<PAGE> 1
EXHIBIT 3.2
BYE - LAWS
OF
ASIA GLOBAL CROSSING LTD.
I HEREBY CERTIFY that the within written Bye-Laws are a true copy of the
Bye-Laws of Asia Global Crossing Ltd. as subscribed by the subscribers to the
Memorandum of Association and approved at the Statutory meeting of the above
Company on the , 2000.
Secretary
Prepared by
Messrs Appleby Spurling & Kempe
Cedar House
41 Cedar Avenue
Hamilton, Bermuda
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INDEX
<TABLE>
<CAPTION>
BYE-LAW SUBJECT PAGE
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1 Interpretation 1
2 Registered Office and Purpose 6
3-4 Share Rights 7
5-6 Modification of Rights 8
7-9 Shares 9
10 Share Capital 10
11-13 Common Shares 10
14-17 Certificates 11
18-21 Lien 12
22-27 Calls on Shares 15
28-34 Forfeiture of Shares 16
35-36 Register of Shareholders 18
37 Register of Directors and Officers 19
38-41 Transmission of Shares 19
42-44 Increase of Capital 21
45-46 Alteration of Capital 22
47-48 Reduction of Capital 23
49 General Meetings and Written Resolutions 23
50-51 Notice of General Meetings 25
52-58 Proceedings at General Meetings 26
59-71 Voting 28
72-77 Proxies and Corporate Representatives 30
78-82 Appointment and Removal of Directors 33
83 Resignation and Disqualification of Directors 36
84-86 Alternate Directors 37
87 Directors' Fees and Additional Remuneration and Expenses 38
88 Directors' Interests 39
89-91 Powers and Duties of the Board 42
92 Gratuities, Pensions and Insurance 43
93-95 Delegation of the Board's Powers 44
96-104 Proceedings of the Board 45
105 Officers 51
106-108 Executive Directors 52
109 Minutes 53
</TABLE>
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<TABLE>
<CAPTION>
BYE-LAW SUBJECT PAGE
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110-111 Secretary and Resident Representative 53
112 The Seal 54
113-119 Dividends and Other Payments 55
120 Stock Splits, Subdivisions, Combinations and Reclassifications 59
121-124 Conversion 60
125 Reserves 61
126-127 Capitalization of Profits 62
128 Record Dates 63
129-131 Accounting Records 64
132 Audit 65
133-135 Service of Notices and Other Documents 65
136 Destruction of Documents 66
137 Untraced Shareholders 68
138-139 Winding Up, Liquidation and Dissolution 70
140-144 Indemnity 72
145 Amalgamation 74
146 Continuation 74
147 Alteration of Bye-Laws 75
</TABLE>
-ii-
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B Y E - L A W S
OF
ASIA GLOBAL CROSSING LTD.
INTERPRETATION
1. (1) In these Bye-Laws unless the context otherwise requires -
"AFFILIATE" means, with respect to any Person, any other Person
that, directly or indirectly through one or more intermediaries,
Controls, is Controlled by or is under common Control with such
first Person;
"ALTERNATE DIRECTOR" shall have the meaning as set out in Bye-Law
84;
"BERMUDA" means the Islands of Bermuda;
"BOARD" means the Board of Directors of the Company or the
directors present at a meeting of Directors at which there is a
quorum;
"CHIEF EXECUTIVE OFFICER" means the officer appointed by the Board
holding such title, or if no officer holds such title, the
President or Chairman of the Company;
"CLASS A SHARES" means all the authorized shares of a class of
common shares designated as Class A common shares with par value
of US$0.01 per share;
"CLASS B SHARES" means all the authorized shares of a class of
common shares designated as Class B common shares with par value
of US$0.01 per share;
"COMMON SHARES" means all the authorized Class A Shares and Class
B Shares;
"COMPANIES ACTS" means every Bermuda statute from time to time in
force
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2
concerning companies insofar as the same applies to the Company;
"COMPANY" means Asia Global Crossing Ltd., a company incorporated
under the laws of Bermuda;
"COMPANY BUSINESS" means the development, creation, launch,
acquisition, ownership and the provision of services through or in
connection with (i) undersea cable systems into or within the
Territory, (ii) intercity networks within the Territory, (iii)
Intracity Networks and (iv) the GlobalCenter Asia Business within
the Territory;
"CONTROL" means, with respect to any Person, the power to direct
or cause the direction of the management of such Person, directly
or indirectly, whether through the ownership of voting securities,
by contract or otherwise. The terms "CONTROLLING" and "CONTROLLED"
have meanings correlative to the foregoing;
"EAST ASIA CROSSING" means a subsea fiber optic cable system
connecting Japan, Taiwan, Korea, China, Hong Kong, Singapore, the
Philippines and Malaysia being developed by the Company and its
Affiliates;
"EXCHANGE ACT" means the United States Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated
thereunder;
"FAILED SHAREHOLDER MEETING" shall have the meaning as set out in
Bye-Law 53; "FISCAL YEAR" means the 12-month (or shorter) period
ending on December 31 of each calendar year.
"GLOBALCENTER ASIA BUSINESS" means the Web Hosting Business within
the Territory;
"GLOBAL CROSSING" means Global Crossing Ltd., a company
incorporated under
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3
the laws of Bermuda;
"GOLDMAN SACHS" means The Goldman Sachs Group, Inc., a Delaware
corporation;
"INTRACITY NETWORK" refers to a terrestrial network and related
infrastructure dedicated to the provision of end-to-end
connectivity of data, Internet and telecom services marketed
primarily to business and commercial customers within a
metropolitan area in the Territory other than Japan and does not
include any business of providing data, Internet and telecom
services, marketed primarily on a retail basis, to a broad
distribution of residential, business and commercial customers and
not directed to business and commercial customers seeking
end-to-end connectivity of data, Internet and telecom services (a
"Permitted Business") or any proprietary network and
infrastructure to such Permitted Business;
"MICROSOFT" means Microsoft Corporation, a Washington corporation;
"OFFICER" means a person appointed by the Board pursuant to
Bye-Law 105 and shall not include an auditor of the Company;
"PAID UP" means paid up or credited as paid up;
"PERSON" means any individual, firm, corporation, limited
liability company, trust, joint venture, governmental authority or
other entity;
"PREFERRED SHARES" means all the authorized preferred shares of
the Company, par value US$0.01 per share;
"RECALLED SHAREHOLDER MEETING" shall have the meaning as set out
in Bye-Law 53;
"REGISTER" means the Register of Shareholders of the Company;
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4
"REGISTERED OFFICE" means the registered office for the time being
of the Company;
"RESIDENT REPRESENTATIVE" means the person (or, if permitted in
accordance with the Companies Acts, the company) appointed by the
Board to perform the duties of resident representative set out in
the Companies Acts and includes any assistant or deputy Resident
Representative appointed by the Board to perform any of the duties
of the Resident Representative;
"RESOLUTION" means a resolution of the Shareholders or, where
required, of a separate class or separate classes of Shareholders,
adopted either in a general meeting or by written resolution, in
accordance with the provisions of these Bye-Laws;
"SEAL" means the common seal of the Company and includes any
duplicate thereof;
"SECRETARY" includes a temporary or assistant or deputy Secretary
and any person appointed by the Board to perform any of the duties
of the Secretary;
"SERVICE" of any Person means the collective reference to the one
or more data, Internet or telecom services and GlobalCenter
Businesses developed, owned, offered, licensed or operated by such
Person;
"SHAREHOLDER" means a shareholder or member of the Company;
"SHARES" means the Common Shares and the Preferred Shares;
"SOFTBANK" means Softbank Corp., a Japanese corporation;
"SUBSCRIPTION AND SHAREHOLDERS AGREEMENT" means the Subscription
and Shareholders Agreement, dated as of [ ], 2000, entered into
among Global
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5
Crossing, Softbank, Microsoft and the Company, as the same may be
amended, supplemented or otherwise modified from time to time;
"SUBSIDIARY" means as to any Person, (i) any corporation of which
more than 50% of the outstanding stock of any class or classes
having by the terms thereof ordinary voting power to elect a
majority of the directors of such corporation (irrespective of
whether or not at the time stock of any class or classes of such
corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person
and/or one or more Subsidiaries of such Person and (ii) any
partnership, association, joint venture or other entity in which
such Person and/or one or more Subsidiaries of such Person have
more than a 50% equity interest therein;
"THESE BYE-LAWS" means these Bye-Laws in their present form or as
from time to time amended, supplemented or restated;
"TERMINATION EVENT" shall have the meaning as set out in Bye-Law
138;
"TERRITORY" shall have the meaning as set out in the Subscription
and Shareholders Agreement.
"WEB HOSTING BUSINESS" means the provision of web hosting services
in or in connection with a data center facility, including
information technology consulting services, data security
services, managed solutions, day-to-day operational management,
distribution of web content, electronic commerce support,
application hosting and related Internet infrastructure products
and services;
(2) For the purposes of these Bye-Laws, a corporation shall be deemed
to be present
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6
in person if its representative duly authorized pursuant to the
Companies Acts is present;
(3) For the purpose of these Bye-Laws, a corporation shall be deemed
to be present in person if its representative duly authorized
pursuant to the Companies acts in oresent;
(4) Words importing only the singular number include the plural number
and vice versa;
(5) Words importing only the masculine gender include the feminine and
neuter genders respectively;
(6) Words importing persons include companies or associations or
bodies of persons, whether corporate or un-incorporate;
(7) Reference to writing shall include typewriting, printing,
lithography, photography and other modes of representing or
reproducing words in a legible and non-transitory form;
(8) Any words or expressions not otherwise defined in these Bye-Laws
or defined in the Companies Acts in force at the date when these
Bye-Laws or any part thereof are adopted shall bear the same
meaning in these Bye-Laws or such part (as the case may be).
REGISTERED OFFICE AND PURPOSE
2. (1) The Registered Office shall be at such place in Bermuda as the
Board shall from time to time appoint.
(2) The Company's purpose shall be to engage in the Company Business
and to undertake all things necessary, incidental or advisable in
connection therewith.
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7
SHARE RIGHTS
3. Subject to any special rights conferred on the holders of any Share or
class of Shares, any Share in the Company may be issued with or have
attached thereto such preferred, deferred, qualified or other special
rights or such restrictions, whether in regard to dividend, voting,
return of capital or otherwise, as the Company may by Resolution
determine or, if there has not been any such determination or so far as
the same shall not make specific provision, as the Board may determine.
4. (1) Subject to the Companies Acts, any Preferred Shares may, with the
sanction of a resolution of the Board, be issued on terms:
(a) that they are to be redeemed on the happening of a
specified event or on a given date; and/or,
(b) that they are liable to be redeemed at the option of the
Company; and/or,
(c) if authorized by the memorandum of the Company, that they
are liable to be redeemed at the option of the holder. The
terms and manner of redemption shall be provided for in
such resolution of the Board and shall be attached to but
shall not form part of these Bye-Laws.
(2) The Board may, at its discretion and without the sanction of a
Resolution, authorize the purchase by the Company of its own
Shares of any class at any price (whether at par or above or below
par) and so that any Shares to be so purchased may be selected in
any manner whatsoever, upon such terms as the Board may in its
discretion determine; provided always that such purchase is
effected in
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8
accordance with the provisions of the Companies Acts.
MODIFICATION OF RIGHTS
5. Subject to the Companies Acts and except as otherwise set forth in
theses Bye-Laws, all or any of the special rights for the time
being attached to any class of Common Shares for the time being
issued may from time to time (whether or not the Company is being
wound up) be altered or abrogated with the sanction of a
Resolution passed at a separate general meeting of the holders of
Common Shares of that class, voting in person or by proxy and
representing at least a majority of the votes cast by holders of
Common Shares of that class at such separate general meeting. To
any such separate general meeting, all the provisions of these
Bye-Laws as to general meetings of the Company shall mutatis
mutandis apply, but so that the necessary quorum shall be two or
more persons holding or representing by proxy Common Shares of the
relevant class representing a majority of the votes that may be
cast by all holders of Common Shares of that class, that every
holder of Common Shares of the relevant class shall be entitled on
a poll to the number of votes for every such Common Share held by
him determined in accordance with Bye-Laws 11 and 12 and that any
holder of Common Shares of the relevant class present in person or
by proxy may demand a poll; provided, however, that if the Company
or a class of Common Shares shall have only one Shareholder, one
Shareholder present in person or by proxy shall constitute the
necessary quorum. Subject to the Companies Acts and except as
otherwise set forth in these Bye-Laws, all or any of the special
rights for the time being attached to any class or series of
Preferred Shares for the time being issued may from time
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9
to time (whether or not the Company is being wound up) be altered
or abrogated with the requisite consent or vote of the holders of
such class or series as shall be set forth in a schedule to the
Bye-Laws relating to such class or series at the time when such
class or series is issued.
