.
51. Power to issue shares
(1) Subject to these Bye-laws and to any resolution of the Members to the
contrary and without prejudice to any special rights previously conferred on the
holders of any existing shares or class of shares, the Board shall have power to
issue any unissued shares of the Company on such terms and conditions as it may
determine and any shares or class of shares may be issued with such preferred,
deferred or other special rights or such restrictions, whether in regard to
dividend, voting, return of capital or otherwise as the Company may from time to
time by resolution of the Members prescribe.
(2) 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.
(3) The Company shall not give, whether directly or indirectly, whether
by means of loan, guarantee, provision of security or otherwise, any financial
assistance for the purpose of a purchase or subscription made or to be made by
any person of or for any shares in the Company, but nothing in this Bye-Law
shall prohibit transactions mentioned in Sections 39A, 39B and 39C of the Act.
(4) The Company may from time to time do any one or more of the following
- 44 -
things:
(a) 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;
(b) accept from any Member the whole or a part of the amount
remaining unpaid on any shares held by him, although no
part of that amount has been called up;
(c) 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
(d) 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 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.
52. Variation of rights, alteration of share capital and purchase of shares of
the Company
(1) Subject to the provisions of Sections 42 and 43 of the Act any
preference shares may be issued or converted into shares that, at a determinable
date or at the option of the Company, are liable to be redeemed on such terms
and in such manner as the Company before the issue or conversion may by
resolution of the Members determine.
(2) If at any time the share capital is divided into different classes of
shares, the rights attached to any class (unless otherwise provided by the terms
of issue of the shares of that class) may, whether or not the Company is being
wound-up, be varied with the consent in writing of the holders of three-fourths
of the issued 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
- 45 -
issue of the shares of that class, be deemed to be varied by the creation or
issue of further shares ranking pari passu therewith.
(3) The Company may from time to time by resolution of the Members change
the currency denomination of, increase, alter or reduce its share capital in
accordance with the provisions of Sections 45 and 46 of the Act. Where, on any
alteration of share capital, fractions of shares or some other difficulty would
arise, the Board may deal with or resolve the same in such manner as it thinks
fit including, without limiting the generality of the foregoing, the issue to
Members, as appropriate, of fractions of shares and/or arranging for the sale or
transfer of the fractions of shares of Members.
(4) The Company may from time to time purchase its own shares in
accordance with the provisions of Section 42A of the Act.
53. 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.
54. 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
- 46 -
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.
55. Share certificates
(1) Every Member shall be entitled to a certificate under the seal of the
Company (or a facsimile thereof) 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.
(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
if it sees fit.
56. Calls on shares
(1) 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 and, if a call is not paid on or before the day appointed for
payment thereof, the Member may at the discretion of the Board be liable to pay
the Company interest on the amount of such call at such rate as the Board may
determine, from the date when such call was payable up to the actual date of
payment. The joint holders of a share shall be jointly and severally liable to
pay all calls in respect thereof.
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(2) The Board may, on the issue of shares, differentiate between the
holders as to the amount of calls to be paid and the times of payment of such
calls.
57. 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
58. 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 following particulars:-
(a) the name and address of each Member, the number and, where
appropriate, the class of shares held by such Member and the
amount paid or agreed to be considered as paid on such shares;
(b) the date on which each person was entered in the Register of
Members;
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and
(c) the date on which any person ceased to be a Member for one year
after such person so ceased.
59. Inspection of Register of Members
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.
60. Determination of record dates
Notwithstanding any other provision of these Bye-laws, the Board may fix
any date as the record date for:-
(a) determining the Members entitled to receive any dividend; and
(b) determining the Members entitled to receive notice of and to vote
at any general meeting of the Company.
TRANSFER OF SHARES
61. 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.
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(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.
62. Restriction on transfer
(1) The Board may in its absolute discretion and without assigning any
reason therefor refuse to register the transfer of a share. The Board shall
refuse to register a transfer unless all applicable consents, authorisations and
permissions of any governmental body or agency in Bermuda have been obtained.
(2) If the Board refuses to register a transfer of any share the
Secretary shall, within three months after the date on which the transfer was
lodged with the Company, send to the transferor and transferee notice of the
refusal.
63. Transfers by joint holders
The joint holders of any share or shares may transfer such share or
shares to one or more of such joint holders, and the surviving holder or holders
of any share or shares previously held by them jointly with a deceased Member
may transfer any such share to the executors or administrators of such deceased
Member.
TRANSMISSION OF SHARES
64. Representative of deceased Member
In the case of the death of a Member, the survivor or survivors where the
deceased Member was a joint holder, and the legal personal representatives of
the deceased Member where the deceased Member was a sole holder, shall be the
only persons recognised by the Company as having any title to the deceased
Member's interest in the
- 50 -
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.
65. 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
66. Declaration of dividends by the Board
The Board may, 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.
67. Other distributions
The Board may declare and make such other distributions (in cash or in
specie) to
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the Members as may be lawfully made out of the assets of the Company.
68. 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 fund to be used to meet contingencies or for equalising dividends or for
any other special purpose.
69. 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.
CAPITALISATION
70. 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 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 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
71. Records of account
The Board shall cause to be kept proper records of account with respect
to all
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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.
72. Financial year end
The financial year end of the Company may be determined by resolution of
the Board and failing such resolution shall be 31st December in each year.
73. 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
74. 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.
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75. 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.
76. 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 shall, as soon as practicable, convene a special general meeting to fill
the vacancy thereby created.
77. 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.
78. 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.
(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
- 54 -
country or jurisdiction.
NOTICES
79. 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 or other mode of representing words in a legible
and non-transitory form.
80. 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.
81. Service and delivery of notice
Any notice shall be deemed to have been served at the time when the same
would be delivered in the ordinary course of transmission and, in proving such
service, it shall be sufficient to prove that the notice was properly addressed
and prepaid, if posted, and the time when it was posted, delivered to the
courier or to the cable company or transmitted by telex, facsimile or other
method as the case may be.
SEAL OF THE COMPANY
82. 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.
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83. Manner in which seal is to be affixed
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 some other person appointed by the Board for the purpose, provided that any
Director, or Officer, may affix the seal of the Company attested by such
Director or Officer's signature only to any authenticated copies of 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 or
Officer.
WINDING-UP
84. 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
85. 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 of the Members.
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*****
***
*
- 57 -
SCHEDULE - FORM A (Bye-law 48)
..............................................
P R O X Y
I
of
the holder of share in the above-named Company hereby
appoint .................................................... or failing him/her
................................................. or failing him/her
................................................. as my proxy to vote on my
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.
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SCHEDULE - FORM B (Bye-law 57)
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 said Company the share(s) will be liable to be
forfeited.
Dated this ....... day of .............., 19...
[Signature of Secretary]
By order of the Board
- 59 -
SCHEDULE - FORM C (Bye-law 61)
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)
- 60 -
SCHEDULE - FORM D (Bye-law 65)
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) numbered [number in
figures] 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: )