6. The special rights conferred upon the holders of any Shares or
class of Shares shall not, unless otherwise expressly provided in
the rights attaching to or the terms of issue of such Shares, be
deemed to be altered by the creation or issue of further Shares
ranking pari passu therewith.
SHARES
7. Subject to the provisions of these Bye-Laws, the unissued Shares
of the Company (whether forming part of the original capital or
any increased capital) shall be at the disposal of the Board,
which may offer, allot, grant options over or otherwise dispose of
them to such persons, at such times and for such consideration and
upon such terms and conditions as the Board may determine.
8. The Board may, in connection with the issue of any Shares,
exercise all powers of paying commission and brokerage conferred
or permitted by law.
9. Except as ordered by a court of competent jurisdiction or as
required by law, no person shall be recognized by the Company as
holding any Share upon trust and the Company shall not be bound by
or required in any way to recognize (even when having notice
thereof) any equitable, contingent, future or partial interest in
any Share or any interest in any fractional part of a Share or
(except only as otherwise provided in these Bye-Laws, or by law)
any other right in respect of any Share except an absolute right
to the entirety thereof in the registered holder.
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10
SHARE CAPITAL
10. The authorized share capital of the Company at the date of
adoption of these Bye-Laws is U.S.$25,200,000.00, divided into
1,200,000,000 Class A Common Shares, 1,200,000,000 Class B Common
Shares and 120,000,000 Preferred Shares.
COMMON SHARES
11. (1) At the date of adoption of these Bye-Laws, [ ] Class A Shares
shall be issued and shall be considered outstanding for all
purposes.
(2) Each holder of record of Class A Shares on the relevant record
date shall be entitled to cast one vote for each Class A Share at
any general meeting of Shareholders of the Company.
12. (1) At the date of adoption of these Bye-Laws:
(a) [ ] Class B Shares shall be issued to Global Crossing or an
Affiliate thereof and shall be considered outstanding for
all purposes;
(b) [ ] Class B Shares shall be issued to Microsoft or an
Affiliate thereof and shall be considered outstanding for
all purposes; and
(c) [ ] Class B Shares shall be issued to Softbank or an
Affiliate thereof and shall be considered outstanding for
all purposes.
(2) Each holder of record of Class B Shares on the relevant record
date shall be entitled to cast 10 votes for each Class B Share at
any general meeting of
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11
Shareholders of the Company.
13. Except as otherwise required by the Companies Acts or these
Bye-Laws, and subject to the rights of holders of any series of
Preferred Shares that may be issued from time to time, the holders
of Class A Shares and Class B Shares shall vote as a single class
on all matters with respect to which a vote of Shareholders is
required under applicable law, these Bye-Laws or on which a vote
of Shareholders is otherwise duly called for by the Company.
CERTIFICATES
14. The preparation, issue and delivery of certificates shall be
governed by the Companies Acts. In the case of a Share held
jointly by several persons, delivery of a certificate to one of
several joint holders shall be sufficient delivery to all.
15. If a Share certificate is defaced, lost or destroyed, it may be
replaced without fee but on such terms (if any) as to evidence an
indemnity and to payment of the costs and out of pocket expenses
of the Company in investigating such evidence and preparing such
indemnity as the Board may think fit and, in case of defacement,
on delivery of the old certificate to the Company.
16. All certificates for share or loan capital or other securities of
the Company (other than letters of allotment, scrip certificates
and other like documents) shall, except to the extent that the
terms and conditions for the time being relating thereto otherwise
provide, be issued under the Seal. The Board may by resolution
determine, either generally or in any particular case, that any
signatures on any such certificates need not be autographic but
may be affixed to such certificates by some mechanical means or
may be printed thereon or that such certificates
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12
need not be signed by any persons, or may determine that a
representation of the Seal may be printed on any such
certificates.
17. Nothing in these Bye-Laws shall prevent title to any securities of
the Company from being evidenced and/or transferred without a
written instrument in accordance with regulations made from time
to time in this regard under the Companies Acts, and the Board
shall have the power to implement any arrangements which it may
think fit for such evidencing and/or transfer which accord with
those regulations.
LIEN
18. The Company shall have a first and paramount lien on every Share
(not being a fully paid Share) for all monies, whether presently
payable or not, called or payable, at a date fixed by or in
accordance with the terms of issue of such Share in respect of
such Share. The Company's lien on a Share shall extend to all
dividends payable thereon. The Board may at any time, either
generally or in any particular case, waive any lien that has
arisen or declare any Share to be wholly or in part exempt from
the provisions of this Bye-Law.
19. The Company may sell, in such manner as the Board may think fit,
any Share on which the Company has a lien but no sale shall be
made unless some sum in respect of which the lien exists is
presently payable nor until the expiration of 14 days after a
notice in writing, stating and demanding payment of the sum
presently payable and giving notice of the intention to sell in
default of such payment, has been served on the holder for the
time being of the Share.
20. The net proceeds of sale by the Company of any Shares on which it
has a lien
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13
shall be applied in or towards payment or discharge of the debt or
liability in respect of which the lien exists so far as the same
is presently payable, and any residue shall (subject to a like
lien for debts or liabilities not presently payable as existed
upon the Share prior to the sale) be paid to the person who was
the holder of the Share immediately before such sale. For giving
effect to any such sale, the Board may authorise some person to
transfer the Share sold to the purchaser thereof. The purchaser
shall be registered as the holder of the Share and he shall not be
bound to see to the application of the purchase money, nor shall
his title to the Share be affected by any irregularity or
invalidity in the proceedings relating to the sale.
21. Whenever any law for the time being of any country, state or place
imposes or purports to impose any immediate or future or possible
liability upon the Company to make any payment or empowers any
government or taxing authority or government official to require
the Company to make any payment in respect of any Shares
registered in any of the Company's registers as held either
jointly or solely by any Shareholder or in respect of any
dividends, bonuses or other monies due or payable or accruing due
or which may become due or payable to such Shareholder by the
Company on or in respect of any Shares registered as aforesaid or
for or on account or in respect of any Shareholder and whether in
consequence of:
(a) the death of such Shareholder;
(b) the non-payment of any income tax or other tax by
such Shareholder;
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14
(c) the non-payment of any estate, probate, succession,
death, stamp, or other duty by the executor or
administrator of such Shareholder or by or out of
his estate; or
(d) any other act or thing;
in every such case (except to the extent that the rights conferred upon holders
of any class of Shares render the Company liable to make additional payments in
respect of sums withheld on account of the foregoing):
(i) the Company shall be fully indemnified by such Shareholder or his
executor or administrator from all liability;
(ii) the Company shall have a lien upon all dividends and other monies
payable in respect of the Shares registered in any of the
Company's registers as held either jointly or solely by such
Shareholder for all monies paid or payable by the Company in
respect of such Shares or in respect of any dividends or other
monies as aforesaid thereon or for or on account or in respect of
such Shareholder under or in consequence of any such law together
with interest at the rate of 15% per annum thereon from the date
of payment to date of repayment and may deduct or set off against
such dividends or other monies payable as aforesaid any monies
paid or payable by the Company as aforesaid together with interest
as aforesaid;
(iii) the Company may recover as a debt due from such Shareholder or his
executor or administrator wherever constituted any monies paid by
the Company under or in consequence of any such law and interest
thereon at the rate and for the period aforesaid in excess of any
dividends or other monies as aforesaid then due or payable by the
Company; and
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15
(iv) the Company may if any such money is paid or payable by it under
any such law as aforesaid refuse to register a transfer of any
Shares by any such Shareholder or his executor or administrator
until such money and interest as aforesaid is set off or deducted
as aforesaid or in case the same exceeds the amount of any such
dividends or other monies as aforesaid then due or payable by the
Company until such excess is paid to the Company.
Subject to the rights conferred upon the holders of any class of Shares, nothing
herein contained shall prejudice or affect any right or remedy which any law may
confer or purport to confer on the Company and as between the Company and every
such Shareholder as aforesaid, his executor, administrator and estate
wheresoever constituted or situate, any right or remedy which such law shall
confer or purport to confer on the Company shall be enforceable by the Company.
CALLS ON SHARES
22. The Board may from time to time make calls upon the Shareholders
in respect of any monies unpaid on their Shares (whether on
account of the par value of the Shares or by way of premium) and
not by the terms of issue thereof made payable at a date fixed by
or in accordance with such terms of issue, and each Shareholder
shall (subject to the Company serving upon him at least 14 days
notice specifying the time or times and place of payment) pay to
the Company at the time or times and place so specified the amount
called on his Shares. A call may be revoked or postponed as the
Board may determine.
23. A call may be made payable by installments and shall be deemed to
have been made at the time when the resolution of the Board
authorizing the call was passed.
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24. The joint holders of a Share shall be jointly and severally liable
to pay all calls in respect thereof.
25. If a sum called in respect of the Share shall not be paid before
or on the day appointed for payment thereof, the person from whom
the sum is due shall pay interest on the sum from the day
appointed for the payment thereof to the time of actual payment at
such rate as the Board may determine, but the Board shall be at
liberty to waive payment of such interest wholly or in part.
26. Any sum which, by the terms of issue of a Share, becomes payable
on allotment or at any date fixed by or in accordance with such
terms of issue, whether on account of the nominal amount of the
Share or by way of premium, shall for all the purposes of these
Bye-Laws be deemed to be a call duly made, notified and payable on
the date on which, by the terms of issue, the same becomes payable
and, in case of non-payment, all the relevant provisions of these
Bye-Laws as to payment of interest, forfeiture or otherwise shall
apply as if such sum had become payable by virtue of a call duly
made and notified.
27. The Board may on the issue of Shares differentiate between the
allottees or holders as to the amount of calls to be paid and the
times of payment.
FORFEITURE OF SHARES
28. If a Shareholder fails to pay any call or installment of a call on
the day appointed for payment thereof, the Board may at any time
thereafter during such time as any part of such call or
installment remains unpaid serve a notice on him requiring payment
of so much of the call or installment as is unpaid, together with
any
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17
interest which may have accrued.
29. The notice shall name a further day (not being less than 14 days
from the date of the notice) on or before which, and the place
where, the payment required by the notice is to be made and shall
state that, in the event of non-payment on or before the day and
at the place appointed, the Shares in respect of which such call
is made or installment is payable will be liable to be forfeited.
The Board may accept the surrender of any Share liable to be
forfeited hereunder and, in such case, references in these
Bye-Laws to forfeiture shall include surrender.
30. If the requirements of any such notice as aforesaid are not
complied with, any Share in respect of which such notice has been
given may at any time thereafter, before payment of all calls or
installments and interest due in respect thereof has been made, be
forfeited by a resolution of the Board to that effect. Such
forfeiture shall include all dividends declared in respect of the
forfeited Shares and not actually paid before the forfeiture.
31. When any Share has been forfeited, notice of the forfeiture shall
be served upon the person who was before forfeiture the holder of
the Share; but no forfeiture shall be in any manner invalidated by
any omission or neglect to give such notice as aforesaid.
32. A forfeited Share shall be deemed to be the property of the
Company and may be sold, re-offered or otherwise disposed of
either to the person who was, before forfeiture, the holder
thereof or entitled thereto or to any other person upon such terms
and in such manner as the Board shall think fit, and at any time
before a sale, re-allotment or disposition the forfeiture may be
cancelled on such terms as
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the Board may think fit.
33. A person whose Shares have been forfeited shall thereupon cease to
be a Shareholder in respect of the forfeited Shares but shall,
notwithstanding the forfeiture, remain liable to pay to the
Company all monies which at the date of forfeiture were presently
payable by him to the Company in respect of the Shares with
interest thereon at such rate as the Board may determine from the
date of forfeiture until payment, and the Company may enforce
payment without being under any obligation to make any allowance
for the value of the Shares forfeited.
34. An affidavit in writing that the deponent is a Director of the
Company or the Secretary and that a Share has been duly forfeited
on the date stated in the affidavit shall be conclusive evidence
of the facts therein stated as against all persons claiming to be
entitled to the Share. The Company may receive the consideration
(if any) given for the Share on the sale, re-allotment or
disposition thereof and the Board may authorize some person to
transfer the Share to the person to whom the same is sold,
re-allotted or disposed of, and he shall thereupon be registered
as the holder of the Share and shall not be bound to see to the
application of the purchase money (if any) nor shall his title to
the Share be affected by any irregularity or invalidity in the
proceedings relating to the forfeiture, sale, re-allotment or
disposal of the Share.
REGISTER OF SHAREHOLDERS
35. The Company shall establish and maintain the Register in the
manner prescribed by the Companies Acts. Unless the Board
otherwise determines, the Register shall be open to inspection in
the manner prescribed by the Companies Acts
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between 9:00 a.m. and 5:00 p.m. in Bermuda, on every working day.
Unless the Board so determines, no Shareholder or intending
Shareholder shall be entitled to have entered in the Register any
indication of any trust or any equitable, contingent, future or
partial interest in any Share or any interest in any fractional
part of a Share, and if any such entry exists or is permitted by
the Board it shall not be deemed to abrogate any of the provisions
of Bye-Law 9.
36. Subject to the provisions of the Companies Acts, the Company may
keep one or more overseas or branch registers in any place, and
the Board may make, amend and revoke any such regulations as it
may think fit respecting the keeping of such registers.
REGISTER OF DIRECTORS AND OFFICERS
37. The Secretary shall establish and maintain a register of the
Directors and Officers of the Company as required by the Companies
Acts. The register of Directors and Officers shall be open to
inspection in the manner prescribed by the Companies Acts between
9:00 a.m. and 5:00 p.m. in Bermuda, on every working day.
TRANSMISSION OF SHARES
38. In the case of the death of a Shareholder, the survivor or
survivors, where the deceased was a joint holder, and the estate
representative, where he was sole holder, shall be the only person
recognized by the Company as having any title to his Shares; but
nothing herein contained shall release the estate of a deceased
holder (whether the sole or joint) from any liability in respect
of any Share held by him solely or jointly with other persons. For
the purpose of this Bye-Law,
<PAGE> 23
20
estate representative means the person to whom probate or letters
of administration has or have been granted in Bermuda or, failing
any such person, such other person as the Board may in its
absolute discretion determine to be the person recognized by the
Company for the purpose of this Bye-Law.
39. Any person becoming entitled to a Share in consequence of the
death of a Shareholder or otherwise by operation of applicable law
may, subject as hereafter provided and upon such evidence being
produced as may from time to time be required by the Board as to
his entitlement, either be registered himself as the holder of the
Share or elect to have some person nominated by him registered as
the transferee thereof. If the person so becoming entitled elects
to be registered himself, he shall deliver or send to the Company
a notice in writing signed by him stating that he so elects. If he
shall elect to have his nominee registered, he shall signify his
election by signing an instrument of transfer of such Share in
favor of his nominee. All the limitations, restrictions and
provisions of these Bye-Laws relating to the right to transfer and
the registration of transfer of Shares shall be applicable to any
such notice or instrument of transfer as aforesaid as if the death
of the Shareholder or other event giving rise to the transmission
had not occurred and the notice or instrument of transfer was an
instrument of transfer signed by such Shareholder.
40. A person becoming entitled to a Share in consequence of the death
of a Shareholder or otherwise by operation of applicable law shall
(upon such evidence being produced as may from time to time be
required by the Board as to his entitlement) be entitled to
receive and may give a discharge for any dividends
<PAGE> 24
21
or other moneys payable in respect of the Share, but he shall not
be entitled in respect of the Share to receive notices of or to
attend or vote at general meetings of the Company or, save as
aforesaid, to exercise in respect of the Share any of the rights
or privileges of a Shareholder until he shall have become
registered as the holder thereof. The Board may at any time give
notice requiring such person to elect either to be registered
himself or to transfer the Share and, if the notice is not
complied with within 60 days, the Board may thereafter withhold
payment of all dividends and other moneys payable in respect of
the Shares until the requirements of the notice have been complied
with.
41. Subject to any directions of the Board from time to time in force,
the Secretary may exercise the powers and discretions of the Board
under Bye-Laws 38, 39 and 40.
INCREASE OF CAPITAL
42. The Company may from time to time increase its capital by such sum
to be divided into Shares of such par value as the Company by
Resolution shall prescribe.
43. The Company may, by the Resolution increasing the capital, direct
that the new Shares or any of them shall be offered in the first
instance either at par or at a premium to all the holders for the
time being of Shares of any class or classes in proportion to the
number of such Shares held by them respectively or make any other
provision as to the issue of the new Shares.
<PAGE> 25
22
44. The new Shares shall be subject to all the provisions of these
Bye-Laws with reference to lien, the payment of calls, forfeiture,
transfer, transmission and otherwise.
ALTERATION OF CAPITAL
45. The Company may from time to time by Resolution in accordance with these
Bye-Laws:
(1) divide its Shares into several classes and attach thereto
respectively any preferential, deferred, qualified or special
rights, privileges or conditions;
(2) consolidate and divide all or any of its share capital into Shares
of larger par value than its existing Shares;
(3) sub-divide its Shares or any of them into shares of smaller par
value than is fixed by its memorandum of association, so, however,
that in the sub-division the proportion between the amount paid
and the amount, if any, unpaid on each reduced Share shall be the
same as it was in the case of the Share from which the reduced
Share is derived;
(4) make provision for the issue and allotment of Shares which do not
carry any voting rights;
(5) cancel Shares which, at the date of the passing of the resolution
in that behalf, have not been taken or agreed to be taken by any
person, and diminish the amount of its share capital by the amount
of the Shares so canceled; and
(6) change the currency denomination of its share capital. Where any
difficulty arises in regard to any division, consolidation or
subdivision under this Bye-Law, the Board may settle the same as
it thinks expedient and, in particular, may arrange for the sale
of the Shares representing fractions and the
<PAGE> 26
23
distribution of the net proceeds of sale in due proportion amongst
the Shareholders who would have been entitled to the fractions,
and for this purpose the Board may authorise some person to
transfer the Shares representing fractions to the purchaser
thereof, who shall not be bound to see to the application of the
purchase money nor shall his title to the Shares be affected by an
irregularity or invalidity in the proceedings relating to the
sale. 46. Subject to the Companies Acts and to any confirmation or
consent required by law or these Bye-Laws, the Company may by
Resolution from time to time convert any Preferred Shares into
redeemable Preferred Shares.
REDUCTION OF CAPITAL
47. Subject to the Companies Acts, its memorandum of association and
any confirmation or consent required by law or these Bye-Laws, the
Company may from time to time by Resolution authorise the
reduction of its issued share capital or any share premium in any
manner.
48. In relation to any such reduction, the Company may by Resolution
determine the terms upon which such reduction is to be effected
including in the case of a reduction of part only of a class of
Shares, those Shares to be affected.
GENERAL MEETINGS AND WRITTEN RESOLUTIONS
49. (1) The Board shall convene, and the Company shall hold, general
meetings as Annual General Meetings in accordance with the
requirements of the Companies Acts at such times and places as the
Board shall appoint. The Board or the Chairman or Vice Chairman of
the Board may, whenever each thinks fit, and
<PAGE> 27
24
shall, when requisitioned by Shareholders pursuant to the
provisions of the Companies Acts, convene general meetings other
than Annual General Meetings which shall be called Special General
Meetings.
(2) Except in the case of the removal of auditors and Directors,
anything which may be done by Resolution of the Company in general
meeting or by Resolution of a meeting of any class of the
Shareholders of the Company may, without a meeting and without any
previous notice being required, be done by Resolution in writing,
signed by all of the Shareholders, or in the case of a Shareholder
that is a corporation (whether or not a company within the meaning
of the Companies Acts) on behalf of such Shareholder, being all of
the Shareholders of the Company who at the date of the Resolution
in writing would be entitled to attend a meeting and vote on the
Resolution. Such Resolution in writing may be signed by, or in the
case of a Shareholder that is a corporation (whether or not a
company within the meaning of the Companies Acts), on behalf of,
all the Shareholders of the Company, 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 in
writing is the date when the Resolution is signed by, or in the
case of a Shareholder that is a corporation (whether or not a
company within the meaning of the Companies Acts), on behalf of,
the last Shareholder to sign and any reference in any enactment to
the date of passing of a resolution is, in relation to a
resolution in writing made in accordance with this section, a
reference to such date.
(4) A Resolution in writing made in accordance with this Bye-Law is as
valid as if it had been passed by the Company in general meeting
or, if applicable, by a
<PAGE> 28
25
meeting of the relevant class of Shareholders of the Company, as
the case may be. A Resolution in writing made in accordance with
this section shall constitute minutes for the purposes of the
Companies Acts and these Bye-Laws.
NOTICE OF GENERAL MEETINGS
50. (1) An Annual General Meeting shall be called by not less than 30 days
notice in writing, and a Special General Meeting shall be called
by not less than 10 days notice in writing. The notice shall
specify the place, day and time of the meeting and the nature of
the business to be considered. Notice of every general meeting
shall be given in any manner permitted by Bye-Laws 133 and 134 to
all Shareholders other than such as, under the provisions of these
Bye-Laws or the terms of issue of the Shares they hold, are not
entitled to receive such notice from the Company and to each
Director and to any Resident Representative who or which has
delivered a written notice upon the Registered Office requiring
that such notice be sent to him or it.
(2) A Shareholder present, either in person or by proxy, at any
meeting of the Company or of the holders of any class of Shares in
the Company shall be deemed to have received notice of the meeting
and, where requisite, of the purposes for which it was called.
51. The accidental omission to give notice of a meeting or (in cases
where instruments of proxy are sent out with the notice) the
accidental omission to send such instrument of proxy to, or the
non-receipt of notice of a meeting or such instrument of proxy by,
any person entitled to receive such notice shall not invalidate
the proceedings at that meeting.
<PAGE> 29
26
PROCEEDINGS AT GENERAL MEETINGS
52. No business shall be transacted at any general meeting unless a
quorum is present when the meeting proceeds to business, but the
absence of a quorum shall not preclude the appointment, choice or
election of a chairman which shall not be treated as part of the
business of the meeting. Shareholders holding at least 50% of the
issued and outstanding voting Shares present in person or by proxy
and entitled to vote shall be a quorum for all purposes; provided,
however, that if the Company or a class of Shareholders shall have
only one Shareholder, one Shareholder present in person or by
proxy shall constitute the necessary quorum.
53. If within five minutes (or such longer time as the chairman of the
meeting may determine to wait) after the time appointed for the
meeting, a quorum is not present and the meeting was called in
accordance with Bye-Law 50 (a "Failed Shareholder Meeting"), the
meeting, if convened on the requisition of Shareholders, shall be
dissolved. In any other case, it shall stand adjourned to such
other day and such other time and place as the chairman of the
meeting may determine. If a Failed Shareholder Meeting occurs and
another meeting for the purpose of transacting the same business
as set forth in the notice with respect to the Failed Shareholder
Meeting (the "Recalled Shareholder Meeting") is called in
accordance with Bye-Law 50 upon at least 7 days prior written
notice to all Shareholders, then a quorum for the Recalled
Shareholder Meeting shall not require inclusion of the Shares held
by the Shareholders who failed to attend the Failed Shareholder
Meeting, in calculating the quorum for the Recalled Shareholder
Meeting.
<PAGE> 30
27
54. A meeting of the Shareholders or any class thereof may be held by
means of such telephone, electronic or other communication
facilities as permits all persons participating in the meeting to
communicate with each other simultaneously and instantaneously and
participation in such meeting shall constitute presence in person
at such meeting.
55. Each Director and the Resident Representative, if any, shall be
entitled to attend and speak at any general meeting of the
Company.
56. The Chairman or Co-Chairman (if any) of the Board or, in their
absence, the Chief Executive Officer or a Vice Chairman shall
preside as chairman at every general meeting. If there is no such
Chairman, Co-Chairman or Chief Executive Officer, or if at any
meeting neither the Chairman nor the Co-Chairman or Chief
Executive Officer or a Vice Chairman are present within five
minutes after the time appointed for holding the meeting, or if
none of them is willing to act as chairman, the Directors present
shall choose one of their number to act or if one Director only is
present he shall preside as chairman if willing to act. If no
Director is present, or if each of the Directors present declines
to take the chair, the persons present and entitled to vote on a
poll shall elect one of their number to be chairman.
57. The chairman of the meeting may, with the consent of any meeting
at which a quorum is present (and shall if so directed by the
meeting), adjourn the meeting from time to time and from place to
place but no business shall be transacted at any adjourned meeting
except business which might lawfully have been transacted at the
meeting from which the adjournment took place. When a
<PAGE> 31
28
meeting is adjourned for three months or more, notice of the
adjourned meeting shall be given as in the case of an original
meeting.
58. Save as expressly provided by these Bye-Laws, it shall not be
necessary to give any notice of an adjournment or of the business
to be transacted at an adjourned meeting.
VOTING
59. (1) Save where a greater percentage is required by the Companies Acts
or these Bye-Laws, any question proposed for consideration at any
general meeting shall be decided on by a simple majority of votes
cast at such meeting.
60. If an amendment shall be proposed to any Resolution under
consideration but shall in good faith be ruled out of order by the
chairman of the meeting, the proceedings on the substantive
Resolution shall not be invalidated by any error in such ruling.
With the consent of the chairman of the meeting, an amendment may
be withdrawn by its proposer before it is voted upon.
61. At any general meeting, a Resolution put to the vote of the
meeting shall be decided on a poll.
62. The result of the poll shall be deemed to be the Resolution of the
meeting at which the poll is taken.
63. A poll relating to the election of a chairman or co-chairman, or
on a question of adjournment, shall be taken forthwith. A poll
relating to any other question shall be taken in such manner and
either forthwith or at such time at such meeting as the chairman
or any co-chairman shall direct. It shall not be necessary (unless
the chairman or any co-chairman otherwise directs) for notice to
be given of a poll.
<PAGE> 32
29
64. The demand for a poll shall not prevent the continuance of a
meeting for the transaction of business other than the question on
which the poll has been demanded and it may be withdrawn at any
time before the close of the meeting or the taking of the poll,
whichever is the earlier.
65. On a poll, votes may be cast either personally or by proxy.
66. A person entitled to more than one vote on a poll need not use all
his votes or cast all the votes he uses in the same way.
67. In the case of an equality of votes at a general meeting, whether
on a show of hands or on a poll, the chairman or any co-chairman
of such meeting shall not be entitled to a second or casting vote
and the resolution shall fail.
68. In the case of joint holders of a Share, the vote of the senior
who tenders a vote, whether in person or by proxy, shall be
accepted to the exclusion of the votes of the other joint holders,
and for this purpose seniority shall be determined by the order in
which the names stand in the Register in respect of the joint
holding.
69. A Shareholder who is a patient for any purpose of any statute or
applicable law relating to mental health or in respect of whom an
order has been made by any Court having jurisdiction for the
protection or management of the affairs of persons incapable of
managing their own affairs may vote, whether on a show of hands or
on a poll, by his receiver, committee, curator bonis or other
person in the nature of a receiver, committee or curator bonis
appointed by such Court and such receiver, committee, curator
bonis or other person may vote on a poll by proxy, and may
otherwise act and be treated as such Shareholder for the purpose
of general meetings.
<PAGE> 33
30
70. No Shareholder shall, unless the Board otherwise determines, be
entitled to vote at any general meeting unless all calls or other
sums presently payable by him in respect of shares in the Company
have been paid.
71. If:
(1) any objection shall be raised to the qualification of any voter;
or,
(2) any votes have been counted which ought not to have been counted
or which might have been rejected; or,
(3) any votes are not counted which ought to have been counted, the
objection or error shall not vitiate the decision of the meeting
or adjourned meeting on any resolution unless the same is raised
or pointed out at the meeting or, as the case may be, the
adjourned meeting at which the vote objected to is given or
tendered or at which the error occurs. Any objection or error
shall be referred to the chairman or co-chairman (if any) of the
meeting and shall only vitiate the decision of the meeting on any
resolution if the chairman or co-chairman (if any) decides that
the same may have affected the decision of the meeting. The
decision of the chairman or the co-chairman on such matters shall
be final and conclusive.
PROXIES AND CORPORATE REPRESENTATIVES
72. The instrument appointing a proxy shall be in writing under the
hand of the appointor or of his attorney authorized by him in
writing or, if the appointor is a corporation, either under its
seal or under the hand of an officer, attorney or other person
authorized to sign the same.
73. Any Shareholder may appoint a standing proxy or (if a corporation)
representative
<PAGE> 34
31
by depositing at the Registered Office a proxy or (if a
corporation) an authorization and such proxy or authorization
shall be valid for all general meetings and adjournments thereof,
until notice of revocation is received at the Registered Office.
Where a standing proxy or authorization exists, its operation
shall be deemed to have been suspended at any general meeting or
adjournment thereof at which the Shareholder is present or in
respect to which the Shareholder has specially appointed a proxy
or representative. The Board may from time to time require such
evidence as it shall deem necessary as to the due execution and
continuing validity of any such standing proxy or authorization
and the operation of any such standing proxy or authorization
shall be deemed to be suspended until such time as the Board
determines that it has received the requested evidence or other
evidence satisfactory to it.
74. Subject to Bye-Law 73, the instrument appointing a proxy together
with such other evidence as to its due execution as the Board may
from time to time require, shall be delivered at the Registered
Office (or at such place as may be specified in the notice
convening the meeting or in any notice of any adjournment or, in
either case or the case of a written resolution, in any document
sent therewith) prior to the holding of the relevant meeting or
adjourned meeting at which the person named in the instrument
proposes to vote or, in the case of a poll taken subsequently to
the date of a meeting or adjourned meeting, before the time
appointed for the taking of the poll, or and in default the
instrument of proxy shall not be treated as valid.
75. Instruments of proxy shall be in any common form or in such other
form as the
<PAGE> 35
32
Board may approve and the Board may, if it thinks fit, send out
with the notice of any meeting forms of instruments of proxy for
use at that meeting. The instrument of proxy shall be deemed to
confer authority to demand or join in demanding a poll and to vote
on any amendment of a resolution put to the meeting for which it
is given as the proxy thinks fit. The instrument of proxy shall
unless the contrary is stated therein be valid as well for any
adjournment of the meeting as for the meeting to which it relates.
76. A vote given in accordance with the terms of an instrument of
proxy shall be valid notwithstanding the previous death or
unsoundness of mind of the principal, or revocation of the
instrument of proxy or of the authority under which it was
executed, provided that no intimation in writing of such death,
insanity or revocation shall have been received by the Company at
the Registered Office (or such other place as may be specified for
the delivery of instruments of proxy in the notice convening the
meeting or other documents sent therewith) at least one hour
before the commencement of the meeting or adjourned meeting, or
the taking of the poll which the instrument of proxy is used.
77. Subject to the Companies Acts, the Board may at its discretion
waive any of the provisions of these Bye-Laws related to proxies
or authorizations and, in particular, may accept such verbal or
other assurances as it thinks fit as to the right of any person to
attend and vote on behalf of any Shareholder at general meetings
or to sign written resolutions.
<PAGE> 36
33
APPOINTMENT AND REMOVAL OF DIRECTORS
78. The Company may by Resolution determine (i) the minimum number of
Directors, which shall be not less than 9 and which is hereby set
at 9 until such number is amended by a further Resolution and (ii)
the maximum number of Directors, which shall not be more than 20
and which is hereby set at 20 until such number is amended by a
further Resolution, and any vacancies on the Board shall be deemed
casual vacancies for the purposes of these Bye-Laws. Without
prejudice to the power of the Company by Resolution in pursuance
of any of the provisions of these Bye-Laws to appoint any person
to be a Director, the Board, so long as a quorum of Directors
remains in office, shall have power at any time and from time to
time to appoint any individual to be a Director so as to fill a
casual vacancy; provided, however, that, in the event that a
casual vacancy has been created as a result of the absence of a
director that had been nominated by Global Crossing, Microsoft or
Softbank, the appointment by the Board of any such individual to
be a Director so as to fill such casual vacancy shall be subject
to the prior approval of any remaining existing Directors that had
been nominated by Global Crossing, Microsoft or Softbank, as
applicable. A Director so appointed shall hold office only until
the next following Annual General Meeting and shall not be taken
into account in determining the Directors who are to retire by
rotation at the meeting. If not reappointed at such Annual General
Meeting, he shall vacate office at the conclusion thereof.
79. Except as otherwise required by the Companies Acts, the
appointment of any person proposed as a Director shall be effected
by a separate Resolution voted on
<PAGE> 37
34
at a general meeting pursuant to Bye-Law 59; provided, however,
that each of Global Crossing, Microsoft and Softbank shall be
entitled to nominate a number of Directors equal to the total
number of Directors multiplied by the percentage that the Common
Shares owned of record or beneficially owned by Global Crossing,
Microsoft or Softbank, as applicable, represent of the aggregate
voting power of all issued and outstanding Common Shares (with any
resulting fraction rounded up or down to the nearest whole);
provided further that each of Global Crossing, Microsoft and
Softbank shall have the right to nominate at least one Director
for so long as Global Crossing, together with its Affiliates,
Microsoft, together with its Affiliates, or Softbank, together
with its Affiliates, as applicable, holds of record or owns
beneficially at least 5% of the outstanding Common Shares. The
Board of Directors of the Company shall by resolution nominate
such number of persons qualified to serve as independent Directors
as shall be necessary or appropriate under applicable law or the
rules and regulations of any securities exchange or automated
quotation system on which the securities of the Company may be
listed.
80. No Person, other than any Person nominated by Global Crossing,
Microsoft or Softbank to become a Director pursuant to Bye-Law 79,
shall be appointed a Director, unless:--
(a) in the case of an Annual or Special General Meeting,
such person is recommended by the Board; or
(b) in the case of an Annual General Meeting, not less
than 120 nor more than 150 days before the date of
the Company's proxy
<PAGE> 38
35
statement released to Shareholders in connection with the
prior year's Annual General Meeting, notice executed by a
Shareholder (not being the person to be proposed) has been
received by the Secretary of the Company of the intention
to propose such person for appointment, setting forth as to
each person whom the Shareholder proposes to nominate for
election or re-election as a Director (i) the name, age,
business address and residence address of such person, (ii)
the principal occupation or employment of such person,
(iii) the class, series and number of Shares which are
beneficially owned by such person, (iv) particulars which
would, if he were so appointed, be required to be included
in the Company's register of Directors and Officers and (v)
all other information relating to such person that is
required to be disclosed in solicitations for proxies for
the election of directors pursuant to the rules and
regulations of the Securities and Exchange Commission under
Section 14 of the Exchange Act, together with notice
executed by such person of his willingness to serve as a
Director if so elected; provided, however, that no
Shareholder shall be entitled to propose any person to be
appointed, elected or re-elected Director at any Special
General Meeting.
81. All Directors, following election or appointment, must provide
written acceptance of their appointment, in such form as the Board
may think fit, to the Registered Office within 30 days of their
appointment.
<PAGE> 39
36
82. The Shareholders may in a Special General Meeting called for that
purpose remove a Director, provided notice of any such meeting
shall be served upon the Director concerned not less that 14 days
before the meeting and he shall be entitled to be heard at that
meeting. Any vacancy created by the removal of a Director at a
Special General Meeting may be filled at such meeting by the
election of another Director in his place or, in the absence of
any such election, by the Board in accordance with Bye-Law 78.
RESIGNATION AND DISQUALIFICATION OF DIRECTORS
83. The office of a Director shall be vacated upon the happening of
any of the following events:
(1) if he resigns his office in writing to the Secretary delivered to
the Registered Office or tendered at a meeting of the Board;
(2) if he becomes of unsound mind or a patient for any purpose of any
statute or applicable law relating to mental health and the Board
resolves that his office is vacated;
(3) if he becomes bankrupt under the laws of any country or compounds
with his creditors;
(4) if he is prohibited by law from being a Director;
(5) if he ceases to be a Director by virtue of the Companies Acts or
is removed from office pursuant to these Bye-Laws.
(6) if he shall for more than six consecutive months have been absent
without permission of the Board from meetings of the Board held
during that period and his Alternate Director (if any and as
defined) shall not during such period have
<PAGE> 40
37
attended in his stead and the Board resolves that his office be
vacated; or
(7) after the initial term he is requested to resign in writing by not
less than three quarters of the other Directors. In calculating
the number of Directors who are required to make such a request to
the Director, (i) there shall be excluded any Alternate Director
appointed by him acting in his capacity as such; and (ii) a
Director and any Alternate Director appointed by him and acting in
his capacity as such shall constitute a single Director for this
purpose, so that the signature of either shall be sufficient.
Any vacancy created by the removal of a Director pursuant to this Bye-Law
83 may be filled by the election of another Director in his place or, in
the absence of any such election, by the Board in accordance with Bye-Law
78.
ALTERNATE DIRECTORS
84. A Director may appoint and remove his own alternate director (an
"Alternate Director"). Any appointment or removal of an Alternate
Director by a Director shall be effected by depositing a notice of
appointment or removal with the Secretary at the Registered
Office, signed by such Director, and such appointment or removal
shall become effective on the date of receipt by the Secretary.
Any Alternate Director may be removed by resolution of the Board.
Subject as aforesaid, the office of Alternate Director shall
continue until the next bi-annual election of Directors or, if
earlier, the date on which the relevant Director ceases to be a
Director. An Alternate Director may also be a Director in his own
right and may act as alternate to more than one Director.
85. An Alternate Director shall be entitled to receive notices of all
meetings of
<PAGE> 41
38
Directors, to attend, be counted in the quorum and vote at any
such meeting at which any Director to whom he is alternate is not
personally present and generally to perform all the functions of
any Director to whom he is alternate in his absence.
86. Every person acting as an Alternate Director shall (except as
regards powers to appoint an alternate and remuneration) be
subject in all respects to the provisions of these Bye-Laws
relating to Directors and shall alone be responsible to the
Company for his acts and defaults and shall not be deemed to be
the agent of or for any Director for whom he is alternate. An
Alternate Director may be paid expenses and shall be entitled to
be indemnified by the Company to the same extent mutatis mutandis
as if he were a Director. Every person acting as an Alternate
Director shall have one vote for each Director for whom he acts as
alternate (in addition to his own vote if he is also a Director).
The signature of an Alternate Director to any resolution in
writing of the Board or a committee of the Board shall, unless the
terms of his appointment provides to the contrary, be as effective
as the signature of the Director or Directors to whom he is
alternate.
DIRECTORS' FEES AND ADDITIONAL REMUNERATION
AND EXPENSES
87. The ordinary remuneration of the Directors who do not hold
executive office for their services (excluding amounts payable
under any other provision of these Bye-Laws) shall be such amount
as the Board may from time to time by resolution determine and in
the absence of a determination to the contrary such fees shall be
deemed to accrue from day to day. Subject thereto, each such
Director shall be paid a fee (which shall be deemed to accrue from
day to day) at such rate as may
<PAGE> 42
39
from time to time be determined by the Board. Each Director may be
paid his reasonable travel, hotel and incidental expenses in
attending and returning from meetings of the Board or committees
constituted pursuant to these Bye-Laws or General Meetings and
shall be paid all expenses properly and reasonably incurred by him
in the conduct of the Company's business or in the discharge of
his duties as a Director. Any Director who, by request, goes or
resides abroad for any purposes of the Company or who performs
services which in the opinion of the Board go beyond the ordinary
duties of a Director may be paid such extra remuneration (whether
by way of salary, commission, participation in profits or
otherwise) as the Board may determine, and such extra remuneration
shall be in addition to any remuneration provided for by or
pursuant to any other Bye-Law.
DIRECTORS' INTERESTS
88. (1) A Director may hold any other office or place of profit with the
Company (except that of auditor) in conjunction with his office of
Director for such period and upon such terms as the Board may
determine, and may be paid such extra remuneration therefor
(whether by way of salary, commission, participation in profits or
otherwise) as the Board may determine, and such extra remuneration
shall be in addition to any remuneration provided for by or
pursuant to any other Bye-Law.
(2) A Director may act by himself or his firm in a professional
capacity for the Company (other than as auditor) and he or his
firm shall be entitled to remuneration for professional services
as if he were not a Director.
(3) Subject to the provisions of the Subscription and Shareholders
Agreement and the Companies Acts, a Director may notwithstanding
his office be a party to, or
<PAGE> 43
40
otherwise interested in, any transaction or arrangement with the
Company or in which the Company is otherwise interested; and be a
director or other officer of, or employed by, or a party to any
transaction or arrangement with, or otherwise interested in, any
body corporate promoted by the Company or in which the Company is
interested. The Board may also cause the voting power conferred by
the shares in any other company held or owned by the Company to be
exercised in such manner in all respects as it thinks fit,
including the exercise thereof in favour of any resolution
appointing the Directors or any of them to be directors or
officers of such other company, or voting or providing for the
payment of remuneration to the directors or officers of such
company.
(4) So long as, where it is necessary, he declares the nature of his
interest at the first opportunity at a meeting of the Board or by
writing to the Directors as required by the Companies Acts, a
Director shall not by reason of his office be accountable to the
Company for any benefit which he derives from any office or
employment to which these Bye-Laws allow him to be appointed or
from any transaction or arrangement in which these Bye-Laws allow
him to be interested, and no such transaction or arrangement shall
be liable to be avoided on the ground of any interest or benefit.
(5) Subject to the Subscription and Shareholders Agreement and the
Companies Acts and any further disclosure required thereby, a
general notice to the Directors by a Director or Officer declaring
that he is a director or officer of, or has an interest in, a
Person and is to be regarded as interested in any transaction or
arrangement made with that Person, shall be sufficient declaration
of interest in relation to any
<PAGE> 44
41
transaction or arrangement so made.
(6) A Director who has disclosed his interest in a transaction or
arrangement with the Company, or in which the Company is otherwise
interested, may be counted in the quorum and vote at any meeting
at which such transaction or arrangement is considered by the
Board.
(7) Subject to the Companies Acts and any further disclosure required
thereby, a general notice to the Directors by a Director or
Officer declaring that he is a director or officer or has an
interest in a person and is to be regarded as interested in any
transaction or arrangement made with that person, shall be a
sufficient declaration of interest in relation to any transaction
or arrangement so made.
(8) For the purposes of these Bye-Laws, without limiting the
generality of the foregoing, a Director is deemed to have an
interest in a transaction or arrangement with the Company if he is
the holder or beneficially interested in five percent or more of
any class of the equity share capital of any body corporate (or
any other body corporate through which his interest derived) or of
the voting rights available to members of the relevant body
corporate with which the Company is proposing to enter into a
transaction or arrangement, provided that there shall be
disregarded any shares held by such Director as bare or custodian
trustee and in which the Director's interest is in reversion or
remainder if and so long as some other person is entitled to
receive the income thereof, and any shares comprised in an
authorised unit trust in which the Director is only interested as
a unit holder. For the purposes of this Bye-Law, an interest of a
person who is connected with a Director shall be treated as an
interest of the Director.
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POWERS AND DUTIES OF THE BOARD
89. Subject to the provisions of the Companies Acts and these Bye-Laws
and to any directions given by the Company by Resolution, the
Board shall manage the business of the Company and may pay all
expenses incurred in promoting and incorporating the Company and
may exercise all the powers of the Company. No alteration of these
Bye-Laws and no such direction shall invalidate any prior act of
the Board which would have been valid if that alteration had not
been made or that direction had not been given. The powers given
by this Bye-Law shall not be limited by any special power given to
the Board by these Bye-Laws and a meeting of the Board at which a
quorum is present shall be competent to exercise all the powers,
authorities and discretions for the time being vested in or
exercisable by the Board.
90. The Board may exercise all the powers of the Company to borrow
money and to mortgage or charge all or any part of the
undertaking, property and assets (present and future) and uncalled
capital of the Company and to issue debentures and other
securities, whether outright or as collateral security for any
debt, liability or obligation of the Company or of any other
persons.
91. All checks, promissory notes, drafts, bills of exchange and other
instruments, whether negotiable or transferable or not, and all
receipts for money paid to the Company shall be signed, drawn,
accepted, endorsed or otherwise executed, as the case may be, in
such manner as the Board shall from time to time by resolution
determine.
<PAGE> 46
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GRATUITIES, PENSIONS AND INSURANCE
92. (1) The Board on behalf of the Company may provide benefits, whether
by the payment of gratuities or pensions or otherwise, for any
person including any Director or former Director who has held an
executive office or employment with the Company or with any body
corporate which is or has been a subsidiary or affiliate of the
Company or a predecessor in the business of the Company or of any
such subsidiary or affiliate, and to any member of his family or
any person who is or was dependent on him, and may contribute to
any fund and pay premiums for the purchase or provision of any
such gratuity, pension or other benefit, or for the insurance of
any such person.
(2) Without prejudice to the provisions of Bye-Laws 140 and 141, the
Board shall have the power to purchase and maintain insurance for
or for the benefit of any persons who are or were at any time
Directors, Officers or employees of the Company or of any other
company which is its holding company or in which the Company or
such holding company has an interest whether direct or indirect or
which is in any way allied to or associated with the Company or of
any subsidiary undertaking of the Company or any such other
company, or who are or were at any time trustees of any pension
fund in which employees of the Company or any such other company
or subsidiary undertaking are interested, including (without
prejudice to the generality of the foregoing) insurance against
any liability incurred by such persons in respect of any act or
omission in the actual or purported execution or discharge of
their duties or in the exercise or purported
<PAGE> 47
44
exercise of their powers or otherwise in relation to their duties,
powers or offices in relation to the Company or any such other
company, subsidiary undertaking or pension fund.
(3) No Director or former Director shall be accountable to the Company
or the Shareholders for any benefit provided pursuant to this
Bye-Law 92 and the receipt of any such benefit shall not
disqualify any person from being or becoming a Director of the
Company.
DELEGATION OF THE BOARD'S POWERS
93. The Board may by power of attorney appoint any company, firm or
person or any fluctuating body of persons, whether nominated
directly or indirectly by the Board, to be the attorney or
attorneys of the Company for such purposes and with such powers,
authorities and discretions (not exceeding those vested in or
exercisable by the Board under these Bye-Laws and excluding the
power or authority to take any action referred to in Bye-Law
96(2)) and for such period and subject to such conditions as it
may think fit, and any such power of attorney may contain such
provisions for the protection and convenience of persons dealing
with any such attorney and of such attorney as the Board may think
fit, and may also authorise any such attorney to sub-delegate all
or any of the powers, authorities and discretions vested in him.
94. The Board may entrust to and confer upon any Director or Officer
any of the powers exercisable by it, except on matters referred to
in Bye-Law 96(2) upon such terms and conditions with such
restrictions as it thinks fit, and either collaterally with, or to
the exclusion of, its own powers, and may from time to
<PAGE> 48
45
time revoke or vary all or any of such powers but no person
dealing in good faith and without notice of such revocation or
variation shall be affected thereby.
95. The Board may delegate any of its powers, authorities and
discretions to committees, consisting of such person or persons
(whether a member or members of its body or not) as it thinks fit;
provided, however, that the Board may not delegate the power or
authority to take any of the actions set forth in Bye-Law 96(2);
provided, further, subject to any applicable independent director
requirements of rules or regulations promulgated from time to time
by the Securities Exchange Commission or any securities exchange
or automated quotation system on which any of the Company's
securities may be listed or quoted, any such committee shall
include one director, if any, that was nominated by each of
Microsoft and Softbank for as long as each of Softbank and
Microsoft, as applicable, shall have the right to nominate
Directors of the Company pursuant to Bye-Law 79. Any committee so
formed shall, in the exercise of the powers, authorities and
discretions so delegated, and in conducting its proceedings
conform to any regulations which may be imposed upon it by the
Board. If no regulations are imposed by the Board the proceedings
of a committee with two or more members shall be, as far as is
practicable, governed by the Bye-Laws regulating the proceedings
of the Board.
PROCEEDINGS OF THE BOARD
96. (1) The Board may meet for the despatch of business, adjourn and
otherwise regulate its meetings as it thinks fit. Except as
otherwise required by the Companies Acts or by these Bye-Laws,
questions arising at any meeting shall be determined by a
<PAGE> 49
46
majority of votes cast by Directors present or represented and
entitled to vote on such actions at a duly convened meeting at
which a quorum was present. In the case of an equality of votes,
the motion shall be deemed to have been lost. A Director may, and
the Secretary on the requisition of a Director shall, at any time
summon a meeting of the Board.
(2) The following actions shall require the consent of a majority of
the Board but must include the consent of the Directors who are
nominated by each of Softbank and Microsoft:
(a) the amalgamation, merger or consolidation of the
Company or any of its Subsidiaries with any other
entity;
(b) any acquisition or investment by the Company or any
of its Subsidiaries involving aggregate
consideration paid by the Company and its
Subsidiaries of in excess of $1.0 billion, or any
acquisition or investment by the Company or any of
its Subsidiaries if the aggregate consideration paid
by the Company and its Subsidiaries in any Fiscal
Year for acquisitions or investments after such
acquisition or investment exceeds $2.0 billion;
(c) any sale, transfer or other disposition of material
assets of the Company or any of its Subsidiaries
(other than an initial public offering by the
Company and other than dispositions of worn-out or
obsolete assets in the ordinary course of business)
in one or more related transactions;
<PAGE> 50
47
(d) any material change in the Company's purposes as
described in Bye-Law 2(2);
(e) any amendment to the Memorandum of Association or
Bye-Laws of the Company that materially adversely
affects the rights of Softbank or Microsoft under
this Bye-Law 96(2) or the right of Softbank or
Microsoft to nominate directors to the Board
pursuant to Bye-Law 79;
(f) the incurrence by the Company or any of its
Subsidiaries of indebtedness in excess of $1.0
billion in the aggregate at any one time
outstanding, excluding indebtedness incurred (A) to
finance expenditures incurred in accordance with the
Company's initial strategic plan, including in
connection with East Asia Crossing, (B) to finance
capital expenditures approved by the Board of
Directors in accordance with clause (g) of this
Bye-Law 96(2) or (C) pursuant to the PC-1 credit
facility existing on September 8, 1999, and any
refinancing thereof, so long as the aggregate
principal amount of such refinancing does not exceed
the aggregate principal outstanding as of any such
refinancing plus the principal amount, if any,
available to be borrowed under such facility as of
such refinancing plus any accrued and unpaid
interest and plus all fees and expenses arising in
connection with any such refinancing;
(g) capital expenditures by the Company or any of its
Subsidiaries in
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48
excess of $1.0 billion on a project by project basis
or in excess of $2.0 billion in any Fiscal Year;
(h) the issuance of additional equity by the Company or
any of its Subsidiaries after the date hereof other
than, in each case, in connection with stock option
plans, benefit and pension plans, other employee
compensation plans or director compensation plans;
(i) the commencement of any proceeding for voluntary
bankruptcy of the Company or any of its
Subsidiaries;
(j) any transaction (including, without limitation, any
transaction, agreement or arrangement to provide
services) between Global Crossing or any of its
Subsidiaries and the Company or any of its
Subsidiaries for consideration having a value in
excess of $5.0 million and to be entered into on
terms less favorable to the Company than those that
could have been obtained at the time of such
transaction in an arms' length transaction with an
unrelated third party, other than (A) transactions
between the Company or any of its Subsidiaries and
Global Crossing or any of its Affiliates, entered
into on an arm's length basis involving the
provision of Services and/or capacity to a customer
in regions both within and outside of the Territory
(and including operation, administrative and
maintenance arrangements entered into on an arms'
length basis) and (B) transactions set forth on
Schedule 3.5(b) to the
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49
Subscription and Shareholders Agreement;
(k) the discontinuance of the Company as a Bermuda
company; and
(l) the dissolution of the Company upon the occurrence
of a Termination Event.
97. Notice of a meeting of the Board shall be deemed to be duly given
to a Director if it is given to him personally or by word of mouth
or sent to him by post, cable, telex, telecopier or other mode of
representing or reproducing words in a legible and non-transitory
form at his last known address or any other address given by him
to the Company for this purpose. A Director may retrospectively
waive the requirement for notice of any meeting by consenting in
writing to the business conducted at the meeting.
98. (1) The quorum necessary for the transaction of the business of the
Board may be fixed by the Board and, unless so fixed at any other
number, shall be three individuals. No Shareholder shall cause,
directly or indirectly, any Director nominated by such Shareholder
to fail to attend any meeting of the Board for purposes of
removing the quorum. Any Director who ceases to be a Director at a
meeting of the Board may continue to be present and to act as a
Director and be counted in the quorum until the termination of the
meeting if no other Director objects and if otherwise a quorum of
Directors would not be present.
(2) The Resident Representative shall, upon delivering written notice
of an address for the purposes of receipt of notice, to the
Registered Office, be entitled to receive notice of, attend and be
heard at, and to receive minutes of all meetings of the Board.
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50
99. So long as a quorum of Directors remains in office, the continuing
Directors may act notwithstanding any vacancy in the Board but, if
no such quorum remains, the continuing Directors or a sole
continuing Director may act only for the purpose of calling a
general meeting.
100. The Chairman or Co-Chairman of the Board or, in their absence, the
Vice Chairman shall preside as Chairman at every meeting of the
Board. If at any meeting the Chairman or Co-Chairman or Vice
Chairman is or are not present within five minutes after the time
appointed for holding the meeting, or is or are not willing to act
as chairman or co-chairmen, as applicable, the Directors present
may choose one of their number to be chairman of the meeting.
101. The meetings and proceedings of any committee consisting of two or
more members shall be governed by the provisions contained in
these Bye-Laws for regulating the meetings and proceedings of the
Board so far as the same are applicable and are not superseded by
any regulations imposed by the Board.
102. A resolution in writing signed by all the Directors for the time
being entitled to receive notice of a meeting of the Board or by
all the members of a committee for the time being shall be as
valid and effectual as a resolution passed at a meeting of the
Board or, as the case may be, of such committee duly called and
constituted. Such resolution may be contained in one document or
in several documents in the like form each signed by one or more
of the Directors or members of the committee concerned.
103. A meeting of the Board or a committee appointed by the Board may
be held by means of such telephone, electronic or other
communication facilities as permit
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51
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.
104. All acts done by the Board or by any committee or by any person
acting as a Director or member of a committee, shall,
notwithstanding that it is afterwards discovered that there was
some defect in the appointment of any member of the Board or such
committee or person acting as aforesaid or that they or any of
them were disqualified or had vacated their office, be as valid as
if every such person had been duly appointed and was qualified and
had continued to be a Director, member of such committee or person
so authorized.
OFFICERS
105. The Officers of the Company shall include a Chairman, Chief
Executive Officer and Vice Chairman who shall be Directors and
shall be elected by the Board as soon as possible after the
statutory meeting and each Annual General Meeting. In addition,
the Board may appoint any person whether or not he is a Director
to hold such office as the Board may from time to time determine.
Any person elected or appointed pursuant to this Bye-Law shall
hold office for such period and upon such terms as the Board may
determine and the Board may revoke or terminate any such election
or appointment. Any such revocation or termination shall be
without prejudice to any claim for damages that such Officer may
have against the Company or the Company may have against such
Officer for any breach of any contract of service between him and
the Company which may be involved in such revocation or
termination. Save as provided in the Companies
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52
Acts or these Bye-Laws, the powers and duties of the Officers of
the Company shall be such (if any) as are determined from time to
time by the Board.
EXECUTIVE DIRECTORS
106. Subject to the provisions of the Companies Acts, the Board may
appoint one or more of its body to be the holder of any executive
office (except that of auditor) under the Company and may enter
into any agreement or arrangement with any Director for his
employment by the Company or for the provision by him of any
services outside the scope of the ordinary duties of a Director.
Any such appointment, agreement or arrangement may be made upon
such terms, including terms as to remuneration, as the Board
determines, and any remuneration which is so determined may be in
addition to or in lieu of any ordinary remuneration as a Director.
The Board may revoke or vary any such appointment but without
prejudice to any rights or claims which the person whose
appointment is revoked or varied may have against the Company by
reason thereof.
107. Any appointment of a Director to an executive office shall
terminate if he ceases to be a Director but without prejudice to
any rights or claims which he may have against the Company by
reason of such cesser. A Director appointed to an executive office
shall ipso facto cease to be a Director if his appointment to such
executive office terminates.
108. The emoluments of any Director holding executive office for his
services as such shall be determined by the Board and may be of
any description and (without limiting the generality of the
foregoing) may include the admission to or continuance of
membership of any scheme (including any share acquisition
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53
scheme) or fund instituted or established or financed or
contributed to by the Company for the provision of pensions, life
assurance or other benefits for employees or their dependents or
the payment of a pension or other benefits to him or his
dependents on or after retirement or death, apart from membership
or any such scheme or fund.
MINUTES
109. The Board shall cause minutes to be made and books kept for the
purpose of recording -
(1) all appointments of Officers made by the Board:
(2) the names of the Directors and other persons (if any) present at
each meeting of the Board and of any committee;
(3) all proceedings at meetings of the Company, of the holders of any
Shares in the Company, of the Board and of committees appointed by
the Board or the Shareholders; and
(4) all proceedings of its managers (if any).
Shareholders shall only be entitled to see the register of Directors and
Officers, the Register, the financial information provided for in Bye-
Law 130 and the minutes of meetings of the Shareholders of the Company.
SECRETARY AND RESIDENT REPRESENTATIVE
110. The Secretary (including one or more deputy or assistant
secretaries) and, if required, the Resident Representative, shall
be appointed by the Board at such remuneration (if any) and upon
such terms as it may think fit and any Secretary
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54
and Resident Representative so appointed may be removed by the
Board. The duties of the Secretary and the duties of the Resident
Representative shall be those prescribed by the Companies Acts
together with such other duties as shall from time to time be
prescribed by the Board.
111. A provision of the Companies Acts or these Bye-Laws requiring or
authorising a thing to be done by or to a Director and the
Secretary shall not be satisfied by its being done by or to the
same person acting both as Director and as, or in the place of,
the Secretary.
THE SEAL
112. (1) The Seal shall consist of a circular metal device with the name of
the Company around the outer margin thereof and the country and
year of incorporation across the centre thereof. Should the Seal
not have been received at the Registered Office in such form at
the date of adoption of this Bye-Law then, pending such receipt,
any document requiring to be sealed with the Seal shall be sealed
by affixing a red wafer seal to the document with the name of the
Company, and the country and year of incorporation type written
across the centre thereof.
(2) The Board shall provide for the custody of every Seal. A Seal
shall only be used by authority of the Board or of a committee
constituted by the Board. Subject to these Bye-Laws, any
instrument to which a Seal is affixed shall be signed by either
two Directors, or by the Secretary and one Director, or by the
Secretary or by any one person whether or not a Director or
Officer, who has been authorized either generally or specifically
to affirm the use of a Seal; provided that the Secretary or a
Director may affix a Seal over his signature alone to authenticate
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55
copies of these Bye-Laws, the minutes of any meeting or any other
documents requiring authentication.
DIVIDENDS AND OTHER PAYMENTS
113. (1) Except as otherwise provided in this Bye-Law 113 and subject to
the rights of the holders of Class A Shares and Class B Shares,
holders of Class A Shares and Class B Shares shall be entitled to
receive equal dividends or other distributions per share, and
whenever a dividend or other distribution is paid to the holders
of any such class of Common Shares, the Company shall also pay to
the holders of each such other class of Common Shares a dividend
or other distribution per share equal to the dividend or other
distribution per share paid to the holders of such class of Common
Shares. Dividends and other distributions in cash, stock or
property shall be payable only as and when declared by the Board
from time to time out of assets or funds of the Company legally
available therefor.
(2) If at any time a dividend or other distribution (collectively, a
"share distribution") payable in Class A Shares or Class B Shares
or any other securities of the Company or of any other Person is
to be made with respect to the Class A Shares or Class B Shares,
such share distribution may be declared and paid only as follows,
and share distributions declared and paid as follows shall be
deemed to be equal distributions for purposes of the foregoing
paragraph:
(a) a share distribution consisting of Class A Shares or
securities that are convertible into, exchangeable
for or evidence of the right to purchase Class A
Shares, on an equal per share basis to holders of
Class A Shares and Class B Shares;
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(b) a share distribution consisting of (A) Class A
Shares or securities that are convertible into,
exchangeable for or evidence the right to purchase
Class A Shares to holders of Class A Shares and (B)
on an equal per share basis, Class B Shares or
securities that are convertible into, exchangeable
for or evidence the right to purchase Class B Shares
to holders of Class B Shares; or
(c) a share distribution consisting of shares of any
class or series of securities of the Company or any
other Person other than Class A Shares or Class B
Shares (and other than securities that are
convertible into, exchangeable for or evidence the
right to purchase Class A Shares or Class B Shares),
either:
(A) on the basis of a distribution of identical
securities, on an equal per share basis, to
holders of Class A Shares and Class B Shares;
or
(B) on the basis of a distribution of one class
or series of securities to holders of Class A
Shares and, on an equal per share basis, one
class or series of securities to holders of
Class B Shares, provided that the securities
so distributed (and, if applicable, the
securities into which the distributed
securities are convertible or for which they
are exchangeable or which they evidence the
right to purchase) do not differ in any
respect other than their relative voting
rights and related differences in
designation, conversion
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57
and share distribution provisions; and
provided further that (x) holders of Class A
Shares receive a class or series of
securities having no more than one vote per
share or convertible securities that are
convertible into, exchangeable for or
evidence the right to purchase securities
with no more than one vote per share and
having class voting rights identical to those
for the Class A Shares and (y) holders of
Class B Shares receive a class or series of
securities having no more than 10 votes per
share or convertible securities that are
convertible into, exchangeable for or
evidence the right to purchase securities
with no more than 10 votes per share and
having class voting rights identical to those
for the Class B Shares.
114. Except insofar as the rights attaching to, or the terms of issue
of, any Share otherwise provide:
(1) all dividends or distributions out of contributed surplus may be
declared and paid according to the amounts paid up on the Shares
in respect of which the dividend or distribution is paid, and an
amount paid up on a Share in advance of calls may be treated for
the purpose of this Bye-Law as paid-up on the Share; and
(2) dividends or distributions out of contributed surplus may be
apportioned and paid pro rata according to the amounts paid-up on
the Shares during any portion or portions of the period in respect
of which the dividend or distribution is paid.
115. The Board may deduct from any dividend, distribution or other
moneys payable
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58
to a Shareholder by the Company on or in respect of any Shares all
sums of money (if any) presently payable by him to the Company on
account of calls or otherwise in respect of Shares of the Company.
116. No dividend, distribution or other moneys payable by the Company
on or in respect of any Share shall bear interest against the
Company.
117. Any dividend, distribution or interest, or part thereof payable in
cash, or any other sum payable in cash to the holder of Shares may
be paid by check or warrant sent through the post addressed to the
holder at his address in the Register or, in the case of joint
holders, addressed to the holder whose name stands first in the
Register in respect of the Shares at his registered address as
appearing in the Register or addressed to such person at such
address as the holder or joint holders may in writing direct.
Every such check or warrant shall, unless the holder or joint
holders otherwise direct, be made payable to the order of the
holder or, in the case of joint holders, to the order of the
holder whose name stands first in the Register in respect of such
Shares and shall be sent at his or their risk and payment of the
check or warrant by the bank on which it is drawn shall constitute
a good discharge to the Company. Any one of two or more joint
holders may give effectual receipts for any dividends,
distributions or other moneys payable or property distributable in
respect of the Shares held by such joint holders.
118. Any dividend or distribution out of contributed surplus unclaimed
for a period of six years from the date of declaration of such
dividend or distribution shall be forfeited and shall revert to
the Company and the payment by the Board of any unclaimed
dividend, distribution, interest or other sum payable on or in
respect of
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59
the share into a separate account shall not constitute the Company
a trustee in respect thereof.
119. The Board may also, in addition to its other powers, direct
payment or satisfaction of any dividend or distribution out of
contributed surplus wholly or in part by the distribution of
specific assets, and in particular of paid-up Shares or debentures
of any other company, and where any difficulty arises in regard to
such distribution or dividend the Board may settle it as it thinks
expedient, and in particular, may authorise any person to sell and
transfer any fractions or may ignore fractions altogether, and may
fix the value for distribution or dividend purposes of any such
specific assets and may determine that cash payments shall be made
to any Shareholders upon the footing of the values so fixed in
order to secure equality of distribution and may vest any such
specific assets in trustees as may seem expedient to the Board,
provided that such dividend or distribution may not be satisfied
by the distribution of any partly paid Shares or debentures of any
company without the sanction of a Resolution.
STOCK SPLITS, SUBDIVISIONS, COMBINATIONS AND RECLASSIFICATIONS
120. In the case of any split, subdivision, combination or
reclassification of Class A Shares or Class B Shares, the Shares
of each other such class of Common Shares shall also be split,
subdivided, combined or reclassified, in each case so that the
numbers of Class A Shares and Class B Shares outstanding
immediately following such split, subdivision, combination or
reclassification shall bear the same relationship to one another
as do the numbers of Class A Shares and Class B Shares outstanding
immediately prior to such split, subdivision, combination or
<PAGE> 63
60
reclassification.
CONVERSION
121. Each Class B Share issued and outstanding shall be convertible, at
the option of its holder, into one validly issued and fully paid
Class A Share at any time. At the time of any optional conversion
of any Class B Shares, the holder of such shares shall deliver to
the registered office of the Company the certificate or
certificates representing such Class B Shares to be converted,
duly endorsed in blank or accompanied by the proper instruments of
transfer and written notice to the Company specifying the number
of Class B Shares to be converted into Class A Shares and stating
the name or names (with addresses) and denominations in which the
certificate or certificates representing the Class A Shares
issuable upon such conversion are to be issued and including
instructions for the delivery thereof. Conversion shall be deemed
to have been effected at the time when delivery is made to the
Company of both such written notice and the certificate or
certificates representing the Class B Shares to be converted (or,
in the event of the loss or destruction of such certificate or
certificates, such other documentation as the Company shall
reasonably require for the replacement of lost or destroyed share
certificates, as set forth in the Bye-Laws of the Company) or such
later time as may be specified in such written notice. As of the
time of conversion, each Person named in the applicable written
notice to the Company in connection with such conversion as the
Person which shall be issued a certificate representing Class A
Shares to be evidenced by such certificates. Delivery of the
certificates
<PAGE> 64
61
(or proper documentation of lost or destroyed certificates) and
written notice as required in this paragraph to effect a
conversion of Class B Shares into Class A Shares shall obligate
the Company to issue such Class A Shares, and thereupon the
Company shall promptly issue and deliver to the holder of such
shares stated in such written notice at the address set forth
therein a certificate or certificates representing the number of
Class A Shares to which such holder is entitled by reason of such
conversion and shall cause such Class A Shares to be registered in
the name of such holder.
122. Each Class B Share issued and outstanding shall, without any
further act on the part of the holder thereof or the Company, be
mandatorily and automatically converted into one Class A Share in
the event that such Class B Share is Transferred to any Person
other than Global Crossing or any of its Affiliates, Microsoft or
any of its Affiliates or Softbank or any of its Affiliates.
123. The Class A Shares shall not be convertible into any other class
of Common Shares.
124. The Company hereby reserves and shall at all times reserve and
keep available out of its authorized and unissued Class A Shares,
for purposes of effecting conversions, such number of duly
authorized Class A Shares as shall from time to time be sufficient
to effect the conversion of all Class B Shares into outstanding
Class A Shares.
RESERVES
125. The Board may, before recommending or declaring any dividend or
distribution out of contributed surplus, set aside such sums as it
thinks proper as reserves
<PAGE> 65
62
which shall, at the discretion of the Board, be applicable for any
purpose of the Company and pending such application may, also at
such discretion, either be employed in the business of the Company
or be invested in such investments as the Board may from time to
time think fit. The Board may also without placing the same to
reserve carry forward any sums which it may think it prudent not
to distribute.
CAPITALIZATION OF PROFITS
126. The Board may, from time to time resolve to capitalize all or any
part of any amount for the time being standing to the credit of
any reserve or fund which is available for distribution or to the
credit of any share premium account or any capital redemption
reserve fund and accordingly that such amount shall be set free
for distribution amongst the Shareholders or any class of
Shareholders who would be entitled thereto if distributed by way
of dividend and in the same proportions, on the footing that the
same be not paid in cash but be applied either in or towards
paying up amounts for the time being unpaid on any shares in the
Company held by such Shareholders respectively or in payment up in
full of unissued shares, debentures or other obligations of the
Company, to be allotted, distributed and credited as fully paid
amongst such Shareholders, or partly in one way and partly in the
other, provided that for the purpose of this Bye-Law, a share
premium account and a capital redemption reserve fund may be
applied only in paying up of unissued shares to be issued to such
Shareholders credited as fully paid and, provided further that any
sum standing to the credit of share premium account may only be
applied in crediting as fully paid shares of the same class as
that from
<PAGE> 66
63
which the relevant share premium was derived.
127. Where any difficulty arises in regard to any distribution under
the last preceding Bye-Law, the Board may settle the same as it
thinks expedient and, in particular, may authorise any person to
sell and transfer any fractions or may resolve that the
distribution should be as nearly as may be practicable in the
correct proportion but not exactly so or may ignore fractions
altogether and may determine that cash payments should be made to
any Shareholders in order to adjust the rights of all parties, as
may seem expedient to the Board. The Board may appoint any person
to sign on behalf of the persons entitled to participate in the
distribution any contract necessary or desirable for giving effect
thereto and such appointment shall be effective and binding upon
the Shareholders.
RECORD DATES
128. Notwithstanding any other provisions of these Bye-Laws, the
Company may by Resolution or the Board may fix any date as the
record date for any dividend, distribution, allotment or issue and
for the purpose of identifying the persons entitled to receive
notices of, and entitled to vote at, general meetings or entitled
to express consent to corporate action in writing without a
meeting. Any such record date may be on or at any time (i) not
more than 60 days before any date on which such dividend,
distribution, allotment or issue is declared, paid or made, (ii)
not more than 60 days nor less than 10 days before the date of any
such meetings and (iii) not more than 10 days after the date on
which the resolution fixing the record date for a shareholder
action by written consent is adopted by the Board.
<PAGE> 67
64
ACCOUNTING RECORDS
129. The Board shall cause to be kept accounting records sufficient to
give a true and fair view of the state of the Company's affairs
and to show and explain its transactions, in accordance with the
Companies Acts.
130. The records of account shall be kept at the principal place of
business or at such other place or places as the Board thinks fit,
and shall at all times be open to inspection by the Directors,
provided that if the records of account are kept at some place
outside Bermuda, there shall be kept at an office of the Company
in Bermuda such records as will enable the Directors to ascertain
with reasonable accuracy the financial position of the Company at
the end of each three month period. Each of the Shareholders shall
have a right, at such Shareholder's expense, to visit and inspect
any of the operations, properties and assets of the Company and to
inspect any accounting record or book or document of the Company
and to make copies and take extracts therefrom and to discuss its
affairs, finances and accounts with its officers and the Company's
independent accountants, all at such reasonable times and as often
as may be reasonably requested.
131. A copy of every balance sheet and statement of income and
expenditure, including every document required by law to be
annexed thereto, which is to be laid before the Company in general
meeting, together with a copy of the auditors' report, shall be
sent to each person entitled thereto in accordance with the
requirements of the Companies Acts.
<PAGE> 68
65
AUDIT
132. Save and to the extent that an audit is waived in the manner
permitted by the Companies Acts, auditors shall be appointed and
their duties regulated in accordance with the Companies Acts, any
other applicable law and such requirements not inconsistent with
the Companies Acts as the Board may from time to time determine.
SERVICE OF NOTICES AND OTHER DOCUMENTS
133. Any notice or other document (including a share certificate) may
be served on or delivered to any Shareholder by the Company either
personally or by sending it by facsimile, through the post (by
airmail where applicable) in a pre-paid letter addressed to such
Shareholder at his address as appearing in the Register or by any
other means. In the case of joint holders of a share, service or
delivery of any notice or other document on or to one of the joint
holders shall for all purposes be deemed as sufficient service on
or delivery to all the joint holders. Any notice or other document
(i) if given by facsimile, shall be deemed to have been served or
delivered at the time such facsimile is transmitted and the
appropriate confirmation is received (or, if such time is not
during a Business Day, at the beginning of the following Business
Day), (ii) if sent by post, shall be deemed to have been served or
delivered three Business Days or, if to an address outside the
United States, seven calendar days after it was put in the post
with first-class postage prepaid or (iii) if given by any other
means, shall be deemed to have been served or delivered when
delivered at the applicable address, and in proving such service
or delivery, it shall be sufficient to prove that the notice or
document was
<PAGE> 69
66
properly addressed, stamped and put in the post.
134. Any notice of a general meeting of the Company shall be deemed to
be duly given to a Shareholder, or other person entitled to it, if
it is sent to him by cable, telex, telecopier or other mode of
representing or reproducing words in a legible and non-transitory
form at his address as appearing in the Register or any other
address given by him to the Company for this purpose. Any such
notice shall be deemed to have been served 24 hours after its
despatch.
135. Any notice or other document delivered, sent or given to a
Shareholder in any manner permitted by these Bye-Laws shall,
notwithstanding that such Shareholder is then dead or bankrupt or
that any other event has occurred, and whether or not the Company
has notice of the death or bankruptcy or other event, be deemed to
have been duly served or delivered in respect of any Share
registered in the name of such Shareholder as sole or joint holder
unless his name shall, at the time of the service or delivery of
the notice or document, have been removed from the Register as the
holder of the Share, and such service or delivery shall for all
purposes be deemed as sufficient service or delivery of such
notice or document on all persons interested (whether jointly with
or as claiming through or under him) in the Share.
DESTRUCTION OF DOCUMENTS
136. The Company shall be entitled to destroy all instruments of
transfer of Shares which have been registered, and all other
documents on the basis of which any entry is made in the Register,
at any time after the expiration of six years from the date of
registration thereof and all dividends mandates or variations or
<PAGE> 70
67
cancellations thereof and notifications of change of address at
any time after the expiration of two years from the date of
recording thereof and all Share certificates which have been
canceled at any time after the expiration of one year from the
date of cancellation thereof and all paid dividends, warrants and
cheques at any time after the expiration of one year from the date
of actual payment thereof and all instruments of proxy which have
been used for the purpose of a poll at any time after the
expiration of one year from the date of such use and all
instruments of proxy which have not been used for the purpose of a
poll at any time after one month from the end of the meeting to
which the instrument of proxy relates and at which no poll was
demanded. It shall conclusively be presumed in favour of the
Company that every entry in the Register purporting to have been
made on the basis of an instrument of transfer or other document
so destroyed was duly and properly made, that every instrument of
transfer so destroyed was a valid and effective instrument duly
and properly registered, that every share certificate so destroyed
was a valid and effective certificate duly and properly canceled
and that every other document hereinbefore mentioned so destroyed
was a valid and effective document in accordance with the recorded
particulars thereof in the books or records of the Company,
provided always that:
(a) the provisions aforesaid shall apply only to the
destruction of a document in good faith and without
notice of any claim (regardless of the parties
thereto) to which the document might be relevant;
(b) nothing herein contained shall be construed as
imposing upon the Company any liability in respect
of the destruction of any such
<PAGE> 71
68
document earlier than as aforesaid or in any other
circumstances which would not attach to the Company
in the absence of this Bye-Law; and
(c) references herein to the destruction of any document
include references to the disposal thereof in any
manner.
UNTRACED SHAREHOLDERS
137. (1) The Company shall be entitled to sell at the best price reasonably
obtainable, or if the Shares are listed on a stock exchange or
automated quotation system to purchase at the trading price on the
date of purchase, the Shares of a Shareholder or the Shares to
which a person is entitled by virtue of transmission on death,
bankruptcy, or otherwise by operation of law if and provided that:
(a) during the period of 12 years to the date of the
publication of the advertisements referred to in
paragraph (b) below (or, if published on different
dates, the first thereof) at least three dividends
in respect of the Shares in question have been
declared and all dividends, warrants and cheques
which have been sent in the manner authorized by
these Bye-Laws in respect of the Shares in question
have remained uncashed; and
(b) the Company shall as soon as practicable after
expiry of the said period of 12 years have inserted
advertisements both in a national daily newspaper
and in a newspaper circulating in the area of the
last known address of such Shareholder or other
person giving notice of its intention to sell or
purchase the Shares; and
<PAGE> 72
69
(c) during the said period of 12 years and the period of
three months following the publication of the said
advertisements, the Company shall have received no
indication either of the whereabouts or of the
existence of such Shareholder or person; and
(d) if the Shares are listed on a stock exchange or
automated quotation system, notice shall have been
to the relevant department of such stock exchange or
automated quotation system of the Company's
intention to make such sale or purchase prior to the
publication of advertisements.
(2) If during any 12-year period referred to in paragraph (a) above,
further Shares have been issued in right of those held at the
beginning of such period or of any previously issued during such
period and all the other requirements of this Bye-Law (other than
the requirement that they be in issue for 12 years) have been
satisfied in regard to the further Shares, the Company may also
sell or purchase the further Shares.
(3) To give effect to any such sale or purchase, the Board may
authorize some person to execute an instrument of transfer of the
Shares sold or purchased to, or in accordance with the directions
of, the purchaser and an instrument of transfer executed by that
person shall be as effective as if it had been executed by the
holder of, or person entitled by transmission to, the Shares. The
transferee of any Shares sold shall not be bound to see to the
application of the purchase money, nor shall his title to the
Shares be affected by any irregularity in, or invalidity of, the
proceedings in reference to the sale.
<PAGE> 73
70
(4) The net proceeds of sale or purchase of Shares shall belong to the
Company which, for the period of six years after the transfer or
purchase, shall be obliged to account to the former Shareholder or
other person previously entitled as aforesaid for an amount equal
to such proceeds and shall enter the name of such former
Shareholder or other person in the books of the Company as a
creditor for such amount. No trust shall be created in respect of
the debt, no interest shall be payable in respect of the same and
the Company shall not be required to account for any money earned
on the net proceeds, which may be employed in the business of the
Company or invested in such investments as the Board from time to
time thinks fit. After the said six-year period has passed, the
net proceeds of sale shall become the property of the Company,
absolutely, and any rights of the former Shareholder or other
person previously entitled as aforesaid shall terminate
completely.
WINDING UP, LIQUIDATION AND DISSOLUTION
138. (1) The interests of the Shareholders in the Company shall be
liquidated upon the occurrence of any one of the following events
(each a "Termination Event"):
(a) the sale of all or substantially all of the
Company's assets;
(b) the unanimous vote of the Shareholders;
(c) the involuntary liquidation of the Company; or
(d) as otherwise required by applicable law.
(2) Upon the occurrence of any Termination Event, the Company shall be
wound up and dissolved. In connection with the winding up and
dissolution of the Company, a liquidator appointed by the
affirmative vote of a majority of the
<PAGE> 74
71
Shares shall proceed, in its sole discretion, with the liquidation
of all the assets of the Company and the final distribution of the
assets of the Company, in the following manner and order of
priority:
(a) First, to the creditors (including any Shareholders
or their respective Affiliates that are creditors)
of the Company in satisfaction of all the Company's
debts and liabilities (whether by payment or by
making reasonable provision for payment thereof,
including the setting up of any reserves which are,
in the judgment of the liquidator, reasonably
necessary therefor);
(b) Second, 100% to the Shareholders, proportionate to
their ownership of the total number of Shares then
outstanding.
(3) If any dividend or other distribution shall have been made by the
Company to the Shareholders prior to the winding-up and
dissolution of the Company, any amounts received by any
Shareholder from such dividends or other distributions shall be
deducted from the amount such Shareholder would otherwise be
entitled to receive in the winding-up and dissolution of the
Company, and the aggregate amount of all dividends and other
distributions previously made by the Company to the Shareholders
shall be deemed to be included in amounts available for
distribution to Shareholders in the event of the winding-up and
dissolution of the Company.
139. The liquidator may, with the sanction of a Resolution of all
Shareholders of the Company and any other sanctions required by
the Companies Act, redeem the Shares held by the Shareholders with
the assets of the Company in lieu of, or in
<PAGE> 75
72
addition to, any dissolution or division contemplated by Bye-Law
138.
INDEMNITY
140. Subject to the proviso below, every Director, Alternate Director,
Officer of the Company and member of a committee constituted under
Bye-Law 95 and any Resident Representative shall be indemnified
out of the funds of the Company against all liabilities, loss,
damage or expense (including but not limited to liabilities under
contract, tort and statute or any applicable foreign law or
regulation and all reasonable legal and other costs and expenses
properly payable) incurred or suffered by him as such Director,
Alternate Director, Officer, committee member or Resident
Representative and the indemnity contained in this Bye-Law shall
extend to any person acting as a Director, Alternate Director,
Officer, committee member or Resident Representative in the
reasonable belief that he has been so appointed or elected
notwithstanding any defect in such appointment or election;
provided always that the indemnity contained in this Bye-Law shall
not extend to any matter which would render it void pursuant to
the Companies Acts.
141. Every Director, Alternate Director, Officer, member of a committee
duly constituted under Bye-Law 95 or Resident Representative of
the Company shall be indemnified out of the funds of the Company
against all liabilities incurred by him as such Director,
Alternate Director, Officer, committee member or Resident
Representative in defending any proceedings, whether civil or
criminal, in which judgement is given in his favor, or in which he
is acquitted, or in connection with any application under the
Companies Acts in which relief from liability is granted
<PAGE> 76
73
to him by the court.
142. To the extent that any Director, Alternate Director, Officer,
member of a committee duly constituted under Bye-Law 95 or
Resident Representative is entitled to claim an indemnity pursuant
to these Bye-Laws in respect of amounts paid or discharged by him,
the relative indemnity shall take effect as an obligation of the
Company to reimburse the person making such payment or effecting
such discharge.
143. Each Shareholder and the Company agree to waive any claim or right
of action he or it may at any time have, whether individually or
by or in the right of the Company, against any Director on account
of any action taken by such Director, or the failure of such
Director to take any action in the performance of his duties with
or for the Company; provided, however, that such waiver shall not
apply to any claims or rights of action arising out of the fraud
or dishonesty of such Director or to recover any gain, personal
profit or advantage to which such Director is not legally
entitled.
144. Subject to the Companies Acts, expenses incurred in defending any
civil or criminal action or proceeding for which indemnification
is required pursuant to Bye-Laws 140 and 141 may be paid by the
Company in advance of the final disposition of such action or
proceeding upon receipt of an undertaking by or on behalf of the
indemnified party to repay such amount if it shall ultimately be
determined that the indemnified party is not entitled to be
indemnified pursuant to Bye-Laws 140 and 141.
Each Shareholder of the Company, by virtue of his acquisition and
continued
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74
holding of a Share, shall be deemed to have acknowledged and
agreed that the advances of funds may be made by the Company as
aforesaid, and when made by the Company under this Bye-Law, are
made to meet expenditures incurred for the purpose of enabling
such Director, Alternate Director, Officer or member of a
committee duly constituted under Bye-Law 95 to properly perform
his or her duties as an officer of the Company.
Notwithstanding the foregoing and Bye-Laws 140-144, the Company
shall not be required to indemnify any Director, Alternate
Director or Officer (which has been appointed by a Shareholder)
which has been determined by a court of law or competent
arbitration proceedings to have been negligent in his actions as a
Director, Alternate Director or Officer of the Company as
applicable.
AMALGAMATION
145. Any Resolution proposed for consideration at any general meeting
to approve the amalgamation of the Company with any other company,
wherever incorporated, shall require the approval of a simple
majority of votes cast at such meeting and the quorum for such
meeting shall be that required in Bye-Law 52 and a poll may be
demanded in respect of such Resolution in accordance with the
provisions of Bye-Law 61.
CONTINUATION
146. Subject to the Companies Acts and Bye-Laws 96(2)(l) and (m), the
Board may approve the discontinuation of the Company in Bermuda
and the continuation of the Company in a jurisdiction outside
Bermuda. The Board, having resolved to
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75
approve the discontinuation of the Company, may further resolve
not to proceed with any application to discontinue the Company in
Bermuda or may vary such application as it sees fit.
ALTERATION OF BYE-LAWS
147. Subject to Bye-Law 96(2)(e), these Bye-Laws may be amended from
time to time in the manner provided for in the Companies Acts.
<PAGE> 79
BYE-LAWS
OF
ASIA GLOBAL CROSSING LTD.
We, being the subscribers to the Memorandum of Association of the above company
hereby subscribe to the above written Bye-Laws pursuant to section 13(4) of the
Companies Act 1981.
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Dated this day of 2000
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